Think tank reports rarely make for compelling reading. That’s why when we come across one that defies the genre, we have no choice but to recommend it. The Foundation for American Innovation (FAI) recently published Going on Wartime Footing: Five Big Reforms for American Defense. Author Tim Hwang defines wartime footing as “a wholesale mobilization of the defense industrial base that would prepare the country for major combat operations and the prospect of a scale of conflict not seen for a generation.” As the authors of a recent book about this very topic, we agree any reforms need to match the scale of our current emergency.

From a Citizen’s Proving Ground to a Defense Acquisition Delta Force, Hwang’s proposals are ambitious. They also exist in the realm of the possible. We’re reminded of William Greenwalt’s and Dan Patt’s bold call to abolish JCIDS, the joint requirements process. It probably seemed outlandish to some, but it came to fruition just six months later under Secretary Hegseth. And like the simple proposal to kill the joint requirements process, Hwang’s reforms are legible to the lay person because they address the root causes of the dysfunction. There is no obfuscation by “experts” who propose tinkering with arcane processes at the margins.

Hwang’s reforms, while creative, are not without precedent. They may seem farfetched or too politically fraught to those who are accustomed to incremental adjustments and inaction. But history suggests that we can—and should—think bigger.

Big, Beautiful Reforms

The defense acquisition bureaucracy employs nearly 160,000 individuals across civilian and uniformed personnel. That’s about the size of the U.S. Marine Corps. What do we have to show for this shadow service? A weapons arsenal largely designed during the Cold War. While some think tanks argue that we just need more acquisition personnel, FAI argues for finding the right people via a “Defense Acquisitions Delta Force.” It may be less exciting than the real Delta Force, but it would be no less important. This “crack team of elite military officers whose purpose is to serve as an acquisitions special operations squad . . . would be tasked with the hardest defense procurement missions.” The chosen few would be up against a massive bureaucracy where inertia is the default. Success would be challenging, but possible.

America had a version of the Defense Acquisitions Delta in the late 1970s under Bill Perry, under secretary of defense for research and engineering. Perry and his small team—a delta force in spirit, if not in name—moved with purpose to acquire the capabilities for the Second Offset strategy. Within five years, stealth, GPS, and precision-guided munitions were all operational. Showing the spirit of a special operator, Perry did whatever it took to win. He circumvented the traditional and slow PPBE acquisition process, killed programs that weren’t delivering, and forced through the efforts that were. That he had no formal acquisition background was almost certainly a boon. If the Department of War (DoW) brings in Perry-quality talent, the Defense Acquisitions Delta has a real shot at success.

Adjacent to the massive acquisition bureaucracy are the resource-intensive government labs, warfare centers, FFRDCs, and more. These DoW-supported institutions compete directly with private industry. For Hwang, it’s high time we “eliminate the shadow competition.” The government competing with industry is not a new problem, just one that’s been remarkably resilient to change. Writing in 1995, Jacques Gansler, who would go on to be President Clinton’s under secretary of defense for acquisition and sustainment, complained of the conflict of interest where the government is “both a direct competitor and the possessor of the right to decide who wins and loses.”1 The dynamic is all the more egregious because the robust private sector “offers essentially identical services.”2 Aside from truly unique areas, like nuclear weapons, Gansler generally opposed the duplicative existence of labs and FFRDCs.

Hwang finds the shadow competition least excusable when it comes to shipbuilding. The Naval Sea Command (NAVSEA) is responsible for acquiring ships and combat systems. In many cases, it also architects and builds those same vessels via its government labs and shipyards, disadvantaging a commercial industry hungry for work. Perhaps the only thing more shocking than learning China has over 200 times more shipbuilding capacity than the United States is learning that NAVSEA has nearly 90,000 employees.

The shunting aside of the commercial shipbuilding industry recalls the trials and tribulations of Andrew Higgins. The outsider boatbuilder from Louisiana built over 90% of all vessels in the U.S. fleet during World War II. But first, Higgins had to go head-to-head to compete with the Navy’s Bureau of Ships (NAVSEA’s predecessor). As late as 1942, the Bureau of Ships blocked him from competition and stole his designs. It was only when Senator Harry S. Truman directly intervened that Higgins finally got the contracts he deserved. Higgins’ assessment of the shadow competition rings true today: “Nothing could be healthier for the Navy as a whole, and the country that they really desire to serve, than that there be a ‘house cleaning’ in the Bureau of Ships. It would be preferable that quite a number of officers and civilians therein go to other duties.”3 Higgins understood then, as Hwang does now, that commercial shipbuilding is a national imperative.

As a talented civilian innovator, Higgins would have been a fan of another of Hwang’s recommendations: a citizen’s proving ground. The DoW would operate a “nationwide network of munitions proving grounds on underutilized federal land, military training areas, or testing ranges.” After obtaining a license, citizens would then be able to conduct weapons and munitions testing, “particularly against defined priorities and targets set by the Pentagon.” It sounds crazy but is entirely possible and aligned with the American innovator spirit. A citizen’s proving ground is a necessary response to the democratization of weapons development via commodity hardware and commercial software and AI. As we’ve seen in Ukraine and Iran, cheap drones are now a fact of modern warfare. Critical innovation happens on a daily or weekly basis—not according to years-long procurement cycles.

While the barriers to build weapons fell, the United States doubled down on the institutionalization of defense technologies. This yielded formidable advances like stealth and intercontinental ballistic missiles. It also crowded out the tinkerers and cowboys who have historically played an important role in developing new tech. Early American rocketry was defined by Robbert Goddard and the Caltech Suicide Squad. Goddard launched the first liquid-propellant rocket at his aunt’s cabbage farm in Massachusetts in 1926; when he could no longer ignore Worcester County’s disgruntled residents, he relocated to spacious New Mexico to continue his experiments. Now NASA’s premier spaceflight center is named after him.

Meanwhile, the Suicide Squad, an inexperienced group of graduate students, were busy testing rocket motors in a “semi-official manner” at Caltech. They operated with no budget and a regard for safety typical of college kids. After they were kicked out of the campus laboratory following an incident involving corrosive nitrogen tetroxide, they moved a few miles to the Arroyo Seco canyon to continue making mayhem. In 1939, General Hap Arnold, commander of the Army Air Forces, paid the group a visit. He liked what he saw. The Suicide Squad promptly received an Army contract for the first jet-assisted takeoff rockets in 1939. By 1943, the group formally became known as the Jet Propulsion Laboratory (JPL). Today’s buttoned-up JPL belies its rag-tag origins. The early aviation and firearm industries come from similar traditions. We would do well to tap the exceptional—if unusual—talent that can be found far outside the Beltway and national labs.

Hwang provides the historical precedent for his remaining two proposals. There’s “The Billion Dollar OTA,” which would be singularly focused on “whether a company is able to deliver systems meeting defined operational metrics. If a contractor is able to meet these requirements, the government would guarantee a certain purchase volume worth billions.” The United States had such an outcomes-based budget for shipbuilding during World War II. Henry Kaiser had the freedom to innovate on mass production for his Liberty Ships because the government defined what ships it needed and committed to buying them in huge quantities. If government provides a clear demand signal and leaves innovation to industry, we can approximate the healthy dynamics of a commercial market.

The final proposal is the simplest: “The Secretary’s Firing Line.” It’s a bet on people over process. The Secretary of War would “bring together the entirety of top military leadership to directly review all legacy programs and cut ruthlessly where needed.” This is something Army Chief of Staff George Marshall implemented to great effect during World War II. He conducted regular program reviews that forced staff to rank programs and defend them. One of the results was a shift away from tank destroyer units and an expansion of armored divisions and artillery. The firing line is a highly leveraged concept the Secretary can implement today.

Every one of Hwang’s proposals has historical precedent. We know they are feasible. Now we need to discover the will to act.

Arthur Herman is the Pulitzer Prize Finalist author of Freedom’s Forge: How American Business Produced Victory in World War II. His newest book, Founder’s Fire: From 1776 to the Age of Trump, will be released by Hachette/Center Street on April 21. Find him on X at @ArthurLHerman

It’s a question historians have often asked themselves. It’s one Nazis caught in the Führerbunker, and later on trial at Nurenberg, must have pondered, as well.

What went wrong, they wonder, when Nazi Germany had so many trump cards in its hand?

A world-class industrial economy.

A first-rate military. (“The most professionally skillful army of modern times,” according to Martin van Creveld, one that, according to Colonel Trevor Dupuy’s analysis, was able to inflict 50 percent more casualties on its British and American opponents under all conditions than its opponents were able to inflict on it).1

An exquisite community of brilliantly trained scientists and engineers.

Above all, a fistful of advanced—even futuristic—military technologies. These included the first jet fighters and aircraft, the first killer drones and ballistic missiles, the first precision-guided munitions (the Fritz-X radio-guided bomb), the world’s most advanced submarine design, and an atomic bomb program underway by 1939.

Imagine what might have happened if Germany had managed to deploy its jet aircraft during the Battle of Britain. Imagine if the V-2 rockets had been improved to reach Moscow and even New York City. Imagine Germany using the first atomic bomb to stop the D-Day invasion, as many in the Manhattan Project had feared.

Yet the truth is, Germany lacked what the United States had and was able to bring to the other Allies: an industrial base large and flexible enough to scale production of the military technologies that did give the Allies their decisive edge: tanks, trucks, conventional fighters and bombers, artillery pieces and machine guns, submarines and destroyers and aircraft carriers—by 1944 eight a month—as well as the freighters needed to carry all this material to battlefields across two oceans.2

The rest—including the atomic bomb—was largely icing on a massively conventional cake.

That’s not to say innovation didn’t play its part in victory. The weapons the Allies started the war with—with the exception of the Supermarine Spitfire fighter—were markedly inferior to those used by the Axis. By the last year of the war, however, America and its allies outclassed the Axis in every area that counted, from tanks to fighters to bombers to artillery fuses.

That truth reveals a larger point: innovative military technologies don’t change the larger strategic balance. They express the larger strategic balance. In that sense, Germany was beaten two years before the war actually ended. By the summer of 1943 the Allies had taken Sicily and the Soviets had crushed the Wehrmacht’s last offensive in the East at Kursk—while U-boat losses forced the German navy to halt its campaign to control the Atlantic at the end of May.

People began avoiding giving the Nazi salute whenever they could. The German security service reported that no senior industry leaders still believed the war was winnable.3

Yet the war itself dragged on until May 1945. What followed was simply a regime struggling to escape its inevitable fate: downfall and defeat.

******

So went wrong for Nazi Germany?

Let’s start with its industrial base, the third largest in the world in 1939. (Tied for second with the Soviet Union if Austria and Czechoslovakia are included).

Further: with the fall of France and occupation of Holland, Belgium, Denmark, and Norway, Nazi Germany had captured the industrial heart of Europe. Hitler controlled an economic bloc equal to the GDP of the United States, when you include allies like fascist Italy—even excluding Germany’s potential ally and biggest trading partner in 1940-1, the Soviet Union. Germany’s sphere of influence at its zenith covered one-fifth of the world’s population: or roughly that of the entire British Empire.4

Yet even with this formidable base, the German war machine lacked two essential ingredients. The first was energy, specifically oil, while the United States was able to supply its allies and meet its own needs and more throughout the war. 5 Access to sufficient oil to keep its armies, navy, and air force running was Germany’s Achilles heel, right from the start.

The other was workforce. Here Germany’s first-rate military demanded more men than the nation’s demographics could support, especially after the invasion of the Soviet Union. Incredibly, by the fall of 1941 virtually every German male in his twenties had already been called up.6 Every demand for more men afterward to fight a three-front war (Western Europe, Russia, and North Africa/Italy) increasingly drained manpower from factories and shipyards; the only alternative for keeping the industrial base going was slave labor. By 1944 more than one-third of workers in the German war industries were unwilling foreigners, including Jews destined for the gas chamber. Even in 1943, 80 percent of the workforce making Stuka bombers were Russians.7

Foreign workers, of course, were not as efficient as German counterparts. Then, even when a superhuman effort was able to surge the production of fighters in the desperate months of 1944, still there was no fuel for flying them.

What about the much-vaunted secret weapons?

We can start with jet propulsion. Heinkel first tested a jet-powered prototype in August 1939, a month before war broke out. Both Heinkel and Messerschmidt immediately plunged into developing jet aircraft. So swift was their progress that some worried the entire prop-driven aircraft development program might be in jeopardy.8 Hitler gave his enthusiastic backing to Messerschmidt’s first designs in the summer of 1942. By the end of May 1943, the Air Ministry was pushing Messerschmidt to start mass production.

If Messerschmidt had somehow succeeded, the entire U.S. daylight bombing campaign that fall might have been swept from the skies by squadrons of Me 262’s. But Messerschmidt couldn’t do it. Going from prototype to production models takes thousands of hours of testing and evaluation, then months of experimental series production. Messerschmidt had no AI or computers or other information technology to accelerate the process; even the Junkers-Jumo jet engine the fighter required wasn’t ready for limited series production until the summer of 1944, when the Allied bombing campaign was approaching its peak.

Instead, it was a prop-driven fighter plane, the P-51 Mustang, which had shifted the balance in the air war over Germany and Europe, escorting thousands of prop-driven bombers to their targets. The Eighth Air Force’s fighter strength quadrupled in just eight months in 1944, while German air losses that summer amounted to half its aircraft and one-quarter of its pilots every month.9

When the 262 finally did take to the air in September, it was still largely in a trial and development unit. Its top pilots died all the time from accidents, while its slow landing speed made it an easy target for P-51’s roaming the skies at will.

Despite claims by German air ace Adolf Galland and others that it was Hitler’s obsession with using the 262 as a fighter-bomber instead of an interceptor that kept it from being a decisive weapon, what actually kept the German jet program from tipping the balance in the air war “was not incompetence or conservatism but the debilitating material limitations of the German war economy”—limitations that did not constrain America’s industrial base.10

Something similar happened with Germany’s rocket program. Here again the Germans were off to a flying start, as it were, going back to 1923 when a German scientist published The Rocket into Interplanetary Space. The German army set up its first top-secret rocket laboratory in 1932, just as Hitler was becoming chancellor. Its first employee was a 20-year-old student, Wernher von Braun.11

The funding for testing and development in 1935 was generous enough to enable von Braun and colleagues to set up a launch pad and supporting lab and production facilities at Peenemünde in northern Germany. Still, it took six years of relentless testing and serial failures before the team had a rocket prototype with which to approach Adolf Hitler in August 1941.

The Führer became rocketry’s enthusiastic champion and hailed the new missile as a military revolution. But it would be another year before the rocket had its first successful operational flight in October 1942, just before American and British troops landed in North Africa in Operation Torch. Nonetheless, Hitler dubbed the rocket “the decisive weapon of the war,” and ordered five thousand for immediate production.

That was a fantasy number. In fact, technical difficulties held up production repeatedly. Then, when the Luftwaffe offered its own “flying bomb,” the so-called V-1, resources were diverted to bring it into production first. It wasn’t until July 1943 that it seemed von Braun finally had the missile he and Hitler wanted: but an RAF air raid the next month virtually destroyed the Peenemünde site, setting production back months.

Now the SS stepped in, taking over production of the V-2 (as it was now designated) in a brand-new site deep underground in the Harz mountains, using slave labor to build the site and then construct the rockets. By January 1944, production finally got underway with an initial contract for 12,000. That month SS managers produced exactly three V-2s, all of which had serious production defects.12 It took another eight months before the first V-2 was fired at its principal target, London. Others were launched almost daily at Antwerp, where the Allies were building up for their final offensive into Germany.

In the end, six thousand V-2’s were built—half the promised contract—and 1,403 were launched, with just 517 landing on or near their target. Unlike the V-1, the supersonic V-2 arrived virtually without warning, with a huge field of destruction.

Together with the V-1—of which some 2,420 landed on target out of a total production of 30,000—the V-2 earned its reputation as Hitler’s “terror weapon.” Together they killed some 9,000 British civilians.

Still, it’s instructive to realize that the 2,500 tons of explosives both weapons delivered over a nine-month campaign equaled less than a quarter percent of the tonnage the Americans and RAF unloaded on Germany during the same period. 13 That destructive power depended not on advanced space-age technologies, or even innovative scientific breakthroughs, but a grim dedication to putting massive amounts of steel on target, while Allied air forces decimated the Luftwaffe and Allied armies swept back the Wehrmacht month after month.

Whether that Allied bombing campaign had a strategic impact on the war worthy of the cost in materiel and lives has been debated almost from the moment the war ended. What we can say is that the Germans themselves knew that while the bombing did not and could not halt their wartime production, it could severely curtail its potential. When German industrial leaders met in January 1945, they discovered that in 1944 they had produced 35 precent fewer tanks, 31 percent fewer planes, and 42 percent fewer military trucks than planned—almost entirely due to Allied bombing.14

By contrast, during that same year America’s factories and shipyards were producing a warplane every five minutes, eight aircraft carriers a month, fifty merchant ships a day, and 150 tons of steel every minute—whereas Germany was lucky to get a third of America’s industrial output that same year. 15

Sclerotic production also doomed Germany’s efforts to build its advanced submarine, the Type XXI, of which 118 were commissioned but only one actually carried out a combat patrol before the war ended.16

Likewise, Germany’s radio-guided munition, the so-called Fritz X, did severe damage to the handful of ships it struck in the Mediterranean when it was deployed in 1943 (including, ironically, an Italian battleship), but then faded from use when the Allies learned how easy it was to disrupt its radio guidance using an early version of electronic warfare.17

Which brings us to the ultimate weapon: the atomic bomb.

One disadvantage of the German nuclear program was Hitler’s lack of interest. For Hitler and other Nazis, atomic physics was still “Jewish science,” even after most of those Jewish scientists like Albert Einstein had left Germany. Hitler never attempted to stop the program, but he never gave it the funding or passionate attention of other secret weapons.

One big advantage was that many of the leading scientists who had created nuclear physics were still working for the Reich, and most were involved in the atomic bomb project from its start in 1939. That year, chemist Otto Hahn published the first paper demonstrating that uranium was capable of nuclear fission; German physicists soon realized a fission reaction would produce an explosion of almost unimaginable power. Another chemist and member of the Nazi Party, Paul Harteck, alerted the Wehrmacht of this potential, and by September—even as German tanks were rolling into Poland—the army had set up its first research team and lab. In December, Germany’s star nuclear physicist, Werner Heisenberg, explained in detail how such a weapon could be created.

Unfortunately for the Nazis, and very fortunately for the Allies, the German scientists chose the most complicated and circuitous path imaginable to create the U-235 needed for fission. They decided using plutonium as a cheaper substitute was impractical (plutonium would be the basis for the bomb the Americans would drop on Nagasaki) and opted for using intermediate materials to slow the nuclear fission reaction of U-235 down to controllable levels. One of those materials was graphite, but the German aircraft industry needed all the graphite it could get, so that wasn’t an option. Instead, the German program had to rely on deuterium or “heavy water,” which had only one source: a hydroelectric plant in far-off Norway.

Once the Allies caught on to what the Germans were doing—even as their own joint U.S.-British-Canadian atomic bomb project was surging ahead—they sent commando teams to disrupt the production and outflow of the heavy water from Vemork in Norway.18 In the end, the Germans never produced more than half the heavy water the program needed; a disappointed Wehrmacht passed the program over to the Education Ministry in 1942, a sure sign no one took the building of an atomic bomb very seriously. When Allied investigators examined the remains of the program in 1945, they found Germany were still years away from building anything like the weapons which America had used to end the war in Japan.

