The Pentagon’s Procurement Revolution: Why Now Is the Time for American Businesses to Engage in National Security Contracts

At the National War College, Secretary of War Pete Hegseth delivered a landmark address outlining the most sweeping transformation of the U.S. defense acquisition system in a generation.

The Department of War's message was clear: America’s defense bureaucracy must move from a peacetime pace to a wartime footing, and the private sector – both inside and outside the traditional defense industrial base – has a pivotal role to play.

Hegseth’s remarks signaled not another reform effort, but a full-scale modernization of the defense procurement infrastructure, designed to unlock innovation, speed, and capacity across American industry. For businesses and investors across sectors, this moment represents the opening of an era of unprecedented opportunity to participate in the federal defense market.

The Vision: From Bureaucracy to Battlefield Readiness

Hegseth’s call to action was both structural and cultural. Citing the Pentagon’s own processes as the “adversary,” he laid out a plan to dismantle decades of bureaucratic inertia that have long slowed defense innovation and procurement. The goal is to shift from process-centered to outcome-centered decision-making, where speed, competition, and mission success guide every single investment.

This transformation builds on a series of recent executive actions and bipartisan legislation designed to overhaul federal procurement and foreign military sales. Together, these initiatives aim to rebuild what Hegseth called the “arsenal of freedom”: an agile, responsive, and resilient defense industrial base that can deter threats, outpace adversaries, and sustain peace through strength.

The Five Core Pillars of Defense Procurement Transformation

Secretary Hegseth outlined five areas of focus that will redefine how the Department of War partners with industry:

1. Stabilizing Demand Signals: Multi-year contracts and longer-term commitments will give companies the confidence to invest in capacity, modernize facilities, and expand their workforce. Predictable demand will attract private capital and reduce dependency on short-term government cycles.

   
   

2. Commercial Solutions First: The Pentagon will increasingly buy off-the-shelf technologies and adapt them for defense applications. This shift opens doors for non-traditional suppliers – from software developers and manufacturers to logistics, AI, and cyber companies – to compete in the federal market.

   
   

3. Empowered Program Leadership: Newly established Portfolio Acquisition Executives (PAEs) will have direct authority and accountability for outcomes, cutting layers of review that previously delayed delivery by years. Contracting officers will be judged by results, not compliance paperwork.

   
   

4. Regulatory Streamlining: The department will roll back excessive Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) requirements, prioritizing speed, competition, and innovation over rigid process. A new “War Fighting Acquisition System” will replace the legacy acquisition framework entirely.

   
   

5. Wartime Production and Industrial Mobilization: Through the creation of the Wartime Production Unit and new “Business Operators for National Defense,” the DoW will embed experts in private industry to drive deal-making, manufacturing optimization, and capital strategy across the defense supply chain.

   
   

Each of these pillars supports one vision: speed to capability. Hegseth emphasized that “an 85% solution in the hands of our warfighters today is infinitely better than a 100% solution years from now.” The Pentagon is deliberately increasing acquisition risk to reduce operational risk, embracing calculated risk-taking as a feature, not a flaw, of the new system.

What This Means for Business Leaders and Investors

For decades, companies outside the traditional defense world have viewed federal contracting as inaccessible, slow-moving, or dominated by a handful of prime contractors. Hegseth’s reforms change that calculus. The Department of War is now explicitly inviting new entrants – from commercial manufacturing and logistics to tech, energy, and AI – to help build the next generation of America’s defense capability.

Key Implications for Industry

1. Expanded Market Entry Points: As the DoW prioritizes commercial products and dual-use technologies, businesses that never considered federal work now have viable pathways into the market. This includes startups, mid-sized manufacturers, and large firms looking to diversify revenue streams.

   
   

2. Stronger Demand Signals for Investment: Multi-year commitments and portfolio-based procurement will create more predictable revenue visibility for defense suppliers. Investors and private equity leaders should view this as an emerging, stable growth sector anchored by national security priorities.

   
   

3. New Standards for Speed and Accountability: The government is moving toward a model that rewards agile performance and rapid delivery. Companies able to demonstrate speed, scalability, and problem-solving capacity will outperform legacy contractors burdened by slower internal systems.

   
   

4. A Shift in Partnership Dynamics: Collaboration will replace compliance as the foundation of industry-government relations. Businesses that actively engage, co-develop solutions, and share risk will find themselves preferred partners in the new defense ecosystem.

   
   

5. Cultural Alignment with Mission and Merit: The Pentagon’s transformation extends to workforce culture. The new Warfighting Acquisition University will train acquisition professionals in decision-making and risk-taking – values mirrored in high-performing private sector teams. Companies that demonstrate a merit-based, mission-focused ethos will align most naturally with the department’s future direction.

   
   

Positioning to Compete: A Strategic Imperative for 2025 and Beyond

This is a rare inflection point for American enterprise. The federal defense market – valued over $800 billion annually – is being reshaped to reward innovation, commercial adaptability, and private investment. Businesses that move early can secure a competitive foothold as the defense procurement landscape reopens to broader participation.

To position effectively, businesses and investors should:

• Map Capabilities to National Defense Needs: Identify where your products, technologies, or manufacturing strengths align with defense priorities such as AI, cyber, logistics, energy, or advanced manufacturing.

  
  

• Understand the Target Market Within Government: Engage with program offices, contracting officers, and acquisition executives early. Align your capabilities to solve their problems. Build fluency in mission language and operational challenges.

  
  

• Craft Messaging Around Pain Points: Speak directly to outcomes – speed, reliability, and resilience – rather than product specifications.

  
  

• Build Strategic Partnerships: Collaborate with existing primes, integrators, or research institutions to accelerate entry, navigate compliance, and scale production.

  
  

• Invest in Compliance and Readiness: Familiarize leadership teams with the new procurement rules, cybersecurity requirements, and complete the simple first steps like registering on SAM.gov.

  
  

The Bottom Line: The Arsenal of Freedom Needs You

Secretary Hegseth’s procurement transformation is not just a bureaucratic adjustment – it’s a call to American enterprise. Every factory floor, lab, and boardroom that can contribute to speed, scale, and innovation now has a role in securing the nation’s future.

For business leaders and investors, there has never been a better moment to enter the defense market. The Pentagon is tearing down its own barriers to make room for new partners. Those who act with urgency, adaptability, and vision will not only grow their businesses but help rebuild the arsenal of freedom that underwrites America’s strength and security.

About Serellium

Serellium is dedicated to making the federal market more accessible for business leaders, founders, and investors.Serellium offers rapid and full-service support to small, medium, and large businesses seeking to enter and expand in the federal contracting market. In a matter of weeks, we position your business for federal contracts by providing a data-driven roadmap tailored to your company and capabilities. This includes an actionable entry strategy grounded in extensive federal market research, refined capability offerings, and a targeted plan to pursue the highest demand and most accessible entry points.

Serellium is on a mission to help businesses brand new to government contracting enter the federal market seamlessly. By leveraging robust market analytics, a methodical process, and a deep understanding of private and government sectors, we're eliminating the barriers that have long plagued the $774 billion-per-year government contracting system. The result? A new era of public-private collaboration that benefits all Americans. 

Book a call with us today to get started or send us a note: info@serellium.com.