The Department of War’s new Draft Acquisition System Guidance is more than another policy update circulating through the Pentagon. It represents a decisive shift in how national security leaders want to buy and deliver capability in an era where technological change and pressures created by rapid adversary modernization are fundamentally outpacing the traditional acquisition cycle. For contractors and commercial entrants, this draft guidance offers a preview of the environment they will soon be competing in, and it is one defined by speed, flexibility, and mission-centered decision-making.
A Shift Toward Speed and Pragmatism
One of the clearest themes in the guidance is a move toward valuing timely capability delivery over protracted efforts to achieve perfection. DOW openly recognizes that long requirements cycles, excessive documentation, and fear-driven risk management have created an acquisition culture that struggles to keep pace with operational needs. The numbers tell a stark story: traditional Major Defense Acquisition Programs (MDAPs) typically take 15-20 years from concept to fielding, while successful rapid acquisition efforts like Project Maven delivered AI capabilities to warfighters in just 18 months. Similarly, the Defense Innovation Unit (DIU) has demonstrated that commercial solutions can be prototyped and deployed in 12-24 months versus the traditional five to eight-year timeline.
The draft guidance challenges that dynamic directly by elevating the importance of meeting timelines, fielding usable capability quickly, and accepting the idea that iteration in the field may be more valuable than extensive development in the lab. This approach mirrors the recent Presidential Executive Order on defense acquisition reform, which explicitly prioritizes programs that demonstrate commercial-first solutions and utilizes “Other Transaction Authority” as a preferred pathway. For industry, this means shifting the mindset from “build the perfect system and deliver it years from now” to “deliver something meaningful, sooner, that can evolve.” Companies that can credibly demonstrate rapid prototyping, accelerated production pathways, or modular upgrade strategies will find themselves increasingly aligned with where the Department wants to go.
Moving from Programs to Portfolios
Another major signal is the guidance’s transition from siloed program management toward a more portfolio-centric model. Rather than treating each program as an isolated undertaking with its own timelines, leadership, and contracting rhythms, the draft shifts authority to Portfolio Acquisition Executives who can balance priorities across interconnected systems. This reflects an understanding that modern capability ecosystems, whether in autonomy, sensing, communications, or digital infrastructure, are enhanced only when they function as part of an integrated whole. The Space Development Agency exemplifies this approach, managing multiple satellite constellations as an integrated portfolio rather than individual programs, achieving cost reductions of approximately 30% compared to traditional approaches.
For contractors, the implication is that solutions will be evaluated in terms of how they fit within broader missions and architectures, not only how well they perform as standalone offerings. Demonstrating interoperability and integration readiness within a larger system-of-systems environment will matter more than ever.
Commercial Technology Moves to the Forefront
The guidance also signals a continued normalization of commercial-first and dual-use pathways. Over the past several years, the Department has experimented with alternative procurement mechanisms, worked to lower barriers for nontraditional vendors, and stressed the importance of strengthening the industrial base through diversity and resilience. Commercial technology has shifted from representing less than 5% of DOW’s technology base in 2010 to over 25% today, with successful programs like JADC2 pilots demonstrating that commercial cloud solutions can be adapted for classified military networks in months rather than years.
This draft memo gives those trends structure and direction. Commercial technology has shifted from a special case to a preferred starting point. At the same time, the Department continues to prioritize oversight, governance, and security. Companies entering from commercial markets will need to demonstrate that they can move quickly without compromising on compliance, data-rights posture, cybersecurity, or sustainment expectations.
Navigating Implementation Challenges
While the guidance signals clear intent, significant obstacles remain. Congressional oversight requirements, embedded in decades of acquisition law, won’t disappear overnight. The Defense Federal Acquisition Regulation Supplement (DFARS) contains over 1,000 pages of requirements that often contradict speed-focused acquisition. Existing contract structures worth hundreds of billions of dollars will need transition strategies that balance reform with program continuity.