The Germans had also seriously underestimated the amount of U-235 needed to create a nuclear reaction leading to an explosion, thanks to Heisenberg’s miscalculations (whether he did so accidentally or deliberately, in order to undermine the Nazi effort, is still not clear). The larger point is that the German program was entirely dominated by scientists rather than engineers: scientists who were more interested in proving theory than devising workable solutions. When they ran into technical difficulties, as they often did, the program stalled and hesitated.

By contrast, the Allied bomb project found all the engineers it needed through the private companies who were intimately involved in every stage of the program, like DuPont, Union Carbide, Monsanto, Chrysler, Stone & Webster, and many others. America and Britain never hesitated to commit its best minds but also its best companies to the project, knowing they would find the solutions to whatever obstacles the program faced.19 And when the British realized it was a project beyond their industrial resources, they quickly handed it over to the Americans and American industry.

No such hand-off was possible with the German program. Instead, years were wasted in large part because the resources were never there, material or intellectual, to achieve a final result. Even the greatest industrial power in the world, devoting 150,000 personnel and $2 billion to the Manhattan Project ($50 billion in today’s dollars), could not manage to create a workable bomb until after Germany had been defeated.

With the atomic bomb, like so many other secret weapons programs, the Germans were in a race to nowhere. The simple fact is that the United States and the allies had the resources to devote to victory. Germany did not.

****

What are the lessons for today?

The first is worth repeating: new defense technologies, no matter how advanced, don’t change the strategic balance. They express the strategic balance, reflecting the material resources in men, machines, and production that created that balance in the first place. Even the atomic bomb was used when the war was already won in Europe and effectively won in the Pacific. By the time Germany’s jet fighters and V-2 rockets became operational, Germany was all but defeated. It was Allied armies and industries, not secret weapons, that determined the tide of war.

The second lesson resonates with today’s defense industrial contest with China and Russia, and even with the current war against Iran.

It’s often said that war is a contest of wills, and the object of victory is to destroy the opponent’s will to fight. That applies to cold wars as much as hot, kinetic ones.

It’s important to acknowledge that China has been on an industrial production “war footing” resembling the United States in World War Two for several years now, while the United States itself has more closely resembled Nazi Germany in its obsession with exquisite and expensive weapons systems like the F-35 and Gerald Ford-class carriers, and an equally exquisite industrial base focused on quality at the expense of quantity.20

Still, if dire warnings about China’s proficiency in technology and defense production serve to discourage and dismay Americans instead of encouraging us to urgent action, then the fault lies not with Beijing but closer to home. The American industrial base that produced victory in World War II no longer exists, but a new industrial landscape is developing before our eyes.21 With it produce a host of new defense companies that can compete with the fabled Big Six--,Lockheed Martin, RTX (formerly Raytheon Technologies), Northrop Grumman, Boeing, General Dynamics, and BAE Systems Inc.--ones that bring those new technologies like AI and autonomy directly in line with productive resources and capabilities.22

And that’s the key point. In the end, what defeated Germany weren’t better weapons or even more industrial output, but the ability to bring the two together in an ever-ascending spiral of innovation and production. No other country, not even China, is able to match the promise the United States has of doing it again.

The crucial question now is, are we poised to end up like Germany during World War II, stuck with lots of great innovative weapons but no means of scaling them into action? Or will we end up like our parents and grandparents in the United States, welding innovation and productivity together into an invincible combination?

The answer will determine the future of the 21^st century.

Lucas Cristaldi is an incoming M.S. Computer Engineering student at New York University and a former U.S. Air Force Contracting Officer who executed acquisition operations across CENTCOM, including contracts supporting the Afghanistan retrograde and Agile Combat Employment exercises in Palau and Puerto Rico. He co-founded the Business Innovation Cell at Moody Air Force Base’s 23rd Contracting Squadron. Lucas is a graduate of Palantir’s American Tech Fellowship.

Matt Brien works for a defense technology company in California and is a Reservist in the U.S. Air Force. Matt’s experience as a contracting officer includes operational contracting support, Director of Business Operations at the 386th Expeditionary Contracting Squadron, USSOCOM Ghost #321, and complex systems procurement at Space Systems Command.

Take a closer look at the everyday items on your desk or at home. Flip over your keyboard, your mouse, or your phone case, or examine the government award you proudly display. You will likely find the words “Made in China” stamped on the back.

China’s industrial base accounts for about 29% of global manufacturing output. China dominates critical dual-use sectors, from shipbuilding (53% of global production) to commercial drones (over 90% of the global market). Under Beijing’s Military-Civil Fusion strategy, this civilian industrial capacity can be rapidly redirected toward military production. The U.S. manufacturing sector, meanwhile, has contracted to just 8% of American jobs compared to 32% in 1953.

These aren’t distant problems from our daily lives. Every “Buy Now” click potentially strengthens our adversary’s manufacturing base and indirectly supports China. The rise of online shopping has obscured country-of-origin information, making many Americans unwitting financial supporters of rival industrial capacity.

The crisis extends beyond individual purchases to institutional procurement. The Defense Acquisition Workforce oversees massive spending flows that could either strengthen American industrial capacity or accelerate its decline. The cumulative effect of routine purchases—Micro-Purchase Threshold (MPT) transactions, Operation and Maintenance (O&M) spending, and Government Purchase Card (GPC) transactions—represents billions in economic activity that could support domestic manufacturers or foreign competitors.

This is an opportunity. While major weapons systems require complex international supply chains, routine institutional purchases offer immediate opportunities to build domestic capacity. Air Combat Command installations alone spent hundreds of millions on GPC transactions. Even small percentages flowing to foreign manufacturers represent substantial sums that could support American businesses instead.

We know these flows can be redirected fast because we tackled the problem as part of a contracting squadron in Valdosta, Georgia. By expanding local vendor pools, partnering with a technology startup to surface American-made alternatives, and building direct relationships between a military installation and its surrounding community, we kept federal dollars domestic and proved that the model can be replicated at installations across the country.

More than any policy shift, what’s needed is a change in mindset. Rebuilding American industrial resilience requires acquisition professionals who refuse to be spectators.

‘It Won’t Fail Because of Me’

In October 2021, while strategists debated supply chain vulnerabilities in conference rooms, we decided to start where we stood. As Contracting Officers with the 23rd Contracting Squadron at Moody Air Force Base in Valdosta, Georgia, our day-to-day work was buying goods and services and executing contracts for the installation. As part of that work, we decided to address foreign dependency in defense procurement in our own, small way.

We started a Business Innovation Cell, supported by leadership that understood that Airmen with time, resources, and permission to solve problems could generate solutions with lasting impact. We saw a glaring gap: a disconnect between what was available in the local market and how the government was buying. Procurement processes were stuck in decades-old rules, not actively taking advantage of capable companies that could deliver quicker, better, and closer to home. Our mandate was to close that gap, to engage local small businesses, keep federal dollars within America, and strengthen the distributed network of enterprises that provides actual resilience during crises. We did this by visiting businesses directly, educating them on government contracting, and actively expanding the pool of qualified vendors for routine purchases.

Defense acquisition professionals can easily fall into a rut, viewing themselves as passive processors of requirements. We decided to live out a different philosophy: “It won’t fail because of me.” This was the operational philosophy behind humanity’s greatest achievements and that helped put Americans on the moon. During Apollo, 400,000 Americans from different backgrounds shared one common commitment: personal accountability for collective success. Each person understood that mission success wasn’t someone else’s problem; it was everyone’s responsibility to ensure their piece worked flawlessly.

We applied this same mindset to fixing defense acquisition from the ground up. Rather than becoming spectators waiting for someone else to solve industrial base vulnerabilities, we recognized we were part of a community we could actively shape.

Our first intervention was symbolic but telling. When rescuemen at Moody Air Force Base—Airmen who risked their lives to save others—received commendation awards with “Made in China” stickers, we recognized an opportunity to act. Heroes being honored with foreign-manufactured awards represented a systemic failure, and we knew that the solution required no complex bureaucratic reform. Numerous small businesses in the Valdosta area could do the job. Many could do it better.

We sourced the awards from local vendors in the Valdosta community and helped on-ramp those small businesses as qualified suppliers to the base. The new awards were crafted by local artisans who understood the significance of what they were creating and took personal pride in honoring American heroes properly, instead of being mass produced on some generic, far-away assembly line. This was a small victory, but it proved that in many cases the solution was already in our backyard. So what else were we missing?

Another operational challenge emerged with off-road vehicle maintenance. Moody AFB struggled with ATV repairs, facing lengthy delays through traditional contractors. Yet driving through Valdosta revealed an obvious solution: local businesses specializing in everything from golf carts to UTVs to motorcycles. Rather than waiting for vendors to discover government opportunities, we redefined our approach to expand the competitive pool. Federal guidance emphasizes that contracting officers should actively encourage small business participation. Therefore, we hunted for qualified local capabilities, visiting and educating potential vendors about opportunities.

By expanding the vendor pool from the usual regional contractors to 50+ qualified local businesses, we created genuine market competition that drove down costs, improved delivery, and enhanced responsiveness. Every contract still went through the competitive bidding process, but now we had more qualified bidders competing for the work.

We also partnered with a technology startup that had developed a browser extension and product-tagging platform designed to identify the country of origin for products on Amazon and surface American-made alternatives. Through this partnership, we worked to integrate product-origin data into our procurement workflow, so that when cardholders shopped for supplies online, they could immediately see where items were manufactured and find domestic substitutes.

The downstream effects of these simple reforms extended throughout Valdosta’s manufacturing ecosystem. When federal dollars stayed local, they created multiplier effects: construction contractors sourced materials from Valdosta’s glass manufacturers, roofing suppliers, and fabricated metals producers. We observed increased participation from local vendors in subsequent contracting cycles, and our relationship with Lowndes County government deepened as shared economic interest aligned the base and the community.

The February 2023 Industry Day at Moody AFB represented the culmination of these efforts. Unlike standard industry events, this gathering focused on local small business contractors in three areas: services, construction, and supplies. It united wing leadership, community entrepreneurs, and government officials. Moody had spent millions in South Georgia, but beyond dollar figures, we achieved community unity around shared prosperity.

A Replicable Model

These examples show that routine O&M purchases can provide vital revenue streams that strengthen the distributed manufacturing network America needs for strategic resilience. It all depends on millions of daily, individual choices—and ultimately, on the mindset that acquisition professionals bring to the work.

Are we passive requirement processors or active contributors to national resilience? Do we accept foreign dependency as inevitable, or actively seek American alternatives? Every “Submit Order” click represents a choice: strengthen America’s industrial base or fund our adversaries’ modernization efforts.

The path forward requires acquisition professionals who understand that their individual decisions, multiplied across thousands of installations and billions in spending, shape America’s strategic resilience. It requires rejecting spectatorship, engaging directly with communities, and remembering that we are part of a society we can actively shape.

Our Valdosta experience offers a replicable framework: expand competitive pools, provide information to businesses, and build genuine market relationships. The essence of rebuilding American industrial resilience lies in helping every American who builds (atoms or pixels) feel that they are part of the arsenal of democracy. That sense of shared stakes: that your work matters, that your community matters, that you are part of something worth defending, is the foundation of national mobilization. When local businesses gain federal contracts, when manufacturers supply military operations, when communities prosper through defense partnerships, we develop the sense of agency and mutual responsibility that sustains communities and strategic advantage.

Start where you stand. Problems won’t solve themselves while we wait for someone else to act. The cumulative effect of countless individual decisions will determine whether America builds the distributed manufacturing capacity that competition demands. In an era where efficiency without resilience creates vulnerability, the acquisition workforce holds the power to rebuild American industrial strength one contract, one relationship, and one conscious decision at a time.

The views expressed are those of the authors and do not necessarily reflect the official policy or position of the Air Force, Department of War, the U.S. Government, or of any other entities.

Evan Loomis, Jordan Blashek, and Morgan Hitzig are General Partners at Overmatch Ventures.

When founders and national security officials gathered in Washington last week for the Hill and Valley Forum, they shared a common premise: America is in a technology race it cannot afford to lose. They are right. What remains unsettled is how to win it.

The scale of the challenge is worth stating plainly. In 2007, the United States led China in 61 of 64 critical technologies for economic and military power, according to an analysis by the Australian Strategic Policy Institute.

Today, China leads in 57.

For three decades, Beijing has executed a coordinated national strategy to dominate the industries that will define the next century: semiconductors, artificial intelligence, autonomous systems, nuclear energy, quantum computing, and rare earth processing. While Washington debated and Silicon Valley chased the social web, China built a vertically integrated industrial base that is now outpacing America in the sectors that matter most.

The United States still fields the world’s most powerful military. But military power is downstream of technological power. And we are now running from behind.

Defense strategists have a word for how countries respond when a rival pulls ahead in capabilities. They call it an “offset” strategy: a way to gain an asymmetric edge rather than matching an adversary strength for strength.

America has done it before. After World War II, the Soviet Union held vast superiority in troops and equipment across Europe. Rather than match Moscow soldier for soldier, tank for tank, President Eisenhower turned to America’s nuclear arsenal, raising the cost of any conventional attack to an unacceptable level. When the Soviets built their own stockpile, the U.S. offset again in the 1970s by pioneering precision-guided munitions they couldn’t match.

The competition with China is different. Not in its structure, but in its substrate. Great power rivalry is not new. What is new is the degree to which technology has become load-bearing in that competition. The Cold War was primarily an ideological, economic, and military fight, with technology as an important enabler. Wars we fight today may well be determined by technology, and the pace at which the underlying stack is evolving is unprecedented. What’s more, the technologies that matter today are too tightly coupled to focus on winning just one. Quantum computing requires advanced semiconductors. Those chips increasingly rely on AI to design them. AI demands far more cheap, reliable energy than the U.S. currently produces.

Technologies no longer enable competition. They are the competition, and they are compounding faster than any single offset strategy can track. That’s why the next offset strategy must look different.

Founders — not technologies — are the answer. A single bet on a single breakthrough won’t suffice. We must place thousands of bets across thousands of founders, unleashing America’s entrepreneurial ecosystem across every critical frontier simultaneously—energy, AI, space, defense, biotech, advanced manufacturing. Founders are the only organizational unit capable of keeping pace with the rate of technological change. Institutions optimize for known problems. Founders are structurally built for unknown ones. Let the best of them surprise us with solutions central planners could never predict.

Call it the Founders Offset.

America does not need to out-China China. It needs to be more American, not less.

China’s model has real strengths. When the Party decides a sector matters, it can mobilize capital, talent, and political attention at a scale few democracies can match. But state-directed innovation has a ceiling. When the government floods a technology area with resources and mandates outcomes, the result is often what China’s own economists call “involution”—an ever-rising effort producing fewer real gains. You can build a thousand battery factories. You cannot command a breakthrough.

America’s system is architected for exactly the opposite. It is decentralized by design, driven by initiative, and purpose-built for the kind of distributed, high-velocity experimentation that the Founders Offset demands.

Consider our capital markets. In 2024, venture capital investment in the United States totaled roughly $210 billion, compared to approximately $35 billion in China. Even more important though is the incentive structure. In China, founders and investors operate under the constant possibility of state interference driven by political versus profit-maximizing motives. Even if China grew its venture capital by 6x to match ours, China’s model would still disincentivize risk-taking, dissuading founders from pursuing the hardest challenges.

In the United States, a founder who swings and misses can raise again. There is, in fact, a premium for second-time founders, even ones that did not have great outcomes the first time. This is one reason why the U.S. has nearly four times as many unicorns as China. Not because American founders are smarter, but because the American system rewards the kind of asymmetric, long-horizon risk-taking that produces genuinely novel breakthroughs.

Those individual incentives for each founder and investor compound into something larger. At its best, the American system creates a flywheel across government, capital, and industry that no adversary can replicate. Government agencies like DARPA fund breakthrough research. Founders turn that research into technology. Venture capital scales it. Industry and government deploy it. The public markets buy it, which then funds the next generation of breakthroughs.

You can see it already in companies like Saronic Technologies, which is redefining naval autonomy, CHAOS Industries, which is revolutionizing sensors, shooters, and the kill chain, and Impulse Space, which is building the propulsion systems that will define how humanity operates beyond Earth’s orbit. That flywheel is turning again today. The question is how fast America chooses to spin it.

Every generation faces a moment when the stakes of building—or not building—become impossible to ignore.

The next generation of world-changing companies in AI, energy, communications, biotech, and advanced manufacturing will either be built in the United States or selected by the Chinese Communist Party. If tomorrow’s critical technology is innovated, designed, and made in China, we will be living in a very different kind of world—and not one that Americans would accept.

So what can we do?

Policymakers should start with these three things:

1) Expand the loan program offices at the Department of Energy, Department of War, and Small Business Administration to finance the industrial buildout at scale.

2) Remove the regulatory and policy barriers that prevent national labs from partnering with startups and industry.

3) Accelerate the acquisition reform efforts already underway, giving insurgent companies clear short-term pathways to programs of record.

Investors can get creative about how America finances its industrial revival, combining every tool in their financial arsenal, from venture to project finance and the public markets, to accelerate progress and pathways to scale for this new generation of companies.

Scientists and engineers sitting inside universities and national labs can ask a harder question: is publishing research the highest-leverage thing I can do, or is building something new?

And founders—the ones who already feel the pull of a problem they cannot ignore—should pursue those quests that can tip the balance in America’s favor. The resources are there. The markets are real. And if successful, they will not only create generational businesses, they will create generational impact as well.

America never wins by planning its way to victory. It wins by unleashing people who refuse to accept the gap between what exists and what is possible, and then building until that gap closes. The Founders Offset is not a government program or a policy agenda. It is a belief that the most powerful force in the global technology race is the American entrepreneur who decides that this is their problem to solve.

The next offset will be recognized—years from now—as the moment a generation of founders decided that America’s problems were their problems. We believe that moment is now.

Stuart Lodge is the CEO of Lodge Systems, a Canadian company building a domestic, software-defined manufacturing stack for flight-ready composite airframes and UAV fuselages.

The Pentagon is built around the Program of Record. Identify one problem, select one solution, lock the design, then scale it for years. That approach exists for good reasons. It creates accountability, supports training and sustainment, and keeps complex programs safe enough to operate.

Autonomy behaves less like a platform and more like a living ecosystem. The advantage comes from speed of adaptation, not from perfecting one design in a conference room and hoping it survives the next countermeasure. Likewise, in software we do not appoint a single point of truth and ban everyone else. We let thousands of teams build, ship, fail, learn, and compete. The ecosystem becomes a meritocracy because reality selects what works.

Defense hardware often does the opposite. We select early, freeze early, and optimize against a stable set of metrics that can look convincing while drifting away from the messy reality of mud, cold, jamming, maintenance, and exhausted operators. The result is a monoculture: one architecture, one supply chain, one brittle bet.

That may be changing as the United States and its allies race to build arsenals of small drones and throw out their old acquisition playbook.

In the United States, the Drone Dominance Program is targeting more than 300,000 small drones over the next several years, with military planners estimating each Corps will need 1,500 to 2,000 per day during active operations. In Canada, the Army’s MINERVA Initiative is building a framework to integrate small uncrewed systems across land, air, and maritime roles, with an explicit focus on iterative development alongside domestic industry.

The demand signal is real on both sides of the border. What neither country has is a manufacturing base that can move hardware from first prototype to fieldable production without forcing teams to start over with new materials, new tooling, and new suppliers. The gap exists because the West’s two default approaches, additive manufacturing and traditional aerospace composites, each solve half the problem. One iterates but cannot scale. The other scales but cannot iterate.

