Seal of the Pentagon on display at the Pentagon visitor center. (Photo by Trevor Raney
Digital Media Division)
WASHINGTON — The defense industry is in a state bordering between confusion and panic, following what could be a pause awarding new Army contracts as the service reviews its plans under the Trump administration.
The fear among industry now is that this move is just the first in what would amount to a Pentagon-wide halt on new awards, for an indefinite period of time.
Word of some sort of freeze on Army contracts began circulating late Friday, and by Monday evening was moving quickly through industry, the Hill and the Pentagon — but with a lack of certainty from anyone about what, exactly, was going on. That includes inside the Army, where as of Tuesday morning when different officials appeared to have different interpretations of what the guidance meant.
In a statement, Army spokesperson Ellen Lovett said, “Army contracting activities continue to move forward. 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. We remain committed to transparency and being responsible stewards of taxpayer dollars.”
However, that clashes with information in a public document and from a well-placed Army source who told Breaking Defense that the service is “pausing and reviewing” contracting activities and outgoing solicitations. The source couldn’t say how long this may last and it wouldn’t be responsible for the service to put an “X-day pause” in place, especially if conditions change with a new leadership team in place. (Bloomberg reported late Monday that it could last as long as several months.)
“It’s a bit of a pause and review, excluding things directly tied to readiness, modernization and people,” the Army source said this morning, noting it “touches all aspects of the requirements and contracting process.” However, the source did not detail what sorts of programs would fall into the readiness category.
A note posted publicly to at least one contract file on the federal contracting database SAM.gov and last updated Monday had said, “Per a directive from the Secretary of the Army, the U.S. Contracting Command has been instructed to immediately pause all contracting actions. As such, no transactions will take place regarding contract awards, modifications, solicitations, or requests for information/sources sought until further notice.” That notice appears to have since been taken down as of this afternoon.
A screengrab of a Sam.gov solicitation showing edits to a contract filing. (Screengrab via SAM.gov)
The confusion seemingly stems from the way the news was circulated amongst the service and then to industry. According to multiple sources, the guidance came down in an email as opposed to a formal memo, leading to uncertainty among program managers about how and when to implement it. As of press time, it’s unclear who penned the email or to whom it was originally sent, but that hasn’t stopped word of it from ricocheting around the Army community.
There is “certainly confusion, escalating to concern,” said one industry source, one of several who spoke to Breaking Defense on the condition of anonymity. “Especially among companies who were about to get something, or been told they have something, or even been selected but now don’t know if the money will come.”
Or, as a second industry source asked Breaking Defense during a Monday call, “What the f— is going on?”
Directive Via Email
According to six industry and military sources who have seen it, the email states that there is “Direction from the Secretary of the Army’s office to immediately hold” on awarding all contract or Other Transaction Awards (OTAs), all solicits and requests for information, any funding association related to grants and any Congressional notifications.
“We are working with leadership to get additional direction as to the timeframe and may come back to you for impacts to mission,” the email says, before concluding with a final note: “If you have an action that supports the Southern Border, please report up through your chain of command and we will seek permission … to move forward.”
A second Army source familiar with contracting and requirements noted that the relationship between the Army and the defense industrial base is a vital part of enacting the President’s vision for lethality across the DoD.
“As we receive updated guidance on how to orient our effort, we are proactively evaluating ways to create decision space for the administration in support of new strategic priorities,” the source told Breaking Defense. “Receipt of new guidance is an opportune time to evaluate the effectiveness of our existing contracting effort with the DIB, and is a necessary step in ensuring our resources are fully aligned to the department’s highest priorities.
“In the context of this review, some existing contracts may be modified or cancelled and others may be increased,” the source added. “This level of agility is vital to ensure our Army is responsive to and in full support of achieving peace through strength,”
In the meantime, industry is standing by for official contracting memos to drop while also circulating one from the director of the Army Staff, Lt. Gen. Laura Potter, which one source dubbed the “DEI memo.”
Dated Jan. 21, that document, a screengrab of which was viewed by Breaking Defense, notes that ongoing solutions, requests for proposals, grants and notices of funds “may not reflect” new administration priorities. It goes on to task the Army’s acquisition office with reviewing all those contracting options, establishing an “operational planning team” to review all solicitations and grants and make recommendations.
“Immediately identify and recommend freezing or suspending” all contracting items related to DEI, critical race theory, climate change, transgender and abortion polices, it adds.
At press time, Army public affairs had not immediately confirmed the existence of that Potter memo, but one service source said it sounded like one that went out.
Will Air Force, Navy follow?
The big question swirling now is whether this is a service-specific issue or one that is going to spread elsewhere.
As of Monday evening, multiple industry sources said they had not yet seen similar language for the departments of the Air Force and Navy, and both services, unlike the Army, awarded new contracts on Monday.
However, a third industry source said they’ve been told that similar direction could come down from the Navy and Air Force in the coming days, and a fourth source said that Air Force direction could come as early as today.
Asked whether the service was pausing new contract awards or solicitations, an Air Force spokesperson told Breaking Defense that the service continues to award contracts. Likewise a spokesperson for the Navy said it, too, “continues to award contracts.”
When asked about a contracting hold Monday afternoon, a Pentagon spokesperson for the Office of the Secretary of Defense said, “unfortunately I don’t have anything for you on that” and pointed out that the standard daily DoD contacts were announced.
If a larger freeze on contracting is coming, it may be part of a push by the Trump administration writ large to halt federal spending and review it. The State Department issued guidance to that extent, effectively freezing foreign assistance money with a few key exceptions, such as Foreign Military Financing for Israel and Egypt.
And according to a memo viewed by Breaking Defense, the Department of Energy issued guidance hours after Trump’s inauguration that “any announcements or awards regarding procurement opportunities and contracts are to be put on hold,” including requests for proposals, request for quotations and contact negotiations — effectively the same guidance sent down by the Army. (DOE manages the nuclear warheads stockpile and works with the Navy on nuclear reactor issues.)
Industry, meanwhile, is scrambling to figure out just exactly what is going on.
“Uncertainty doesn’t benefit anyone except our adversaries,” the second industry source said. “Industry is spending time now trying to adjust to rumors when we should be absolutely dedicated to the national security mission.
“We need to get after our adversaries. This is absolutely unhelpful.”
Michael Marrow in Washington and Justin Katz in San Diego contributed to this report.
UPDATED Jan. 28, 2025 at 1:15pm ET to include new information from a SAM.gov listing and response from a spokesperson for the US Navy.
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