Business Groups Urge Senate to Drop Pentagon Contractor Buyback Restrictions from Defense Bill

The U.S. Chamber of Commerce and 40 other business groups sent a letter Tuesday to Senate leaders urging removal of Section 815 from the National Defense Authorization Act. Cnbc reported that the provision would require all companies doing business with the Pentagon to obtain Defense Department approval before executing stock buybacks or paying dividends.

The Senate is scheduled to begin consideration of the NDAA this week. Section 815 was included in the bill on a bipartisan basis by the Senate Armed Services Committee, which approved the overall measure by an 18-9 vote after a closed-door session. The provision was pushed by Sen.

Warren. Cnbc reported that Section 815 is intended to codify President Donald Trump's January executive order barring buybacks and dividends for contractors that underperform Defense Department expectations. Trump issued the order the month before he began a war against Iran.

"Giant military contractors are cheating our government out of billions in taxpayer dollars and lining their executives' and shareholders' pockets instead of investing in our national defense," Warren said. Sen. Rounds told Cnbc on Monday that the provision goes farther than he is comfortable with.

"I don't like it when politicians are telling business people how to build their businesses necessarily," Rounds said. The provision would take effect June 15, 2027. The House version of the NDAA does not contain the buyback and dividend restriction.