‘They overreached’: Amid industry worry, new Feinberg memo tweaks accounting regime

Nominee for Deputy Secretary of Defense Stephen A. Feinberg listens to the opening remarks of a Senate Armed Services Committee in Washington, D.C., Feb. 25, 2025. (DoD photo by U.S. Air Force Senior Airman Madelyn Keech)

WASHINGTON — A memo signed out by Deputy Secretary of Defense Stephen Feinberg this week is the latest in the Pentagon’s attempt to streamline defense acquisition, but also serves as a corrective to a previous declaration that had concerned industry, analysts tell Breaking Defense.

Tuesday’s memo, titled “Fostering One Strong Industrial Base,” primarily targets the Cost Accounting Standards (CAS) used across gover nment, encouraging them to be replaced instead with the Generally Accepted Accounting P rinciples (GAAP) used in the commercial sector.

“We will accept GAAP-based accounting across all contracts to the maximum extent the law permits,” Feinberg writes. “Transparency and partnership run both ways: the Department opens its buying to market forces, and when asked, industry shares the cost and pricing information it already keeps.”

While Feinberg said the move was part of an effort to “completely transform and modernize our contract cost and pricing ruleset,” analysts said it also appeared to be something of a reversal for the Pentagon in the wake of a contentious Aug. 18 missive that floated more aggressive Pentagon oversight of pricing practices. In the wake of that memo, some in industry worried the Pentagon was attempting to get deep into proprietary info or financial information, a particularly sensitive issue for the kind of non-traditional firms the department has been courting.

The August memo “was received very poorly, and I think no one really understood what they meant, I think was the challenge,” said Jerry McGinn, director of the Center for the Industrial Base at CSIS and a former senior defense acquisition official. “And that is what they’re doing here — they’re tying it back to the [industrial base] strategy and what they’d like to do, and they articulate that it’s a process.”

Added Bill Greenwalt of the American Enterprise Institute, “The first memo was an attempt to applying traditional compliance oversight to everyone including commercial and non-traditional companies. That would have had serious ramifications to the firms trying to disrupt the status quo. I think they got the message on that, that those firms weren’t happy and could exit the market.”

In the new memo, Feinberg defended the August order as “essential to ensure companies at every tier are treated fairly.” But he also appeared to offer industry more options, analysts said.

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“It looks like they may have realized they overreached with the first memo, and they’re now trying to limit the damage,” Greenwalt, who worked on acquisition reform as a Senate aid for years, continued. “This is a Pentagon that doesn’t want to admit they made a mistake, and the first memo was a huge mistake, so it’s progress they’re at least working to change things.”

‘A Way For Traditionalists To Become Non-traditional’

CAS has traditionally been used to help audit government-only sole source contracts. While used across government, the Pentagon, with its outsized budget, has naturally had the lion’s share of CAS-covered contracts.

The problem is that right now, there is effectively a bifurcated system: major defense firms have to undergo CAS standards due to their participation in CAS-covered contracts, while many non-traditional firms do not. McGinn said that only around 7 percent of companies that do business with the Pentagon are CAS-compliant, but those 7 percent accounted for around $300-$400 billion that was obligated last year, as they cover all the major defense programs like carriers, subs or fighter jets.

When Defense Secretary Pete Hegseth launched a major acquisition reform effort last November, part of the goal was to streamline the system. That effort bled through in Feinberg’s August memo as well, which Greenwalt described as attempting to create one system for all contractors. But Greenwalt said the DoD chose the wrong way to go about it, by increasing oversight and pushing everyone more towards something resembling CAS requirements.

In contrast, this week’s memo effectively says that the Pentagon will attempt to get off CAS as the default.

“The first memo seemed like it was trying to get everyone into one system, but it did that by doubling down on the government-unique ideas and oversight, which was a mistake,” Greenwalt said. “This language seems to lean towards opening up commercial-type systems to everyone, or at least the option of that to everyone.”

It won’t be quick: By law, the Pentagon will still need to apply CAS to sole source development programs until it can work within the government-wide CAS Board to change the standards of CAS to GAAP.

In the meantime, the Pentagon will attempt to use a series of existing authorities to constrain CAS on commercial and new entrants. The goal will be to apply CAS on a program-by-program basis, and attempt to limit CAS applicability on a company-by-company basis as it currently is.

