Hegseth pledges sweeping overhaul of Pentagon procurement

WASHINGTON — Defense Secretary Pete Hegseth on Nov. 7 outlined an ambitious slate of procurement and regulatory reforms aimed at breaking through what he called the Pentagon’s “backwards culture” and accelerating the pace of innovation in military programs.

In a wide-ranging address to industry executives at the National War College, Hegseth said he intends to implement sweeping changes over the next six months to shift the Defense Department away from its reliance on bespoke systems from traditional defense contractors and toward commercially available technology.

Many of the proposals are expected to resonate with commercial space and defense technology firms that have long pushed for faster acquisition cycles and greater opportunities to sell off-the-shelf solutions to the Pentagon.

“The defense industry financially benefits from our backwards culture, schedule overruns, huge order backlogs,” Hegseth said. “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.”

Hegseth called on major defense contractors to “change the focus on speed and volume and divest their own capital to get there.”

Hegseth borrowed portions of his remarks from a 2001 speech by then Defense Secretary Donald Rumsfeld, who famously railed against Pentagon bureaucracy for stifling innovation and diverting funds from front-line needs. Hegseth said he resurrected Rumsfeld’s words to underscore how little has changed in nearly a quarter century.

The problems Rumsfeld highlighted persist to this day, he said.

Hegseth criticized a system that “prioritizes process and paperwork over the urgent and evolving needs of forces in the field.” He said the new reforms are designed to “better align the defense bureaucracy with the realities of modern warfare.”

Shifting to ‘commercial first’

Under the new approach, Hegseth said, “commercial products and offerings will be the default policy.” The Pentagon will issue new guidance requiring a “‘commercial first’ and alternative proposal policy to enhance flexibility.”

That change could open the door wider for companies in the commercial space and technology sectors — many of which have struggled to break into the defense market under existing procurement rules that favor traditional primes.

“We will harness more of America’s innovative companies to focus their talents and their technologies on our toughest national security problems,” Hegseth said.

He also pledged to provide companies with more predictable demand. “We will award companies bigger, longer contracts for proven systems so those companies will be confident in investing more to grow the industrial base,” he said.

Flattening chains of command

Hegseth said he has tasked Undersecretary of Defense for Acquisition and Sustainment Michael Duffey and Undersecretary for Research and Engineering Emil Michael with leading the implementation effort.

Among the planned structural changes, the Pentagon will empower 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.”

In addition, senior acquisition officials — known today as program executive officers — will be re-designated as “portfolio acquisition executives.” Each, Hegseth said, “will be the single accountable official for portfolio outcomes, and have the authority to act without running through months or even years of approval chains.”

On the regulatory front, Hegseth said, “we will 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 changes, he said, are designed 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.”

Legislative momentum

Hegseth said his reform agenda builds on earlier initiatives, including executive orders from President Donald Trump directing the Defense Department to expand its use of commercial technology. Congress also has advanced complementary legislation, such as the House’s SPEED Act, which would cut red tape for defense programs, and the Senate’s FORGED Act, aimed at shortening production cycles and incentivizing domestic suppliers.

Hegseth also reaffirmed a previously announced move to scrap the Pentagon’s Joint Capabilities Integration and Development System, or JCIDS — a labyrinthine process that has long frustrated defense officials and contractors alike for delaying programs by years.

“We’re ending a system built for paperwork, not mission,” he said. “JCIDS is dead. It was slow and bloated and disconnected from reality, and we will do better.”

U.S. adversaries, he said, “are moving fast, they’re developing and delivering new capabilities at a rate that should be sobering to every American, especially those who work in the Pentagon and in the defense industrial base.”