Memo To Congress: Pass The FoRGED Act

The Race Is On

On Inauguration Day, the Chinese company DeepSeek introduced R1, an AI large language model demonstrating China is close to the United States lead in AI. Like many commercial technologies today, that the U.S. lead is narrow is a national security concern because dual-purpose technologies like AI have military applications. If both the U.S. and China can produce similarly advanced technology, what may be most important is not the introduction of new technology but effectively deploying it across the economy—which includes military acquisition and use. In other words, winning great power competition means staying ahead both in Silicon Valley and through the Pentagon’s acquisition system. The Pentagon must harness American innovation by rapidly and iteratively acquiring and deploying the latest technology.

As the Director of the Defense Innovation Unit in 2018-2022, I saw first-hand that the defense acquisition system itself is one of the biggest inhibitors to improving our national security. But I was also at the forefront of working with America’s innovative companies to share some of the Defense Department’s challenges and enlist the help of tech companies. We had dozens of success stories where we rapidly demonstrated novel commercial technologies meeting operational challenges. The FoRGED Act seeks to adopt the DIU model much more widely to enable greater speed, agility, and innovation.

Fortunately, the incoming Administration has declared that modernizing our forces with newer technologies and reforming the slow pace of defense acquisition will be a priority. Secretary Hegseth affirmed this in his Senate confirmation hearing and no doubt this will be a goal shared by incoming Deputy Secretary of Defense nominee Stephen Feinberg given his private equity experience.

The FoRGED Act…A Way Forward

Opportunely, some outstanding thinking has already been put forward in the FoRGED Act introduced in December, 2024 by Senator Roger Wicker, Chairman of the Senate Armed Services Committee. Key provisions of the FoRGED Act (Fostering Reform and Government Efficiency in Defense) include:

• Cutting Red Tape: Repealing unnecessary regulations and streamlining reporting requirements.
• Unleashing Innovation: Promoting rapid acquisition pathways and commercial contracting.
• Creating Competitive Pressure: Enhancing competition by simplifying qualification and testing procedures.
• Enabling Decisive Action: Empowering Program Executive Officers to make decisions.
• Modernizing Budgeting: Restructuring the budget process for agility and transparency

Sen. Wicker has included key features to change the defense acquisition system which operates much as Defense Secretary Robert McNamara experienced it when he left the Pentagon in 1968. Those key ingredients for change include simplifying regulations and reporting, using commercial methods for procurement, increasing competition, making decisions faster and providing budget flexibility to field new capabilities more rapidly than the average of 17 years under the current system. Some of the most forward-leaning provisions include standardizing commercial procurement processes and contracting, like Commercial Solutions Openings which often leverage Other Transaction Authority. DIU pioneered these rapid, more flexible agreements as an alternative to the complex 3,500 pages of Federal Acquisitions Regulations used in the Defense Department.

Another helpful provision is budgeting and managing portfolios of capabilities rather than managing thousands of individual programs. Budgeting for a portfolio, like small unmanned drones, would allow the military to choose how much of that budget to spend on different types of drones and, for each type, to choose the best model and vendor at that time. In contrast, today, a program for drones would have to be authorized, formal requirements written for each type of drone and be part of a three-year budget cycle for Congressional approval. We saw this go awry when the Army spent a decade and over $500 million on the requirements to procure a handgun. This multi-year process may be suitable for fighter jets but is certainly not flexible nor fast enough for technology where product life cycles are shorter than the federal budget cycle. Instead of the current focus on process compliance, the Pentagon has an opportunity to share our biggest challenges with America’s leading companies—engaging startups and non-traditional suppliers—to fuel competition, build a robust industrial base to support defense, and more rapidly deliver new capabilities to warfighters.

A Generational Investment in Defense….

Sen. Wicker views the FoRGED Act as “an opportunity to maximize the use of public dollars to buy second-to-none weapons systems, adopt new technology faster, and boost competition within the defense industry. I have started a national conversation about making a generational investment.” To make that generational investment, Wicker calls for an increase in defense spending from 2.9% to 5% of GDP which would return defense spending on a relative basis to where it was during the Reagan military buildup of the 1980s.

Defense Spending as a Percent of GDP (1950-2030)

While the $850 billion currently spent on defense is a lot of money no matter how you measure it, most of this funding goes towards the salaries of men and women in uniform, the civilians that support them, and the maintenance of the aging ships, tanks and aircraft in the arsenal. That leaves only about 20% of the budget to procure new capabilities for warfighters. This is the part of the defense budget that must be increased first— especially if our more dangerous world means warfighters are called to defend national interests in the near-term. And most of this 20% for procurement is spent on major weapons systems (aircraft, ships, tanks) first delivered in the last century; more of it needs to be spent on complementary capabilities like drones, commercial satellite imagery, AI software and other newer technologies which are much more cost-effective and can be deployed in one to two years as the Department’s Replicator initiative is proving.

Composition of the Fiscal Year 2025 Defense Budget

….Guarantees “Peace Through Strength”

Sen. Wicker and Rep. Rogers will likely include provisions of the FoRGED Act in the FY2026 National Defense Authorization Act which is the most reliably-passed legislation. While the NDAA doesn’t authorize more spending in itself, its provisions can ensure that what we do spend is spent more effectively. That’s good news for anyone interested in defense acquisition reform but also, more broadly, for all citizens who share an interest in a strong defense. In speaking about national security President Trump has been using the theme “peace through strength” which we associate with Ronald Reagan but shares roots dating back to our first president. In his State of the Union address in 1793, Washington presciently declared, “If we desire to secure peace…it must be known that we are at all times ready for war.” As a deterrent to our adversaries, the FoRGED Act is the most important and sweeping legislation in years to reform defense acquisition. We need it in place as soon as Congress can pass it. Otherwise, an unchanged acquisition process means we are likely to see Chinese technology innovations deployed by the People’s Liberation Army faster and more effectively than we deploy our own innovations.