The guidance directs the implementation of an executive order that President Donald Trump issued to federal agencies last month.

“It is the policy of my Administration that agencies shall procure commercially available products and services, including those that can be modified to fill agencies’ needs, to the maximum extent practicable,” Trump wrote in the EO, which called for pursuing “more cost-effective” solutions and services for taxpayers in federal contracting.

Pentagon officials “must redouble our efforts to establish requirements in a way that avoids inadvertently disqualifying commercial solutions,” John Tenaglia, DOD’s principal director for defense policy, contracting, and acquisition policy, wrote in the new memo to acquisition executives at the Departments of the Army, Navy and Air Force, Cyber Command, Special Operations Command, Transportation Command, and DOD agency and field activity directors. “Requiring activities, program managers, and contracting officers must work together to identify commercial solutions to fulfill DoD mission requirements.”

He warned against “casting truly non-commercial products or services as ‘commercial’ for the purpose of misapplying policies and procedures unique to the acquisition of commercial products and commercial services.”

Tenaglia emphasized the importance of continuous market research so that the DOD acquisition community can stay abreast of commercially available solutions.

The EO implementation guidance calls for high-level oversight of proposed procurements, noting that contracting officers don’t have the authority to independently determine whether a commercial product or service is sufficient to satisfy a requirement owner’s needs.

The authority to approve or deny proposed non-commercial procurements will rest with DOD components’ senior procurement executives unless they delegate that authority to a general officer, flag officer, or member of the Senior Executive Service within their respective agencies.

“Any delegation(s) shall only be granted to acquisition officials possessing the necessary acumen to determine whether a proposed non-commercial procurement serves the best interests of the agency,” an attachment to Tenaglia’s memo states.

In the near term, contracting officers will be tasked to conduct a review, no later than June 15, of pending Federal Acquisition Regulation actions — including all open solicitations, pre-solicitation notices, solicitation notices, award notices, and sole source notices — for prime contract awards for non-commercial products or services valued at or above the “Simplified Acquisition Threshold.” That threshold is currently $250,000, according to the Defense Acquisition University.

The reviews don’t have to include contracts that have already been awarded, according to the new implementation guidance.

“Contracting officers are to either consolidate or create an application for each solicitation, pre-solicitation notice, solicitation notice, award notice, and sole source notice into a proposed application requesting approval to proceed with a prime contract procurement for non-commercial products or services. Applications must be submitted to the respective approval authority,” the guidance states.

In the future, program managers and requirement owners will have to submit a request for approval to procure non-commercial products or services under FAR-based prime contracts prior to releasing solicitations valued at or above the Simplified Acquisition Threshold. As part of those efforts, officials must provide a justification for pursuing a “Government-unique, custom-developed or otherwise non-commercial product or service,” as well as a report on the market research that was used to determine the availability of commercial products and services to meet the Defense Department’s needs.

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The traditional acquisition system can take years from initial requirements to fielding meaning that by the time units received it, the capability could be outdated or didn’t work as intended.

“The American politicians over 30 years have harmed the American soldier, not necessarily intentionally in all instances, but they have let rational decision-making decay. They have a lot of calcified bureaucracy get in the way of doing what’s right,” Secretary Daniel Driscoll told reporters Thursday at the Pentagon. “We are changing that. From this moment forward, we are going to make every decision, and the only thing we are going to weigh is this good for the American soldier, does this make them more lethal, when we send them around the world to fight and kill on our behalf, does this increase the odds of them succeeding at that mission and coming home to their community safely?”

This comes on the heels of a memo signed Wednesday by Defense Secretary Pete Hegseth charging Driscoll to transform the Army by making it leaner through combining and slashing certain headquarters elements and changing how the service purchases capabilities, all in the name of prioritizing homeland defense and deterring China in the Indo-Pacific.

Driscoll noted that the Army going forward will eliminate obsolete equipment that continued to show up in motor pools despite soldiers wanting to get rid of them.

