Drumroll, please. On November 7, 2025, the Department of Defense (DoD) released three memoranda signaling changes to its approach to procurement and Foreign Military Sales/Direct Commercial Sales in the years to come: “Unifying the Department’s Arms Transfer and Security Cooperation Enterprise to Improve Efficiency and Enable Burden-Sharing”; “Reforming the Joint Requirements Process to Accelerate Fielding of Warfighting Capabilities”; and “Transforming the Defense Acquisition System into the Warfighting Acquisition System to Accelerate Fielding of Urgently Needed Capabilities to Our Warriors.” The latter memorandum appends the DoD’s Acquisition Transformation Strategy (the Strategy), which is aimed at dramatically reforming how the DoD’s acquisition system operates with an eye toward increasing the speed and flexibility of DoD procurements and the acquisition workforce. This document begins the march toward sunsetting the existing Defense Acquisition System in favor of what is envisioned to be a more rapid and effective system designed to provide the DoD with the capabilities it needs to meet its mission requirements.

Background

There are several actions described in the Strategy that if implemented as envisioned will have seismic implications for the defense industrial base. Some key initiatives from the guidance include:

  • Increasing DoD focus on expanding and diversifying the defense industrial base
  • Accelerating a transition from “requirements-based acquisition” to “solutions-based acquisition”
  • Focusing on acquiring increased intellectual property (IP) rights to meet the DoD’s needs
  • Reducing the regulatory and process burden currently applicable to contractors
  • Prioritizing the use of non-Federal Acquisition Regulation (FAR) contracting instruments, including the other transaction authority (OTA), and using commercial contracting procedures wherever possible
  • Reforming the bid protest process
  • Empowering the DoD’s acquisition workforce through a number of initiatives aimed at removing red tape and providing opportunities to make “requirements trades”
  • Holding the acquisition workforce accountable for acquisition outcomes, including through developing and implementing key performance indicators

Pursuant to President Donald Trump’s April 9, 2025 Executive Order 12465, “Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base” (EO), the DoD was instructed to take several key actions to revamp its acquisition system. Of particular note, Section 3 of the EO required the DoD to submit a plan to the president to reform its acquisition process, incorporating (1) the utilization of existing authorities to expedite acquisitions, with a focus on pathways such as commercial solutions and OTAs; (2) a process review of each role within the acquisition workforce “to eliminate unnecessary tasks, reduce duplicative approvals, and centralize decision-making”; and (3) the use of a configuration steering board, a formal body that will be used “to effectively manage risk for all acquisition programs.” In Section 4, the EO also directed review of the applicable regulations, manuals, and other guidance documents related to the DoD’s acquisition process to “[e]liminate or revise any unnecessary supplemental regulations or any other internal guidance” and promote “expedited and streamlined acquisitions.”

As part of its response to these mandates, the DoD issued a memorandum titled “Transforming the Defense Acquisition System into the Warfighting Acquisition System to Accelerate Fielding of Urgently Needed Capabilities to Our Warriors.” The memo redesignates the Defense Acquisition System as the Warfighting Acquisition System (WAS) and charges the WAS with “aggressively [prioritizing] the timely and urgent delivery of operations capabilities to the Warfighter.” The memo directs the Under Secretary of War for Acquisition and Sustainment (USW(A&S)) and the Service Acquisition Executives to “immediately begin executing the transformation directed herein.”

Critical Next Steps

In light of the foregoing, contractors throughout the DoD supply chain should take particular note of these forecasted changes and prepare to pivot to continue to meaningfully participate in the WAS. The Initial Directed Implementation Actions appended to the memo direct DoD functionaries to take numerous steps in the near term to begin the transformation. In particular, the USW(A&S) is directed to take a broad range of key actions, including establishing new portfolio acquisition executives (PAEs) to enhance accountability for acquisition outcomes, implementing a “commercial-first and alternative proposals policy,” cutting regulations (including the Defense FAR Supplement (DFARS)), and modernizing contracting “to provide clear incentives and potential penalties to industry.”

The Strategy attached to the memo articulates the three outcomes for the transformed acquisition system:

  • Field technology and modernize systems at a rate that outpaces adversaries.
  • Increase production capacity and deliver wartime surge capacity for key capabilities, systems, weapons, and munitions to US warfighters and priority allies and partners.
  • Put the entire acquisition system and defense industrial base on wartime footing with the urgency and mandate to accept more risk, transitioning from a culture of compliance to one of speed and execution, with a focus on rapidly tackling the strategic challenges facing the nation.

