On April 9, 2025, President Donald Trump signed a landmark Executive Order
(EO) titled “Modernizing Defense Acquisitions and Spurring Innovation in the
Defense Industrial Base.” This directive aims to overhaul the Department of
Defense’s (DoD) acquisition processes, addressing inefficiencies and enabling
the military to adapt more rapidly to modern security challenges. By prioritizing
speed, flexibility, and commercial innovation, the EO is designed to revitalize how
the Pentagon procures weapons systems, technology, and equipment for
warfighters.
Accelerating Acquisition Processes
The directive to streamline the DoD’s acquisition processes within 60 days is
central to the EO. The goal here is clear: accelerate procurement cycles to match
the speed of technological advancements. Historically, FAR-based processes
have been sluggish, with timelines stretching several years—an unacceptable
pace in today’s fast-evolving battlefield environments.
To address these challenges, the EO emphasizes the use of Other Transaction
Authority (OTA), a flexible contracting mechanism that bypasses many
traditional bureaucratic hurdles. OTAs are especially appealing for non
traditional contractors, startups, and commercial firms, which often avoid
defense contracts due to complex regulations. By enabling faster acquisitions,
this reform encourages greater participation from innovative companies.
Additionally, the EO incorporates the Adaptive Acquisition Framework, which
adapts processes to specific program needs rather than a rigid, one-size-fits-all
approach. Combined with efforts to eliminate redundant approval tasks and
centralize decision-making, these changes are expected to significantly expedite
delivery timelines and reduce the compliance burdens faced by smaller and non
traditional contractors.
Cutting Bureaucratic Red Tape
The EO also tackles the regulatory burdens that have long plagued defense
procurement. The Secretary of Defense is required to review and revise the
Defense Federal Acquisition Regulation Supplement (DFARS) and other internal
guidance, removing outdated or redundant regulations.
A standout feature of the EO is the administration’s “ten-for-one rule,” which
mandates eliminating 10 existing regulations for every new one added. This
approach reduces the complexity of compliance, making it easier for small and
mid-sized companies to compete in the defense market. These efforts are
expected to widen the defense industrial base and boost competition by
lowering barriers for non-traditional contractors.
The EO explicitly calls for breaking away from traditional biases and preferences
in contracting. Historically, many agencies have favored familiar acquisition
methods, often overlooking innovative approaches that better serve the needs
of non-traditional companies. By fostering a mindset of flexibility and openness,
the EO aims to nurture a more inclusive and competitive defense ecosystem.
Workforce Reforms to Support Innovation
Recognizing that policy changes alone won’t transform acquisition culture, the
EO emphasizes reforming the DoD’s acquisition workforce. Within 120 days, the
Secretary of Defense must present a plan to restructure the workforce’s
performance metrics, rethink incentives, and assess staffing levels. The goal is to
empower acquisition professionals to embrace innovative procurement
authorities, such as OTAs and Commercial Solutions Openings (CSOs), while
getting comfortable with taking calculated risks.
To support this cultural shift, field training teams led by senior acquisition
executives will be deployed to educate personnel on best practices for utilizing
tailored acquisition tools. The EO seeks to create a more agile workforce capable
of leveraging modern contracting mechanisms by addressing the longstanding
risk-averse culture. This is expected to make it easier for businesses to propose
alternative acquisition approaches without encountering resistance from
leadership across the board. (Huge win!)
Scrutinizing Legacy Programs
Another defining feature of the EO is a call for accountability in ongoing
acquisition programs. Within 90 days, the Pentagon must review all major
defense acquisition programs (MDAPs). Programs that are more than 15% over
budget, 15% behind schedule, or no longer aligned with mission priorities may
face cancellation.
This marks a significant departure from the traditional Nunn-McCurdy breach
standard, which required a 50% cost overrun to trigger congressional review. By
lowering the threshold for intervention, the EO signals a stricter approach to
underperforming programs. Such reviews could free up funding for higher
priority initiatives and enable the procurement of more agile, cost-effective
systems.
Modernizing Requirements Development
In addition to acquisition reforms, the EO mandates a review of the Joint
Capabilities Integration and Development System (JCIDS), the process by which
the military defines capability requirements. Within 180 days, the DoD must
streamline this system to reduce the time it takes for emerging technologies to
reach warfighters. The current requirements development process has lagged
behind rapidly changing technological advances and has been a sticking point for
program budgets and contractors competing for them.
Implications for Industry
The EO has far-reaching implications for the defense industry. For small
businesses and non-traditional contractors, the focus on commercial solutions,
faster acquisitions, and simplified compliance requirements represents a unique
opportunity to break into a market traditionally dominated by large, established
players. By fostering a more inclusive industrial base, the DoD hopes to bring
cutting-edge technologies into the fold more rapidly.
For legacy contractors, the increased scrutiny on program performance and cost
overruns may mean reevaluating timelines and budgets. Underperforming
programs could face cancellations, signaling a shift toward higher accountability
and more efficient use of resources. These are changes that American taxpayers
and non-traditional industry members should welcome.
A Dynamic Future for Defense Procurement
This Executive Order marks one of the most ambitious attempts to modernize
the defense acquisition system in recent history. By combining process
improvements, regulatory relief, workforce reforms, and heightened
accountability, the directive sets a bold vision for the Pentagon’s future.
As the DoD begins implementing these changes, industry stakeholders should be
watching closely to evaluate their impact. If successful, the reforms could set a
new standard for defense procurement—one that prioritizes speed, adaptability,
and innovation. The EO holds the potential to empower a new generation of
defense industrial base competitors that could reshape the defense industry for
the better.
For businesses navigating the defense market, the message is clear: The time has
come to embrace non-traditional acquisition strategies and align with the
Pentagon’s evolving priorities. With the administration committed to
modernization, opportunities are ripe for companies ready to innovate and help
reshape the future of defense procurement.