Incoming President Donald Trump and advisor Elon Musk have pledged to reform Pentagon spending, a goal shared by officials across the political spectrum. However, insiders have indicated to Defense One that while the new administration might initiate changes, comprehensive reforms to how Congress allocates funding and oversees expenditures will be essential for a genuine transformation.
Trump and Musk, recently appointed to lead a new Department of Government Efficiency, are considering several innovative proposals for Pentagon procurement. These include replacing the F-35 Joint Strike Fighter with drone technology. Trump has criticized the “military industrial complex” but paradoxically signed increasingly larger budgets for the Defense Department during his previous term. Musk, noted as the world’s wealthiest defense contractor, has advocated for a reduction in the federal workforce, sought greater accounting transparency, and pushed for increased funding for modern technologies like drones over manned aircraft.
The Defense Department is already undertaking initiatives to attract new companies and accelerate the acquisition of drones and other advanced technologies. Current and former officials believe the new administration should leverage these existing efforts, even under a different branding approach.
Michael Brown, a former White House Innovation fellow and head of the Defense Innovation Unit (DIU) under Trump’s first administration, emphasized that the DIU is currently managing these initiatives. Nevertheless, with less than $1 billion allocated to the unit last year, its limited budget restricts its ability to disrupt traditional purchasing systems. He argued that instead of expanding DIU, it should focus on enhancing military service acquisition processes and training contract officers to streamline procurement in a way akin to software acquisition speed.
Furthermore, significant reforms in contracting methods are necessary, particularly by utilizing other transaction authorities, which the Pentagon can deploy for smaller acquisitions.
Brown pointed out that while large platforms will always be necessary, there is no reason to complicate smaller purchases with the same bureaucratic processes that govern major acquisitions. He suggested that leadership should prioritize enterprise needs over specific service requirements to improve purchasing efficiency.
A new report from Defense Innovation Board chair Michael Bloomberg and former Marine Corps Commandant Gen. David Berger, released this week, provides several recommended reforms for Pentagon procurement. Berger highlighted the Pentagon’s Replicator program, designed to deploy tens of thousands of cost-effective autonomous drones, as a commendable initiative that suffers from inadequate attention and funding.
This report proposes the Defense Department establish a flexible spending portfolio akin to a hedge fund, focusing on expenditures beneficial to all military services rather than on a singular one. Berger suggests that allocating 15% of the overall Defense Budget as a starting point could facilitate more strategic spending over time.
Jake Sullivan, the outgoing national security advisor, remarked that the next administration needs to persist in efforts to rebuild the U.S. industrial base, a task Trump has already committed to undertaking. He described the endeavor as a “generational” challenge, emphasizing the importance of learning from contemporary conflicts, like Ukraine, to effectively integrate new technologies into military doctrine and produce them at scale.
Despite these plans, Brown, Berger, and Sullivan identified Congress as the principal barrier to procurement reform. Sullivan noted that while lawmakers often complain about slow Pentagon acquisition processes, they still desire to maintain control over the budget, which can hinder effective management.
Brown criticized the excessive scrutiny on the defense budget’s division into 1,700 program elements, stating that congressional oversight has devolved into micromanagement. He emphasized that Congress must recognize its role in allowing the Department of Defense greater autonomy in its operational decisions, particularly regarding what equipment and capabilities to purchase.
While there is some support for reducing federal staff, particularly among contracting officers, both Brown and Berger advised caution. They noted that the Defense Department performs numerous non-defense-related functions, such as security clearance management, which might be suitable for privatization, but stressed that cutting essential expertise needed for procurement would be detrimental.
Brown countered Musk’s implication that automation could fully replace contracting officers. He acknowledged the potential for AI to enhance their capabilities but insisted that certain procurement processes still require human intelligence. He urged the need to simplify the existing federal acquisition framework, which spans 2,000 pages, before pursuing automated solutions.
Ultimately, Berger cautioned that fostering distrust in the federal workforce would likely produce negative outcomes. He remarked that the current punitive approach does not inspire motivation, lacking incentives or rewards for the workforce.
