An Early, Easy, and Essential Win for Trump on Defense Acquisitions Is Within Reach

A defense tech CEO shared a memorable insight with me over coffee last year: “Selling to government is like fighting a toddler.” Just as a toddler needs food and sleep to survive and thrive, the Defense Department has clear requirements for what it needs to deter and win wars, and thereby allow the country to survive and thrive. Yet, navigating that process is exasperating and maddening — like negotiating with a toddler in the middle of a tantrum.

Ultimately, this comes down to people and their incentives. It’s not technology, it’s not insufficient authorities — it’s people, pure and simple.

Too few civil servants in the Defense Department are willing to break free of the constraints of “business as usual.” Due to a mixture of ignorance, fear, and sclerosis, the bureaucrats who America relies on to buy the future of the U.S. military have too many reasons to say no and vanishingly few reasons to say yes. To be sure, plenty of people in the system are ready to push for change and are fighting every day to drive innovation. They win some important battles, but they’re still losing the war against the status quo. As a result, the path that innovative companies must travel to cross the “valley of death” are littered with mines laid by bureaucracy. And the critical war-winning technologies that the country needs remain out of reach because of it.

I am not talking about buying aircraft carriers but rather best-in-class commercial and emerging technologies. Traditional government approaches to buying such products are not appropriate. The technology moves too quickly — and that is a speed that the Department of Defense needs to be able to match by leveraging the authorities available to it today.

As the owner of a dual-use technology company called Bedrock Knowledge that works with the U.S. government, I undoubtedly have an interest in these issues. I sell software licenses to both the public and private sectors. My efforts to sell to the Defense Department (some successful, some not… yet) have given me acute insights into the deeply ingrained problems of the senior civil service and acquisitions culture, which are limiting America’s ability to build the military its citizens deserve.

The Trump administration can and should put its thumb on the scale, and it can do so right away.

It wouldn’t require changing laws or permission from Congress (the House and Senate have their own work to do, but I’ll save that for a future article). It would really just take a directive memo. It would be signed by the under secretary of defense for acquisition and sustainment as well as the service secretaries. It would also have to be followed by assertive enforcement from the same officials and the assistant secretaries of acquisition for each service. All of the new president’s nominees for these roles should be asked by members of the Senate Armed Services Committee if they will support and issue such a directive. It is fully in line with Secretary Pete Hegseth’s first message to the force, in which he says the department will reform its acquisitions process and field emerging technologies rapidly.

What I recommend here won’t solve all the Defense Department’s problems — far from it — but it would constitute a necessary foundation for success in a world where the United States faces advanced weapons and capabilities from foes utterly determined to use them.

Memo Item No. 1: Use Other Transaction Authorities

You shall use Other Transactions according to specific and quantifiable targets and justify decisions for the preference of more traditional contracts. You shall prioritize advancing Small Business Innovation Research companies seeking production contracts. You shall create dedicated offices reporting to senior leadership within each service to support and escalate Other Transactions execution and non-traditional/small business participation, paired with competitive funding to incentivize program managers and address administrative costs and risk aversion.

Doing business with most Defense Department contracting shops is hard. One reason is simply that the Federal Acquisition Regulation — which governs how the U.S. government must buy things — is onerous, complex, and byzantine, amounting to thousands of pages. Contrast this with “Other Transactions,” which started with NASA in 1958 to enable flexible industry collaboration. They were later adopted by the Defense Department for research and prototype development, evolving through legislative refinements, especially in the late 1980s and early 1990s. The 2016 National Defense Authorization Act revitalized the usage of these agreements in the Defense Department with a critical subsection that allowed seamless transition from prototype to production if the prototype was awarded competitively. As highlighted in Unit X: How the Pentagon and Silicon Valley Are Transforming the Future of War, this is why the Defense Innovation Unit adapted Other Transactions through its commercial solutions opening construct. This created a fast, flexible, and collaborative environment for the department to engage with companies that might not otherwise work with the U.S. military.

So, what are they? Other Transactions are flexible agreements outside traditional Federal Acquisition Regulation-based contracts. They aim to foster innovation, collaboration, and access to non-traditional defense contractors.

While these agreements can minimize bureaucratic constraints, that only works if the bureaucracy actually uses them. Unfortunately, they don’t use them nearly enough. Why is that? Many civil servants in the services — to include acquisitions professionals, members of the senior executive service, and general counsels — default to traditional Federal Acquisition Regulation-based procurement processes out of ignorance, habit, or fear of non-compliance. Too many bureaucrats also tend to believe Other Transactions are risky, only applicable to certain projects, or not in alignment with regulatory standards. For instance, some believe Other Transactions cannot include competitive practices or that they cannot transition to production, which is incorrect​. In fact, all of these concerns are baseless.

