What Experts Will Watch as the Pentagon Implements Acquisition Reform

When Defense Secretary Pete Hegseth rolled out an expansive acquisition reform agenda earlier this month, he promised aggressive implementation and reorganization aimed at transforming the way the Pentagon develops and fields weapons and platforms. 

Hegseth’s plans for eliminating cumbersome requirements processes, making program management teams more flexible and accountable, and prioritizing speed as a performance metric—which he revealed Nov. 7 in a speech to CEOs and Pentagon acquisition leaders—appear to have been well-received by past administration officials and lawmakers from both parties who have watched numerous ambitious acquisition reform proposals fade. Several experts who spoke with Air & Space Forces Magazine in the days since the rollout say the breadth of the Pentagon’s reform plan, its alignment with Congress in key areas, and the fact that senior officials are leading the charge, are all signs that this time, the changes may stick.  

“These are, without question, the most sweeping reforms and changes in the way the Department of Defense determines requirements, acquires those requirements, budgets for those requirements, and deals with the industrial base of any we’ve seen in 50 years,” said Arnold Punaro, a former Senate Armed Services Committee staff director, and now a defense consultant.  

However, the promise of reform carries with it some significant question marks, experts said. Will senior leaders provide top cover to program managers when something inevitably goes wrong? Will congressional appropriators give the right people within the department the right authorities at a time when trust between the executive and legislative branches is wearing thin? And could the scope of the Pentagon’s vision for reform prove to be too heavy an undertaking?  

In the coming months, experts said, they’ll be tracking legislative movements, risk-taking in the services, and programmatic changes for initial answers to these questions, which could shape the outcome of the Pentagon’s acquisition ambitions.

Building Trust with Congress

Hegseth’s strategy takes aim at much of the Pentagon’s acquisition bureaucracy—from requirements to program management to manufacturing and production.  

Among the strategy’s major moves is a plan to dissolve the Joint Capabilities and Integration Development System and replace it with a Requirements and Resourcing Alignment Board focused on the military’s top operational needs as defined by the Joint Requirements Oversight Council. The Pentagon also directs the military services to abandon siloed program management structures and replace them with a more flexible portfolio approach that condenses decision chains and gives program leads more authority to shift funding away from less relevant programs and toward higher-need capabilities.  

The strategy also calls for the military services to adopt a commercial-first mindset when crafting purchasing plans, looking for off-the-shelf systems that can meet mission requirements. To maintain competition, programs will be required to develop “multi-track” acquisition approaches where multiple vendors remain on contract, competing and offering buyers options as technologies mature prior to initial production. 

Many of these ideas align with proposals in recent years from bipartisan commissions and continue initiatives that began in past administrations. For example, Hegseth’s call to increase production and deliver affordable capabilities at scale has echoes of former Deputy Defense Secretary Kathleen Hicks’ Replicator initiative, which aimed to field large quantities of high-need systems—like loitering munitions, drones, and drone defense systems—on faster timelines. 

What differentiates DOD’s current reform movement from past internal efforts is it doesn’t just seek to create a shortcut within the current system, according to Michael Horowitz, former Deputy Assistant Secretary for Force Development and Emerging Capabilities. Horowitz, who served in the Pentagon during the Biden administration and worked on the Replicator initiative, said the key to Hegseth’s vision is that it’s not a workaround—it’s an uprooting of a lot of the processes that have impeded speed and scale. 

“I think this Pentagon deserves credit for taking a big swing at trying to address the pathologies at the center of the acquisition process,” Horowitz told Air & Space Forces Magazine. “They are making changes at the core of the process, designed to encourage competition and to encourage speed. Given the scope of the China threat and the rate of technological change, this is a very sensible approach.” 

The department’s reforms also reflect elements of proposals from Congress in this year’s National Defense Authorization bills. The Senate Armed Services Committee’s FORGED Act, short for Fostering Reform and Government Efficiency in Defense, would eliminate dozens of regulations deemed obsolete, require commercial-first acquisition strategies, and create portfolio acquisition executives with expanded authority—all core elements of the Pentagon’s strategy. 

There also several provisions from the bipartisan Streamlining Procurement for Effective Execution and Delivery, or SPEED Act, proposed by House Armed Services Committee Chairman Mike Rogers, R-Ala., and Ranking Member Adam Smith, D-Wash, including a proposed directive to overhaul of the Pentagon’s requirements process, a push for more commercial technology, and an emphasis on efficiency over regulation. 

That overlap means that the final NDAA will likely adopt many of the reforms proposed by the two chambers and included in the Pentagon’s transformation strategy. However, the bills do differ in some ways, and those differences could become sticking points as lawmakers refine a compromise version of the legislation in the coming weeks. A former senior acquisition official, who requested anonymity to speak freely about the legislation and Hegseth’s reforms, pointed out that the Senate’s FORGED Act takes a “slightly more aggressive posture” than the House’s bill and is more closely aligned with the Pentagon’s forward-leaning approach.  

One potential sticking point, the former official said, is the establishment of portfolio acquisition executives, or PAEs—an idea that has been proposed in the past but faced opposition from some lawmakers who argue it gives too much authority to program officials and limits Congress’ line-by-line oversight of the services’ spending.  Implementing a PAE structure requires communication and transparency between Congress and Pentagon at a moment where perceived executive overreach has eroded some of that trust, the former official noted. 

“If that tension seeped into the portfolio acquisition executive management structure, that could be a source of tension that causes Congress to tighten screws on the otherwise attractive amount of flexibility that they’re giving to these officials,” they said.   

That flexibility for PAEs, Horowitz said, is key to the Pentagon’s strategy.  

