The Department of War Wants to Transform Its Acquisition System

The Department of War has introduced an Acquisition Transformation Strategy aimed at prioritizing commercial solutions and expanding participation from nontraditional contractors. While the direction signals reduced barriers and faster acquisition, contractors must evaluate how evolving expectations, timing, and risk tolerance will affect compliance, pricing, and engagement strategies.

On November 7, 2025, the Secretary of War Pete Hegseth stated at a speech at the National War College that the Department of War (DOW) is looking to “prioritize the purchase of industry driven solutions, commercial solutions first, that meet … [the warfighter’s] needs faster, even if that means bids do not meet every requirement.”  To move in the direction the Secretary is looking for, the DOW Acquisition Transformation Strategy was issued.

DOW Acquisition Transformation Strategy

The first section in the strategy document is “Fuel the Arsenal of Freedom: Rebuild the Defense Industrial Base.”  To accomplish this goal, the DOW is looking to “[g]et more companies building military equipment, make it easier for new ones to join in, come up with better ideas, work faster to win contracts, and deliver results faster.”  The DOW believes that the key to this accomplishment is to engage commercial companies that are “advancing cutting edge technology across multiple product domains while gaining cost efficiencies from increased volume and productivity gains with each successive generation.”  DOW plans to leverage its Capability Portfolio Management (CPM) approach and Program Acquisition Executives (PAEs) (Congress is in on PAEs as well, see below) to increase “diverse performers and non-traditional vendors” and “aggressively assess and manage competitiveness within their industrial base sector when developing acquisition strategies, requesting and allocating funding, and negotiating contracts to protect vendor diversity, healthy competition, and accessibility of non-traditional defense companies.”  Additionally, DOW is looking “[t]o maximize the effects of industry innovation and allow for speed of capability delivery, the Department will pursue a strategy to transition from requirements-based acquisition to solutions-based acquisition, where bespoke requirements defined without industry input will not exclude companies from offering bids.”

While we fully support this goal, we are not sure the current acquisition system will be easily transformed. Here are just a few likely competing considerations:

• Elected officials (i.e., Congress), while fully supportive of getting the warfighter what they need, have a competing priority: getting as much of the Federal Spend back to their districts.
• Many Government employees appreciate large acquisition programs that provide them with stable, long-term positions. Additionally, Government employees are not known to be risk-takers, and this new system will require them to take risks.
• Historically, DOW, when it comes to Research and Development (R&D), has either directly contracted for the effort or been on the pay-as-you-go plan for Independent Research and Development (IR&D), provided the effort is related to something the DOW may want in the future. Most commercial companies work off a model where R&D is recouped as part of future sales (i.e., prices). Convincing contracting officers that a fair and reasonable price needs to include venture capital repayment and a return on that investment is not going to be easy.

This is not to say we do not support the planned transformation; it is simply that we believe the transformation is going to take significant effort from all parties.

What Will the Future Acquisition System Look Like

DOW will ensure it makes industry aware of its “operational problems and kill chain gaps … through consortiums and solutions marketplaces.”  Industry will then “propose and demonstrate solutions through modeling or prototyping.”  The DOW will then select from competing solutions. The contractor with the winning solution will be awarded a contract to further develop, produce, and field the solution. In determining the winning solution, the focus will be on the “life cycle costs,” not the instant contract.

This system will rely heavily on DOW communicating needs, problems, gaps, and desires in a very open format. Additionally, DOW acquisition professionals will have to significantly improve “market research, technology scouting, business intelligence, and industry and technology assessments” processes. Based on our clients’ recent interactions with the Defense Contract Management Agency (DCMA) Commercial Item Group (CIG), their focus has been on finding products and services as non-commercial and has disregarded any additional market research provided by our clients.

DOW Communication with Industry

DOW will be using the “existing Industrial Base Council (IBC), the Joint Industrial Base Working Group (JIBWG), and the Joint Defense Manufacturing Council (JDMC) to serve as the Department’s mechanisms for coordinating [with the] industrial base.”  By the way, web searches for IBC and JIBWG did not result in clearly DOW lead organizations. DOW “will verify that membership in these consortia includes Government, industry, and academia with expertise in advanced manufacturing, production technologies, and scalable defense component solutions, and that each consortium’s charter will prioritize removing policy and procedural barriers to nontraditional defense contractors, maximizing the use of commercial standards, and smoothing transitions from R&D to acquisition programs of record.”

If you are familiar with any of these organizations, now is the time to ensure your company has some representation. Also, if you or your company are a member of another organization or consortia, this is the time to engage with DOW to try to be a part of the communication network.

