Pentagon Oversight: Defense Companies Should Prepare for the Next Congress

Last week’s midterm election results have catalyzed swift statements on the congressional oversight agenda of potential incoming leadership, and oversight of the U.S. Department of War (DoW)1 — and the defense companies with which it does business — is high on the list. On November 4, 2026, Rep. Adam Smith sent a letter to his Democratic colleagues seeking their support to serve as chairman of the House Armed Services Committee (HASC) in the 120th Congress convening in January 2027. Rep. Smith identifies “vigorous oversight” of the DoW and the Trump administration as his top priority if he is given the gavel, and his agenda expressly includes examining “contracts and other financial support awarded to private companies to ensure they are in the best interest of the taxpayers, are free from conflicts of interest or favoritism, and were awarded consistent with legal authorities and procedures.” 

Rep. Smith’s prior experience chairing HASC in 2019 and 2020 during the first Trump administration offers a preview of the resistance congressional investigators may encounter. Recognizing the likelihood of this resistance, Rep. Smith may start by sending subpoenas to senior officials at the DoW, but he will likely swiftly turn to companies doing business with the Pentagon as potential sources of information responsive to his inquiries. 

Rep. Smith does not have subpoena authority yet, and his bid to chair HASC must be approved by party leadership. Regardless of final committee assignments and leadership, the focus areas he identifies still reflect shared concerns within the Democratic caucus. But the writing is on the wall: Pentagon spending and the businesses benefiting from it will likely become a focal point of congressional scrutiny. Our recent Law.com article noted that companies’ relationships with the Pentagon could make them targets in broader political battles. Rep. Smith’s letter now gives defense companies even more reason to prepare for the investigations ahead. 

Government May Be the Target, But Companies Can Supply the Evidence 

Rep. Smith calls for more public testimony from senior Pentagon officials and proposes reestablishing an Oversight & Investigations Subcommittee. His potential oversight topics include military operations abroad and military deployments to U.S. cities. Those priorities concern administration decisions, but his proposed scrutiny of private-company awards reaches directly into the defense industrial base. 

The questions he identifies are concrete: Were contracts and other financial support in taxpayers’ best interests? Were awards free from conflicts of interest or favoritism? Were they made consistently with legal authorities and procedures? Those questions could put a company’s own people and records at the center of an inquiry into government conduct. Award histories, communications with government officials, conflict disclosures, and explanations of procurement decisions are almost certain to be subpoenaed from companies to help congressional investigators assess administration conduct. 

Rep. Smith does not identify a particular company or award as improper. Instead, he is proposing to cast a wide net. All companies associated with Pentagon priorities — especially politically sensitive awards — may soon face demands to provide information, produce documents, and give testimony to explain their role even when the Pentagon, rather than the contractor, made the decision being investigated. 

A Contract File Alone Is Not a Response Strategy 

A company responding to questions about Pentagon decisions will need to protect sensitive information, preserve its government relationships, and ensure coordinated strategies across proceedings that may overlap in subject matter.  Key considerations include assessing the potential impact of recent legal developments, including an opinion issued by the U.S. Department of Justice’s (DOJ) Office of Legal Counsel concluding that certain communications with “private advisers” may be subject to executive privilege, and case law on the operation of rights and privileges in the congressional context. Moreover, due to the unique nature of government business, defense companies should also assess the risks posed to their information in the event of two kinds of inquiries: (1) those directed to the DoW that could call for contractor information in its possession, and (2) inquiries directly to the companies, which pose distinct considerations. And, as is the case in any policy debate, companies may field inquiries from both sides of the aisle that align with their specific investigative goals, albeit with differing investigative authorities reflecting their majority and minority statuses. The preparation team should therefore reach beyond the contracting department to other groups, including government contracts counsel, oversight counsel, government affairs, communications, and compliance. 

Companies with potentially sensitive Pentagon awards or financial support have a brief and closing window to prepare before the key priorities in Rep. Smith’s agenda ripen into requests.  They should work with experienced oversight and government contracts counsel to conduct a privileged review covering the following areas: 

• Identify likely points of scrutiny. Assess risk by reviewing significant or unusual awards, administration-facing communications, and transactions that could raise questions about political access, conflicts, favoritism, or taxpayer value.  
• Establish the factual record. Develop a reliable chronology of the award and performance history. Identify the records supporting the procurement rationale, relevant disclosures, deliverables, and costs.  
• Review preservation and information handling. Assess retention practices and any necessary revisions with counsel. Plan for handling classified, export-controlled, proprietary, and other sensitive material before an inquiry arrives. 
• Set response authority. Designate who receives congressional correspondence, who approves engagement with committee staff, and who coordinates legal, business, and public communications.  
• Assess overlapping exposure. Consider how a congressional response could affect existing disputes, regulatory matters, contractual obligations, stakeholder communications, and shareholder considerations. 

Rep. Smith’s letter is an early statement of things to come and highlights priority focus areas that have percolated in the halls of Congress since last year. Once he and his fellow Democrats are sworn into the majority on January 3, 2027, those statements will swiftly turn into subpoenas. Companies should act now to prepare