Faster Capabilities For Warfighters With Dual Defense Acquisition

San Diego––Lt. Commander Rose O’Carroll, Division Officer of the METOC office aboard the USS Bonhomme Richard, shows a radar profile on one of the ship’s new advanced weather computers at the Naval Station in San Diego recently. Advances in technology have helped ships like these to get the latest, greatest data to the commanders and warfighters to use as a tactical advantage. (Photo by Don Tormey/Los Angeles Times via Getty Images)

Los Angeles Times via Getty Images

Re-Imagining Acquisition Reform

As the Second Trump Administration prepares the defining document for defense strategy, its National Defense Strategy, there is no problem more important than acquisition reform since this determines how fast capabilities get to our warfighters. Strategies to deter and confront adversaries are hollow without delivering the hard power of new and more voluminous warfighting capabilities. Over the last decade there have been numerous acquisition reforms including the creation of the Adaptive Acquisition Framework (in the first Trump Administration) and the increasing use of Other Transaction Authority instead of the Federal Acquisition Regulations. The Second Trump Administration has accelerated this pace of reform with four Presidential Executive Orders and the Secretary of Defense’s “Software Acquisition Pathway” directive. Congress is also directing further reform included in the SPEED and FoRGED Acts which emphasize using commercial technology where possible. While all these reforms are headed in the right direction, the major drawback is the “one-size-fits-all”approach for all types of acquisition.

With the complexity of buying multi-billion dollar ships as well as software and low-cost drones, a single acquisition system may be the obstacle to delivering capabilities at the pace warfighters need. Why should we use the same process to specify all of what’s required on an aircraft carrier with a 50- year service life that we use to buy attritable drones? The highest impact reform would be to create a second acquisition system: complementing the current system for large defense platforms, this second system could operate in parallel with a much faster cycle time for any items the commercial world can supply without bespoke military requirements.

Maintaining Technological Advantage

Historically, the United States has maintained decisive military advantage due, in large part, to superior technology capability through technology DoD invented or helped create. Today, the U.S. military is increasingly drawing upon commercial technologies like AI, cyber, space and unmanned systems which are being developed by companies outside the traditional defense industrial base in Silicon Valley and other innovation hubs. Former Secretary of Defense Ash Carter foresaw the need to re-connect the military to Silicon Valley when he created the Defense Innovation Unit, Defense Innovation Board and the Defense Digital Service a decade ago.

Further, as we incorporate the lessons of recent conflicts in Ukraine and the Middle East, there is a growing awareness that the U.S. needs more than its large platforms (ships, tanks, planes) to be effective including commercial capabilities such as lower-cost, higher-volume unmanned systems, AI-based software capability and space-based platforms. This high/low mix or “hedge strategy” makes our military stronger through an increased breadth of capabilities which is easier to scale rapidly and more interoperable with allies.

The DoD procurement system, which is actually the combination of three interdependent processes of requirements, acquisition, and budgeting, has historically delivered new capabilities in 7 to 27 years—clearly not fast or agile enough to deliver capabilities warfighters need to address rapidly evolving threats made possible through new technologies.

Increasing Importance of Commercial Technology

Given its increasing importance, not having an effective approach to rapidly adopt commercial technology is a glaring weakness for DoD. Technologies such as advanced communications, AI software, unmanned systems, satellite imagery, and many others can be rapidly purchased from credible commercial vendors to deliver novel capabilities at a fraction of the cost of dedicated defense technologies just as SpaceX demonstrated by revolutionizing launch capability.

To modernize faster, DoD requires an order of magnitude increase in its adoption of commercial technologies. Commercial technologies have non-trivial differences from strictly defense technologies. First, commercial technologies are produced in massive unit volumes—sometimes in the millions—often led by the global consumer market as is the case with small drones. Second, in addition to larger volumes, commercial technologies evolve at a much faster speed than defense technologies with products refreshed on 12-18 month cycles instead of decades. As a result, DoD needs to move much faster in assessing and fielding these technologies. Third, commercial technologies such as AI software or commercial satellite imagery are not Service-specific. We do not need special versions for the Navy or the Air Force (even though at DoD, we often try to create these) and, in fact, creating special versions by Service makes it more difficult and costly for commercial suppliers to do business with DoD. Fourth, and maybe most relevant, since DoD does not control the global diffusion of these technologies, slow adoption creates an asymmetric disadvantage for the U.S.military if our adversaries adopt more rapidly.

