The military's acquisition reform push means 85% ready is good enough to start

In his Nov. 7 address to industry, Defense Secretary Pete Hegseth said the Pentagon will be more willing to buy a system that provides “the 85% solution” and can be iterated to 100% over time.

That approach means fundamental change is coming to how the Defense Department thinks about tradeoffs in speed, cost and quality for how it acquires technologies and deploys them into the field.

Speaking Tuesday at an event hosted by our Defense One colleagues, a panel of industry executives spoke to those tradeoffs as they pertain to risks DOD is willing to take in different categories.

“It starts with how much acquisition risk are (they) willing to take to decrease operational risk,” said Steve Harris, vice president of defense and intelligence at the Professional Services Council, a GovCon trade association. “It is a culture change for the department writ-large, and eventually, I think probably the government in terms of what the tolerance is going to be for acquisition risk, and that’s going to be something that has to be a major culture change.”

Getting to the 100% solution often requires lengthy testing and technological development timelines, which Hegseth said are “unachievable” during his speech.

Margaret Boatner, vice president for national security policy at the Aerospace Industries Association trade group, said the work to hit 100% can add another one or two years to those timelines.

“We have to be willing to make some of those performance tradeoffs to meet 85% of the requirement, and move out with more speed than waiting the additional two years to get to 100%, and then moving out,” Boatner said.

Christian Gutierrez lives and works in that world of moving faster as a vice president at Shield AI, one of the handful of defense technology startups whose touted valuations exceed $1 billion. He oversees engineering for Hivemind, Shield AI’s flagship product for enabling unmanned aircraft to operate autonomously.

As Gutierrez put it, his world is all about getting a minimum viable product into the hands of customers. MVP is the most basic version of a new product that has just enough features to be usable by early customers, who then provide feedback for future development and iteration.

He described cost, schedule, budget and technical risks as factors companies like Shield AI always balance against one another in product development and delivery.

“Really, what we're talking about is a schedule risk. Speed is the name of the game right now. We have pacing threats, we have adversaries moving at speeds that we just haven't seen before,” Gutierrez said. Now it’s a matter of how you incentivize speed, how you lower the barrier to entry, and we're seeing that with this administration and the new policies.”