Category: MIL-OSI

What will it take for acquisition reform to finally succeed? New org charts aren’t enough: The people in the organization need new incentives.

Since last fall, in a sweeping organizational overhaul, all three military departments have replaced program executive officers with Portfolio Acquisition Executives (PAEs). The Army stood up six, the Navy nine. The Space Force completed its transition in July with nine. The Air Force redesignated all of its program executive officers as PAEs effective July 4.  These new executives have the power to launch sustainable reform that, at long last, shifts defense acquisition from a focus on procedural compliance to one on accomplishing the mission — if and only if they use that power to take two crucial and complementary steps. First, they must provide believable, executable top cover for contracting officers, not just lip service about taking risks. Second, they must refocus performance metrics to measure whether and how quickly acquisition outcomes produce mission results.

Both moves fall within the PAEs’ authority under Section 1802 of the fiscal 2026 National Defense Authorization Act. Modeling of acquisition workforce behavior shows that the two together break a portfolio out of the compliance trap; neither one alone does.

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Prior reforms aimed at the acquisition workforce, but none changed the conditions under which it worked. What the PAEs do next will determine whether 30 years of acquisition reform produces yet another wave of promise, then reverts back to the bureaucratic mean, or delivers the change previous waves promised.

The PAE is the first acquisition official made responsible by statute for delivering capability across a portfolio rather than simply for milestone compliance on individual programs.

Compliance culture is not an attitude problem. The acquisition workforce is not timid or indifferent — it is rational. Consider the contracting officers (COs) in any PAE’s portfolio today. The COs aren’t ignorant: They know the Federal Acquisition Regulation (FAR) permits commercial procedures, oral presentations, Other Transaction Agreements (OTAs), and statements of objectives (SOOs) instead of detailed statements of work (SOWs). They know that the Revolutionary FAR Overhaul, triggered by Executive Order 14275, signed in April 2025, has expanded that legal operating space, stripping non-statutory content from most of the FAR. They know the Defense Secretary’s November 2025 directive [PDF] launched the transition to a Warfighting Acquisition System, with speed of capability delivery as the organizing principle.

That’s well and good, but when COs exercise flexible methods and face a protest, an audit, or a congressional inquiry, they are personally exposed. They’re the ones who sign for the government: Their name is literally on the line. When COs follow standard procedures and an acquisition produces a poor outcome, bad career consequences rarely follow. Under those conditions, rational COs default to the safest available procedure — not from cowardice, but from judgment. Compliance remains the smart choice.

Section 1802 alters that calculus. The PAE now holds direct authority over the program managers (PMs) and COs within a portfolio: a group of related programs managed together so resources can shift across them as missions evolve. Section 1802 makes the PAE responsible for capability delivery across that portfolio as a whole, not just for milestone compliance on any single program.  For the first time, the leaders with institutional authority over COs have a mission that requires them to provide real top cover, because the PAE’s own success depends on the outcomes that cover enables.

This is what every past reform lacked. The Federal Acquisition Streamlining Act, the Office of Federal Procurement Policy’s procurement innovation guidance, and the Section 809 Panel each sought to enable better behavior at the CO level. But none altered the chain of authority above the CO to link senior leaders’ performance to portfolio outcomes. Section 1802 does. That is the structural difference.

Of course, top cover and outcome metrics are not new ideas. The reform literature has called for them for decades. What simulating the acquisition system reveals, and previous reform efforts missed, is that the order of deployment determines whether the reforms take off or are absorbed.

Deploy outcome metrics first, and the CO sees a dashboard that measures behaviors the system still punishes. The metrics are accurate. The career risk is unchanged. The CO does not move.

Deploy top cover first, and the CO begins exercising flexible methods, because the risk that mattered most — professional exposure — has been removed. When metrics arrive, they make the resulting outcomes visible. The PAE can see what is working. Resources flow toward what works. The loop closes.

Simulation showed that top cover paired with outcome metrics revolutionized portfolio management, a “phase change” as dramatic as solid ice melting into liquid water. But neither one alone was sufficient to break the hold of compliance culture.

A second simulation finding sharpens the urgency: Building the outcome culture is harder than losing it. It takes roughly twice the institutional commitment to establish the new pattern as to maintain it. Reforms that fail to reach the threshold collapse, and the system reverts, as it has after every previous reform wave. Reforms that cross the threshold stick.

The system is now closer to that threshold than at any point in three decades, but it has not yet crossed it.

The PAE is the binding constraint. The first decision — whether to provide real institutional protection for contracting officers who exercise flexible methods — determines whether everything else can be sustained or is absorbed by the old pattern.

Top cover is not a memo encouraging innovation or a speech about speed. It is a written, public commitment by the PAE, by name, to defend specific contracting decisions made in good faith using specific flexible methods. It specifies which methods the institution will support, from oral presentations to OTA prototype agreements. It commits dedicated legal resources and senior leadership engagement when a flexible-method award is challenged. It assures that a CO acting in good faith, with a documented rationale, will not face career consequences for an imperfect outcome or a sustained protest. And it changes how COs are evaluated.

Documented business judgment replaces procedural perfection as the standard, with mission delivery and procedural compliance carrying equal weight.

Three metrics constitute a viable starting set. First, time-to-mission-effect tracks elapsed time from a validated operational need to capability in the operator’s hands — the full pipeline that traditional metrics like procurement administrative lead time (PALT) cannot capture, since it runs only from solicitation to award. Second, post-award mission satisfaction, a structured assessment conducted by the requiring activity at six and 12 months, links the contract to the operator’s lived experience of how the product actually performs, rather than to technical acceptance alone. Third, competitive yield, the number and quality of offers received, makes visible the firms that did not bid because the solicitation signaled that innovative vendors were unwelcome.

None of this requires new authorities now that the system structure has changed with the creation of PAEs. It requires a decision to measure what matters.

The PAE does not need to push every program through Other Transaction Authority or exotic procurement vehicles. Moving the portfolio’s default requirements format from the detailed SOW to the outcome-focused SOO, paired with credible cover, is sufficient. A CO who can describe what the operator needs rather than which technical solution to pursue, and who is protected when the resulting award attracts a protest, will make the trades that get capability to the warfighter faster.

This is well within Section 1802 authority. All that’s needed to start the journey is the decision, the top-cover document, and the outcome metrics.

The PAE need not transform an entire portfolio at once. Pick one or two programs as pathfinders. Apply maximum cover and flexibility. Measure the results. The first successful pathfinders become seeds visible to the next CO, the next PM, the next portfolio, and the effects propagate.

The authority exists. The regulatory space exists. The leadership signal exists. The statutory foundation exists. The system is closer to the threshold than it has ever been.

The question is whether this generation of acquisition leaders will push it across.

Timothy W. Cooke is president and CEO of ASI Government LLC, which advises federal agencies on acquisition strategy and organizational transformation.