These differences are extremely relevant for future conflicts where our adversaries effectively employ commercial technologies. For example, when U.S. troops were stationed in Mosul, ISIS sent small drones, purchased on e-commerce platforms like Amazon, with grenades to kill American soldiers. Countries such as Azerbaijan and Ukraine quickly adapted commercial technology in new ways to gain an edge on the battlefield. Azerbaijan decisively won the Nagorno-Karabakh Conflict against Armenia due to its use of commercial drones. More recently, the Ukrainians are effectively employing small aerial drones to destroy Russian tanks and maritime drones to destroy Russian capital ships. DoD must add new capabilities like these in one to two years rather than the historical timeframe of one to two decades; however, this will not happen if we remain rooted in a half-century old acquisition process suited only to defense-specific technologies. DoD must reform its sequentially-oriented requirements, acquisition, and budgeting processes to adapt to an environment where industry is leading technology development. The current sequential process lags commercial product cycles and delivers technology several generations behind, which is the equivalent of supplying flip phones and fax machines to our warfighters.

The Fast Follower Paradigm: Envisioning a Parallel Acquisition System

For commercial technologies that DoD does not invent or specify, DoD must become a Fast Follower to gain rapid access to these technologies to maintain technological parity with adversaries. DoD should create a parallel acquisition system that modifies the three elements comprising today’s acquisition system: first, requirements, where commercial technology negates the need for the time-consuming process of detailed specification of solutions; second, acquisition, where new adaptive acquisition frameworks (for urgent capability or middle tier) can be adapted for commercial technology and OTAs can be used instead of the FAR; and, third, budgeting, where new commercial solutions enter the market on a faster cycle than the three-year defense budget cycle and much faster than the refresh rate of traditional defense technologies which can be decades or more for major platforms.

Therefore, key tenets of a Fast Follower paradigm include:

1. Eliminating the requirements process for commercial technologies and replacing it with simple approvals of the need for a capability. We do not need to develop detailed specifications for products the commercial market already builds; in fact, such specifications will limit both creative problem solving and the number of suppliers competing for defense contracts. Additionally, the verification and validation processes to ensure the requirements are complete and accurate are also unnecessary. Lastly, the operational test and evaluation process—necessary for uniquely military items—is also unnecessary as long as there is a test plan included as part of the prototyping process. Eliminating the requirements, validation, certification and unique testing processes can save years in delivering capability to warfighters.

2. Applying the best practices of commercial procurement which means applying to the maximum extent non-consortia Other Transaction Authority through Commercial Solutions Openings. CSOs maximize competition while minimizing the opportunity costs for participating vendors. The CSO is simply a structured competition for solutions to a military problem which includes objective criteria for a vendor down-selection process followed by testing solutions in a military environment and, finally, placing chosen vendors on a prototyping contract. CSOs can translate classified problem sets to unclassified challenges and require as little as a five-page white paper or slide deck which encourages more vendors to compete. One additional key feature of CSOs is the ability to incorporate warfighter feedback through testing competing solutions. Real-time feedback has a direct analog to the commercial world where companies test beta versions with end users and iterate based on feedback to develop a solution that meets customer needs; this is the essence of agile development. Within the military, that feedback should leverage expertise from Combatant Commands since these organizations are literally on the front lines and face the most pressing operational needs.

The Defense Innovation Unit exclusively applies these CSO practices with the aim of placing companies on contract within 90 days; this fast and vendor-friendly process attracts, on average, more than 50 vendors for each competition. With an OTA, if a vendor successfully prototypes a solution, there is no required re-compete at the end of the prototyping period, so DoD can immediately scale the solution. Using a CSO instead of a FAR-based contract can save years in the process and, by incorporating warfighter feedback, ensure that new technologies are deployed instead of collecting dust in warehouses.

