Pentagon Memo Creates Unified Tech Enterprise for Acquisition Modernization

As part of War Secretary Pete Hegseth’s push to overhaul technology acquisition, the Pentagon released new guidance formalizing a restructuring of agencies and new processes to collapse acquisition timelines, streamline requirements and strengthen industry partnerships.

“Mission command governs this ecosystem: we set intent, set priorities, remove blockers and hold leaders accountable for measurable outcomes,” Hegseth wrote in the “Innovation Ecosystem” memo. “Every organization in this ecosystem will strive to deliver warfighting advantage faster than our adversaries can adapt.”

The reorganization centers on a new Warfighting Acquisitions System and a revamped requirements process intended to replace legacy structures that Hegseth has criticized in recent speeches as slow, risk-averse and disconnected from operational needs. The reforms include establishing the Requirements and Resourcing Alignment Board to directly link funding to top warfighting priorities, creating the Mission Engineering and Integration Activity to accelerate experimentation and prototyping, and standing up a Joint Acceleration Reserve to help promising technologies cross the valley of death.

Fielding Tech Faster

According to the department’s new implementation plan, the goal is to “rapidly accelerate the fielding of capabilities” by empowering program leaders, reducing bureaucratic layers and prioritizing commercial solutions wherever possible. The Pentagon also plans to award longer‑term contracts for proven systems to stabilize demand signals and encourage industry investment in production capacity, the document reads.

“Some efforts will take years. We will sustain them where the outcome justifies perseverance — and terminate them where it does not,” Hegseth wrote in the memo.

As part of the department’s next phase of GenAI.mil, Hegseth announced that the Pentagon has added xAI’s Grok – run by former government special employee and SpaceX chief Elon Musk — will go live as part of GenAI.mil’s suite.

“I want to thank you, Elon, and your incredible team for leaning forward with us on this as well,” Hegseth said during a speech at a SpaceX plant in Starbase, Texas, on Jan. 12 as part of his “Arsenal of Freedom” tour. “Very soon, we will have the world’s leading AI models on every unclassified and classified network throughout our department, long overdue.”

Organizing the Department for Innovation

Hegseth also appointed DOW’s Under Secretary of Defense for Research and Engineering (R&E) Emil Michael as the department’s first “single Chief Technology Officer” for the entire enterprise. In the role, Michael will set unified technical direction and eliminate the “alphabet soup of councils” that have historically delayed progress, according to Hegseth.

Additionally, the reorganization codifies the reorganization of DOW organizations under Michael:

• Chief Digital and Artificial Intelligence Office (CDAO)
• Defense Advanced Research Projects Agency (DARPA)
• Defense Innovation Unit (DIU)
• Office of Strategic Capital (OSC)
• Strategic Capabilities Office (SCO)
• Test Resource Management Center (TRMC)

“We are rolling out the red carpet for innovators who want to work with the War Department,” said Under Secretary of Defense for Research and Engineering (R&E) Emil Michael in a statement. “This new structure creates a stronger identity for our innovation ecosystem and gives industry a more direct path to move technology into the hands of the American warfighter.”

Hegseth said that the changes will allow “game-changing technology, scalable products, new ways of fighting” to flourish.

“The CTO, DIU, SCO, DARPA, CDAO and OSC are no longer a loose federation. They are the office of the Secretary of War’s innovation operating system,” Hegseth said in Texas on Jan. 12. “DARPA delivers game changing technology, innovation and strategic surprise. DIU delivers scalable products. SCO delivers new ways of fighting. And CDAO and OSC provide the data, test and capital to move at wartime speed.”

West Named New DIU Director

The Pentagon also appointed Owen West as the new director of DIU. West is a former Marine Corps officer, partner at Goldman Sachs and part of Musk’s Department of Government Efficiency team at the Pentagon.

“Owen will bring a warfighter’s mentality to DIU’s core mission of transitioning technology to our troops,” Hegseth said during his Texas speech. “Owen also has the private capital experience needed to ensure DIU remains working hand in glove with the venture and investor communities and continues to onramp new entrants into the War Department. Owen led DOGE at DOW, the most effective DOGE effort across the administration, saving tens of billions of dollars for our department, and now he will lead DIU.”

By institutionalizing DIU’s “commercial-tempo execution,” the Pentagon aims to move beyond peripheral experiments and make rapid technology adoption a fundamental part of the military’s DNA, according to a DIU statement. DIU will remain the centerpiece of the innovation ecosystem under West.

‘Speed to Capability’

The reorganization and acquisition changes are part of Hegseth’s broader transformation agenda rebuilding the nation’s “arsenal of freedom.” In a November speech, Hegseth argued that the Pentagon must fundamentally rethink how it buys, builds and fields military capabilities in order to deter increasingly aggressive adversaries.

“Our objective is simple: transform the entire acquisition system to operate on a wartime footing,” Hegseth said in November. “We must wage an all‑out campaign to streamline the Pentagon’s process, to unshackle our people from unproductive work and to shift our resources from the bureaucracy to the battlefield.”

The reforms emphasize the defense industrial base, which Hegseth said must be capable of rapidly scaling production in a crisis. The strategy calls for closer partnerships with commercial manufacturers, expanded use of multiyear contracts and regulatory reforms to reduce barriers to entry for new vendors.

“In modern warfare, the fastest innovator and iterator will be the winner, and no one can out innovate an American entrepreneur who has been liberated from the constraints of stifling bureaucracy. That old era ends today,” Hegseth said in Texas. “We are done running a peacetime science fair while our potential adversaries are running a wartime arms race.”