In a recent shift, the DoD is rolling out new rules aimed at tightening the reins on service contracts. A recent memo from Defense Secretary Pete Hegseth orders all DoD components to exhaust in-house options before turning to external contractors for consulting, advisory, or management services. The directive demands that any proposed contract must be accompanied by a certification proving that no internal team or agency could reasonably do the job—a significant barrier intended to push components to tap into existing personnel and resources.
The memo introduces strict thresholds: IT and management contracts exceeding $10 million and other professional services over $1 million will undergo high-level scrutiny. It also prohibits any attempt to dodge the policy through contract reclassification. While there are carve-outs for support related to weapons systems, the tone is unmistakable—the Pentagon wants fewer consultants and more in-house delivery. This push toward insourcing could spell turbulence for contractors but signals an effort to retain critical functions within the government’s control, even as broader plans to cut civilian employment by up to 8% are underway. It’s a curious balancing act: consolidate, streamline, and trim—but also bolster core internal capacity.
Layoffs: Veterans Affairs
The Department of Veterans Affairs is set to receive a 4% budget increase under the proposed FY 2026 plan, but that boost comes alongside significant staffing reductions. The Veterans Benefits Administration could lose about 2,000 positions—roughly 6% of its workforce—while the VA’s Office of Information and Technology is expected to cut 1,000 IT roles. These moves mark a shift from recent efforts to expand the VA’s tech workforce, including pay raises and hiring initiatives launched in 2023.
VA officials say the cuts target non-mission-critical roles and won’t impact claims processing, which is currently relying on mandatory overtime to reduce backlogs. However, some former officials and lawmakers have raised concerns about the department’s ability to maintain services and safeguard veterans’ data amid staffing reductions. While the administration argues the changes are part of a broader reform effort to improve efficiency, questions remain about the long-term impact on the VA’s capacity.
Hiring: NOrthrop Grumman
Northrop Grumman is on a hiring spree, with about 2,800 cleared positions currently listed on ClearanceJobs. The majority of roles require a Secret clearance (2,191 jobs), but there’s still strong demand for candidates with Top Secret (344) and TS/SCI (246) clearances. A handful of openings call for Confidential or Department of Energy Q or L clearances.
The jobs are spread across the country, with California leading the pack at 639 positions. Utah and Maryland follow with 451 and 396 openings, respectively. Other hot spots include Colorado (248), Alabama (221), and Florida (185). Even the United Kingdom makes the list with 44 positions available, pointing to the company’s broad geographic reach.
The defense sector demand remains strong, especially for professionals with active clearances and technical expertise.
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Opportunity to Watch
If you’re eyeing a future in the defense industry, now’s the time to sharpen your AI and software engineering skills. Micael Johansson, CEO of Saab—the largest defense manufacturer in Scandinavia—says demand for AI and data engineers is surging as modern warfare shifts toward software-defined systems. Saab, maker of the Gripen fighter jet, is hiring aggressively and expects software talent to play a central role as defense platforms become increasingly connected and updatable in real time.
Johansson noted that traditional manufacturing roles like welders and technicians remain vital, but software is becoming the backbone of next-gen defense. Lessons from Ukraine have shown how quickly battlefield technology evolves, with rapid cycles of innovation in areas like drone warfare. That pace means adaptability—and by extension, software flexibility—is now mission-critical. As defense companies transition to service-based models, opportunities for engineers skilled in AI and data are only expected to grow.