Technologists often speak about going from zero to one. The urgent challenge today is figuring out how to go from prototype to production. Solving this problem means building a manufacturing stack where the same materials and processes carry a design from unit one to unit ten thousand, so that every flight hour at prototype scale still counts at production scale.

The 1-to-100 Trap

The West does not need a million of one drone. We need the capacity to let a hundred teams build a hundred variants at the same time, then prove which ones survive real use. But we are failing at the most important phase of hardware learning: the jump from Unit 1 to Unit 100.

This is the hardware valley of death. If you cannot build production-representative batches, you compensate with models, lab demos, and a handful of prototypes. Then the first honest stress test arrives in operational use and the learning shows up late, when it is most expensive to change.

U.S. operational test guidance is blunt: decisions tied to full-rate production are supposed to be informed by testing with production systems or production-representative test articles. If you cannot afford to build enough representative units to test, you are not doing the kind of validation the system expects. You are guessing, and hoping the guess holds up under fire.

Why the Obvious Manufacturing Answers Miss the Mark

Drone Dominance and MINERVA set the demand signal. Translating it into hardware means hitting hard manufacturing constraints. Per-unit costs for attritable systems need to land around $5,000. The Army’s SkyFoundry initiative is planning facilities that can produce 10,000 systems per month. At those price points and production rates, the airframe cannot depend on materials or processes that were designed for platforms built to last thirty years. It needs to be cheap, fast, structurally sound, and producible on a line that can change geometry between production runs. Neither of the two manufacturing approaches the defense world defaults to can deliver.

Additive manufacturing is a false summit. It works well for getting to the first prototype, and carbon-fiber-reinforced filaments have pushed 3D-printed parts closer to structural relevance in recent years. But the gap between a printed demo and a fieldable airframe is wide, and it gets wider under exactly the conditions that matter: vibration, moisture, temperature cycling, sustained operational stress. A printed part is built layer by layer, and each layer boundary is a potential failure plane. Moisture absorption in printed composites runs significantly higher than in compression-molded equivalents because the microstructure is more porous. Dimensional consistency drifts from part to part, with shrinkage rates exceeding two percent on larger components. The physics of the process makes this unavoidable.

The rate problem is just as severe. Even the most ambitious deployable additive systems—containerized print factories designed to operate near the point of need—top out at roughly fifty Group 2 airframes per month. That is a meaningful prototyping capability. Against wartime consumption rates measured in thousands of drones per day, it is a rounding error. You cannot 3D-print your way to a wartime production base.

The traditional aerospace approach fails in the opposite direction. The composites infrastructure the West has spent decades building was designed for platforms that fly for thirty years: F-35s, 787s, Global Hawks. That entire stack is optimized for durability and low volume. Invar steel molds can take twelve months to develop. Autoclave cure cycles run hours per part. The supply chains depend on a handful of specialized firms in Japan, the United States, and increasingly China. A CSIS analysis published in late 2025 found that carbon fiber production cannot be surged, and that any disruption would ripple across every composite-dependent program in the defense industrial base. Aerospace-grade carbon fiber is the right answer for a fighter jet that needs to last decades. For an attritable drone that costs five thousand dollars and may not come back from its first flight, it is the wrong material, at the wrong price, from the wrong supply chain.

So the defense innovation ecosystem is stuck between two bad options: a prototyping method that cannot scale, and a production method that cannot iterate.

One company we work with is caught in exactly this gap. They are 3D printing medium-sized quadcopter airframes. It works fine for development, but they hit a wall after about five units. Each part needs extensive support structures and post-processing. The per-unit cost stays stubbornly high. The parts are not production-representative. Their only conventional path forward is to re-engineer the entire system for injection molding, spend fifty thousand dollars or more on permanent steel tooling, and lock a geometry before they have had enough flight hours to know if it is right.

Every team trying to enter the defense UAS space hits the same wall. It is happening right now, across dozens of startups, in the path of every program from Minerva to Drone Dominance to Canada’s IDEaS challenges. The West keeps producing impressive demos that stall before they reach operational relevance. The designs are often good. The manufacturing options force a choice between learning and scaling, and the current industrial base does not let you do both at the same time.

Mass Iteration

Real hardening requires feedback at a volume where failure shows up with enough frequency to act upon. One prototype tells you whether the concept works. Five prototypes tell you whether the build is repeatable. Fifty units, in the hands of real operators, in bad weather, under jamming, is where you actually start learning how a system fails. Below that threshold, you are still guessing.

This is a different manufacturing requirement than rapid prototyping, and it is a different requirement than mass production. Rapid prototyping optimizes for speed to first article. Mass production optimizes for cost at volume. Neither one is designed for the thing that actually matters in a fast-moving conflict: the ability to build, test, break, learn, and rebuild in operationally relevant batches, on a cycle measured in weeks rather than years.

Call it mass iteration. The side that can run this loop fastest will have a compounding advantage. Every batch of fifty reveals something the previous batch could not. Multiply that across dozens of teams running parallel experiments and you get an innovation rate that no single program of record can match, no matter how well funded.

We already know what happens when one side has this capacity and the other does not. Ukraine’s Ministry of Defense reported delivering over 1.2 million drones of various types in the first eleven months of 2024. The designs are evolving month to month. The teams that cannot iterate fast enough get replaced by teams that can. When consumption is measured in mass, the advantage belongs to whoever replenishes and improves fastest.

The same logic applies outside of conflict. Wildfire response, infrastructure inspection, offshore energy, logistics. Any domain where you need rugged, mission-specific airframes at moderate volumes benefits from a manufacturing approach built around iteration speed.

The Real Requirement: No Second Switch

Most hardware teams experience not one valley of death, but two. They prototype in whatever process is fast and available, usually 3D printing or hand layup. Then, if they get traction, they are forced into a completely different manufacturing process to reach production scale. New materials, new tooling, new suppliers, new qualification, new failure modes. That second switch is where startups go to die.

The problem goes deeper than cost or schedule. Every material system behaves differently under load, under heat, under moisture. A part validated through hundreds of flight hours in printed nylon tells you almost nothing about how the same geometry will perform when injection-molded in glass-filled polypropylene. Beyond delaying production, the second switch resets your engineering knowledge to near zero. All the test data, all the failure analysis, all the hard-won confidence in your design goes out the window the moment you change the material.

We see this pattern playing out across the industry right now. Teams printing airframes that work well enough to demonstrate capability, then stalling because their only path to volume requires them to start over with a different process. Some spend months re-qualifying. Others burn through their runway trying to bridge the gap. The ones that make it to production typically do so by raising enough capital to brute-force the transition. The ones that do not have the capital simply stay small, no matter how good their design is.

The goal should be a single manufacturing stack that carries you from Unit 1 to Unit 100 to Unit 10,000 without changing the material system or the process logic. Same material. Same forming method. Same failure modes. Every hour of flight testing at prototype scale becomes data that is still valid at production scale. No second switch. No reset.

I started my company to build this stack for composite UAV airframes. The core idea is to treat tooling the way software treats code: versioned, disposable, and fast to produce.

Our software models the structural loads an airframe will encounter to define the most efficient reinforcement patterns, producing composite parts with the strength of metals at the weight of plastics. From there, we produce tooling in hours rather than the weeks or months that traditional steel dies require. Our material properties are compatible with additively manufactured tooling modeled on high-throughput automotive stamping, letting us calibrate tooling fidelity to the run size rather than committing to permanent steel dies upfront. If the geometry needs to change, we produce new tooling. There is no six-figure commitment locking us to a shape we are not yet confident in.

The structural material is a thermoplastic biofiber composite sourced from Canadian forestry by-products. The entire supply chain is domestic and sovereign. The result is a drop-in airframe: flight-ready, structurally validated, and made from the same material system at unit five as at unit five thousand.

A team using this process does not re-engineer when they move from prototype to production. The material stays the same. The process stays the same. The failure modes stay the same. The only things that change are tooling fidelity and production rate. And because the tooling is transient, the cost of changing your mind is low enough that you can actually afford to learn from the field before you commit.

What the Ecosystem Needs

The defense industrial base lacks the capacity to build fieldable, production-representative hardware in batches of 50 to 500, learn from real operational use, and then scale the survivors without switching materials, processes, or suppliers.

This is the structural gap that programs like Minerva, Drone Dominance, and IDEaS are running into right now. They can fund the design work. They can fund the procurement. What they cannot do is force a hundred drone startups through a manufacturing transition that the industrial base does not yet support.

Building that missing middle is what I’m focused on. But the need is bigger than one company or one material system. The West needs manufacturing infrastructure that treats iteration as a first-class requirement, treated with the same seriousness as cost and schedule. The teams that can iterate in hardware the way software teams iterate in code will be the ones that produce systems capable of surviving real conflict. The ones that cannot will keep producing demos.

We should stop trying to pick a single winner in advance. We should instead build the manufacturing infrastructure that lets many teams compete, fail fast, and scale the survivors. That requires domestic materials, transient tooling, and production systems designed for learning.

The 1-to-100 gap is a mass iteration problem. And it is solvable.

Today is the release date of our book Mobilize: How to Reboot the American Industrial Base and Stop World War III. This book tells the stories of past American mobilizations that helped our country win the defining struggles of the last century. They are stories about innovation, production, and policy. More fundamentally, they are stories about people: visionary builders, courageous entrepreneurs and bureaucrats, heretical outsiders—above all, patriots.

We wrote Mobilize because the last thirty years have been extremely destructive to American defense capabilities. Our adversaries stopped fearing American power, and we lost deterrence. The challenge of how to build the best weapons, fast and in sufficient numbers, was viewed as a niche issue best left to D.C. policy wonks and a dwindling number of legacy defense contractors. Meanwhile, many leaders from the public and private sector focused on making money and technology in China while America’s industrial base withered.

Now we are fighting Iran. The news is dominated by stories about the rapid depletion of U.S. interceptors and other munitions. We’re in a race to complete our goals before we use up too many of our lethal but difficult-to-produce missiles. China watches from the sidelines knowing every missile used is one less available for the Western Pacific. Other production stats are grim. Our aircraft fleet is half as large as it was during the Cold War, with readiness rates hovering around 50 percent; China built more ships in 2024 than America has built since World War II.

The American industrial base is broken, but it means we have a generational opportunity to rebuild manufacturing for the realities of the 21st century. American prosperity depends on it.

Despite these serious handicaps, the American military continues to operate with exceptional skill. During last year’s Operation Midnight Hammer, stealthy B-2s dropped 30,000-pound bunker buster bombs on underground Iranian nuclear sites. This New Year started with Delta Force operators capturing Venezuela’s Nicolas Maduro in a daring night raid with zero U.S. deaths. Less than two months later, U.S. and Israeli air strikes eliminated Iran’s Supreme Leader Ali Khamenei. And now, as American missiles and bombs rain down on Iranian military targets, F-35 fighters are deployed alongside kamikaze drones costing $35,000.

These feats show that America’s warfighters have the esprit and skill to win. What we need to do is reform the broken culture and broken rules in Washington so they have the tools to finish the job.

Successful mobilization will be defined by optionality and speed. The battlefield extends from the factory to the foxhole and we must be able to pivot production and upgrade hardware at the tempo of AI-enabled warfare. Timelines to improve weapons are now measured in hours and days, not months and years.

Behind the kinetic action, the bureaucratic war is just as hot. Secretary of War Pete Hegseth is igniting a flame front of initiatives. The joint requirements process known as JCIDS is dead, poor-performing programs are on the chopping block, and rampant fraud in programs like 8(a) is being rooted out and eliminated. Then there’s the Revolutionary FAR Overhaul to cut unnecessary regulation, Business Operators for National Defense (BOND) to bring the best of private industry to Pentagon acquisitions, and executive orders enforcing the purchase of commercial technology. The pace of change is dizzying—and refreshing.

The Defense Reformation is underway, but enormous inertia and hostility from the establishment could still thwart the genuinely impressive directives from the top. The fight, truly, is just beginning.

We believe in America. We believe in the primacy of people and that heroes still walk among us. To that end, we hope Mobilize fires up the crazy founders and inspires builders from every corner of the country. We need heretics, whether they have two bars or four stars on their shoulder. To quote legendary fighter pilot John Boyd, we need “people, ideas, hardware—in that order.”

We hope you’ll help us spread the word and order Mobilize.

M-Day was yesterday. We Mobilize today.

Max Streeter is a Deployment Strategist at Palantir Technologies serving U.S. government clients.

In his autobiography, Royal Navy Admiral Percy Scott told of a letter written by a fellow naval officer that breached all protocol. In November 1901, a forty-two-year-old American lieutenant bypassed his superiors and wrote directly to President Theodore Roosevelt. Scott called it “a gross act of insubordination for a junior officer.”

Lieutenant William Sims did not deny the charge. He justified it as a necessary act. He wrote to the president because the United States Navy could not shoot.

That conclusion sat awkwardly beside the country’s recent naval performance. The Spanish-American War had ended swiftly and decisively. But a closer inspection found that the accuracy of American guns hovered around four percent. One after-action observer remarked dryly that “Spain exerted all her skill to lose the war.”

The State of Gunnery

For centuries, naval gunfire had been a battle between gravity and swell. A gun crew stood on a rolling deck, waiting for the fleeting second when ship and target aligned. Fire too early and the shell flew high; too late and it sank into blue water. Gunnery was patience masquerading as precision.

In October 1900, then-Captain Scott of H.M.S. Terrible ended the masquerade. By re-gearing gun elevation mechanisms to allow continuous micro-adjustment, he freed the gunner from waiting for the sea’s permission. Add telescopic sights and extended range, and the effect was transformative: accuracy multiplied, rate of fire surged. The outcome was continuous-aim firing.

Despite these dramatic results, the Admiralty demurred. Scott’s comprehensive and technical report, endorsed by Admiral Edward Seymour and supported by Captain John Jellicoe, received no official Admiralty response. It was allegedly turned down by a junior lieutenant at the gunnery school. The innovation was judged against the cost of redesigning gunnery quarters and retraining all gunners across the Royal Navy.

Across the Hong Kong harbor aboard the USS Monterey, Lieutenant Sims immediately grasped the implications. What set Sims apart wasn’t brilliance or technical acumen, but a perspective that saw technology not as a threat to tradition but as a tool for mission.

The Brilliance of Lieutenant Sims

Sims was a middle-of-the-class graduate of the Naval Academy. He struggled with the entrance examinations and, allegedly, the congressman who wrote his recommendation later claimed he almost regretted doing so. After graduating in 1880, Sims spent 17 years at sea aboard numerous ships. During that time, he was shaped by the bureaucracy around him. It was an education in naval custom rather than innovation.

In 1897, his perspective widened. Posted as a naval attaché to Paris, St. Petersburg, and Madrid, Sims officially collected intelligence on the Spanish Navy. Unofficially, he learned a sobering lesson in how far the U.S. Navy lagged Europe’s great powers.

Those powers were not idle. An industrial arms race was underway: armor shifted from iron to KC steel and effective naval gun ranges expanded from roughly 2,000 yards in the 1880s to nearly 10,000 by the mid-1890s. Accuracy mattered more, not less.

Sims saw in Scott’s continuous-aim firing not a curiosity but a naval necessity. The inconvenience of redesigning ships and retraining crews paled beside a more fundamental truth: a battleship exists to hit what it fires at. Lethality is not ornamental.

Sims installed Scott’s system in his own squadron on the China Station. He took steps to retrain his gun crews and test and measure results. Their accuracy improved markedly. He reported his findings to the Bureau of Ordnance and received no response. His appeal could have ended there, alongside Scott’s. Instead, he appealed to higher authority.

Sims’s letter to President Roosevelt came through desperation. “I have within the past few months submitted to the Navy Department a number of reports on foreign target practice,” he pled. The reports concluded “that our marksmanship is so crushingly inferior to inevitably suffer humiliating defeat at the hands of an equal number of an enemy’s vessels of the same class and displacement.”

Sims had seen the future of long-range naval engagements that would characterize the Great War and sought to give the U.S. a head start. He wrote of how he had modified his own fleet but also highlighted the appalling accuracy of U.S. Navy gunnery. Roosevelt, formerly the Assistant Secretary of the Navy, understood immediately. Sims demonstrated that American ships obtained less than 10 percent accuracy, whereas Scott’s ship, H.M.S. Terrible, achieved 80 to 85 percent.

Roosevelt recalled Sims to Washington and made him Inspector of Target Practice, a position created to prove his claims weren’t fiction.

The outcomes followed swiftly. Sims implemented continuous-aim firing alongside a reformed training regime. Modeled off the Royal Navy, he launched an annual gunnery competition. The winning crews’ methods were written up and circulated across the Navy. Within years, the system increased American accuracy by 100 percent and battery effectiveness by 500 percent. An early American report suggested he had elbowed his technology into frame: “The very first practice under his system convinced the authorities that he was right and that much of the gun gear was all wrong.”

In 1909, Roosevelt summarized the progress of American gunnery and attributed the feat to Sims: “our fighting power is at least five times greater than it was before our training had been improved by Commander Sims’ methods.”

The Iconoclast

The historical record only ever suggests so much about a man’s character. What picture we do get of Sims suggests a career that never settled. In 1918, he wrote to a friend that he had “never liked” the Navy and had “never been comfortable in uniform.” There is a certain breed of officer who loves his service enough to irritate it.

Following the Great War, Sims irritated it some more. He publicly refused his Distinguished Service Medal and rebuked the Secretary of the Navy, Josephus Daniels, for altering promotion standards in ways that made them less meritocratic. His low opinion of Daniels prompted him to write a scathing report, “Certain Naval Lessons of the Great War,” which questioned the Navy’s failure to adequately prepare for war, citing inadequate ship construction among other deficiencies. Some scholars suggest that his parochial pursuit of truth is the reason why he was not promoted from Rear Admiral to Admiral.

Sims spoke truth to subordinates and superiors alike, memorably stating to 400 naval officers:

“It is not only the privilege but the duty of Army and Navy officers to direct letters of constructive criticism to their superior officers, and the officer who chooses to accept personal comfort in place of responsibility for such criticism is not only not worth his pay, but he is not worth the powder to blow himself to hell.”

Sims fought two wars throughout his career: one against foreign navies, another against the peacetime inertia and bureaucratic resistance of his own. The latter proved more exhausting.

This meant overturning assumptions and preconceptions as technology evolved. In 1921, he warned the Naval Academy graduating class against institutional calcification around emerging technology. A year later, after observing a demonstration of aerial bombing tests on naval vessels, Sims pronounced decisively: “the battleship is dead.” The man “who taught the navy how to shoot” had already seen the next generation of carrier-based warfare and wasn’t going to wait.

Continuous-aim firing did not shape naval warfare simply by existing. It shaped conflict because someone refused to let it be ignored. There are great innovators like Admiral Percy Scott who engineer innovative technologies. But an innovative technology is nothing if it languishes in obscurity. We must equally esteem iconoclasts like Sims who refuse to let bureaucracy bury the future.

Every generation confronts its own version of the four percent accuracy problem. Sims’s remedy was clear: focus on the outcome and champion the technology through the institutional machinery.

And write the letter anyway.

Daryl Wieland is Senior Director of Partnerships at Palantir and an Adjunct Professor of Finance at George Mason University.

On the morning of June 6, 1944, General Dwight D. Eisenhower possessed more intelligence data than any military commander in human history. Weather models, tide charts, reconnaissance photographs, intercepted communications, resistance reports, and statistical analyses of German defensive positions flooded his headquarters. Yet when the meteorologists’ models showed a narrow window of acceptable weather, contradicting earlier predictions, Eisenhower faced a decision no algorithm could make for him. He understood something that transcends data: context matters.

