WASHINGTON – In a bold move to reshape America's military-industrial backbone, Defense Secretary Pete Hegseth announced comprehensive reforms on Friday to the Pentagon's defense acquisition and arms transfer processes, aiming to turbocharge weapons production, bolster industry resilience, and equip U.S. forces to counter rapidly evolving global threats from adversaries like China and Russia.
Delivering his remarks at the prestigious National War College in Washington, D.C., Hegseth – a former Fox News host and Army National Guard veteran turned Trump administration stalwart – framed the overhaul as a "historic transformation" of the Defense Acquisition System. The changes, many of which are already in motion under directives from President Donald Trump's April executive order on foreign defense sales, seek to dismantle bureaucratic hurdles that have long plagued procurement timelines, often stretching years for critical systems like hypersonic missiles and drone swarms. Speaking to an audience of industry executives, military commanders, and policymakers, Hegseth emphasized that the reforms would foster a "wartime industrial base" capable of surging production at the "speed of ingenuity," echoing the urgency of conflicts in Ukraine and the Middle East that have depleted U.S. stockpiles and exposed vulnerabilities in supply chains.
Hegseth outlined five core transformations designed to inject dynamism into the $400 billion annual weapons-buying enterprise overseen by Under Secretary for Acquisition and Sustainment Michael Duffey. First, the Pentagon will incentivize American industry – from legacy giants like Lockheed Martin to nimble startups – to pivot toward wartime footing. This includes providing "reliable demand signals" through multi-year contracts and flexible business models that prioritize volume over perfection, welcoming new entrants into a sector historically dominated by a handful of primes. "We're not just reforming; we're liberating the bureaucracy from itself," Hegseth declared, urging contractors to "get on board or get out of the way." He highlighted early wins, such as the rapid scaling of the Army's Future Vertical Lift program, where prototype testing timelines have been slashed by 40% through relaxed certification requirements for low-risk components.
The second pillar focuses on unleashing the "defense industrial and government workforces" by shifting incentives from rigid processes to tangible progress. Hegseth announced provisions to "penalize or sideline" acquisition officials and contractors who chronically miss deadlines, introducing performance-based bonuses tied to delivery metrics rather than paperwork compliance. This cultural shift, he argued, addresses a Pentagon plagued by "fragmented accountability and misaligned incentives" that have delayed everything from F-35 upgrades to next-generation submarines. Deputy Defense Secretary Stephen Feinberg, in a rare public appearance, reinforced this by critiquing the department's "slow and bureaucratic manner," vowing that "speed and volume above all else" would define partnerships moving forward.
Streamlining acquisition systems forms the third transformation, with Hegseth directing a 150-day review of the Pentagon's 5000-series instructions – the bible of weapons procurement – to embed flexibility and efficiency. Key changes include mandating at least two qualified sources for critical program elements to foster competition and reduce single points of failure, as well as piloting "agile contracting" models inspired by commercial tech sectors. For instance, software acquisition – reformed earlier this year – will now extend to hardware, allowing modular upgrades to systems like the Joint All-Domain Command and Control network without full recertification. Hegseth stressed that these tweaks would cut approval layers, potentially halving the average 18-24 month timeline for major programs.
The fourth goal champions "technical excellence" while embracing "higher levels of calculated risk" to accelerate innovation. In a departure from risk-averse norms, the reforms permit prototyping with 80% maturity thresholds for urgent needs, such as counter-drone technologies amid rising threats from Iranian-backed militias. Hegseth cited the Valkyrie combat drone exhibition in July as a model, where Under Secretary for Research and Engineering Emil Michael fast-tracked integration with manned fighters, shaving months off development. This risk-tolerant ethos, he said, will integrate emerging tech like AI-driven logistics and quantum-secure communications more swiftly, ensuring warfighters aren't outpaced by adversaries investing billions in asymmetric capabilities.
Finally, the fifth transformation establishes "war speed" – or "warp speed," a nod to Operation Warp Speed's COVID-19 vaccine push – as the procurement norm. Sustainment contracts will prioritize rapid replenishment, with Hegseth mandating IT modernizations and performance dashboards to flag bottlenecks in real-time. "By taking greater calculated risk in how we build, buy, and maintain our systems, we will gain speed to more quickly provide capabilities to the battlefield," he explained, underscoring that "increasing acquisition risk decreases operational risk." This principle will apply to sustainment, where aging fleets like the B-52 bombers will see modular retrofits accelerated by 50% through pre-approved vendor pools.
A cornerstone of these reforms is the overhaul of Foreign Military Sales (FMS), the mechanism for arms transfers to allies. Hegseth revealed a seismic realignment: the Defense Security Cooperation Agency (DSCA) and Defense Technology Security Administration (DTSA) will shift from the policy directorate – currently led by Under Secretary Elbridge Colby – to the acquisition and sustainment shop under Duffey. This consolidation, detailed in a post-speech memo, aims to align U.S. sales with domestic production rhythms, addressing complaints that policy silos have ballooned FMS timelines to 2-3 years, driving allies toward faster suppliers like Turkey's Baykar for drones. Building on Trump's April executive order "Reforming Foreign Defense Sales to Improve Speed and Accountability," the move requires a 60-day implementation plan, including legislative outreach to Congress for statutory tweaks.
The reforms come at a pivotal moment. Russia's invasion of Ukraine, now in its fourth year, has strained U.S. munitions reserves, with artillery shell production lagging demand by 300% despite $61 billion in aid. Escalating tensions in the Indo-Pacific, including China's hypersonic tests and gray-zone tactics around Taiwan, further underscore the need for agility. Hegseth noted that combatant commands have already piloted efficiencies, such as streamlined FMS in the Central Command theater for Ukrainian resupplies. Industry leaders, including the U.S. Chamber of Commerce's Defense and Aerospace Council, hailed the changes as a "growth opportunity," predicting a surge in deals if bottlenecks clear.
Yet, challenges loom. Critics, including some former acquisition officials, warn that empowering program executive officers (PEOs) over service acquisition executives (SAEs) could fragment oversight, while embracing risk might invite quality lapses in high-stakes systems. Hegseth dismissed such concerns, positioning the overhaul as a litmus test for his tenure: "For those who come along with us, this will be a great growth opportunity and you will benefit." He also signaled a "legislative engagement plan" to secure congressional buy-in, potentially averting funding clashes in the FY2026 budget.
Hegseth's rhetoric struck an unusually conciliatory tone toward industry, a shift from his September berating of flag officers for "woke" distractions. "I’m here to transform and empower," he said, invoking the Arsenal of Democracy legacy. "The War Department will be ready when the time comes. We will have, and we will be, the arsenal for freedom." He closed with a rallying cry: "The world is watching. Our adversaries are watching. Our allies are watching. We must show them that America is back, stronger and more determined than ever to defend our interests and uphold freedom."
Analysts see these reforms as Hegseth's bid to cement a legacy amid scrutiny over his non-traditional background. If successful, they could replenish stockpiles by 2027, per Pentagon models, and reclaim U.S. primacy in global arms markets, where exports hit $238 billion last year but face eroding edges. As implementation ramps up, all eyes turn to whether "warp speed" can outpace the inertia of a trillion-dollar behemoth.
