Welcome to the latest edition of Defense Tech and Acquisition.
The biggest stories across the Department and the defense industry this week:
Dan Driscoll resigns as SecArmy, Hung Cao nominated as full SECNAV
New industry partnerships to advance novel tech solutions.
Army moves out on new MOSA, software directives, and Jailbreak exercises.
Navy pursues directed energy, CCA, and unmanned refueling at sea
Air Force pushed to buy CCAs for HVAA protection, needs new MQ-9 ASAP
Space Force still struggling to integrate commercial data for multiple reasons
GCAP program back on-track, Russia actively conducting sabotage in NATO
Army Secretary Dan Driscoll Resigns
BLUF: Dan Driscoll tendered his resignation after speaking with the President. His last day was Thursday. Driscoll’s departure comes amid months of a reported strained relationship with Defense Secretary Pete Hegseth.
In recent months Driscoll launched the Army’s low-cost interceptor program to produce scalable, affordable interceptors in an effort to end the days of relying solely on multimillion-dollar systems, mainly manufactured by large defense primes, to down drones costing a couple thousand dollars.
He also created the Army’s FUZE program — a VC-like acquisition model designed to speed up the private development of emerging technologies for later use by soldiers.
Trump Taps Adam Telle as Acting Army Secretary
BLUF: Adam Telle, currently Assistant Secretary of the Army for Civil Works will step in as the acting Army Secretary. Mr. Telle was previously Chief of Staff to Senator Hagerty, White House Legislative Affairs Senate team lead, and Senate Appropriations Committee staff member. He previously served on Senator Cochran’s staff.
Supersonic Challenge
BLUF: USW(R&E) has launched an open challenge to develop innovative, ground-launched, high-speed missile prototypes capable of precision strikes at approximately 1,000 nautical miles in contested environments.
This challenge explicitly encourages first-principles engineering solutions across all missile types and propulsion architectures, including cruise, ballistic, and hypersonic glide systems employing solid rocket, liquid rocket, ramjet, scramjet, or hybrid propulsion.
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Co-located w/Data Analytics & Decision Support Conference | Sept 8-10
Gain insights into challenges and opportunities driving the frontiers of future warfare across key technology and mission areas, including autonomy, C5ISR, contested logistics, and surge readiness, among others.
Participants will engage with senior government officials, investors, academic experts, and industry representatives who share the same interest:
Harnessing emerging technologies for tomorrow’s warfighter.
DoW Launches OpenAI’s ChatGPT Mil on GenAI.mil
BLUF: DoW launched OpenAI’s ChatGPT Mil as another frontier model on GenAI.mil.
This milestone represents the adoption phase of an enterprise partnership established between the DOW and OpenAI in 2025.
Accredited for CUI at Impact Level 5 (IL5), ChatGPT Mil is engineered for secure, consistent enterprise use.
The core experience centers on chat, files, projects, and custom GPTs, with additional features sequenced over time. ChatGPT Mil supports document-heavy unclassified work across the DoW, including planning, policy, logistics, and administration, and is built for scale to support more than 3 million personnel.
Through the CDAO and USW(R&E), the Department will continue scaling frontier AI as a force multiplier across the Joint Force.
Hermeus Picks Anduril Autonomy for Quarterhorse Drone
BLUF: Hermeus’s Mk 2 Quarterhorse high-speed drone will be equipped with autonomy software provided by defense tech firm Anduril.
Anduril’s mission autonomy suite, Lattice, will be paired with the Quarterhorse for flight testing that will kickoff next year.
Quarterhorse is being developed with DIU funding with a goal to fly at Mach 3.
The partnership will carry benefits for Anduril too. While the company’s Lattice solution is currently in the mix for the Air Force’s CCA program, partnering with Hermeus offers a chance to test out the technology’s performance on a large, high-speed platform.
The partnership can dovetail with ongoing work for the government to develop the Quarterhorse, particularly as it relates to integrating an autonomous solution using a government reference architecture.
“As we evaluated a bunch of solutions, we viewed Anduril as the natural partner. We now need to automate a lot of those flight controls. I want to be able to push a button, have the aircraft spin up, have the aircraft auto takeoff, all those basic features that allow one person to manage multiple platforms. Irrespective of the mission, just that level of C2 and scalability, we needed a partner to help us do that.” Zach Shore, Hermeus CEO
Related: Hermeus Taps Anduril for Mission Autonomy
High-Energy Fuel Passes First Rotating Detonation Rocket Engine Test
BLUF: CycloKinetics is testing its alternative rocket fuel with Venus Aerospace in a rotating detonation rocket engine (RDRE). The program will examine whether CycloRP can replace conventional RP-1 and RP-2 propellants.
CycloRP aims to work with existing engines without requiring hardware modifications. CycloKinetics designed the fuel for higher energy density and cleaner combustion.
The testing has support from AFRL and USW(R&E).
Results from the program could offer a closer look at how alternative propellants perform inside advanced rocket hardware.
CycloRP has to perform reliably under extreme pressure and temperature conditions. Successful detonation provides an early indication that the fuel can operate within the unusual environment created by an RDRE.
The second phase will examine CycloRP’s cooling performance.
That test could prove just as important as combustion performance. A drop-in fuel must meet multiple requirements if operators want to use it without redesigning existing propulsion systems.
US Startup Tests Autonomous Cargo Drone with 500-lb Payload, 450-Mile Range
BLUF: Elroy Air completed the first autonomous, uncrewed flights authorized under the government’s eVTOL Integration Pilot Program (eIPP).
The company conducted the flights using its Chaparral hybrid-electric vertical takeoff and landing aircraft in Louisiana.
The week-long demonstrations were carried out with partners and focused on transporting different types of cargo, including medical supplies, food, and industrial equipment.
Elroy Air completed a new series of autonomous, uncrewed flight tests of its Chaparral cargo aircraft under the US Department of Transportation and FAA’s eIPP project.
The project aims to safely integrate Advanced Air Mobility aircraft into US airspace, using operational data to shape aviation policy and support wider commercialization.
The Army requested the capabilities under an existing development contract. The new delivery modes are intended to support resupply missions in contested, remote, or infrastructure-limited environments.
The same technology could also be applied to commercial logistics operations where conventional delivery infrastructure is unavailable.
“These test flights demonstrate how these new aircraft can expand cargo delivery options to communities nationwide and improve our logistics infrastructure.” - Bryan Bedford, FAA Administrator
H4D Seeking Spring 2027 Problem Submissions
BLUF: H4D is looking for real, unresolved national security problems where university teams can work directly with your organization, interview end-users and other stakeholders, test assumptions, and explore potential pathways toward solutions.
Hydrogen-Hybrid Ship Cuts Fuel Use 24% Over 8,500 Nautical Miles
BLUF: Newlight completed an 8,500-nautical-mile commercial voyage using its hydrogen-hybrid system aboard a Lomar Shipping bulk carrier. The voyage produced a 24% reduction in fuel consumption.
The 199-meter vessel traveled from Singapore to Ghana with the retrofit system installed on its existing diesel engine. Newlight also reported a 28% reduction in CO₂ emissions and a 22% decrease in CO emissions during the voyage.
Newlight projects annual savings of roughly $500,000 for large vessels.
Related: New US Factory Opens to Scale Up Hydrogen-Powered Drone Production
Other Defense Tech News:
Manufacturing a New National Security
James Swartout and Nick Doucette
BLUF: The constraint is no longer whether America can invent superior weapons; it is whether the defense industrial base (DIB) can build them fast enough, and whether the government can buy them in quantity before a crisis rather than during one.
The DIB needs a fundamentally different approach to manufacturing rapidly evolving capability at scale.
Recent operations have shown how fast modern conflict consumes high-end inventory—hundreds of interceptors are expended in days while replenishment timelines are measured in years.
