The Defense Department is being directed to adopt special contracting pathways for rapidly acquiring software, according to a new memo from Defense Secretary Pete Hegseth.
“The Department of Defense (DOD) has been slow to recognize that software-defined warfare is not a future construct, but the reality we find ourselves operating in today,” he wrote.
While commercial industry has “adjusted to a software-defined product reality,” Hegseth wrote, DOD “has struggled to reframe our acquisition process from a hardware-centric to a software-centric approach.”
Getting there, the defense secretary said, must begin with broad adoption of existing authorities that have yet to be widely used.
Hegseth, therefore, is directing all DOD components to adopt the streamlined Software Acquisition Pathway (SWP) as the “preferred pathway for all software development components of business and weapon system programs in the Department.”
The SWP is used across the department but the office of the under secretary for acquisition and sustainment will now work with the Defense Innovation unit to pair it with novel contracting instruments like the Other Transaction Authority and Commercial Solutions Opening to streamline procurements.
Hegseth's memo directs "the use of Commercial Solutions Openings and Other Transactions as the default solicitation and award approaches for acquiring capabilities under the SWP.”
The directive applies to any software pathway program in the planning phase prior to execution.
“When it comes to software acquisition,” Hegseth wrote, “we are overdue in pivoting to a performance-based outcome and, as such, it is the Warfighter who pays the price.”
DIU will be responsible for developing and submitting an implementation plan within the next 30 days.
Senior defense officials who briefed reporters on the initiative under the condition of anonymity said DIU is likely to experience an “uptick” in requests for assistance from the contracting officers of other DOD components who are not as experienced using the OT/CSO contracting tools. But the implementation plan, they said, will address the DOD-wide training of contract officers. In the meantime, however, they said that “uptick” in demand could lead to additional resources or staffing at DIU.
“One of the biggest changes is using flexible contracting tools, CSO and OTs, to speed up acquisition,” one official said. “And the reason this works better is instead of spending years writing detailed requirements and going through a rigid, one-size-fits-all process, we can tap into the best tech available right now, prototype it fast and get it to the field quickly if it works. Bottom line -- we are cutting out middlemen. Software companies make software. We're going to buy software form software companies.”
Another official said DIU has experienced success with the approach in the secretive Replicator program, which aims to have multiple thousands of autonomous drones fielded by August.
DIU, the official said, has used a combination of the Software Acquisition Pathway, an OT and a CSO to put three vendors (Swarm Aero, Anduril Industries, and L3Harris Technologies) on contract for Replicator’s Autonomy Collaborative Teaming (ACT).
“From putting that out there to us making the award, it took us 110 days, which is much faster than sort of the traditional way of putting out a solicitation and making those awards,” the official said.
The new directive also aims to lower the barriers for non-traditional defense contractors who might be unable to respond fully to a typical government solicitation.
One official said DIU has awarded more than 500 OTs using the Commercial Solutions Opening tool, with 88% going to non-traditional vendors and 68% going to small businesses.
“The hard work to implement begins now," the official said.