The Pentagon is looking to radically speed up the way it buys weapons and platforms by rewarding contractors who deliver on time, slashing review processes and offering new incentives to staffers, a leaked memo revealed this week.
The memo, titled “Transforming the Warfighting Acquisition System to Accelerate Fielding of Capabilities,” outlines that speed will trump all else in a new acquisition regime.
“Speed to capability delivery is now our organizing principle: the decisive factor in maintaining deterrence and warfighting advantage,” the memo, first reported on by Politico, reads. “The core principle of this transformation is simple: place accountable decision makers as close as possible to program execution, eliminate non value added layers of bureaucracy, and prioritize flexible trades and timely delivery at the speed of relevance.”
The memo, addressed to senior Pentagon leadership and combat commanders, stresses that the “warfighting acquisition system” will be concerned with delivering the most effective and lethal tools to the battlefield as quickly as possible.
The Pentagon declined to comment on the memo. However, Defense Secretary Pete Hegseth is expected to address a crowd of top military acquisition officials and defense industrial base leaders on Friday to announce major changes to the Pentagon’s acquisition process.
Portfolio acquisition executives will largely manage the Pentagon’s new acquisition process, the memo says, overseeing numerous systems and shifting resources to support those deemed most essential.
Those executives will have an opportunity to receive “incentive compensation” if they deliver weapons and systems to warfighters on time.
PAE appointments will also be extended, with executives expected to serve for a minimum of four years. The extension addresses a major concern from the acquisition space, since the usual appointment length of two or three years was not enough to complete a project.
PAEs will use portfolio scorecards to track and grade the performance of an acquisition portfolio. The scorecards are expected to grade prototype development, operational capability, production ramps and schedules, according to the memo.
The new scorecards will be used to calculate business incentives for the defense industrial base, but only if they deliver on time. New time-indexed incentives will be used on contracts to reward contractors who deliver systems or platforms early.
Contractors who deliver late will face penalties, the memo said, but it did not provide further details on what those penalties would entail.
Defense Undersecretary Michael Duffey is tasked with guiding military departments on changes to the acquisition system within 45 days.
Also according to the memo, Mr. Duffey will conduct monthly acquisition acceleration reviews.