Legacy defense manufacturing fails when requirements change between fiscal years, because every new variant demands new tooling, a fresh qualification campaign, and lead times that outlast the threat that prompted them.
Modular, adaptable manufacturing inverts that logic by creating product-agnostic tooling and common architectures enabling changeovers to be conducted by software rather than a capital project.
Four pillars are necessary to enable adaptability:
additive manufacturing
vertical integration of complex machining
design, build and test colocation
multiproduct line design.
Ursa Major’s adaptable manufacturing practice allows it to print four different diameter solid rocket motors (SRMs) at the same time and on the same line.
That production efficiency lets the company scale production and development catered exactly to the warfighters’ demands.
Recommendations
Congress should fund munitions procurement at peer-conflict quantities and commit across multiple years. Single-year buys do not send signals a manufacturer can responsibly invest against.
The military services should convert validated capability into signed contracts and purchase orders with real lead time. Stated intent does not underwrite machines, technicians, or qualified processes; orders do.
The government should enable private capital to accelerate production. Private capital funds a company to build a capability. A government contract validates it. This leads to faster manufacturing and a base that is ready before the requirement turns urgent.
The Pentagon should place real orders with proven new entrants, not just incumbents. A diversified supplier base is what makes surge capacity real.
Our Take: The 4 pillars outlined here are key to the future and DoW should take note. While we agree with the specific recommendations, the challenge there is that the budget only supports so many munition lines at scale. With so much focus on expanding current lines as well as funding a few lower-cost product lines, it not clear that the budget can support more multi-year deals. As manufacturers prove out more lower cost variants of current munition lines, DoW will need to be prepared to pivot.
How Quickly Can the DOD Rebuild and Recast the Munitions Industrial Base?
BLUF: Recent analyses have identified the causes and consequences of shrinking munitions stockpiles. Policymakers and industry should now turn their efforts to not only rebuilding the munitions industrial base but also recasting it for the demands of modern high-intensity wars of precision and attrition.
This calls for increasing the size and changing the composition of the arsenal, embracing magazine breadth and magazine depth through equipping the joint force with a “high-low mix” of exquisite and affordable missiles and interceptors.
The multiyear “framework agreements” between DoW and key contractors is important, but they need to be followed by appropriations from Congress, increased capital expenditures by industry, and contracts from the Pentagon.
Based upon the DOD’s FY 2027 budget requests and subsequent policy announcements, the Pentagon plans to significantly grow stocks of the nation’s proven and capable missiles and interceptors.
Requests for Patriot PAC-3 Missile Segment Enhanced (MSE) interceptors have grown 839%, from 341 in FY 2026 to 3,203 in FY 2027.
Requests for Terminal High Altitude Area Defense (THAAD) interceptors have climbed 2,216%, from 37 in FY 2026 to 857 in FY 2027.
Requests for Tomahawk missiles have surged 1,740%, from 57 in FY 2026 to 1,049 in FY 2027.
Unfortunately, these and other exquisite legacy systems were fundamentally built for performance and not designed or funded for production at scale.
The amount of attention and capital devoted to expanding affordable options within the U.S. arsenal is dramatically growing.
The Pentagon launched the Drone Dominance Program in December 2025, for example, a $1.1B initiative to scale domestic small drone production, remove acquisition barriers, and rapidly field some 340,000 units by the end of 2027.
Since May 2026, the Pentagon and manufacturers have signed several multi-year framework agreements to field substantial inventories of low-cost weapons.
Air Force’s Family of Affordable Mass Missile (FAMM) program plans 27,000 air-launched cruise missiles over the next five years.
The Air Force’s Low-Cost Containerized Missiles (LCCM) program will order 10,000 ground-launched cruise missiles to be delivered by 2030.
The Navy plans to build 4,500 hypersonic air-launched cruise missiles through FY 2031 as part of the Multi-Mission Affordable Capacity Effector program.
The Army seeks to equip its air and missile defense systems with modular interceptors costing under $1,000,000 per unit under its low-cost interceptor (LCI) initiative.
Success requires a sustained and concerted effort by Congress, the Pentagon, and industry to send and receive long-term demand signals and invest in the underlying production capacity capable of building and sustaining inventories.
Our Take: Jerry provides an excellent overview of the current state with a clear view of where DoW is heading. We’re quite sure that this picture will change in the next few years given the current investments and new companies coming online to disrupt the current providers.
America’s Systemic Munitions Shortfall
William Schneider Jr. and David Deptula
BLUF: The munitions shortfall is more complex than industrial failure. It resulted from several factors: unstable defense budgets, overly optimistic assumptions about length of wars, shrinking production capacity, and restrictions on allied manufacturing.
Appropriating more money and asking contractors to run production lines harder is the first step, but a long-term fix requires the U.S. to change the system that produced the current shortage.
The U.S. should look to its allies to expand its industrial base. During World War II, the U.S. issued standardized designs to multiple producers.
A better strategy would involve increased production across the U.S. and allied nations using common designs.
U.S.-German cooperation on the Rolling Airframe Missile has endured for decades. Japan already produces Patriots and agreed last year to produce Advanced Medium-Range Air-to-Air Missiles.
Yet current U.S. policy makes such cooperation difficult, in large part because of the Arms Export Control Act of 1976 (ITAR regulations).
Recommendations:
DoW should base munitions requirements on the possibility of prolonged multi-theater conflicts rather than the naive hope of a brief campaign.
Congress should provide stable multiyear funding at economically meaningful production rates and ensure the availability of excess manufacturing capacity for surge requirements.
The Arms Export Control Act should be replaced with a system designed to expand industrial collaboration among trusted allies with common designs.
Our Take: We 100% agree. One of us served as munitions acceleration lead during the Afghanistan conflict and was amazed at the quantities that represented what is called the Total Munition Requirement which is based on OPLANS and rarely the likely reality in a peer conflict. Adjusting those to represent a mobilization scenario where munitions would have to be regenerated quickly would be much more accurate. ITAR has undergone some reforms but that needs to be continued.
DoW Secures 7-Year Agreements with General Dynamics and Lockheed Martin to Triple PAC-3 and Quadruple THAAD Production
BLUF: DoW announced the signing of two pivotal framework agreements with General Dynamics Ordnance and Tactical Systems (GD-OTS) and Lockheed Martin.
These agreements initiate seven-year multiyear procurement (MYP) contracts designed to increase production quantities and accelerate delivery schedules for critical missile subcomponents supporting THAAD & PAC-3 MSE programs.
Key production goals under the new frameworks include:
Tripling the production capacity of PAC-3 MSE interceptors.
Quadrupling the production capacity of THAAD interceptors.
Ramping up manufacturing for essential sub-components, including motor cases, seeker housings and midsections, and shroud deployment systems.
Related Articles:
US Backs 7-Year Procurement Frameworks to Expand Patriot and THAAD Manufacturing
Lockheed Martin, General Dynamics Get Framework Deals to Surge Patriot, THAAD Production
Replacing Powerpoint Primes with Production Primes
BLUF: The defense venture cycle is entering a new phase. Venture capital has largely made its bets: a small group of companies is emerging as the next generation of defense primes, while capital is beginning to move downstream into reindustrialization.
The old “thin prime” model (assembling systems from sprawling supplier networks) is increasingly ill-suited to a world of production bottlenecks, fragile supply chains, and geopolitical chokepoints. See RTX and Tomahawks.
The emerging model for defense needs to be the “thick prime”: well-capitalized, vertically integrated companies that control more of their production stack. Think SpaceX: where 90%+ of Starship is built in-house.
The factory is the product. The ability to manufacture at scale is becoming as important as the technology itself. That will create a generational opportunity to add new primes. Production economics and customer requirements will drive consolidation toward a much smaller group of roughly twenty prize fighters.
The thin primes we have today, who mostly manage very large networks of subcontractors and do the leading systems integrator work, weren’t always this hollow.
