Funded via a reconciliation bill with broad definitions, the "Golden Dome" missile defense project lacks a clear plan and rapid contracting. This delay makes its massive budget vulnerable to being reallocated for other purposes, risking an outcome similar to the California high-speed rail—a project with huge funding but little to show for it.
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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.
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.
Decades of adding regulations without subtracting have made the current defense procurement framework unsalvageable through minor adjustments. To achieve necessary speed and efficiency, policymakers must abandon the current system and start fresh, focusing on outcome-based contracts rather than process compliance.
To prevent promising startups from failing from funding gaps—the "Valley of Death"—the DoD actively "crowds capital" around them. This stack includes rapid R&D contracts, manufacturing grants, and low-cost loans from a $200B lending authority.
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.
The US Navy is shrinking despite stated goals to expand against threats like China, largely due to congressional budget dysfunction. "Continuing resolutions" prevent new ship starts and lead to billions in waste, while the Pentagon as a whole fails to spend about $15 billion annually, money which eventually evaporates.
Unlike most countries that fund legislation upon passing it, the U.S. Congress passes laws first and separately debates funding later. This fundamental disconnect between approving work and approving payment is a structural flaw that repeatedly manufactures fiscal crises and government shutdowns.
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.
The perception of the defense budget as a massive fund for new technology is incorrect. More than half is allocated to fixed costs like personnel, facilities, and maintaining old equipment. The actual procurement budget for new systems is historically low as a percentage of GDP.
The 8A program, designed to support disadvantaged businesses, is now used by Pentagon units to bypass the slow, official contracting process. While enabling mission completion under tight deadlines set by Congress, this workaround introduces massive inefficiency, as units pay a significant premium for speed, highlighting a fundamentally broken system.