Oct. 29, 2026
Department of War Shifts Acquisition Strategy, Prioritizing Mission Outcomes Over Compliance
WASHINGTON D.C. – The Department of War (DoW) is undergoing a significant strategic overhaul in its acquisition processes, aiming to hold leaders accountable for tangible mission outcomes rather than mere regulatory compliance or activity metrics. This pivot, initiated by Secretary of War Pete Hegseth in November 2025, represents a fundamental change in how the department procures and evaluates its critical defense systems and software.
Secretary Hegseth publicly announced the ambitious reforms at the National War College, signaling a departmental shift where contracting officers will be judged primarily on the mission impact of their acquisitions. This contrasts sharply with previous evaluation criteria, which often centered on meeting technical specifications or adhering to procedural guidelines. The new directive emphasizes mission effectiveness as the paramount measure of success.
Reorganizing for Results
A key component of this overhaul involves the reorganization of traditional program executive offices (PEOs) into Portfolio Acquisition Executives (PAEs). Each PAE is designated as the single accountable official for the complete lifecycle and ultimate outcomes of an entire portfolio of related acquisitions. The strategy underpinning these reforms explicitly calls for accountability measures that “prioritize outcomes rather than activity.” This structural change is designed to create clearer lines of responsibility and foster a holistic view of program success.
The Air Force has been among the first branches to fully embrace this transformation, completing its transition in July 2026. The service has since designated PAEs for all 17 of its acquisition portfolios, embedding the new philosophy at the operational level. This move is expected to streamline decision-making and better align acquisition efforts with strategic military objectives.
Software Policy Follows Suit
The focus on outcomes has also permeated the DoW’s approach to software development. In September 2026, the Department of War’s Chief Information Officer (CIO) issued DoW Instruction 8430.01, titled “Accelerated Mission Software.” This instruction mandates that enterprise reporting for software initiatives must now concentrate on “value stream and mission outcomes.” Traditional delivery metrics, such as deployment frequency, are to be treated as diagnostic tools for individual teams rather than primary indicators of overall program success, shifting the focus towards the actual utility and impact of the software.
Defining the Shift: Outputs vs. Outcomes
Central to the DoW’s new strategy is a clear distinction between “outputs” and “outcomes.” Outputs refer to the tangible products or activities generated by a team, such as new features, software releases, story points completed, or reports generated. While necessary, these are no longer considered sufficient measures of success.
In contrast, outcomes are defined as measurable changes in user or system behavior that directly and positively contribute to the mission’s value stream. For instance, an outcome could be an intelligence analyst completing their task 50% faster, or a pilot receiving critical flight data in seconds instead of minutes. These behavioral changes, in turn, are expected to produce “impact” – the ultimate mission result, such as a successful operation, lives saved, or critical services reaching their intended recipients.
Addressing a Persistent Problem: Effort Without Impact
The impetus for this policy shift stems from a recognized pattern of significant effort in defense projects failing to translate into meaningful mission impact. Anecdotal and empirical evidence suggests that many large government software initiatives, despite consuming substantial resources and meeting internal milestones, often yield little practical value for end-users or the mission. Programs might appear “on track” through regular reviews, with hundreds of tasks completed and impressive demos, only for the delivered software to see minimal adoption due to a disconnect from actual operational workflows.
This issue is not confined to the Department of War. According to data from the Standish Group, frequently cited by organizations like the General Services Administration’s 18F digital service, approximately 87% of large government software projects are considered failures. The Standish Group’s definition of “success” is generous, classifying a project as successful even if it merely lands on time, on budget, and with a satisfied customer, irrespective of whether it actually moved the mission forward. This highlights a systemic problem where the “entire system is oriented around the activities and the outputs instead of the outcomes,” as observed by Bryon Kroger, co-founder of the Department of War’s first software factory, Kessel Run, and now CEO of Rise8.
Beyond “Buying Hope”
Traditionally, government contracts often pay for “hours and features,” even under firm-fixed-price agreements, which frequently default to a level-of-effort model. This means that contractors are compensated for time spent and personnel assigned, regardless of whether the mission demonstrably improves. The responsibility for software adoption and ultimate mission value often falls to other government or contractor teams post-delivery, creating a disconnect. Critics argue that this approach amounts to “buying hope” – paying vendors with the expectation of a future outcome that may or may not materialize into mission value, a strategy deemed inherently risky.
A New Contracting Paradigm: Buying Outcomes
To align with the new outcome-focused philosophy, the Department of War is exploring new contracting methods. The fundamental principle is that outputs should be de-emphasized in contracts. Given that teams rarely possess perfect foresight on what to build from the outset, contracts that rigidly list specific outputs are often destined for misalignment. Instead, “buying outcomes” involves a reverse engineering approach.
This process begins by clearly articulating the desired mission impact. Program leadership defines this impact, and then government and contractor teams collaboratively identify the specific changes in user or system behavior that would produce it. The current state of that behavior is measured to establish a baseline. This defined change and its baseline then form the core of the contract, with success measured by the demonstrable achievement of that change in a live production environment. This innovative approach aims to ensure that every dollar spent directly contributes to verified mission improvement.
Why This Matters
The Department of War’s shift from output-based to outcome-based acquisition represents a profound change with far-reaching implications across national security, fiscal responsibility, and the defense industrial base.
Enhanced National Security:By prioritizing measurable mission outcomes, the DoW aims to acquire systems and software that genuinely enhance military capabilities and operational effectiveness. This means faster, more reliable, and more user-centric tools for service members, directly improving their ability to execute critical missions, save lives, and maintain a strategic advantage. It moves beyond merely possessing advanced technology to ensuring that technology is effectively utilized and impactful in real-world scenarios.
Fiscal Responsibility and Efficiency:The high failure rate of government software projects and the “buying hope” phenomenon have historically led to significant waste of taxpayer money. By focusing on outcomes, the DoW seeks to reduce spending on projects that deliver outputs without tangible mission value. Contracts tied to measurable improvements incentivize efficiency and effectiveness, potentially freeing up resources for other critical defense priorities and ensuring that every dollar spent contributes directly to national security objectives.
Driving Innovation and Modernization:This new approach encourages contractors and internal teams to be more innovative and agile in problem-solving. Instead of rigidly adhering to pre-defined specifications that may become obsolete, teams are empowered to find the most effective ways to achieve desired mission outcomes. This could accelerate the adoption of cutting-edge technologies and methodologies, fostering a more dynamic and responsive defense ecosystem capable of adapting to evolving threats.
Transformation of the Defense Industrial Base:Defense contractors will need to adapt significantly to this new paradigm. Companies that can demonstrate a clear ability to deliver measurable mission outcomes, rather than just delivering features or hours, will likely gain a competitive advantage. This could foster a more performance-oriented culture across the defense industry, pushing companies to develop deeper understanding of military operations and user needs. It also promotes a stronger partnership between government and industry, with shared goals centered on mission success.
Precedent for Wider Government Adoption:Should the Department of War successfully implement and demonstrate the benefits of this outcome-focused strategy, it could serve as a powerful model for other government agencies. The challenges of inefficient procurement and project failures are not unique to defense. A successful transformation within the DoW could catalyze similar reforms across the federal government, leading to more effective public services and better use of taxpayer funds nationwide.