Modernizing DoD Acquisition: Strategies for Speed, Efficiency, and Innovation
Introduction
The DoD’s acquisition system is facing a crisis. As the U.S. confronts rising global threats, technological disruption, and constrained fiscal resources, the inefficiencies of the defense acquisition process are delaying the delivery of capabilities, increasing costs, and deterring non-traditional innovators from engaging with the DoD. Despite multiple reforms, procurement cycles remain too lengthy, regulatory complexity hinders agility, and bureaucratic hurdles impede the rapid adoption of emerging technologies, such as AI, quantum computing, and autonomous systems. If left unaddressed, these inefficiencies will undermine the U.S. military’s ability to maintain its technological edge over adversaries.
The Fiscal and Strategic Context
The new administration has proposed addressing this challenge, in part, through the Department of Government Efficiency (DOGE), a special commission within the Executive Office of the President aimed at trimming federal bureaucracy, streamlining government operations, and eliminating wasteful spending (Weissert, 2025; Herman, 2024). DoD accounts for approximately 12% of total federal spending and nearly 50% of discretionary spending, with 40% of its budget allocated to research, development, and procurement (Keys & McGarry, 2024). Given the pressing national debt concerns—estimated at $26.2 trillion by the end of 2023 (CBO, 2024)—ensuring efficient defense spending is imperative. The newly confirmed Secretary of Defense has also reinforced the need for reforms to adopt emerging technologies, revitalize the defense industrial base, and streamline acquisitions (Harper, 2025). The defense industry does not yet appear to have a fully cohesive strategy tailored to DOGE, and as a result, there may be some winners and losers due to resource shifts. CEOs, however, do support efforts to accelerate acquisition, streamline foreign military sales, and ease export restrictions to help the US compete with global rivals (Insinna, 2025).
Despite ongoing reform efforts, DoD acquisition remains hindered by excessive regulations. The Federal Acquisition Regulation (FAR) spans over 2,000 pages, with the Defense Supplement (DFARS) adding approximately 1,500 more. Guidebooks and other regulations further complicate compliance; the sheer volume and complexity of this regulatory environment have not resulted in better outcomes—only longer delays and higher costs.
This complex DoD acquisition environment can benefit large defense contractors, with their large staffs, who can navigate it effectively while creating challenges for smaller, innovative firms. Bureaucrats, politicians, and consulting firms can also benefit from the system's inefficiency; they can gain jobs, influence, and revenue. As a result, warfighters, taxpayers, and smaller firms lose out, facing barriers to entry, delayed capabilities, and higher costs with no improvement in outcomes.
The Case for Acquisition Reform
Historical Lessons on Efficiency
Historical examples demonstrate the effectiveness of simpler processes. Earlier development timelines were also dramatically shorter: the U-2 went from the proposal in 1954 to flying its first operational mission in less than three years. Although significantly modified, it is still used today (designated the U-2S). Today, major defense programs take more than a decade.
The Wright Flyer and F-4, as compared to the 1980 C-17 proposal, best illustrates this shift. The Wright Flyer was developed for the US Army under a simple eight-page contract, whereas the specification for the F-4 was detailed on just two pages in 1955. Thus, the C-17 proposal, which consisted of over 13,000 pages, stands in stark contrast to these earlier contracting examples (Watts, 2008). As the regulatory burden and oversight have increased dramatically, the performance of the acquisition system has not improved; on the contrary, despite even the most recent efforts to reform the DoD acquisition system, it continues to be plagued by inefficiencies. These examples highlight how excessive bureaucracy has not improved outcomes but led to slower procurement cycles and higher costs.
Increasing Development Timelines and Inefficiencies
In a recent report, GAO found that DoD's major defense acquisition programs (MDAPs) are experiencing extended development periods. The average MDAP now plans to deliver initial capabilities in over 10 years, continuing a trend of increased cycle times. For programs that have been delivered, the average time to achieve initial operational capability has risen from 8 to 11 years. For example, the F-35 Joint Strike Fighter took approximately 18 years from the issuance of the initial RFP to attain operational capability. This is in an era of rapidly evolving technological innovation, with cycle times measured in months, not decades (GAO, 2024).
Additionally, the new Middle Tier Acquisition (MTA) program pathway, designed for rapid prototyping and fielding within five years, is not consistently achieving its objectives. GAO found that many MTA programs lack plans to implement leading practices for speed, with some following lengthy, linear development schedules that extend beyond the intended timeframe. Software programs didn’t perform much better, with many lagging in implementing key practices such as utilizing software factories, modular contracting, and using modern software development approaches (GAO, 2024).
Challenges with Non-Traditional Contractors
Startups and commercial firms drive today's technological advancements in AI, biotechnology, and quantum computing1—many of which hesitate to work with the DoD. These companies are more comfortable operating in the commercial sector. Dealing with the DoD involves complex acquisition processes, lengthy procurement timelines, unfamiliar funding models (such as SBIR2 and OTAs3), and payment delays. Perhaps, most importantly, given DoD’s requirements for data rights and access, companies worry about losing control over their intellectual property. If DoD does not address these challenges, it risks losing access to cutting-edge innovations that could define the future of warfare.
