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During World War II, the United States unleashed free market mavericks to solve our hardest industrial challenges and build a war machine that proved to be the engine for the Allies’ victory. This machine served us well through the Cold War, but in the past 30 years, it stalled.
Today, we face a risk of losing our next major war, not for lack of courage or ingenuity, but because of a broken defense acquisition system riddled with bureaucratic sclerosis.
Americans constantly read headlines about growing threats and potential conflicts as our adversaries innovate rapidly. Meanwhile, our defense industrial base is tied down by regulations built for a bygone era.
A 2024 congressional report makes clear America is facing its most serious global threats since the Second World War, and we are woefully unprepared to meet the demands of a great power conflict.
FIDDLING WHILE ROME BURNS: AMERICA IGNORES CHINA’S RISING RED TIDE
While China spent two decades growing its military, the United States lost its industrial edge, surrendered risk tolerance and emphasized process over outcomes. The result is a constrained system that produces too little material, too slowly and in decreasing quality.
Reports suggest the U.S. could exhaust our long-range, anti-ship missile supply in as little as a week of conflict with China. The Pentagon takes almost 12 years to deliver the first version of a new weapons system. Our troops even use decades-old radio systems – what if you used a decades-old cellphone?
Years of rigid regulations have dwindled our once formidable, agile industrial base into a lumbering bureaucracy that fails to meet the needs of our warfighters and our national security interests.
Reforming the way we develop, produce and deploy weapons in the 21st century is not an option; it’s an imperative.
THE PENTAGON NEEDS MAJOR REFORM. NOW IS OUR CHANCE
To maintain agility and deterrence, we must supercharge our military industrial base by incentivizing the best private sector actors to invest in defense technology and manufacturing. Let them, not the government, drive the process to innovate, iterate and scale the latest capabilities. We don’t need more companies making dating apps and yoga pants; we need businesses built to secure America’s future.
Forty years ago, many of America’s greatest companies had healthy defense and commercial divisions which created cross-pollination between commercial and government innovation. Now, they are beholden to a byzantine contracting structure that, throughout the 1990s, boiled our defense industrial base down to a small sect of companies that only contract with the government and deters commercial companies from participating in defense industry initiatives.
That’s why we support the Dynamic Tech Defense Reform initiative in this year’s National Defense Authorization Act (NDAA) to break inertia, overhaul the incentive structure that favors a handful of entrenched contractors, and empower new, innovative entrants into our defense industrial base.
CHINA IS EXPLOITING OUR GOVERNMENT’S TECH WEAKNESS. WE NEED A RAPID REBOOT
While the traditional primes are often villainized for their role in the stagnation of our defense acquisition, the truth is they are what the Pentagon has made them.
Decades of systemic inefficiencies have created the paradigm we see today. The FY 2026 NDAA takes important steps to address these problems.
First, the NDAA’s “commercial first” model champions speed and agility, requiring Pentagon acquisition officers to prioritize commercial options over costly, bespoke development programs. This can save us years in development and billions in taxpayer dollars.
Second, by narrowing requirements in contracting to only those required by law, the FY 2026 NDAA opens doors to a multitude of innovative businesses, big and small, who can participate in the defense industrial base. This will save costs and strengthen supply chains by ensuring we aren’t reliant on a pool of subcontractors so small that our most critical components for military equipment have only one, maybe two, suppliers.
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Finally, by reforming how the Department of War values past performance, Congress is ending the tyranny of incumbency at the Pentagon. The War Department currently favors entrenched contractors over newer startups – even those that offer superior solutions. Making this change will level the playing field with a focus on competition and improvement instead of a “don’t rock the boat” mentality.
These reforms will ensure our defense industrial base is vibrant and able to produce and iterate quickly – a requirement for modern warfare. Take the war between Ukraine and Russia, for example. That conflict consumes thousands of drones, missiles and bombs per month. The U.S. struggles to make that many in a year.
Quantity has a quality all its own. We must ensure we are able to not just produce weapons and materials quickly, but re-fit, re-tool and redeploy them just as fast.
The United States simply cannot afford to wait until the next war starts to fix our broken acquisition system. We cannot sacrifice our national security on the altar of bureaucracy.
The time is now for Congress to reinvigorate our defense industrial base to meet the demands of the 21st century. Let’s get to work.
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Katherine Boyle is a general partner at Andreessen Horowitz and co-lead of its American Dynamism practice.
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