The Strategy provides details on five key pillars to achieve the direction of the EO:

  • Rebuild the Arsenal of Freedom: Rebuild the Defense Industrial Base
  • Elevate and Empower the Acquisition Workforce to Rapidly Deliver Capability
  • Maximize Acquisition Flexibility through Reduced Regulations and Process
  • Develop High-Performance Systems through Rigorous Enterprise Technical Execution Excellence
  • Improve Lifecycle Risk Management

This sweeping Strategy, while nascent, still previews changes that will come at a quick tempo in the next few months. Of particular note, within 150 days, the DoD is instructed to update 5000-series DoD instructions, the DoD 7000.14-R Financial Management Regulation, the DFARS, and “other relevant documents to codify the directions contained in this memorandum.” As the rhythm of these changes is established, contractors in the DoD supply chain should be aware of several key themes and potential pitfalls in the DoD’s Strategy:

  • As part of its goal to Rebuild the Defense Industrial Base, the DoD intends to expand the pool of contractors building military equipment and reduce barriers to entry for new companies to join the DoD supply chain. In addition, the DoD intends to work directly with suppliers, not just large prime contractors, to ensure “effective integration across the supply chain.” This means that there may be considerable opportunity for nontraditional companies of all shapes and sizes to become involved in the DoD’s acquisition life cycle. However, while these opportunities may be attractive, and while the DoD has articulated an intent to transition from a “culture of compliance to one of speed and execution,” companies should be cautious not to lose the beat as many existing compliance obligations will still be in play.
  • The transition from “requirements-based acquisition” to “solutions-based acquisition” could facilitate involvement in procurement from companies offering solutions to operational problems rather than rigid adherence to bespoke requirements. This promises to invite innovation in the defense industrial base and reward companies that are able to rapidly prototype potential solutions. Companies that are able to meet this cadence will be well positioned to engage with the DoD in the years to come.
  • Cumbersome existing regulations and processes are squarely in the DoD’s crosshairs. In particular, the DoD intends to eliminate the Joint Capabilities Integrations and Development System, support a transition from Cost Accounting Standards to Generally Accepted Accounting Principles (a process that is already underway), and reform the FAR and DFARS to reduce regulations and “[s]lash rules down to only what is absolutely vital and remove anything that slows down government contracts, especially the Truth in Negotiations Act [TINA].” The DoD anticipates that “the competitive pressures of the market will provide inherent cost and quality management.” Contractors should expect that while these revised regulations and accounting procedures and the tailored application of TINA may ultimately have the desired effect of streamlining the DoD’s acquisition system, they will not be eliminated entirely (and may well simply be rebranded). Thus, regulatory compliance in this shifting environment is absolutely critical to success. 
  • Contractors should be especially aware that the DoD intends to push for greater IP rights. In fact, the DoD intends to focus on the Modular Open System Approach for development programs moving forward, and as part of those acquisitions, the DoD intends to obtain broad government purpose rights. This will give the DoD considerable flexibility to share IP, with the goal of increasing competition and resiliency. In addition, expect the DoD to seek greater IP rights as part of its push to “conduct organic depot-level maintenance, repair, and overhaul of systems and subsystems to ensure military readiness for any conflict.” The DoD anticipates balancing contractor IP rights with the data the government will require to meet its own needs. This objective is headlined as “Owning the operator’s manual of our systems,” which indicates the DoD’s objective in terms of how it will approach IP rights. Contractors should be aware that while the WAS reforms will likely present significant opportunity, they also may come with risks to valuable IP rights and should therefore be prepared to vigorously negotiate these rights as part of their future contracts.
  • The DoD intends to expand the use of OTAs, using them for prototype and follow-on contracts “where in the best interest of the U.S. Warfighter and the taxpayer.” The Strategy acknowledges that this dramatic change will require training the acquisition workforce to use these flexible contracting tools. The Strategy also mandates an increased reliance on commercial products and services so that the DoD can leverage the cost and schedule efficiencies that result from acquiring solutions from the commercial marketplace.
  • The Strategy aims to minimize the impact of bid protests on the DoD’s acquisition efforts by finding ways to accelerate the process and “make losers pay.” To achieve this, the DoD, in concert with the Office of Management and Budget, is pushing for legislative change aimed at driving down the number of bid protests and accelerating the timeline for completion of the process. It is not clear from the Strategy whether and to what extent the protest process—which is already a complex web of short timelines—could change, but the DoD does float the idea of withholding fee or profit from an incumbent that files a frivolous protest for the purpose of obtaining a bridge contract while the process plays out.
  • The DoD’s Strategy devotes significant details to the DoD’s vision of an agile, empowered workforce. In addition to initiatives to recruit and retain a highly skilled workforce, the Strategy lays out the DoD’s plan to transform the Defense Acquisition University into the Warfighting Acquisition University, which will modernize the training delivered to acquisition professionals. On a macro level, the DoD intends to “pivot from program- and platform-centric structures, processes, and strategies to deliver integrated suites of capabilities across platforms and systems.” In service of this goal, the DoD will empower PAEs, who will be paired with a cross-disciplinary team of subject matter experts, to manage portfolios focused on connected major acquisition activities.

As the rat-a-tat of DoD acquisition reforms continues, contractors should prepare to march to the beat of the DoD’s drum to ensure they can take advantage of continued and/or new acquisition opportunities. Companies should also expect that legacy acquisition procedures will not disappear overnight as contracting officers and other acquisition professionals adjust to the new rhythm.