Peace through strength starts with reforming the Pentagon

By Megan Milam
Real Clear Wire

Former Navy Secretary John Lehman once quipped that the best way to enhance the defense procurement process was to take all its regulations and appeals paperwork and burn it in the Pentagon parking lot. He was onto something.

We can end decades of inefficiencies by simply cutting onerous regulations and updating outdated statutes governing defense procurement. Advances in military technology desperately demand the Pentagon change how it does business. Capitol Hill and the White House are poised to drive those changes. 

While everyone recognizes the United States military needs the most advanced technology, it’s less understood that how it buys those weapons is outdated by at least 50 years. Federal acquisition requirements are a thicket of red tape, and congressional oversight of this regulatory mess has become similarly byzantine. 

This bureaucracy-driven contracting regime no longer supports the core mission of the Department of Defense: ensuring our military has the tools to deter great power conflict. It shuts the door for opportunities to expand the defense industrial base, which would bring in new capacity and private capital to a sclerotic system.

Despite injecting billions of dollars of private investment into the defense technology ecosystem, non-traditional defense companies (NTDCs) receive a tiny percentage of defense contracts, in part due to the insurmountable structural barriers to entry. The NTDC category isn’t just some fancy moniker. While this term is often used to describe new entrants to the defense industrial base, many of which are leveraging private capital to develop capabilities instead of relying on government funds to do so, its legal definition is convoluted and inconsistent. As a result, for many NTDCs, the regulatory costs of competing for a contract often outweigh the reward of winning it.

While many American companies sit on the sidelines, unwilling or unable to clear the Pentagon’s bureaucratic hurdles to providing advanced defense capabilities, our adversaries are sprinting ahead. Luckily, Capitol Hill and the White House alike recognize the promise of our new defense technology ecosystem and are moving quickly toward solutions that modernize the acquisition process.

Adjustments that focus on acquiring weapons at the speed of technological development are a crucial step forward. These goals can be achieved in part by modernizing statutes governing NTDCs to account for the internal research a given company does, as well as further leveraging use of commercial contracting processes. These alone would spur private investments needed to grow the next generation of defense technology companies, while strengthening competition and expanding capacity within the defense industrial base. 

On a bipartisan, bicameral basis across the Armed Services, Appropriations, and Foreign Affairs Committees, Congress is prepared to act on this challenge. Senate Armed Services Chairman Roger Wicker (R-MS) recently stated that we need revolutionary changes at the Department of Defense, while House Armed Services Ranking Member Adam Smith (D-WA) has publicly called on the Pentagon to look more like Apple than a 1950s car manufacturer in how it embraces innovation. 

Last year, Chairman Wicker released the FoRGED (Fostering Reform and Government Efficiency in Defense) Act, which proposes critical reforms to pull defense budgeting and acquisition into the 21st century. On the other side of the Capitol, leaders of the House Armed Services Committee have indicated they plan to propose their own reforms to these bureaucratic and outdated processes.

Complementing these efforts, the executive branch has already released multiple executive orders, including those focused on leveraging commercial capabilities, accelerating our production of weaponry, and reforming the foreign military sales process. Combined, these actions lay solid – and timely – foundations for the future.

It’s also fitting that as these reform efforts take root, lawmakers are using reconciliation to modernize our military by investing in critical capabilities and supporting the expansion of the defense industrial base. Under the leadership of Chairman Mike Rogers (R-AL), the House Armed Services Committee recently approved legislation to invest $150 billion in defense priorities through reconciliation. In addition to investments in traditional platforms, like manned aircraft and ships, the defense reconciliation bill proposes investments in newer capabilities like counter-drone technologies and distributed autonomy – both beneath the waves and in the skies. As proposed, this funding represents a singular opportunity to rapidly invest in advanced technologies beyond the traditional budget process – defense technologies that NTDCs are well-positioned to provide. 

My company, the defense technology company Anduril, was built for exactly this ethos. Founded in 2017, we operate on an entirely different business model: instead of relying foremost on taxpayer dollars to develop capabilities, we leverage our own private capital dollars upfront to build novel capabilities and provide a finished product manufactured at scale on operationally relevant timelines. Beyond Anduril, an entirely new ecosystem of NTDCs – flush with more than $7 billion in capital raised in just the last two years alone – is prepared to arm warfighters with devastatingly effective tools.

Taxpayers should be encouraged by these efforts which drive towards two key outcomes: fielding the most lethal military in the world and ensuring the best investment of their tax dollars. These bold legislative steps matched with ongoing innovation in the defense industrial base suggest another future is possible – one where capabilities are delivered on time and on budget.

There isn’t much time to get this right. Washington’s focus on cutting inefficiencies at the Pentagon while investing in new military technologies is critical if we are to maintain peace through strength. 

Megan Milam is the Senior Vice President for Government Relations at Anduril Industries.