As a result, Other Transactions remain poorly used outside of the Defense Innovation Unit, DARPA, small innovation organizations like AFWERX, Special Operations Command, and various consortiums. They are especially underutilized when it comes to follow-on production, as opposed to just research and development or prototyping.

And even when they are used, bureaucrats — again out of risk aversion — often follow traditional processes, applying unnecessary bureaucratic steps to these agreements, undermining the speed and flexibility they are meant to offer.

Some of these problems were identified by the Other Transactions Guide issued by the Defense Department in July 2023, but the document did not go far enough, offering only the mildest suggestions to solve this problem of under-use — one that is costing the United States its military-technological edge.

The memo I propose should go further and be more specific:

It should impose quantifiable usage targets for Other Transactions within each service branch, requiring annual reporting on the percentage of acquisition programs using these agreements, particularly in production phases for information technology and other technology areas where commercial industry is leading. It should mandate that those senior civil servants who direct acquisitions professionals explicitly justify, in writing, decisions not to use Other Transactions for applicable projects, especially when weighing options on “Phase III” agreements for companies that have already completed Small Business Innovation Research Phase II awards.

Additionally, the memo should direct the establishment of offices within each service, tasked with providing hands-on guidance for structuring and executing Other Transactions, and empowered to work directly with senior leadership when barriers to these agreements are discovered. A competitive fund should also be created to incentivize program managers to pursue Other Transactions by offsetting perceived risks and covering administrative costs.

These measures would ensure accountability, embed the use of Other Transactions into the culture of defense procurement, and give companies ready to build and scale important technologies the chance to succeed. The latest National Defense Authorization Act includes provisions that make these agreements even easier to enact. And the FORGED Act — which was recently introduced by Sen. Roger Wicker, the chairman of the Senate Armed Services Committee — emphasizes modifications to expand the use of Other Transaction agreements, particularly for nontraditional defense contractors. But the Defense Department need not wait for the FORGED Act to become law to do everything I have described here.

Since a key part of the problem is a lack of knowledge and familiarity, we shouldn’t expect (or want) the department to immediately being issuing more Other Transactions the day after this memo goes out. But with appropriate training (see “Memo Item No. 4” below), and strong leadership enforcing strict timelines and expectations, taxpayers should expect to start seeing more Other Transactions within a year.

These agreements will not be a panacea, but if Other Transactions are underutilized or bureaucratically constrained, the likelihood of innovative technologies influencing the broader acquisition ecosystem, including programs of record, diminishes.

Memo Item No. 2: Authorize Conversations with Capital

You are encouraged to communicate with representatives of financial organizations — whether they are family offices, venture firms, private equity firms, or lenders — seeking to perform diligence on investment decisions under the following conditions…

Private capital is generally critical for any consequential company selling technology. And it becomes even more important for companies selling to the government due to painfully long sales cycles that can be measured in years. Venture capital in particular has therefore become an important resource for companies to endure, so when the light finally turns green, they are still viable and can press on the gas pedal. But investors need to understand what the customer wants and thinks. These conversations are the lifeblood of venture investments. Unfortunately, too many defense leaders and civil servants believe they are prohibited to talk to financial professionals trying to perform due diligence on investment decisions. My company, Bedrock Knowledge, lost out on a $1 million seed investment for this reason.

In 2023, defense officials I was dealing with told me that they couldn’t provide any advantageous information to investors. They are, however, wrong. There are policy memos from the first Trump administration that remain authoritative. The most important among these is Deputy Secretary of Defense Pat Shanahan’s 2018 memo on “Engaging with Industry.” It emphasizes that dialogue between the department and industry “helps industry make informed investment and business decisions necessary to meet near- and long-term requirements of the Department.” Even the Federal Acquisition Regulation, particularly part 10, encourages the government to engage early and often.

Department of Defense personnel are allowed to have conversations such as the one my prospective investor was denied as long as they are willing to hold similar discussions with other investors or industry stakeholders in the future and that they do not share things like contract bid or proposal information of competitors (which in our case was not applicable because we were not competing with any other company for this deal).

Shanahan’s memo mentions industry but not explicitly investors, so bureaucrats may not feel this gives them sufficient “top cover.” However, the Defense Innovation Unit already interprets the memo as inclusive of investors. And other officials have emphasized the importance of engaging with investors, including Schuyler Moore, the former chief technology officer of Central Command, and Justin Fanelli, the chief technology officer at the Department of the Navy. The memo I propose here can solve any residual uncertainty and ambiguity by stating that employees of the Department of Defense and military officers can indeed interact with investors under certain conditions, especially when the conversations are limited to explaining the department’s needs, priorities, and interests in order to help investors understand the relevance and potential impact of technologies, sectors, or capabilities without endorsing specific companies or sharing restricted information.

