The Department of War’s New Acquisition Strategy: What Might It Mean for Contractors? Right Now… It’s Really Hard to Tell

Secretary of the U.S. Department of War (DOW) Pete Hegseth outlined planned reforms to DOW’s acquisition strategy in a memo, “Transforming the Warfighting Acquisition System to Accelerate Fielding of Capabilities,” on November 7, 2025, at the National War College at Fort McNair, Washington, DC (the “Memo”).^[1] Through the Memo, and the attached Initial Directed Implementation Actions, the DOW seeks to transform the existing Defense Acquisition System (DAS) to “aggressively prioritize” rapid, flexible procurement and production of supplies and systems critical to the DOW’s mission.^[2]

Summary of the Memo’s Actions

The Memo immediately redesignates DAS as the Warfighting Acquisition System (WAS) to underline that “acquisition is a warfighting function and must enable the continuous adaptation and improvement of our warfighting capability” and seeks to overcome three perceived challenges in the current acquisition process: a lack of singular program leadership; broken incentives based on satisfaction of specification requirements that directly impact on-time delivery; and “government procurement behaviors that disincentivize industry investment, [] production, and growth,” which hinder the DOW’s ability to surge and adapt.^[3]

The memo explains that the provisions are effective immediately and take precedence over inconsistent existing policies.^[4] It directs DOW officials to take immediate and staggered action:

1. The Under Secretary of War (USW) for Acquisition and Sustainment (A&S)
   1. Immediately
      1. With the Service Acquisition Executives (SAE), execute the transformation directed in the memo.^[5]
   2. Within 30 days
      1. Issue Transformation Guidance: Publish implementing guidance for cross-cutting transformation of the acquisition procedures ...^[6]
      2. Establish Portfolio Acquisition Executives (PAEs): Begin the process of reorganizing Program Executive Offices ...^[7]
   3. Within 60 days
      1. Transform PAE and Program Manager roles and management: Work with the USW for Personnel and Readiness (P&R) ...^[8]
      2. Establish the Wartime Production Unit (WPU): Work with the Director of the Economic Defense Unit (EDU) ...^[9]
   4. Within 90 days
      1. Implement commercial-first and alternative proposals policy: Issue guidance requiring utilization of authorities under the Adaptive Acquisition Framework ...^[10]
   5. Within 150 days
      1. Cut regulation and guidance to enable speed: Make updates to the 5000-series DOW Instructions ...^[11]
   6. Within 180 days
      1. Establish portfolio scorecards and performance measures: Publish portfolio scorecards with primary performance measures.^[12]
      2. Implement competition, modularity, and multi-source practices: Work with the USW for Research and Engineering (R&E) ...^[13]
      3. Modernize and transform the Defense Acquisition University (DAU) into the Warfighting Acquisition University: Prepare plans to end DAU's compliance-focused training ...^[14]
      4. Modernize contracting to provide clear incentives and potential penalties to industry: Publish new guidelines to ensure clear incentives ...^[15]
   7. Continuing activities
      1. Chair monthly Acquisition Acceleration Reviews to track PAE establishment ...^[16]
2. Military Departments
   1. Within 180 days
      1. Expand acquisition education with industry: Expand acquisition education among acquisition professionals ...^[17]
3. USW (R&E)
   1. Within 180 days
      1. Streamline test and evaluation requirements: Provide a roadmap and policy recommendations ...^[18]
4. USW (Comptroller) with the Director, Cost Assessment and Program Evaluation
   1. Within 180 days
      1. Improve budget flexibility: Work with the USW (A&S) and Military Departments to prioritize budget flexibility ...^[19]

Analysis

Many of Secretary Hegseth’s observations have been long-standing concerns regarding defense procurements, and while his goals of reforming defense acquisition are laudable, the proposed schedule is aggressive, given the complexity of the existing infrastructure. The proposed schedule contains few details in terms of how these milestones will be met, and on specificity and considerations.

Most government contractors can agree that the procurement system, civilian or defense, has become unwieldly and places heavy administrative burdens on contractors, but oversight authorities—GAO, inspectors general, and Congress itself—remain concerned with waste, fraud, abuse, and a myriad of other issues. In fact, it is these very concerns that have caused much of the burden in defense contracting, as well as concerns over foreign adversaries and the need to maintain strong and secure supply chains for the sake of national security. Indeed, each year, when the National Defense Authorization Act is passed, government contract attorneys comb the document for new requirements being foisted on defense contractors in the name of national security.

Given this backdrop, Secretary Hegseth seeks to erase decades of regulation that explain to both the government and the contracting community how a procurement is supposed to proceed, under what terms, and how those terms are to be understood. Reforming this decades-old regime in a matter of months could result in some useful items being discarded and subsequent uncertainty. Furthermore, much of the previous “red tape” was designed to ensure the integrity of the acquisition system. Removing it will almost certainly invite abuse.

Right now, it’s difficult to surmise how this will play out, but in the weeks and months ahead, we will begin to see the DOW make changes. In this regard, it will be important to see how and who those changes benefit and/or how and who they might hurt. As a result, we at Venable will closely monitor these developments, applaud those that do in fact streamline acquisition, and raise concerns when appropriate.