<p class="wp-block-paragraph">The Iran war, which on Friday hit the six-month mark and has exceeded the expectations of the Trump administration, has intensified the need for changes to the defense industrial base that Pentagon leaders were already beginning to address.</p>
<p class="wp-block-paragraph">Before the war, which has led to the depletion of certain critical munitions, War Secretary Pete Hegseth initiated a significant transformation of the department’s procurement strategy, referring to it as a “1939 moment.”</p>
<p class="wp-block-paragraph">In a speech to industry leaders in November, Hegseth stated that the department and its operations with defense companies “must transform” because the “Pentagon bureaucracy” is an “adversary that poses a threat, a very serious threat, to the United States of America.”</p>
<p class="wp-block-paragraph">The department aims to reverse decisions made in the 1990s after the Cold War that reduced the size and output of the defense industrial base, while also adapting to the increasing use of autonomous systems—such as aerial, ground, and surface vessel drones—and the growing application of artificial intelligence, which has expedited the process of gathering and analyzing intelligence for critical decision-making.</p>
<p class="wp-block-paragraph">“What I need you to know, and I know this is simple for me to say but hard to do, is to go faster. Please go faster,” General Dan Caine, the chairman of the Joint Chiefs of Staff, said last month at an event in Carlisle, Pennsylvania. “The very character of war is changing.”</p>
<h2 class="wp-block-heading" id="h-the-pie-is-growing">‘The pie is growing’</h2>
<p class="wp-block-paragraph">The era of a few prime defense contractors receiving all Pentagon contracts is changing. The administration is working to reduce barriers to entering defense contracting by easing previous hurdles and promoting programs for smaller, innovative, non-traditional companies.</p>
<p class="wp-block-paragraph">“The good news is the pie is growing, so it’s not like the pie is shrinking and the big guys are getting a smaller piece of a smaller pie,” Undersecretary of War for Research and Engineering Emil Michael told the Washington Examiner. “They’re still getting their piece of a bigger pie because of President Trump’s and Secretary Hegseth’s defense spending proposal.”</p>
<p class="wp-block-paragraph">Earlier this month, Sebastian Gorka, senior director for counterterrorism on the National Security Council, told drone producers during an event at the Eisenhower Executive Office Building that “big legacy companies” that fail to adapt “will die, like the dinosaurs.”</p>
<p class="wp-block-paragraph">Hegseth resumed his “arsenal of freedom” tour this week with a visit to Oshkosh Defense in Wisconsin. After touring the plant and test-driving a Joint Light Tactical Vehicle, he addressed the plant workers.</p>
<div class="wp-block-image"> <figure class="alignleft size-large"><img alt="Secretary Hegseth and leadership from Oshkosh observe integrated assembly line during facility tour (Business Wire)." class="wp-image-4701022" height="558" src="https://www.washingtonexaminer.com/wp-content/uploads/2026/08/Hegseth.jpg?w=696" width="700" /><figcaption class="wp-element-caption">War Secretary Pete Hegseth and leadership from Oshkosh Defense observe an integrated assembly line during a facility tour. (Business Wire)</figcaption></figure> </div>
<p class="wp-block-paragraph">“All four years, we’re going to cut red tape and requirements and ridiculous layers that have been added time and time again, year after year, mostly by lawyers of big companies that want to prevent competition,” he said. “We have to tear those barriers down to allow the best companies, America, defense or commercial, large or small, to run as fast as possible.”</p>
<p class="wp-block-paragraph">The Pentagon is exploring various opportunities depending on the stages of development of companies’ products, including providing access to military facilities for testing and competing for financial support. The department is also focused on securing U.S. supply chains and access to critical minerals to prevent vulnerabilities that an adversary could exploit during a conflict.</p>
<p class="wp-block-paragraph">“I’ve been working on acquisition for 20 years, different facets of it,” Jeb Nadaner, senior vice president of government relations for Air, a defense acquisition software company, told the Washington Examiner. “Sometimes more on the technical programmatic side, and sometimes more on the government relations side. I would say this is the boldest initiative. It only launched during the first week of November 2025, so we’re not even a full calendar year out of it. The secretary made a really bold move against a lot of traditional entrenched voices in launching this.”</p>
<h2 class="wp-block-heading" id="h-into-the-valley-of-death">Into the ‘valley of death’</h2>
<p class="wp-block-paragraph">The department announced last month that it issued its latest round of awards under the Accelerate the Procurement and Fielding of Innovative Technologies program, bringing the total money disbursed to more than $2 billion since the program’s inception in 2022. The program is intended to assist companies that have completed development and are ready to transition to operational use, thereby reducing procurement timelines.</p>
<div class="wp-block-image"> <figure class="alignright size-full is-resized"><img alt="Soldiers using drones" class="wp-image-4701063" height="467" src="https://www.washingtonexaminer.com/wp-content/uploads/2026/08/1-23-IN-Neros-Archer-UAS-LFX-.jpg" style="width: 700px; height: auto;" width="700" /><figcaption class="wp-element-caption">Soldiers assigned to the 1st Battalion, 23rd Infantry Regiment, 7th Infantry Division pilot a one-way Neros Archer first-person-view drone at Joint Base Lewis-McChord in Washington state on Wednesday, May 20, 2026. (U.S. Army photo/Sgt. Taylor Zacherl)</figcaption></figure> </div>
<p class="wp-block-paragraph">The APFIT program focuses on “taking the small company with a product that we know that works, helping them scale, and the military service has already said I want it,” Michael said. “So the demand signal’s set, and that’s trying to break down this notion, which I hate talking about, the ‘valley of death.'”</p>