Over the last several decades, that industrial capability migrated outward into the supply chain. The prime became thinner. That worked extraordinarily well when the global industrial base was deep, cheap and reliable. It works much less well when the bottleneck is the industrial base itself.
Another factor that played into this: new starts for programs of record have become less and less common due to disfunction in Congress and common CRs.
Thin Primes Don’t Scale Production Fast. The US has few options other than exquisite systems like PAC-3, AMRAAM and Tomahawks to fight a war with.
Many Neo-primes are just now reaching critical mass to compete for larger contracts and the Pentagon is starting to take notice.
The best way to avoid supply chain bottlenecks is to simply build your company and products so you don’t have a supply chain.
With a little help from the DoW it’s starting to swing the other direction and after years of consolidation and hollowing out the primes, they are demanding that new players and so-called Neo-primes be more vertically integrated.
“The defense industry thus enjoys neither the benefits of vertical integration and scale nor the benefits of Darwinian free market competition. The resulting inefficiencies are excused and continually enabled by generous financing from Congress and little to no effective auditing of the Defense Department.” - Samo Burja, Bismarck Analysis
“It upsets and shocks people, but I’ve said that it takes a billion dollars in private capital to IPO a defense company.” - Alex Moore, 8VC, Partner
137 Ventures’ Returns Soar on SpaceX, Anduril and Cognition Bets
BLUF: The 2014 fund of 137 Ventures is now worth more than eight times the money investors originally put into it, net of fees and other charges.
137 Ventures distributed $2.5B worth of SpaceX shares back to investors last quarter following the rocket company’s record-breaking listing.
The firm’s total assets under management are now in excess of $20B.
The payout underscores how consequential SpaceX has become for 137 Ventures and brought a big liquidity moment for private market investors.
Defense startup Anduril Industries’s latest round priced its shares 70% higher than its previous financing.
Startup Cognition AI’s represented a 60% increase.
Aevex and Divergent Partner on Next-Gen Drone Manufacturing
BLUF: Aevex and Divergent are partnering to develop a next generation autonomous platform.
They will roll out an unmanned system in the “Group 2 to Group 3 UAV space.
The goal is to design the drone (or, ultimately, drones) to be adaptable and mass-producible around Divergent’s 3D printing technology so that when requirements (range, payload, etc.) shift, production can shift with them—fast and at volume.
Aevex has a lot of drones to build, and they’re betting that adding some fancy shmancy additive manufacturing to the process will help them deliver more of them faster, and make them easier to update as requirements shift.
The advanced-manufacturing hotshot’s secret sauce is its Divergent Adaptive Production System (DAPS), a digital-manufacturing platform that combines AI-enabled engineering and design, 3D printing, and automated assembly.
With most of its customers, Divergent is working with a standardized design and retroactively adding 3D printing into the process. With Aevex, the UAS and loitering munitions they design and produce will be built around Divergent’s manufacturing process (and Monolith One) from the get-go.
“The partnership isn’t necessarily about a specific platform, it’s focused on the development and production approach that we’re building together and we believe this partnership is going to accelerate the path from that concept to production.” Manan Patel, Aevex CTO
Rune and Havoc Team Up for Contested Logistics
BLUF: Rune and Havoc have partnered and integrated Rune’s TyrOS onto Havoc’s UAVs to deliver autonomous sustainment solutions built specifically for contested and denied environments.
Havoc is on the flashy go-fast boats and drones side of things, Rune is pretty much on the opposite, nuts-and-bolts end of the spectrum.
Integrating the software onto autonomous systems was a natural next step. If they already have all the data telling them where stuff is and where it needs to go, they might as well get robots to do it.
At Fort Hood, the two companies were able to demo an autonomous logistics chain on an airfield, but now the plan is to scale this way, way up. Ultimately, this needs to work in places like the Indo-Pacific.
“Logistics win or lose wars, right? That’s the thing that everyone throughout history has known. The perfect use case for autonomous systems right now is to transfer supplies between two points and free up the main assets to do more critical things. Now, with Rune we will be able to predict where our platforms are needed and where supplies are going to be needed ahead of time. Automating the logistics chain will make sure that our warfighters are more lethal so that they have the tools and the supplies they need to be effective.” Paul Lwin, Havoc CEO
Pentagon Kicks Off Pursuit of Mobile SCIFs to Aid Defense Companies
BLUF: DoW launched a new initiative called the Secure Space Network aimed at helping small businesses and other innovators gain access to facilities where they can do classified work.
The plan is to design and produce about 50 mobile Sensitive Compartmented Information Facilities and related information systems that could be rapidly deployed to military installations, industry-related sites and other locations across the nation where they’re needed.
Many companies with technologies relevant to national security do not have ready access to accredited facilities where classified information can be discussed, developed and integrated.
For emerging and non-traditional suppliers seeking to work with the Department, establishing fixed classified infrastructure can require significant time and investment, creating a barrier to entry and business expansion.
“Industry has identified access to classified environments as a major barrier, and the Secure Space Network directly addresses that challenge by opening the door to classified work for more companies. With strong partnership across the agency and support from Congress, this effort will strengthen our supplier base and help deliver the capabilities our warfighters need faster and at greater scale.” James Mismash, Director of the Office of Small Business Programs
Your Startup Can’t Reindustrialize
BLUF: Getting to reindustrialization for the defense industrial base is much harder than standing up a megafactory and churning out a lot of cheap drones. This is because fulfilling promises to reindustrialize America (both for the general good and for investors) requires a national political commitment that no single company can make on behalf of the country.
This political commitment to defense reindustrialization involves two choices.
The U.S. must decide what kinds of wars it is preparing for and understand public support for those wars.
It also must decide whether to intervene in the economy to sustain defense capacity at levels that the peacetime market will not support.
A startup can contribute to shaping these choices, but at the end of the day these choices are not up to a startup to make. In this way, reindustrialize startups are downstream of politics.
Tyler Hacker’s excellent CSBA monograph, The Arsenal of Democracy: Myth or Model?
Turning American industrial strength into the Arsenal of Democracy required years of false starts, including contentious government policies, huge amounts of funding, and brand new institutions that did not always work. More than anything, creating the arsenal of democracy required political will.
In the Silicon Valley conception of things, the founder identifies a failure, builds something better, and changes the world through technology. That model might work in commercial markets, and defense startups can often build better products than the government or traditional defense contractors.
But reindustrialization is not simply a product that a company can create through good execution. It requires government intervention — it’s a symbiotic relationship.
A modern reindustrialization effort would require its own version of this, including multiyear contracts, stockpiling, subsidies for excess capacity, and perhaps controversially, government stakes in critical defense industries.
A factory sits within an industrial commons of suppliers, skilled workers, and production know-how. A startup may improve one part of that commons, but the rest does not spring up around it.
A few problems that a megafactory cannot solve by itself.
Modern weapons make industrial interdependency greater.
Manufacturing capacity is less shiftable today.
Megafactories still depend on global supply chains.
Workers are part of the industrial commons too.
Startups should build factories anyways. I hope they build many more of them, and I think the government should fund many. But founding a factory startup, especially a venture backed one, is not the same as reindustrialization.
Our Take: Luke gets the distinction right: building a factory is an important contribution to reindustrialization, but it is not reindustrialization itself. Restoring defense production at scale requires sustained government demand, multiyear commitments, resilient supply chains, workforce investment, and enough excess capacity to survive the gaps between conflicts. The opportunity for defense startups is to build better products and production models, but the DoW must create durable market and industrial conditions that allow those capabilities to scale and persist.
L3Harris Licenses Shield AI’s Drone-Tracking Software for VAMPIRE
BLUF: L3Harris inked a deal with Shield AI to integrate the Tracker Counter-UAS, which has AI-and-computer-vision-powered software for drone detection and tracking, across L3Harris’ VAMPIRE c-UAS platform. It’s the first time Shield AI has licensed the software to another company.
