The department’s Software Acquisition Pathway, or SWP, was set up during the first Trump administration under then Undersecretary of Defense for Acquisition and Sustainment Ellen Lord as part of a broader push for a so-called Adaptive Acquisition Framework that enables the department to procure software differently than it buys hardware. Programs on that pathway are not subject to some of the encumbrances associated with the Joint Capabilities Integration and Development System and major defense acquisition program designations.

“Programs using the software acquisition pathway will demonstrate the viability and effectiveness of capabilities for operational use not later than 1 year after the date on which funds are first obligated to develop the new software capability. New capabilities will be delivered to operations at least annually to iteratively meet requirements, but more frequent updates and deliveries are encouraged where practical,” according to DOD Instruction 5000.87 issued in October 2020.

The instruction also requires government and contractor software teams to use modern iterative software development methods such as DevSecOps.

Now, Hegseth wants to make sure all DOD components are taking advantage of the pathway.

“Software is at the core of every weapon and supporting system we field to remain the strongest, most lethal fighting force in the world. While commercial industry has rapidly adjusted to a software-defined product reality, DoD has struggled to reframe our acquisition process from a hardware-centric to a software-centric approach. When it comes to software acquisition, we are overdue in pivoting to a performance-based outcome and, as such, it is the Warfighter who pays the price,” he wrote in a March 6 memo addressed to senior leaders, combatant commanders, and agency and field activity directors.

To address the problem, Hegseth is decreeing that all DOD components must adopt the SWP as the “preferred pathway for all software development components of business and weapon system programs.”

“This will enable us to immediately shift to a construct designed to keep pace with commercial technology advancements, leverage the entire commercial ecosystem for defense systems, rapidly deliver scaled digital capabilities, and evolve our systems faster than adversaries can adapt on the battlefield,” he wrote.

As the U.S. military pursues new AI tools — a tech pursuit which Hegseth is prioritizing as the department moves to modernize for potential fights against advanced adversaries — software is expected to become even more critical.

To get software vendors on contract faster and cut through bureaucratic red tape, the Pentagon chief also wants DOD components to leverage commercial solutions openings — a solicitation mechanism that the Silicon Valley-headquartered Defense Innovation Unit has been using to bring commercial firms into the Pentagon’s acquisition fold — and Other Transaction agreements, which allow for rapid prototyping and follow-on production contracts for new tech.

However, Pentagon officials have noted that acquisition offices and contracting officers don’t always use or aren’t aware of some of these tools that are available to them, instead relying on more traditional processes associated with federal acquisition regulations.

“Effective immediately, for efforts that meet the threshold requirements enabling the application of authorities provided at title 10, U.S.C., § 3458 or title 10, U.S.C., § 4022, I am directing the use of Commercial Solutions Openings and Other Transactions as the default solicitation and award approaches for acquiring capabilities under the SWP. This applies to any software pathway program in the planning phase prior to execution. Department Components are prohibited from implementing further guidance on this point that would set out restrictive measures, guidelines, frameworks, directives, or policies other than required by statute,” Hegseth wrote.

“The reason this works better [is that] instead of spending years writing detailed requirements and going through a rigid … one-size-fits-all process, we can tap into the best tech available right now, prototype it fast and get it to the field quickly, if it works,” a defense official told reporters during a background call Friday regarding Hegseth’s directive. “So bottom line, we’re cutting out middlemen. Software companies make software. We’re going to buy software from software companies.”

Another senior defense official noted the importance of combining SWP with the commercial solutions opening and OTAs.

“The challenge with that software pathway is that it did nothing in and of itself for how we expose commercial, nontraditional vendors who are also developing innovative software to those software programs. So when we take that software pathway mechanism and we combine it with innovation that DIU has been working in commercial solutions openings, or CSOs, and other transaction authorities, OTAs, we get to the point where now we can expose the programs, the software programs, to nontraditional and commercial software developers, while we simultaneously … lower the barrier for those nontraditional and commercial software developers to get into defense programs of record,” they said.

