FY26 Defense Bill Mandates Multi-Year Warship Deals, Bans DEI, and Cuts TRICARE Gender Care

The massive Streamlining Procurement for Effective Execution and Delivery and National Defense Authorization Act for Fiscal Year 2026 is here, and it’s not just about funding tanks and planes. This bill is a colossal piece of legislation setting the Department of Defense (DoD) budget for fiscal year 2026, but buried deep within its thousands of pages are major policy shifts that will hit everything from military families’ healthcare to who gets to play sports at the Service Academies.

The Big Money Drop: Who Gets What

First, the basics: this bill greenlights the money necessary for the Army, Navy, Air Force, Marine Corps, and Space Force across the board—procurement, research, operations, and personnel. We’re talking about billions authorized for everything from daily maintenance (Title III) to next-generation weapons research (Title II).

For the Navy, it’s a shipbuilding spree (Title I): The Secretary of the Navy gets the green light to sign contracts for up to two Ford-class aircraft carriers and up to five Columbia-class submarines, using incremental funding. This multi-year buying power (Sec. 121, 122) is great for industrial stability in places like Virginia and Connecticut, ensuring the yards can plan ahead, but it also locks the government into huge future financial commitments, even if Congress has to re-approve the funding later.

For the Army, it’s helicopter deals: The Army gets multi-year procurement authority for UH60 Blackhawk aircraft starting in FY 2027 (Sec. 111) and is told to start early production of future long-range assault aircraft (Sec. 112). This is a move to keep specialized workers in places like Texas and Kansas employed and keep the production line warm.

The Acquisition Overhaul: Speeding Up the Buy

If you think government bureaucracy is slow, you’re right, and this bill tries to fix it by shaking up the acquisition process (Title XVIII).

Higher Thresholds, Faster Buys: The bill dramatically raises the dollar limits for what constitutes a “major program” and what counts as a “small purchase” (Sec. 1821). The threshold for a major defense acquisition program jumps from $300 million to $1 billion for development costs, and the micro-purchase limit goes from $10,000 to $25,000. For the person ordering basic supplies or a small software tool for their team, this means less red tape and faster delivery. For the taxpayer, it means less oversight on billions more dollars spent.

The End of “Good Job” Reviews for Contractors: A sweeping reform changes how the DoD tracks contractor performance (Sec. 836). Moving forward, performance reviews will focus almost exclusively on negative, objective failures (e.g., missed deadlines, faulty products) rather than subjective positive ratings. The idea is to level the playing field for smaller, non-traditional companies that don't have decades of history, but it could make it harder for the government to track overall performance trends if everything that isn't a failure is ignored.

Healthcare, Housing, and Hiring: Life on Base Changes

This bill contains some of the most controversial changes affecting service members and their families.

TRICARE Bans Gender-Related Care: Section 713 explicitly prohibits TRICARE coverage for gender-related medical treatment for service members and their dependents. The ban is comprehensive, covering surgeries and hormone therapies for both male and female beneficiaries, with the only exception being the treatment of certain rare disorders of sex development (DSDs) in minors. For military families relying on TRICARE for this care, this provision cuts off a vital medical lifeline.

Childcare Help Gets a Boost: The bill establishes pilot programs to increase payments for childcare providers in high-cost areas (Sec. 572, 573). For military parents of infants and toddlers, this could mean up to a 30% increase in the maximum monthly payment to eligible providers, potentially easing the financial strain of childcare in expensive areas like Southern California or the DC Metro.

Family Separation Pay Goes Up: The Family Separation Allowance is permanently increased to a flat rate of $400 per month (Sec. 622). This is a welcome, tangible boost for any service member deployed away from their family.

The PCS Headache Gets a Checkup: The DoD must conduct a massive survey of at least 10,000 service members who moved recently to determine if the Basic Allowance for Housing (BAH) and other reimbursements actually cover their moving costs (Sec. 529). They’re checking to see if moves are causing financial stress and hurting retention—a long overdue study for anyone who has ever paid thousands out-of-pocket for a Permanent Change of Station (PCS).

The Culture Clash: DEI and Identity

Two sections deliver a major blow to diversity and inclusion efforts across the DoD.

DEI is Out: Section 901 and 525 strictly prohibit the use of funds for any Diversity, Equity, and Inclusion (DEI) program, office, or employee resource group across the entire Department of Defense. This is a sweeping directive that forces the repeal of existing DoD reporting requirements and eliminates the Chief Diversity Officer position. For the thousands of civilian and military personnel whose jobs touched DEI, this is a total institutional reversal.

Service Academy Sports: Biological Sex Only: Section 549K bans any male cadet or midshipman from participating in a women’s athletic program at a Service Academy. The bill defines “male” and “female” strictly based on biological reproductive capacity. This eliminates any ambiguity and makes it clear that gender identity will not be a factor in determining eligibility for single-sex sports at West Point, Annapolis, and the Air Force Academy.

The China Check: Supply Chains and Tech

This bill continues the trend of aggressively targeting China’s influence in the U.S. defense supply chain.

Bans on Foreign Tech: The DoD is banned from buying information or communication technology (ICT) from companies substantially owned or controlled by China (Sec. 821). This ban also extends to advanced batteries (Sec. 864) and computer displays (Sec. 860E) sourced from “foreign entities of concern” by specific deadlines, forcing the DoD to prioritize domestic sources.

Tracking Critical Minerals: Contractors supplying weapon systems must now track and disclose the origin of strategic and critical materials used in advanced batteries and permanent magnets (Sec. 872). If a company uses lithium, nickel, cobalt, or rare earth elements, the military wants to know exactly where those materials were refined and assembled, aiming to eliminate reliance on foreign adversaries for these key components.