L3Harris’ Vehicle Agnostic Modular Palletized ISR Rocket Equipment combines an EO/IR stabilized targeting-and-sensor system with APKWS laser-guided rockets (or other low-cost guided munitions) to shoot down drones.
Tracker C-UAS uses Shield AI’s AI-and-computer-vision software to detect, discriminate, and track drones in EO/IR video.
It’s designed to detect drones of all classes with automated detection boxes…by recognizing drones amongst airborne detections with a minimum of 2×2 pixels, to provide a binary classification (drone vs. not-drone), and visually filtering out airborne clutter such as birds and weather artifacts.
Defense Industry Pushes Back on Pentagon's Right to Repair IP Campaign
BLUF: As the DoW pushes for greater access to contractors' IP in the name of improving weapons maintenance and readiness, industry experts and executives are warning the effort could go far beyond what is needed to repair and sustain systems.
The tension between government and industry over IP rights is fueled in part what some industry advocates say are misconceptions about how big a role “right to repair” plays when it comes to readiness of weapons platforms, voicing concern that some companies have been deterred from doing business with DOD out of fear the government may go too far in asking for proprietary information.
AIA opposed the provision on government purpose rights, saying such a one-size-fits-all approach would not be appropriate for every weapon system.
There are worries that without better messaging and assurances from the Pentagon that companies will be able to maintain crucial IP protections, industry will have less incentive to make upfront investments in technology.
Defense industry analysts say the messaging surrounding DOD’s approach to IP needs to improve, particularly as it pertains to the department’s suggestion that obtaining the right to repair for weapons platforms will solve many readiness and sustainment challenges.
“With DOW, sometimes it's we don't want you to make the money in the design phase. We don't want you to make the money in the production phase, and we don't want you now to make the money in the aftermarket phase because we want to take your IP and give it to your competitor. Well, where do you want them to make the money? A major problem is that defense companies often don’t know why the department is asking for all of their IP, and the government, without explaining the reasons, says it is needed for.” Moshe Schwartz
“This is not like a narrow set of technical data that is limited to maintenance and repair, which is often how it's discussed in the vein of right to repair. It's pretty extensive levels of IP that can even be used for manufacturing.” Margaret Boatner, AIA VP for National Security Policy
DoW Announces $174M Investment to Secure Gallium Supply Chain
BLUF: DoW announced a $174M equity financing investment to construct a new gallium production facility at Alcoa's Wagerup alumina refinery.
Executed by the ASW Industrial Base Policy via the Industrial Base Analysis and Sustainment (IBAS) program, the initiative is a multinational partnership with Export Finance Australia (EFA), the Government of Japan, and Sojitz Corporation.
Alcoa of Australia will operate the facility, which is projected to produce 100 metric tons of gallium metal annually.
“This landmark agreement with our key allies, Australia and Japan, will secure a vital supply of gallium for our defense industrial base, strengthening our collective security and economic resilience for years to come.” - Michael Cadenazzi, ASW for Industrial Base Policy
Other Defense Industry News
What Each F-35 Variant Really Costs Right Now
BLUF: The base cost of an F-35A, the Air Force variant of the Joint Strike Fighter, is going up 11.5% from $82.5M to $92M for the latest lots of the fifth-generation aircraft.
The price tags include the cost of the jets’ engines and radars, which are provided as government-furnished equipment.
The Government has also been working on adding more capabilities to the jet, including additional computing and processing power with TR-3 and additional weapons, sensor, and sensor fusion capabilities as part of the Block 4 effort.
“Inflation is real. The cost of raw materials has gone up. The cost of everything has gone up, so there is just inflation pressure in the system.” Greg Ulmer, Former Lockheed Martin Aeronautics President
Our Take: There are likely multiple factors at play here. Specific cost components have likely risen in cost like many things, and new hardware for TR-3 and Block 4 that has increased capability and that may not have achieved scale at the suppliers.
Department of War Launches Secure Space Network to Break Down Barriers to Classified Defense Work
BLUF: DoW announced the Secure Space Network, a new effort to expand access to classified work by designing, producing, and deploying approximately 50 mobile SCIFs and related information systems across the U.S.
This effort will enable more defense suppliers to participate in classified development, collaboration, and production by broadening regional access to accredited secure workspaces.
By making accredited secure environments available for companies in more locations across the country, the Department can expand the pool of companies able to contribute capabilities, collaborate directly with government teams, and compete for classified defense work.
“We must make it easier for capable companies to contribute at every level of the mission. Industry has identified access to classified environments as a major barrier, and the Secure Space Network directly addresses that challenge by opening the door to classified work for more companies. With strong partnership across the agency and support from Congress, this effort will strengthen our supplier base and help deliver the capabilities our warfighters need faster and at greater scale.” James Mismash, DAWS for Industrial Base Growth and Director of the Office of Small Business Programs
Thank you to all the Contracting and Agreements Officers out there.
Recommend bringing them coffee and chocolate to help them power through the day and even better bring a quality, complete document file for them to execute.
Army Directive Implementing Modular System Interfaces
BLUF: Effective immediately, Army program managers will include performance requirements for open systems architecture, open interfaces, and comprehensive documentation for all new-start acquisition programs and legacy system modification programs (including upgrade and sustainment modifications)—regardless of acquisition pathway or dollar value
Program managers will ensure all software and systems acquired by the Army will be designed, developed, and maintained in accordance with open system architecture (OSA) principles using modular design, standardized interfaces, and widely adopted standards to facilitate seamless integration, interoperability, and portability within the Army’s existing and future systems and with authorized third-party applications.
Program managers will obtain and maintain secure, bidirectional, and exposed APIs or similar protocols that allow the Army full programmatic access to software/system features, functions, and data with corresponding rights.
Program managers will ensure Army contracts require the provision of comprehensive, up-to-date, and commercially reasonable developer documentation as deliverables for all exposed APIs.
Operation Jailbreak is Operationalizing MOSA Outside of Buzzwords
Operation Jailbreak focused at a fundamental level - expose, document, enable, collaborate.
Expose the best interfaces for systems to consume the broadest set of functions.
Document those interfaces and endpoints in a common place - independent of landing zones.
Enable soldiers and systems to consume interfaces independent of any prime, neoprimes, abstraction layers, ‘integrators’, and institutional middlemen.
A Jailbroken Company
Identified the interfaces to be exposed and documented.
Provided the tech plan to our software factory team on the ground.
Uploaded your documentation (.json, .proto, yaml files, etc...) into the API Marketplace.
Provided glue code for consumption of your interfaces.
Demonstrated interface consumption on a government designated landing zone.
By the numbers:
Jailbreak 1.0: 60 vendors representing 82 systems were jailbroken and tracked.
Jailbreak 1.5 (Reveille Forge): Cyber Harden 16 systems from JB 1.0
Jailbreak 2.0 (Falcon Fury): 69 vendors representing 102 systems Jailbroken. 29 systems repeating from JB1.0 (adding new endpoints) and 74 new systems for JB2.0.
156 Systems have been Jailbroken over the span of Jailbreak events.
Procured 12 prototype autonomous systems from Jailbreak through the NANO-ACE process.
Deployed 10 autonomous systems for operational assessment.
Our take: Operation Jailbreak is what MOSA looks like when it moves from architecture diagrams and contract language into executable acquisition practice. By exposing and documenting interfaces, proving third-party consumption, and then carrying successful systems into prototype procurement and operational assessment, the effort is creating real competitive leverage. It shifts integration power away from proprietary middlemen and toward the government and warfighter. The key now is institutionalizing these interface and data requirements in contracts and programs so “jailbroken” becomes the default condition, not an event-driven exception.
