Modernizing Defense Acquisitions and Spurring Innovation in the Defense Industrial Base: Executive Order 14265

As there are terms in this post that are new to some, links to other posts will be inserted to help explain the processes to which this Executive Order refers. Namely, The Defense Acquisition System (DAS) and the Adaptive Acquisition Framework (AAF) will be more defined in additional posts. Recall, that at the Senate Armed Services Committee confirmation hearing to confirm Lt. General Caine, Senators at that committee were indicating a strong preference for the Department of Defense (DOD) to move more quickly toward advances in the military through innovation and procurement. This Executive Order pushes that goal in streamlining DOD acquisitions and doing away with “unnecessary or redundant regulations or policies.”

  On April 9, 2025, President Trump signed Executive Order 14265—Modernizing Defense Acquisition and Spurring Innovation in the Defense Industrial Base. Federal Register Doc. 2025-06461. Section Two of the EO sets forth the policy reasons behind the EO is to (1) “rapidly reform our antiquated defense acquisition processes with an emphasis on speed, flexibility, and execution;” and (2) “modernizing the duties and composition of the defense acquisition workforce, as well as incentivize and reward risk-taking through these personnel.”

  The policy will be implemented by the Secretary of Defense submitting a plan within 60 days to the President to reform the DOD’s acquisition that to expedite incorporates the following elements:

·       First Preference—Commercial Solutions;

·       General Preference—Other Transactions Authority (contracts other than standard procurement contracts, grants, or cooperative agreements) [Practioner’ s Note—OTA explained here: https://www.acq.osd.mil/asda/dpc/cp/policy/docs/guidebook/TAB%20A1%20-%20DoD%20OT%20Guide%20JUL%202023_final.pdf ];

·       Application of Rapid Capabilities Office policies (Rapid Capabilities Office—RCO—is a specialized office within the military branches—that bypasses traditional, lengthy acquisition processes to deliver capabilities faster—generally thought of as rapid material development and delivery to meet immediate, near-term, and mid-term military needs ); [Practioner’ s Note—here is a link to the Air Force’s RCO: https://www.af.mil/About-Us/Fact-Sheets/Display/Article/2424302/rapid-capabilities-office/ , here is one for the Marines’ RCO https://www.mcwl.marines.mil/Divisions/RCO/ ]

·       This shall be done under the Adaptive Acquisition Framework—AAF—(and its six tenets with the mission to “Enable Execution at the Speed of Relevance”); [Practioner’ s Note—here is a power point on how AAF works-- https://www.acq.osd.mil/asda/dpc/api/docs/031523%20-%20AAF%20Edu%20Session%20Briefing%20Deck.pdf ]

·       A detailed process review of each functional support role within the acquisition workforce to eliminate unnecessary tasks, reduce duplicative approvals, and centralize decision-making.

o   These reviews should also include evaluations of program managers, contracting officers, engineering authorities, financial managers, cost estimators, and logisticians.

·       Review Internal Regulations—eliminate or revise unnecessary supplemental regulations or internal guidance. Promote streamlined acquisitions.

·       Timeline—120 Days for Secretaries of Army, Navy, Air Force and Composition Acquisition Executives shall submit to the President plans to carry out the EO including the following:

o   The restructuring of performance evaluation metrics for acquisition workforce members to include the ability to demonstrate and apply a first consideration of commercial solutions, adaptive acquisition pathways through the Adaptive Acquisition Framework, and iterative requirements based on the perspective of the end user. [Practioner’ s Note—this emphasis on performance evaluation of workforce members is a reoccurring theme through most EOs dealing with procurement.]

o   The establishment of field training to provide “hands-on guidance” deliver templates as well as the development and implementation of policies, procedures to take measured and calculated risks.

·       Timeline—Within 90 days Secretaries of Army, Navy, Air Force and Composition Acquisition Executives shall complete a comprehensive review of all major defense acquisition programs.

o   any program more than 15 percent behind schedule based on the current Acquisition Program Baseline (APB), 15 percent over cost based on the current APB, unable to meet any key performance parameters, or unaligned with the Secretary of Defense's mission priorities, will be considered for potential cancellation.

This Executive Order does several key things: (1) it points to streamlining acquisition for the warfighters through programs already established—and must be current on the procurement/contract goals; (2) evaluation of personnel and ability to meet goals; (3) evaluation of contracts and the overall goals of the DOD; and (4) defining functionality of some programs and policies—or at least defending or getting rid of them. This EO also establishes critical timelines for adhering to these goals—60, 90, and 120 days—a time in which many companies may be asked to justify why there is a delay in time or an increase in cost of contracts that may be ripe for cancellation or simply face cancellation. This EO is coupled multiple other EOs revisiting the procurement processes as well as the overhaul of the FAR—commonly known as FAR 2.0. This EO again emphasizes that for every regulation promulgated there must be ten eliminated. A company may be well-served by revisiting the performance level of DOD contracts and preparing to take affirmative action during this DOD evaluation period.