Defense technology and national security companies and contractors are trying to ramp up production after a record-setting government shutdown that lasted over 40 days and limited funding mechanisms.

The 43-day shutdown concluded Nov. 12 when enough Senate Democrats crossed the aisle despite their party not reaching a long-term solution for Obamacare-related extensions. President Donald Trump signed a congressional bill keeping the government funded until Jan. 30, 2026, with benefits for Supplemental Nutrition Assistance Program (SNAP), women, infants and children (WIC) benefits, and the Department of Veterans Affairs (VA) being funded until September 2026.

The shutdown impacted millions of Americans in myriad ways, notably affecting federal workers in the national security/defense sector and at airports where air traffic controllers became limited. Military families also visited food pantries at accelerated rates while work-related payments were put on hold.

Business startups like Arlington, Va., based Rune Technologies, which receives private capital but also depend on government funding to accelerate defense and security initiatives, faced their own funding lapse which leaders say will negatively impact projects that have long been in the pipeline.

“We employ people, those people need to be paid at a certain point; we need to keep moving forward,” Rune co-founder and CEO David Tuttle told Military.com^[1] on the precipice of the government’s reopening. “There's actually the human impact aspect of it.

“And then [there’s] the programmatic side, right? When you choke off the RDT&E (Research, Development, Test, and Evaluation) money that needs to happen to do these things, we're never going to get that time back.”

Rune, owned and operated by individuals with military experience from the U.S. Army and U.S. Marine Corps, to the Joint Special Operations Command and DARPA, as well as experience in the private technology sector, provides logistics technology innovation.

The shutdown led to delays on Rune’s new starts and other opportunities put on the backburner.

Ramifications of Closed Government

The longest shutdown in U.S. history will have an impact in the weeks and months ahead, as funding mechanisms vary and a flurry of businesses and companies rely on contracts to stay viable.

While some with already funded contracts could in certain capacities continue as usual, others awaiting contract modifications, renewals or finalizations, etc., were left in the dark due to the financial lapse. Contracts requiring additional financial capital were also put on hold.

BDO, an international company that provides clients with assurance, tax and financial advisory services, put the onus on the government contractors to “pick up the pieces.”

“Many government contracts may be modified to reduce payments that contractors would have received if there was no shutdown, and some contracts may be terminated,” BDO wrote in the shutdown’s infancy. “Contractors may be forced to furlough or lay off employees due to the shutdown as well.”

A statement and fact sheet published by the Republican-led House Armed Services Committee on Oct. 23, which blamed Democrats for "serious national security consequences," describes various ill-fated effects of the closure that included weakened nuclear deterrents and military service members working without pay.

"The military cannot enter into new contracts or renew existing contracts during the shutdown, needlessly delaying the acquisition of critical capabilities for our warfighters," the fact sheet reads.

Another line within states: "Critical exercises have been delayed or cancelled, including activities to deter China through new capabilities testing, validating operational concepts, and informing force posture. Military exercises with the Philippines have been canceled. Planning for large-scale military exercises has been postponed. Ongoing intelligence that informs weapons development and predicts geopolitical conditions has been stopped, hurting our ability to equip our troops and prepare for future threats."

Tuttle acknowledged benefits his company gets through private capital to keep moving forward on product development, but starting new programs has been a hindrance.

“And last time I checked, our greatest global adversary [China] is not stopping with their development anytime soon,” he said. “So, I think it puts us in a spot where now we're catching up even further…every day that goes by.”

Companies, Contractors Should Expect 'Lag'

Staying ahead in the digital age is on the minds of Tuttle and countless others, including those spread out across the U.S. defense and tech sectors.

The days of shooting 100 rounds in a tank-heavy military conflict are long gone, Tuttle said. That transition from long-held strategies and ubiquitous artillery is now a conversation revolving around supply chains, drones, AI, logistics, and achieving a tactical edge over adversaries.

