Acquisition Reform Is Materializing, but the Harder Test Still Lies Ahead

April 2026

Author: Hugo Holopainen and Val Moon, Executive Director, ICIT

Every new Presidential administration takes office with the goal of reforming the defense acquisition system. Acquisition reform returns as a familiar Washington ritual, yet change is often only seen at the margins. The task at hand has simply been too monumental to effectively revamp the entire system: Reforming how the Pentagon buys alone isn’t enough, any meaningful transformation depends on revitalizing the industrial base, strengthening supply chain security, giving industry the capital and demand certainty to invest, requirements-setting, and sustained workforce development and retention. The core bottlenecks have never been solely procedural.

In recognition of that, current reform attempts are considerably more ambitious in scope than many earlier initiatives, and they have unfolded on top of adjacent PPBE reform efforts that seek to loosen the budgetary and resourcing rigidities that have long limited acquisition agility. Since late 2025, the Department of Defense, now designated in name as the Department of War by a September 2025 executive order, has begun moving from rhetoric about speed towards an operating model that tries to reorganize how requirements are set, programs are managed, commercial technology is inserted into capability development and fielding, and industry is pushed to build at scale. 

A More Ambitious Reform Cycle 

The clearest inflection point came in November 2025, when the Department formally redesignated the traditional Defense Acquisition System as the Warfighting Acquisition System, released the Acquisition Transformation Strategy, and directed the bureaucracy to prioritize speed, reduce non-value-added processes, and move accountable decision-making closer to execution. The memo created the logic for Portfolio Acquisition Executives, or PAEs, as the central managerial instrument of the new system, explicitly designed to organize around capability portfolios instead of individual programs, and to enable trade-offs across programs within a mission area, reinforcing the logic that the reform is not simply about buying faster in a generic sense. It is about changing the “unit of action” – the old model centered individual programs, milestones, and perfected requirements. The emerging one centers portfolios, operational problems, and faster trade-offs across related capabilities. The Warfighting Acquisition System revamp also pushed the workforce away from compliance training and toward immersive, scenario-based education built around risk, urgency, and operational judgment. Although the Defense Acquisition University’s (DAU) rebrand to Warfighting Acquisition University (WarU) still remains suggestive rather than decisive - many of WarU's pillars predate it and are based on earlier DAU reforms - the rebrand at least signals the Department is trying to institutionalize a new professional culture around speed, risk, and operational relevance.

The Hon. Michael Duffey’s, the Under Secretary of War for Acquisition and Sustainment (USW(A&S)), March 2026 testimony shows the same logic still driving the effort, with “solutions-based” acquisition, commercial adoption, and faster decision-making framed as necessary to put the system on a “wartime footing”. 

Congress has already reinforced the shift in the FY26 NDAA, which strengthened commercial-solutions-first language, expanded flexibility around Commercial Solutions Openings, restricted some non-commercial FAR/DFARS clause flow-down (when a rule in the prime contract gets copied into lower-tier supplier contracts), and tied portfolio management more directly to acquisition governance. Read together, the memo package and the NDAA provisions suggest a department that is trying to move from “how do we execute this program correctly?” to “how do we solve this operational problem in time?” That is a much more consequential shift than the Pentagon merely attempting to be less bureaucratic. 

The strongest evidence for the reform materializing beyond concept came in January 2026 as the Department issued its innovation ecosystem memo, centralizing innovation governance under the Chief Technology Officer, disestablishing older coordinating bodies, and elevating the Defense Innovation Unit, or DIU, as the Department’s main center of excellence for commercial technology adoption and product transition. A week later, the Joint Force Requirements Process manual operationalized the replacement of JCIDS, reoriented the JROC, created the Requirements and Resourcing Alignment Board, and formalized the Mission Engineering and Integration Activity as a way to break operational problems into technical components and engage industry earlier. It also launched the logic for the Joint Acceleration Reserve beginning in the FY2027 cycle, explicitly targeting the long-standing “valley of death” between prototype promise and funded transition.

From Memo to Structure 

The implementation pattern at the service level points in the same direction. The Department of the Air Force publicly framed its January rollout as a move from a compliance-based model to a warfighter-focused one, with PAEs empowered to control resources, talent, and decisions in ways traditional PEO structures often could not: enabling portfolios to be managed for mission performance rather than individual program metrics, a shift reflected by February in the Air Force’s alignment of this structure to mission outcomes such as the DAF Battle Network. The Army has also moved publicly, standing up a PAE for Agile Sustainment and Ammunition and activating a Capability Program Executive for Ammunition and Energetics, followed by five Navy PAEs. All of this points to the same larger theme; acquisition reform is being fused to munitions production, sustainment, and industrial capacity, not kept separate from them.

The Industrial Question 

At a March 4 HASC hearing, Senator Rogers argued that acquisition reform alone is not enough, and he is correct. Reform alters how the Pentagon buys, it does not, by itself, create the factories, machine shops, shipyards, skilled workers, minerals, and predictable demand needed to produce at wartime scale. GAO has already warned that continuing resolutions disrupt production and create uncertainty, that the Department lacks coordinated visibility into many foreign supplier dependencies, that blue-collar defense workforce problems remain persistent, and that industrial-base investment in sectors like shipbuilding has been undermined by unstable demand. Duffey’s own testimony reinforces the same point, noting more than 400,000 open defense manufacturing jobs and four million workers needed over the next decade, and this potentially rapidly increasing with the $1.5 trillion president’s defense budget request and the consecutive acquisition and production ramp-up. Faster acquisition, by itself, does not solve the gap between the United States’ pressing military industrial needs and the defense manufacturing sector it currently has.

