Senate Version FY26 NDAA Focuses on Supply Side for Small Drones

The Senate’s version of the Fiscal Year 2026 National Defense Authorization Act (NDAA) takes a different approach to unmanned aircraft systems than the version passed by the House earlier this month. While the House bill builds on previous restrictions related to drones from foreign entities, the Senate bill emphasizes strengthening the U.S. small drone manufacturing base.

Section 842: Small UAS Industrial Base Remediation Plan

Section 842 of the Senate bill is titled “Small unmanned aircraft system industrial base remediation plan.” It directs the Department of Defense to develop a strategy to ensure that the U.S. industrial base can meet requirements for small unmanned aircraft systems (sUAS).

The legislation states:

“Not later than March 1, 2026, the Under Secretary of Defense for Acquisition and Sustainment, acting through the Joint Production Accelerator Cell and the Assistant Secretary of Defense for Industrial Base Policy, shall submit to the congressional defense committees a strategy to ensure that the national technology and industrial base is able to meet the requirements of the Department of Defense for small unmanned aircraft systems and components of such systems.”

The plan must be developed in coordination with the military services, the Defense Advanced Research Projects Agency (DARPA), and the Defense Innovation Unit (DIU).

Funding Priorities and Onshoring

The strategy is required to include recommendations for prioritizing funding to strengthen domestic production. Specifically, the law calls for a plan to:

“prioritize the expenditure of funding available to the Department of Defense to expand and modernize manufacturing capacity of the national technology and industrial base for small unmanned aircraft systems components and finished articles… by establishing—
(A) onshore production of such components;
(B) private facilities for the production of such components;
(C) government-owned, contractor-operated facilities for the production of such components; and
(D) government-owned, government-operated facilities for the production of such components.”

Independent Review of Industrial Base Capacity

The bill also directs the Department of Defense to contract with a federally funded research and development center (FFRDC) to conduct an independent review of the small UAS industrial base. The review must consider capacity, the potential for new entrants, vendor qualification, program demand mapping, and critical material needs such as rare earth elements and lithium. That review is due to the Department of Defense by September 30, 2026, and must be transmitted to Congress within 30 days of completion.

Supply Side vs. Restriction Focus

This approach differs from the House version of the NDAA, which emphasized restrictions on drones and related equipment produced by foreign entities. As reported previously, the House version of the bill would expand FY25 NDAA language requiring risk assessments of drones, software, and spectrum equipment tied to Chinese manufacturers.

In contrast, the Senate’s Section 842 focuses on bolstering U.S. production capacity by directing DoD to identify gaps, fund onshoring, and strengthen the industrial base for small UAS. Rather than imposing additional restrictions, the Senate version looks to the supply side of the issue, seeking to ensure that U.S. manufacturing can meet defense requirements.

Next Steps

The House and Senate will need to reconcile their versions of the NDAA in conference later this year. The outcome will determine whether the final legislation leans more heavily toward restrictions, supply-side expansion, or a combination of both approaches.