“All of these parochial interests and all of these lobbyists that crawl around this building and crawl around Congress, they have succeeded for far too long. The first thing is, we are going to start to cut the things we don’t want or need,” he said.

Gen. Randy George, chief of staff, noted how the Army last year canceled the RQ-7 Shadow drone program, a capability he said wasn’t very good when he was a brigade commander in Afghanistan in 2009.

“We just have to stop spending our money on things that we know are not going to make us more lethal,” George said.

Key to that effort is modular and open systems, something George has been pushing for the last year-plus. Officials didn’t outline any specific metrics they’d use to evaluate whether a program wasn’t meeting lethality standards, but they stressed they want to rely on commercially available, dual-use systems to get out of the game of custom-built systems as much as they can.

A prime example is the GM Defense-designed Infantry Squad Vehicle, an expeditionary vehicle based off a Chevy Colorado, with a special off-road kit that enhances capability across complex terrain.

“It’s already got consumer buy-in, it’s got a consumer demand signal that the company can build out manufacturing. It can model out what it needs. In the years where the United States Army has funding constraints or when it gets caught up in Congress, they’re not relying on us to keep their lights on,” Driscoll said. “That is the perfect kind of model for most. And much of our equipment should be these dual-use purposed vehicles and assets so that we’re capable of being a better partner. The things we’re going to try to avoid is being the sole customer of a business, because it’s not fair to us and it’s not fair to the business.”

George said officials want systems that can be easily modified and upgraded. The ISV provides a template to mount different sensors and systems that aren’t produced by GM Defense, a key aspect going forward for modularity.

He said any vehicle, for example, will need an active protection system, but some companies will be better at building them than others. The platform builder doesn’t have to be the one to develop the active protection system as well.

“We should be looking at acquisition in terms of what we can adopt. You have a program manager that says, ‘okay, I can adopt this technology because it’s out there and it’s dual use,’” George said. “There’s others that you could modify. ISV is an example. It’s dual use, but you can modify it.”

Driscoll pointed to the startup and venture capital world, which has in the last few years come booming into the defense sector. Many top officials in the Trump administration have private equity and venture capital backgrounds, so it’s no surprise the military would be looking to prioritize those types of avenues.

Notably, Secretary Hegseth early in his tenure signed a memo directing components to leverage the software acquisition pathway. In his memo last night, he directed the Army to expanded use of other transaction agreements. The Army has typically been the service with the most OTA use in the past.

“Startups in the venture capital community have solved this for a very long time. You create a minimum viable product, you get it into the hand of your customers, and you get market feedback, and you tweak and pivot,” Driscoll said. “We, the Army, can and should, and we are doing that now too, to hold ourselves accountable and tighten the feedback loop in our manufacturing process.”

He cited an example from an unmanned company that makes autonomous software for commercial cars, or what Driscoll called the “brains” of commercial vehicles. While that company had never worked with the military before, the Army provided them with an ISV and Humvee and gave them 10 days to see what they could do.

According to Driscoll, the technology allowed the vehicles to be controlled autonomously and synchronize with drones, among other things. The Army sent those vehicles to soldiers to play with in the field to figure out what worked and what didn’t.

While Driscoll said he’s not sure if the Army will work with that company again, he cited that as a key example of how the service wants to operate in the future.

“This would have taken five-to-eight years in any other instance. And we’ve done it in under three weeks so far,” he said.

George also noted that much of this modularity begins with the network. In order to be able to share information and move data rapidly, there needs to be a robust communications backbone.

Much of these lessons have been and will continue to be learned through the service’s transforming-in-contact effort, which aims to speed up how the Army buys capabilities and designs its forces by injecting emerging capabilities into units and letting them experiment with them during exercises and deployments.

“The drones that we had for the second brigade were different than the first, so on and so forth,” George said of transforming-in-contact. “It’s the bottom-up feedback. That’s what we need to continue to do for everything we have.”