“If you don't have any kind of digitization or any kind of software platform that can work at those tactical levels, you can never fix this problem,” he said. “You can never have this future vision, which I think everyone has at this point, which is like tactical, connected to operational, connected to strategic, all the way back into the defense industrial base to drive manufacturing production. I think that's the vision everybody wants.”

What everyone wants and how things shake out over time are different parts of the equation. As Tuttle and his company survey the landscape, they don’t necessarily characterize it as a supply chain problem but more so an operational plan with various maintenance requirements, munitions requirements, and sustainment.

“We feel that we can't just be a great technology company,” Tuttle said. “We also have to be a deeply doctrinally rooted military logistics company to have those things.”

And even though the shutdown is now done, funding remains a liability rather than a viability at this juncture.

“RDT&E money, and I'm not saying this is a bad thing, but RDT&E money was used to pay salaries over the last 40 days—which was the right ethical call to make,” Tuttle added. “But that money is going to have to flow back down to those accounts to happen. 

“So, we're going to see a lag…before some of these things can happen. And it just slows things down. The clock is ticking on capabilities and the adversaries’ capabilities.”

The United States is defending its deployment of drones to contested waterways, telling Military.com that China's maritime rhetoric has become "increasingly coercive."

American forces in recent days expanded surveillance in one of the world’s most contested waterways, deploying Marine Corps MQ 9A Reaper drones to the Philippines in disputed water where Chinese ships have repeatedly challenged Manila. The deployment drops U.S. unmanned aircraft straight into a volatile stretch of the South China Sea.

The deployment gives the Philippines around-the-clock eyes on waters where Chinese ships have escalated confrontations and tested how far Manila and Washington will go. It also strengthens the United States’ ability to monitor flashpoints as both countries compete for control of shipping lanes, reefs and shoals. The Reapers are already supporting missions that document, track and push back against hostile behavior.

White House Calls Out China

White House officials say China’s behavior remains a destabilizing force across the region. A senior administration official told Military.com the United States views Beijing’s actions as an urgent concern for allies and partners.

“China’s sweeping territorial and maritime claims in the South China Sea and its increasingly coercive actions to advance them at the expense of its neighbors continue to undermine regional stability and fly in the face of its prior commitments to resolve disputes peacefully,” the official said.

The U.S. remains committed to defending the Philippines under the 1951 Mutual Defense Treaty, the official added, saying, “The United States is and will always be a Pacific naval power."

Marine officials deployed the drones to support surveillance missions over waters claimed by both China and the Philippines. The aircraft give Manila longer-range reconnaissance capability as tensions rise around areas like Second Thomas Shoal and Scarborough Shoal.

“The temporary stationing of unarmed MQ-9As to the Philippines demonstrates mutual commitment to improving the collective maritime security and supports our common goal for a free and open Indo-Pacific,” the Marine Corps said in a statement regarding the deployment, per reports.

The deployment remains temporary and the drones are unarmed, a Marine Corps spokesperson told Defense News.

Military.com reached out to the Marine Corps, Indo Pacific Command, Pacific Fleet and the Philippine government for comment. The U.S. State Department declined to comment.

Contested Waters

The Asia Maritime Transparency Initiative says Chinese coast guard and militia ships have engaged in repeated blocking maneuvers and close intercepts near Philippine outposts at Second Thomas Shoal and Scarborough Shoal.

Analysts describe the encounters as part of an increasingly confrontational pattern across contested waters. U.S. Indo Pacific Command has also reported a rise in unsafe and unprofessional behavior by Chinese forces, and has documented multiple risky intercepts involving U.S. and allied aircraft and ships.

China has also accused U.S.^[1] and allied patrols of “escalating tensions,” a claim raised again during a recent regional patrol near the Philippines.

The deployment builds on expanded U.S. access to Philippine bases under the Enhanced Defense Cooperation Agreement^[2]. The broader alliance also recently held large scale combat drills, signaling Washington’s sustained commitment to the region. Additional context on regional activity is available from the Asia Maritime Transparency Initiative and Indo Pacific Command, which track maritime and aerial incidents across the theater.

