Trump Orders an Overhaul of Defense Acquisitions

Yesterday, President Trump issued an Executive Order (EO), Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base.

The stated goal of the EO is to modernize Department of Defense (DOD) procurement with an emphasis on speed, flexibility, and execution to ensure that the U.S. military has “the most lethal warfighting capabilities in the world.”

To pursue this objective, Trump ordered the Secretary of Defense (SECDEF) to rapidly reform the DOD’s antiquated acquisition processes and modernize the duties and composition of the defense acquisition workforce, including to incentivize and reward their risk-taking and innovation.

The EO is broken down by the following focus areas, with delivery dates for most key elements (emphasis added):

Acquisition Process Reform

• Effective immediately, the DOD is to prioritize use of all existing authorities to expedite acquisitions, including first preference for commercial solutions, a general preference for Other Transactions Authority (OTA), application of Rapid Capabilities Office (RCO) policies, or any other authorities or pathways to promote streamlined acquisitions under the Adaptative Acquisition Framework (AAF). 
  • DOD is to use these authorities in all pending contracting actions and require their application for all DOD contracting actions pursued while the required DOD acquisition reform plan (see below) is under consideration. 
• Within 60 days (by June 8, 2025), the SECDEF is to submit a plan to reform the DOD’s acquisition processes that incorporates the following:
  • Expedited Acquisitions – Uses existing authorities to expedite acquisitions (noted above)
  • Acquisition Process Review – A detailed process review of each functional support role within the acquisition workforce to eliminate unnecessary tasks, reduce duplicative approvals, and centralize decision-making.
  • Acquisition Workforce Review – Evaluations of program managers, contracting officers, engineering authorities, financial managers, cost estimators, and logisticians.
  • Risk Management Process – A detailed process by which the DOD Acquisition Executives can effectively manage risk for all acquisition programs through a formal Configuration Steering Board. 

Major Defense Acquisition Program Review

Within 90 days (July 8, 2025), the DOD is to complete a comprehensive review of all major defense acquisition programs (MDAPs) to determine if any are inconsistent with the objective to accelerate defense procurement. The review is to include and identify:

• Program Schedule/Cost Overruns – Programs more than 15% behind schedule or 15% over cost, based on the current Acquisition Program Baseline (APB)
• Potential Cancellations – Programs unable to meet any key performance parameters, or are unaligned with the SECDEF’s mission priorities, will be considered for potential cancellation and submitted to the Office of Management and Budget (OMB) for future budget determinations.
• Performance Against Cost Estimates – A listing of all MDAPs contracts with performance against original and approved government cost estimates are to be provided to OMB for review.
• Review of All Remaining Major Systems – (b) Following this comprehensive review of MDAPs, the DOD is to provide OMB with a plan for reviewing all remaining major systems that are not MDAPs.

Acquisition Workforce Reform Plan

Within 120 days (Aug. 6, 2025), the DOD is to develop a plan to reform, right-size, and train the acquisition workforce that includes the following components:

• Restructured Acquisition Workforce Performance Evaluation Metrics – The restructuring of performance evaluation metrics that includes the ability to demonstrate and apply a first consideration of commercial solutions, adaptive acquisition pathways through the AAF, and iterative requirements based on the end user perspective.
• Staff Level Analysis – An analysis of acquisition workforce staff levels required to develop, deliver, and sustain warfighting capabilities. 
• Field Training Teams – The establishment of field training teams led by senior acquisition executives or managers with expertise in innovative acquisition authorities and commercial solutions, and modeled after field training teams authorized by section 832 of the Fiscal Year (FY) 2025 Nation Defense Authorization Act (NDAA).
  • These teams are to provide hands-on guidance, deliver templates and case studies of successful approaches for implementing innovative acquisition authorities, and should assist integrated functional program teams in completing acquisition and sustainment tasks.
• Incentivize Acquisition Innovation – The development and implementation of policies, procedures, and tools to incentivize acquisition officials to use innovative acquisition authorities and take measured and calculated risks.

Joint Capabilities Integration and Development System Review

Within 180 days (Oct 6, 2025),  the EO directs the DOD to complete a comprehensive review of the Joint Capabilities Integration and Development System, with the goal of streamlining and accelerating acquisition.

Internal Acquisition Regulations Review

(No date prescribed.) The DOD is to review and propose revisions to relevant DOD acquisition instructions, implementation guides, manuals, and regulations to: 

• Eliminate Unnecessary Regulations – Eliminate or revise any unnecessary supplemental regulations or any other internal guidance, such as relevant parts of the Financial Management Regulation and Defense Federal Acquisition Regulation Supplement (DFARS).
• Promote Expedited and Streamlined Acquisitions – If DOD proposes any new supplemental regulations or internal guidance, they shall apply the ten-for-one rule per EO 14192, Unleashing Prosperity Through Deregulation.

Contractor Implications

Potential implications for defense programs and the defense industrial base (DIB) span both the immediate and long-term.

In the immediate, one question that emerges is whether the 90-day MDAP review will produce any contract cancellations, and if so, how many. Further, the program reviews will not stop at MDAPs but eventually encompass all remaining major systems. Primes and subcontractors working on these programs should already know if these are performing within the cost and schedule parameters outlined above.

It remains to be seen if and how the MDAP review, potential cancelation determinations, and possible budget changes will impact the FY 2026 DOD budget submission timeline, which is already well beyond the traditional February release, (although DOD has not held to that deadline for years.)

Looking at the longer-term impacts … Even with a cursory reading, it is clear these reviews and reform efforts could have wide implications for both existing defense programs and the procurement processes that enable them. It may not be hyperbole to say that these efforts – depending on their scope and efficacy – could effectively overhaul a defense acquisitions landscape that has developed over decades and has come to be viewed by many as lethargic, inefficient and ineffective. However, revising or creating new DFARS takes significant time to draft and finalize, so it could be several years before we see the full ramifications of these endeavors.

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