There are of course situations where government officials should refrain from talking to industry and investors, such as when there is a competitive, active solicitation. This refers to the time between the issuance of a request for proposals / commercial solutions opening and goes through contract award. Any other time, it should be encouraged, if not required, as a means to conduct market research with industry about the current state of the art, feasibility of future technical developments, and potential interest in private financing of projects. Again, the law and regulations allow for this, but the bureaucracy needs a push. For early-stage companies like mine that have won Small Business Innovation Research Phase awards, we are often not dealing with a competitive solicitation, yet we still can’t even get our actual customers to take the call from investors.

Memo Item No. 3: Use the General Services Administration

You shall leverage the General Services Administration’s assisted acquisition services and flexible contracts, to streamline procurement and enhance adoption of commercial technologies. Specific offices within each service shall be designated to oversee and promote the use of these pathways, and all contracting officials must justify in writing any decisions to avoid these solutions where applicable. Clear accountability measures, including annual reporting and acquisition plan transparency, shall be implemented to ensure compliance and incentivize adoption of these practices.

When most people in the Pentagon think about the General Services Administration, vehicles, real estate, and office supplies come to mind. But that agency has also stepped into the breach to help the Defense Department with its woes with a purchasing program called assisted acquisitions.

This program is especially useful when it comes to streamlining procurement, accessing non-traditional vendors, and adopting commercial technologies. The General Services Administration can’t buy things that go boom, but they can be especially valuable to the Defense Department when it comes to information technology, artificial intelligence, quantum technologies, and more. By offering flexible contracts that allow multiple purchases over time without renegotiating terms, this critical agency has created pathways for the Defense Department to adopt advanced technologies while reducing bureaucratic delays.

Instead of issuing individual contracts for each project or requirement, defense officials can issue task orders under an existing contract, saving time and administrative effort — or, to put it bluntly, avoiding contracting shops in certain military commands that simply can’t get their acts together. Sounds great, right?

Well, it could be.

There is a lack of familiarity among bureaucrats and leaders on how issuing task orders works. I have routinely met general and flag officers, senior officials, civil servants, contracting officers, and others who don’t even know this path exists. With my Bedrock hat on, I had the displeasure of dealing with a member of the senior executive service who simply refused to respond to the General Services Administration when it was interested in working with the Air Force to make a contract for my company happen faster. And I am not alone.

What can the memo do about this? First off, mandate training, which I’ll address in the next section of the article. But the memo should also designate specific offices in each service to oversee and facilitate the use of these assisted acquisition pathways, ensuring that defense officials are both aware of and incentivized to use them. Clear accountability measures should also be implemented, requiring contracting officials to justify decisions to not employ these tools when they are available and when it comes to information technology solutions in particular. Requiring transparency when program managers write their acquisition strategies and plans is one opportunity for improving accountability.

Next, the department can change one critical recording practice that is standing in the way of working more with the General Services Administration on these contracts. The Small Business Administration is responsible for monitoring U.S. government performance on how many contracts are given to small businesses. That agency issues goals to all the large contracting agencies, like the Defense Department, then grades everyone. Every part of the government except the Defense Department pulls data for the Small Business Administration according to an identifier tied to the funding office. This means the office that owns the mission and money gets the credit even if the General Services Administration papers the contract. The Defense Department uses a different identifier that is tied to the contracting officer. That means the people that paper the contract get the credit. This creates a disincentive for the Defense Department to bring work to the General Services Administration because the department won’t get credit for working with a small business. This results in policies that delay and kill deals. The key signer of this memo — the under secretary of defense for acquisition and sustainment — has the authority to change this and bring the department in line with the rest of U.S. government practice.

Memo Item No. 4: Make Professionals Know Their Profession

You shall create and enact mandatory training programs on contracting authorities and procurement best practices for all Defense Department personnel involved in directing, overseeing, and issuing acquisition decisions. These programs, which should draw on commercial solutions, shall include modules and regular informational streams on the art of the possible in defense acquisitions, emphasizing statutory authorities, innovative practices, and commercial solution integration. Accountability for knowledge gaps will be enforced through evaluations tied to the effectiveness of acquisition outcomes.

Because so many people in the Defense Department touch buying things in some way, many people think they have a thorough and deep understanding of contracting and acquisitions (yes, there’s a difference). The fact is, most of them don’t. While many of my colleagues in industry often blame the contracting officers, the fact is the real problem is with those who oversee them — often senior civil servants (including members of the senior executive service) and general officers — as well as the legal professionals who advise them. Without leaders and lawyers who understand the art of the possible, available authorities, and how those authorities do and do not work, the Defense Department will never overcome the hurdles standing between the present and a more technologically advanced force ready to deter and win a war against an adversary like China.