Workforce transformation presents another challenge. DOW’s 150,000-person acquisition workforce has been trained on traditional milestone-driven processes. The guidance’s emphasis on Configuration Steering Boards and risk-based decision-making will require extensive retraining and cultural change. Resistance points are predictable: program managers accustomed to detailed requirements documents, contracting officers trained to minimize risk above all else, and oversight bodies comfortable with familiar processes.
Legacy programs present particular complexity. Current MDAPs represent over $1.8 trillion in committed spending. The recent Presidential Executive Order suggests programs more than 15% behind schedule or over cost will face potential cancellation but transitioning ongoing efforts to portfolio models while maintaining capability delivery will require surgical precision.
A Broader Trend Across the National-Security Enterprise
Within The Chertoff Group’s Federal Strategy practice, we see this draft guidance as part of a much broader realignment across the national security enterprise. Agencies are confronting the same pressures: tighter budgets, rapid adversary innovation, and shrinking tolerance for slow fielding. Across our work with established contractors and emerging dual-use innovators, we have observed that the organizations best positioned for this shift are those that pair a deep understanding of mission needs with an equally deep commitment to technical agility. What distinguishes these firms is not only what they build but how they build it: with flexible architectures, iterative delivery models, and a clear sense of where they fit within larger operational ecosystems. This guidance reinforces those attributes as essential rather than optional.
What This Means for Industry: Tactical Recommendations
For industry leaders, the most productive takeaway from this document is the opportunity it presents. The Department is signaling that it wants a different relationship with the companies it depends on; one that rewards speed, encourages adaptation, and values commercial innovation.
Traditional prime contractors should focus on pursuing agile certifications by investing in SAFe (Scaled Agile Framework) and DevSecOps certifications for their acquisition teams. Establishing commercial technology partnerships through formal joint venture structures, following models like Boeing-Cubert or Lockheed-Palantir partnerships, will become increasingly critical. These companies also need to restructure their program management approaches by training program managers on portfolio thinking and creating cross-program integration roles.
Commercial technology companies face a different set of priorities. Obtaining security clearances early by beginning the process for key personnel to obtain Secret clearances before pursuing DOW contracts will provide competitive advantage. Developing government-specific product lines that create versions of commercial products meeting DFARS cybersecurity requirements and government data rights expectations becomes essential. Building relationships with systems integrators by partnering with established defense contractors who can provide prime contractor vehicles and integration expertise will open doors that might otherwise remain closed.
During the transition period, all companies must maintain dual capabilities to operate under both traditional FAR-based contracts and Other Transaction Authority (OTA) agreements simultaneously. Investment in compliance automation by developing tools and processes that can rapidly adapt to changing regulatory requirements will differentiate successful firms. Creating rapid response teams through dedicated groups that can respond to opportunities with 30-day proposal cycles rather than 6-month traditional timelines will become table stakes for participation.
The firms that will thrive in this environment are the ones prepared to articulate how they can deliver capability on real world timelines and how their solutions plug into broader mission circumstances.
The Road Ahead
DOW’s draft guidance is less about process changes and more about a fundamental shift in acquisition culture. It marks a transition toward an acquisition system that is more responsive, more integrated, and more open to the dynamics of modern technology development. For contractors willing to embrace those principles, the next era of defense acquisition may be one defined by opportunity rather than constraint. If the guidance becomes final in anything close to its current form, the companies that succeed will be those prepared to meet the Department’s trajectory with speed, adaptability, and delivery-focused execution.
The convergence of this draft guidance with the Presidential Executive Order on defense acquisition modernization suggests this transformation will accelerate rapidly. Companies that begin adapting now, rather than waiting for final policy implementation, will find themselves best positioned to capitalize on the estimated $100+ billion in acquisition opportunities that will be restructured under these new approaches over the next five years.
Davi Hayes is a senior director with the Federal Strategy team, helping companies accelerate growth in the Federal marketplace.
