The U.S. Army is undergoing a major acquisition overhaul, spearheaded by Secretary Daniel Driscoll. The stated goal? To cut bureaucracy, accelerate the delivery of weapons systems, and, perhaps most surprisingly, acknowledge that the defense industry has "conned the American people and the Pentagon." Strong words. But do the numbers back up this claim of systemic waste, and more importantly, can Driscoll actually fix it?
Let's start with the baseline. The U.S. defense budget has been astronomical for decades. In 2024, it hovered around $886 billion. A huge amount of money (more than the next ten highest-spending countries combined). The problem isn't necessarily the topline number, but where that money goes. For years, a disproportionate amount has flowed to large prime contractors, often for bespoke military solutions that Driscoll argues are no better – and sometimes worse – than commercially available alternatives.
Driscoll's claim that the Army wants to flip its procurement strategy – from 90% purpose-built to 90% commercially available – is a radical shift. It suggests a fundamental reassessment of the value proposition offered by these primes. The promise is faster deployment and greater scalability, arguing that "you cannot scale one-off solutions as quickly and easily as you can scale commercially available things." This is a compelling argument, particularly in the context of potential large-scale conflicts.
But here's where the data gets murkier. While Driscoll points the finger at the "defense industrial base broadly, and the primes in particular," he also admits that the Army itself has been a "less-than-perfect customer." He says the Army incentivized the primes' behaviors over a long period. In other words, the Army created the monster it now seeks to tame. According to a recent report, The defense industry ‘conned the American people and the Pentagon’: Army Secretary.
The Army's solution is a sweeping reorganization of its acquisition structure. Instead of twelve Program Executive Offices (PEOs), the Army is creating six Portfolio Acquisition Executives (PAEs). The goal is to cut bureaucracy by 30-50%. That's a big claim.
These PAEs (PAE Fires, PAE Command and Control, PAE Maneuver Ground, etc.) consolidate existing PEOs and aim to streamline the acquisition process. Each PAE will be led by a two-star general or civilian equivalent, supported by a deputy. The idea is to centralize authority and accountability.
Furthermore, the Army is establishing the Pathway for Innovation and Technology (PIT) office to quickly develop new technologies and scale successful ones. This PIT will also host non-traditional programs and support companies seeking to enter the defense industrial base. Army Overhauls Acquisition Structure to improve efficiency.
Here's where I get skeptical. (And this is the part of the report that I find genuinely puzzling.) Reorganizations are common in large organizations, but they don't always deliver the promised results. Cutting bureaucracy is a laudable goal, but simply shuffling boxes on an org chart doesn't guarantee efficiency. It often just creates new layers of bureaucracy.
The key question is whether these changes will actually change the incentives within the Army. Will the new PAEs have the authority and resources to push back against the primes and prioritize commercial solutions? Will the PIT office be able to navigate the complex regulatory environment and bring in truly innovative companies?
Driscoll is betting that it can. He is also taking a risk by publicly criticizing the defense industry. This could alienate key stakeholders and make it more difficult to get things done. However, it could also be a calculated move to create public pressure for change.
The Army has already started incorporating commercial products into its systems, such as General Motor’s engines for the service’s infantry squad vehicles (ISVs). They are also looking at Caterpillar engines for the M1E3, the Army’s next-generation Abrams tank.
This is an interesting example. Engines are a mature technology. There's no reason why the Army needs to spend billions developing custom engines when perfectly good commercial engines are already available. This is the low-hanging fruit of the commercialization strategy.
The real test will be whether the Army can apply this approach to more complex systems, such as weapons, sensors, and communication networks. Can the Army really buy an 85% solution and iterate over time to achieve the 100% solution, as Defense Secretary Hegseth suggests? Or will the Army continue to demand bespoke solutions that are over-engineered, over-priced, and delivered years behind schedule?
Driscoll's "conned" confession is a welcome dose of honesty in a town not known for it. The data clearly shows that the defense acquisition system is broken. However, whether Driscoll's reforms will actually fix the problem remains to be seen. The success hinges on changing the incentives within the Army, empowering the new PAEs and PIT office, and overcoming the resistance of entrenched interests. If not, this could be just another reorganization that fails to deliver on its promises.
Chief: What Does It Even Mean Anymore?
2025-11-17
