**NATIONAL HARBOR, Md.** — The White House aims to simplify the Pentagon’s complex acquisition system, but obstacles remain that prevent commercial companies from engaging in national security work. The Defense Department’s outdated processes treat the procurement of quadcopter drones the same as that of fighter jets. Liz Young McNally, the Defense Innovation Unit’s deputy director for commercial operations, highlighted the challenges associated with the authority-to-operate (ATO) process, which is intended to ensure software security. This process can take years and introduces substantial costs, acting as a barrier for companies seeking to work with the Pentagon.
McNally spoke at the Apex Defense forum, stating, “The intent behind [the ATO process] is good…we’ve made some progress, but there is a lot more that really needs to happen.” The ATO is vital for verifying that software is safe for use. The Trump administration’s focus on acquisition reform aims to ease the process for businesses and includes initiatives like a software memo from Defense Secretary Pete Hegseth, which encourages contracting officers to utilize rapid buying tools.
During the forum, Melissa Johnson, the acquisition executive for U.S. Special Operations Command, noted a cultural challenge within the acquisition community. She remarked, “Most people choose not to tailor,” indicating that training and awareness about available tools are critical. Johnson encouraged the acquisition community to embrace more flexible and faster approaches rather than relying on outdated methods.
While Young McNally feels optimistic about the trajectory of defense acquisition reform, she acknowledged ongoing challenges such as the ATO process and related cultural issues surrounding trust and risk. After a company receives an ATO, there is reciprocity with other defense organizations; however, she noted that system owners may hesitate to trust an ATO from an external party due to concerns about accountability. “I know that you gave the ATO to them, but I don’t fully trust your ATO,” she explained, underscoring the hesitation that can lead system owners to mandate a fresh ATO process.
The Defense Innovation Unit is currently piloting rapid ATOs with its portfolio companies and is exploring how to scale this process elsewhere. Additionally, budget flexibility presents another hurdle, as funding for commercial technology can be limited. McNally indicated that collaborative efforts with innovation organizations, the Defense Department, and Congress are essential for addressing these issues. “There is work being done on each of those, but I think that’s the next wave of barriers that we’re going to have to solve in order to really ensure that technology gets in the hands of the warfighter at the speed we need,” she said.
