The Department of Defense is moving from rigid, program-specific contracts to a portfolio model. New Portfolio Acquisition Executives can now reallocate funds from underperforming projects to more promising startups mid-stream, rewarding agility and results over incumbency.

Congressional appropriators hate program changes or cancellations because it forces them to admit to their constituents that a previously funded project failed. This political pressure creates powerful inertia, forcing the military to continue with suboptimal programs and preventing agile shifts in resource allocation.

The nearly trillion-dollar US defense budget is misleading. The vast majority is locked into fixed costs like salaries, facilities, and sustaining legacy systems. The actual procurement budget for new technology is at a historic low as a percentage of GDP, constraining modernization.

A singular, massive cash infusion into the defense budget encourages buying more of today's systems, filling order books for weapons with built-in obsolescence. This approach creates a short-term 'sugar high' but fails to fund the adaptive industrial infrastructure needed for future conflicts, ultimately leading to a less capable force.

Frank Kendall argues that criticism of defense primes is misplaced. The defense industrial base builds what its customer, the Department of Defense, asks for. To get cheaper, simpler, and more innovative products, the services must change their requirements and demand them. The problem lies with the customer, not the supplier.

A reform-minded leader can create ad-hoc teams and force collaboration between operators and technologists. However, these changes are often temporary. Once the leader departs, the military's established cultural norms and organizational structures, like powerful four-star commands, tend to reassert themselves, erasing the progress.

The Department of Defense (DoD) doesn't need a "wake-up call" about AI's importance; it needs to "get out of bed." The critical failure is not a lack of awareness but deep-seated institutional inertia that prevents the urgent action and implementation required to build capability.

The defense procurement system was built when technology platforms lasted for decades, prioritizing getting it perfect over getting it fast. This risk-averse model is now a liability in an era of rapid innovation, as it stifles the experimentation and failure necessary for speed.

When complex situations are reduced to a single metric, strategy shifts from achieving the original goal to maximizing the metric itself. During the Vietnam War, using "body counts" as a proxy for success led to military decisions designed to increase casualties, not to win the war.