New Act Mandates 10-Year Review of Defense Contractor Mergers to Assess Competition and Oversight Failures

The newly proposed Defense Contractor Competition Act isn't about changing the rules right now; it’s about making sure the rules we have been working. This bill tasks the Comptroller General (CG)—the head of the Government Accountability Office (GAO)—with launching a deep-dive investigation into defense industry mergers and acquisitions that have happened over the last decade.

Think of this as an accountability audit for the massive defense contractors and the government agencies that are supposed to regulate them. The CG has to produce a detailed report for Congress that answers one big question: Have these mega-mergers actually made the defense industry less competitive, and did the government’s attempts to fix those problems actually work? This is critical because when competition shrinks, costs usually go up, and that eventually hits taxpayers.

The Merger Fixes: Did the Remedies Stick?

When two huge defense companies merge, regulators sometimes require “remedies”—like forcing the merged company to sell off a specific subsidiary or technology—to prevent them from gaining too much market power. This bill requires the CG to look back and see how well those remedies actually maintained healthy competition and kept the defense industrial base sustainable. This matters to the average person because if those fixes failed, it means less innovation and potentially higher prices for equipment, which ultimately comes out of the federal budget. The CG will be checking the fine print to see if the promises made during merger approvals actually played out in the real world.

The Vertical Integration Black Box

The report also focuses heavily on vertical integration, which is when one company owns different parts of the supply chain—say, the company that builds the missile also owns the company that makes the guidance system. The bill requires the CG to analyze the methods the Department of Defense (DoD) uses to measure the competitive effects of this kind of integration. Are they collecting the right data? Can they actually get the necessary information from these massive contractors to spot anti-competitive behavior? This is a huge deal because if the DoD can't accurately measure how much control a single company has over a supply chain, they can't negotiate fair prices, potentially costing taxpayers billions.

The Information-Sharing Scorecard

Another key provision requires the CG to assess how effectively the Attorney General (DOJ), the Federal Trade Commission (FTC), and the Secretary of Defense (DoD) share information when reviewing these mergers. Mergers are complex, and if the agencies responsible for antitrust (DOJ/FTC) aren't talking effectively with the agency that buys the products (DoD), critical competitive issues can get missed. The report will essentially grade the collaboration between these powerful agencies. If they’re failing to communicate, it’s a failure of oversight, and that’s a problem that needs fixing.

Following Through on Past Advice

Finally, the CG must check the implementation status of past recommendations—from the CG, the DoD, or the Defense Science Board—aimed at boosting competition. It’s a simple but necessary check: The government spends time and money generating reports and advice, but does anyone actually follow through? This provision ensures that past lessons aren't just gathering dust on a shelf. Overall, this bill is a necessary step toward accountability and transparency, giving Congress the hard data needed to decide if the current system for regulating defense industry consolidation is truly serving the public interest.