Critical Defense Ownership Review Act
- Bill Number
- H.R. 9283
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Armed Forces and National Security
- Status
- Introduced
- Latest Action
- 2026-06-11: Referred to the House Committee on Armed Services.
- Last Updated
- 2026-07-06T20:16:43Z
AI-Generated Summary
Summary of H.R. 9283: Critical Defense Ownership Review Act
Purpose of the Legislation
This bill establishes a requirement for Department of Defense (DoD) review of certain acquisitions by investment companies that would result in control or significant ownership of major defense suppliers. Its goal is to assess potential effects on national security, the defense industrial base, and related capabilities before such transactions proceed.
Key Provisions Outlined
- Prior Review Requirement: Investment companies are prohibited from completing covered transactions with major defense suppliers that grant them a direct or indirect equity interest of at least 25 percent or control, unless the DoD conducts a review first.
- Premerger Notification: Parties must submit a notification to the DoD, following processes similar to those in existing law (section 857 of the National Defense Authorization Act for Fiscal Year 2024).
- DoD Review Criteria: The DoD evaluates each transaction for impacts on:
- National security and the industrial base.
- Competition for DoD contracts.
- Access to critical suppliers, goods, or services.
- Financial stability of the supplier and any resulting cost increases to the DoD.
- Risks to current or future DoD programs.
- The investment company's financial plan and its effect on supplier performance.
- Report to Antitrust Authorities: Within 30 days of receiving a notification, the DoD must provide a written review report to the Federal Trade Commission or the Department of Justice's Antitrust Division.
- Triennial Review: The Assistant Secretary of Defense for Industrial Base Policy must review merger and acquisition activity involving major defense suppliers every three years, assessing financial health and effects on essential goods or services. Reports are submitted to congressional defense committees starting December 31, 2027.
- Definitions:
- Control: Power to direct important matters affecting an entity.
- Covered transaction: Any proposed merger, acquisition, joint venture, strategic alliance, or investment.
- Investment company: Entities that would qualify under the Investment Company Act of 1940 but for specific exemptions.
- Major defense supplier: Prime contractors or subcontractors supplying goods or services to the DoD, or those with potentially significant defense-related technology, including those under certain contract authorities.
Significant Changes to Existing Law Introduced
This legislation adds a new layer of DoD oversight specifically for investment company acquisitions in the defense sector, building on but expanding beyond current premerger notification rules. It introduces mandatory reviews focused on financial stability and industrial base risks, which were not previously required in this targeted manner for such entities. The triennial reporting requirement creates an ongoing assessment process not present in prior statutes referenced.
Potential Impacts
- Government Agencies: Increases DoD responsibilities for transaction reviews and reporting, potentially requiring additional resources for analysis and coordination with antitrust bodies. It may slow some acquisitions while enhancing oversight of the defense supply chain.
- Citizens: Indirect effects through strengthened protection of the defense industrial base, which supports national security and could influence taxpayer-funded defense costs or capabilities.
- International Relations: No direct provisions address foreign entities, but the focus on investment companies could affect cross-border transactions involving U.S. defense suppliers if they fall under the definitions.
Main Stakeholders Affected
- Department of Defense and its industrial base policy office.
- Investment companies seeking acquisitions in the defense sector.
- Major defense suppliers, including prime contractors and subcontractors.
- Congressional defense committees receiving triennial reports.
- Federal antitrust agencies (Federal Trade Commission and Department of Justice) receiving DoD reports.
- Broader defense industrial base entities reliant on critical suppliers.
Notable Legal, Constitutional, or Political Implications
- Legal: Establishes a specialized review process that interfaces with antitrust laws, potentially creating parallel reviews without altering core merger statutes. It defines terms like "control" and "covered transaction" to clarify scope.
- Constitutional: Relies on Congress's authority over national defense and commerce, with no evident conflicts noted in the text.
- Political: Emphasizes protection of critical military capabilities from private investment influences, with built-in reporting to Congress for ongoing oversight.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2026-06-11: Referred to the House Committee on Armed Services.
- 2026-06-11: Introduced in House
- 2026-06-11: Introduced in House
Bill Versions
- Critical Defense Ownership Review Act — issued 2026-06-11 — PDF (6 pages)