As an example of the effectiveness of leveraging these types of mechanisms, a senior defense official noted that since 2016, DIU has awarded more than 500 OTAs using the commercial solutions opening process. About 88 percent of those deals went to nontraditional vendors and 68 percent to small businesses. The unit’s goal is to get vendors on contract in less than 90 days.

“This … [Hegseth] memo is applied to programs that are new heading into the planning phase of the software acquisition pathway. And then for any other programs where they have a natural transition point to adopt a new acquisition pathway, that’s when this would apply” to them, a senior defense official said.

DIU and the Defense Acquisition University plan to train and educate other acquisition professionals so they can also use a CSO OT model, according to officials.

Hegseth tasked the acquisition and sustainment directorate in the Office of the Secretary of Defense, in coordination with DIU, to develop and submit an implementation plan for the initiative within 30 calendar days.

The implementation plan is expected to address efforts to train the acquisition workforce.

There’s no dollar-value limit to OTAs for software, according to a senior defense official, although there are thresholds that require A&S-level approval to cross.

“What you do have is the mechanic that allows you to go from a prototype OT in software that may exist pre-acquisition into an acquisition program of record that has an associated production OT that follows on to that prototype OT, right? So that’s a key element of these OTs is that … you can prototype an OT and then a completely different organization can drop a production OT on top of that prototype OT,” a senior defense official told DefenseScoop during the call with reporters. “So think about that in the concept of a prototyping organization transitioning to an acquisition program of record, right? You suddenly have this tool that allows you to use that OT mechanic to go very quickly between the prototyping aspect and the production aspect. And again, of course, the production OT … has to have a successful prototype OT on which to base its award.”

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“What I think could really help is for us to find a way to make a case with Congress for a little bit more flexibility on in-year funding,” Assistant Secretary of the Army for Acquisition, Logistics and Technology Doug Bush said Wednesday at the annual McAleese and Associates Defense Programs Conference, referencing funding in between standard annual appropriations.

Even within the Pentagon, the mentality is “‘Oh, my gosh, we don’t have any money for this, even though this great thing came along,’” Bush said, adding that Defense Department officials must make the case for more room to maneuver. He suggested the door is opening a little bit in this regard, specifically on counter-drone systems.

However, another area where Bush wants to see more flexibility outside the typical aquisition cycle is AI.

“AI could be another one where we make the case to Congress, get a little more flexibility on funding, that’ll let us go faster in cycle. But that’ll be a running conversation,” he said. “That’s one of the things I’m going to try to work with Congress on this year. We have to have to make a case for it, and we have to earn that flexibility by doing it well and showing Congress what we’re doing.”

The Army is already taking advantage of the software acquisition pathway. The DOD has sought to make the case for special authorities for software given it is iterative and not compatible with the traditional acquisition and budgeting cycle.

“The software pathway is actually more radical in some ways than any of the other new authorities. It is an effort, and I think a great one, to recognize how industry and how the private sector does software and get us much closer to that. We frankly had an industrial kind of approach to software,” Bush said. “I think we are getting points on the board in terms of getting Army software programs close to how the private sector does it.”

However, the funding for it is a bit different and requires ongoing conversations with Congress and inside the Pentagon.

“They all have to get on board with this new way of doing software, which recognizes that software is really never finished. It’s iterative,” he said. “You need a minimum viable product early and then you just keep spinning on that to improve it and get it in the hands of soldiers and get feedback. That’s not an easy one, but we’re committed to it and it’s a big deal.”

The Army has eight programs now using the software pathway and it’s looking to add eight more over the next year under the authority, according to Bush.

The service is also looking to upskill its acquisition workforce in software, Bush explained.

“We can’t have a waterfall requirements structure when we’re going to do it agile,” he said. “Upskilling the Army’s side of software knowledge, both users … [and] the great work going on at [Army Futures Command] and elsewhere about just increasing the Army’s institutional knowledge about software, putting it in the operating force, but also in acquisition. Upskilling the acquisition workforce to be better partners with industry and actually know what we’re doing, or know what we’re talking about when we’re engaging with industry that’s moving at lightspeed on software.”

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