Faster Military Construction Reform Brings Legal and Operational Risks to Contractors

The U.S. Army and the Department of Defense are shifting procurement practices to accelerate military infrastructure delivery by up to 50% and reduce costs by 30%. Under reform initiatives and expanded Other Transaction Agreement (OTA) authorities in the 2026 National Defense Authorization Act, agencies are moving away from traditional design-bid-build delivery toward design-build methods and industrialized construction techniques like modular building. However, construction attorneys warn that these streamlined processes operate largely outside standard Federal Acquisition Regulation (FAR) frameworks, altering project risk allocation. Incomplete initial designs and accelerated procurement schedules could expose contractors to increased liability for cost overruns, scheduling disputes, and site delays. Legal experts emphasize that contractors must negotiate protective provisions individually, thoroughly evaluate their capacity for expedited schedules, and carefully manage collaborative design partnerships before committing to these federal projects.

Key takeaways

• The U.S. Army announced a military construction reform targeting up to 50% faster delivery and 30% cost cuts, prioritizing design-build and modular techniques over traditional design-bid-build delivery.
• The 2026 NDAA expands the Department of Defense's authority to utilize Other Transaction Agreements (OTAs) broadly across military facility repairs and construction, including planning, engineering, and execution.
• Attorneys caution that OTAs typically bypass standard Federal Acquisition Regulation (FAR) dispute clauses, meaning critical contractor protections must be negotiated individually rather than assumed.
• Legal experts warn that accelerated schedules and immature front-end designs may shift risks of cost overruns, labor shortages, and procurement drag directly to builders.