How will US defense changes affect procurement strategy?

Summary: Following the resignation of US Defense Secretary Chuck Hagel earlier this month, there could be major changes ahead for the way the US Department of Defense (DoD) procures goods and services, with more of a focus on promoting innovation and reforming outdated modes of operating.

The resignation of Mr Hagel marks the third Defense Secretary to leave the position under President Obama. It is thought that the decision was mutual after a series of disagreements over foreign policy in Iraq and Syria.

Difficult budget choices

Mr Hagel led the DoD in making difficult budget choices in the military’s force structure, compensation and benefits programs, while sustaining and expanding future programs future such as cyber warfare and the Joint Strike Fighter.

Before his departure, Mr Hagel made high-profile speeches which were potentially intended to put his legacy in place, knowing he was set to leave office. The most important of these polices is the Defense Innovation Initiative, also called the third offset program.

The third offset program is a multi-administration effort to encourage rapid innovation in defense areas and sectors which the US deems to be strategically valuable. These include robotics, unmanned systems, long-range strike and big data.

Third Offset proposes to exploit the U.S. lead in specific commercial areas where it is believed it will be hardest for political adversaries to develop effective countermeasures. The program seeks to create a new strategy to counter Russian and Chinese weapon developments.

The work aims to boost innovation in order to bring the Pentagon’s R&D and acquisition programs into the 21st century.

Reversing budget cuts

Perhaps the main change to expect in President Obama’s new Defense Secretary is a reversal of the Budget cuts which have been seen across the globe in recent years, particularly in the West.

Chuck Hagel was given the position with the main aim of controlling budgets, removing personnel from Iraq and creating a more efficient and streamlined department.

However, with new threats in Syria and with the rise of ISIS reshaping worldwide defense priorities, it is time for a reversal of the cuts Hagel was keen to implement.

While a successor has yet to be announced, it is clear that the Third Offset Program would represent a major upheaval of the country’s current defense strategy, with investment and innovation at the heart of the new agenda.

Speaking to the New York Times, Ben FitzGerald, director of the Technology and National Security Program at Center for a New American Security (CNAS) said that the next Defense Secretary will be sure to improve budgets and invest in the future of defense:

“If they do that right, these will be investments and initiatives that can run through multiple administrations.

“This shouldn’t be seen as political. This is about military innovation and power projection and wise investments, which one hopes are not partisan issues.”

Defence procurement developments

Mr Hagel will remain in post until a new Secretary is appointed by the President. To keep up to date with all these developments and more changes in defense procurement from across the globe, find out more about Defence Contracts International today.


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