The Army is undertaking a significant transformation in its approach to defense contracting, as outlined by Army Secretary Dan Driscoll this week. He emphasized a shift away from traditional prime defense contractors towards smaller, innovative vendors reminiscent of Silicon Valley. This announcement follows the Army’s decision to revamp its acquisition structure, a move that aims to streamline operations and accelerate the delivery of essential resources to soldiers.
Transforming Acquisition Strategies
At a media roundtable, Driscoll stated, “It used to be 90 percent of things we bought were purpose-built for the military or the Army, and 10 percent were off the shelf.” He criticized the defense industrial base, asserting that it has misled both the American public and military leaders into believing that only military-specific solutions would suffice. “In reality, a lot of these commercial solutions are equal to or better,” he added, arguing that the Army has hindered its own progress by clinging to outdated procurement practices.
This new strategy aims to reverse these trends by shifting the balance towards acquiring 90 percent of resources from commercially available products, reserving only 10 percent for specialized military solutions when absolutely necessary. Driscoll highlighted the urgency of this change, noting that in the context of large-scale conflict, relying on bespoke solutions is impractical and slow.
While advocating for this significant shift, Driscoll also acknowledged the Army’s historical shortcomings as a customer. He noted that the Army has often created challenges for defense contractors through its complex and demanding procurement processes. “When I meet with primes, I highlight how bad of a customer we have been,” he said, recognizing the difficult landscape that primes navigate in fulfilling military demands.
Collaboration with Commercial Vendors
The Army’s revised acquisition structure is set to be the most comprehensive overhaul in years, including a reduction in the number of general officers overseeing acquisitions and a consolidation of the existing 12 Program Executive Offices (PEOs). This restructuring aims to enhance collaboration with commercial entities and adapt to a rapidly changing defense landscape.
These changes align with remarks made by Defense Secretary Pete Hegseth during a meeting with defense CEOs on November 7, 2023. Hegseth stressed the importance of being open to commercially available solutions, even if they do not fully meet Army specifications. “It means that we will be open to buying the 85 percent solution and iterate together over time to achieve the 100 percent solution,” he explained, emphasizing a willingness to accept some level of risk in order to enhance operational effectiveness.
In practical terms, the Army has already begun incorporating commercial products into its operations. For instance, General Motors’ engines are being utilized in the Army’s Infantry Squad Vehicles (ISVs), and discussions are underway to potentially use Caterpillar engines for the next-generation M1E3 Abrams tank. “There are companies out there that do this that we can definitely take advantage of, and that’s what we’re doing,” said Army Chief of Staff Gen. Randy George. He expressed optimism about the collaborative efforts between traditional primes and emerging vendors, indicating a shared commitment to enhancing operational speed and efficiency.
The Army’s shift towards engaging with a broader range of suppliers reflects a growing recognition of the need for adaptability in defense contracting. As the military landscape evolves, the Army aims to leverage commercial innovations to meet the challenges of modern warfare more effectively.
