Rebuilding the DIB with the FORGED Act
Fostering Reform and Government Efficiency in Defense
Sen Roger Wicker, SASC Chairman, introduced the FORGED Act which represents one of the most impactful pieces of legislation in defense acquisition in a generation. It could shape the acquisition enterprise far greater than the Federal Acquisition Streamlining Act of 1994 and Weapon System Acquisition Reform Act of 2009 given its renewed focus on streamlining processes, empowering officials at the edge, and promoting scaling as a key national security objective.
The official title is FORGED (Fostering Reform and Government Efficiency in Defense) Act. Sen Wicker also released an executive summary for those who don’t like to read legislative text. Restoring Freedom’s Forge: American Innovation Unleashed
This is DOGE for DoD.
H/T to Moshe Schwartz for his expert analysis that contributed to this post.
Five Part Plan For Driving Efficiency Into Weapon Systems Acquisition
Cut Red Tape. Repeal decades of layered statute and regulations creating a labyrinth of rules that prevent innovative thinking or urgent actions.
Unleash American Innovation. Solidify rapid acquisition pathways, commercial procedures, and tap innovative nontraditional defense contractors.
Create Competitive Pressure. Streamline processes for reverse engineering, qualification, testing, and second sourcing to increase defense suppliers.
Enable Decisive Action. Delegate decision authorities from dozens of oversight organizations to upgraded Program Executive Officers to execute portfolios.
Modernize Defense Budgeting. Adopt the PPBE reforms including transforming budget structure, consolidating budget lines, provide additional authorities.
FORGED Outline
Repeal Low-Value Sections of Existing Law (285 sections)
Modification to Current Defense Acquisition Requirements
Automatic Sunset for Future Statutory Reporting Requirements
Defense Acquisition Roles, Responsibilities, and Organizations
Rapid Acquisition and Commercial Contracting
Promotion of Competition in the Defense Industrial Base
Defense Budgeting Processes
Top 10 Reform Areas
While we think many of the proposals in the FORGED Act are high impact, there are some that stand-out as particularly important and impactful.
Commercial Reinforcement (Section 102, 310, 313 & 314)
Modifies 10 USC 3705 to provides relief on the level of information that contracting officers can require to determine fair and reasonable pricing when certified cost and pricing data is not required. Specifically, it eliminates the ineligibility for award provision and some reporting provisions (Section 102).
Amends 10 USC 3456 to create a default determination that products and services acquired by DoD are commercial and shall be acquired using commercial procedures unless determined to be non-commercial by the contracting officer.
Further reinforces FASA that a defense-unique development product or service may not be procured if there is a commercial product or service, with or without customization, that meets DoD’s minimum requirements (Section 310).
Creates 10 USC 3459 prohibiting DoD from requiring a clause to be included in a subcontract for commercial products or service other than clause required by law and further requires DoD to combine all provisions of law require for subcontracts into a single contract clause (Section 313).
Requires that DFARS include a list of contract clauses that are expressly required in law for the procurement of commercial products and commercial services (Section 314).
Impact: This series of provisions provides strong reinforcement for DoD to get serious about leveraging commercial products and services. It lowers the bar on pricing, changes the default mode for commercial determinations, prohibits buying a non-commercial item if a commercial one exists, limits excess clause flow-downs and requires transparency on statutorily required contract clauses. If implemented, this would make acquisition professionals change their approach to procurement planning.
Non-Traditional Defense Contractor Reform (Sec. 303, 304, 305, 315)
Would exempt NDCs from a number of standard provisions that are normally applied to every contract of a certain size such as Cost Accounting, Earned Value Management, Contractor Business Systems, and Forward Pricing Rate Agreements (Section 303).
Modifies 10 USC 3457 to require the treatment of products and services from NDCs as commercial items (Section 304).
Modifies 10 USC 3014 to redefine the definition of an NDC to be based on a combination of revenue growth, investment of non-reimbursable IR&D, and funding from third-party sources - rather than not having executed a CAS-covered contract as it is defined today (Section 305).
Modifies 10 USC 4022 to establish a consortia of NDCs to conduct prototype projects and follow-on production under each systems command and portfolio acquisition executive. Includes an acquisition pathway preference for programs established using this consortia (UCA, MTA, SWP, or AOS pathways).
Impact: These changes keep the onus on NDCs to continue investing IR&D and raise private capital while also alleviating some major burdens that constrain these companies that are usually commercially-oriented and shun adoption of DoD-unique business processes and systems (that add cost and hassle but very little value for the government or the industrial base).
Portfolio Acquisition Executives (Section 201)
Implements Section 809 Panel’s Recommendation #36 on upgrading the Program Executive Officers (PEOs) to Portfolio Acquisition Executives (PAEs)
Impact: This begins the shift from from a program-centric model, where particular systems are managed on an individual basis, to a portfolio-centric model, where particular systems are managed holistically as part of a broader set of capabilities, mission-needs, and technologies. The PAEs will be empowered to make decisions by balancing the three legs of the “Big A” acquisition stool – requirements, program funding, and acquisition. To fully enable this construct of course requires relief on appropriations flexibility (which will be beyond the scope of the FORGED Act).
Capstone Requirements (Section 205)
Service Secretaries and Defense Agency Directors shall establish a capstone requirement approach for each PAE that has responsibility to enable greater speed, agility, and innovation in fielding military capabilities. Each capstone requirement shall be established in consultation with the Joint Requirements and Programming Board.
Authorize the PAE to change the scope and requirements for programs within the portfolio (per authority below) and assign representative of operational forces to the acquisition portfolio. Maximize the use of prototyping, experimentation, and MVPs to shape capability scope and requirements.
Authorize the PAE to resource and acquire commercial or NDIs under the capstone requirement by validating the need with reps. Manage IT requirements used dynamically prioritized lists of user needs rather than large static requirements documents
Iteratively define, prioritize, and refine requirements at the portfolio, program, and iteration levels based on user input and previous deliveries.
Impact: We love the idea of mission focused capstone requirements for each PAE portfolio. It shapes the strategic priorities of each capability area to regularly deliver integrated solutions instead of overly defined stovepiped programs. This provides the foundation to effective portfolio management and acquiring more commercial solutions. It focuses industry and defense R&D on priority mission outcomes.
Procurement for Experimental Purposes (Section 320)
Modifies 10 USC 4023 to expand usage of any defense-related article (rather then a small subset) to support demonstrations and prototypes of any products, supplies, parts, accessories, auxiliary services, and design activities.
It also importantly, allows follow-on production contracts or transactions without the use of competitive procedures or further justification if a combatant command submits a written determination that the purchased item successfully completed the experiment and it intends to field the item.
Impact: This is huge as it allows any defense item (that is militarily useful) to be used in an experiment and if successful to have a streamlined contracting path to scaling. This would for instance allow INDOPACOM to incorporate a new commercial sensing capability onto one of its ships for RIMPAC and if it proved useful, allow the Navy to finish fielding it to the fleet without any further competition. Now it might still be wise to have some competition when selecting what systems participate in an experimentation event but that can be tailored and not constitute a long drawn out source selection.
Paid subscribers see the rest of our top 10 along with two dozen other key sections that will forge the future of defense acquisition and industry.