OODA Loop

Today’s military planners operate in an environment that would have seemed like science fiction to Eisenhower. America possesses computational power that can simulate thousands of battle scenarios in seconds. Our models evaluate satellite imagery, signals intelligence, open-source data, human intelligence, biometric information, and real-time sensor feeds to generate probability assessments with decimal-point precision. We can model logistics chains, predict maintenance failures, and estimate casualty rates with unprecedented sophistication. These capabilities are transformative in nature but also present a profound danger if we rely on them without context or misunderstand how important “under these conditions” is when using algorithms and models.

Ultimately, it’s about decision advantage and tempo. It’s about tightening the Observe, Orient, Decide, Act (OODA) loop that Air Force Colonel John Boyd made famous. It’s about the team that can make better decisions faster winning. Models and automation can massively accelerate your decision cycle. That’s real advantage. But speed without accuracy means you’re accelerating toward the wrong outcome. It is like option c in this graphic where precision without accuracy doesn’t help:

The goal is rapid, high-quality decisions. That requires tight human-machine teaming where the human interprets the context.

Human – Machine Teaming

The danger lies not in the models themselves, but in our relationships with them. The failure mode we see repeatedly is treating this as a zero-sum game. Either we trust human judgment (slow, inconsistent, doesn’t scale) or we trust the machines (fast, consistent, scalable). That’s a false dichotomy. The right answer is integrated teaming where humans and machines amplify each other’s strengths and compensate for each other’s weaknesses.

A good example of successful human-machine teaming is how PayPal combines automated machine learning models that assign risk scores and flag suspicious transactions with human fraud analysts who manually review uncertain cases, adjust custom filters, and provide feedback that continuously improves the AI models’ accuracy.

This hybrid approach allows machines to process vast numbers of transactions at scale while human experts catch context-specific fraud patterns that algorithms might miss, such as social engineering schemes, and helps the system adapt to evolving fraud tactics through their domain expertise.

We have become a civilization intoxicated with quantification, mistaking precision for accuracy and correlation for causation. When a model produces an output, particularly one rendered in clean graphics with confidence intervals, it carries an aura of objectivity that human judgment lacks. “According to the data” has become the model equivalent of “thus saith the Lord,” an incantation that supposedly settles arguments and justifies decisions. But data, like scripture, requires interpretation. And interpretation requires context.

Under These Conditions

Every model operates within boundaries, explicit or implicit. Interpreting data “under these conditions” means acknowledging conclusions drawn from data are specific to the exact environment, models, and variables present during collection. In other words, context is king.

A logistics model built on assumptions about fuel consumption in temperate climates will fail catastrophically in Arctic conditions. A pattern-of-life analysis trained on peacetime behavior becomes dangerously unreliable when populations are displaced by combat. A terrain analysis model that excels at predicting trafficability in open desert may prove worthless in dense urban environments where a single blocked intersection reshapes an entire operation. These limitations seem obvious when stated plainly, yet they fade from view when we encounter the seductive authority of the output itself.

The problem compounds as modeling becomes democratized. Where sophisticated analysis once required expensive specialists and rare computational resources, today’s junior officer can run complex simulations on laptops. This accessibility is valuable as it decentralizes analytical capability and speeds decision cycles. But it also means that the human capital required to interpret results responsibly must be scaled proportionally. As we distribute power we need to also distribute insights that lead to wisdom.

Decision Dominance

When I talk to defense contractors and customers about deploying advanced analytics, I remind them of the importance of human-machine teaming and to remember the human in the solution. Train your analysts. Build feedback loops. Create curious and skeptical cultures that question the model and the inputs.

This is about building decision support for warfighters operating in complex and contested environments. The technology is incredible. But it’s in service of human judgment, not a replacement for it. Get that relationship right and the result is decision dominance. Get it wrong and the decision making will suffer.

Military history offers sobering examples of this phenomenon. During the Vietnam War, Secretary of Defense Robert McNamara brought unprecedented analytical rigor to military planning. Body counts, sortie rates, weapons-destroyed ratios, and hamlet evaluation surveys generated mountains of data suggesting progress. The models said we were winning. Yet these metrics existed within a context the data couldn’t capture: a political war being fought as a military one, a population whose loyalty couldn’t be quantified, and an enemy whose will the statistics fundamentally misunderstood. The data wasn’t wrong; it simply couldn’t answer the questions that mattered.

Using Common Sense

Consider a more recent example: predictive targeting models that assess strike options. These tools can calculate probable collateral damage, mission success rates, and follow-on effects with remarkable sophistication. They are invaluable assets. But they cannot tell you whether destroying a particular target at a particular moment advances strategic objectives, how the strike will be perceived regionally, or whether the second-order effects align with your theater commander’s intent. They operate within a narrower context than the decision requires.

This is where the irreplaceable value of human judgment emerges. Common sense, which as Voltaire noted is not so common, provides the critical mission ingredient. It’s the experienced planner who recognizes that a model trained on historical data cannot account for an adversary’s recent doctrinal shift. It’s the intelligence analyst who understands that unusual patterns in communications intercepts might reflect religious holidays rather than operational preparation. It’s the logistician who knows that convoy timelines need padding because troops are exhausted, even if the fuel and route analysis say otherwise.

Healthy Skepticism Required

The responsibility that accompanies our analytical power is to cultivate this judgment systematically. It means training our people to interrogate and understand their model assumptions rather than simply run model outputs. It means encouraging healthy skepticism even toward—especially toward—results that confirm our existing beliefs. It means creating organization cultures where questioning the data is considered prudent rather than obstructive.

We must teach our warfighters to ask essential questions: What assumptions underpin this model? What data fed these algorithms? What range of conditions was this tool designed for? What factors exist in my operational environment that the model cannot capture? When the model’s assessment contradicts my observations, which deserves greater weight?

The goal is not to reject analytical tools but rather to employ them properly. Models are force multipliers for human judgment, not replacements for it. They narrow uncertainty, reveal patterns, and free cognitive resources for higher-order thinking. But they remain tools, and tools require skilled operators who understand both their capabilities and limitations.

Ultimately It Was the General’s Decision

General Eisenhower wrote two key messages before D-Day. The first was his inspiring “Order of the Day” to the troops on June 6, 1944, rallying them for the “Great Crusade” with confidence in victory. The second was a secret “failure message” taking sole blame if the landings failed, emphasizing bravery and devotion to duty.

The “Order of the Day” boosted morale, acknowledging the tough fight ahead but highlighting Allied strength, while the failure message underscored his immense responsibility, a testament to his leadership under extreme pressure.

Eisenhower ultimately gave the “go-ahead” and launched the massive D-Day invasion based on the weather model’s narrow window, but he made that choice understanding the broader context: strategic timing, alliance politics, troop morale, and operational alternatives. The data informed his decision; it didn’t make it. That distinction, preserved through decades of technological advancement, remains as critical today as it was on that gray morning in Portsmouth.

The machines can calculate. Only humans can command.

Yoel Margolis is a student at Reichman University in Israel. He was previously a Deployment Strategist intern at Palantir.

When Israel’s Merkava (Chariot) tank was introduced in 1979, experts in Israel and abroad disparaged its radically unconventional design, which broke many commonly held assumptions in the industry. The tank’s chief designer—Major General Israel Tal—was written off as delusional.

Four decades and eight wars later, the Merkava, now in its fourth generation, is regarded as one of the best armored combat vehicles in the world. Israel Tal’s image can be found on the “Wall of Greatest Armor Commanders” at the Patton Museum of Leadership, alongside figures such as Creighton Abrams, Erwin Rommel, and Old Blood and Guts himself.

It is said that necessity is the mother of invention—and the Merkava is no exception.

In the mid 1960s, Israel was in desperate need of modern tanks. The British, recognizing an opportunity for collaboration, agreed to sell the Chieftain, their newest tank, to the IDF. In return, Israel became a secret development partner—providing invaluable knowledge from its recent combat experiences. Israel even helped to sell the Chieftain to Iran—then a discreet ally of Israel on matters of defense.

It seemed like a perfect deal. There was only one problem: the British were bluffing.

Succumbing to pressure from Arab states, the British finally came clean in 1969, after years of relying on Israeli expertise. They had no intention of selling the Chieftain to Israel. Instead, they announced several deals with Arab nations including Jordan—at that time a sworn enemy of the State of Israel.

Facing grim intelligence reports of modern Soviet T62s pouring into the surrounding Arab armies, Israel scrambled for a second option. The United States, reluctant to sell their newest tank, the M60, to Israel, agreed to arrange the sale of refurbished M48 Pattons from the West German army, following an overhaul process conducted by the Italian defense company OTO Melara. This deal also collapsed, partially due to noncooperation from communist Italian union workers influenced by Soviet anti-Israel propaganda.

Driven by his frustration over the Chieftain and Patton debacles, Major General Israel Tal, the head of IDF armored corps, came to a radical conclusion: the time had come for Israel to develop its own domestic tank program.

No stranger to controversy, Tal had earned a reputation during his years of service as blunt and uncompromising—promoting his unique perspectives on armored warfare and its central importance in broader strategic planning. His unconventional views created tension with many powerful members of IDF senior leadership. Tal resigned twice from the military—first in 1969 following a dispute with Chief of Staff Haim Bar Lev over a strategic decision in the Sinai desert. Wooed back three years later, he served as Deputy Chief of Staff and Commander of the Southern Command during the Yom Kippur war until he resigned again in 1974—this time because of an argument with Defense Minister Moshe Dayan.

Despite his resignations, Tal did not disappear from the defense establishment. In 1970, following his first resignation, he founded MANTAK (an abbreviation of Merkava and Armored Vehicles Directorate) as a subunit within the Israeli Ministry of Defense. MANTAK’s one mission was to develop an indigenous tank program that would relieve Israel’s armored corps from any dependence on potentially unreliable foreign states.

Surprisingly, given his discordant relationship with many in the defense establishment, Tal was essentially given free rein. Reporting directly to Dayan, he structured MANTAK with a model of extreme centralization. He employed just 150 engineers and took part in almost every decision—ensuring that his unique design philosophy was implemented across every step of production.

After many years as an armored field commander himself, Tal had developed a perspective on armored warfare tactics that differed from the mainstream. He viewed tanks as the ideal front-line force while most thought of them as support assets that depended on infantry protection. This shift in tactical thinking formed the basis of his guidelines for the Merkava.

Before Merkava, most tank programs promoted a balanced compromise between speed, firepower, and protection of the crew. Tal, drawing on his experience leading tank troops, insisted on a design philosophy that prioritized the protective qualities of the tank above all else. If the tank was to lead the charge in battle, without infantry protection, then ensuring its resilience to enemy fire was crucial. Furthermore, he believed that tank crews with an added sense of protection would perform better, thereby making up for potential losses in mobility and firepower.

In the most notable departure from standard designs, the engine was placed in front of the crew, rather than behind it. A crew hatch was placed in the rear, allowing crews to evacuate an immobilized tank while being protected from enemy fire by the front facing, heavily fortified, engine compartment. Choices such as these added significant weight to the Merkava, severely reducing its horsepower to weight ratio compared to other comparable tanks. It was a tradeoff Tal thought would pay off.

His perspective emerged from personal study of battlefield reports from Israel and around the world. As military strategists Edward Luttwak and Eitan Shamir note, “[The Merkava] is also the only tank designed by tank soldiers based on their own experiences, including the synthesized experience of Tal’s exhaustive ballistics research…” For instance, one report examined 500 damaged tanks and determined that while penetration of the engine compartment only immobilized the tank 2% of the time, a breach of the crew compartment disabled the tank 100% of the time. This report, among others, reinforced Tal’s decision to provide enhanced protection to the crew.

Israel of the 1970s was still very much a product of its socialist founding and its private defense industry was far from the powerhouse it is today. The Merkava’s design and production processes were run from within the Ministry of Defense itself with Israel’s large defense primes (including IMI, Rafael, and others) limited to manufacturing specific components. To anyone familiar with the typical failures of government-run production projects, this arrangement might seem destined for disaster.

Yet Tal succeeded, likely because he reported directly to the defense minister, essentially removing the lengthy chains of command and bureaucratic red tape that typically stifle efficiency and innovation. The freedom he enjoyed, combined with the relatively small size of his team, enabled him to maintain a rapid development timeline—components were designed in weeks (and sometimes hours), immediately tested and refined, then moved to full-scale production.1

This model of rapid feedback loops and compressed timelines proved remarkably effective. Tal delivered combat-ready tanks in 1979—a timeframe similar to tank programs of countries with significantly more developed industrial bases.

The Merkava drew intense criticism upon its introduction. Skeptics both in Israel and abroad questioned Tal’s design decisions—above all, the front-facing engine compartment, which conventional wisdom deemed a fatal compromise.

Unlike many other heretics featured in this series, Tal’s vindication did not take long to arrive. In 1982, the State of Israel invaded southern Lebanon in Operation Peace for the Galilee. The campaign, remembered today as the First Lebanon War, was the Merkava’s combat debut. It silenced the critics almost immediately.

The Merkava spearheaded Israel’s ground invasion and Tal’s controversial design choices proved their merit under fire. Crew survival rates far exceeded those of previous tanks, even when hit. Demand for the Merkava from armored commanders soared as they recognized the added safety and success rates of Merkava crews.

Throughout the war and its immediate aftermath, Tal and his team at MANTAK gathered field reports and combat data, documenting every aspect of the tank’s performance. When the Merkava Mark II rolled out in 1983, barely a year into the conflict, it incorporated dozens of refinements drawn directly from frontline experience. The rapid iteration that had defined the tank’s development continued through its evolution.

Over the next two decades, the Merkava became synonymous with the IDF, ultimately becoming its sole tank in 2004. Tal retired as special armor advisor to the minister of defense in 1989 but remained unofficially involved in developing all four Merkava variants until his death in 2010.

In the two years since the October 7th Hamas attacks, Tal’s philosophy has been vindicated once again. For decades beforehand, Israeli defense leaders, including multiple chiefs of the general staff and defense ministers, had backed strategic policies that marginalized the armored corps. Armored battalions were cut as resources shifted to the “sexier” elite special forces and cyber units. When hostilities erupted in Gaza and Lebanon, the armored corps returned to center stage, proving crucial to the IDF’s counterguerilla strategy in both invasions. Once again, Tal’s theory of armored warfare’s centrality proved correct in the face of skepticism.

Beyond the enduring relevance of tanks, the story of Israel Tal and the Merkava offers a number of lessons for modern military innovators in Israel and abroad. Western nations face a defense industrial challenge similar to Israel’s in the 1970s: how to rapidly rebuild and reshore the production of critical military capabilities. The Merkava program demonstrates how military bureaucracies can break from peacetime inertia and produce genuinely innovative technologies when national security demands it.

Not all features of the Merkava’s story should be replicated. Establishing a MANTAK-esque government-run production line for defense technology would be a recipe for disaster in most large Western countries. However, there is undoubtedly much to learn from how Tal leveraged this potential nightmare of bureaucratic inefficiency. Tal used his organization’s placement within the Ministry of Defense to gain frictionless access to frontline troops for constant testing and feedback. This rapid iteration cycle, combined with his own combat experience, ensured the Merkava’s design reflected actual battlefield needs—not the theoretical preferences of executives disconnected from war.

Most importantly, the Merkava succeeded because Israel’s defense establishment recognized brilliance even in its prickliest form. Tal deserves immense credit, but so do the IDF and Ministry of Defense leaders who backed him—and who had personally clashed with him in the past. They set egos aside, recognized his unique strengths, and empowered him despite the friction.

The question facing today’s defense bureaucracies is whether they can do the same: identify the righteous heretics in their ranks and empower them in spite of—or perhaps because of—their heresy.

Further Reading

The Art of Military Innovation: Lessons from the Israel Defense Forces by Edward N. Luttwak and Eitan Shamir

Nick Miller led Arlington National Cemetery's digital transformation as CIO from 2010 to 2013 following Army service in Iraq and Afghanistan. He then spent six years at In-Q-Tel and six years at AWS Marketplace helping healthcare, non-profits and government organizations access commercial technology.

In 2005 I celebrated Christmas and New Year’s at one of Saddam Hussein’s palaces in Iraq. The generation that went to war after September 11th is in our 30s, 40s, 50s now. We carry the weight of injuries, lost friends, and lost youth.

We also know we lost soldiers to an enemy using cell phones while our institutions took years to field basic technology that could have saved many.

In June 2010, I found myself at Arlington National Cemetery, where our nation’s fallen are put to rest. I was 30 years old, only a few months removed from 24 months in Iraq and Afghanistan, having just dropped out of a PhD program bound to teach at West Point. I was scared, concerned, and confused about my future. Now I was watching us bury the best of my generation—and discovering that Arlington Cemetery’s antiquated systems simply weren’t up to the task.

Families discovered that the graves of their loved ones might be mismarked, misplaced, or missing altogether—headstones pulled from the earth and left mud-caked along a stream, paper records saying one name while the headstone said another. All this on our nation’s most sacred ground.

As a veteran, as an American, that reality was both heartbreaking and infuriating. It was a failure of leadership and of systems that had been left in the past. The root cause was painfully simple: a 150-year-old institution conducting 7,000 funerals a year was still largely running on typewriters (yes, really), 3x5 cards, and tattered paper maps. Senator Mark Warner said it best: “We are one fire, one flood from the records being lost.” Congress was considering taking Arlington from the Army.

I was privileged to lead Arlington’s digital transformation to bring modern technology to military families and the cemetery’s more than 4 million annual visitors. We moved operations off millions of pages of paper records, filing cabinets, typewriters, and fax machines. We had to throw out technology that had been retired decades earlier by industry. In the process, I found personal healing by throwing myself into a valuable mission. I also learned four enduring principles that I hope can guide leaders today.

We can and did do better then, when our nation’s fallen and their loved ones needed it most. We can still do better now.

1. Start Necessary Movement. Choose Direction Over Precision.

Army procedures teach every soldier: “Receive the mission, issue a warning order, make a tentative plan, start necessary movement.” Movement matters more than perfect planning.

At Arlington, we didn’t have the luxury of waiting 12-18 months for requirements. Families were calling every day. 7,000 funerals a year could not wait. We started by understanding real pain—parents wanting assurances their children were in the right place, families unable to find relatives, visitors lost across 624 acres. Then we moved quickly with strategic intent:

• We prioritized the visitor experience by launching a mobile app, ANC Explorer, so visitors could use the phones already in their pockets to navigate and honor their loved ones, even when the enterprise’s standard was still BlackBerry.

• We used available commercial technology, accepting its limits, instead of spending years building aspirational custom geospatial infrastructure specific to cemetery operations.

• We focused on clean data through digitized workflows and distributed stewardship across the organization instead of delaying digital operations while a centralized team created a pristine database from paper.

The lesson: in high-stakes missions, movement with clear and strategic intent beats elegant plans that never reach the people who need them.

2. Executive Leaders Must Drive Speed Through Personal Ownership

On my first day, I went to the Secretary of the Army’s office and met with his executive leadership team—an Army captain in a room with the equivalent of the Army’s senior executives. The Deputy CIO made it clear the mission mattered more than bureaucracy: “Both feet on the gas. Keep it between the white lines. Call ME if you need help.” He backed that up by clearing obstacles himself instead of hiding behind layers.

When some argued to delay launching ANC Explorer until every record was perfectly validated, leadership decided families couldn’t wait—we launched with safeguards and improved from there. Developers worked round the clock with special focus on Section 60—the Iraq and Afghanistan burials—to ensure we got those records right before launch. We listened to feedback and improved in the open.

