Is the National Defense Strategy Calling for Acquisition Reform?

The 2022 National Defense Strategy (NDS) connects the vision laid out in the National Security Strategy (NSS) to action for the Department of Defense (DOD). NDS guidance impacts plans for force structure and modernization, including investments in additional systems and the processes for acquiring additional capabilities. Many of the planning constructs laid out in the 2022 NDS are not new challenges since the 2018 NDS. China remains the pacing threat. Russia continues to be a concern, with its unprovoked attack on Ukraine highlighting the importance of working with NATO allies and partners. North Korea and Iran persist as problematic actors, and violent extremist organizations remain a concern.

A close read of the 2022 NDS from an acquisition perspective suggests that there are deep concerns about the existing acquisition system and how it has been postured to meet the threat. There is less recognition of the specific challenges being faced on defense industrial base or on how DOD can work with industry to provide a surge capacity in case of national need.

The 2022 NDS specifies that the current system is “too slow and too focused on acquiring systems not designed to address the most critical challenges we now face.” Why is this an issue? If the acquisition system is not postured to meet the threats in the 2022 NDS, which have not evolved dramatically since 2018, then this leads to two obvious questions: What systems is the acquisition system buying today, and why is it buying them if they are not designed address these challenges? The top 10 defense acquisition major weapon system programs and categories total almost $45 billion. These 10 areas represent significant spending for DOD, and significant investments for the United States. If they are not designed to address the most critical challenges that the United States faces, that is a serious problem.

To address the concern that funds are not being spent in the most effective way, the NDS offers a solution that links the acquisition system with the mission: “We will better align requirements, resourcing, and acquisition, and undertake a campaign of learning to identify the most promising concepts, incorporating emerging technologies in the commercial and military sectors for solving our key operational challenges.” One idea is central to the above, and it can be summarized in one simple loaded phrase with a history of big picture thinking, a frequently renewed push to improve, and promises that have not fully delivered: acquisition reform.

The last several years have seen transformations in the acquisition system that have created new approaches and tools. Innovative acquisition approaches include the Adaptive Acquisition Framework and the increasing use of contracts using the Other Transaction Authority (OTA) approach (although this is being dialed back). While these new tools are promising, it is difficult to ascertain their impact—it may take 8–10 years to see the results of significant reforms, given how long it takes to procure major weapon systems. With the concern offered by Secretary of State Antony Blinken that China has become impatient with the status quo and may be looking to reunify with Taiwan on a faster timeline—perhaps as early as this decade—the question is whether the call for action in the 2022 NDS can generate change to address these challenges rapidly enough to meet the current and future threat.

Another reform underway will address resource allocation challenges. Section 1004 of the National Defense Authorization Act (NDAA) for FY 2022 established the Commission on Planning, Programming, Budgeting, and Execution (PPBE) Reform as an independent advisory committee in the legislative branch. The commission will examine the effectiveness of the PPBE process and adjacent practices of DOD, particularly with respect to facilitating defense modernization. The PPBE process offers the pathway through which military services implement NDS guidance as they balance operational requirements and modernization imperatives. Updating this process has the potential to ensure that new capabilities are delivered at the speed of operational relevance. However, the implicit PPBE assumption is that the plan will drive the program—that investments will be made to ensure that the defense strategy can be executed. In reality there are never enough funds in the defense budget to fully implement the plan, so in a sense, the program actually drives—or constrains—the plan. No matter the significance of the need, it will need to compete with other requirements, creating the need for strategic choices. The top 10 defense programs listed above are the result of such a competition for resources—they represent top priorities that derive from the requirements process and should directly address the nation’s most pressing threats.  

Another gap in the 2022 NDS is consideration of current challenges in the industrial base and the impact this might have on the ability of the industrial base to surge in a timely way. A recent panel of defense industry executives pinpointed the inflationary environment, workforce challenges including issues recruiting new employees in an environment of low unemployment, and persistent supply chain constraints as limitations to manufacturing at scale. This is especially important because of the quantity of weapons that the United States and its allies have sent to Ukraine to defend itself against Russia’s invasion. Rebuilding and enhancing inventories is urgent—and this will be difficult at current production rates and funding levels. The 2022 NDS does call for DOD to “strengthen our industrial base to ensure that we produce and sustain the full range of capabilities needed to give U.S., allied, and partners forces a competitive advantage” which is a strong statement, although lacking in details. It offers one solution: “The Department will act urgently to better support advanced manufacturing processes (e.g., aircraft and ship building, preferred munition production) to increase our ability to reconstitute the Joint Force in a major conflict.” However, advanced manufacturing processes are not the entire solution here. DOD also needs to ensure there is adequate industrial capacity, including ensuring that industry has the incentives to invest in rebuilding that capacity over the long term. And this will be difficult to regenerate given the industrial base challenges that hinder industry today.

As a defense strategy, the 2022 NDS covers the critical strategic issues of the here and now. From an acquisition process and defense industrial base perspective, it opens several important questions, and unless these are resolved, they may impact the ability of the United States to execute its desired strategy.

Cynthia R. Cook is the director of the Defense-Industrial Initiatives Group and a senior fellow in the International Security Program at the Center for Strategic and International Studies in Washington, D.C.

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Cynthia Cook
Director, Defense-Industrial Initiatives Group and Senior Fellow, International Security Program