A Conversation with the Pentagon's Chief Buyer, Under Secretary Michael P. Duffey
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In this podcast episode, Under Secretary of Defense Michael P. Duffy discusses his efforts to transform the U.S. defense acquisition system, focusing on speed, partnership, and industrial base growth. He highlights a shift from compliance-based processes to execution-based ones, driven by urgent global threats and the need to deliver capabilities faster to warfighters. Duffy stresses the importance of direct, transparent engagement with industry, including both traditional contractors and startup entrants, to overcome obstacles like production bottlenecks and investment risks. Key to this is the aggressive use of multi-year procurement authority, which has secured $25 billion in industry self-investment for systems like Patriot missiles and aircraft, enabling traditional firms to behave more like capital-raising startups. He also details recent NATO summit deals in Ankara, such as establishing European production lines for PAC-3 and ATACMS, which meet high allied demand while maintaining U.S. jobs. Duffy learns from Ukraine’s rapid, iterative battlefield innovation, advocating for an "85% solution" approach that accepts trade-offs to prioritize schedule. He describes the transition from PEOs to PAEs, which consolidates accountability to allow leaders to make strategic trades across portfolios, ensuring capability delivery on time. Overall, the conversation underscores a collaborative, direct approach to rebuilding the defense industrial base and meeting contemporary security challenges.
(upbeat music) - Welcome to the Cogs of War Podcast. I'm Jonathan Panter, executive editor of the Cogs of War Vertical, brought to you by Juan the Rocks and Guz Allen Hamilton. Today I am joined by the honorable Michael P. Duffy, Under Secretary of Defense for Acquisition and Sustainment. In this role, he is responsible for all matters pertaining to acquisition, contract administration, logistics and material readiness, installations and the environment, the acquisition workforce, the defense industrial base, and several other areas. Over the past two decades, Mr. Duffy has served in senior roles throughout the Pentagon, including deputy chief of staff to the secretary of defense and chief of staff to the undersecretary of defense for research and engineering. He also previously served as the program associate director for national security at the office of management and budget, where he oversaw the entire $1 trillion national security budget for the United States government. Under Secretary Duffy, thank you for joining Cogs of War. - Thank you Jonathan for having me. - You and I have met before, a couple months ago, I think it was at the Schmidt AI Expo on stage where I interviewed you. - And there's just a question I've really been dying to know, which is that I asked you a bunch of questions at the time, but I ran through the questions too fast. And so I had about 10 minutes left on the shot clock and I made up a few questions at the end. Did you notice that or did that pull that off? - You pulled it off miraculously. I didn't notice it at all. - No, well, you kind of gave me a little bit of a look. So I was like, maybe I really ruined it with this guy. - Not at all. - I thought it was an interesting experience there, walking around the floor and we're talking to an industry audience. And of course, you and I had the misfortune of going on right after Mr. Schmidt. So people's attention spans had diminished a little bit, but I imagine you get out in front of industry audiences like that a lot. - I try to as much as I can. I mean, this whole idea of transforming the acquisitions of the system is not about government, it's about government and industry. And so ensuring that we've got clarity of our message and our expectation and what we're trying to accomplish is critical. So I think we've had a really positive run here developing and building trust and relationship with the industry so that we know what is getting in their way. They can tell us how we can improve to achieve the speed and the volume that we need for the war fighter. - You've been in this building for a long time. I understand about 20 years in different roles. - In and out, yes. So when you talk about engaging with industry as directly as you are, would you say it's at a much higher tempo than it has been previously in your career? - From industry's account. - It is. - Certainly in my experience, you know, I think we have had stretches where we've been meeting with industry leadership multiple times a week at the deputy secretary and my level. And certainly throughout the acquisition enterprise, I think that's been critical to us bringing new models of how to do business. - The transparency of communication, the directness in terms of our expectations think is built our ability to do that. - And is the messaging different that's going out to industry? Some of it I think is encouraging, but some of it is it seems like you're trying to light a fire under industry, right? To rebuild our industrialist. - It's not all kindness and we are clear and direct about what our expectations are to deliver capability for the war fighter. - And we have to have those hard conversations. - But I think we recognize on both sides of the table that in the end we need to work together in a partnership to get the mission accomplished. I think that's what we're doing right now with our level of engagement. - Without naming names, can you say what some of those hard conversations sound like or what they're about? - Well, it's how can you move faster? How can you get your production level up? How can we do this within budget level? I think there's initial resistance. I think that most folks are used to the old system, which is I've got to kind of protect my risk. I've got to protect myself from getting overextended, but I think as we get into the discussions and there's clear understanding that, this is not a one and done conversation, we're gonna be working through this together to get to a place where we can come to an agreement. Like we did with the munitions deals earlier this week and as we're working towards in some of our aircraft platforms and other portfolios, to get to a place where we can understand what is an obstacle for industry, to get to tripling the production of the Patriot Missile and what is an obstacle to industry, to