“Frankly, the thing that will make the PAEs successful is if they are able to move on from projects that aren’t working and reallocate funds to projects that are working to get capabilities out faster,” he said. 

Some elements of the transformation will also require buy-in from appropriators, who may be even more hesitant to cede authority. Elaine McCusker, resident scholar at the American Enterprise Institute and an acting DOD comptroller during President Donald Trump’s first term, said that while authorizers may be able to help “institutionalize” the Pentagon’s changes, the appropriators play a key role in providing the funding structure to support those shifts. 

“Without statutory appropriation law changes, the budget will be out of alignment with the portfolio program management approach in the acquisition transformation strategy,” McCusker told Air & Space Forces Magazine. “If that new management approach is going to be effective and last, the budget will have to support it.” 

Risk Tolerance and Top Cover

A major theme of Hegseth’s Nov. 7 speech was the need to take performance risks to deliver capabilities at speed.

“We mean to increase acquisition risk in order to decrease operational risk by taking greater calculated risk in how we build, buy, and maintain our systems,” Hegseth said. “An 85 percent solution in the hands of our armed forces today is infinitely better than an unachievable 100 percent solution endlessly undergoing testing or awaiting additional technological development.” 

The department’s public implementation plan lists a few ways it plans to reorient its processes, organizations, and incentives toward that goal. PAEs will implement performance scorecards that set incremental schedule milestones and incentivize on-time delivery. The plan calls for reducing documentation requirements and delegating responsibility for reviews and analysis to the services whenever possible.  

The Pentagon will also adopt an “adaptable test approach” to rapidly validate and certify capabilities. PAE teams will lead the way by reducing testing requirements. 

“When done well, the right balance will ensure operational safety, suitability, and effectiveness in system development, production, and sustainment while maintaining accountability to PAEs and program leaders to deliver program priorities within timelines, cost constraints, and acceptable levels of risk,” the strategy states.  

The strategy also includes parallel efforts to incentivize PAEs and the rest of the acquisition workforce to promote speed, make capability trade-offs when needed, and be held accountable to that objective.  

These provisions that call for greater risk-taking and then empower the Pentagon’s acquisition experts and lean more heavily on internal expertise create an important link between the department’s transformation goals and the internal culture that supports it, McCusker said. But if the department is going to empower the workforce to take risks, it also needs to continue to support that workforce in situations when those risks don’t pay off. 

“It will be important to see if during implementation the direction for increased speed and risk tolerance is backed up with top cover when things go wrong, as something inevitably will go wrong,” she said. 

That means that if the Pentagon says it’s willing to accept a faster solution that meets 85 percent of requirements, it needs to hold that line when its programs deliver a less-capable system or when that capability costs more than expected but is delivered on time, the former acquisition official said.  

“If you want to incentivize speed, make sure that you are creating either evaluation metrics or compensation or decision-making methods that protect people if they make a decision that supports speed but may incur a trade-off in cost,” they said. “Maybe it costs a little bit more to get it next week, as opposed to waiting a year when it’s going to be untimely.” 

Proof in the Pudding

One of the first programs in line to apply the Pentagon’s new approach is Golden Dome, the department’s nascent effort to field an integrated, layered homeland missile defense shield. While officials haven’t publicly discussed the architecture, at a high level, the plan is to stitch together a network of existing and new ground-, air-, and space-based systems built by a mix of legacy defense firms and new entrants.  

That project’s ambitions, according to Punaro, provide a prime opportunity to implement Hegseth’s reforms—from setting requirements to determining the acquisition strategy to budgeting and working with Congress to remove red tape and deliver on faster timelines. 

“Golden Dome would be a perfect petri dish for absolutely doing every single thing that they’re talking about,” he said. “Shame on us and shame on them if they don’t do that for Golden Dome. I fully expect them to.” 

Experts highlighted several other efforts to watch for near-term implementation, including the Air Force’s Collaborative Combat Aircraft, Navy shipbuilding, and the Army’s new plan to field 10,000 drones per month as soon next year. Evidence that these ideas are sticking will show up in how programs are managed, in the types of contracts DOD is awarding, in its approach to competition and rapid fielding, and in how industry responds to the new incentives.  

“If these things are happening at an increased rate, if competitions are displacing particular solutions at a more rapid clip, that could be an indicator that this is starting to work,” the former acquisition official said. 

Paul Sciarra, executive chairman at Joby Aviation—a dual-use electric aircraft company—said he’ll be watching first to see how quickly the military services respond to the deadlines laid out in the implementation plan.  

That plan directs the Air Force, Space Force, Army, and Navy to identify initial portfolios within 30 days and, in 60 days, craft a plan to transition all programs into portfolio management over the next two years. Among other deadlines is a mandate for the Pentagon’s acquisition executive to issue guidance to the services within 90 days on implementing commercial-first buying practices.  

“The real proof of the pudding will be in what happens at the end of these timelines,” Sciarra said. “Does it happen at the speed and in the way that it’s outlined? To some degree, the jury is still out. But it’s exciting to see the push, and I’m certainly hopeful and excited that there is more follow-through than we’ve historically seen around procurement reform.” 

Another area to watch is the types of capabilities the Pentagon is buying. Horowitz said there’s a growing recognition in the department that as much as it still needs exquisite platforms like aircraft carriers and the F-35, future wars will require an arsenal of attritable, low-cost systems that can be produced and fielded en masse. That will require a new mindset, he said—both from the department and Congress—and it’s important they maintain acquisition pathways that account for the nuances of buying both simple and more complex capabilities.  

“Implementing these reforms successfully requires following through on the promise to not just change how we are buying things, but to change what we are buying,” Horowitz said.