The Defense Acquisition System, as You Knew It, Is Dead

Introduction

Ahead of the last week’s release of the 2025 U.S. National Security Strategy, Secretary of Defense Pete Hegseth issued sweeping public statements and new policies on defense acquisition reform. One declaration captured the moment’s significance: “The defense acquisition system, as you knew it, is dead.” These ten words, delivered at the National War College, on Nov. 7, signaled the Department of Defense’s abandonment of its long-standing process-driven procurement model in favor of what Hegseth described as “the beginning of an unrelenting onslaught to change the way we do business.”

For contractors, the message carries immediate operational implications: adapt to a faster, warfighting-driven acquisition environment — or risk obsolescence in the defense industrial base.

Three days later, on Nov. 10, the Department issued formal memoranda and an Acquisition Transformation Strategy, confirming this shift as official policy rather than rhetorical positioning. The strategy streamlines acquisition processes, replaces legacy requirements systems, and prioritizes speed and commercial availability while explicitly calling on defense industry partners to share risk, increase production capacity, and deliver at operational tempo.

The 2025 National Security Strategy (NSS), published on Dec. 5, provides the strategic framework for Hegseth’s systemic overhaul, reconceptualizing industrial policy as a strategic imperative that prioritizes domestic production of semiconductors, batteries, energy systems, weapons, ships, and strategic materials to ensure wartime mobilization capacity. Together, the NSS and the new acquisition policies demand that contractors view and respect the defense industrial base’s production capacity as a fundamental dimension of national power rather than merely a commercial relationship with government.

Key Remarks from November 7th

Secretary Hegseth’s remarks carried several themes that matter immediately to the commercial  partners in the Defense Industrial Base:

1. Speed is replacing process.

 “Speed replaces process, money follows need…”

Legacy approval chains and years-long development cycles will be deprioritized in favor of rapid prototyping, accelerating fielding, and commercial-first solutions.

2. The Department expects industry to invest – now.

“[Contractors] need to change their focus… and invest their own capital to get there.”

Contractors who rely on taxpayer-funded development, slow scaling, or narrow proprietary approaches may lose relevance as the Department demands faster, larger-scale output.

3. Comfortable incumbents risk losing their seat.

Hegseth warned that companies clinging to the prior system may be “wished well in future endeavors” – a not-subtle signal that market share is in play.

4. Partnership is expected; urgency is required.

 “You are not our enemies… You are our allies. You are Obi-Wan Kenobi, you are our only hope.”

Hegseth emphasized that this reform is not aimed against contractors but depends on them. The Department expects commercial industry partners to lean in, share risk, and help execute this new acquisition model at operational tempo.

The November 10th Memoranda: What Officially Changes

Three memoranda released on November 10, 2025, translate the speech into policy direction:

1. Transforming the Defense Acquisition System into the Warfighting Acquisition System: It outlines structural shifts, including speed-to-field, reduced bureaucracy, expanded use of commercial technology, and warfighter-driven requirements.

2. Reforming the Joint Capabilities Integration and Development System (JCIDS) Process: It begins dismantling the JCIDS as it has been historically understood, replacing it with a faster, portfolio-assigned approach.

3. Unifying the Arms Transfer and Security Cooperation Enterprise: It signals streamlined foreign military sales and accelerated international support pathways.

These memoranda are reinforced by the Acquisition Transformation Strategy, which sets out five pillars:

1. Rebuild the Defense Industrial Base – expand capacity, foster competition, reform bid protests, and accelerate decision-making cycles.
2. Empower the Acquisition Workforce – stronger authority and faster decision-making.
3. Maximize Flexibility – broader use of Other Transaction Authority (“OTA”), Middle Tier Acquisition (“MTA”) pathways, commercial tech, modular systems.
4. Deliver High-Performance Systems – open architectures, scalable manufacturing, digital engineering.
5. Strengthen Life-Cycle Risk Management – dual-sourcing, supply-chain resilience, sustainment planning.

Together, these documents and the accompanying strategy form a detailed blueprint for the new acquisition framework outlined by Hegseth. Understanding this larger pattern is essential to anticipating what comes next.

What This Means for Contractors Right Now

1. Expect more competition – quickly.

New entrants, commercial tech firms, and agile midsize contractors may gain ground as the Department seeks faster solutions and diversified supplies.

2. Proposals must speak to speed, investment, and capacity.

Narrative emphasizing regulatory compliance alone will not be competitive. Contractors should highlight:

• • Rapid prototyping and iteration
  • Modular/open architecture
  • Surge manufacturing capability
  • Internal capital investment and risk-sharing

3. Portfolios and new leadership roles will shift who makes decisions.

The move toward portfolio acquisition executives means contractors must quickly identify new points of contact and understand how performance will be measured.

4. Legacy Programs will face scrutiny.

Contracts with long lead times, limited scalability, or closed (or non-agnostic) architectures  may be modified and “re-looked” under the “war-fighting relevance” lens.

Contractor Action Checklist

To stay competitive under the new system, contractors should:

• Assess adaptability: Prepare to adapt to the Department’s vision or lose contracts
• Assess internal capacity: Where can you scale faster? Where must you invest?
• Review your portfolio for slow programs: Identify where speed can be accelerated or bottlenecks removed.
• Strengthen supply-chain resilience: Prepare for dual-source expectations.
• Modernize proposal narratives: Highlight speed, modularity, and internal investment – not just compliance.
• Engage with portfolio leads early: The Department is shifting decision authority and timelines.
• Identify commercial-tech opportunities: Integrate commercial capacities into defense offerings.

Our Clark Hill Team is Here to Help

As the Department of War advances this accelerated posture, contractors will face new expectations, competitive pressures, opportunities, and challenges.

Our team is prepared to help you navigate these changes—whether you need guidance on compliance, capture strategy, restricting your offerings, preparing for new program competitions, or aligning with the Warfighting Acquisition System. Please do not hesitate to reach out to our team if you have any questions or require assistance.

Contributors: Lauren Tesler, Law Clerk

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