making the investment required to achieve that rate and to do it without raising the unit cost. We're better positioned to have a direct negotiation to get to a place like we did recently and like we continue to do, not just with our traditional contractors, but with some of our new entrance to say, this is the level of performance that we expect and demand from you. If you think that you can meet this, we can make some commitments that I think will allow us to really accelerate. Well, I definitely wanna get to the munitions that you just mentioned. I understand that was a big discussion. The PAC-3, Miss Wells, the Attackums, when you were in Ankara. But you just mentioned something interesting, which is, well, you brought up risk and then you also brought up our traditionals versus our non-traditionals. And I think this is something maybe people miss that the risk profile of each of those is very different. You have VC-backed companies, they don't really have to worry about revenue yet. And then you also have our traditionals who are building very important things, but they have to deliver value to their shareholders or publicly traded companies. They may want something like the cost plus contract that we're moving away from because of the potential development overruns that are associated with building complex systems of systems. So how do you manage talking to those two different audiences? I think this is really the genius of where I believe we're going, which is leveling the playing field. So we certainly agree with the value and are pursuing partnerships with the startups, the new entrants that have been able to capitalize, tremendous growth. That's cost the taxpayer doesn't have to bear, or the department doesn't have to bear. Traditionally, the traditional contractors didn't have that model to raise funds, but by leveraging the multi-year procurement authority, which is not a new authority, but it's applied in a more aggressive way, we give that certainty of demand to both the traditional and the non-traditional and as a result of the multi-year procurement authority with these exquisite systems, which have mature designs, we've been able to get commitments from industry to the tune of $25 billion of self-investment, which I think is basically saying, okay, the traditionals can now behave like the startups and the non-traditionals where they can capitalize if it's not based on, well, it is based on assured growth. I think the non-traditionals have built a portfolio based on we have the promise of tremendous growth and that growth will attract capital. We have made the same demands of the traditionals who build exquisite systems that are hard to reproduce. When I say leveling the playing field, now those traditional companies are bringing similar levels of capital to achieve the growth that we need, all to the benefit of the warfare and the taxpayer, getting capability at high volumes at speed to really make sure that we can keep pace with our adversaries. - And what have been some of those major multi-year procurements? Is it just munitions or are there other things we wouldn't expect in there? - It's just right now we have agreements on munitions, not just munitions, but we've stepped into the supplier base, we're talking to solid-maker rocket motor providers, we're talking to secure providers that are critical components for these key systems like standard missile and patriot and THAAD and assuring that we have where we have stable need and where we need considerable investment to grow that we provide that certainty of demand signal to industry. So they've got the confidence in their investor base as the confidence to make those investments. But we're extending beyond that. I was encouraged to see the Congress recently put multi-year procurement authority in for the F-35 and the F-15, tremendously capable platforms that we're gonna need in great supply, but there's also a need for some investment to grow, for example, software labs and the F-35 and industrial base to make sure that we've got the throughput for advanced capability to make sure that aircraft stays as competitive as we need it to be. And we're in great discussions right now with the vendors for those aircraft to make sure that we can pursue similar deals. - So let's get to Turkey then. You were just in Turkey with the NATO Summit in Ankara. You were there, I understand, for about three nights, is that right? - That's all right. - And how scheduled are you in these sort of high-level visits? - Highly scheduled. - Yeah, I say that with the greatest of affection because we have a lot of announcements to make. We have a lot of accomplishments. Our teams have been working throughout the year, dating back to the Hague when this president's leadership helped us achieve spending commitments from our European allies. And since then, we've been pursuing, how do we take those spending commitments and how do we convert them into true industrial growth and capability in the hands of our allies? And so we rolled out seven or eight deals where we were establishing, for example, a system, a pack three system facility in Europe where we don't have to send Patriot missiles back to the United States to get refurbished or renewed for future years or whatever system is required. We can do it in theater there in Europe or exploring potentially establishing Amaran production capacity in Europe. That's the advanced medium range air missile, right? - That's right. That's one of our best air to air munitions and a key element of the F-35, which of course, many of our partners over in Europe have procured. And I'm excited about the ATACMS you'd mentioned. So Lockheed Martin has built the Prism, which is the next generation of deep strike missile. ATACMS has been a war course for our war fighter, but we're focused on the Prism and so we're downshifting on the production line of ATACMS to build up the Prism production line. But there's still a need for our allies and partners they want to buy and build ATACMS. And so in a partnership with between Lockheed Martin and Ryan Mattal, we're gonna be able to build an ATACMS line in Germany, which will take the great innovation of America and help to equip and arm our allies and partners by building out their industrial capacity over in Europe. - I certainly see the case for the production and the sustainment of some of these exquisite munitions among partners and allies on their territories. time more.
