By Sandra Erwin

Welcome to this week's edition of SpaceNews' Military Space, your source for the latest developments at the intersection of space and national security. In this week's edition: DoD awaits 2026 budget details and sweeping cuts for DoD's testing office. 

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SpaceNews wants to hear from government civilians, military service members and contractors about changes within the Pentagon and throughout the government. You can contact me at serwin@spacenews.com or SandraErwin.43 on Signal.

Defense budget details still under wraps

The White House Office of Management and Budget on Friday released a 1,224-page Appendix for the fiscal year 2026 federal budget request. For the Department of Defense, this document includes topline numbers for the base budget, but not the portion that would be added from a massive reconciliation bill the House passed last week in a 215-214 vote and sent to the Senate. 

The administration’s 2026 budget proposal would keep base-level defense spending flat at $892.6 billion. An additional $113 billion is in the reconciliation bill.

• A more detailed defense budget request is expected to be released by OMB later this month. 

• Without the reconciliation package, the Space Force stands to lose ground. The appendix identifies a little more than $26 billion for the military space branch, a drop from the $28.7 billion it received in fiscal 2025. That figure already fell short of the service’s 2025 request by $800 million.

• Allocations for the Space Force include $1.5 billion for military personnel, $5.8 billion for operations and maintenance, $3.4 billion for procurement, and $15.5 billion for research, development, testing and evaluation.

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DoD slashes testing office, drawing fire from Hill

The Pentagon is moving to downsize and restructure one of its key internal watchdogs. In a reorganization announced last week, Defense Secretary Pete Hegseth ordered a more than 50% cut to the Office of the Director of Operational Test and Evaluation (DOT&E) — the department’s top authority for independently assessing the effectiveness and suitability of military systems before deployment.

• The office will shrink from 94 personnel to 46, including a sharp reduction in civilian staff and the elimination of all contractor support within a week. Only 30 civilian and 15 military employees, along with one senior executive, will remain. Carroll Quade, a former Navy test and evaluation official, has been tapped as acting director to manage the overhaul.

• In a statement, Hegseth said the move follows an internal review that found “redundant, non-essential, non-statutory functions” within DOT&E that were inconsistent with the department’s goals for “operational agility” and cost-effectiveness. The Pentagon projects more than $300 million in annual savings from the change and argues it will accelerate the delivery of weapons systems to warfighters.

Critics say the cuts threaten independent oversight and compromise military readiness. Sen. Jack Reed (D-R.I.), the top Democrat on the Senate Armed Services Committee, blasted the decision as “reckless and damaging,” warning it could open the door to untested, flawed systems reaching the field.

“For decades, DOT&E has played a vital, legally mandated role in safeguarding the integrity of major defense programs,” Reed said in a statement. “With staffing reduced to a skeleton crew and limited contractor backing, DOT&E may be unable to provide adequate oversight for critical military programs.”

The reorganization comes alongside a broader crackdown on the use of IT consultants and management contractors across the Department of Defense.

• In a separate directive, Hegseth imposed new requirements for justifying and approving such contracts, including a mandatory 30-day review and approval by the Deputy Defense Secretary or designee. The goal: curb reliance on third-party integrators, bring more expertise in-house, and eliminate duplicative services.

• The new policy applies to advisory and assistance contracts such as strategic studies, management support and policy recommendations.

Space Command’s current HQ setup ‘not sustainable,' warns GAO

A new Government Accountability Office report released last week casts fresh scrutiny on the decision to keep U.S. Space Command’s headquarters in Colorado Springs.

• The report affirms that Redstone Arsenal in Huntsville, Alabama, consistently emerged as the preferred location across several rounds of Air Force analysis. President Joe Biden announced in July 2023 that Space Command would remain in Colorado, citing military readiness concerns during a “critical period.” 

• The watchdog’s findings also highlight the strain on current operations in Colorado Springs. Space Command is spread across four aging facilities — two on military installations and two in commercial office space — with three of the four buildings dating back more than four decades. Command leadership told the GAO the setup is “not sustainable” and would require roughly $1.5 billion in military construction to support long-term operations. That construction is stalled due to a funding freeze.

• Staffing challenges remain acute. As of fall 2024, significant vacancies persisted, with officials citing uncertainty over the headquarters’ future location as a key obstacle to recruitment. Contractors are filling many of the gaps.

While the Air Force has projected a $426 million savings over 15 years by relocating to Huntsville, the GAO noted the department’s analysis was incomplete and lacked a full accounting of life-cycle costs, making an apples-to-apples comparison difficult.

The report adds fuel to the political fire between Colorado and Alabama lawmakers that started after the Trump administration designated Huntsville as the preferred site in January 2021.

U.S. Space Command, which oversees the military’s space operations and monitors threats from China and Russia, has operated out of Colorado Springs since its establishment in 2019. 

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