TheChek News Flow

Bureaucracy puts military in danger of falling behind rivals, defense secretary says; contractors told to speed production

Pentagon leaders are putting their weapons suppliers in the crosshairs.

Defense Secretary Pete Hegseth said Friday that the U.S. military will shake up the way it buys weaponry, equipment and software by making purchases more quickly, and from a broader range of potential suppliers. The plan would streamline Pentagon program offices, develop incentives for new investments and potentially box out suppliers that miss deadlines.

Hegseth said the overhaul was needed to break the cycle of decadelong weapons- development timelines, which he said have put the U.S. military at risk of falling behind geopolitical rivals such as China. He said he would clear testing requirements that can slow purchasing and empower military officials to order commercial products on the open market when custom-made military technology takes too long.

“We need to save the bureaucracy from itself,” Hegseth said Friday at an address to dozens of defense-industry executives in Washington.

The Trump administration aims to extend Pentagon efforts to bring into the fold more technology companies, many backed by Silicon Valley investors. The push has exposed tensions between the old-guard contractors such as Boeing and Lockheed Martin—which have for decades feasted on much of the military’s nearly trillion-dollar annual budget—and a new crop of politically connected tech companies.

The Pentagon’s acquisition regime dates to the Vietnam War era, according to Steve Blank, a national security expert at Stanford University. The system worked well enough against the Soviet Union, he said, but can no longer keep up with the competition.

“China implemented a system like Silicon Valley when we were still using a system that looked like Ford or General Motors,” Blank said. “At the turn of the century, China basically had a coast guard. Now they have a larger navy than we do.”

Some principles of the Pentagon’s new “Arsenal of Freedom” acquisition strategy date to the Biden administration or earlier. Other proposals share similarities with Republican-proposed legislation in Congress.

Two pieces of proposed legislation, the Senate’s FoRGED Act and House SPEED Act both would encourage the military to issue contracts more quickly by skirting many of the detailed requirements that have governed past programs.

“In the defense world, you build to the terms of the contract—no more, no less,” said Jerry McGinn, an industrial-base expert at the Center for Strategic and International Studies. As a result, he said, the U.S. military supply chain “is not currently performing at the level that it needs to.”

Hegseth that the military is already moving at “wartime speed” to develop its Golden Dome antimissile shield and strengthen the supply of critical munitions. Deputy Defense Secretary Steve Feinberg has overseen both efforts.

“Our contractors need to change and do better,” Feinberg said Friday. “Contractors who are willing to change with us will prosper and grow. Those who don’t and resist it will be gone.”

Some military departments already have begun to overhaul their bureaucracy. The Army has started dissolving roughly a dozen “program executive offices” and reorganized them into six portfolios under more powerful executives. Officials say the goal is to thin the number of officials needed to sign off on a new contract.

The Pentagon earlier this year reorganized an office set up to deploy thousands of low-cost drones, partly because of concerns that the effort wasn’t moving quickly enough. The move shifted work from the Replicator program to a new unit called the Defense Autonomous Warfare Group, or DAWG.

Hegseth on Friday also promised new incentives to encourage companies to hit production targets and invest in new production capacity. In some cases, the U.S. has already invested directly in companies like MP Materials to guarantee a safe supply of important resources such as rare earths.

The defense industry is noticing the Pentagon’s growing preference for nontraditional contractors. Executives at several startups say that major defense contractors are pitching them on partnerships, thinking their chances are better with a new face at their side.

“We are committed to expanding the commercial business model within a streamlined and less bureaucratic acquisition framework,” said Chris Kubasik, chief executive of defense giant L3Harris, ahead of Hegseth’s speech. He cited partnerships with defense startups as a sign of L3Harris’s responsiveness to the Pentagon’s new effort.

Other Pentagon priorities could require more time to see through. Hegseth’s plan calls for the military to maintain at least two sources for critical components to promote competition and avoid supply-chain disasters. Diversifying the supply of linchpin parts has frustrated Pentagon officials for years. Weapons systems ranging from jet fighters to missiles often feature some parts made by a single U.S. manufacturer, according to supply-chain experts.

Military officials have tried before to loosen the military’s hidebound acquisition process, with mixed results. Some Silicon Valley-backed executives warned that the shake-up could slow their progress before new weapons production can pick up steam.

Andy Lowery, CEO of the air defense company Epirus, said the streamlined structure could complicate his company’s effort to secure a final contract for counterdrone technology after years of Army tests.

“I’ve seen things sit in a quagmire because nobody knows who’s in charge,” Lowery said. “It’s a risk to us.”