The result wasn’t a perfect product, but the feedback we received speaks for itself. One caller said simply: “Thank you. Years ago I came to visit Ira Hayes and was unable to locate the grave site. I was finally able to find Ira Hayes.” (World War II veterans and Marines will recognize Ira Hayes from the iconic flag-raising photo on Iwo Jima.)

The lesson: if executives do not personally champion speed and absorb risk, the organization will default to comfort and politics, not mission.

3. Enable Your Innovators: Shared Learning Over Central Planning

On paper, Arlington’s transformation looked “wrong” to traditional governance: no big program office, no five-year architecture roadmap, no fully validated requirements list. On the ground, it looked exactly like other successful technology products: small teams, tight feedback loops with stakeholders and customers, decisions made close to the mission.

• We unlocked innovators at every level. I was 30 years old, fresh from deployment, given the privilege to lead. Every organization has dozens like me; the question is whether your culture enables them to act.

• Everyone understood the vision, clean data requirements, and urgency—enabling rapid decisions across the organization, not just at the top.

• Culture shifted from ‘we can’t’ to ‘yes, here’s how’—systematically removing blockers and enabling action at scale.

The lesson: if you want responsible speed, you cannot centralize every decision. Build shared clarity, then trust your people to move.

Your innovators—your engineers, your product teams, your operators closest to customers—already know what needs to change. The question is: will your processes allow them to act on that knowledge?

4. Embrace Partnerships. Lead With Humility.

When the crisis broke, it would have been easy to hide behind bureaucrat-speak: “the work is inherently governmental—only the government can do this.” Instead, leaders opened the doors. The Northern Virginia Technology Council, industry partners, veterans groups, and technology companies all contributed expertise through a pro-bono assessment and ongoing collaboration.

The partnership model—government mission clarity, industry execution speed, outside perspectives—became a force multiplier beyond what any single team could achieve alone. Not every recommendation was adopted, but every conversation helped refine the path and avoid reinventing wheels others had already built.

The lesson: humility is not weakness. It is recognizing that the mission is bigger than any organization, any process, any individual. That wisdom makes transformation possible. Partnerships make it a reality.

Where Are Your Organization’s Typewriters?

When I tell people Arlington was using typewriters in 2010, they laugh. It’s the natural response to such an absurdity. But today’s organizations are running on their own typewriters. They’re maintained by institutional inertia—the defaults that choose comfort and control over the continuous innovation the age of AI demands:

• Waiting for perfect information instead of moving with clear direction

• Delegating transformation to committees instead of leaders personally owning speed

• Centralizing every decision instead of trusting people closest to customers

• Going it alone instead of listening and building partnerships across sectors

Arlington’s transformation didn’t happen because we chose better. Congress forced it. Then the Army moved decisively, installed new management, and demanded change.

You don’t have to wait for tragedy.

For governments and corporations facing fierce competition, adversary innovation cycles, and missions that can’t afford delay, the stakes are too high to wait. Your systems will break catastrophically or your competitors will win.

Those who internalize the lessons above can guide their organizations to success and victory: Start necessary movement. Leaders personally own speed. Enable your innovators. Build partnerships with humility.

Will your leaders make these choices before they’re forced to?

Our Best Days Are Ahead

Over the next three years, my team retired the typewriter, launched one of the government’s first mobile apps, and helped restore public trust in the management of Arlington National Cemetery. The technology now supports more than 20 other cemeteries, and the Army retained the privilege of administering Arlington.

On occasion, I now use the same technology to virtually view the West Point gravesite of my grandfather, Sergeant Major (Ret.) Thomas Ciurczak, whose funeral I was unable to attend due to my deployment to Afghanistan.

Generations before us rose to their moment. In 1940, FDR called on America to become the Arsenal of Democracy and we retooled an entire industrial base. Today, the generation that deployed after September 11th is rising—alongside entrepreneurs building at AI speed, technologists unlocking commercial innovation, and leaders across sectors who refuse to accept failing institutions.

We’re not waiting for permission. We’re not waiting for perfect plans. We’re moving with strategic intent, unlocking innovators, and building the America worthy of those we laid to rest at Arlington.

Our best days aren’t behind us. They’re ahead. And we’re building them now.

Eliot Pence, Michael Brown, and Jason Nichols are the co-founders of Supply Energetics, a new energetics upstart reshaping the American defense industrial base. In addition to their roles at Supply Energetics, Brown is a General Partner at Bowery Capital, Pence is a founder of Dominion Dynamics and formerly led global growth at Anduril Industries, and Nichols is the former director of AI for Walmart.

Over the last two years, the United States and its NATO allies have committed extraordinary resources to a problem it believed was largely solved: ammunition. The return of high-intensity industrial warfare in Europe triggered an emergency response in Washington, with Congress directing billions of dollars toward what was framed as an urgent need to “surge” munitions production.

Measured narrowly, the effort has produced visible gains. Output of 155mm artillery shells has increased and contracts have been signed (though output has not come close to the desired goal). Yet, today, the broader condition of the munitions enterprise remains fragile. Stockpiles are thin, lead times remain long, and production capacity remains vulnerable to disruption.

Industrial atrophy accumulated over half a century cannot be reversed simply by injecting capital into legacy systems. The United States is attempting to sustain a modern war of mass and precision using an industrial architecture designed for a different era, under different assumptions about scale, safety, and tempo.

The difficulty lies in diagnosis. Ammunition production has been treated primarily as a procurement problem rather than as an industrial systems problem. Funding has flowed, but the underlying structure through which that funding is converted into output has changed little.

The solution involves redesigning industrial production around small, standardized modular units rather than relying on large, centralized high-hazard plants. Using continuous-flow chemistry and automation, these modular systems scale by replication, improve safety and resilience, reduce transport risks, and allow capacity to grow without overstressing existing infrastructure.

Structural Fragility in the Munitions Base

A central weakness of the current approach is the persistence of single-spine dependencies. Despite incremental investments, large portions of U.S. munitions production still hinge on a small number of aging facilities that produce critical energetic components such as nitrocellulose or black powder. These sites function as pacing items for the entire enterprise. Their vulnerability is not theoretical. A single fire, environmental shutdown, or equipment failure can halt national output for months. Increasing throughput at such nodes improves peacetime efficiency, but it does not produce resilience under stress.

Compounding this fragility is the persistence of peacetime contracting logic. Even with emergency funding, industry behavior remains shaped by the expectation that demand will eventually fall back to baseline levels. Firms are understandably reluctant to invest in large amounts of redundant or surge capacity without long-term, bankable signals. The result is a system optimized for just-in-time efficiency rather than sustained conflict.

Modernization efforts, meanwhile, have tended toward incrementalism. Legacy facilities have been instrumented with digital sensors and compliance tooling, but the underlying production processes—many of them conceived in the mid-20th century—remain largely intact. These efforts produce marginal gains, not structural change.

Energetics as the True Bottleneck

The deeper issue is clear when examining the energetics layer of the munitions stack. Energetics—the explosives and propellants encased in shells, missiles, and rockets—are not simply another industrial input. They are a distinct class of material governed by uniquely restrictive handling and transportation standards. Finished explosives and many energetic intermediates are subject to stringent limitations on packaging, routing, shipment size, carrier certification, storage, and transfer.

As a result, energetics do not scale like metals, electronics, or structural components. Even when domestic production exists, movement remains expensive, slow, and capacity-limited, particularly as volumes increase. In crisis conditions, these constraints intensify. Insurance retreats, transport availability narrows, and regulatory waivers struggle to keep pace with operational need. The consequence is that production capacity can become functionally inaccessible long before factories reach physical limits. Throughput collapses not at the point of manufacture, but along the transportation spine that connects industrial nodes.

Reinvent, then Reshore

This dynamic explains why reshoring, by itself, has delivered disappointing results. A domestically produced energetic that must traverse long distances under hazardous-material constraints remains exposed to delay and disruption. The issue is not national origin, but system design. Attempting to move more energetic material through the same constrained transport pathways simply relocates the bottleneck. Without altering how and where energetics are produced, increases in nominal capacity do not translate into usable supply.

Distributed Production as Industrial Redesign

Addressing this challenge requires a shift in industrial philosophy rather than a continuation of current practice. Instead of concentrating output in massive, high-hazard plants, production can be decomposed into smaller, standardized modular units enabled by redesigned synthesis pathways, continuous-flow chemistry, and automation. These systems are safer, more controllable, and scalable by replication rather than expansion.

Modularization distributes capacity geographically, reduces single points of failure, and minimizes transport risk by moving safer inputs—or producing closer to use. The same logic extends beyond energetics: software-defined lines enable rapid reconfiguration, contractor-owned facilities improve operational incentives, and automation increases consistency while reducing human exposure. Collectively, this shifts the munitions enterprise from brittle optimization toward resilience and adaptability.

Aligning Policy and Metrics with Readiness

Policy must follow structure. Episodic appropriations and cost-plus expansion of legacy capacity reward paper output rather than sustained readiness. Performance-based production credits and incentives for validated surge capacity would better align private investment with national security needs, treating readiness itself as a strategic asset.

The core lesson is that industrial design—not just demand—determines wartime responsiveness. Production rate, adaptability, and resilience under disruption now define strategic advantage. The only metric that ultimately matters is reliable production under the conditions conflict actually imposes.

Nathan Mintz is the co-founder and CEO of CX2, an electronic warfare start up. Nathan spent 14 years as an EW and Radar systems engineer at Raytheon and Boeing before becoming founding CEO of directed energy company Epirus and Spartan Radar (recently acquired by John Deere). He has 10 U.S. patents, mostly in RF and EW systems.

“You Need a Lot of Good Yogi Berra Quotes”

The late great Dr. Joe Guerci, former DARPA Special Program Office (SPO) director, friend, and prolific RF guru, once told me he wanted to write a book about “the Art of Straphanging.” For those who don’t know what a straphanger is: it’s a person on a team who is just “along for the ride”:

“It’s a hard job being a straphanger . . . you have to intentionally try to be unproductive . . . you have to love being in meetings and creating useless actions . . . You need a lot of Yogi Berra quotes locked and loaded.” —Dr Joe Guerci

Joe lost his battle with cancer this past year, but I thought I would title this article in his memory.

Joe’s hilarious tirade aside, the fact is that we have too many straphangers in the Defense (now War) Industrial Complex. People getting paid way too much to hang the strap and waste our money, or even worse: to squander it through fraud or abusing the rules to their financial advantage. It’s bankrupting us.

While we should be enthusiastically cracking down on green energy subsidy fraud in North Carolina, Medicaid fraud in Minnesota, and PPP loan fraud in California, we also cannot deny that the Department of War has tens or even hundreds of billions of dollars in waste, fraud, and abuse hidden within. The last report from the DoD Office of Inspector General (OIG) identified over $6.6 billion in criminal fraud and avoidable waste and abuse in a six month period alone.

In this post, I will dive into various schemes of waste, fraud, and abuse I have personally seen in my two decades plus in aerospace and defense that small businesses in particular are guilty of—and talk about what we are already doing or should be doing to rein this in. I could write a book about abuse of cost-plus contracting and earn value accounting, along with the straphanger nature of most SETAs and FFRDCs, so I’ll save those subjects for a later date (maybe my memoirs).

Take a walk with me through a master class in the art of DoW small business straphanging.

Is It Waste, Fraud, or Abuse?

Before we go too far, we need to define our scope and terms. The FAR has very specific definitions of these things, but I’ll start with some pithy definitions that work for me:

• Waste = money spent without necessity or discipline: inefficiency elevated into routine, no malice required.

• Fraud = deliberate falsification for gain: lies told knowingly, paperwork weaponized, intent unmistakable.

• Abuse = rule-following without rule-honoring: compliance stripped of purpose, loopholes mistaken for legitimacy.

It’s important to understand not just what these cheats are, but also the behaviors and glitches in the federal acquisition regulations that cause these to occur.

“If you want to understand the behavior, look at the incentives”

—Charlie Munger

DEI Set Asides

Earlier this month, Secretary Hegseth called out and started a crackdown on one of the oldest examples of this fraud, the 8(a) program for small disadvantaged businesses (SDBs). Here’s a post of his announcement:

Hegseth announced he was taking a “sledgehammer” to the Pentagon’s use of the 8(a) program, and the metaphor is doing real work. The 8(a) Business Development Program—a 48-year-old SBA mechanism built to steer federal contracts toward firms classified as socially and economically disadvantaged—has long occupied an awkward moral niche in Washington: too institutionalized to dismantle, too visibly gamed to defend without qualification. In practice, it became less a ladder than a routing mechanism, a way to move money while preserving the appearance of corrective justice.

In big aerospace, every major proposal came with a small-business volume and a small-business specialist whose job was not to ask whether the structure made sense, but whether it complied. Percentages were allocated, boxes were checked, ownership categories were satisfied—either at the contract level or smoothed out across the corporation.

In too many cases, the small businesses in question are essentially Potemkin contractors: pass-throughs that collect fees while the substantive work is performed by larger incumbents. Many of these firms just exist as toll booths: collecting money that they then dole out in subcontracts to larger incumbents or other firms, but not before collecting their 7-15% fee for collecting the checks and doing the accounting.

I’m seen numerous examples of 8(a) set aside abuse: passthrough contractors with no value add other than providing a contract number and satisfying a small business requirement. The one example of this I’ve seen time and time again is old white guys who put 51% (or more) of the company in their wives’ name to qualify as a woman-owned or woman and minority-owned business and get the contracts directed to them. My own post recounting one experience with it is presently at 1.9 million views and counting on X:

Hegseth’s move does not repeal the law; the statutes remain, the machinery hums on. What it does do is withdraw the Pentagon’s indulgence, forcing large sole-source awards back under scrutiny and making 8(a) a DEI relic of the past.

SBA Administrator Kelly Loeffler sharpened the knife further, cutting required percentages and targeting the cut-out contractors the program quietly trained into existence.

Contract Number as a Service

I’ve had several cases where some DoW customer wanted to buy a particular system from us for a fixed price but was unable to easily because we don’t have a contract number. It’s hard to get a contract number because issuing one is a legal commitment that concentrates authority, money, and personal risk in a single signature, and the system is designed to make delay safer than error. After decades of layered compliance, audits, and scandal-avoidance, contracting has become a ritual of risk deferral where no one owns the whole chain, but everyone can stop it.

So one popular solution is to have a number of “primes” who provide no other service other than to administer a contract number that can be doled out—for a modest fee of something like 6-18% of the topline. The best part is, many of these contracts are also small disadvantaged businesses themselves, so DoW gets credit against their 8(a) requirements to boot. Two birds, one stone!

These sorts of services are a textbook example of what anthropologist David Graeber in his Best Seller Bullshit Jobs refers to as “duct-tapers”: folks who patch over structural failures that should be fixed at the root, such as staff compensating manually for broken software or incoherent processes.

There is room for optimism that the DoW may have found ways around this, however: the Golden Dome program was recently kicked off with a massive Indefinite Quantity/Indefinite Delivery (IDIQ) contract with over 1,000 no-dollar awards. Going forward, the strategy appears to be that individual contractors will simply bid on task orders within this vehicle, cutting out the need for the contract number gatekeepers. This bypasses the need for any of this other stuff.

OTA Consortia Managers: A Different Flavor of Contract Number as a Service

The most popular contract in the new defense era is the “other transaction authority” (OTA), which enables quick bidding and awards while short circuiting the rigorous requirements for “programs of record” that can take years to step through.

Because heaven forbid government contract officers just manage this process itself, the “OTA consortia manager”—basically a non-profit that the bidders have to join and pay fees to—was invented to manage this. The OTA consortia manager oversees the “sources sought” stage which qualifies bidders in the “request for information” phase of major programs. In plain English, we take a layer of bureaucracy out of the DoW and put it in a new entity that shouldn’t exist. Now you have a private sector contractor in a “non-profit” raking in the dough to solve the government’s problem.

The consortia manager doesn’t define requirements, evaluate technical merit, or carry mission risk. It simply talks to the contractors so the government doesn’t have to. That alone places the role squarely in Graeber’s territory for box-ticking and legitimacy theater. Motion without authority, structure without responsibility: a bullshit job not by accident, but by design.

While the job is indeed bullshit, the fees aren’t: OTAs are averaging $10 billion a year in awards lately across the 28 or so consortia. If you assume 50% of awards flow through a consortia with a 1-3% management fee for awards plus management fees, you’re talking hundreds of millions in management fees for these entities every single year.

Service Disabled Owned Veteran Small Business (SDOVSB)

Since we are already slaughtering sacred cows, we might as well go after another one: SDOVSB businesses. While we owe veterans who were injured in the service of our country a debt of gratitude, it’s less clear if using the acquisition rules to pay that debt doesn’t create perverse incentives.

Set-asides and sole-source authorities reward status at the moment of award, not competence over the life of the contract, creating firms whose primary asset is eligibility itself. The service-disabled designation applies at a 0% disability threshold, broadening the category beyond any meaningful proxy for need or limitation. My great uncle Bob Mintz z’’l would show me from time to time the barely crimped range of motion of his right pinky, an injury he earned when he slipped on a ship deck carrying a vacuum tube in the early 50s. That injury gave him “a 0% disability, as declared by a military doctor for which I receive $220 a month, to this day.” A shame he never thought to start an SDOVSB.

The predictable result of this designation is a landscape littered with pass-throughs and cut-outs: nominal ownership satisfying the statute while real work and real risk migrate elsewhere.

Small Business Innovation Research (SBIR) Mills

No discussion of small business abuses is complete without discussing SBIR mills: the bane of Senator Joni Ernst’s existence and a problem that’s currently holding up the SBIR reauthorization act, leaving billions in contracts to legitimate small businesses in limbo.

SBIRs are small contracts from DoW or other agencies with money allocated from the SBA. They are structured in phases, with short, low-dollar Phase I efforts (up to $295k) designed to prove feasibility and larger Phase II awards (up to $1.97M) meant to mature the concept. These contracts provide on-ramps into bigger-money contracts like STRATFI/TACFI for larger prototype and production contracts. Think of SBIRs as non-dilutive pre-seed and seed checks for startups that the government writes to get promising new tech off the ground.

The top 20 “SBIR mills” have consumed $3.4 billion in Phase I and II contracts while often producing little more than elaborate research reports.

—Tyler Beaver, “Defense Companies Get Played on Contracts”

The reality in recent years has been that a small number of contractors have gamed the SBIR proposal process and played a numbers game to capture an excess share of the grants purely for their own profit. This would be fine if they were actually producing viable technologies with that money, but the transition rate is quite poor (17% on average just to Phase II and less than 1% of revenue in some cases coming from later stage Phase III, TACFI, or STRATFI contracts).

According to Ben Van Roo, the top 20 SBIR mills have captured $7.4 billion in defense funding. SBIR mills like Physical Sciences, Physical Optics Corporation (bought by Mercury Systems in 2020), Charles River Analytics and Triton Systems have each accumulated hundreds of awards totaling over $200 million each. These SBIR mills also have an abysmal rate of transition to other contracts (sometimes as low as 1%).

Having hired engineers from and worked with some of these companies before, I’ve seen how they’ve got the grant writing process completely dialed in (and now with the advent of generative AI probably even more so). One engineer who worked as a “chief scientist” at one told me that their operation was so dialed in that they could generate a 20-30% award rate on $150,000 Phase I grants on less than $5,000 in production costs. The “real money” of course is in the Phase IIs, which often have a 40-50% win rate and bring in a million dollars or more for slightly higher proposal costs. The problem is that 80% of these contracts fail to convert to even a Phase II award, much less real meaningful products, sucking funds from more worthy products and contracts. Meanwhile these SBIR mills soak up empty calories that never transition to real products that are relevant and useful to the warfighter.