Army Overhauls Software Acquisition to Speed Delivery
Army Directive: Enabling Modern Software Acquisition Practices
BLUF: The Software Acquisition Pathway is mandatory for all software development efforts including for msixed efforts that include software development.
PMs currently using other pathways will transition to the SWP at their next major decision point.
Army contracting officer will use Army enterprise software contracts when available for selected vendors to purchase commercial software that has applicability beyond a single-use case.
The PM will consider commercial solutions first, then configured commercial solutions. Custom development should be extremely rare and will be authorized only when no commercial solution can meet a significant portion of operational needs.
Testing and cybersecurity processes will enable, not impede, rapid delivery.
“Custom development should be extremely rare and will be authorized only when no commercial solution can meet a significant portion of operational needs.” - Dan Driscoll, Army Secretary
“That’s exactly what we need. This environment, it’s complex and the threat changes, and if you take a year to award something, you’re almost out of sync with where the requirements [have] evolved to.” - Greg Garcia, Inserso Corp, CTO
Our Take: This is an important policy to reinforce use of the SWP for software development. This builds upon DODI 5000.87, SECWAR memos, and acquisition transformation EOs/strategies. Army PMs must continue to embrace commercial first practices and not subject software vendors to cumbersome Department processes whenever practicable. Driving transition of existing programs is the biggest factor here as many may have been comfortable with legacy processes.
Army’s TITAN Platform Moving into Production Phase with $192M Delivery Award for Palantir, Anduril
BLUF: The Army awarded Palantir and Anduril a combined $192M in delivery orders for the service’s Tactical Intelligence Targeting Access Node (TITAN) program, pushing the targeting platform into a production phase.
Having been in development for several years, officials have touted TITAN as a “game changing” mobile ground station capable of using AI to ingest data from a variety of sensors and package it into target recommendations, specifically for long-range fires.
The Army awarded Palantir a $178.4M deal in 2024 to deliver 10 TITAN prototypes.
Under the latest delivery announcement, the Army expects to receive eight production systems over the next 18 months.
The idea behind the TITAN is for targeting analysts to quickly move across the battlefield in or alongside the platform in a separate vehicle while they hoover up geospatial or SIGINT from ground-based sensors, drones, aircraft and satellites to then turn into target packages using on-board AI and machine learning tools.
the Army tested the TITAN system at Project Convergence Capstone 6, an exercise in the Mojave desert last month meant to pressure test the service’s prototype command and control ecosystem.
They said TITAN’s AI systems were able to fuse geospatial and SIGINT there for increased targeting accuracy, and that different system variants dispersed across the training area were able to connect and cover a larger number of targets through the NextGenC2 prototype’s data mesh Lattice, developed by Anduril.
“This effort is the result of soldier feedback we have received over the past four years of prototyping from units utilizing TITAN prototypes in multiple configurations across diverse operating environments. It drastically reduces sensor-to-shooter timelines through automated target nominations while fusing the common intelligence picture.” - COL Jonathan Lipscomb, Project Manager for Intelligence Systems and Analytics
“TITAN was shaped by the Soldiers who used it, in the conditions they used it in, against the standard they set. That is the only way a system like this earns its place in the field. We are honored by the Army’s trust, grateful for a partner team that shared the same commitment, and clear-eyed about the work still ahead.” - Akash Jain, Palantir USG, President and CTO
Related: Palantir to Deliver Eight TITAN Systems to the U.S. Army and Army Awards $192M to Palantir, Anduril for TITAN Production and The Army Awards Palantir and Anduril $192M for Eight TITAN Mobile Ground Stations and Anduril Wins $65m US Army Contract to Build TITAN Hardware
AV Scores First Production Contract for Laser Weapons with the Army
BLUF: Army announced that it’s awarded a $464.8M OTA to AV for dozens of AV’s LOCUST X3 cUAS systems.
The contract was issued by PAE Fires for the Enduring-High Energy Laser (E-HEL) program.
LOCUST was actually first developed by BlueHalo (AV snapped up the company for a cool $4.1B last year).
The Army first received two LOCUSTs in 2022 through the Palletized High Energy Laser (P-HEL) program. AV then delivered two more integrated onto Infantry Squad Vehicles last September, and another two mounted on Joint Light Tactical Vehicles (JLTV) in December under the Army Multi-Purpose High Energy Laser (AMP-HEL) program.
The LOCUST X3 packs 30 kW of power and is designed to take down Group 1 to 3 drones.
Per AV, LOCUST X3 will be integrated with various platforms, such as the Army’s Joint Light Tactical Vehicle (JLTV), with options for palletized configurations, while analyzing the potential to integrate on an Infantry Squad Vehicle (ISV) in the near future.
“This award marks a defining moment not only for AV, but for the future of modern defense. The transition of directed energy from experimentation to an enduring, fielded capability reflects years of collaboration, innovation, and operational success alongside the Army.” - Wahid Nawabi, AV, Chair, President and CEO
Related: US Army Launches Laser Production with $465M Contract Award
Army Awards Georgia Tech $33M to Be Lead Weapons Integrator for CAML Program
BLUF: Georgia Tech Research Institute (GTRI) will lead the integration of the autonomous mobility platform and the modular munitions pallets — the components that make up the Common Autonomous Multidomain Launcher (CAML) system.
The Army awarded GTRI a $33.4M contract to be the CAML LSI.
The CAML program is set to serve as a replacement for the Army’s Typhon — its Mid-Range Capability (MRC) long-range launcher.
The new launcher will be an autonomous, optionally crewed, “highly mobile” cross-domain fires launcher designed to be air transportable.
As the weapons system integrator, GTRI will be responsible for support systems engineering, interface integration, modeling and simulating and other “integrated” testing for the CAML prototype program
“The Army is moving with urgency to deliver adaptable, survivable, and scalable Fires capabilities to Soldiers. CAML gives us a pathway to experiment with modular launcher concepts, learn quickly, and make informed decisions at the speed of relevance.” - LTG Frank Lozano, PAE Fires
“How do you bring together folks like a weapon system integrator, a munitions palette and an autonomous platform provider, so that we aren’t trying to ask one company who probably isn’t good at those things individually to try to do the things they’re not good at. We are really serious about bringing the team together so that it looks and feels like Legos, where the best athlete is doing the thing they’re really good at.” Alex Miller, Army CTO
Our Take: The Army’s decision to separate the integrator role from the platform and payload providers is a smart way to preserve modularity, competition, and the ability to bring in the best technology over time. What makes CAML notable is the selection of GTRI, a nonprofit University Affiliated Research Center, for that role. This potentially giving the Army a more neutral integrator than a traditional prime with incentives to favor its own products. At the same time, industry has legitimate concerns when UARCs and FFRDCs move into work the private sector could perform, so the key test will be whether GTRI acts as an unbiased technical integrator that enables competition and open interfaces rather than becoming another enduring layer between the government and its suppliers.
Maneuver Isn’t Dead, Armor Isn’t Obsolete: Modern Battlefield Conditions Encourage Positional Warfare, But Don’t Dictate It
Alan Hastings, James Casey, and Elijah Leroux
BLUF: Armor and combined arms maneuver face significant challenges in the contemporary operating environment. Yet, while these challenges are formidable, they are not insurmountable. Armored and cavalry warfighters must develop new concepts, train and organize differently, and prepare to integrate new capabilities into new combined arms formations.
The Army’s armor branch is driving the transformation of our combined arms formations to meet the current and future challenges of modern warfare, but armor’s viability will rest on maintaining the momentum of that transformation.
While US and allied militaries have long enjoyed unrivaled control of the air, our adversaries are increasingly able to contest the air domain and bypass our air-control capabilities, threatening the viability of maneuver in future wars.
A new, contested dimension of the battlefield has emerged, in which the future viability of combined arms maneuver will be determined: the air-ground littoral.
Maneuver by armored formations is viable, but only under the right conditions. Achieving local dominance in the air-ground littoral is of paramount importance before armored formations are committed to the fight.