National Defense Authorization Act of 2026

The 2026 NDAA had a number of sections that align with the DOW transformation strategy or will likely be supportive:

• Sec. 836. Voluntary registration of compliance with covered sourcing requirements for covered products. A requirement to establish and maintain a publicly available online repository of information provided by small businesses related to available “American Sources.”
• Sec. 913. Authority to establish regional outreach centers for the Defense Innovation Unit. A provision that allows DOW to establish and maintain regional outreach centers within and outside the United States to streamline interactions with the private sector, academia, and other mission partners. If centers are established, a strategy and criteria for selecting locations, as well as the rules, regulations, policies, or guidance necessary for operation, must be developed and made publicly available.
• Sec. 1071. Assessment of the potential establishment of incubator programs for secure facilities and networks at universities. DOW shall conduct an assessment of the feasibility, advisability, and potential benefits of establishing incubator programs to develop, operate, and sustain secure facilities and networks at universities across the United States.
• Sec. 1534. Digital sandbox environments for artificial intelligence. By April 1, 2026, DOW shall establish a task force on artificial intelligence sandbox environments. The Task Force will identify, coordinate, and advance DOW efforts to develop and deploy artificial intelligence sandbox environments necessary to support artificial intelligence experimentation, training, familiarization, and development across DOW.
• Sec. 1801. Alignment of the defense acquisition system with the needs of members of the Armed Forces. DOW shall ensure that the acquisition system expeditiously provides the warfighter with the capabilities necessary to operate effectively, to address evolving threats, and to sustain the military advantage of the United States in the most cost-effective manner practicable.
• Sec. 1802. Establishment of the role of portfolio acquisition executive. “A portfolio acquisition executive is the senior acquisition official designated by the component acquisition executive or the service acquisition executive of the military department concerned, as applicable, to lead a portfolio of capabilities, with authority for plans, budgets, and execution of programs assigned to the portfolio, including life-cycle management.”
• Sec. 1803. Amendments to life-cycle management and product support. Establishment of a Product Support Manager responsible for managing product support required to field and maintain the readiness and operational capability of a system throughout the life cycle of the system.
• Sec. 1807. Establishment of Project Spectrum. Project Spectrum provides small and medium businesses with an online platform of digital resources, training, and services that increase awareness of, and facilitate compliance with, the requirements of the defense acquisition system.
• Sec. 1812. Ensuring the successful implementation of requirements reform. Establishment of the Requirements and Resourcing Alignment Board with biannual reporting to Congress.

With the alignment between DOW’s transformation strategy and Congressional direction, we have great hopes for the future of DOW acquisition and the opportunities available to nontraditional defense contractors. However, this will take time.

What is Available Today

Currently, direct interaction with DOW for most commercial companies is not a viable option. However, FAR subpart 15.5 of the FAR Part 15 Overhaul does allow for the DOW to consider unsolicited proposals. Unsolicited proposals can be used to present unique and innovative ideas or approaches developed outside the Government to DOW for accomplishing its mission.

What You Need to Remember

As we have stated previously, the underlying intent of both DOW and Congress is to increase the defense industrial base; reduce compliance costs; increase competition; leverage the existing commercial marketplace for technologies; focus the determination of a fair and reasonable price on pricing information, not cost data; and create a more flexible acquisition process. These are all great goals and aspirations. Are you ready to convince a DOW Contracting Officer or a higher-tier contractor’s buyer as to how you are supporting these goals and aspirations?

The Redstone GCI team has a great deal of experience (i.e., many of us worked for DoD for over 30 years) and based on that experience, most Government employees, including contracting officers and program managers, are very risk averse. Yet the Acquisition Transformation Strategy is asking them to operate “with speed and rigor … [as well as] take risks that result in successful outcomes.”[i]  If we want this to work, contractors are going to have to help by feeding the right information to decision-makers.

Understanding Evolving Acquisition Requirements and GovCon Readiness

Redstone GCI assists government contractors in understanding the Government’s requirements and expectations, as well as in implementing adequate systems to generate the information the Government may need to award contracts.

The fact is that unless you are selling to the Federal Government commercially available off-the-shelf (COTS) products, there are going to be some additional requirements beyond those of a standard commercial contract with a non-government party. Even COTS are starting to get additional requirements, such as the Federal Acquisition Regulations (FAR) proposed rule on the Prohibition on Certain Semiconductor Products and Services.

A government contractor, whether having done business with the Government for years and now fits the definition of a nontraditional defense contractor, or a new entrant that DOW is looking for, needs to understand the future of DOW acquisition. Please allow us to help ensure the future of your company or organization is as smooth as possible.

[i] Acquisition Transformation Strategy – Section “Elevate and Empower the Acquisition Workforce to Rapidly Deliver Capability” Subsection “Incentivize the Workforce: Pay our acquisition professionals well and hold them responsible for getting the best deals for the warfighter, no matter what it takes” Page 18.