Broader Ambition, Broader Risk 

If there is a larger analytical point here, it is that many observers - not necessarily the Department itself - are still describing this as a speed reform, when it is better understood as an integration reform. The Department is not just trying to award faster. It is trying to integrate requirements, acquisition, technology transition, industrial policy, workforce incentives, and even allied burden-sharing into one “warfighting logic” that delivers material to the warfighter faster to reduce operational risk. That is why Duffey’s testimony sits so heavily on industrial-base issues, why the requirements rewrite is as important as the contracting rhetoric, and why DIU’s place in the new structure matters so much. 

The twist, then, is that the reform’s ambition is broader than many people assume, but so are its vulnerabilities. The more the Department tries to connect all of these functions, the more success will depend on whether it can actually coordinate them in practice, across budgets, services, and political cycles. 

The Test of Implementation

 

The current state of implementation is mixed. The reform now has law behind it, operating manuals behind it, visible service re-organizations behind it, and early regulatory movement around it. The clearest contracting example is the PAC-3 MSE framework agreement, which is meant to raise annual output from roughly 600 to 2,000 missiles and provide the kind of stable, long-horizon demand signal that private firms need before they truly invest in capacity. Duffey has pointed to the same model for THAAD and several RTX missile lines, and he also highlighted a direct-to-supplier partnership with L3Harris for solid rocket motor production. That is important because it shows the Department understands something basic, acquisition reform will fail if it stops at process and does not shape capital formation, production planning, and supplier behavior. In that sense, the reform is beginning to move from “buy differently” to “buy and scale differently.”  

Still, the biggest questions remain in front of the Department, not behind it. The first is whether the Joint Acceleration Reserve will become a real transition mechanism, or just another paper bridge that sounds promising but is too thinly funded to matter. The second is whether PAEs will get enough true budget and decision flexibility to make portfolio trade-offs without running into appropriations rules and service stovepipes. The third is whether commercial-first rhetoric will actually improve the prototype-to-production transition rate for nontraditional firms, or whether it will simply create more prototypes while scale, certification, and integration continue to favor incumbents. The fourth is whether the oversight culture will change enough to match the rhetoric of speed. Public materials so far are much clearer on pathway choice, clause relief, and flexibility than on any wholesale rewrite of source-selection fundamentals or pricing norms. Finally, fifth is whether the acquisition workforce at the mid-level will actually internalize the new risk-accepting model and is being incentivized and trained enough to do so. Memos can change structures and rhetoric quickly, but the mid-level workforce, who are not responsive to political pressure and who must implement those changes, are likely to wait and see whether today’s top cover extends down to them, or survives oversight pressure and the first visible failure.

The Monumental Task Ahead

 

The Pentagon is no longer only trying to streamline procurement. It is trying to align acquisition, requirements, procurement, technology transition, production incentives, and industrial capacity around a “warfighting tempo”, shortening the path from operational need to fielded capability and scalable industrial production. That is a more ambitious project than many earlier reform cycles, but it is also precisely why the test is not simply whether the Department can produce a more efficient acquisition system. The test is whether the United States can coordinate and translate this reform into sustainable warfighting and industrial throughput, and do so before the next crisis, rather than because of it.

Hugo Holopainen

Hugo researches the intersections of cybersecurity, aerospace, critical infrastructure (CI), emerging technology, and defense. As a Senior Associate at Gray Space Strategies, he leads research on technology, cyber, and CI security, federal budgets, and defense-industrial dynamics for the advisory and ICIT.

He draws on experience with the Defense-Industrial Initiatives Group at CSIS, analyzing acquisitions, funding, emerging technology, and illicit tech transfer, as well as tech diplomacy with the Finnish Foreign Ministry, where he identified market opportunities for start-ups in critical infrastructure, aerospace, and advanced computation. He also served in Finland’s air defense forces. His work bridges defense, cyber, and emerging technology to inform strategy at the nexus of security and innovation.

Val Moon

Val Cofield is the Executive Director for ICIT. Prior to joining ICIT, Ms. Cofield served as the Chief Strategy Officer of the Department of Homeland Security’s (DHS) Cybersecurity and Infrastructure Security Agency (CISA). In that role she was the principal policy and strategic adviser to CISA leadership and senior management, integrating strategy across all the organization’s mission areas and ensuring policy, strategy, and operational consistency throughout the agency.

About ICIT

The Institute for Critical Infrastructure Technology (ICIT) is a nonprofit, nonpartisan, 501(c)3think tank with the mission of modernizing, securing, and making resilient critical infrastructure that provides for people’s foundational needs. ICIT takes no institutional positions on policy matters. Rather than advocate, ICIT is dedicated to being a resource for the organizations and communities that share our mission. By applying a people-centric lens to critical infrastructure research and decision making, our work ensures that modernization and security investments have a lasting, positive impact on society. Learn more at www.icitech.org.