Armor, as part of the combined arms team, must develop the capability to dominate the air-ground littoral to penetrate no-man’s land and prepared defensive positions of a peer adversary.
Senior leaders should prioritize leader professional development programs that create greater shared awareness for how armor is transforming and their units’ role within it.
The Armored Transformation and Standardization Initiative and Armored Brigade Combat Team Warfighters’ Forum are platforms for achieving this.
Other Army News:
5 Key Questions the Army Is Still Working Out for Its Nuclear Microreactor Plan
Wet tees on Starlink: Army’s desert trial reveals commercial tech challenges, opportunities
C-NOte #10: Directed Energy
For decades, directed energy has been described as a future capability. That future has arrived. High-energy lasers and highpower microwaves are becoming essential elements of naval warfare, providing the Fleet with new ways to defend itself, preserve combat power, and sustain operations during prolonged conflict.
The question is no longer whether these systems work — it is how quickly we can field them across the Fleet and place them in the hands of Sailors.
For too long, we have viewed directed energy as an emerging technology rather than an operational capability. That must change.
Unlike conventional weapons, directed energy converts electrical power into concentrated energy to produce scalable combat effects.
Directed energy operates at the speed of light, allowing Sailors to engage threats rapidly with precision and reduced collateral damage.
Potential adversaries increasingly rely on massed, low-cost drones, attritable systems, and coordinated saturation attacks designed to exhaust traditional defensive magazines.
By converting electrical power into combat effects, commanders can defeat many threats while preserving missiles for the most dangerous targets.
The most important near-term role for directed energy is point and terminal defense.
Directed energy also changes tactical decision-making.
Trump Announces Nomination of Hung Cao as SECNAV
BLUF: The President announced he’s nominating Hung Cao to be SECNAV on a permanent basis. He has been acting SECNAV since April.
He has prioritized modernization and shipbuilding, launched the DON Office of the Defense Industrial Base, and plans to stand up a new AI War Council.
The House and Senate would need to approve a waiver before his confirmation as he has served in an acting capacity for more than four months and left active duty as a Navy Captain in Oct 2021.
Navy Unveils New Specs for Carrier-Based Collaborative Combat Aircraft
BLUF: The Navy unveiled an array of new specs for its future carrier based CCA.
A RFI noted the Navy wants the CCA to carry up to five tons of weapons and cost < $30M/unit.
Prospective contractors are asked to provide the maximum combat radius including weapons loadout, 30 minutes on-station and reserve fuel for safe recovery that the proposed solution can perform.
While potential CCA designs can have both internal and external weapons, the aircraft must be capable of carrying four weapons up to 2,500 pounds each externally throughout the target flight envelope and carrier certification flights.
The Navy is seeking two prototypes capable of achieving shore-based, aircraft carrier qualifications within the next three years.
The CCA project aims to deliver an autonomous combat drone that can team up with manned carrier aircraft and perform missions in contested skies that are becoming increasingly risky for human pilots.
Related: Navy Kicks Off Search for First Increment of CCA Drones and Navy Sounds Like It Now Wants The Air Combat Drone It Notoriously Passed Over A Decade Ago
Naval Warfare Center Showcases Unmanned Refueling at Sea
BLUF: The Navy took a major step toward enabling persistent, unmanned operations when the Naval Air Warfare Center Weapons Division led a demonstration using a robotic towed connector to repeatedly capture, refuel and release a USV at sea.
In seven months, a Navy-industry team moved from concept to real-world testing using the T38, a Navy-owned remotely controlled USV built by industry partners, and a towable capture and connection refueling system.
During the demonstration, the team ran dozens of full-cycle exercises at sea, in addition to pier-side demonstrations. The training support vessel USNS Vindicator towed the refueling system and transferred a total of 400 gallons of fuel to the T38 during the event.
In total, the refueling system completed about 100 connection cycles over the course of a few days leading up to and including the event.
The Littoral Combat Ship Mission Modules Program Office and the Navy's PAE for Robotics and Autonomous Systems also provided contracting support that enabled BWI to partner with industry and to run the demonstration.
“The short timeline from inception of the refueling system to on-water demonstrations came from the collaboration between government and industry, which allowed the team to respond quickly to changes when needed. Working directly with our industry partners allowed us to bring the platform, control systems, operators and engineers together as one integrated team. We could make changes, test them on the water and iterate quickly based on what we observed.” Spencer Holloway, NAWCWD Director of the Future Capabilities Office
Related: Navy Demonstrates USV Refueling at Sea Using Robotic Towed Connector
Our Take: Very happy to see rapid, iterative demonstrations, testing, and improvements to work through TTPs and capability development to employ USVs. Working closely with operators and industry is vital to defense modernization.
Navy to Build Arleigh Burke Flight III Destroyers Into 2040 as China’s Missile Threat Grows
BLUF: Navy plans to continue building Arleigh Burke-class guided-missile destroyers into 2040, positioning the Flight III configuration as a core element of its future defense against increasingly complex cruise and ballistic missile threats.
Centered on the AN/SPY-6(V)1 Air and Missile Defense Radar and Aegis Baseline 10 combat system, Flight III gives U.S. carrier strike groups a more capable surface-based missile defense asset as Ticonderoga-class cruisers leave service.
Planned Arleigh Burke deliveries extend through DDG 150 in August 2040. This long production horizon is strategically significant as the U.S. Navy prepares for operations against adversaries that can generate increasingly dense and sophisticated missile attacks, particularly in the Indo-Pacific.
The program's scale makes the Arleigh Burke-class a central component of U.S. surface combat power for decades to come. The report states that 76 destroyers have been delivered since the program began in 1985, with 12 ships under construction and 24 under contract.
The current acquisition estimate covers 109 destroyers, meaning the delivered fleet represents almost 70% of the planned procurement quantity.
After Epic Fury, Navy May Need an Extra $8B to Be Solvent
BLUF: Amid combat operations and related efforts to clear mines and open sea lanes in the Strait of Hormuz, all while sustaining a naval blockade, CNO ADM Daryl Caudle estimates the Navy needs $6 - $8B above what was budgeted to be whole and solvent for FY26.
More than 27,000 sailors and more than two dozen ships had supported combat operations in America’s conflict with Iran.
The Navy had to replenish its missile stockpiles and grow in both personnel and ship production to meet readiness targets for a scenario involving multiple conflicts.
Regarding increasing production of munitions including the Tomahawk and SM-6 missile, the military had to demonstrate stable demand with its own funding.
In June, the White House requested $67.1B in supplemental funding for the DoW to replenish depleted munitions and cover the cost of months of combat in Iran.
“Think about the scale of what your sailors accomplished. We brought together naval forces from waterfronts on both coasts. What we’ve recognized is this has to be a risk-sharing venture. The way we buy down risk for them to refacilitize, recapitalize, start more shifts is to give them longer contracts. And what we’re seeing is a fundamental shift already with those levels of commitments and orders. Tomahawk production’s up, SM-6 production’s up, and you’re already seeing the fruits of this.” - ADM Daryl Caudle, CNO
The Three Foreign Frigates Being Studied for Possible U.S. Navy Service
BLUF: Three foreign frigates – Japan’s Mogami class, the South Korean Chungnam class, and the Istanbul class from Turkey – are reportedly included in a study of ships the U.S. Navy could procure.
The Trump administration has been openly pushing to leverage ships designed in friendly countries to rapidly bolster the Navy’s fleet while also working to rebuild America’s shrunken domestic shipbuilding capacity.
The President directed SECNAV to submit a plan that includes timelines and resourcing requirements, for a new competitive acquisition approach for surface combatants with sufficient inherent capabilities to perform anti‑submarine warfare, surface warfare, and convoy escort duties.
