Analysis & Reports

The US Air Force has selected nine companies for contracts in the second round of its Collaborative Combat Aircraft program, focusing on developing drone wingmen to operate alongside manned aircraft. This phase, known as 'Concept Refinement', will evaluate various designs for future prototyping. The Air Force is also collaborating with the Navy and Marine Corps to ensure interoperability among services.

The Pentagon has failed its financial audit for the eighth consecutive year, revealing ongoing systemic challenges in accounting for its assets. The Department of Defense has not passed any audits since annual reviews were mandated in 2018, and auditors identified numerous weaknesses in financial reporting. The Pentagon reported significant assets and liabilities and aims to resolve critical issues by 2028.

President Trump has nominated Marine Corps Lt. Gen. Frank Donovan to lead US Southern Command, overseeing operations in the Caribbean, including strikes on drug smuggling boats. Donovan will replace Adm. Alvin Holsey, who retired recently.

The U.S. military is ending the practice of using live animals for medic training, opting for advanced simulation technology instead. This decision is part of the annual defense bill and aims to reduce animal suffering while maintaining effective training for medics. The change has been supported by animal rights advocates and reflects a broader shift towards humane training methods.

The Pentagon is preparing to enforce a ban on companies with indirect ties to Chinese military firms, aiming to eliminate such entities from defense supply chains. This ban will take effect in stages, starting with direct contracts in June 2026 and extending to indirect contracts by June 2027. The Pentagon plans to assist contractors in identifying risks associated with subcontractors' affiliations.

The report outlines significant changes in defense policy and features opinion pieces that will influence discussions in the defense sector going into 2026.

The Pentagon is working on a unified command-and-control system for counter-drone operations, led by Joint Interagency Task Force 401, to enhance security during the 2026 FIFA World Cup. The focus is on smaller drones, with collaboration among military and federal agencies to prepare for potential threats.

The Missile Defense Agency (MDA) has qualified 1,086 additional companies for its SHIELD program, aimed at developing advanced missile defense technology. This announcement more than doubles the original pool of firms and is part of a contract with a ceiling of $151 billion, expected to last until December 2035.

The Space Development Agency (SDA) has awarded four contracts totaling $3.5 billion for the development of 72 new missile tracking satellites, with the first launches expected in fiscal year 2029.

President Trump has issued a new executive order aiming for an initial Moon base by 2028 and reiterating plans for a missile defense shield. The order emphasizes civil space exploration while also addressing national security and defense roles in space.

The Pentagon has failed its eighth consecutive audit, restating its goal to achieve a clean audit by 2028. The audit revealed significant financial reporting weaknesses, particularly concerning the F-35 Joint Strike Fighter program. Defense Secretary Pete Hegseth emphasized the commitment to improving financial management, while the newly confirmed comptroller, Michael Powers, is expected to implement strategies to address these issues.

The Senate confirmed Adm. Kevin Lunday as the new commandant of the Coast Guard and several key Department of Defense officials, following a policy change regarding hate symbols. The confirmations included notable figures such as Michael Powers and Amy Henninger, with a focus on improving Pentagon operations and oversight.

The U.S. Navy has announced plans to develop a new frigate class based on HII’s Legend-class national security cutter, aiming for deployment by 2028. This initiative follows the cancellation of the Constellation-class frigate program and is part of a broader strategy to enhance the Navy's fleet with more small combatants and unmanned vessels.

The Pentagon is mandated to release summaries of internal safety investigations spanning nearly three years due to increasing military aviation mishaps, as stipulated in the 2026 National Defense Authorization Act. This move aims to enhance transparency and accountability following several high-profile incidents.

President Trump has nominated Army Lt. Gen. Joshua Rudd to lead the NSA and U.S. Cyber Command, filling a leadership void that has persisted since April. The NSA has faced internal challenges and morale issues during this period. Additionally, Marine Corps Maj. Gen. Lorna Mahlock has been nominated as deputy chief of Cyber Command.

The report discusses various military-related developments including a troop housing subsidy rebranded as a 'warrior dividend', arms sales to Taiwan, and the Venezuelan navy escorting tankers amid U.S. sanctions.

President Trump announced that 1,450,000 military service members will receive $1,776 checks as a housing allowance supplement, totaling $2.6 billion. This initiative is part of a Congressionally-approved funding aimed at improving the quality of life for service members before Christmas 2025.

U.S. special warfare trainers are requesting expanded areas for jamming cellular and GPS signals to enhance training in electronic warfare and drone operations, reflecting the increasing importance of these capabilities in modern warfare, particularly as observed in Ukraine.

Congress is scrutinizing the need for a Space Force Special Operations Component Command, requiring a detailed report before any funding is allocated. The Space Force has established components within various commands but faces questions about redundancy with existing organizations. The report must clarify the command's structure and personnel needs.

The Trump administration has nominated Army Lt. Gen. Joshua Rudd to lead the National Security Agency and U.S. Cyber Command, filling a vacancy that has existed since April. The nomination has been submitted to the Senate for approval, and Rudd's background is expected to align with U.S. efforts to counter Chinese cyber threats. The NSA has faced challenges in workforce morale and leadership stability during this period.