In an investor note, Roman Schweizer of TD Cowen noted that while the August memo was focused on pricing transparency, this memo “seems less about imposing new oversight & more about removing barriers that discourage companies from doing business” with the Pentagon.

Still, shifting to a new model raises questions, according to Alek Jovovic, also of CSIS.

“What are the business implications of transitioning from CAS compliant companies to CAS compliant programs? What impact does that have on companies? I think that’s a critical element of the memo, but how they’re going to implement this change it is the question,” he said.

Said Greenwalt, “It looks like they are providing a way for traditionalists to become non-traditional depending on what contracts they pursue. That’s an interesting new shift and will require a lot of thought by the companies on corporate restructuring and the CAS board to figure out how to convert from CAS into GAAP accounting.”

Sorting out how this will all work will be especially important with “things like the Family of Affordable Mass Munitions , these new kind of programs, low-cost interceptors,” McGinn said.

Some Pricing Info Concerns Remain

Early reaction from industry seems cautiously optimistic. A statement from Eric Fanning of the Aerospace Industries Association, a major defense trade group, said, “Many of the reforms outlined in this memorandum, including streamlining business systems requirements and continuing the shift from Cost Accounting Standards toward Generally Accepted Accounting Principles, reflect priorities AIA has long supported and helped advance.

“At the same time, some aspects, particularly continued demands for extensive cost and pricing data, could undermine the Department’s broader objective of attracting more companies, capital, and innovation into the defense industrial base,” Fanning said.

Wrote Schweizer, “We believe there could still be some potential negatives for [companies] in the implementation and adoption. We also think Congress and industry will want input into how the changes are enacted — we do not see the new memo as the final word on this subject.”

McGinn agreed this will not be the last word, stressing that the memo is best thought of not as a standalone, dramatic change, but rather as part of a continuum of reform efforts being pursued by the Trump Pentagon.

“It’s very much in line with the administration’s priorities, but it’s a journey, I think,” he said.

2025年2月25日，美国国防部副部长提名人斯蒂芬·A·范伯格在华盛顿特区聆听参议院军事委员会的开幕致辞。（美国空军高级飞行员马德琳·基奇摄，美国国防部照片）

华盛顿——据《防务新闻》报道，分析人士称，国防部副部长斯蒂芬·范伯格本周签署的一份备忘录是五角大楼为简化国防采购而采取的最新举措，同时也纠正了此前一项令业界担忧的声明。

周二发布的题为“培育一个强大的工业基础”的备忘录，主要针对政府部门使用的成本会计准则 (CAS)，鼓励用商业部门使用的公认会计原则 (GAAP) 来取代这些准则。

费恩伯格写道：“我们将在法律允许的最大范围内接受所有合同均采用基于公认会计准则的会计处理。透明度和合作是双向的：国防部向市场力量开放采购，而当被问及时，行业也会分享其已掌握的成本和定价信息。”

费恩伯格表示，此举旨在“彻底改革和现代化我们的合同成本和定价规则”，但分析人士指出，这似乎也标志着五角大楼在8月18日一份引发争议的备忘录之后，态度有所转变。该备忘录暗示五角大楼将加强对定价行为的监管。备忘录发出后，一些业内人士担心五角大楼试图获取专有信息或财务信息，这对于国防部一直积极争取合作的非传统企业而言，是一个极其敏感的问题。

“8月份的那份备忘录反响很差，我认为没人真正理解他们的意思，这才是问题所在，”战略与国际研究中心（CSIS）工业基础中心主任、前高级国防采购官员杰里·麦金恩说道。“而他们现在正在做的，就是将此事与（工业基础）战略以及他们想要做的事情联系起来，并阐明这是一个循序渐进的过程。”

美国企业研究所的比尔·格林沃尔特补充道：“第一份备忘录试图将传统的合规监管应用于所有人，包括商业公司和非传统公司。这将对那些试图打破现状的公司产生严重影响。我认为他们已经明白了这一点，那些公司并不满意，可以退出市场。”

在新的备忘录中，费恩伯格为8月份的命令辩护，称其“对于确保各层级公司都得到公平对待至关重要”。但分析人士表示，他似乎也为业界提供了更多选择。

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“看来他们可能已经意识到第一份备忘录操之过急，现在正试图将损失降到最低，”格林沃尔特继续说道。他曾在参议院担任助理多年，负责采购改革工作。“五角大楼不愿承认自己犯了错误，而第一份备忘录确实是个巨大的错误，所以他们至少在努力改变现状，这本身就是一种进步。”