Officials in Washington say they are watching the region closely. The drones are expected to continue flying long endurance missions that help chart militia vessels and naval activity. The flights also allow the Philippines to monitor its own resupply missions to disputed shoals.

China issued a sharp warning after U.S., Philippine and Japanese ships pushed through contested waters in the West Philippine Sea, challenging Beijing’s sweeping maritime claims and spotlighting one of the world’s most sensitive security flashpoints.

The three nations carried out the coordinated patrol on Nov. 14 inside the Philippines’ exclusive economic zone—a stretch of water Beijing claims as part of its South China Sea map despite a ruling rejecting those assertions. The operation featured U.S. carrier movements and joint maneuvers meant to reinforce regional security. China accused the three allies of provoking instability but did not cite any specific incidents at sea.

A senior administration official told Military.com the White House views China’s behavior as destabilizing, saying China’s “sweeping territorial and maritime claims in the South China Sea and its increasingly coercive actions to advance them at the expense of its neighbors continue to undermine regional stability and fly in the face of its prior commitments to resolve disputes peacefully.”
The official reaffirmed that Article IV of the 1951 U.S.-Philippines Mutual Defense Treaty applies to armed attacks on Philippine forces, vessels, or aircraft — including its Coast Guard — anywhere in the South China Sea, adding: “We are closely monitoring the situation in the South China Sea and remain committed to our alliance with the Philippines. The United States is and will always be a Pacific naval power.”

The move follows a series of recent escalations across the region. Earlier this year, U.S. forces briefly deployed two warships^[1] to a disputed South China Sea shoal after a Chinese vessel collided with a Philippine Coast Guard ship—an incident that underscored the rising risk of confrontation among regional militaries.

'Escalating Tensions'

China’s Southern Theater Command said its forces monitored the patrol closely and accused the three allies of raising tensions.

“The Philippines has been frequently colluding with external forces to carry out so called joint patrols, which seriously undermine regional peace and stability,” Senior Col. Tian Junli of the PLA Southern Theater Command said in a statement published by the Xinhua New Agency, the official state news media outlet of the People's Republic of China. “We urge the Philippine side to immediately stop provoking incidents and escalating tensions.”

Beijing continues to insist it has “historic rights” to the waters despite a 2016 Hague tribunal ruling that invalidate its claims.

Chinese officials did not respond to Military.com’s requests for comment.

State media followed with additional statements portraying the patrol as harmful to regional stability. China did not specify whether its naval or coast guard ships shadowed the operation.

Details Remain Limited

A U.S. Defense Department official confirmed to Military.com that the U.S., Japan and the Philippines conducted the Nov. 14 activity inside the Philippines’ exclusive economic zone, saying that the operation “demonstrated a collective commitment to strengthen regional and international cooperation in support of a free and open Indo Pacific” and that the patrol “proceeded safely and without disruption.”

Neither U.S. Pacific Fleet officials nor officials in Japan and the Philippines responded to inquiries.

U.S. officials previously said multilateral maritime activities with Japan and the Philippines support a free and open Indo Pacific, but they did not address this specific patrol.

The patrol also comes as the U.S. expands regional deterrence efforts. Earlier this month, Washington approved South Korea’s plan^[2] to build its first nuclear-powered attack submarine—a move analysts say signals a broader shift in U.S. posture across the Indo-Pacific.

Philippines Deepens Cooperation with Allies

The Philippines has strengthened its partnerships amid repeated encounters with Chinese Coast Guard ships across the West Philippine Sea.

Manila argues that joint patrols and closer coordination with the U.S. and Japan reinforce its rights inside its exclusive economic zone and deter further Chinese interference.

The Nov. 14 operation appeared to underscore that strategy by placing allied ships, including a U.S. carrier group, inside waters China wants to control.

Joint Patrols Expected to Continue

More joint maritime activities are expected.

The Philippines and U.S. have announced more than 500 planned military engagements for 2026, including expanded naval operations with partners such as Japan.

That plan, along with previous trilateral commitments outlined by Washington and Manila, signals continued cooperation at sea and has drawn repeated objections from Beijing.