3. Providing a consistent demand signal for the market by budgeting for a capability rather than a requirement. Different from a program of record, which reflects a rigid requirement and often a single vendor, a capability of record signals the need for ongoing capability, such as for small drones. With continuity in budgeting, DoD can assess technology on a more continuous basis, choose the best vendor at a point in time, and refresh that capability with a frequency that matches commercial product cycles. Vendors would see a consistent demand—which would encourage investment in productive capacity—and likely expand the choice of solutions to better compete.

Today, almost all of the buying offices at DoD are housed within one of the Service branches—Army, Navy, Marines, Air Force or Space Force. DoD may need to create non-Service-specific buying offices since it is not clear where in DoD non-Service-specific technologies like small drones or AI software should be assessed and procured. The current situation where each Service buys its own versions of commercial items splinters demand into different products which, in turn, offsets DoD’s volume-based buying power. Instead, DoD could establish a center of expertise for each of these commercially-oriented technologies and budget for these so that the buying office is not dependent on the Services for budgets. The Special Competitive Studies Project has suggested one approach for this in creating a Joint Warfare and Innovation Command to oversee these non-Service-specific buying offices and ensure adherence to a set of principles including speed to assess and procure rapidly, refresh rates of technology consistent with technology product life cycles, and satisfying the needs of the Combatant Commands and Services’ unique missions.

Buying based on capabilities—rather than requirements—allows DoD to adapt to rapidly evolving threats and procure solutions that were not even available when the budget was created three years earlier. Further, consistency of the demand signal would be enhanced with budgets for multi-year procurement. This is similar to the idea of budgeting for a portfolio of capabilities which was recommended by the PPBE Reform Commission with the key difference being the capability of record provides for consistency in demand signalling whereas the objective of the portfolio approach is to enable flexibility to move funds within the portfolio.

A Fast Follower paradigm has several key benefits: maximizing competition of solutions from multiple vendors; reducing costs by leveraging higher volumes of the commercial market; increasing speed and transparency of the acquisition process; and minimizing the opportunity cost for vendors to encourage participation in future competitions. In fact, a Fast Follower approach is a common sense adaptation of how technology is adopted in the commercial world. Much of what DoD buys beyond the large defense platforms could use this parallel system: commercial items plus any items where solutions already exist in the market and do not require government-paid internal R&D to develop a solution to evaluate. This allows DoD to leverage the ten-fold increase in defense tech investment by venture capital both for commercial items and even for non-commercial items like munitions and military drones.

How easily could DoD implement this parallel acquisition system? Almost immediately since it requires no new authorities from Congress, and only a change in internal processes. OTAs already provide the legal authority to contract differently, CSOs already form a blueprint for managing the process, and DoD could budget for these joint capabilities (non-Service-specific capabilities) in the next budgeting cycle. Congress has already shown the way with the broad categories for appropriated funds in the recently passed Reconciliation (or Big Beautiful) Bill when it allocated funds for broad categories like unmanned systems.

Conclusion

Maintaining the U.S. military’s technological superiority requires not only developing unique defense technologies like hypersonics and directed energy, but also following fast the innovations of our vibrant commercial technology sector in AI, unmanned systems, space-based platforms, and other technologies. Creating a parallel acquisition system for items that do not require military-unique specifications and where solutions already exist in the market is well within the existing authorities of the Department of Defense. Only the will to act prevents us from optimizing for speed and cost in acquiring much of what warfighters need. The U.S. innovation ecosystem is the envy of the world and the military can better leverage this system by reimagining a parallel acquisition system that moves at commercial speed. Continuing to deploy a one-size-fits-all approach for defense acquisition guarantees fewer choices and delivers last-generation capabilities for warfighters at high cost. As the military increasingly makes use of commercial technologies, the divergence in outcomes from what today’s warfighters need with historical acquisition becomes wider and increasingly dangerous.