Not Gonna Happen

Still, it is heartening that the Senate Armed Services Committee has Added a provision to the national defense authorization act that would require Pentagon pre-approval before engaging in stock buybacks or paying dividends.

Even if this were to make it into the final bill, the Pentagon would never enforce it.

Just look at the fate of the march in rights in the Bayh-Dole Act of 1980.  The have never been used.

Still it is nice that the problem has been identified. 

The Senate Armed Services Committee approved a must-pass bill with a provision that could bar some defense contractors from executing stock buybacks or paying dividends unless they have Defense Department approval.

The measure, an annual bill known as the National Defense Authorization Act, was approved 18-9 in a closed-door committee meeting last week. The stock buyback provision’s inclusion in the committee’s bill greatly increases its chances of becoming law and sets up a potential sea change in how the Pentagon interacts with some of the country’s largest businesses.

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The provision in the bill, Section 815, specifically would prohibit the Pentagon from entering into contracts with contractors unless the contractor agrees in writing not to “purchase an equity security of such entity, or any parent entity of such entity, that is listed on a national securities exchange” or “pay dividends or make any other capital distribution with respect to the equity securities of the entity.”

The provision would take effect June 15, 2027. The defense secretary could agree to waive the limitation if the contractor provides a “qualifying defense investment plan.”