U.S. Army contracting is not on hold, the Defense Department said Tuesday in an attempt to clear up confusion stemming from email guidance that circulated in anticipation of an administration memo to get all “financial assistance” in line with recent Trump administration executive orders.
The memo, issued Monday by the Office of Management and Budget, does not apply to contracting in general, according to a Pentagon statement sent Tuesday evening.
“While we are not aware of any specific contracts or other activities affected, it is possible that activities may be paused if they are determined to fall within the bounds of the guidance,” a senior defense official, who was not authorized to speak on the record about the issue, said in the statement. “We look forward to providing more details regarding this matter as they develop and become available.”
The uproar began with a Monday report from Bloomberg Government that Defense Secretary Pete Hegseth had called for a review of all in-progress Army contracts and any forthcoming requests for proposals, to insure that any requirements or stipulations that include diversity, equity, and inclusion be removed in accordance with an executive order signed the day after Trump’s inauguration. A subsequent story from Breaking Defense detailed “confusion and panic” in the defense industry in response to the Army’s guidance.
An email shared Tuesday with Defense One, on Department of the Army letterhead addressed to “industry partners,” claimed that Army Contracting Command – Detroit Arsenal received guidance Friday to “put an immediate hold on all new solicitations and contract awards.”
The guidance found its way into contract solicitations posted on the Systems for Award Management website, including a request for proposals for Guantanamo Bay detainee support services that now shows a crossed-out section citing a “Secretary of the Army Directive Pause all Contracting Actions.”
The Army downplayed the news reports, and put out a statement saying it is reviewing all pending contract awards and solicitations to “ensure that our programs are aligned with the incoming leadership’s policies and directives.”
The other military services didn’t circulate similar emails, but news of the Army’s pause spread widely Tuesday. Two officials familiar with the Marine Corps’ acquisitions enterprise told Defense One they hadn’t received any guidance, but were waiting to hear how the Army’s pause might affect their operations.
News of the alleged pause reached industry executives at the AFCEA West conference in San Diego as well.
“My basic point on this is the new administration is going to come in and do exactly what I think many predecessors will do, which is say, like, ‘Hey, let’s all take a knee for a second. I want to get a sense of what’s going on before we just start shoveling a ton more money out the door,’ “ Chris Brose, chief strategy officer at Anduril, told Defense One. “I don’t know all of what’s being reported, to what extent that’s true. I do think that sort of desire to just kind of take account of what’s happening is not unhealthy.”
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