Braxton Taylor
Incoming President Donald Trump and advisor Elon Musk have promised to significantly reform Pentagon spending, a long-sought goal for officials on both sides of the aisle. But while current and former officials told Defense One the new administration could make some changes, reforms to the way Congress allocates funding and provides oversight would still be necessary for a true overhaul.
Trump and Musk, tapped to run a new Department of Government Efficiency, have floated a variety of ideas to reform Pentagon purchasing, such as ditching the F-35 Joint Strike Fighter in favor of drones. Trump has been critical of what he has called the “military industrial complex,” but signed larger and larger budgets for the Defense Department over his last term in office. Musk, the richest defense contractor in the world, has targeted the federal workforce for cuts, pushed for more accounting transparency, and advocated for more money for newer technologies like drones versus manned aircraft.
The Defense Department does already have various efforts to entice new companies and speed the acquisition of drones and other new technologies. Current and former officials said that’s a good place for the new administration to start on scaling up those efforts, even if they do so under a new brand.
Michael Brown, who served as a White House Innovation fellow and the head of the Defense Innovation Unit, or DIU, during Trump’s first term, said DIU is already leading those efforts, but with just under a $1 billion allocated to the unit last year, it doesn’t have the budget or clout to disrupt established purchasing systems. The solution, he says, isn’t for DIU to be bigger, but rather for it to take a leading role in helping the military services acquire weapons—and use the already established DIU model of training contract officers on how to buy things at the speed of software.
The solution also will require making big reforms in contracting, and relying more on other transaction authorities—a contracting vehicle the Pentagon can use for smaller purchases.
“We’ll always buy large platforms, but we buy a hell of a lot of other stuff. Why gum that up in the same machinery, requirements, acquisition, and budget processes that we have for, you know, huge capital purchases?” Brown said.
In addition to helping individual services buy things better, Brown said new leadership would do well to move some purchasing away from the services, particularly for things that can be used across multiple services. “We default to service specific purchases, services creating their own requirements.” The new Defense Department focus should be “what is the enterprise need versus just what is each service need?”
A new report out this week from Defense Innovation Board chair Michael Bloomberg and former Marine Corps Commandant Gen. David Berger outlines a series of reforms they recommend for the future of Pentagon acquisition.
In a conversation with Defense One about the report, Berger pointed to the Pentagon’s Replicator program, which seeks to deploy tens of thousands of highly-autonomous but inexpensive drones, as an example of a good idea that’s not getting enough attention or budget to make a difference. And even if you give it more money than the current roughly $500 million a year, it’s still too constrained by the Pentagon budgeting process. “It can’t be scaled big enough in the current framework,” he said.
Instead, the report recommends the Defense Department establish a sort of hedge-fund portfolio. Similar to Brown’s idea, the portfolio would enable the Office of the Secretary of Defense to spend on things that apply to all of the services, not just one. Fifteen percent of the overall Defense Budget is probably a good starting point, Berger said.
“There is a saturation point where you could pour a bunch more in that within the industry and it wouldn’t absorb it fast enough. So we thought 15%—and it may take a couple years to get there—of the current top line.” He emphasized that the Pentagon must move quickly but also methodically, to ensure industry has time to adjust business models and practices to operate under a new model.
Jake Sullivan, the outgoing national security advisor, told a small group of reporters this week that the next administration needs to continue the work of rebuilding the U.S. industrial base, something Donald Trump has already committed to. Sullivan described that as a “generational” effort.
“On the innovation side, making sure we’re actually making the most of Replicator and other programs that look to field new technology and learn the lessons of conflicts like Ukraine for how to incorporate new technology into warfighting doctrine and then be able to produce it at scale,” he said.
Fire Congress
Still, the biggest obstacle to acquisition reform, Brown, Berger and Sullivan agreed, is Congress.
“You know, you have the services, you have the acquisition guys, you’ve got leadership and so forth. Then you’ve got the appropriators and the authorizers and individual members [of Congress] who have very strong opinions about where dollars should be allocated and how to protect, understandably protect, jobs or economic activity in their jurisdictions,” Sullivan said.
Brown pointed out that as much as lawmakers complain about the speed of Pentagon acquisition, they still want to maintain control, and don’t necessarily use that control well.
“The defense budget is divided into 1,700 program elements. The amount of scrutiny on so little money is ridiculous. So [congressional] oversight has really become micromanagement.”
Congress, he said, needs to “realize its own role in that and give the department more authority to manage its affairs.” The budget is “not going to be better managed if professional staffers in the committees are deciding by line item…I mean, [if] the Air Force is not deciding how many and what type of aircraft it’s buying.”
Brown and Berger also urged caution when cutting federal staff, particularly contracting officers. The Defense Department does a lot of things that aren’t directly related to defense, such as performing security clearance checks for the rest of the government and managing healthcare for current and former service members, and those tasks could be privatized or performed elsewhere. But, Brown said, it is not helpful to eliminate precisely the expert civil servants you need to speed up the system of buying.
And no, Brown said, they can’t just be replaced with automation, as Musk has hinted. Contract officers may be able to train AI solutions like large language models to enable them to do more, but some aspects of the Pentagon-buying bureaucracy still need human intelligence.
“There’s not enough contracting officers. What we ought to be looking at is: how do you simplify the process before you automate? I think everybody would be for automation, but let’s not try and automate the [Federal Acquisition Regulation,] which is 2,000 pages. You know, how can that be simpler?”
Berger said treating the federal workforce with distrust and contempt likely wouldn’t create positive results. “It’s kind of a punishment sort of approach, the stick, but there’s no incentive there. There’s no reward, there’s no, it’s just punishment.”
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