I'm worried that some people here, some skeptics might say that that idol's American production lines. Is there something they're missing? The president did recently roll out the America first arms transfer strategy. And I think it's driven by, first of all, we need to make sure that we're taking care of the American war fighter and putting adequate capability in his hands. And we're confident and proud of the fact that we build the best weapons in the world with the greatest exporter of arms in the world. And I think that truly the demand for our munitions and our weapons, with especially with the spending growth, spending commitments, being both our European and our Asia, allies and partners, is such that demand is so great that we will need actually partnerships for production in the international space. There is no shortage of demand. And I think those munitions deals we rolled out earlier this year make clear that the production capacity of the U.S. will be stretched. That will provide for jobs that will provide factories that will provide growth in the U.S. And I think there will still be a place for production overseas with our partners in allies. What do you think mostly explains that really high overseas demand? Is it Ukraine? Is it the president's demands for partners in allies to meet the 5% spending targets? Is it a recognition of what warfare looks like today in the cost exchange ratio? All the above, what's apparent that we have a pretty threatening global security environment right now. I think countries across the world are recognizing a need for them to provide for their own defense. You know, there's a natural need for it. The president's leadership in partnership with Secretary General Ruta and European leaders to get to those spending commitments is just an extension of that. That, okay, we do see there's a need. We're going to make this commitment to spend those dollars. And the next step becomes, how does that lead to real growth? And I think I like to point to those munitions deals that we did earlier this year. Beyond munitions deals are partnerships and unmanned systems, our marketplaces we're developing. All these initiatives, I think, can be examples of how we can partner with our European allies to take the commitment of spending and translate it into shovels in the ground, additional factories and capability rolling off the line. I can also really see why those partners and allies they want to buy things like the pack three, the attack them since on the exquisite systems, but you mentioned the unmanned systems. And I've always wondered about this because some of the we talk about the proliferated low cost mass. We're talking about small quadcopter drones commercial off the shelf technology. It seems like some of those things might be things that Europeans themselves could build or might have an interest in building indigenously. So have you seen interest from the partners and allies in some of the cheaper off ranks or the non traditional order of ranks? I don't want to say cheaper. They just say different, not necessarily full-fledged exquisite systems. Well, I think there's clearly a proliferation of unmanned aerial vehicle development. My another Ukrainians have really excelled at getting new responsive iterations on the battlefield to stay ahead of the threat. But I think there's unmanned undersea vehicles, there's unmanned surface vehicles where I think we really have continued to be a market leader where we are seeing interest. And so some of our allies are seeking opportunities to buy some of those systems, even in small quantities to start to get to establish their capabilities. We learned anything about acquisition and sustainment from the Ukrainians from watching how they, as you said, rapidly onboarded, iterated or other things maybe we shouldn't be learning because they're model-squat different. I think we can always learn, especially with the speed at which they've developed battlefield adjacent production capacity, how they've been able to embed engineering capability with the warfighter so that they can quickly learn what doesn't work and translate that right back into design and production so that they can always stay ahead of the threat. I think that that's something I think we can certainly learn from. But I think it's mutual, right? There's a lot of things that we've been able to provide to them and get feedback from them on how do our systems perform. But one of the things that Ukrainians get a lot of credit for is moving fast and breaking things. I think we're trying to impose that here in the United States with the commercial first offerings and the departments claim that we're okay with 85% solutions, I think, was the phrase I heard. And I'm very sympathetic to that as well. Are you at all concerned that when programs fail in that 15% of cases that it can incur pushback from the hill or from IG or anything like that? First principle is urgency and speed are absolutely essential right now. They have to be kind of the dominating characteristic of how we go about acquiring our systems. The Ukrainians have no choice but to operate under that principle because they've got the threat of a battle right in front of them. So yes, we're trying to pursue how do we establish that urgency and that wartime footing in the secretary and the