Editor’s Note: This story was updated May 5 with clarifying information from GM Defense, the contractor for the Infantry Squad Vehicle.

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Caine, President Donald Trump’s pick to be the next chairman of the Joint Chiefs of Staff, is a former F-16 pilot who held a variety of roles throughout his 34-year military career, including with the active-duty Air Force and National Guard, the special operations community and the CIA.

But at Tuesday’s hearing with the Senate Armed Services Committee, he also highlighted his private sector experience.

“I’ve been an entrepreneur and investor in the business sector while a citizen soldier in the National Guard,” Caine noted. “I’ve also had the privilege of serving alongside incredible business leaders, starting and scaling companies as an entrepreneur. And along the way, I learned what a different kind of grit looks like. Our American entrepreneurial spirit is a force multiplier, and my time as an entrepreneur has made me a better general officer and leader. And if confirmed, I’ll bring more of that spirit into the joint force.”

After his recent retirement from the military, Caine became chairman of the national security advisory board at Voyager Space, a venture partner at Shield Capital, an advisor for Thrive Capital and a venture partner at Ribbit Capital, according to his LinkedIn bio.

“I also may be the only officer ever nominated for this position with experience in the venture capital world, an experience I will draw on as the DoD looks to modernize its business systems and revitalize America’s Defense Industrial Base,” Caine wrote in his responses to advance policy questions from senators.

Caine’s confirmation process comes as the Pentagon is trying to buy more technologies from the commercial sector, including software and hardware, and bring more nontraditional companies into its acquisition fold. The department’s Silicon Valley-headquartered Defense Innovation Unit has been spearheading many of these efforts.

Caine told lawmakers that the U.S. commercial marketplace is “teaming with innovative solutions” for defending the nation. However, the biggest challenge is bringing them into the force.

“The Department must work to exploit these solutions via rapid prototyping programs, defense innovation organizations, and congressionally granted authorities,” he wrote.

The DOD needs to make investments that promote resilient supply chains, workforce readiness, closer collaboration with commercial industry, flexible acquisition, and support from international allies and partners, he suggested.

“The Joint Force should re-evaluate its interactions with industry and fight for access to the commercial space, leveraging organizations like the Defense Innovation Unit,” Caine wrote.

The Pentagon’s research and engineering directorate has been focusing on 14 “critical technology areas” as it pursues next-generation capabilities, including hypersonics, FutureG wireless technology, advanced materials, integrated network systems-of-systems, directed energy, integrated sensing and cyber, space technology, quantum science, trusted AI and autonomy, microelectronics, renewable energy generation and storage, advanced computing and software, human-machine interfaces, and biotechnology.

Caine noted that DOD also needs to spend more money on advanced manufacturing technology.

“Investments in advanced manufacturing will have impacts across the listed 14 critical technology areas and enable the United States to produce complex components and systems more quickly and cost effectively. If confirmed, I’ll work with [Defense] Secretary [Pete] Hegseth to refine the development and acquisition of these technologies in order to enable rapid employment to meet the needs of the Joint Warfighter to fulfill the Administration’s strategy,” he wrote.

If confirmed, he promised to work with Hegseth and his team to evaluate the budget for next-gen capabilities.

Caine told senators that there’s “room for improvement” in how investments in next-gen capabilities are synchronized across the department.

“There is a lot of good work going on, but I do have some concerns that innovation entities are actually colliding with each other in the incubation process. The DOD must have a greater level of collaboration between entities in order to maximize the return on the [U.S. government’s] invested capital,” he wrote.

He said he’s “encouraged” that there are new leaders coming into the department with substantive business backgrounds. Although he didn’t mention any by name, Deputy Secretary of Defense Stephen Feinberg, Navy Secretary John Phelan and other senior officials were wealthy businessmen and investors when they were tapped by Trump to serve on his national security team during his second term.

Pentagon leaders need to have an “entrepreneurial mindset” as they pursue reforms, Caine said.

