Amidst the sweeping, often turbulent, efforts to overhaul federal government operations, one area has emerged as a beacon of promising change: defense acquisition reform. Driven by a vision of speed, time-based iterative innovation, and commercial integration, current leadership aims to equip warfighters in months, not decades.
A Bold Vision, Hampered by History: This renewed focus is a refreshing departure after countless previous attempts by past administrations and Congresses to essentially recreate an innovation system the Pentagon last mastered in the 1950s. Yet, history has shown that such ambitious pushes, no matter how well-intentioned, are destined for failure if they do not confront the fundamental dysfunctions embedded within the underlying defense budget system.
Learning from Civilian Success: A Blueprint for the DoD: The good news is that the essential budgetary flexibilities required already exist within various civilian agencies. Their successful models merely need to be replicated at the Pentagon to grant defense acquisition reform a fighting chance. The core of this transformation lies in providing the budgetary agility necessary for the Pentagon to operate at a pace comparable to Silicon Valley.
The Peril of a Peacetime System in a Modern Conflict: Mirroring China’s military-civil fusion policies, the Pentagon is actively pursuing strategies to leverage commercial technology and achieve civil-military integration across the U.S. and allied industrial bases. This critical shift acknowledges a nearly 30-year trend where commercial innovation has dramatically outpaced its defense counterpart, a gap that continues to widen as commercial research and development (R&D) expenditures overwhelmingly dwarf those in defense. The emerging defense acquisition system, designed to dismantle these long-standing barriers, is founded on „Other Transactions” Authority (OTA), time-based Middle Tier Acquisition (MTA) and Rapid Acquisition Authorities. It also features a revamped joint requirements system centered on iterative, rapid operational prototyping, and a new project management structure led by Portfolio Acquisition Executives (PAE). The ability of these PAEs to reallocate funds within the fiscal year to bolster successful initiatives and curtail failing ones will be paramount to any lasting success.
Bureaucracy: The True Enemy of Innovation: Why is this entire endeavor so critical? Because the existing acquisition system remains a linear, peacetime construct. It famously requires up to 25 years to deploy a new initial operational capability (IOC) from a program’s inception—a stark reality seen in programs like the F-35 and V-22. This timeline doesn’t even account for the years it takes for a project to even become a „program of record”—a multi-stage process involving up to three years for requirements generation, followed by three years of internal budget programming and appropriations approval, and then a two-year competition and contracting phase just to get a new program started. Once underway, such a program is then evaluated against a fictitious budget baseline, often derived from theoretical briefing charts established years before any physical components were built or software was coded. As the program progresses through rigid acquisition milestones, annual re-validation via the budget and appropriations process rarely allocates the previously planned future-year funding. Compliance with rigid acquisition rules and the inevitable rework triggered by budget adjustments further adds another 10-20 years to initially field a capability. This excruciating pace stands in stark contrast to programs developed in the 1950s and early 1960s, which delivered tangible capabilities in under five years. Today, the private sector and nations like China operate at these accelerated timelines, or even faster, leaving the Pentagon significantly behind.
Breaking the Chains of the PPBE Beast: The ultimate key to accelerating this process lies in rapid iterative operational prototyping, swift and early decision-making on requirements, source selection, and contracting, and, critically, flexible budgeting. Congressional actions in 2016, which expanded OTA authority and established MTAs, were intended to empower the Department to move faster. Furthermore, the embrace of recommendations to abolish JCIDS and replace it with a joint requirements system based on iterative operational prototyping promised to shave decades off the process. Yet, the effective implementation of iterative operational prototyping hinges on a fundamental overhaul of the budget process itself. It is time to push further and tackle the root cause of the budget’s temporal stagnation: the Planning, Programming, Budget Execution (PPBE) process. Secretary McNamara’s system, initially implemented by the so-called „Whiz Kids” and „Best and the Brightest,” has plagued the Pentagon ever since. Central planning and a hierarchical bureaucracy supplanted a previously agile, time-based decision-making and operational prototyping system. Despite an early attempt to apply PPBE government-wide as a purported „best practice,” it was universally rejected by all other federal agencies. Indeed, no other entity in the world has adopted the PPBE process, with the closest historical comparison being the five-year plans of the former Soviet Union.
Success Stories: What the Rest of Government Does Right: While Congress did act on a recommendation to establish a PPBE Commission, its resulting report proved incremental and conservative, falling short of advocating for a wholesale deconstruction of the system. Even as the Department has committed to implementing the Commission’s rather tepid recommendations, this will not occur until at least 2028. Meanwhile, the defense appropriations subcommittee—arguably the last true believer in PPBE—has steadfastly resisted granting the Pentagon any real budget flexibility. This pushback was most recently evident in report language concerning the 2026 Defense Appropriations Act, specifically addressing the Army’s request for agile funding. This rigid stance contrasts sharply with the flexibilities routinely granted to the rest of the government by the eleven other appropriations subcommittees. The public might never have become aware of these discrepancies were it not for a congressional mandate requiring the PPBE Commission to compare the DoD’s budget system with that of other agencies; a task the Commission ultimately delegated to RAND. While the RAND reports are comprehensive, even the limited observations made by the Commission itself regarding other agency authorities are profoundly revealing.
A Menu of Flexibility: NASA, HHS, and Beyond: Consider the alternatives: NASA structures its funding by mission rather than rigid appropriation categories and benefits from two-year appropriations instead of annual ones. The Department of Health and Human Services (HHS) operates with multi-year and „no-year” funds, allowing it to recycle expired balances into a department-wide capital investment account. The Department of Homeland Security (DHS) can carry over half its unobligated balances into the subsequent fiscal year. The Department of Veterans Affairs (VA) receives advance appropriations, ensuring budget stability through continuing resolutions and government shutdowns, alongside additional flexible multi-year funds. And the National Nuclear Security Administration (NNSA) has „no-year” appropriations with complete flexibility over fund categories.
Urgent Imperative: Time for a Budget Revolution: The glaring absence of these critical authorities continues to sabotage the Pentagon’s ability to provide its forces with essential capabilities in a timely manner. For the Pentagon to succeed in any competition with rivals like China, it requires immediate access to every one of these flexible authorities already extended to civilian agencies – not in 2028, or 2030, but right now. Whether the defense appropriations subcommittee will ultimately support this necessary transformation remains to be seen. However, the diametrically opposed approaches of this subcommittee and its civilian counterparts raise serious questions about the underlying motivations for this persistent disconnect. Consistency and parity in budget authorities and processes across all agencies should be a clear policy objective for both Congress and the administration. Decades ago, it became evident that the vast majority of appropriators and the executive branch preferred the budget systems of civilian agencies over the Pentagon’s. It is time to rectify the errors of the past and empower the Department of Defense with the same operational flexibility enjoyed by its civilian counterparts.