The study could lead to an international warship competition that could include building up to two of the ships in foreign shipyards before transitioning to domestic yards as part of the administration’s push to rapidly expand the fleet.
The acquisition approach described here is in line with what is called the Finland Model, which entails construction of an initial batch of ships overseas before moving further production to yards in the U.S.
“The President has directed the Navy to aggressively increase domestic shipbuilding capacity, including leveraging the proven shipbuilding skills and industrial expertise of our allies. We are actively developing options to fulfill the intent to deliver ships faster while ensuring long-term investment, technology transfer, and workforce expansion within U.S. shipyards.” - CAPT Ron Flanders, Navy Spokesperson
“The Arleigh Burke fleet gets used with a very high demand signal combatant commanders. The Navy can’t operate with only one size of ship. The FF(X) frigate will fill that gap. They can be used in less contentious waters. They can be used as high-value escorts. There are all kinds of things the frigate can fill the gap for and allow destroyers to execute the high-end mission set.” - RADM Brian Metcalf, Deputy PAE for Maritime for Combatants
New Continuous-Fiber 3D Printing Turns Military Drone Structures into Power Pathways
BLUF: The Navy is backing continuous-fiber 3D printing to integrate electrical pathways into UAV structures.
Continuous Composites secured a Navy Phase II SBIR contract for a new approach to UAV manufacturing. The company will develop composite aircraft components that can carry electrical power through conductors embedded inside their structures.
The work could reduce the wiring and connectors currently needed across unmanned aircraft. It also aims to turn structural components into active parts of the aircraft’s electrical system.
The Navy-funded work builds on demonstrations completed during Phase I. Engineers produced fiberglass-reinforced panels with conductive elements printed directly into the composite.
Phase II will push the idea toward higher-capacity electrical pathways. Engineers will study how those pathways can fit within components that must withstand operational loads.
The potential payoff extends beyond eliminating a few wires. Aircraft designers could gain more freedom when arranging electrical systems inside compact UAV structures.
Field maintenance could also benefit. Damaged components could potentially be swapped without disturbing separate wiring assemblies running through the airframe.
The Armyfication of the Navy
BLUF: The Navy has set a course that will see it morph into an army on the sea. The differentiating factors between the sea services and its landbound compatriots are fast eroding, diminishing the value of the fleet as its capabilities are more constrained.
Traditionally, the utility and strength of the Navy revolved around the supreme maneuverability of the fleet and its ability to pass without a trace.
Now, fleets have never been more visible or more movement constrained, exposing them to the same strategic limitations an army on campaign faces.
The combination of long-range radar/sonar, satellite surveillance, drones, and SIGINT gives commanders unprecedented ability to locate and track fleets.
Permanent sensors, such as fixed array sonar systems, provide real time monitoring of vital transit lanes and vast swaths of the ocean without sending out ships or aircraft.
These technologies will only become more readily available and cheaper with time, exacerbating commander’s struggle to operate unobserved.
While the risk of detection is relatively low while out on the high seas, the chances of detection increase exponentially the closer the fleet comes to shore.
Modern tech allows a capable force to restrict where opposing fleets are likely to operate and prepare the battlefield in ways unprecedented for naval warfare.
This can create opportunities to more consistently develop kill boxes, ambushes, and direct the fighting to areas of strength for the forces operating near their shorelines, and thus within range of supporting missile and drone units.
Modern navy doctrine then shifted to force projection as the ultimate raison d’etre, a natural metamorphosis in support of wars in Iraq and Afghanistan.
Modern commanders are thus stuck with a dilemma. To effectively employ the weapons and doctrine developed over the last three and a half decades they cannot freely move their ships. In order to replenish and repair, they must return to easily targeted ports.
Resolving the current transformation of the sea services will require bold thinking and innovative synthesis of emerging technologies and revised doctrine.
Developing a better understanding of how peer competitors are thinking of possible engagements.
The Navy should consider fleet composition and organization.
Examining how joint operations in the littoral and just into blue water are conducted could bear fruit in the shorter term.
The challenges facing the sea services are great even without factoring in the challenges within the defense industrial complex supporting them. No amount of enhanced lethality or iterative innovation can save a force sailing in the wrong direction.
The Logistics Nightmare Facing U.S. Warships
BLUF: Iranian attacks have upended the Navy’s supply chain in the Middle East, causing a strain on the aircraft carriers, destroyers and amphibious ships that are being kept in the region indefinitely.
On a typical U.S. aircraft carrier, 5,000 crew members work around the clock.
The planes and helicopters flying off them use 2 million gallons of fuel each week.
Carriers don’t travel alone. They are protected by destroyers armed with antiaircraft and cruise missiles, forming what is called a carrier strike group.
The Navy has about 20 ships in the Middle East, carrying roughly 20,000 sailors and Marines. The logistical challenges are immense: The ships need enough food for more than 420,000 meals and about eight million gallons of fuel each week.
Navy supply ships in the region now have to travel 2,200 miles to a tiny island in the Indian Ocean called Diego Garcia to bring food, fuel and other goods to the warships in the Gulf of Oman and the Arabian Sea.
The next option is to go to Singapore, 3,700 miles away — which requires the ships to pass through the Strait of Malacca, a busy commercial corridor.
The only option is to undertake resupply missions at sea every five or six days.
This process is potentially hazardous, exposing both the receiving ship and the supply ship to risk.
Saildrone’s Spectre: Making Sub Chasers Great Again?
BLUF: Saildrone’s surface USV has proven their utility.
The WWII-era PC-461-class submarine chaser had a displacement of 457 metric tons, 53 meters long, and a speed of 20 knots.
Saildrone’s Spectre has a displacement of 250 metric tons, 52 meters long, and a speed of 30 knots… and does not need to house and sustain a crew of 65.
While configurable for a variety of missions, anti-sub warfare caught my eye.
Saildrone is also working with Thales to integrate the Combined Active Passive Towed Array Sonar-4 (CAPTAS) Variable Depth Sonar on Spectre. This project expands on previous ONR-funded work, integrating Thales Australia’s BlueSentry array on the Saildrone Surveyor.
ASW is a numbers game. The oceans are big. More ‘good’ tails in the water pretty soon beat a few ‘perfect’ tails that may or may not be available at some point in the out-years.
This is good. Let’s get a half-dozen in the water sooner rather than later. Get them to VACAPS, mark off some waterspace, and challenge the geeks from Groton to try to transit from point-A to point-B. Place bets. It’s all for fun and freedom…let’s see what they can do.
The Navy Will Never Build the $18,000,000,000 Trump-Class Battleships
BLUF: The logic of the capital ship is impeccable. The impediments are daunting for the Trump-class. The CBO puts each hull at $18B against roughly $13B for a nuclear carrier. Only one American shipyard builds nuclear surface combatants, and it is already behind schedule. The Navy remains more than 55 ships short of a mandate Congress set a decade ago.
The goal of the Navy is to concentrate stronger firepower at the scene of action at the right time. The implements of high-seas warfare have morphed with the advent of guided missiles, naval nuclear propulsion, and, today, AI, autonomous weapon systems, and directed-energy weapons harnessing lasers or microwaves.
Capital ships remain desirable, but several factors should give us pause.
Aircraft carriers have been the U.S. Navy’s capital ships—the core of its battle fleet—since World War II. A fundamental question is whether the Defiant class would replace the carriers as the U.S. Navy’s capital ships if purchased.
With the estimated average cost of each Defiant-class hull at $18B compared to over $13B for an aircraft carrier, which will the Navy fund?
The other armaments planned to be installed aboard the Defiants—an electromagnetic railgun, hypersonic missiles, lasers, sea-launched nuclear-tipped cruise missiles—are promising technologies that have not yet proved their mettle.
Should the White House and Congress make the fateful choice to forge ahead with the battleship project, the U.S. Navy should experiment with the new class rather than rush it into mass production. Build a little, test a little, learn a lot. Better to get the technology right first than have it disappoint later.
