New DoW Policy Requires Proactive HSR Filing Submissions for Defense-Related M&A Transactions
In February, the Department of War (DoW) announced a significant procedural change affecting mergers and acquisitions in the defense sector. Under new guidance implementing Section 857 of the Fiscal Year 2024 National Defense Authorization Act (NDAA), parties to certain Hart-Scott-Rodino (HSR) reportable transactions must now proactively submit their HSR filings to the DoW concurrently with their filings to the Federal Trade Commission (FTC) and Department of Justice (DOJ). Companies should carefully assess whether their transactions will trigger this new notification requirement.
Background: The War Department's Role in M&A Review
The DoW plays a critical advisory role in the review of defense-sector transactions. As the primary customer for defense products and services, the DoW collaborates with the FTC and DOJ to assess whether proposed mergers may adversely affect national security, the defense industrial base, or long-term innovation in critical technologies. While the FTC and DOJ retain ultimate enforcement authority, DoW input can be highly influential in shaping the agencies’ enforcement decisions.
In the past, the FTC and DOJ would consult with the DoW on an as-needed basis. If consulted, the DoW would conduct its own investigation before providing a recommendation on whether the deal warranted further scrutiny. Previously, there was no formal requirement for parties to proactively notify the DoW of their transactions.
This framework changed with the passage of the NDAA in December 2023. Section 857 of the NDAA requires parties to proposed mergers or acquisitions "that will require a review by the [DoW]" to "concurrently provide such information to the [DoW] during the [HSR] waiting period." However, the statute provided little clarity on which transactions triggered this requirement or how parties should submit their filings. In practice, parties continued to submit filings only upon DoW request.
February 2026 Policy Change
The DoW's February 2026 guidance formalized the process and shifted the compliance burden to the deal parties. Under the new policy, parties must proactively notify the DoW if a proposed transaction meets one or more of the following criteria:
- Defense Directed Business: Either party currently, has a history of, or intends to contract with the DoW or perform as a subcontractor on a DoW contract.
- Critical Technologies: The M&A transaction involves one of the six critical technologies vital to U.S. national security. These technologies include applied artificial intelligence, biomanufacturing, contested logistics technologies, quantum and battlefield information dominance, scaled hypersonics, and scaled directed energy.
- Defense Industrial Base Sector: The M&A transaction involves aspects of the Department of Homeland Security's Defense Industrial Base critical infrastructure sector.
- Intellectual Property: One or more of the parties have patents, trademarks, copyright protections, or trade secrets in the above critical technologies or critical infrastructure.
Importantly, the DoW has stated that these criteria are non-exhaustive.
Submission Procedures
Parties to transactions meeting one or more of the above criteria must email the DoW M&A Division at: osd.mc-alex.ousd-a-s.mbx.ma-division@mail.mil. This email must:
- Inform the DoW that the parties are contemplating or engaging in an M&A transaction that may require premerger review; and
- Confirm whether the parties submitted the HSR Notification and Report Form to the DOJ and/or FTC.
The DoW will then respond within one business day with instructions for submission of the Notification and Report Form and additional materials to the DoW through secure channels.
Notably, Section 857 of the NDAA and the DoW policy are in slight conflict: the NDAA requires notice for parties who must submit HSR filings, while the DoW policy also requires notice for parties who are simply "contemplating" an M&A transaction.
Key Takeaways
- Early assessment is essential. Companies should evaluate NDAA Section 857 applicability during the early stages of deal planning and HSR preparation. The broad scope of the notification criteria (particularly the Defense Directed Business category) means that many transactions will now trigger DoW notification requirements.
- Expect expanded DoW involvement. This policy change significantly broadens the universe of transactions subject to DoW review.
- Because the FTC and DOJ are unlikely to close their HSR reviews while the DoW is still evaluating a transaction, this expanded scope of DoW review may lead to extended review times and increased transaction costs for deals that previously would not have attracted DoW attention.
- The non-exhaustive nature of the notification criteria and the tension between the statutory text and the DoW's guidance create compliance uncertainty. Until the DoW provides further clarification, parties who are unsure whether a transaction meets the criteria for DoW notification should contact the DoW M&A Division at mc-alex.ousd-a-s.mbx.ma-division@mail.mil.
For more information on the DoW's new policy requiring proactive HSR filing submissions for certain defense-related M&A transactions, please contact Scott Claassen, Jeetander Dulani, Heather Franco, Nicci Warr or the Stinson LLP contact with whom you regularly work.