It is routine for me to meet someone responsible for programmatic and buying decisions who does not know, for example, that companies that have won a Small Business Innovation Research contract have satisfied the competition requirement and, consequently, the government can negotiate contracts directly with the company without “competing” the opportunity further. Moreover, the program’s statutory language goes further to say that agencies must “to the greatest extent practicable” facilitate the commercialization of these technologies, which includes leveraging sole-source authority when applicable.

Given this language, why are the traditionalists so resistant to using the authority to work directly with small businesses? They either know about it and choose not to use it, or they don’t know and therefore should be educated.

I also routinely meet officials responsible for programmatic and buying decisions for software who don’t understand that a lack of a completed FedRAMP certification does not rule out purchasing a solution (if it did, the government would have virtually no software). I have often met Defense Department lawyers who don’t understand the laws around “color of money.”

I usually don’t blame these individuals. Standards only work when they are created, communicated, and enforced. And unfortunately, across multiple administrations, this simply hasn’t happened, feeding a crisis of competence and culture that could lead to America’s defeat.

This brings me to the Defense Acquisitions University, which was established in 1991 for “the professional educational development and training of the acquisition workforce.” There should be some recognition that, despite the good intentions of leaders there and solid visioneering, that institution has not come close to fulfilling its mandate adequately. It is a solution for a world that no longer exists. If you look at its curriculum you’ll see that the vast majority of classes are on traditional acquisitions, with vanishingly little on the authorities I have written about here. It should be overhauled.

More immediately, the shortfalls of the Defense Acquisitions University can be filled by commercial solutions. The Federal Acquisition Streamlining Act, passed in 1994, requires the U.S. government to prioritize the acquisition of commercial items for the military and civilian agencies. There are solutions on the market today for delivering this training and education, including Bedrock Knowledge.

There are some amazing policies, strategies, laws, and concepts addressing how the Department of Defense can modernize its digital learning enterprise. But it will take sustained senior leadership attention to take them from the page to reality. Incoming senior Defense Department appointees can start by delivering modern, commercial training solutions and a mission-relevant curriculum to the people buying the future of the U.S. military.

Really? Just a Memo?

Some of you might be reading this, thinking “Surely, Ryan, if it were this easy, it would have already been done.” I wish you were right!

I’ve had conversations with senior officials in past administrations on these very issues. I often wish I could give every American the opportunity to work in the Defense Department for a week so they could understand the rigidity and stagnation that reigns supreme. There is an astounding reluctance to change how the department does business in ways both big and small.

Why does this happen? Bureaucratic inertia is a well-documented phenomenon that describes how large institutions resist change due to complex hierarchies, risk aversion, and deeply embedded norms. James Q. Wilson’s seminal work, Bureaucracy: What Government Agencies Do and Why They Do It, explains how public agencies like the Department of Defense prioritize process adherence over outcomes, as their accountability structures reward avoiding and even punishing errors more than achieving innovation.

If we want to overcome these barriers, we should understand that the Defense Department’s reluctance to change is not just a matter of obstinance. It is a product of deeply ingrained systems, positive and negative incentives, and mindsets. Changing that culture will require more than good ideas — it will demand leadership willing to challenge convention and a public that demands accountability for results.

A memo offering the specific guidance and expectations I laid out above can have powerful effects on this sclerotic bureaucracy for two reasons. First, it will provide “top cover” for those who are normally too reluctant to stray from the narrow path most bureaucrats stick to. There are so many people in the bureaucracy waiting to drive innovation, but the cards are stacked against them. And they won’t stick around for long if they are unable to drive change. In the future, if someone else tries to get them into trouble for issuing an Other Transaction, that civil servant will be able to say, “Well, I followed the guidance and rules laid out by our bosses. Read the memo.” Second, it will give companies trying to offer important capabilities to the Defense Department — capabilities it is asking for — recourse when faced with an official who says “we can’t.” These companies will have an authoritative statement of policy and procedure to point to and say “actually, you can, and you’re expected to.”

The Defense Department is a sprawling organization populated with professionals who are largely mission-driven and service-oriented, but too many of those buying the future don’t have a map to get America there. The policies recommended here would be a modest but critical start on finding the way.  I hope to see senators asking nominated defense officials about how they plan to lead the way.

Ryan Evans is the founder of War on the Rocks and of Bedrock Knowledge. He can be reached at ryan@thebedrock.co.

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