U.S. Secretary Of Defense Suspends New Contracts Amid Procurement Review

Newly appointed U.S. Secretary of Defense Pete Hegseth has issued a directive suspending all new defense contracts, signaling a potential reevaluation of the military’s procurement practices.

This decision, reported by Bloomberg and attributed to an unpublished Pentagon order, also halts requests to initiate new defense programs.

The suspension, effective immediately, may last for 10 days, but insiders suggest it could extend further. Sources familiar with the situation indicated that nothing prevents the Pentagon from prolonging the freeze, raising questions about its impact on defense contractors and military readiness.

Hegseth, who assumed office on January 25, has prioritized addressing inefficiencies in the defense procurement system. Vice President James David Vance, in a CBS interview, commented on the necessity of overhauling the arms procurement process.

“We are facing a recruitment crisis, severe overspending, and delivery delays in our procurement system. Aircraft costing billions are emblematic of these issues. Serious reforms are essential, though not universally welcomed,” Vance said.

Vance emphasized the need to redirect funding toward emerging technologies such as artificial intelligence, drones, and unmanned aerial vehicles. “Rapid advancements in these areas necessitate a complete reevaluation of how we allocate resources for weapons procurement,” he added.

The pause is seen as a step toward addressing these concerns, with a broader strategy potentially reshaping how the U.S. military acquires its capabilities.

Ukraine Exemptions

In a related development, President Donald Trump issued an executive order on January 23, temporarily halting U.S. international support programs for 90 days. However, the Pentagon clarified that this restriction does not apply to military aid for Ukraine.

A Pentagon spokesperson told the Ukrainian service of Voice of America, “Security assistance to Ukraine is not subject to the restrictions of the recent foreign assistance order, as it only applies to development programs, not military support.”

This ensures the continuity of weapons production contracts under the Ukraine Security Assistance Initiative (USAI) and previously announced deliveries from U.S. stockpiles under the Presidential Drawdown Authority (PDA).