Defense acquisition reform may seem like a topic that never changes, but a group of former Pentagon officials said they have solutions that will not only work, but work quickly. The Atlantic Council’s commission on defense innovation adoption released its interim report Wednesday with a list of 10 ways the Defense Department can immediately modernize acquisition.

The list focuses on a strategy the Defense Department can use to adopt cutting edge technology by working with commercial and public sectors to deliver those products in a shorter time frame.

“The United States is the global leader when it comes to innovation. We are the envy of the world. We do not have an innovation problem in this country. However, the Pentagon’s ability to quickly adopt this advanced technology is woefully inadequate. That is where the problem resides,” said former Defense Secretary Mark Esper, a co-chairman of the commission.

Combining acquisitions into five portfolios, one each from the Army, Navy, Air Force, Special Operations Command, and one from a defense agency topped the list of recommendations. The PEOs in charge of those programs could create plans to segment large programs into modular acquisitions, leverage common platforms, components, and services, and maximize use of commercial solutions and DoD research.

“So we start with a capstone requirements document to say, what are the operational performance measures you want us to move the needle on? And then we’ll focus our acquisition systems on that, as well as research both within the department and focus on industry,” said Peter Modigliani, a co-author of the report and defense acquisition lead at the MITRE Corporation.

Following the theme of realigning organization, the commission offered three ways to reform the budgeting process. The first involves consolidating program elements and budget line items to simplify budget submissions. Those items would be reduced by 200 per year starting with the fiscal 2024 budget markup. It would enable cost-schedule-performance trade-offs, including the prototyping and fielding of new systems.

As a second budget reform, reprogramming, or moving money from one budget item to another, would be changed so that above-threshold actions would require congressional notification but not approval. Congress would still have a 30-day window to object.

“Right now you have to go through a lengthy process of the services, then Office of the Secretary of Defense (OSD), then Office of Management and Budget, then the Hill all have to approve reprogramming above that threshold,” said Modigliani. “And that could take six to nine months to go through DoD and congressional process. So we said, let’s flip it back to 30 day notification. Within that window, Congress can still ask for briefing for more information, or flat out reject it, but at least we’re able to move a little further.”

The third point part of budget reform would be using AI to streamline and modernize budget justification documents and have the system in place for the fiscal 2026 budget request.

Aside from budget reform, the commission focused on several ways to nurture innovation and create a system where the Defense Department could make better use of private capital and commercial industry, especially in the area of small or non-traditional businesses. One of the commission’s recommendations became a reality the week before the report was released. The Pentagon restructured the Defense Innovation Unit (DIU) and made it a direct report to the OSD.

“We saw DIU as filling the gap of an organization that can dedicate itself to better aligning the non-traditional and the commercial industrial space. And in that role, really leveraging all of what the non – traditional industrial base has to offer,” said Whitney McNamara, a vice president at Beacon Global Strategies and co-author of the report.

The commission also singled out the Space Development Agency (SDA) as a model organization in terms of its ability to quickly acquire new technology and speed up its acquisition process. A launch of 10 low earth orbit missiles on April 3 marked an achievement for the agency, because it managed the entire process from acquisition to launch in only 30 months.

“We’re very bullish on SDA to not only disrupt defense space acquisition, but also space operations. So let’s break from the model of we’re going to spend billions of dollars, let’s build smaller things, get many vendors on a rapid iterative scale, and move out on a key mission or capability area,” Modigliani said.

The commission offered a number of specific recommendations aimed at strengthening the process of getting new technology into production. The Office of Strategic Capital should develop tools for leveraging external capital market funding for research and development pilot projects, and grant money should be generated for phase III Small Business Innovation Research projects to fast-track successful companies when they are ready to move to production, the panel found.

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