Defense acquisition reform has been a priority for Congress and the current administration, as they have focused on streamlining processes and boosting production capacity to replenish stockpiles. However, there is still much to be done to ensure the defense industrial base is prepared to meet the needed ramp-up in production.
Breaking Defense discussed the current state of defense acquisition, what reforms are still needed and how Congress, the administration and industry need to collaborate to meet both current and future needs with Sam Mehta, President, Space & Mission Systems and Communications & Spectrum Dominance, L3Harris.
Breaking Defense: What’s the threat scenario that makes defense acquisition reform so urgent right now?
Mehta: We’re seeing the urgent threat scenario play out around the world right now with current conflicts and current capabilities. This isn’t a “what will warfare look like in 2035?” scenario. The future of warfare has come and it’s come in a few different forms.
One is asymmetric warfare. What we’ve seen in Ukraine, the Middle East and other engagements is the threat of highly capable, low-cost, highly proliferated UAS (unmanned aerial systems) vehicles delivering unprecedented amounts of challenge and damage to more exquisite, higher-cost systems that the US and our allies employ. That has significantly changed the equation of warfare. Now, it’s incumbent upon us to adapt.
The second one I would call the “invisible war,” which is being fought within the electromagnetic spectrum every day. It’s not just about kinetic force – two objects colliding. This is rendering communication systems and radar systems ineffective so that your enemies can’t communicate or get an early warning of incoming threats.
Third is the ability to be able to scale quickly. We’ve really seen that play out in Ukraine, where the Ukrainians were outmatched when the conflict started, but have shown their ability to adapt and scale. They’re becoming an exporter of those technologies and capabilities I talked about earlier that are changing the equation on the battlefield, which I don’t think anyone would have expected even a few short years ago.
Are industry and government treating defense acquisition reform with the proper urgency?
There’s much more determination to implement meaningful reforms and realize the practical benefits of those changes sooner rather than later. We’re starting to see conversion into policy and process through increased use of some commercial acquisition pathways and Other Transaction Authorities, as well as the leveraging of existing contract vehicles. We’re also seeing customers embrace solutions that are “good enough,” rather than developing and testing for years until you get the absolute perfect solution for a specific scenario.
I give the Department of War (DoW) a lot of credit for not only fast-tracking from a policy standpoint, but now starting to proliferate the mindset that a technology that’s perfect 20 years from now isn’t going to help us with deterring and defeating the threats we face now. They’re saying, “Can our warfighters take this out to fight tonight?”
Perfect is the enemy of good, as the saying goes.
It has to be a mindset of, “This is good enough for right now and we’ll continue to iterate and evolve this solution.” Technology is moving at such a rapid pace that version 1.0 may be very different from version 5.0, and that’s OK. We don’t need to wait for version 5.0. We can field 1.0, get feedback from the warfighter and improve on an iterative basis.
I’ve seen a real market shift toward the idea that capacity is the new capability. America has the best engineers, the best capabilities and the best warfighters in the world. But in this new era of industrial-scale warfare, we must invest in the long-term health of an industrial base that can produce those capabilities at the speed and scale those warfighters need to deter and defeat our enemies.
What needs to happen from not only the Pentagon, but also from Congress and from the administration for the defense industrial base to be able to go full speed ahead on increasing production?
Congress can ensure that the Pentagon has stable and predictable funding. That’s an important thing to provide industry with the confidence to continue to invest in increased production capacity. Expanding the use of multi-year agreements is a great way to do that. In our industry, we have some very long-cycle products – solid rocket motors being one, satellites being another – and the ability to do multi-year acquisition instead of relying upon that individual year-by-year demand signal provides the incentive to make long-term investments.
At L3Harris, we’re already investing billions of dollars to increase production of solid rocket motors for missiles and space-based missile warning and defense payloads. With multi-year contracts, we would have five years, seven years, 10 years of demand laid out, and we would have every incentive to continue to add factories and make further investments in third- or fourth-tier suppliers and those small- and medium-sized businesses that form the backbone of our supply chain.
