Pentagon to penalize defense contractors who skip government factories
S. 905 — Arsenal Workload Sustainment Act · Filed by Richard Durbin (D-IL) · 4 cosponsors · Introduced Mar 6, 2025 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill creates a five-year pilot program requiring the Department of Defense to favor defense contractors who partner with government-owned Army arsenals by adding a 20% cost penalty to bids from contractors who do not use those arsenals. The program aims to keep government-owned manufacturing facilities busy and competitive by steering federal procurement dollars toward contractors willing to subcontract work to these public arsenals.
Why we flagged it
The bill's operative mechanism is a procurement preference (20% cost penalty) designed to steer defense contracts toward private contractors who use government arsenals as subcontractors. This functions as a subsidy to private defense firms and an indirect subsidy to public arsenals, framed as workload sustainment.
What the text implies
- The 20% cost penalty may inflate total defense procurement costs by forcing the DoD to pay more for contracts that include government-arsenal subcontracting, shifting costs to taxpayers.
- Private contractors gain a competitive advantage by being able to use government facilities and labor at negotiated rates, potentially undercutting pure-private competitors while still winning the 20% preference.
The full analysis lists 5 implications of this text.
Who stands to gain
defense contractors entering public-private partnerships with Army arsenals; private firms bidding on DoD contracts with arsenal subcontracting arrangements