Defense Secretary Pete Hegseth is halting all new Army contract awards as well as solicitations for new programs, sending shock waves through the defense industry, according to two people familiar with the pause and an email reviewed by Bloomberg Government.
The pause could last as little as 10 days but could potentially continue for months, the two people said. The people spoke on condition of anonymity because the Pentagon move has not yet been made public.
The hold comes in part to review diversity, equity and inclusion clauses in contracting, but it’s also a review that new administrations can do to gauge priorities and free up funding. The review doesn’t affect performance on contracts already awarded.
The Army in a statement confirmed a review is happening but said that “contracting activities continue to move forward” without offering any specifics.
“As is customary, the Army is currently conducting a review of existing solicitations and awards of contracts to ensure that our programs are aligned with the incoming leadership’s policies and directives,” Army spokeswoman Ellen Lovett said in a statement. “We remain committed to transparency and being responsible stewards of taxpayer dollars.”
The Pentagon did not immediately respond to a request for comment from Bloomberg Government. It’s unclear whether the contracting pause would extend to other military branches.
Army procurement spending on unclassified contracts in fiscal year 2024 amounted to $113.8 billion, according to a Bloomberg Government analysis.
(Updates with additional reporting throughout.)
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