It’s vitally important that those small- and medium-sized businesses that are three, four, five tiers down in our supply chain have that long-term demand signal they can count on so they can make their own investments in their people and facilities.
We’ve talked about what this administration is doing, but is part of the issue that administrations change, priorities change, and then everybody’s back to square one?
The lessons we’ve learned from the last few conflicts will outlast any short-term political considerations. It’s a bipartisan issue. We have members of both political parties that are equally committed to transforming our defense acquisition system. The idea that we need to be more ready than we have been is common across both sides of the aisle.
It’s not only because of the conflicts, but also because of what we’re learning from them. I mentioned asymmetric warfare – the ability of an adversary to be able to adapt very quickly and employ things like software attacks and electronic warfare attacks that don’t expend kinetics. All those things have taught us on a bipartisan basis that in modern warfare, especially against a peer threat, we need advanced capability at speed and scale.
Why haven’t commercial products been more widely accepted in the past? Why is it that there needs to be a push now to be able to get the military to buy commercial products?
The concern in the past has always been two-fold. One is that something that’s specifically designed for the commercial market wouldn’t stand up well to the rigors of war or warfighting. An aircraft that was designed for commercial civil aviation purposes wouldn’t function well in a military context because it wasn’t made according to specifications for the military context. It was made to be able to fly people safely according to civil aviation standards. So there was a bit of compartmentalization to say, “That’s made specifically for commercial, this is made specifically for military.”
The second thing is there’s now enough market data out there that can provide the DoW and others comfort that they’re paying a fair price for something. What’s gotten in the way in the past is this idea that unless you show me cost and pricing data, how do I know that I’m paying a fair price? The transition that’s taking place is the ability to be able to go and get market data, market pricing, because the technological tools that we have make it much easier for the procurement community to say, “I think I’m paying a fair price.”
Secretary Hegseth has made a “commercial-first” approach a key element of his Acquisition Transformation Strategy. Delivering solutions to warfighters at speed is paramount, and leveraging streamlined commercial acquisition processes is one way to meet urgent needs in a more cost-effective manner. By broadening the definition and application of what constitutes a “commercial item” that can be purchased through these streamlined pathways, the DoW can take an important step toward implementing the Secretary’s “commercial-first” approach.
In early 2025, L3Harris sent a letter outlining four policy recommendations for acquisition reform. What kind of movement have you seen in those areas?
We’re starting to see some trending in the right direction. The most tangible example is Cost Accounting Standards. The threshold for CAS implementation through the Truth in Negotiations Act went from $50 million to $100 million. Just doubling it is an important indicator.
The challenge we have is we need to make sure that the entire defense ecosystem gets the benefit of these reforms. We agree with the vast majority of reforms that the DoW has been articulating, but they have to be applied to the whole of industry. We can’t have two separate groups of companies where we say, “Here’s a set of ‘non-traditional’ contractors and you guys are going to be exempt from all these requirements and specifications,” but then we say for the “traditional” contractors, “We’re going to make some incremental changes to make it easier.”
What that’s doing is a couple things. Number one, it’s skewing competitive balance, so the government in many cases may not be getting the best that industry has to offer because one group is being weighed down by requirements that the other group may not be weighed down by. That creates a real imbalance, which means it could be thwarting competition and discouraging some of the most innovative aspects of the so-called “traditional” defense industrial base from even participating in some of these opportunities and bringing their technology to bear.
The second thing it’s doing is over the long-term. Creating these two separate groups and two different sets of rules will end up in a situation where you’re going to have talent migrate in a way that is not going to be helpful to the industry. If you have one group where you create the conditions for thriving success and the other one you say, “We’re going to make it a little bit better, but you largely have to continue being weighed down by these requirements,” some of the innovation and talent is going to skew more toward one than the other.