Key Steps to Improve DoD Acquisition
Reduce the Bureaucratic Burden
The bureaucratic burden of the existing system has been well documented (Section 809 Panel, 2018; Wicker, 2024; GAOb, 2024). An immediate step that can simplify and expedite the acquisition process and reduce delays is to expand the use of Other Transaction Authorities (OTAs) to bypass lengthy traditional procurement processes, enabling faster prototyping and deployment. The FAR, DFAR, and other regulations should be simplified and harmonized. For example, three frameworks currently govern cybersecurity, namely the Cybersecurity Maturity Model Certification (CMMC), NIST SP 800-171, and DFARS 252.204-7012. While these share common objectives, they have differences that create challenges for defense contractors; for example, DFARS allows self-assessment, whereas CMMC mandates third-party certification for certain contract levels.
A streamlined regulatory environment will reduce administrative burdens, increase efficiency, and lower barriers for small and emerging defense firms.
Implement Agile and Flexible Contracting Models
Traditional FAR-based contracts often lock contractors and government entities into rigid terms. This makes it challenging to navigate today's dynamic environment, characterized by rapidly changing technology, shifts in geopolitical conditions, emerging threats, and evolving operational constraints (e.g., supply chain disruptions). Contracts should incorporate built-in adjustment mechanisms with predefined review cycles to reassess scope, funding, and performance metrics. This will also require major changes to the current Planning, Programming, Budgeting, and Execution (PPBE) process to allow more flexibility. A recently legislatively mandated commission examined the existing process. It recommended replacing the outdated Planning, Programming, Budgeting, and Execution (PPBE) process with a streamlined Defense Resourcing System (DRS) to enhance agility, align budgets with strategy, improve decision-making, and accelerate the delivery of capabilities (Hale & Lord, 2024).
Finally, the DoD should adopt the practice of modular contracting. This practice enables system modules to be developed, delivered, and implemented incrementally. As a result, it reduces risk, improves flexibility, and engages a more diverse group of industry partners.
3. Reduce Barriers for Non-Traditional Contractors
To reduce barriers for non-traditional contractors, the DoD should utilize targeted outreach and flexible funding models, such as the Small Business Innovation Research (SBIR) program and Other Transaction Authorities (OTAs), which enable faster prototyping and reduced bureaucratic hurdles, to expand its engagement with startups and commercial tech firms.
The Defense Innovation Unit (DIU)4 will also play a critical role in bridging the gap between non-traditional defense contractors and the DoD by accelerating the adoption of commercial technology for military applications. To effectively integrate DIU into broader DoD acquisition reforms, the organization should be leveraged to expand engagement with startups and commercial firms, streamline acquisition pathways, and drive the adoption of innovation at scale. Additionally, reforming DoD’s approach to intellectual property (IP) rights is essential to reassure firms that they can retain control over proprietary technologies, encouraging greater participation from cutting-edge innovators wary of restrictive government contracts. DIU could serve as a central facilitator in IP reform efforts by developing standardized IP agreements that strike a balance between DoD access needs and commercial IP protections. This would reduce industry concerns over technology ownership and long-term competitiveness. Finally, rather than limiting DIU's influence to early-stage experimentation, DIU should have a formal role in integrating commercially developed solutions into larger procurement programs, ensuring that rapid innovation does not stall due to bureaucratic barriers.
4. Leverage AI for Acquisition
AI is in the early stages of the Gartner Hype Cycle and is often touted as a solution to every problem. Although we can expect many disappointments before AI’s full potential is achieved, its development and integration into DoD’s acquisition processes should be accelerated. There are use cases with near-term applications. For example, with the vast amounts of collected data, DoD can leverage the more mature machine learning and deep learning techniques to improve system readiness with predictive maintenance and supply chain oversight efficiency. The DoD is also exploring generative AI techniques for document analysis and summarization to improve decision-making. DoD’s Chief Digital and AI Office has developed a large language model (AcqBot) to accelerate contract writing by up to 400% while maintaining human oversight (Luckenbaugh, 2025; Heckman, 2023). As with any technological transition, we can anticipate cultural resistance to the use of AI, but it must be overcome.
5. Improve Training for the Acquisition Workforce
The DoD must strive to enhance the capabilities of its acquisition workforce by expanding educational programs. These should emphasize agile procurement and emerging technologies to equip employees with the necessary skills to navigate the rapidly evolving technological landscape. Additionally, the training should ensure AI literacy, enabling employees to effectively use artificial intelligence to make informed decisions and leverage AI tools to accelerate procurement processes. Furthermore, strengthening workforce retention strategies is vital so that DoD can ensure continuity and sustained progress in its reform initiatives, ultimately leading to more efficient and effective procurement practices.
