He likened the department's planning culture to Soviet-style central planning, which he believes has stifled innovation, risk-taking, and the nation's readiness for war.
Addressing a group of defense industry executives, Hegseth began by invoking the specter of a familiar adversary, only to swiftly pivot his critique inward. "Today, I'd like to talk to you about an adversary that poses a threat, a very serious threat, to the United States of America," Hegseth began.
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"This adversary is one of the world's last bastions of central planning. It governs by dictating in five-year plans from a single capital, it attempts to impose its demands across time zones, continents and continents, oceans and beyond, with brutal consistency, it stifles free thought and crushes new ideas. It disrupts the defense of the United States and places the lives of our men and women in uniform at risk."
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After drawing parallels to the former Soviet Union and the Chinese Communist Party, Hegseth revealed his true target: "The adversary I'm talking about is much closer to home. It's the Pentagon bureaucracy — not the people, but the process."
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According to Fox News, Hegseth lambasted decades of War Department policy, accusing it of being paralyzed by "impossible risk thresholds" and "burdensome and inefficient processes" that have transformed the Pentagon into a self-perpetuating machine where "process, not outcomes, matter."
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He contended that past administrations exacerbated the problem by attempting to "go around the process rather than confront it head-on," leaving both the U.S. military and defense industrial base weaker and slower to adapt. "The institution shapes the individuals as much as the individuals shape the institution," Hegseth noted. "Over time, the prevailing pattern becomes more and more entrenched, risk-averse and immovable."
Hegseth argued that this bureaucratic inertia has seeped into the defense industry itself, fostering a system where contractors profit from inefficiency rather than performance. "The defense industry financially benefits from our backwards culture," he stated. "Schedule overruns, huge order backlogs and too-predictable cost increases become the norm."
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The secretary cautioned that the outcome is "an absence of urgency, a fear of innovation and a fundamental lack of trust" between the Pentagon and its suppliers — precisely the kind of dysfunction, he argued, that America’s adversaries exploit.
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"Our military and our taxpayers need a defense industrial base that it can count on to scale with urgency in a crisis — not one that is content to wait for money before taking action," Hegseth asserted.
Hegseth's comments are part of a broader initiative within the administration to expedite defense acquisition reform, streamline contracting, and restore what he has termed "wartime urgency" to the Pentagon’s daily operations.
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Hegseth signed three internal memoranda directing leadership to take action to achieve the acquisition overhaul. The first memo, centered on acquisition reform, instructs each service branch to identify and eliminate internal barriers that delay weapons fielding. The second memo, addressing the defense industrial base, warns that American production has become "risk-averse and immovable," mirroring the very bureaucracy it supports. The third memo realigns the Pentagon’s arms-transfer and security cooperation enterprise.
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"Our objective is simple: transform the entire acquisition system to operate on a wartime footing," Hegseth declared.
The Army has emerged as the Pentagon’s testing ground for acquisition reform, implementing some of the most aggressive efforts to expedite weapons procurement and cut through the red tape Hegseth criticized in his remarks. Over the past year, the service has begun dismantling decades-old program structures that officials say are too rigid, too slow and too far removed from the battlefield.
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Senior leaders have unveiled what they term a "transformation strategy" — a plan to streamline the Army’s force structure, slash redundant oversight, and reform contracting practices that have kept modern systems from reaching soldiers on time.
"The Army is running as fast as it possibly can to try to reinvent itself, to be ready for modern warfare," Sec. Dan Driscoll told Fox News Digital previously. "They’ll do a lot of that outside the traditional procurement process. That flexibility lets them innovate and test at a speed that’s just really hard to do in the conventional force."
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The Army and Department of War more broadly are emphasizing a "commercial-first" approach: using commercial technologies and industry models instead of bespoke, highly custom, defense-unique systems where possible.
"They’ll do a lot of that outside the traditional procurement process. That flexibility lets them innovate and test at a speed that’s just really hard to do in the conventional force," Driscoll said. "They basically just use their corporate credit card to go online and purchase things to test, and they will find what works."
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This bold approach to reform, driven by a desire for efficiency and innovation, underscores the administration's commitment to strengthening the nation's defense capabilities. It's a clear signal that the Pentagon is ready to break free from its bureaucratic shackles and embrace a more agile, outcome-driven future.