Another thing I learned about was the “shell game” these companies often play so that when the business gets too large the original owners spin out a portion as a divested entity so that they can qualify for new grants and stay below the 500 employee limit. Indeed, when Physical Optics Corporation was sold off to Mercury in 2020 primarily for its processor and data recorder product lines, the owners prepared for the acquisition by spinning out 7 or more smaller SBIR companies like Intellisense that continued with the same SBIR mill business model (and the same original shareholders), but with a different name on the door.

What Can Be Done?

As Shyam’s 18 theses rightfully point out, “Small Business Programs should not be welfare.” Hegseth’s scrutiny of the 8(a) program is an important first step in reining in one particular area of waste and abuse, but other steps need to be taken to ensure money is spent more efficiently and create an incentive structure that improves the speed and effectiveness of procurement for the benefit of the warfighter and taxpayer.

8(a) contractor set asides should be eliminated entirely at some point—perhaps with litigation through the courts on the civil-rights implications of these programs—but before that long process plays out, there are some mitigations that can be done. Audits should be forced to prove that the owner is an actual performer on the contract and not just a cut-out who is married to the real person doing all the work. Primes should be banned from receiving funding on these contracts from their subs to avoid the kickback cycle I mentioned in my X post on the subject. The president could also go a step further and suspend set aside requirements entirely by EO—rendering the whole scheme moot.

Cut-out contractors can be addressed by more rigorous auditing proving that companies are performing a significant portion of the technical or services work themselves rather than outsourcing—perhaps changing the contract statute to require a hard percentage like 30% or more for smaller performers.

“Contract as a service” shops can be rendered superfluous by streamlining the process for contract awards and making more aggressive use of “cattle car” IDIQs with scores of no dollar awardees like they are using for Golden Dome. This would give everyone a charge number the government can apply funds against, eliminating the need for this particular duct-taper bullshit job.

SVOSDB companies should be subject to more rigorous disability requirements (perhaps increasing the disabled criteria to a higher number than 0%) and/or subjecting them to the same cutout contract rules above.

OTA rules have been expanded so much that I question the usefulness of consortia managers at all. Groups like DIU, RCO, JIATF 401, and others seem perfectly capable of running RFIs, sources sought solicitations, and hiring qualified contract officers to award and manage OTA processes without outsourcing this responsible to external “non-profits” that are just taskmasters anyways.

SBIR mills can be limited by both incentivizing SBIR program managers (known at TPOCs) to get higher transition rates through awards and penalties. Limiting the number of awards per entity per year to reasonable number (like 8) and capping lifetime awards at $25 million or less would also limit the efficacy of the “spray and pray” SBIR proposal writing model. You could also limit the number of SBIR grant applications a company is able to submit each quarter.

We also need to seriously question whether, in the era of billion-dollar companies with 10 employees, the 500-employee limit is too high and should be revisited.

Any of these steps would help push the straphangers out of the way of the performers, save the taxpayer billions, and help focus the farm system of the Department of War’s acquisition apparatus on its core mission: to deliver new capabilities to the warfighter as quickly as possible.

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Arthur Herman is the Pulitzer Prize Finalist author of Freedom’s Forge: How American Business Produced Victory in World War II. His newest book, Founder’s Fire: From 1776 to the Age of Trump, will be published by Center Street in April.

By now everyone understands the key to America’s successful mobilization in World War Two was unleashing the drive, energy, productivity, and innovation of our private sector to solve a national security crisis. It’s one reason why so many people, including people in Congress and the current administration, are turning to my book, Freedom’s Forge, for inspiration as they grapple with the problem of reigniting America’s defense industrial base today.

At the time it was an American president, Franklin Roosevelt, who saw the right path forward: letting the private sector take the lead despite his New Deal and progressive instincts. That decision—contrary to the recommendations of his leading advisors—set the direction and tempo of the entire mobilization, as he turned the initiative over to General Motors CEO Bill Knudsen and his business colleagues.

It was FDR’s successor Harry Truman who decided to try another way: a top-down, centralized model, with the government telling industry what and how to produce the weapons we needed, rather than the other way around.

The culmination of this effort was the Office of Defense Mobilization, set up in 1950. The result? A major procurement mess during the Korean War. It also triggered a national economic crisis that rocked Truman’s presidency to its foundation—and left a toxic legacy for defense procurement that we’re still trying to clean out today.

The date was 1947. As the federal government was coming to grips with the challenges of global leadership and a nascent Cold War with the Soviet Union, a series of acts passed Congress creating a new national security establishment. That included creating the National Security Council, Central Intelligence Agency, and a unified Defense Department that merged America’s armed forces.

Another part of the effort was setting up an office to oversee any future defense mobilization, dubbed the National Security Resources Board (NSRB). At the time—and indeed for many observers and historians still today—the issue of merging the armed forces overshadowed everything else.1 But the creation of NSRB would have far-reaching consequences no one considered or imagined.

The issue was: how to capture and institutionalize the magic that made mobilization in World War II possible?

Official Washington had convinced itself that government—not private industry—had the answer. Under the National Security Act of 1947, the NSRB was supposed to mobilize and coordinate government agencies and adapt America’s economic resources to meet military and civilian needs in time of war. It was also supposed to set policies for “establishing adequate reserves of strategic and critical material, and for the conservation of these reserves,” i.e. vital supply chains for the moment when America found itself at war again.2 To complete Washington’s control over the NSRB, Truman centralized its power in a single chairman and moved it over to the Executive Office of the President.

Americans didn’t have long to wait before the NSRB faced its first major test. On June 25, 1950, North Korean troops poured over the border into South Korea and a desperate struggle for control of the Korean peninsula was on. Truman and policy makers immediately realized America’s demobilization after V-E and V-J Day had gone too far—the U.S. Army had shrunk from over 8 million personnel in 1945 to just 600,000 four years later—leaving the United States vulnerable on multiple fronts.

Truman hoped his NSRB would figure out how to rapidly close the production gap. He quadrupled the defense budget to $50 billion and the NSRB was put in control of prices, wages, and raw materials. The result was soaring inflation and shortages in consumer goods and housing, which grew worse with China’s intervention in the war in November.

Truman’s response was to give the federal government even more authority over the economy and defense production. On December 16, 1950 he declared a national emergency. Using the powers granted to him by the Defense Production Act (which Congress passed in September), Truman created a new Office of Defense Mobilization (ODM) to oversee virtually every aspect of the American economy to meet its wartime needs.

When assessing Truman’s fateful decision, it’s important to remember this was a real crisis. Massive Chinese intervention in the war had forced United Nations forces into a hurried, large-scale retreat from North Korea culminating in the Hungnam evacuation, where troops and over 98,000 Korean civilians had to be evacuated by sea under intense communist attack.3 Tanks were in such short supply the Army was reduced to seizing Sherman tanks used in war memorials at home and refurbishing them for use in Korea. The economy was rocked by seven-plus percent inflation even as American support for the war was floundering. Finally, everyone expected a similar war to break out in Europe, with the possibility that the Soviets might use their newest weapon, the atomic bomb.

Under these conditions, Truman’s desperation was understandable. But his response violated every lesson learned in the World War II buildup. The creation of ODM foreshadowed a takeover of the entire U.S. economy that Nazi Germany or the Soviet Union might have admired, even envied.

NRSB already had the power to control prices, wages, and the flow of raw materials. ODM raised the game to the next level under Truman’s interpretation of the DPA by setting up two new organizations. The first was the Defense Production Administration, which established production goals and supervised production operations for military procurement. The second was the Economic Stabilization Agency, which coordinated and supervised wage and price controls across the country. And that was just the beginning. In all, 19 separate mobilization agencies sprang up inside ODM to control and direct every aspect of the American economy.4 Truman also directed ODM’s head to attend NSC meetings and then made him a member of the senior staff.

Truman’s pick for ODM director was Charles E. Wilson, the president of General Electric known to colleagues and the media as “Electric Charlie” to distinguish him from the Charlie Wilson who was CEO of General Motors (“Engine Charlie”).5 Wilson had been a leading mobilization executive in World War II, but he was hardly the reincarnation of the business executive FDR had put in charge of mobilization before World War II, namely GM’s William “Big Bill” Knudsen. Instead, Wilson firmly embraced the twin principles of government centralization and coercion to get the economy revved up for war.

For example, Wilson was given power over national wages through his Wage Stabilization Board as part of ESA. He simultaneously had power over all critical raw materials in America, from steel and aluminum to copper and coal.6

Wilson went on to set wartime production quotas for American businesses, with sharp sanctions against any company that failed to comply. Government now told businesses outright what they were to produce and when it was needed—a complete reversal of the cooperative approach during World War II. No new plant investment was allowed for private businesses unless it was pre-approved by ODM. Even more, Wilson decided it was too dangerous to have any new defense plants close to the traditional hubs of U.S. manufacturing in the Midwest and Northeast. Instead, ODM laid down permits for new facilities across the Southeast and South in order to disperse resources in case of a concentrated Soviet attack.7 This in turn disrupted the kind of efficiencies of scale and reliance on in situ industrial and engineering expertise in places like Detroit that had helped to make America’s mobilization in World War II so swift and effective.

Meanwhile, the Economic Stabilization Agency immediately canceled price increases by Ford, General Motors, and Chrysler.8 At the same time, Wilson and ODM imposed price controls on all good and services in the United States, while making workers’ wages subject to government approval and direction. In total, these actions represented a level of government intervention that not even FDR’s takeover of the U.S. economy with the National Industrial Recovery Act (which the Supreme Court declared unconstitutional in 1935) could have hoped for or imagined.9

Despite all the government fiats and oversight, defense production still lagged—as anyone who truly understood the World War II model could have told Truman and Wilson. Supply chain bottlenecks became inevitable when any raw material now required an ODM permit. At the same time, despite the boost in defense spending from $15 billion to $50 billion, the production of new equipment came in fits and starts. Many businesses chose to stay out of the Department of Defense’s way rather than submit to overregulation if they wanted to produce war materiel—the start of a long-term trend.

Instead, it was the opening of the procurement process to foreign sources, especially Japan—outside ODM’s reach—that saved the Korean War effort from catastrophe and also laid the foundation for the revival of the Japanese economy. In 1951, 40 percent of all Japanese exports came from U.S. military procurement. The next year, in 1952, that number doubled.10

But all these already-considerable problems were upstaged when ODM decided to intervene in the negotiations between the United Steel Workers and the steel industry over a long-overdue wage increase.

Steel companies were ready to give in to labor’s demands, but only if they could also get a price increase. Under the new ODM rules, both required government approval. Truman and his Democrat administration were very sensitive to the need for union support. They OK’d the wage increase—but not the price increase Big Steel wanted to offset the additional expense. With ODM saying no to a price increase, major steel companies said no to the wage increase. The steel workers were now poised to strike on January 1, 1952.

Truman was desperate. He persuaded union leader Phil Murray to delay the strike, although industry still refused to play ball without a price adjustment. Electric Charlie quit in disgust over the impasse. Congress was in an uproar over the possibility that steel workers would shut down America’s steel plants when their output was most needed, especially for the war effort. His back to the wall, Truman decided to nationalize the entire steel industry, just hours before the strike was supposed to begin at midnight, April 9, 1952.

A court injunction halted Truman’s move just in time and the case eventually wound up in front of the Supreme Court. The issue had become: can a president as Commander-in-Chief issue an executive order taking over an entire industry for the sake of national security? In a 6-3 vote, the Supremes said no, he did not have that power. It was a landmark case for future limits on presidential power—and limits on ODM’s power, as well.11

A Republican-majority Congress now stepped in to strip away the powers of the Wage Stabilization Board, which had been ODM’s primary weapon in controlling Americans’ pay. The end of the fighting in Korea also defused the crisis atmosphere and brought to a halt most, but not all, of ODM’s production, wage, and price control authority.

When Dwight Eisenhower became president the following year, he curtailed ODM’s role even further. First under Ike-appointed directors Arthur Flemming and then Gordon Gray, it confined its activities to defense production effort per se. Finally, in 1958, ODM died a merciful death when it merged with the Federal Civil and Defense Administration into the Office of Civil and Defense Mobilization (OCDM), which was more focused on building bomb shelters and civil defense in case of nuclear war. Director Gray went on to become Ike’s National Security Advisor.

Several name changes later, OCDM finally vanished from the federal register in 1973. Still, many of its original powers reside with today’s Federal Emergency Management Agency (FEMA), which was set up by executive order in 1979 to take over from OCDM and its successors.

But the damage the ODM era had done remained, especially for how the government approached defense procurement and acquisition. The vision of a strictly controlled and centralized government office overseeing every aspect of the defense production process, from planning to final execution, became DoD gospel. It set the stage for McNamara’s so-called reforms in the early 1960’s, including the Pentagon budget system we still have today. Arguably, it even set the table for the Last Supper in 1993, when the Pentagon felt free to tell the defense industry it had to shrink in order to match a shrinking defense budget—instead of encouraging competition to lower overall costs, on the principle that the more players, the better.

Meanwhile, the diaspora of defense manufacturing across the Sun Belt and Deep South meant traditional industrial centers like Detroit, Pittsburgh, Chicago, Cleveland, and Buffalo played less and less of a role in helping America arm itself or to develop the next generation of weapons systems. In fact, this shift accelerated deindustrialization and the emergence of the Rust Belt—the very place where, ironically, American defense mobilization first cut its teeth.12

And so, for more than 70 years we were stuck with the idea that, when it came to defense procurement, government knows best who should make what, when, and where.

Only now, with the growing Chinese threat and equipment shortfalls like the ones exposed by the war in Ukraine are we realizing this top-down, centralized approach is wrong for America—and that we need radical changes in order to move closer to the original World War II model. Until those changes happen, the ghosts of Electric Charlie and Harry Truman will continue to haunt the corridors of the Pentagon—as will the sad saga of ODM.

Ethan Copple, Ph.D. is a systems engineer and applied anthropologist focused on solving coordination problems in complex operational systems. Copple is a National Science Foundation Graduate Research Fellow and Principal at Systems Intelligence Consulting.

Efforts to rebuild the American industrial base are gaining real momentum. Public and private investment, renewed interest in manufacturing, and a wave of defense-focused entrepreneurs are helping advance a long overdue shift. Yet despite this progress, there is an underlying issue that is often missed. Reindustrialization is not only a technology, finance, and policy problem; it is also a cultural problem.

For decades, the United States moved away from a culture of building. We outsourced manufacturing and changed the story we told ourselves about what kind of work is worthwhile. Over time, the story was replaced by a narrative that success meant distance from physical production. As a result, the foundation that allows an industrial ecosystem to function eroded.

This foundation is a form of ‘soft infrastructure.’ It includes the shared beliefs, informal incentives, and identity systems that shape how people behave within society and understand their place inside it. It shapes who is encouraged to build, who is rewarded for it, and how that work is understood.

During my own training as an industrial engineer, I spent only one required credit hour inside a machine shop lab. Most of my education centered on spreadsheets, statistical models, and optimization problems. We learned to represent factories through simulation software, but not to understand how they actually run. The workforce pipeline that produces engineers is much too far from the systems we are meant to improve. The older image of the engineer as a builder had faded, replaced by the expectation that engineers will manage and optimize from afar. Beneath it was a broader story that equated distance with status, that treated thinking and making as separate domains rather than parts of the same craft.

If the United States is going to rebuild the American industrial base, we must first restore meaning to the act of building. Fixing the problem requires rebuilding the cultural foundations that connect thinking and making so that manufacturing and the talent it draws are seen as central to the nation’s future.

Cultural Narratives Shaping Industrial Decline

There have been periods in American history when the cultural foundation for building was strong. The rapid mobilization of the industrial base during the Second World War depended not only on factories and logistics, but on cultural alignment around a shared effort. Industrial work was framed as a contribution to the nation, and builders understood how their work fit into a larger system. That shared understanding sustained coordination, learning, and commitment at scale.

The lesson is that mobilization requires more than technical capacity; it requires systems that connect thinking and making. Those systems have been eroded by decades of underinvestment and harmful ideas.

I once spoke with an industrialist who tried to fund a new machine shop lab at a well-known engineering school. His aim was simple: give students a chance to learn how things are made by actually making them. The university dismissed the idea: “We don’t do that type of engineering here. Maybe the tech school would be interested.” That dismissal revealed an unspoken hierarchy about whose work matters. This school trained engineers for polished offices and clean environments, not machine shops, assembly lines, or oil rigs. The image of the engineer as a builder had been replaced with the image of the engineer as a spreadsheet manager. And when engineers are disconnected—physically, mentally, and culturally—from the places and people that build things, their understanding of how to design and manufacture goods suffers.

While many damaging narratives exist, three have been particularly damaging to American manufacturing, shaping how status is assigned, how institutions behave, and how young people imagine their futures.

1. Industrial Work as a Step Down Rather Than a Path to Success

For generations, American families have been taught that success requires leaving hands-on work behind. Industrial roles came to be associated with low status, limited autonomy, and constrained futures, while manufacturing, operations, and skilled trades were framed as fallback options rather than callings. This narrative redirected talent away from factories and shop floors, pulling capable builders into careers disconnected from making.

2. The United States Should Design and Others Should Build

Globalization normalized the idea that the United States should focus on design and innovation while outsourcing production to others. While attractive in the short term, this separation eroded the feedback loops that link invention to execution. Innovation became more conceptual, supply chains more fragile, and industrial capability less grounded in practice. By drawing a boundary between thinking and building, the narrative reduced the value placed on those who turn ideas into reality and undermined the foundations of long-term resilience.

3. Efficiency as Superior to Resilience

As production moved out of view, efficiency became the dominant measure of success. Lean operations, outsourcing, and asset-light strategies were rewarded, while slack and redundancy were treated as waste. This approach performs well in stable environments but fails under stress. Resilience depends on flexible capacity, diverse supply chains, and people trained to solve problems in real time. These are cultural as much as technical qualities, and a culture that prizes efficiency alone steadily erodes the conditions required for learning, adaptation, and durable industrial strength.

Rewriting the Narrative

Every year around Christmas, the street outside the Peterbilt factory in Denton, Texas fills with trucks from across the company’s history. Restored rigs from the forties and fifties idle beside the newest freightliners, chrome reflecting winter light. As they pass, you hear the same murmurs from the crowd: “I worked on that one in ’84.” “That model was the first with the long nose.” Families point toward small features only someone who built them would notice. The parade becomes a lineage of workmanship, a way for workers to see their labor carried forward into the world.

Scenes like this reveal the pride that workers and communities still get from manufacturing—and they reveal what is at stake in reindustrialization. The cultural meaning of building has thinned, even as the need for builders has grown. Reindustrialization depends on restoring identity, status, and purpose to industrial work, reinforced through the signals institutions send about what they value and reward. That means reversing the cultural narratives that have devalued American manufacturing.

1. From Factory Jobs to Careers as Builders

Industrial work must be understood as a path of agency, creativity, and long-term contribution, where builders shape the future through tangible problem-solving rather than occupying fallback roles.

2. From Separation to Integration of Design and Production

Innovation and production should be treated as a single learning cycle, with engineers, technicians, and operators working together to restore the feedback, judgment, and tacit knowledge that complex manufacturing requires.

