The United States Department of War — the renamed Department of Defense — is executing a broad transformation of how it buys, builds, and secures military capabilities. Secretary Pete Hegseth set the agenda on 7 November 2025, when he announced the Acquisition Transformation Strategy (ATS) at the National War College on Fort McNair, according to Crowell & Moring. The strategy rests on five reform pillars designed to accelerate the delivery of capabilities to warfighters.
In the months since, four major initiatives have taken concrete form: a regulatory overhaul of federal contracting rules, a suspension of cybersecurity certification requirements, a new artificial intelligence strategy anchored by seven named projects, and a request for private capital to fund defence infrastructure. Together, officials say, they mark a deliberate shift toward speed, reduced compliance burdens for smaller businesses, and what the department describes as wartime-tempo technology adoption.
Regulatory reform: departing from standard contracting rules
On 10 February 2026, the DoW released a letter to the defence industrial base announcing Phase 1 class deviations under the Revolutionary FAR Overhaul (RFO), the department announced. The Federal Acquisition Regulation (FAR) is the body of rules governing how the US government purchases goods and services. Class deviations allow the department to depart from those rules across broad categories of contracts without seeking individual waivers each time.
The department simultaneously requested industry input to shape Phase 2 reforms. The specific content of those reforms has not yet been determined and remains subject to stakeholder feedback.
Cybersecurity: a pause on stricter contractor requirements
One of the most consequential near-term changes concerns cybersecurity. The DoW announced the immediate suspension of Phase II requirements under the Cybersecurity Maturity Model Certification (CMMC) programme — a framework that requires defence contractors to demonstrate they meet defined cybersecurity standards before winning contracts. Phase II had been scheduled to take effect on 10 November 2026.
DoW Chief Information Officer Kirsten A. Davies said the suspension was intended to reduce compliance barriers for small and medium-sized businesses, according to the department. She has initiated a 60-day study of the programme. A CMMC Reform Task Force, established under her office, will conduct a top-to-bottom review and gather feedback through a public request for information. Its final report is due to Davies within 60 days of the suspension announcement.
Phase I self-assessment requirements remain in place. During the suspension period, cybersecurity compliance will be enforced through the National Institute of Standards and Technology Special Publication 800-171 Revision 2 standard, using self-assessments and select government-led assessments. All contractors remain obligated under Defence Federal Acquisition Regulation Supplement clause 252.204-7012 to protect covered defence information. Whether Phase II will be reinstated, modified, or eliminated depends on the task force's findings, which have not yet been published.
Artificial intelligence: seven named projects, no disclosed budgets
On 9 January 2026, the DoW released two memoranda. The first set out an Artificial Intelligence Strategy. The second, on transforming the defence innovation ecosystem, consolidated innovation activity under the Under Secretary of War for Research and Engineering, who also serves as the department's Chief Technology Officer.
The AI Strategy names seven Pace-Setting Projects, as reported by Inside Government Contracts: Swarm Forge, Agent Network, Ender's Foundry, Open Arsenal, Project Grant, GenAI.mil, and Enterprise Agents. They span warfighting, intelligence, and enterprise functions. No specific budget figures, timelines, or performance metrics for these projects have been made public.
Private capital: the Army seeks outside financing across six areas
On 27 February 2026, the US Army issued a request for information (RFI) seeking ideas from industry and investors on private sector financing and partnership models, according to Holland & Knight. The request covers six areas: energy resilience; the Organic Industrial Base, meaning the network of government-owned arsenals and depots; logistics and supply chains; real assets and facilities; advanced manufacturing and technology; and critical minerals.
The RFI was issued under Executive Order 14265 as part of the broader effort to modernise acquisition and revitalise the Defence Industrial Base. No contracts or partnerships arising from the RFI have yet been announced.
The combined scope of these actions carries direct implications for established prime contractors and for smaller or non-traditional businesses seeking entry into the defence market. Much remains unresolved. The Phase 2 regulatory reforms are still being shaped by stakeholder input. The CMMC task force has not yet reported. The Army's private capital initiative has produced no disclosed results. The pace of follow-through will determine whether the strategy delivers the speed its architects have promised.
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