The defense authorization bill, providing $662.4 billion for national defense programs along with plans to continue funding Lockheed Martin’s Medium Extended Air Defense System (Meads), passed in the Senate Dec. 15 by a vote of 86-13.

The bill also takes Lockheed’s F-35 Joint Strike Fighter to task for problems with development while in production. But it pushes out by one year an effort by Sen. John McCain (Ariz.), the top Republican on the Senate Armed Services Committee, to have Lockheed pick up the tab for cost overruns exceeding a certain amount.

“The Pentagon thus far has failed to incentivize the prime contractor to control costs. So a tougher measure, as embodied in this report, is warranted,” McCain said on the Senate floor before the bill’s final passage. “While I would have preferred the original Senate position that would have made the fixed-price requirement apply to the fifth lot currently being negotiated, I strongly support this provision.”

The road to passage was not easy for the defense policy bill. Provisions over how to handle detainees drew a veto threat from President Barack Obama but were reworked to ensure passage by both Democrats and Republicans.

McCain sought to terminate the tri-national Meads missile defense program, arguing that it has been poorly managed and is running behind schedule and way over budget. Plus, the government has no firm plans to buy the system at the end of its development in 2013. But the final version of the defense authorization bill blunted potential cuts, carving out 25% of this year’s request and asking the Pentagon to limit the scope of the program or renegotiate termination costs with the program’s international partners.

While that’s stern language for the program, the bill doesn’t contain an outright kill. Defense industry officials aren’t even breaking a sweat over the language. They note that Deputy Defense Secretary Ashton Carter has justified Meads in the past and is likely to go to bat for the program again, “sooner rather than later.”

The bill was the first under the congressional ban on earmarks, but an investigation by Sen. Claire McCaskill (D-Mo.) into the House version found 115 instances of congressionally directed spending worth up to $834 million. The amendments that put that spending in place were part of a carefully constructed process by the House Armed Services Committee. In the end, those 115 amendments were stripped from the final version of the bill.

The bill also capped reimbursements for defense contractors at $700,000, a figure that was too high for Sens. Barbara Boxer (D-Calif.) and Charles Grassley (R-Iowa), who sought to limit the amount to $400,000. “We have more work to do to whittle down the cap of the salary subsidy,” Grassley says. “The high cap is very disappointing.”

In approving the bill, Congress also makes a dramatic change to the leadership structure of the military, mandating that the chief of the National Guard Bureau be a member of the Joint Chiefs of Staff.