president are clear about the fact that we need to pivot from a compliance-based structure to an execution-based system. And so I think that is a theme of how are we transitioning to a commercial model in doing so with an understanding of the mission that we're in translating that urgency to the workforce and to the industrial-based leadership. And is there any way we've communicated to industry or maybe even the policy made it clear that they can fail sometimes? Yes. So you'd ask the question about the 85% solution. The way I think about the 85% solution is I think we had the benefit for a long time because we didn't have a threat of saying what is the 100% solution? And how do we apply the tremendous engineering, talent, and technological and innovative capabilities the United States government and industry to achieve the dominant capability? And that served us well through the Gulf War and the Cold War. We no longer have that advantage now. I think what we need to recognize is that technology is advancing outside the five walls of the Pentagon faster than it is here. And so how do we come up with a system that first of all doesn't prescribe what a solution might be? So how do we state the problem the warfighter is facing instead of prescribing the solution that the warfighter needs and invite the innovation of industry to help us bring innovative solutions to solve the warfighter's problem. So that's one angle on the 85% is we don't even necessarily want to prescribe what 100% looks like. And I ask the industry to come in and talk about where they see opportunities if we describe the problem adequately. The second thing is go I go back to that concept of speed and urgency, which is essential for us to prioritize at this time. And so what we are looking for and empowering our acquisition leaders, we recently transitioned the program executive officers or PEOs to portfolio acquisition executives or PAEs. And it's more than just a name change. What we want them to do is say, okay, I am the the official who's singularly responsible for delivering a capability on schedule to get in the hands of the warfighter. Are there trades that I can make in partnership with the operating community or maybe I need 85% of the range instead of 100% of the range that I thought I could and that allows me to deliver faster or allows me to cut the cost just enough so that I can enhance another characteristic of the weapon. And so what we want to do is empower our acquisition leaders, be able to make those trades and preserve schedule as the paramount characteristic of how we deliver our capability. So just to maybe make that concrete for some of our listeners, what is it that the PAEs maybe can do today that used to take a PEO a month or six months or a year? I think that what we've done is clarify that the PAE is the accountable official. I think what you had before was kind of distributed accountability. It's just that characteristic of working with the government where you had a contracting chain of command that reported to a head of contracting who loaned a contracting officer to a PEO. And so that contracting officer had the their primary chain of command was the contracting authority. Now it's the PAE. And so now there's a natural incentive and that's across all of the disciplines of the acquisition workforce, so science and technology, requirements, test and evaluation, systems engineering, contracting. All those folks are concentrated on a team that is accountable to the PAE that then is also accountable to the war fighter to deliver on time. So I think that's first of all making sure they've got the right team with the right accountability to deliver. Secondly, I think that the mechanism existed before, but I think what we did was reinforced and really prioritized the ability for the PAE to take leadership in making those trades with the operators, with the war fighter to say, hey, what if I shaved this range by 100 kilometers? I could or miles. I could take it from two year development to a year development and you know, get in your hands much more quickly. Is that trade useful? Sometimes it might not be. And that's the conversation we wanted to facilitate with the creation of the capability trade councils where they can have that conversation between the operator and the acquisition officials and feeling powered that, okay, I'm going to prioritize schedule here. I'm going to drive this conversation so we can get something in the hands of the war fighter. So when I'm taking away and many people have said this also in academia and people have studied this, is that the greatest bottleneck in the US industrial based policy was for a long time, they bureaucracy and that there's been some streamlining efforts that affect. And I wonder since you've said on multiple sides of the issue, I understand you are office of management and budget and you oversaw the entire national security budget, whether there's anything you saw there that you brought into your streamlining efforts from now being on the side of depending on the chief fire. A great experience to be over in the office management and budget with a great leader, Russ Vote, somebody who's a passionate supporter of shippling, for example, has a key national security capability. Are you just saying that because you know I was in the Navy. So