<p class="wp-block-paragraph">The “valley of death” refers to the historical timeframe between a product’s development and the time it takes for the department to decide to fund it.</p>
<p class="wp-block-paragraph">Hegseth in December announced the Drone Dominance Program, which aims to help the Pentagon meet its drone needs. The program’s goal is to purchase more than 200,000 drones by 2027. Michael expressed “high confidence” that the department will achieve this goal, noting that the Pentagon has received 6,480 drones from seven companies so far through this program.</p>
<p class="wp-block-paragraph">Michael Coulter, CEO and president of Hanwha Defense USA, stated, “I’ve been in the defense industry for decades now. This is certainly the most industry-friendly administration and Pentagon that I’ve worked with. We really do have access at all levels. Not just us, but all of our peers have the ability to go in and talk.”</p>
<p class="wp-block-paragraph">Much of the Pentagon’s plans will depend on whether Congress passes both the defense budget, reconciliation, and the supplemental request to fund the Iran war. The budget and reconciliation are intended to provide the Pentagon with a record-setting $1.5 trillion budget, which the secretary has described as a “generational investment.”</p>
<p class="wp-block-paragraph">“We’re asking for $1.5 trillion to include reconciliation,” Michael said. “So there’s more than enough to go around, but it does incentivize the prime contractors to be better, faster, and cheaper when you bring in the innovators, and that’s good for the ecosystem.”</p>
<p class="wp-block-paragraph">If Congress does not pass reconciliation, “we’re going to have to make some trade-offs, just like any other organization or agency that has to make trade-offs if they don’t get the full budget they ask for,” he added. “That’s just a little bit beyond my pay grade, how those trade-offs get made, but there’s no doubt that Congress is listening and understands that this is an important concept.”</p>
<p class="wp-block-paragraph">“It’s pretty sacred,” Hegseth told reporters Monday at Oshkosh Defense’s headquarters when asked whether the department could choose to cut munition purchases if Congress doesn’t pass the budget, reconciliation, and supplemental.</p>
<h2 class="wp-block-heading" id="h-munitions">Munitions</h2>
<p class="wp-block-paragraph">The U.S. military relies on several types of critical munitions for its long-range and air-defense capabilities, which have been utilized during the war against Iran. These munitions can cost millions of dollars each and are typically single-use.</p>
<p class="wp-block-paragraph">The military has employed many of these munitions during the Iran war and has also provided some to Ukraine in previous years. Experts had warned prior to the start of the Iran war that U.S. stockpiles of these key munitions were insufficient for a conflict with a near-peer adversary such as China, indicating that the U.S. needs to enhance not only the replacement of used equipment but also the long-term changes in procurement that the administration aims to implement.</p>
<p class="wp-block-paragraph">Hegseth and other senior Pentagon officials assert that the department has all the munitions necessary to carry out any ordered operation.</p>
<div class="wp-block-image"> <figure class="alignleft size-full is-resized"><img alt="Patriot missile" class="wp-image-4701055" height="525" src="https://www.washingtonexaminer.com/wp-content/uploads/2026/08/Patriot-missile.jpg" style="width: 600px; height: auto;" width="700" /><figcaption class="wp-element-caption">A Patriot missile mobile launcher is displayed outside the Fort Sill Army Post near Lawton, Oklahoma, on March 21, 2023. (AP Photo/Sean Murphy)</figcaption></figure> </div>
<p class="wp-block-paragraph">Critical munitions include both offensive and defensive missiles. For offense, this includes RTX-made Tomahawk missiles, Lockheed’s Joint Air-to-Surface Standoff Missiles, and Lockheed’s Precision Strikes Missiles; for defense, it includes RTX’s Standard Missile 3, RTX’s Standard Missile 6, Lockheed’s Terminal High Altitude Area Defense interceptors, and Lockheed’s Patriot Advanced Capability-3 Missile Segment Enhancement.</p>
<p class="wp-block-paragraph">Before the war, the U.S. military had approximately 2,330 Patriot missile interceptors, which has now decreased to between 759 and 827, according to a Center for Strategic and International Studies report from late July. The military had approximately 452 THAAD interceptors prior to the war, and it currently has between 234 and 278.</p>
<p class="wp-block-paragraph">The Pentagon has established several framework agreements with defense companies to increase production of these munitions, although replacing them will take years. The department is utilizing long-term agreements with these companies to provide the confidence needed to open new facilities, hire more workers, and boost their output.</p>
<p class="wp-block-paragraph"><strong><a href="https://www.washingtonexaminer.com/policy/defense/4700153/defense-startup-successful-test-electromagnetic-containerized-drone-defense/" rel="noopener noreferrer" target="_blank">DEFENSE STARTUP HAS SUCCESSFUL TEST OF ELECTROMAGNETIC CONTAINERIZED DRONE DEFENSE SYSTEM</a></strong></p>
<p class="wp-block-paragraph">Last week, the department and RTX announced a $22.9 billion agreement aimed at increasing Tomahawk annual production to more than 1,000 missiles.</p>
<p class="wp-block-paragraph">The War Department is also exploring cheaper alternatives to eventually replace the expensive munitions, although these plans are long-term.</p>
<p class="wp-block-paragraph">In July, Lockheed Martin announced plans to produce a new, less expensive Patriot missile interceptor designed to reduce the cost per kill while increasing the magazine depth for U.S. and European defense. The new PAC-3 ACE interceptor is expected to be less than half the cost of the current PAC-3 MSE per unit, although the company did not specify the expected cost or timeline for mass production and deployment.</p>