SECDEF HEGSETH ANNOUNCES SWEEPING CHANGES TO DEFENSE ACQUISITION PROCESS

John Driessnack has been deeply connected to the Air Force’s acquisition process pretty much since the day he was born. His late father, Lt General (retired) Hans “Whitey” Driessnack, who served as the USAF’s Comptroller and ended his career as Assistant Vice Chief of Staff of the Air Force, is credited with creating something called Earned Value Management (EVM), a project management methodology that objectively measures project performance by integrating scope, schedule, and cost data. At the time of its creation, EVM was considered to be pretty revolutionary stuff. EVM methodology today is used by program managers around the world, per recognized international standards.

The Driessnack boy followed in his father’s footsteps, minus the part where his dad flew fighters during the Korean War, and became an officer in the USAF. He served 21 years as an acquisition officer on several big-dollar programs and finished his career teaching at the Defense Acquisition University (DAU).

Since his retirement as a Lt Colonel in 2004, Driessnack has consulted on numerous USAF acquisition programs and continues to teach at DAU through the University of Maryland. In his more than 40 years of acquisition experience, not including time served living with mom and dad, he’s seen the Department of Defense’s acquisition process receive criticism for a long list of problems to include cost, schedule overruns, and the sheer complexity of the process itself. Under a new reform initiative, that may soon change.

SecDef Announces Sweeping Changes to the Acquisition Process

On November 7, Driessnack watched Defense Secretary Pete Hegseth announce a plan to profoundly change the DoD’s acquisition process. The centerpiece of Hegseth’s plan is to replace Program Executive Officers (PEOs) with Program Acquisition Executives (PAEs), giving the people who run major programs more authority and freedom to run a portfolio of programs as they see fit, with less oversight. This particular change brought a big smile to Driessnack’s face.

“In 2019, I was the expert advising a congressional committee on reform of the DoD acquisition processes. In that effort, the commissioners of generals and senior officials wanted to empower the PEOs for the portfolio they were charged to manage.

I advised them to take this approach and convinced them to change the name PEO to PAE. It’s taken six years for that idea to finally get to implementation.”

Under Hegseth’s plan, the Pentagon will replace the old Defense Acquisition System with a new "Warfighting Acquisition System." The aim is to accelerate the delivery of weapons and systems by prioritizing speed, flexibility, and commercial technology by eliminating excessive regulations. The new reforms include the following key changes:

• Redesignation of the System: The Defense Acquisition System (DAS) is "dead" and being replaced by the new "Warfighting Acquisition System" (WAS).
• Emphasis on Speed and Risk: The new system will focus on speed, flexibility, and a higher tolerance for risk, moving away from a system that rewarded meeting all requirements regardless of timeline.
• Structural Reorganization: The existing Program Executive Officers (PEOs) will be replaced by empowered Portfolio Acquisition Executives (PAEs), who will have greater authority to manage budgets and reallocate funding to promising programs.
• Elimination of Bureaucracy: The Joint Capabilities Integration and Development System (JCIDS), a process often criticized for being slow and rigid, will be terminated.
• Prioritizing Commercial Solutions: The DoD will encourage the use of commercial off-the-shelf (COTS) technology and will partner with agile vendors capable of rapid production.
• Industry Accountability: The DoD will prioritize contractors who can deliver efficiently, potentially opening the door to new vendors and warning those "too comfortable with the status quo" that they may not be included in future contracts.
• Reforming Foreign Military Sales: The system for selling weapons to US allies is also being streamlined and unified to improve efficiency and speed of delivery.

Is This Really New?

This isn’t entirely new, says Driessnack.

“PEOs were created as part of Goldwater-Nichols in 1986, so 40 years ago. The industry portfolio standard was first published in 2008, so it’s time for defense to move to this evolving construct that takes a more strategic approach with a broader view than each individual program. Missions today require more integrated systems, so the portfolio approach should help with that,” Driessnack said.

A Brief History of Defense Acquisition Reform

Those who have worked in defense acquisition over the last fifty years or so might say, “So what? We’ve tried this before.” They’re not necessarily wrong.

Since the 1960s, the DoD has made several attempts to make the acquisition process leaner, meaner, faster, and cheaper with limited successes. In some cases, efforts at reform just served to add complexity to the process.

Here’s an abbreviated list of some of those efforts.

• Packard Commission (1985): This commission made numerous recommendations to improve defense acquisition, including creating new leadership positions and streamlining the process. Those were implemented in the Goldwater-Nichols Act (1986). While not solely an acquisition reform, this act significantly restructured the military chain of command. It had a major influence on acquisition reform efforts, particularly by considering the integration of planning, programming, budgeting, and requirements generation.
• Defense Acquisition Workforce Improvement Act (1990): This act focused on the acquisition workforce, establishing new standards and training for acquisition personnel.
• End of the Cold War: Reduced defense budgets and industry consolidation led to a push for more efficient acquisition processes.
• Federal Acquisition Streamlining Act of 1994: This act was part of a larger effort to reduce bureaucracy and competition requirements.
• Federal Acquisition Reform Act of 1995: Addressed full and open competition standards in procurement.
• Clinger-Cohen Act of 1996: Focused on improving information technology acquisition after the DoD recognized that its slow processes weren’t in step with rapid developments in the commercial IT industry.
• Shift to commercial practices: The government began to adopt practices from the commercial sector, including shifting more responsibility to contractors for managing programs, but this did not always lead to better outcomes. Instead, the DoD found itself with less visibility into the execution of programs.
• Weapon Systems Acquisition Reform Act of 2009: This law aimed to reduce procurement costs by changing how major defense programs were contracted and purchased. It also created the Office of Cost Assessment and Program Evaluation to increase the emphasis on testing new weapons before full production.
• Continued studies: Over the years, numerous studies by organizations like the General Accountability Office and universities have analyzed acquisition issues, often arriving at similar conclusions but facing challenges in implementation.
• Recent legislative focus: Current reform efforts continue to focus on speeding up the acquisition process. Examples include legislative provisions from recent National Defense Authorization Acts (NDAAs) and proposed legislation like the House Standardized Permitting and Expediting Economic Development (SPEED) Act and the Senate Fostering Reform and Government Efficiency in Defense (FoRDED) Act, which sought to drastically cut the requirements-to-delivery timeline. moving to a portfolio approach.

Implications for the Defense Industry

One of the first questions the defense industry will ask is, “What does this mean to us?”

Driessnack says the answer is a lot.

“Giving flexibility to the PAE means quicker decisions for industry and more flexibility on funding with budget subsets. Plus, with the program elements being consolidated, this gives the PAE more flexibility.”

Success Where Previous Efforts Have Failed

Hegseth and the DoD plan to implement the new changes immediately. While that sounds great in a press release, reality is typically far more complex. As they say in military operations, “No plan survives first contact with the enemy.”

The enemy, in this case, may be the big defense companies themselves and/or the Congressional committees that hold the DoD’s purse strings. Congress has been known to make funding decisions that don’t necessarily match the budget requests submitted by DoD. The currently stalled FY26 budget is no exception.

On paper, the new reforms should make things easier for industry and, when you’re talking about defense contracts, easier normally means cheaper and faster. Those are good things.

Driessnack says this new approach is going to evolve, and it will take time to realize tangible improvements. As part of his ongoing consulting efforts for the USAF, Driessnack has created a newsletter on LinkedIn to keep those who are interested up-to-date on what’s happening with the new reforms.

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