now I'm not saying that. I didn't know that you're a. in the Navy, but now I do. (laughs) So I think the office of management and budget, my experience there was, from the budget side of things, there's also this kind of traditional system that I think what I hope acquisition transformation can deliver is in addition to requirements flexibility, we can also provide our acquisition leaders with budget flexibility, because what I learned from the OMB experience was the 18 month life cycle of a budget, and that's I think in the best case scenario. We start building a budget in the spring, and we build it through the department through the fall, and then OMB takes a look at it through the winter, and then we submit it to Congress, and then Congress works on it throughout the spring and summer, and if we're lucky, we get it by December. So that's actually more like a 24 month timeframe. Well, what has changed since that budget occurred? Maybe 30 years ago, not a lot has changed, but now you've got emerging technology that you couldn't have accounted for 24 months ago. You've got a rapidly evolving threat. Well, we need to then those budgets oftentimes, although they do get adjusted throughout the process, they don't benefit from the original leader who developed that budget back at the beginning of the process. What we need to do is make sure we preserve the flexibility to respond to emerging technology opportunities that we see every day here with these new startup, and then also the evolving threat, and make sure that we can move money around inside the system to apply to those emerging technologies or to make sure that we're prepared for that evolving threat. Yeah, I think what you're saying, if I might repeat it back to you, is that especially things like the software development cycle and updates, these happen nowadays, well, they happen in months, but with AI, they could potentially happen in weeks, these changes, and that on a 24 month cycle, it's nearly impossible to keep up, and nothing might be expenditure of munitions that we talked about, as we saw during the Iran War, and that's public reporting. What's at risk if we don't get reconciliation? I think a number of things, first of all, a lot of the progress we've made, I mean, I think we've made tremendous progress in transforming the acquisition system. I think we've made tremendous progress in pivoting our traditional defense contractors to think more in a commercial mindset, and yes, they've committed $25 billion of their own corporate money to grow the industrial base and to increase the speed and volume that we buy our weapons, but that still requires us to be able to buy the weapons from them at those increased rates. So we've gotten commitments from our industry partners to invest in the CAPEX to achieve the growth. We've gotten commitments from them to hold the unicost steady. All of these things are tremendous victories for the taxpayer. We in exchange for us buying increased volumes of weapons, and so that requires an increased budget level. And that, and I think we're getting a great deal for the taxpayer and the war fighter because we are preserving the unicost. We are not bearing the cost of the increased production capacity, but we are buying more weapons and expensive exquisite weapons. And so that's dependent on reconciliation. I also think that we're at a pivot point. We are just modernizing across the entire portfolio. We've got an F-35 modernization underway while we also have to sustain those planes and ensure that we've got enough spare parts in the pipeline to make sure that we can keep them afloat. We have all this capital investment in startups that are building on man-undersea vessels. They're building autonomous UAVs. They're building low-cost, hypersonic weapons. We just across the board seeing tremendous investment in defense tech and innovation. If we don't take advantage of the opportunity to provide those that are providing capability with a contract, we have risk that investment going away. And so I think it's critical for us to ensure that we embrace this moment where we create a multiple of each government dollar that's invested and leverage the investment that the venture capital and finance community has made in advancing defense technology across the board. I took this job because I felt very strongly that the defense industrial base is a strategic capability in and of itself. And I think there's a very aggressive approach in the reconciliation built in to ensure that we're building the defense industrial base of the future that the war fighter needs to supply not just the first but multiple supplies of the joint force that we need in the future. In the case of protracted war, we have to make sure that we're, as we did very successfully in World War II, building capability at scale that will keep our war fighter replenished to a place where we can prevail in a long-term conflict. I remember reading Secretary, former Secretary Gates has memoir a few years ago. And he said that when you enter a high level position in the Pentagon, you have all these different plans and things you want to do. You get maybe one major change, right? Because you're fighting against the building sometimes. Is there any of these mission sets you just described? I mean, you mentioned certain emerging