EconDefense
IND-55 / Industrial capacity, capital and credit

Allow covered private borrowing costs in production and sustainment contracts

A discretionary pilot permits reasonable market-rate interest, bond discounts and capital refinancing costs to become allowable and allocable direct or indirect costs for covered inventory-management and capacity-expansion contracts. The financing is supplied by an independent financing entity; this is not a new DoD direct-loan or guarantee program.

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At a glance

Mission goalExpand production
Possible toolIND-55 · Contracts & purchases

Authority holder: Secretary of Defense

Contracts & purchases

Mechanism tags describe the source text; they do not expand the authority.

Availability and verification

Enacted discretionary pilot authority; establishment, implementing procedures and transaction funding must be verified.

Requirements and limits

Eligibility & prerequisites

  • Secretary establishes pilot after briefing congressional defense committees on material/inventory audit compliance
  • Covered activity manages production or sustainment inventories, or materially expands production/sustainment capacity through capital expenditure
  • Cost paid to independent Federal/State-organized financing entity engaged in financing business; not under common control with borrower
  • Financing costs reasonable and consistent with market rates; material/inventory management audit requirements satisfied

Limits & exclusions

  • No authorization of financing-cost treatment for covered contracts entered on or after Dec.31,2029
  • Government termination liability capped at funding obligated when terminated
  • Financing entity is not a subcontractor solely by participating
  • Pilot establishment and current implementation guidance not verified

Funding conditions

  • Contract payments subject to availability of appropriations for purpose; financing-cost allowability does not itself provide funds or create government credit subsidy authority.

Read the funding and execution guide

Who contributes what

Need & planning

  • DoD acquisition and program sponsors
  • Defense Pricing, Contracting, and Acquisition Policy / Price, Cost and Finance directorate (relevant policy office; pilot-specific assignment unverified)

Resources

  • Component covered-contract budget and resource sponsor

Approval

  • Secretary of Defense for pilot establishment; authorized officials under any resulting implementation
    Office profile

Execution

  • Covered-contract contracting and pricing teams under implemented pilot

Partners & review

  • Independent financing entity
  • Contractor and subcontractors
  • Material/inventory audit officials
  • Congressional defense committees

Office links are editorial matches to the original role text, not verified delegations. Composite labels and unmatched actors are preserved.

Coordination pathway

Requirement sponsor → named planning office → resource owner and counsel → statutory approving official → authorized executing/contracting office.

Actor and execution-role sources

Legal basis

What this research establishes

Legal powerSource and conditions recorded
EligibilityProject-specific check needed
Available fundsBalances not verified
DelegationValid signature authority must be checked
ExecutionOffice capacity and approvals must be checked

Confidence: High on statutory permission; execution roles are organizational routing, not verified individual delegations.

Currentness: Full enacted FY26 NDAA §803 read; applies only to covered contracts entered before Dec.31,2029. Report due Feb.15,2028 if pilot established.

Research target: October 2, 2026. A record-specific last-review date is not supplied. Publication date is not legal-currentness certification.

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