Defense Acquisition Reform in 2026: SPEED, FoRGED, and the Defense Tech Wave

Every capability discussed in contemporary defense analysis — drone mass production, counter-UAS at scale, collaborative combat aircraft, attritable autonomy — depends on the same enabling condition. The Department of Defense must be able to buy things faster than the threat changes.

For most of the past forty years it has not been able to. A major program takes a decade or more from requirement to fielding. Drone technology iterates in months. That mismatch is not a management failure; it is a structural characteristic of a system designed for a different problem, and it is why acquisition reform has become the central enabling question for defense modernization.

The fiscal 2026 defense policy bill incorporated provisions from the House's SPEED Act and the Senate's FoRGED Act, aimed at streamlining prototyping and accelerating the transition of technologies into production. Assessments of the final legislation have been mixed — analysts noted that the most ambitious reform proposals were scaled back in the final bill and that workforce issues received little attention.

This analysis covers what changed, what did not, and what it means for firms competing for defense business.

The structural problem

Understanding why reform is difficult requires understanding what the current system was designed to do.

The Federal Acquisition Regulation and the defense acquisition system exist to ensure fair competition, prevent fraud, protect taxpayer funds, and deliver systems meeting stated requirements. These are legitimate objectives, and the system achieves them reasonably well.

The cost is speed. Every check adds time. Competition requirements add solicitation and evaluation periods. Cost accounting standards impose compliance overhead. Milestone reviews add decision gates. Testing requirements add schedule. Protests add delay. Individually, each is defensible. Cumulatively they produce a system in which fielding a capability takes years.

For a nuclear submarine, this is acceptable. For a drone whose design will be obsolete in eighteen months, it is disqualifying.

A second structural problem compounds the first: the system is designed for programs, not products. A program of record has a requirement, a budget line, a program office, and a lifecycle plan. Commercial technology does not fit this model. It exists, it improves continuously, and it is bought rather than developed. The acquisition system has no natural way to buy something that already exists and keeps changing.

Third, the budget process itself imposes delay independent of acquisition. Appropriations arrive late, continuing resolutions prevent new starts, and moving money between accounts requires congressional approval. A program can make a fast decision and still wait a year for funds.

What the FY2026 reforms did

The SPEED Act — Streamlining Procurement For Effective Execution And Delivery — focuses on refining the existing acquisition system rather than replacing it. Key elements formally define the program executive officer role with specific responsibilities for program management, cut procedural requirements, and lower barriers to entry for commercial firms.

The most operationally significant changes concern Commercial Solutions Openings.

Expanded CSO authority. CSOs are a competitive process for acquiring innovative commercial technologies, substantially faster than traditional solicitation. The reforms expand the Department's ability to use them and broaden their scope to include commercial products, commercial services, and non-developmental items.

CSO-to-production pathway. Critically, the legislation allows the Department to move successful CSOs into production. This addresses the single most persistent failure point in defense innovation: the gap between a successful prototype and a funded production program. Prototypes that cannot transition are wasted effort, and the transition gap has consumed a great many promising efforts.

Startup support mechanisms. Expanded support through the BOOST program and higher accounting thresholds that ease compliance burden for non-traditional defense contractors. Cost accounting standards compliance is a genuine barrier for small companies — the overhead of establishing compliant systems can exceed the value of a first contract.

Broader commercial purchasing authority. Expanded authority to purchase commercial technologies, with greater latitude for military officials to buy commercially developed drones, AI software, and autonomous systems.

The intended effect is to let commercial and dual-use companies, particularly venture-backed defense technology firms, compete alongside traditional primes without first building a compliance apparatus designed for major weapons programs.

What the reforms did not do

Honest assessment requires noting the gaps, and analysts have been direct about them.

The most ambitious proposals were scaled back. The original SPEED and FoRGED bills contained more far-reaching changes than survived into final legislation. Reform legislation consistently narrows during negotiation, and 2026 was no exception.

Workforce received little attention. This may be the most consequential omission. The acquisition workforce is the mechanism through which any reform is implemented. Contracting officers who lack training, capacity, or incentive to use new authorities will default to familiar processes. Authorities that exist on paper and are unused change nothing.

There is a specific incentive problem here worth stating plainly: a contracting officer who uses a novel authority and encounters a problem bears career risk. One who uses the traditional process and produces a slow but defensible outcome does not. Until that asymmetry changes, adoption of new authorities will lag their availability.

Budget process reform was not addressed. Appropriations timing, continuing resolutions, and account flexibility impose delays that acquisition reform cannot touch. Color-of-money restrictions — the separation between research, procurement, and operations funding — remain a genuine obstacle to buying commercial technology that does not fit neatly into any category.

Requirements generation was largely untouched. The requirements process that produces overspecified, capability-maximizing documents is a primary driver of cost and schedule. Reform focused on how things are bought rather than on what is asked for.

Test and certification capacity was not expanded. Faster contracting does not help if range access, spectrum allocation, and certification queues remain the binding constraint. For autonomous systems in particular, this is a real bottleneck.

The defense technology investment context

Acquisition reform is occurring alongside — and partly because of — substantial private capital flowing into defense technology.

The investment thesis is straightforward: defense budgets are growing, the technologies in demand (autonomy, AI, space, uncrewed systems) are ones where commercial firms hold genuine advantages, and the incumbent primes are structurally slow. If procurement barriers fall, well-capitalized technology firms can capture meaningful share.