technologies. You mentioned underwater vehicles or walking factory plant floors and rebuilding industrial base. Is there any one issue that you're just obsessed with that like if you had to pick your one thing that we cannot fail on that you want to accomplish? I think it is building the industrial base to a place where we are re-industrializing America that can supply and provides the resilience, the supply chain resilience, the production capacity to supply the war fighter, the innovation they need to keep that edge. I could go program by program and portfolio by portfolio. All of them have critical needs. Mountain nuclear modernization. We're modernizing all three legs of the triad right now. We've got F-47, we've got F-35. Shipbuilding requires a tremendous attention. All of it across all of it is, do we have the defense industrial base with the workforce and the supply chain and the innovation that will allow us to scale these tremendous technological advancements and provide them to the war fighter in the volumes that he needs, he and she needs? We're talking about something I can dust your base policy. It involves so many different variables. You're talking about potentially emerging technologies where we don't know what they're gonna look like in 10 years. We're talking about buying up a bunch of stuff and then five or 10 years now, there are various sustainment costs associated with that, the graceful degradation, their replacement. We're talking about workforce development. I think it's a really cool position to be in when you're it's almost like a Marionette here of the defense industrial base. But I'm also curious because it's multivariable and there could be second and third or effects, is there anything you're worried that, not you, but in general, with a way we understand technology for instance or workforce? Is there anything you're worried that we might be wrong about that you think about, maybe, what if this goes wrong? - I think that there's tremendous capability in the innovators that are just fighting to get into the Pentagon and there's tremendous capability that's been proven in our traditional contractors. I think they know how to get it right. I think our workforce knows how to get it right. I think that, you know, in a role like the one I have, the only way to be effective is to figure out how do you empower this coalition of people, this, you know, the industrial base leaders, the workforce, the acquisition workforce, the finance community, how do we create the policies and support an actment of the budgets that allow them to do all the great work they knew how to do. So I'm sure there are things that could go wrong, but in the aggregate, I think we think about how do we adjust the policy or pursue the statutory change or support the budget that empowers the great patriots in our acquisition workforce in our industry leadership and especially in our industry workforce at the deck plate level that are, you know, turning out destroyers and F-47s and unmanned systems at the pace that we need. - People have been trying to reform the acquisition system for decades and Secretary Hanks at actually just recently, you know, he quoted something former Secretary Rumsfeld said in 2001 about this, right? So everyone kind of knows it's a challenge. What do you think is really different this time? - First of all, we have a tremendous alignment of leadership. It's probably the unifying issue in Washington right now. Both sides of the Potomac, both sides of the aisle and both sides of Pennsylvania Avenue, all want acquisition reform and has not a lot of divergence on how they think it should be done empowering the right leaders in the acquisition workforce, getting the right funding to the right places to supercharge our defense industrial base. So what's different? I think there's a recognition of leadership certainly on my part, I believe on Secretary Feinberg's part and Secretary Hanks at the end of President Trump and congressional leaders that it's not gonna happen overnight. What we need to do is recognize that it's this Secretary called it a war of attrition against a culture that has been entrenched for decades. And I think that what we need to do is we have a blueprint for how we can empower that workforce. And we need to through repeated communication, examples, championing those who take smart risk and deliver outside the traditional kind of compliance based approach that achieve speed and volume, championing the folks that recognize a different way of doing business and celebrating them as an example to how we can drive this sort of change throughout the system. It's not gonna be easy. I'm not professing that it would be, but I believe now we have the threat that we face. I think everybody recognizes that it's a challenging global environment. We have disruptive leadership in place. We have alignment of that leadership. We have this emerging focus from all corners of American innovation base that defenses a place where there's opportunity, it's opportunity for growth, it's opportunity to deliver for the warfare. There's an opportunity to be a part of the mission. And how do we restore that sense of mission in addition to creating the growth that drives the market? I think we can do that in the environment we're in. Does the workforce internal to the Pentagon?
