Pentagon gets veto power over private-equity deals in defense sector
H.R. 9283 — Critical Defense Ownership Review Act · Filed by Ro Khanna (D-CA) · Introduced Jun 11, 2026 · Referred to committee
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What it does
This bill requires the Department of Defense to review and approve any deal where an investment company (like a private equity firm or hedge fund) tries to buy 25% or more of a major defense contractor. The DoD must assess whether the deal threatens national security, military supply chains, competition, or the contractor's ability to serve the Pentagon. The bill also requires the Pentagon to report to antitrust authorities and conduct triennial reviews of all defense-sector mergers and acquisitions.
Why we flagged it
The bill's core function is to insert DoD review authority into private-equity and investment-company acquisitions of defense contractors, protecting national security and supply-chain integrity. It is a regulatory safeguard, not a tax measure, subsidy, or commemorative act.
What the text implies
- The 25% threshold may incentivize investment companies to structure deals just below that level (e.g., 24.9% stakes) to avoid DoD review, potentially creating a loophole.
- The bill grants DoD broad discretion to block deals on 'public interest' grounds, which is undefined and may invite political or strategic use of veto power.
The full analysis lists 5 implications of this text.
Who stands to gain
Incumbent defense contractors (reduced acquisition risk); DoD procurement (stronger oversight of supply-chain integrity)