In a move to modernize the Pentagon and expedite the integration of new technologies, Defense Secretary Pete Hegseth on Nov. 7 presented a comprehensive plan to overhaul the Department of Defense's procurement and regulatory frameworks. Speaking to industry leaders at the National War College, Hegseth emphasized the need to move away from reliance on custom-built systems from traditional defense contractors and embrace commercially available solutions.
Hegseth’s proposals are expected to be welcomed by commercial space and defense technology companies seeking quicker acquisition processes and more opportunities to offer off-the-shelf solutions to the military. “The defense industry financially benefits from our backwards culture, schedule overruns, huge order backlogs,” Hegseth stated. “Our military and our taxpayers need a defense industrial base that it can count on to scale with urgency in a crisis, not one that is content to wait for money before taking urgent action.” He urged major defense contractors to prioritize speed and volume, and to invest their own capital to achieve these goals.
Drawing inspiration from a 2001 speech by former Defense Secretary Donald Rumsfeld, Hegseth highlighted the persistent bureaucratic challenges that hinder innovation. Hegseth noted the system “prioritizes process and paperwork over the urgent and evolving needs of forces in the field.” He asserted that the reforms are designed to “better align the defense bureaucracy with the realities of modern warfare.” The new approach will prioritize “commercial products and offerings…[as] the default policy.”
This shift could create new opportunities for commercial space and technology firms, which have struggled to penetrate the defense market under existing regulations. “We will harness more of America’s innovative companies to focus their talents and their technologies on our toughest national security problems,” Hegseth affirmed, promising companies more predictable demand and larger, longer contracts for proven systems.
Hegseth has tasked Undersecretary of Defense for Acquisition and Sustainment Michael Duffey and Undersecretary for Research and Engineering Emil Michael with spearheading the implementation. Planned changes include empowering program managers to “direct program outcomes, to move money and quickly adjust the priority of required sister performance to deliver on time and under budget.” Program executive officers will be re-designated as “portfolio acquisition executives,” each with the authority to “act without running through months or even years of approval chains.”
On the regulatory side, Hegseth aims to “remove excessive and burdensome regulations and reporting requirements, accounting standards, excessive testing, oversight, excessively long studies and analysis. Anything that unnecessarily slows down government contracts will be eliminated.” These adjustments aim to move the Pentagon away from “the current prime contractor dominated system defined by limited competition, vendor lock, cost plus contracts … to a future powered by a dynamic vendor space that accelerates production.”
Hegseth emphasized that his reform agenda builds on previous efforts, including executive orders from President Donald Trump promoting the use of commercial technology. He also acknowledged congressional support, such as the House’s SPEED Act and the Senate’s FORGED Act. Furthermore, Hegseth reiterated the plan to eliminate the Joint Capabilities Integration and Development System (JCIDS), calling it “slow and bloated and disconnected from reality.” He warned that U.S. adversaries are rapidly developing new capabilities, necessitating a more agile and responsive defense system.