the acquisition workforce after these reforms have everything to need in terms of knowledge, training, and tools to deliver on rapid acquisition. That is also a constant opportunity for us to take these innovative techniques, OTA, CSOs, and further drive their use in the system. I think that I do think that's also kind of a pattern of repetition. If we want to ensure that we're getting the knowledge of how to best utilize these new tools, and they're not necessarily new anymore. I think the incentive structure is what we need to evaluate. How do we incentivize the workforce? How do we incentivize industry to adopt new modes of behavior, to pursue speed as opposed to compliance as the primary driver of behavior? I think they answer the question is, no, we don't necessarily have all those tools in place, but we recognize that. I think that's part of the process of transitioning the workforce to a much more forward-leaning approach. Are you seeing the culture change at all? We are seeing the culture change. I just was at a dinner with the chairman, Boo said that very directly, said the ability for us to turn around a contract, the ability for us to take a capability that may be prototype by industry without direction from the Pentagon, recognizing, oh, we actually need this, and being able to jump through what were traditional obstacles to get something on contract in the field underway quickly, this happening at speed. So we're looking for those opportunities. This is where I think the workforce is getting to. How do we get to a place where it's not about how do I protect my, manage my risk, it's how do I get capability in the field quickly? We've covered a lot of territory in this talk. You seem like you might be a guy who doesn't sleep much. My last question for you is, what's fun about this job? Everything. This job is rewarding in the sense that I do think it's central to success of supporting the war fighter. Let's be honest, you know, the battle of the future is going to be won with weapons and capability and our ability to produce them at scale, our ability to create, re-industrialize, a defense industrial base that can supply that joint force of the future. And so I get to work with great folks like under secretary of meal, Michael, who has just an unparalleled network of folks in the startup community with his experience at Uber, and chance to work with Brad Hansel over at Undersecretary for Intelligence and Security and kind of being at the cutting edge of how do we think ahead of where the adversary is going and how do we allow that to inform how we strategically invest in the future force and the defense industrial base that will supply that force. And then Secretary Feinberg and Secretary Hegseth, who we each are bringing their tremendous talents and leadership styles to rethinking how the Pentagon does business. So to just be a part of that team and to have the kind of impact that I believe we're having and that we must have in order to win the future is really a true honor. Undersecret Deuffy, thank you for joining us. Thank you very much. It's great to be here. Thank you for listening to Cogs of War. Don't forget to sign up for our free newsletter that comes out every other week. WarntheRox.com/cogs-of-war. Keep reading, keep thinking, and stay healthy.
Podcast Summary
Key Points:
Under Secretary Michael P. Duffy emphasizes transforming defense acquisition from a compliance-based to an execution-based system, prioritizing speed and urgency for warfighter needs.
The department is increasing engagement with industry, including both traditional contractors and new entrants, to build trust and address obstacles like production capacity and investment.
Multi-year procurement authority is being used aggressively to secure industry self-investment (e.g., $25 billion) for mature systems like munitions, Patriot missiles, and aircraft (F-35, F-15), leveling the playing field between traditional and non-traditional firms.
Recent NATO summit in Ankara announced deals to establish European production lines for systems like Patriot (PAC-3) and ATACMS, partnering with allies to meet high global demand without displacing U.S. jobs.
The department is learning from Ukraine’s rapid, battlefield-adjacent innovation and iterative development, applying an "85% solution" approach that accepts trade-offs to deliver capability faster.
Program Executive Officers (PEOs) are being transitioned to Portfolio Acquisition Executives (PAEs), consolidating accountability to empower leaders to make schedule-preserving trades across portfolios.
Summary:
In this podcast episode, Under Secretary of Defense Michael P. S. defense acquisition system, focusing on speed, partnership, and industrial base growth.
He highlights a shift from compliance-based processes to execution-based ones, driven by urgent global threats and the need to deliver capabilities faster to warfighters. Duffy stresses the importance of direct, transparent engagement with industry, including both traditional contractors and startup entrants, to overcome obstacles like production bottlenecks and investment risks. Key to this is the aggressive use of multi-year procurement authority, which has secured $25 billion in industry self-investment for systems like Patriot missiles and aircraft, enabling traditional firms to behave more like capital-raising startups.
S. jobs. Duffy learns from Ukraine’s rapid, iterative battlefield innovation, advocating for an "85% solution" approach that accepts trade-offs to prioritize schedule.
He describes the transition from PEOs to PAEs, which consolidates accountability to allow leaders to make strategic trades across portfolios, ensuring capability delivery on time. Overall, the conversation underscores a collaborative, direct approach to rebuilding the defense industrial base and meeting contemporary security challenges.
FAQs
He is responsible for all matters pertaining to acquisition, contract administration, logistics and material readiness, installations and the environment, the acquisition workforce, and the defense industrial base.
The department has increased the tempo of meetings with industry leadership, often multiple times a week, to build trust, clarify expectations, and address obstacles to achieving speed and volume for the warfighter.
These conversations focus on moving faster, increasing production levels, and staying within budget, with initial resistance from industry but leading to direct negotiations and agreements, such as munitions deals.
By using multi-year procurement authority to provide certainty of demand, securing commitments like $25 billion in self-investment, allowing traditional contractors to behave more like startups and attract capital.
Agreements include munitions and critical components like solid rocket motors and seekers for systems like Patriot and THAAD, with Congress also granting authority for F-35 and F-15 platforms.
Deals included establishing a PAC-3 system facility in Europe for in-theater refurbishment, exploring AMRAAM production capacity, and building an ATACMS line in Germany with partners like Lockheed Martin and Rheinmetall.
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