Opinion: Can Hegseth Transform U.S. Defense Acquisition?

U.S. Defense Secretary Pete Hegseth’s strategy to transform the American defense acquisition system is hugely ambitious. In a much-heralded speech on Nov. 7, he animated a 43-page memorandum commanding change to every function of acquisition management, from requirements-setting and program management to budgeting and arms exports. However far-reaching, the initiatives constitute a familiar catalog of good ideas that have been advanced from every corner of the acquisition ecosystem for more than a decade. Still, fully implemented, the strategy would indeed transform the Pentagon’s $300 billion acquisition enterprise.

The question is whether Hegseth can find the money and muscle to deliver on the strategy. Laboring to implement the Defense Reform Initiative as a deputy undersecretary in then-Defense Secretary William Cohen’s Pentagon, I learned the hard way that no defense reform happens without sufficient budgetary resources and organizational heft.

There is much to like about Hegseth’s vision for a “Warfighting Acquisition System.” To begin with, it is spot-on in diagnosing the system’s pathologies: fragmented authority and accountability, incentives that are biased to favor performance at the expense of cost and schedule, and procurement practices that stifle private investment and production efficiency. To gain leverage on a system of such overwhelming complexity, a good strategy requires just such a simple but compelling problem statement.

The strategy’s prospects also are strengthened by its clear focus: speed. Forms of the words “speed” and “accelerate” appear no fewer than 83 times across the memo’s 43 pages. As corporate strategy sage Richard Rumelt insists, “[S]trategy is primarily about deciding what is truly important and focusing resources and action on that objective.” Hegseth makes crystal clear the objective on which the strategy focuses.

It is also key that Hegseth has put his authority and brand at the front of this acquisition-reform campaign. Implementation of its many antecedents—the Reagan administration’s Packard Commission (1986), the Clinton administration’s Defense Reform Initiative (1997) and the Obama administration’s Better Buying Power (2010), to name just three—often stalled in the face of resistance they confronted inside the Pentagon and on Capitol Hill. To succeed, Hegseth will need to sustain his personal engagement with it and expend the capital of his office to break through or buy off recalcitrants.

Hegseth’s strategy to transform the acquisition system is off to a good start, but its implementation will be challenged by two crucial shortcomings: money and muscle. The memo says surprisingly little about money, given that the most concrete initiatives it identifies will cost more money up front than would customarily be the case. Acquisition strategies do not routinely plan, for example, to purchase government purpose rights that would enable a “right to repair,” qualify redundant sources of key upstream inputs or procure weapons in large, efficient quantities, to cite three of the strategy’s key reforms. Why? It is because investments are expensive in the short run, and there is scant economic incentive to trade money over time in a financial system that budgets for one-year appropriations.

If the Trump administration were projecting growth in the base budget for defense, one might look past the strategy’s omission of dollars on the assumption that the costs of the transformation strategy will show up in the positive wedges of expanding topline. But the administration’s budget request for fiscal 2026 shows no growth over 2025, and the Office of Management and Budget indicates that growth in defense budgets will depend on contingent appropriations, not the base budget. Until Hegseth substantiates how the Pentagon will pay for these initiatives, savvy acquisition managers and corporate executives will feel little incentive to enact the behaviors he commends and commands.

The strategy also is weakened by how little it says about the role of the military departments. The four-page appendix to the memo, entitled “Initial Directed Implementation Actions,” comprises more than two dozen paragraphs of direction to the various undersecretaries in the Office of the Secretary of Defense and only one—“Expand acquisition education with industry” (of all things)—addressed to the military departments. The military departments are the muscle in the acquisition system, and the strategy’s inattention to that fact betrays a misunderstanding of where transformation either will catch fire or fizzle.

The opportunity to improve defense acquisition substantially could hardly be greater. President Donald Trump seems determined to rewrite the playbook of government administration and likes taking on vested interests. The adoption of better business practices in defense acquisition has mostly bipartisan support. And at least one segment of the defense industry, the Silicon Valley set, loudly cheered Hegseth’s speech. But to seize that opportunity, Hegseth will need to engage new money and military muscle.

Steven Grundman is executive in residence at Renaissance Strategic Advisors and directs the Arsenals of Democracy Project at the Atlantic Council.