3. From Efficiency Culture to Learning and Resilience Culture

Industrial excellence should be defined not only by efficiency but by the capacity to learn and adapt, replacing narrow optimization with systems that build resilience, depth, and durable capability.

What We Can Do Now

There are practical steps we all can take to change societal narratives. Our roles will be different, but our goal must be the same: strengthening the soft infrastructure of American industry so that more talent, more capital, and more attention flow to the sector upon which our prosperity and security depend. Across these roles, the common task is restoring proximity between design and production, software and hardware, and institutions and shop floors.

Technologists

Technology companies are now industrial actors, whether they acknowledge it or not. Their design choices shape how industrial work is experienced and valued, not just how efficiently it is managed. They help determine whether work feels like craftsmanship grounded in physical reality or abstraction managed from a distance. Treating operators and technicians as core users, preserving shop-floor knowledge, and keeping engineers close to physical processes allows software to support the human foundations of industrial work.

The failure of recent decades was not due to technology itself, but to how it was deployed. Too often, digital systems managed production from a distance, reinforcing the separation between design and execution.

Used differently, technology can shorten that distance. Tools such as digital twins, real-time process data, and AI-assisted diagnostics can strengthen feedback between design and production when they are grounded in physical processes. In this role, software does not replace building. It restores proximity, learning, and shared understanding across industrial teams, carrying forward the same connective function that cultural alignment once provided.

Builders and Industrialists

Create cultures that honor the craft of building. Offer development pathways that help people grow and that highlight the meaning of the work. Provide opportunities for engineers to spend time on the shop floor, learning directly from those closest to the process. Recognize those who improve systems, not only those who design them.

Investors

Support companies that integrate production early, not as a patriotic concession but a bet on capability. In a world defined by supply chain risk, political constraint, and brittle global optimization, operational depth and domestic capacity are emerging as durable sources of competitive advantage as efficiency-only strategies lose reliability. Recent large-scale commitments by institutions such as JPMorgan Chase to domestic supply chains reflect a growing recognition that rebuilding industrial capability is not charity, but a viable long-term business strategy.

Policymakers

Pair financial incentives and regulatory reform with efforts to strengthen cultural foundations. Support apprenticeships, regional talent pipelines, and programs that rebuild identity around industrial contribution. Invest in initiatives that bring visibility to the importance of manufacturing for national resilience. Policy can help reestablish the expectation that industrial capacity is a shared public good.

Educators

Connect academic work with industrial experience. Introduce students to production environments early in their training. Help them see the intellectual challenge and societal importance of building. Normalize the idea that industrial careers are meaningful and future-shaping.

The Foundation for Reindustrialization

Factories, capital, and technology do not come together easily in the United States today, but regulatory friction, workforce shortages, and institutional misalignment did not emerge in isolation. They reflect decades of disinvestment in industrial identity, skill formation, and institutional familiarity with production. Where building has been culturally devalued, regulation accumulates, workforce pipelines atrophy, and capital loses patience. Culture does not substitute for policy, capital, or execution but sits upstream, conditioning how those systems coordinate.

Reindustrialization depends on recovering the belief that building matters and that those who build help shape the future. When industrial work regains its place as a source of identity and contribution, the rest of the system can begin to cohere around it.

Hunter Scott is a Founding Engineer at Reach Power.

In the 20th century, the government had access to the latest technology because it was funding and directing most of the technology itself, along with prime defense contractors. But now the tables have turned: industry is outpacing government R&D and startups are moving at blistering speeds, proliferating game-changing platforms and capabilities powered by software rather than expensive, exotic hardware. These capabilities need to transition to the warfighter at a speed that matches this progress. The Department of War (DoW) has recognized this change and is in the middle of large-scale reforms aimed at speeding acquisition of these new technologies. But buying the technology when it’s mature is only part of the equation. If the DoW wants to encourage defense innovation at the scale and speed of Silicon Valley, it must allow startups to run the same successful playbooks that they use for commercial customers. The on-ramp for startups doing business with the DoW needs to be rebuilt.

Escaping the Commercial Valley of Death

In the commercial world, startups use several techniques to move fast and avoid the valley of death. First, they’re able to sell a small number of unpolished prototypes to a small group of passionate users. This is an indicator that they’re making something people want: at least a few people have a problem serious enough that they’re willing to accept an imperfect solution for it. The quick and early feedback from these users fuels the iterative process of making the product better: not just more “finished,” but better at solving the real problem. It’s usually straightforward for a company to be able to charge for their prototype once the commercial customer agrees to buy it. This isn’t always the case with the government.

Second, startups can leverage letters of intent (LOIs) to indicate to investors and themselves that someone intends to buy the finished product. These letters are often used to attract VC investment, giving startups enough runway to get the first polished version of the product delivered. The DoW in its current form is not compatible with this method of early product development. Portfolio Acquisition Executives (PAEs) and warfighters can’t offer those kinds of LOIs, even though the letters are completely non-binding. A contracting officer must be involved. There is no way for the DoW to indicate in a formal way that it wants to buy the future version of a product.

Y Combinator advises startups to do only two things when they’re trying to find product- market fit: write code and talk to users. Talking to commercial users is relatively easy; finding and talking to warfighters, much less watching them use your product, is a lot harder. Opportunities exist with exercises and experimentation events. Unfortunately, these events are often exclusive and infrequent, meaning new companies can’t get user feedback on their product when they need it most.

How the DoW Can Rebuild the On-Ramp

The DoW could do a few things to prevent defense startups from falling into the valley of death. First, there should be a mechanism for units to procure or test prototypes directly from startups without complex contracting. This would allow startups to get warfighter feedback early and often, like they do in the commercial world. It would also allow decentralized decision making by units, allowing them to go after the specific problems that they’re facing. Selling prototypes and pilots that cost a small amount of money ensures that the unit, with limited budget, has skin in the game and actively pursues solutions to real problems. It would also provide initial revenue for startups that are funding their product development.

Startups also need access to contract vehicles to sell things to the government, yet they can be difficult to obtain, especially for a company that is trying to do business with the government for the first time. Reforming the Federal Acquisition Regulation (FAR) is a good start, but getting into a position to transact with the government at all remains a major barrier for new defense tech companies. Without a contract vehicle, companies that are awarded Research, Testing, Development, and Evaluation (RTD&E) money can end up waiting many months to put that money to work. In some cases, if the government takes too long to get the money on contract, it disappears (I know this because it has happened to my company).

One solution that some companies use is to pay another company to use their prime contract as a “landing pad” for money so that it can quickly get on contract. This is a bad deal for everyone (except the prime contractor): the government doesn’t like it because there’s now less money for the intended project, and the startup doesn’t like it because it must sacrifice 8 to 10 percent of the total contract value. This is a huge waste of money for the taxpayer and is especially hard on startups that need to invest almost all of their contract revenue into product R&D .

DoW should make contract vehicles easier to access, especially for small and new companies. Existing defense industry consortia could help to solve the problem of companies needing a place to “land” awarded money. The awarding office could transfer money to Other Transaction Authority (OTA) contracts that are held by the consortium, and companies could join the consortium and pay a much lower fee than if they subcontracted directly from a prime contractor. This is already done sometimes, but to make it work well, OTA contracts with consortia should be modified to explicitly allow any DoW office to use this mechanism. Likewise, subcontracts performed this way should not need to be recompeted after the money is transferred to the consortium.

Next, PAEs and colonels should be allowed to issue a capped number of LOIs for products each year. These would have no price associated with them, but would declare an intent to purchase a number of units or software licenses. This would provide a formal way for warfighters to communicate demand to the DoW and to VCs about capabilities that they want. Critically, it would also allow warfighters to show demand for capabilities too novel or unique to have an existing formal written requirement or capability gap.

Finally, DoW needs to increase opportunities for warfighter feedback of products and capabilities. Several avenues for this already exist, like Special Operations Command (SOCOM) Technical Experimentation events and numerous other exercises listed on Vulcan (SOCOM’s innovation scouting platform). The problem is that these events only happen a few times per year, they’re not always coordinated and sometimes overlap, and startups must vie for a small number of slots to be accepted. Many other events don’t have a public application process at all, so companies must be referred or recommended by government insiders.

The DoW must match the speed of technology development by assessing more companies faster. Rather than individual events, the Office of the Undersecretary of Defense, Research and Evaluation (OUSW R&E) should have a rolling assessment program that continuously runs at one location. Dedicated assessors at OUSW R&E would observe demonstrations lasting roughly one or two days and post an abbreviated writeup to Vulcan. This would allow the DoW to learn about more technology and to watch and chart the progression of companies and technologies. It would also allow the thousands of units and offices within the DoW to find and follow the specific capabilities that they’re interested in. This would reduce the risk that a critical capability is passed over just because there weren’t enough slots, an application reviewer didn’t recognize it, or the application was poorly written.

Measuring the Results

How would we know if these new policies were working? One metric would be the number of new technologies and capabilities evaluated per year. Compared to the current number, we should see a huge increase, and this metric could be benchmarked against the number of new defense tech companies being founded and VC activity. We should also see more contract activity from these companies. Ultimately, we should see more new capabilities fielded per year.

Our national security depends on our ability to match the speed of technology with the speed of transition. Contracts, demos, and PR mean nothing unless the technology makes it out of the lab and into the hands of the warfighter, contributing meaningfully to the lethality and dominance of the United States. A few simple changes could help startups deliver that technology.

Greg Little is a senior counselor at Palantir Technologies.

Aaron Jaffe is a deployment strategist at Palantir Technologies.

A few years ago, one of us sat in a conference room late in the afternoon as a major weapon system program team debated a marginal performance improvement. Single-digit percentages. Decimal places. Over hours of discussion, what no one talked about was how many of these systems could be built, how fast they could be replaced, or whether the parts could be sustained at scale.

That meeting captures a pattern the Department of War knows too well: we design the ideal weapon first and only later ask whether the country can actually produce it in the quantities a prolonged fight would demand.

This is why Secretary of War Pete Hegseth’s recent acquisition transformation announcement matters. His focus on speed and scale, on shifting the department to a wartime footing, and on breaking a culture that rewards compliance over execution points us in the right direction. It acknowledges something fundamental: capability delivered late—or in boutique quantities—is not capability at all. But if we really want speed and scale, acquisition reform alone isn’t enough. The deeper problem isn’t how we buy weapons. It’s how we design them and coordinate their production.

Designing for Scale

For decades, the department has treated manufacturing and the industrial base as downstream concerns. Requirements are written as if time, production capacity, and supply availability are secondary. Only after the system is defined—sometimes after it’s certified—do we focus on scaling production. This approach produces impressive prototypes. It does not produce the mass and responsiveness required for deterrence at scale. If we want to field lots of weapons fast, we need to flip the logic: design weapons systems to fit the industrial base we have and then iterate—rather than designing unicorns and hoping the supply chain catches up.

World War II is often cited as proof that America can surge production when it matters. That’s true, but the reason we surged is often misunderstood. Yes, we mobilized labor. Yes, we built factories. But the real breakthrough wasn’t just industrial effort—it was design choices that embraced industrial reality.

Consider aircraft production. In 1940, the U.S. aircraft industry was small and craft-based, producing roughly 3,600 aircraft per year. By 1944, it had become the world’s largest aircraft producer, outproducing Germany and Japan combined—and fielding over 96,000 aircraft that year alone. This transformation didn’t come from engineers pursuing optimal designs. It came from designing aircraft around manufacturing capabilities first, with performance improvements emerging organically through production experience and operational feedback.

Within four years, the U.S. designed, introduced, and built more than 30 different bombers, iterating from the workhorse B-17 to the advanced B-29 with more than twice the power, range, and load. By comparison, the latest bomber produced in the United States, the B-2, required more than a decade to move from design to the initial production of a fleet of 21 aircraft.

America’s rapid wartime evolution was spurred by a collaboration between government and manufacturers to maximize the use of their existing capabilities. At Willow Run, Ford—the automobile company—adapted aircraft designs to the logic of automotive assembly, using standardized parts, simplified subassemblies, and repeatable processes. By 1944, a B-24 bomber was rolling off the line nearly every hour. Ford optimized for throughput, not perfection—and throughput won the war.

This story was repeated across the American industrial base. At the Detroit Arsenal, Chrysler applied the same logic to tank engine production. The Sherman tank wasn’t designed to win one-on-one duels against the most advanced enemy armor. It was designed to be built quickly in enormous quantities and to be easily repaired in the field. The result was a tank that could be produced and replaced faster than adversaries could destroy it.

This design-for-scale philosophy is not a complete relic of World War II—it’s re-emerging today where speed and volume matter most. Anduril’s Barracuda cruise missile is a modern example of this same logic. Rather than designing a missile optimized solely for performance and then struggling to manufacture it, Barracuda was designed from the outset to be compatible with high-volume production, using components, processes, and tolerances that allow it to be built on current automotive manufacturing capabilities. The result is a system explicitly designed for mass production, rapid replenishment, and iterative improvement.

This is an entirely different mindset for manufacturing, and it has strategic consequences for the nations that embrace it. Production reality becomes the key design constraint, not an afterthought. Interchangeability isn’t just a maintenance convenience—it’s a warfighting advantage. Designs that can tolerate variation and substitution proliferate. Designs that can’t are redesigned or abandoned. The lesson is simple and uncomfortable: the United States doesn’t scale by asking industry to stretch to meet perfect designs. It scales by aligning designs to industrial strength.

Here’s where this gets uncomfortable. If a modern weapon system depends on a bespoke material, a limited supply base, or a certification regime that freezes design for a decade, then it may be technologically impressive—but it is strategically brittle. In a contested industrial war, elegance is not resilience. A system that cannot tolerate supplier substitution, component swaps, or rapid redesign is not “high-end.” It is pre-failed the moment production is disrupted or losses exceed peacetime assumptions.

We often describe these bad outcomes as manufacturing problems or supply-chain shocks. And yes, we need investment to expand industrial capacity and deepen critical supply chains. But at root these are design decisions—made early, reinforced by incentives, and rarely revisited. And then we act surprised when scale never materializes.

Orchestrating Production

Too many in the Department of War still operate on the assumption that if we simply fix acquisition policy, streamline contracts, and empower program offices, the rest of the system will somehow align. It won’t, and Secretary Hegseth’s acquisition transformation recognizes this. Even if every acquisition reform memo is executed perfectly, the department is still missing something fundamental: a way to operate the war machine as a single, connected system.

Today, weapon design lives in one world. Manufacturing capacity lives in another. Supply chains live in spreadsheets. Sustainment data arrives late. Readiness has little connection to its industrial inputs. Learning happens—but slower than the fight evolves. This is a coordination problem.

What’s missing is a war machine operating system—not a product, but a capability. A digital layer that connects weapon design decisions, factory throughput, supplier health, substitution options, and sustainment realities into one continuously updating picture.

There is precedent for this idea, and it comes from an era long before software existed. During World War II, the United States effectively created a human version of a war machine operating system. Through institutions like the War Production Board—and figures like William S. Knudsen, a former auto executive elevated to general officer and placed in charge of industrial production—the government unified design, manufacturing, supply chains, and battlefield demand under a single coordinating authority. Knudsen didn’t just manage contracts. He managed tradeoffs. He could simplify designs, redirect factories, force standardization, and prioritize throughput over elegance. He had visibility into what industry could produce and the authority to shape what was being designed accordingly. Knudsen wasn’t merely a bureaucrat. He was the conductor of a vast industrial orchestra.

What’s different today is that this coordinating function no longer has to live in a handful of individuals or emergency boards. It can live in software. In limited cases, it already does. During recent Navy ShipOS pilot deployments, AI-powered manufacturing and sustainment capabilities demonstrated what a war footing looks like in practice. At General Dynamics Electric Boat, submarine schedule planning was slashed from roughly 160 manual hours to fewer than 10 minutes. At Portsmouth Naval Shipyard, material review timelines that once took weeks were compressed to less than an hour. These changes show how a wartime industrial system moves when information, authority, and execution align.

The same model is already visible in commercial manufacturing enterprises that must operate continuously, at scale, and under real-world stress. Airbus’s Skywise platform connects design data, production systems, maintenance records, and operational telemetry across thousands of aircraft—creating continuous feedback between engineering, production, and operations. This is how modern industrial systems function when downtime, delay, and uncertainty are unacceptable.

War Footing

The key takeaway for the Pentagon is that operating a complex industrial machine at scale on a war footing is already possible. The limiting factor is adoption, integration, and leadership. Today, those feedback loops are fractured in the defense industrial base. Requirements, engineering, production, logistics, and sustainment are treated as sequential phases instead of one living system. By the time a problem surfaces, the opportunity to adapt cheaply has already passed. Now that the Pentagon is taking a war footing mindset and approach, it needs an operational backbone that treats design, production, and sustainment as one system, not as disconnected handoffs. Without this connective tissue, the department is forced to manage by lagging indicators and intuition—exactly the opposite of what a wartime footing demands.

Secretary Hegseth’s push for speed and performance is necessary—but it will only deliver results if the department changes what it rewards upstream. Designing for substitution, modularity, and common components is a strategic choice. It’s how you stay in the fight when conditions change—and they always do.

So here’s the rule leaders should apply before approving the next major weapon system: can this weapon be built, repaired, and replenished faster than it will be destroyed? If the answer is no, no amount of acquisition reform, contracting flexibility, or urgency memos will save it. In a fight defined by attrition, adaptation, and industrial endurance, the winning systems will not be the perfect ones on paper but the ones that can be produced, replaced, and improved the fastest.

America didn’t win past wars by hunting unicorns. We won by designing for scale—and then scaling relentlessly.

2026 has started with a bang: Delta Force’s spectacular snatch-and-grab raid in Venezuela, the ‘1979-in-reverse’ revolution brewing in the streets of Iran, the hunt for sanctioned shadow fleet tankers on the high seas, President Trump’s tough love for the primes, and much more.

Secretary of War Pete Hegseth’s speech at Starbase, Texas earlier this week deserves a place on that list. History will look back on that speech and the reforms it unveiled as an inflection point for the Pentagon in how it acquires new technology and uses autonomy to fight and win wars. Let’s hope we remember this as the moment the long hangover from the Last Supper ended and the table was set for the First Breakfast, with plenty of seats for new entrants, innovators, and heretical heroes. Or as Secretary Hegseth put it, the old era “created a closed innovation ecosystem dominated by just a handful of prime contractors. . . . Today that old era comes to an end.”

Statements like these and the actions that back them up prove that this administration is committed to unleashing innovation in our Armed Forces. Dismantling the paperwork-driven joint requirements process was the first step. Creating the Mission Engineering and Integration Activity to interface with industry was a second. The reforms announced this week are another giant leap in the right direction.

The big announcement at Starbase is an “AI acceleration strategy” to transform our Armed Forces into an “AI-first warfighting force across all domains, from the back offices of the Pentagon to the tactical edge on the front lines.”

Easy to say, hard to pull off. But that’s why the details are so enticing.

The AI acceleration strategy is designed to enable real-world action, at speed and scale. This isn’t another blue-ribbon panel to study the problem to infinity and beyond. It’s not a beard-stroking convention. It’s an aggressive effort to bring cutting-edge AI technology (and technologists) from the commercial sector into the military fold where it can be put to good use.

We have a lot of catching up to do. Bureaucratic kludge and red tape have hamstrung widespread AI deployment at the Pentagon. It takes forever to accredit cutting-edge models; the “ChatGPT moment” happened in late 2022, yet it took 18 months for the bureaucracy to approve OpenAI for use even in unclassified settings. Compounding the problem, the Pentagon has been trapped in a legal thicket because each model provider has a different acceptable use policy, some of which limit their use by the military. Additionally, the Pentagon’s AI infrastructure is woefully underpowered compared to the private sector. Classified compute is nowhere near where it needs to be to use AI in game-changing ways. Legacy programs have hoarded mission-critical data to protect their fiefs at the expense of the warfighter (and in flagrant violation of years-old decrees intended to maximize data sharing). We’ve been showing up to the prize fight late, underweight, and with our shoelaces tied together.