Conclusion
The DoD’s current acquisition system is too slow, too costly, and too bureaucratic to meet modern defense challenges. The U.S. risks falling behind adversaries in critical technology areas without immediate reforms. By reducing regulatory burdens, adopting agile contracting models, reforming its PPBE processes, engaging with non-traditional innovators, and leveraging AI for acquisition efficiency, DoD can build a faster, more adaptive, and innovation-driven procurement system. These changes are not just about efficiency but about ensuring national security in an era of rapid technological change. The time for action is now.
End Notes
1) The NSF reported that in FY 2022, of the $892B the U.S. spent on R&D, the federal government invested $72B, while the private sector share was $697B (NCSES, 2025).
2) Small Business Innovation Research (or SBIR) program includes a competitive, three-phased process to solicit proposals from small businesses for research/research and development, production, services, or any combination to meet stated agency needs.
3) Other Transaction Authority (OTA) is the authority of the DoD to carry out specific prototypes, research, and production projects. They were created to give DoD the flexibility necessary to adopt and incorporate business practices that reflect commercial industry standards and best practices into its award instruments.
4) Recognizing DIU's growing role in integrating commercial technology into military applications, Congress appropriated approximately $983 million to DIU in FY 2024, a significant rise from the $191 million allocated the previous year. This increase reflects a 431% boost in funding (GAOc, 2025).
References
CBO. (2024) An Update to the Budget and Economic Outlook: 2024 to 2034. Congressional Budget Office. June 2024. Available at: https://www.cbo.gov/system/files/2024-06/60039-Outlook-2024.pdf
GAOa. (2024). Weapon Systems Annual Assessment: DOD Is Not Yet Well-Positioned to Field Systems with Speed. Government Accountability Office. GAO-24-106831. July 18, 2024.
GAOb. (2024). Military Departments Should Take Steps to Facilitate Speed and Innovation. Government Accountability Office. GAO-25-107003. December 2024.
GAOc. (2025). DEFENSE INNOVATION UNIT: Actions Needed to Assess Progress and Further Enhance Collaboration. GAO-25-106856. February 2025. Available at: https://files.gao.gov/reports/GAO-25-106856/index.html
Hale, R. & E. Lord. (2024). Defense Resourcing for the Future. Commission On Planning, Programming, Budgeting, and Execution Reform. March 6, 2024. Available at: https://ppbereform.senate.gov/wp-content/uploads/2024/03/Commission-on-PPBE-Reform_Full-Report_6-March-2024_FINAL.pdf
Harper, J. (2025). Pete Hegseth, Trump’s new defense secretary, issues message vowing to ‘rapidly’ field emerging tech. Defense Scoop. January 25, 2025. Available at: https://defensescoop.com/2025/01/25/pete-hegseth-defense-secretary-message-to-the-force-emerging-technologies/
Heckman, J. (2023). DoD builds AI tool to speed up ‘antiquated process’ for contract writing. Federal News Network. February 9, 2023. Available at: https://federalnewsnetwork.com/contracting/2023/02/dod-builds-ai-tool-to-speed-up-antiquated-process-for-contract-writing/
Herman, A. (2024). The WWII lesson for DOGE. The Wall Street Journal. Dec. 10, 2024.
Insinna, V. (2025). General Atomics Aeronautics CEO calls on DOGE to expedite acquisition, streamline FMS red tape. Defense Business Report. January 27, 2025. Available at: https://breakingdefense.com/2025/01/general-atomics-aeronautics-ceo-calls-on-doge-to-speed-acquisition-cut-fms-red-tape/
Keys, C. M., & McGarry, B. W. (2024). FY2024 Defense Appropriations: Summary of Funding. CRS. Updated April 22, 2024. Available at: https://crsreports.congress.gov/product/pdf/IN/IN12234
Luckenbaugh, J. (2025). Army, Pentagon Explore AI’s Potential to Transform Acquisition. National Defense Magazine. Jan. 7, 2025. Available at: https://www.nationaldefensemagazine.org/articles/2025/1/7/army-pentagon-explore-ais-potential-to-transform-acquisition
National Center for Science and Engineering Statistics (NCSES). (2025). U.S. R&D Totaled $892 Billion in 2022; Estimate for 2023 Indicates Further Increase to $940 Billion. NSF 25-327. Alexandria, VA: U.S. National Science Foundation. Available at https://ncses.nsf.gov/pubs/nsf25327/.
Section 809 Panel. (2018). Report of the Advisory Panel on Streamlining and Codifying Acquisition Regulations. 2018. Available at: https://discover.dtic.mil/section-809-panel/
Watts, B. D. (2008). The US Defense Industrial Base Past, Present and Future. Center for Strategic and Budgetary Assessments. 2008. Available At: https://csbaonline.org/uploads/documents/2008.10.15-Defense-Industrial-Base.pdf
Weissert, W. (2025). Trump made DOGE part of the government. Here is what that might mean. Associated Press. January 22, 2025. Available at: https://apnews.com/article/doge-government-trump-executive-order-1a2fb7235b9d6f178c764cf6c78d3317
Wicker, R. (2024). Restoring Freedoms Forge: America’s Innovation Unleased. Available at: https://www.wicker.senate.gov/services/files/4396C3A9-DA26-4BD6-A655-9E0910B83DA8