Trump surprised many in February when he announced Caine, an unconventional pick, as his choice for chairman after firing Gen. Charles “CQ” Brown.

Caine is expected to garner enough votes to get confirmed. Republicans have a majority in the Senate with 53 GOP members. Apart from Hegseth, who narrowly won confirmation in January, Trump’s nominees for top Pentagon posts during his second term have been confirmed by comfortable margins during final voting.

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DIU Director Doug Beck unveiled his updated strategic vision in early 2024 as a way to address a number of challenges that have kept the organization from accelerating the Defense Department’s adoption of dual-use, commercial technologies. A significant part of the new vision focused on both growing DIU and improving its ability to work with the commercial sector, Liz Young McNally, the organization’s deputy director for commercial operations, told DefenseScoop.

Hired in April 2024 to spearhead the unit’s collaboration with the commercial sector and investment community, McNally has spent the last several months integrating different components within DIU into a more unified commercial ops center while also helping the organization build out its regional infrastructure.

“DIU has folks all across the country helping to galvanize the defense innovation ecosystem,” she said in a recent interview. “We have onramp hubs, we have individuals — both government and contractor — bringing in talent, new companies [and] new technology into the department.”

Although the organization is still working to synchronize all relevant components into a single commercial operations center, McNally said DIU is already seeing improvements to how it brings new companies into the Pentagon ecosystem.

“I think now we’re in an even better position to focus on what the big rocks are, which are really around how do we lower the barriers for entry and … what are all the things that we can do to help make it easier to work with the department,” she told DefenseScoop.

For decades, Pentagon bureaucracy has been an obstacle for non-traditional contractors wanting to do business with the department — a phenomenon DIU and others are trying to remediate as commercial technology advances at a rapid pace.

McNally noted that while funding uncertainties have historically served as a barrier to entry, new entrants are also worried about other bureaucratic hurdles such as cyber resiliency, security clearances and the cumbersome authorization-to-operate (ATO) process. Addressing those specific challenges will be a focal point for the unit in 2025, she added.

“There’s so much chicken and egg for a lot of those in terms of when did the company work on them,” McNally said. “We’re in the process of, in the new year, launching some various efforts to pilot, in terms of what we can do even more to help our DIU portfolio companies in those different areas, using some of the [Defense Innovation Community of Entities] funding in the budget to do so.”

As it launches those pilots, McNally said her organization is taking lessons learned from working with some of the smaller companies on the Replicator initiative — an initiative that seeks to field thousands of advanced autonomous systems by August 2025. A future effort will allow the organization to aid those non-traditional defense companies in assessing their cyber resilience, she said.

“I think DIU just has more of a commercial lens to it than other parts of the department,” McNally told DefenseScoop “So when we do those assessments and help companies to think about what types of remediation they are going to do, quite frankly it feels different than when other parts of the department do it.”

The cultural difference between the commercial sector and the sprawling DOD is another barrier McNally pointed to as an area DIU will be tackling this year. For new entrants, the Pentagon is a large and opaque organization to try and navigate, and her organization wants to increase transparency to help companies know where to focus their investments and technology development, she noted.

It’s a task that requires change from both the top- and bottom-levels of the entire ecosystem, McNally said.

“By actually working together, you’re starting to evolve things as well so that there’s the top-down change,” she said. “But then ultimately, it’s starting work with those different program offices and starting to do the work that we’re doing at [Immersive Commercial Acquisition Program] offices and with the [Defense Acquisition University] and others to evolve that.”

Moving forward, a big focus will be on aligning the Pentagon’s most critical capability gaps with where the venture capitalist community is making investments. While some technologies — like AI and autonomy — are readily being funded, others that are more hardware-intensive currently don’t have as much private capital flowing in, she explained.

“Maybe there will be a window going forward to continue to think about what are the right incentives and other changes we have to make to ensure that we have enough private capital, [and] thinking about those other areas as well,” McNally said.

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