Evidence supports parts of this thesis. Anduril's roughly $20 billion Army counter-UAS award in March 2026, and its selection alongside General Atomics for CCA Increment 1 production, demonstrate that firms founded within the last decade can win at scale.

Several cautions are warranted.

Defense revenue is lumpy and slow. Sales cycles measured in years, dependent on appropriations, and vulnerable to program cancellation. Growth-stage financial expectations map poorly onto this.

Program of record dependency creates concentration risk. A company whose revenue depends on one program faces existential exposure to a cancellation decision it cannot influence.

Compliance costs scale with contract size. The regulatory relief that eases entry does not extend to large programs. Firms that grow into major contracts encounter the full compliance apparatus eventually.

The primes are adapting. Established contractors have capital, customer relationships, past performance records, and increasing awareness of the competitive threat. Assuming they remain static is a mistake.

Not every technology has a customer. A capability that is technically impressive without a validated requirement, a budget line, and a program office to receive it has no path to revenue regardless of merit.

Practical guidance

For firms navigating this environment, several observations hold consistently.

Find the receiving program before building. The most common failure is developing capability with no organization funded to buy and sustain it. Identify the program office, the budget line, and the requirement owner before committing engineering resources.

Understand which money can buy what. Research funding, procurement funding, and operations funding have different rules and different timelines. A customer with enthusiasm and the wrong color of money cannot buy anything.

Use the fast pathways deliberately, not reflexively. CSOs, Other Transaction Authorities, and Small Business Innovation Research contracts each have distinct applicability and limitations. Selecting the wrong mechanism wastes months.

Plan for the transition gap explicitly. Moving from prototype contract to production program is where most efforts die. The CSO-to-production pathway helps, but the transition still requires a funded receiving program, a sustainment plan, and force structure.

Build compliance capability incrementally. Full cost accounting standards compliance is expensive and unnecessary early. Understanding what is required at each contract size, and building toward it, avoids both premature overhead and disqualifying gaps.

Invest in production capacity ahead of demand. For attritable systems, demonstrated manufacturing capacity is increasingly a source selection factor. This requires capital deployed before contracts are certain — an uncomfortable but necessary position.

Secure compliant supply chains early. Component provenance requirements are tightening. Firms with qualified non-adversarial supply chains hold an advantage that is difficult to replicate quickly.

Treat past performance as an asset to accumulate. Small contracts executed well build the record that enables larger ones. There is no shortcut around this.

Outlook

The FY2026 reforms represent genuine progress on contracting mechanics, particularly the CSO-to-production pathway and the compliance relief for non-traditional suppliers. These address real barriers that Replicator and similar efforts encountered.

They do not address the workforce, the budget process, the requirements process, or test infrastructure. Those omissions bound how much acceleration is achievable, and further reform efforts are already being framed around them for subsequent authorization cycles.

The realistic expectation is incremental improvement rather than transformation. Programs that would have taken eight years may take six. That is meaningful and insufficient against technology cycles measured in months.

The deeper question is whether an acquisition system designed to buy small numbers of complex systems can also buy large numbers of simple ones. These require different processes, different oversight, different risk tolerance, and different workforce skills. Attempting both within one system produces compromise that serves neither well.

Some analysts argue for a genuinely separate pathway — different rules, different oversight, different workforce — for commercial and attritable technology. That would be a larger change than anything enacted so far, and there is no current legislative vehicle for it. But the logic is sound, and the pressure created by every capability gap discussed elsewhere in this analysis points toward it.

For now, the practical reality is that the pathways have widened, the barriers have lowered, and the customer is actively trying to buy differently. Firms that understand the mechanics and position accordingly have more opportunity than at any point in decades. The system remains slow, but it is measurably less slow than it was, and the direction of travel is consistent.

Allied procurement systems face the same tension and are experimenting independently. European rearmament programs, NATO innovation mechanisms, and national schemes in the United Kingdom, Germany, and the Nordic states have all created fast-track pathways for commercial technology. Several have moved faster than the U.S. system on specific mechanisms, and the resulting divergence in procurement practice creates both opportunity and friction for firms operating across markets.

Frequently asked questions

What is the SPEED Act? The Streamlining Procurement For Effective Execution And Delivery Act — House legislation whose provisions were incorporated into the FY2026 defense bill. It formally defines the program executive officer role, reduces procedural requirements, and lowers barriers to entry for commercial firms.

What is a Commercial Solutions Opening? A competitive contracting process for acquiring innovative commercial technologies, substantially faster than traditional solicitation. FY2026 reforms expanded CSO scope to include commercial products and services and created a pathway to move successful CSOs into production.

Why is defense acquisition so slow? The system is designed to ensure fair competition, prevent fraud, and deliver systems meeting stated requirements. Each safeguard adds time. It also assumes a program model that fits complex weapons development but not commercial technology that already exists and changes continuously.

What did the FY2026 reforms not address? Acquisition workforce training, capacity, and incentives; the appropriations and budget process; requirements generation; and test and certification infrastructure capacity. Analysts noted the most ambitious reform proposals were scaled back in the final legislation.

Can startups realistically win large defense contracts? Yes, though it remains difficult. Anduril's roughly $20 billion Army counter-UAS award in March 2026 and its selection for Collaborative Combat Aircraft production demonstrate it is achievable. Success typically requires years of accumulated past performance, a validated requirement with a funded receiving program, and demonstrated production capacity.