The AI acceleration strategy addresses these problems, leaning heavily on the private sector to close the gap between commercial and government AI capabilities. It sets an aggressive standard for accreditation: new models should be deployed “within 30 days of public release.” It slashes through the legal thicket by standardizing the acceptable use policy for AI models used by the military. It pushes for expanded access to compute from commercial hyperscalers, allowing our military to reap the benefits of the hundreds of billions in private investment in AI infrastructure. And it enforces the data decrees by requiring every corner of the Department of War to catalog its data and make it available on request unless a truly good reason for not sharing it exists. With data sharing mandatory and the playing field is level, we’ll see who is truly committed to openness—and who was faking it all along.

The strategy also focuses on real-world use cases for AI establishing seven “Pace-Setting Projects” designed to unlock AI’s potential and keep the department focused on tangible forward progress:

Warfighting:

Swarm Forge: Competitive mechanism to iteratively discover, test, and scale
novel ways of fighting with and against AI-enabled capabilities - combining
America’s elite Warfighting units with elite technology innovators.

Agent Network: Unleashing Al agent development and experimentation for Al
enabled battle management and decision support, from campaign planning to kill
chain execution.

Ender’s Foundry: Accelerating AI-enabled simulation capabilities - and
sim-dev and sim-ops feedback loops - to ensure we stay ahead of AI-enabled
adversaries.

Intelligence:

Open Arsenal: Accelerating the TechINT-to-capability development pipeline, turning intel into weapons in hours not years.

Project Grant: Enabling transformation of deterrence from static postures and
speculation to dynamic pressure with interpretable results.

Enterprise:

GenAI.mil: Democratizing AI experimentation and transformation across the Department by putting America’s world-leading AI models directly in the hands of our three million civilian and military personnel, at all classification levels.

Enterprise Agents: Building the playbook for rapid and secure AI agent
development and deployment to transform enterprise workflows.

Getting AI into the hands of the people so they can experiment, at all classification levels. Giving them armies of robot agents to compound their labor and learning. Using AI to speedrun mundane bureaucratic processes. This is what enterprise autonomy actually looks like, and OSD is laser focused on achieving it.

It’s hard to say where these projects will lead, of course. I suspect some will succeed, others will fail. But that’s the point. The Department of War is identifying problems and trusting its people to find the best way to solve them using novel technology. It’s embracing bottom-up innovation. It’s saying “bring on the revolution.”

What’s equally exciting is that Secretary Hegseth has clearly learned lessons from the Pentagon’s past and has structured his reforms accordingly.

The AI acceleration strategy acknowledges that “the person is the program.” Cameron Stanley, the new Chief Digital and Artificial Intelligence Officer, will oversee the strategy in conjunction with the new, single CTO of the Department of War, Emil Michael. Each of the Pace-Setting Projects will have a single lead, with full control and full accountability for outcomes. We know there are new Rickovers, Schrievers, and Boyds in the Pentagon. Now we’ll find out who they are. This is their chance to rise to the occasion.

Just as we’ve seen in other aspects of this administration’s acquisition policy, the AI strategy embraces the need for speed. The great inhibitors of speed in the Department of War are the thousands of invisible non-statutory rules, regulations, and processes inside the department itself. So the strategy establishes a “Barrier Removal Board” that will meet every month to hear from the people in the implementation trenches about what’s stopping them from succeeding. And the board is empowered to bulldoze obstacles, not just study them. Instead of creating an oversight layer to say ‘No’ to the builders, this one exists to say ‘No’ to the bureaucracy.

Secretary Hegseth is taking a big swing here. He has produced a strategy that meets the moment and recognizes the stakes of success and failure. As I noted last month, the choice we face is whether the technology of the future will advance freedom and human flourishing or tyranny. Secretary Hegseth clearly understands this stark reality:

The question before us is not whether or not the most powerful technologies of this century will reinforce free societies. Is it going to reinforce our free societies, or will that technology be shaped and twisted by malign regimes that seek to use those technologies for control and coercion?

We’ve moved beyond comprehension to action. This strategy has the ambition to overhaul the Pentagon for the AI age: a full gut renovation, not a shiny coat of paint on the old system. Now we have to execute.

Just seven months ago, I announced the first cohort of the American Tech Fellowship (ATF).

Now ATF is back. New year, new cohorts—same mission. And I’m especially excited about our first opportunity of the year. Now through February 2, Palantir invites all veterans to apply for a new mission in the AI age: the American Tech Fellowship for Veterans (ATF-V).

I founded the American Tech Fellowship last year to identify and unlock talent that other companies ignored: builders with unconventional resumes. Patriots who want to use AI to strengthen the country... not to flood it with slop and other digital opiates.

ATF is about creating the cadres for America’s comeback—and it’s been a smash success. Thousands have applied. Two cohorts of American Tech Fellows have graduated after intensive training on Palantir’s Foundry and Artificial Intelligence Platform. They’ve participated in hackathons in Detroit. Heard from top leaders and engineers at Palantir. Made invaluable friends and business partners in their cohorts. The best have even landed jobs at Palantir and our customers.

Our ATF cohorts already have been packed with veterans, and it’s obvious why. They’re down with the mission. They’re not afraid of hard quests. And they know viscerally that having the best technology can be the difference between mission success and failure—sometimes the difference between life and death.

So now we’re launching an ATF cohort just for military personnel: veterans, active-duty, reservists—all those who have served. The cohort will have ~50 spots for a 12-week virtual training course taught by elite Palantirians. Top graduates will have a chance to interview for jobs at Palantir and our customers on the front lines of implementing AI in critical industries like defense, healthcare, and manufacturing.

America’s warfighters are the best in the world and AI is the most powerful tool in the world. Combine the two and the result will be a renaissance for this country. ATF-V is about unleashing that revolution.

Will you be a part of that mission?

Applications for the American Tech Fellowship for Veterans run through February 2. The fellowship begins March 2, 2026. Learn more, share with veterans you know, and APPLY today.

The science of today is the technology of tomorrow. Many people are afraid we will be attacked by China. I am not free of such worry. But I do not think this is the most probable way in which they will defeat us. They will advance so fast in science and leave us so far behind that their way of doing things will be the way, and there will be nothing we can do about it.

Every year without war is a benefit for all mankind. But the Chinese can conquer us without fighting, through a growing scientific and technological preponderance. Already today we are beginning to have some global control over the forces of nature. Throughout the world we already are beginning to change conditions. The planet will become smaller and smaller. What one country’s technology is doing will obviously more and more affect other countries. If the Chinese go ahead faster than we do in this direction, then we will be just helpless. If we are not able to use our freedom in the direction of accelerated progress, and if the Chinese use their tyranny in this direction, they will win.

Maybe you’ve already guessed: the words above were originally spoken about Soviet Russia, not China. They come from Edward Teller, the father of the hydrogen bomb and one of the twentieth centuries’ greatest heretical heroes. Teller was speaking in 1957 about the very real threat that Russia posed to America’s technological primacy and way of life.

The Soviets had just sent Sputnik into orbit, demonstrating that they could launch a beeping metal ball into space. And if the Soviets could launch a ball, Teller and other scientists knew it was only a matter of time before they could launch a nuclear weapon. America had to mobilize once again to develop the same capability in order to avoid a world dominated by the communists through nuclear overmatch. And it did.

Before the decade was through, America’s first ICBM—Convair’s Atlas missile—was in the field. Within five years, America had a nuclear trifecta as its ultimate deterrent and last line of defense.

Not only that: America had a successful spy satellite program, CORONA, to put eyes on the Soviet arsenal at all times. And it had a civilian space agency, NASA, to oversee manned spaceflight and the Moon mission.

America played a wild card, too: it developed a brand new technology (the microchip) that launched a Digital Revolution, exposed Russian science and technology as uncompetitive, and hammered a nail in the coffin of the Evil Empire.

The speed and scale of these accomplishments are staggering to contemplate. They were possible because America’s approach to innovation was nothing like the Soviets’. Yes, America’s mobilization had direction from the top and plenty of public support. But money isn’t magic, and rulers can’t simply wave a wand and produce innovation.

The X factors were other things. For starters, America had the world’s best people at every level of society: truly elite-level scientists like Teller’s “Martians” and Von Braun’s Germans, plus a massive industrial labor force of American workers with skills forged in the ultimate crucible of the Second World War. And that’s not all. America also had patriotic capitalists, fiercely competitive companies, and a Pentagon that welcomed those things instead of crushing them.

As Madeline Hart and I relate in our forthcoming book, Mobilize, CORONA spy satellites were built by great American companies like Eastman Kodak and General Mills, which served commercial and defense markets alike. The Polaris and Minuteman missiles were fielded so quickly because of competition among program managers and contractors alike. The semiconductor industry, meanwhile, was nurtured in its infancy by defense contracts but exploded in scale and sophistication when it made contact with the commercial market. The American Spirit of capitalism and competition was the jet fuel that ignited rapid technological progress, as well as serendipitous breakthroughs that no planner foresaw on either side of the Iron Curtain.

I relate these stories, and Teller’s quote, because America has to perform comparably difficult feats at comparably breakneck speeds today. Great causes are on the move again in the world. Cold War II is on, the AI race has begun, and 2027 is right around the corner. China is building landing craft suitable for an invasion and sending its navy—the largest in the world by hull count—deep into the Pacific on maneuvers. This competition spans all frontiers, from biotechnology to telecommunications to advanced manufacturing to space itself, where China is working to erode our lead in a new space race. America has to mobilize again and use our freedom in the direction of accelerated progress, or live in a world shaped by the Chinese Communist Party and its tyranny.

There’s no sugarcoating it: this is an even greater challenge than the one that Teller and his generation confronted. After all, Russia’s economy was half the size of America’s. Our populations were roughly the same. Russia’s command-and-control system was capable of brute-force development, but it had none of the genius of America’s capitalist system.

Communist China is a more capable and dangerous enemy by far. It has a larger economy than the United States, adjusted for purchasing power. It has four times as many people (and is exploiting American surrogates and reproductive technology to create more). It has one-third of the world’s manufacturing and even larger shares of defense-critical manufacturing of metals, ships, cars, and much else. It has world-class research institutions and technology clusters like Shenzhen that are dynamic, bustling, and innovative. Like a chimera, the CCP has adopted some of the best aspects of capitalism and competition in service of its tyrannical vision for the future. We underestimate this new enemy at our peril.

It’s a daunting challenge, but I believe we can meet it. There’s a new sense of urgency in Washington, from the Department of War’s accelerating reforms to initiatives like the U.S. Tech Force, Pax Silica, and the Genesis Mission—a national effort “comparable in urgency and ambition to the Manhattan Project,” which Teller himself helped lead and that became the foundation for the Department of Energy and its national laboratories.

The parallels are intentional and profound.

The Genesis Mission’s aims are especially audacious: double the productivity of American science and engineering within a decade by harnessing AI to accelerate discovery. It will unite the seventeen national laboratories—the crown jewels of American scientific infrastructure—with leading universities, pioneering companies, and the government’s vast stores of research data and supercomputing power. The ultimate goal is to build a “scientific instrument for the ages” that can reason, simulate, and experiment at speeds no human researcher could achieve alone.

The scope is breathtaking: fusion energy, advanced nuclear reactors, quantum computing, new materials for defense, grid modernization, biotechnology, and more. These are precisely the domains in which China is racing to overtake us. As Secretary of Energy Chris Wright put it: “Throughout history, from the Manhattan Project to the Apollo mission, our nation’s brightest minds and industries have answered the call when their nation needed them. Today, the United States is calling on them once again.”

The Genesis Mission explicitly acknowledges that we are “in a race for global technology dominance” against China. It understands that the revolution in AI and computing will determine which civilization’s values shape the coming century.

Teller and most of the old Cold Warriors are gone. Their example can inspire us, but it can’t save us. We have to put in the herculean work so that technology continues to serve America and our way of life.

The good news as 2025 comes to a close: we know the stakes, we have a mission, and the work is well underway.

Daryl Wieland is Senior Director of Partnerships at Palantir and an Adjunct Professor of Finance at George Mason University.

What is rewarded is repeated. For over a century, much of federal government contracting has rewarded the wrong behaviors and activities contrary to taxpayers’ wishes, resulting in wasted resources and missed schedules under activity-based contracts. Efficiency is punished, innovation discouraged, and effectiveness ignored.

Rather than a measurement or management problem, this is an incentive problem. When success means billing more hours instead of delivering results, failure becomes profitable. Contractors earn millions producing activity, not outcomes, while accountability drowns in timesheets and compliance theater.

The Dirty Little Secret

Many vendors are terrified of being paid for results. They’ve built business models on activity, not outcomes, preferring the certainty of activity-based billing to the accountability of performance-based pay.

The issue with activity-based contracting is summed up well by Upton Sinclair’s famous quote: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Outcome-based contracting highlights companies that create value. Instead of paying for hours, the government shares the value created with contractors who deliver it. This aligns contractor success with taxpayer benefit.

Still, success requires rigorous measurement of key metrics and contract structures that reward results.

It Can Be Done

A handful of examples, specifically in performance-based logistics (PBL) contracts, prove outcome-based contracting works.

For example, the C-17 Globemaster III represents one of the most celebrated PBL success stories in military aviation contracting. Beginning in 2002, the Air Force partnered with Boeing under the “Globemaster III Sustainment Partnership” (GSP), transitioning from traditional spare parts procurement to a comprehensive PBL arrangement. Under this contract, Boeing assumed responsibility for achieving specific aircraft availability rates rather than simply delivering parts and services.

The result was remarkable: mission-capable rates consistently exceeded 85%, often reaching above 90%, while significantly reducing the total cost of ownership. The C-17 PBL demonstrated how aligning contractor incentives with operational outcomes—paying for readiness rather than transactions—could transform sustainment performance. Boeing integrated supply chain management, depot maintenance, and engineering support into a seamless operation that adapted to the Air Force’s global mission demands, proving that industry could effectively manage complex weapon system sustainment when properly incentivized.

Similarly, The HH-60 Pave Hawk, the Air Force’s combat search and rescue helicopter, achieved PBL success through Sikorsky’s comprehensive sustainment contract beginning in the mid-2000s. This arrangement consolidated multiple legacy contracts into a single performance-based framework in which Sikorsky guaranteed aircraft availability rates while managing the entire supply chain and maintenance pipeline. The HH-60 PBL reduced supply response times dramatically, improved parts availability, and increased mission-capable rates while providing cost predictability for Air Force budget planners.

Both the C-17 and HH-60 programs demonstrated critical PBL success factors: clear performance metrics tied to warfighter needs, appropriate risk-sharing between government and contractor, access to technical data and reliable funding, and a cultural shift from adversarial oversight to collaborative partnership.

These programs became textbook examples taught at defense acquisition schools, proving that PBL could deliver superior readiness outcomes while controlling costs when implemented with well-structured contracts and committed partnerships.

Unfortunately, these examples are dated and few and far between.

How It Could Work

Outcome-based contracting needs rigorous measurement. Using decision analysis and quantitative methods, project value estimates can be made before completion and implemented in outcome-based payments. Here’s how:

1. Define the Real Decision

Instead of “Should we hire a firm to reduce improper payments?”, ask “How do we structure incentives to maximize improper payment reduction while minimizing false positives and administrative burden?”

Next, identify relevant factors such as baseline rates, current costs, industry benchmarks, vendor capabilities, and risk tolerance. Then define clear, measurable metrics that achieve your desired outcomes.

2. Quantify Uncertainty

Outcome-based contracts require accurate baselines. Use probability distributions, not point estimates. Account for real-world variability and correct for the all-too-common overconfidence of experts by having them attend calibration training. This simply means that when the expert says they are 90% confident about their estimate, the outcome is within their range nine out of ten times.

Early measurements update uncertainty about net benefits. These distributions have computable monetary value, the basis for outcome payments even when true results won’t be known for years.

3. Measure What Matters

Most programs measure the wrong things. The most uncertain variables get ignored while less meaningful metrics receive attention because they are easy to measure.

Calculate which metrics drive the value creation. Prioritize variables with highest impact on government outcomes. Often, overlooked variables are harder to measure but matter most.

4. Structure Risk-Informed Contracts

Model various outcome-based structures and compare expected results. Plan multiple scenarios, from modest success to breakthrough performance. Then ensure structures align with an agency’s risk appetite.

Illustrative Example: Improper Payments Prevention

Note: actual results may vary based on the variables for the specific use case.

Traditional activity-based approach: Pay $5 million annually for detection services and reports.

Outcome-based approach: Structure compensation to reward prevention and recovery while minimizing legitimate claim delays.

1. Define the real decision by focusing on improper payment prevention, not just detection. Start with the end in mind by determining the desired end goal or achievement. Keep focus on outcomes and avoid activity-based distractions.

2. Quantify uncertainty by using probability distributions to baseline the entire solution lifecycle. Point estimates are insufficient.

3. Measure what matters by finding the variables that impact the outcomes. Pressure test the assumptions that the models are based on. For instance, if “time to detection” is found to be four times as valuable as “total detection rate,” and “prevention accuracy” is eight times as valuable as “recovery rate,” then the contract incentives needed to focus on the time to detection and prevention accuracy variables.

4. Structure risk-informed contracts by modeling various scenarios where the range of outcomes inform leaders as to what they can expect given the current assumptions.

Projected Results (Illustrative):

• Conservative: 25% reduction saves government $47M, contractor earns $4.2M

• Expected: 45% reduction saves government $88M, contractor earns $7.8M

• Breakthrough: 65% reduction saves government $129M, contractor earns $11.4M

Implementation Challenges

Outcome-based approaches require more upfront effort than activity-based approaches in order to structure them correctly and define the right metrics. Here are some of the more common additional challenges and how to address them:

• Gaming the system: It is human nature to find the path of least resistance. To combat this, statistical process control, independent baseline verification, and automated anomaly detection can be implemented.

• Attribution: As we all learned in Stats 101, correlation is not causation. Design measurement systems can be used to isolate the contractor contributions, as well as controlled testing with treatment and control groups.

• Resistance: Bureaucratic culture also needs to be addressed, as anything new is usually met with a healthy level of skepticism. Demonstrate that well-designed outcome-based contracts are lower risk than activity-based arrangements, as the contractor only gets paid when the agency receives the desired outcomes.

The Path Forward

• Immediate: Select high-impact pilots and calibrate your experts to include training the team in quantitative methods.

• Medium-term: Develop contract templates to capture and improve on what has worked well and cultivate capable vendors that deliver.

• Long-term: Shift from compliance-focused to outcome-focused culture and establish government-wide standards for outcome-based contracts.

Conclusion

Outcome-based contracting offers an escape from the dire incentives of activity-based contracting. However, it requires an upfront investment to identify desired outcomes and establish data-driven decision making.

By applying actuarial science and decision theory, agencies can implement outcome-based contracts with confidence, knowing metrics are statistically sound and structures align with their documented risk tolerance.

The result is a contracting approach that truly aligns contractor incentives with taxpayer interests, not through wishful thinking or regulatory mandates, but through the rigorous application of decision science and economic analysis. For agencies ready to move beyond paying for effort, compliance, or hours, this is the roadmap to driving outcomes.