“传统主义者走向非传统的途径”

传统上，CAS（竞争评估系统）用于协助审计仅限政府内部的单一来源合同。虽然CAS在政府各部门均有应用，但由于五角大楼预算庞大，自然也占据了CAS涵盖合同的绝大部分。

问题在于，目前实际上存在着一种两极分化的体系：大型国防企业由于参与了受CAS约束的合同，必须遵守CAS标准，而许多非传统企业则无需遵守。麦金恩表示，与五角大楼有业务往来的公司中，只有约7%符合CAS标准，但这7%的公司去年签署的合同金额却高达3000亿至4000亿美元，因为它们涵盖了所有主要的国防项目，例如航母、潜艇和战斗机。

去年11月，国防部长皮特·赫格塞斯启动了一项重大的采购改革计划，其目标之一是简化采购系统。费恩伯格8月份的备忘录也体现了这一改革方向，格林沃尔特将其描述为试图为所有承包商创建一个统一的系统。但格林沃尔特表示，国防部采取了错误的方式，加强了监管，并迫使所有人更加倾向于类似近距离空中支援（CAS）的要求。

相比之下，本周的备忘录实际上表示，五角大楼将试图取消将CAS作为默认选项。

格林沃尔特说：“第一份备忘录似乎想让所有人都使用同一个系统，但它却通过强化政府特有的理念和监管来实现这一目标，这是一个错误。这份备忘录的措辞似乎倾向于向所有人开放商业化系统，或者至少向所有人提供这种选择。”

这不会很快：根据法律规定，五角大楼仍需对单一来源开发项目应用 CAS，直到它能够在政府范围内的 CAS 委员会内开展工作，将 CAS 标准改为 GAAP。

与此同时，五角大楼将尝试利用一系列现有授权来限制商用飞机和新进入者使用先进控制系统（CAS）。其目标是逐个项目地应用CAS，并力求限制CAS的适用范围，使其不再像目前那样逐个公司地适用。

TD Cowen 的 Roman Schweizer 在一份投资者报告中指出，虽然 8 月份的备忘录侧重于定价透明度，但这份备忘录“似乎与其说是要施加新的监管，不如说是要消除阻碍公司与五角大楼开展业务的障碍”。

不过，CSIS 的 Alek Jovovic 也表示，转向新模式会引发一些问题。

“从符合CAS标准的公司过渡到符合CAS标准的项目，会对企业产生哪些业务影响？这对公司会有什么影响？我认为这是备忘录的关键要素，但问题是他们将如何实施这一变化，”他说道。

格林沃尔特说：“看起来他们正在为传统主义者提供一种根据他们所追求的合同而转变为非传统主义者的途径。这是一个有趣的新转变，需要公司在企业重组方面进行深入思考，也需要CAS董事会弄清楚如何从CAS会计准则过渡到GAAP会计准则。”

麦金恩说，弄清楚这一切将如何运作，对于“像经济型大规模杀伤性弹药家族、这些新型项目、低成本拦截器之类的东西”来说，尤其重要。

部分定价信息仍存在疑问。

业界的初步反应似乎谨慎乐观。美国航空航天工业协会（AIA）是主要的国防贸易组织，其代表埃里克·范宁在一份声明中表示：“这份备忘录中概述的许多改革措施，包括简化业务系统要求以及继续从成本会计准则向公认会计原则转变，都体现了AIA长期以来支持和推动的优先事项。”

“与此同时，某些方面，特别是对大量成本和定价数据的持续要求，可能会破坏国防部吸引更多公司、资本和创新进入国防工业基地的更广泛目标，”范宁说。

施韦泽写道：“我们认为，在实施和采用过程中，[各公司]仍可能面临一些潜在的负面影响。我们也认为，国会和业界会希望参与这些变革的实施过程——我们并不认为这份新备忘录是对此问题的最终定论。”

麦金恩同意这不会是最终定论，并强调这份备忘录最好不要被视为一项独立的、戏剧性的变化，而应被视为特朗普五角大楼正在推行的一系列改革努力的一部分。

“这与本届政府的优先事项非常吻合，但我认为这将是一个循序渐进的过程，”他说。