The Department of Defense has released updated guidance for the continuation of military operations and other activities amid a government shutdown.

According to the document published Thursday, vendors who were already awarded contracts before the funding lapse may continue to perform work even if it supports non-excepted activities, but only to the extent of funds already obligated on the contract before the lapse in appropriations.

The Pentagon noted that new contracts, renewals, extensions, task orders or exercised options may not be issued or executed unless they support an excepted activity. Until Congress appropriates new funds, no additional obligations can be assumed for non-excepted work.

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Lack of Oversight May Trigger Stop-Work Orders

According to the guidance, contract performance cannot continue if it requires inspection or oversight by furloughed federal government employees. In such cases, DOD may issue stop-work orders or terminate contracts.

Departmental Priorities

DOD identified several priority areas that may continue during a funding lapse if suitably resourced, including shipbuilding, depot maintenance, critical munitions, Golden Dome for America, Middle East operations and border security.

For contracts relevant to mission priorities, DOD components should evaluate whether they may be deemed “excepted” and allowed to proceed even in a funding lapse.

Defense Appropriations Bill Blocked in Senate

The Hill reported Thursday that the Senate failed to pass the full-year $852 billion defense spending measure in a 50-44 vote, falling short of the 60 votes needed to advance the bill.

The Senate vote comes as the government shutdown extends into its third week.

According to the report, Senate Democratic Leader Chuck Schumer, D-N.Y., opposed to taking up the measure without first voting on the annual appropriations bill for labor, health and human services.

The defense appropriations bill would allocate $171 billion for weapons systems procurement and $141 billion for research, development and testing initiatives.

The U.S. Army has announced that it is adjusting its acquisition priorities to align with its Army Transformation Initiative and an ongoing acquisition shakeup, Breaking Defense reported Thursday.

Army Highlights Need for Transparency on Purchases

Brent Ingraham, assistant secretary of the Army for acquisition, logistics and technology, emphasized the need for transparency with industry partners on future purchases, noting that the Army must use its limited modernization budget effectively by prioritizing programs that deliver the most impact on the battlefield.

“We’ve got to let industry know where we’re going, what sort of capabilities we’re looking for and just be open with them about what we need to buy [and] we don’t need to buy,” said Ingraham.

How Is Army Transformation Initiative Reshaping Programs? 

The ATI effort signals a reduced future for vehicles like Humvees and Joint Light Tactical Vehicles. The service has already paused purchases of General Atomics’ Gray Eagle drone and halted a Future Tactical Uncrewed Aircraft System competition. It is also considering retiring AH-64D Apaches, ending General Electric’s Improved Turbine Engine Program and decreasing High Accuracy Detection and Exploitation Systems. These reductions are intended to fund the Future Long-Range Assault Aircraft program.

What Is the Transformation in Contact Program?

The Transformation in Contact program is designed to quickly assess new equipment with units both in the U.S. and overseas to determine operational effectiveness. It will provide insight to the Army on which weapons and platforms will advance under the ATI.

The U.S. Air Force has discarded its plan to establish a major new command dedicated to setting requirements and modernizing its weapon systems, choosing instead to consolidate these functions within an existing department, Breaking Defense reported Wednesday. The service will simultaneously create a new senior executive role, the chief modernization officer, to direct strategic efforts.

How Will Modernization Leadership Be Consolidated?

The functions originally designated for the abandoned Integrated Capabilities Command will be absorbed by the Air Force Futures organization. This transfer of responsibilities is scheduled for completion by April 2026.

The newly created CMO position will serve as the principal leader of these newly integrated activities. The role’s mandate is to guide critical modernization processes across the service, focusing on four primary areas:

• Strategy and force design
• Mission integration and mission threads
• Capability development and requirements
• Prioritization of modernization investments

Air Force Secretary Troy Meink stated that this organizational realignment is intended to produce faster results.

“This restructuring will accelerate the delivery of combat power, improve efficiency, and shorten the decision timeline,” he explained in the service’s official announcement.

Leading the organizational transition of A5/7 will be Maj. Gen. Christopher Niemi, who previously commanded the Air Force Warfare Center at Nellis Air Force Base.

Why Is the Air Force Reversing a Key Overhaul Initiative?

The decision marks a significant pullback on a core component of the Biden administration’s “reoptimization” plan, a sweeping effort intended to overhaul how the service defines its requirements for acquiring new warfighting capabilities.

The ICC was activated on a provisional basis in 2024 with a defined mission: to test various operational concepts, align the development of new capabilities and generate unified demand signals for necessary system improvements. Following a service-wide pause on the reoptimization efforts earlier this year, a review concluded that moving forward with a permanent ICC was no longer the optimal path. The service’s assessment of other elements of the broader overhaul, which includes initiatives for the Space Force, remains ongoing.

Strategic and Leadership Context

The drive to reoptimize the service has been linked to recent changes in senior leadership. Reports indicate that disagreements over the overhaul contributed to the departure of former Air Force Chief of Staff Gen. David Allvin. Gen. Kenneth Wilsbach, former head of Air Combat Command, has since been nominated as the successor.

Commenting on the service’s strategic outlook, Secretary Meink has publicly shifted the focus away from the common nomenclature of “great power competition.” Speaking at a conference in September, he underscored the need for measurable outcomes, stating that the primary objective for the Air Force must be achieving success. He concluded simply, “we need to be able to win, period,” emphasizing readiness and modernization above geopolitical frameworks.