I want Defiant-class battleships at sea. But the impediments are daunting.
GE Wins Deals for F/A-18 Engine Parts, Hypersonic Test
BLUF: GE was separately awarded one deal worth up to $2.9B to supply parts for its F414 engine, and another to provide a hypersonic test vehicle for the DIU.
The F414 engine powers the F/A-18 Super Hornet and the EA-18G Growler.
The deal was awarded as a performance-based logistics contract, which essentially pays a vendor based on outcomes. The contract runs to August 2031.
The company expects to essentially double its production output of the F404 over roughly the next five years.
DIU also picked GE to provide a liquid-fueled hypersonic test vehicle, a key step forward for the firm as it pursues opportunities for high-speed systems.
The award was issued for the DIU’s Hypersonic and High-Cadence Airborne Testing Capabilities (HyCAT) program, which has issued deals to other vendors to unlock more flight test options for high-speed vehicles.
Related: GE Aerospace Awarded DIU Contract to Advance Hypersonic Test Bed Development for HyCAT Program
US Aircraft Carrier Hits 200,000 Landings
BLUF: The USS George Washington (CVN 73) reached a major aviation milestone. It completed its 200,000th fixed-wing aircraft recovery amid more than three decades.
Lt Steven Frazier received the honor by landing in an F-35C.
“Two hundred thousand traps is not just a number, it is a testament to the enduring strength of American naval aviation and the unmatching professionalism of the Sailors who make it possible. This milestone reminds the world that U.S. carriers remain ready to launch and recover aircraft anywhere, anytime, in defense of freedom and our allies.” - RADM Jeffrey Heames, Carrier Strike Group 5, Commander
Other Navy News:
New Marine Battery Uses Immersion Cooling for 2x Energy Density and Fire Safety
PMA-213 Secures Safe Fleet Recoveries w/ AN/FPN-68A Precision Approach Radar
Harpoon Coastal Defense System Passes Navy Developmental Test
To Counter China, America’s Next CCA Needs a Different Mission
BLUF: A fight with China will require CCAs for defense as well as offense.
Contemporary air-to-air combat (a likely feature of the future fight) relies on airborne early warning (AEW) and aerial refueling aircraft.
These high-value airborne assets (HVAA) provide the critical information and fuel for air combat in the Western Pacific but are easy to track and have few defenses.
To safeguard its HVAA, the Air Force can acquire more fighters, develop new HVAA, or use space-based sensing. Or it can, and should, make protection of HVAA the primary mission of the second increment of its CCA program.
CCAs capable of defending HVAA aircraft for long-range air-to-air engagements would break the firepower-versus-protection paradox, enhance the capability to inflict aerial attrition on the PLAAF, and establish air superiority.
The Air Force is planning to purchase 187 F-47s, whereas the PLAAF has at least 300 J-20s and an unknown number of future fighters.
A CCA favoring endurance over fighter-like performance, with a significant missile payload tailored to engage not only PLAAF HVAA and fighter aircraft, but perhaps even Chinese PL-17 missiles, could tip the balance.
Long-range, networked, high-risk aerial combat benefits from flying CCAs with a resilient datalink and a semi-autonomous engagement capability.
A larger CCA with minimal signature reduction, built for long-duration, extended-range missions, and carrying an increased missile payload represents a superior defensive option.
A force of 150 CCAs, each carrying four-to-six missiles, would add an additional 600-900 missile rails for long-range air-to-air engagements.
Our Take: While we support longer-range CCAs (beyond Increment 1 capabilities) to counter adversary HVAAs and execute fighter counterair closer to adversary bases, the focus on using CCAs to defend HVAAs makes less sense. The characteristics of these aircraft to counter the many threats (some well beyond the PL-17) would require a beefed up CCA designed for a very low profile with special engines for efficiency, EW and IRST capabilities and likely a high-end radar. By the time you build this larger aircraft and equip it with the high-end sensors and propulsion, it will be closer to an F-35 than an attritable asset. Add in 4-6 A-A missiles (especially if they are JATMs), then you have now built a capital asset. If multiple are used for single HVAA protection, then they might also burn through the fuel a tanker they are protecting is carrying for manned aircraft. Everyone wants an easy answer for tankers but the fact is that NGAS requires an investment to support these forward operations. For other aircraft like the E-7, it makes more sense to leverage 4th gen assets than designing a CCA specific for HVAA protection.
Air Force Sets Up Continuous CCA Software Contest as Aircraft Production Begins
BLUF: The Air Force revealed a unique approach to acquiring the mission autonomy software that will serve as the “brains” of the aircraft, establishing a pool of six vendors that will continuously compete for contracts over the next six years.
The software contract utilizes what the Air Force called a first-of-its-kind award fee exposure strategy, allowing the service to only pay the entire licensing fee if a vendor provides a combat capability aligned with warfighter needs and feedback.
Through this approach, at any point over the next six years, the Air Force can award software licenses to Anduril, General Atomics, Lockheed Martin, Northrop Grumman, RTX Collins Aerospace or Shield AI.
Along with the autonomy architecture, the Air Force is utilizing another technical standard called the Agile Mission Suite Government Reference Architecture to integrate mission systems, comms and ground systems.
“I don’t look at mission autonomy as a monolithic thing. Because we’re using a licensing model that drives the vendor to continuously team with the operator, get the feedback and make those changes — and we’re talking in real time, in hours or days possibly — the mission autonomy that I fly with on a Monday may be very different than the mission autonomy I fly with on a Friday, let alone two months later.” Brig Gen Helfrich, PAE for Fighters and Advanced Aircraft
“I think there will be this consortium of different training environments, different behaviors. What I [would] love to see is that we do mission planning from one company, we do on-aircraft autonomy from another company, we do mission debrief from another company.” Michael Atwood, vice president of advanced programs at General Atomics Aeronautical Systems
Our Take: All of the companies are playing nice at the moment, but they are all angling to do a take it all approach to providing the software, so they are willing to make their own investments. The Air Force will have to show that they are willing to pay top dollar for the best performer and that the CCA quantities stay high over the long-term to keep the incentives aligned. Right now, this is a very clever strategy as there is a lot more advancement needed in this space and a lot of runway for vendors to differentiate themselves.
AFRL Seeks Payload-Agnostic, Affordable Hypersonic Cruise Missile
BLUF: AFRL has signaled to industry it wants to develop a low-cost hypersonic cruise missile to deliver a wide range of payloads at a range up to 500 nautical miles.
The new AFRL project has “no specific payload requirement.
If right-sized, that kind of missile could be used across a variety of platforms, such as the F-15EX, as well as the B-21, B-2, F-47 and even the F-35
Offerors are encouraged to consider modular open systems architectures, together with aggressive application of digital engineering advanced manufacturing techniques.
Doubling of F-15EX Fleet Comes with Risks for USAF to Manage: New Pentagon Report
BLUF: The Air Force’s decision to more than double its purchase of F-15EX Eagle II jets may bolster the service’s fighter fleet, but it also comes with risks and questions officials will have to manage in the years ahead.
Air Force officials announced plans to expand its planned F-15EX fleet from 129 to 267 jets, as they move recapitalize the older F-15E Strike Eagle.
When the change was announced, the Air Force said it needed to buy more F-15EXs alongside F-35As because both jets bring different capabilities that will be needed in in a future war.
The previous F-15EX acquisition strategy called for eight lots of the jet; the new one calls for 12. This will likely require Boeing to conduct “a major technical refresh” to overcome diminishing manufacturing sources and material shortages.
Key systems such as the F-15EX’s radar, mission computer, EW suite, and engines could become obsolete and need to be replaced would constitute a “significant redesign effort” according to the report.
Another concern is uncertainty around the costs of extending production.
The F-15EX program management office is working with DoW’s BOND team to figure out how to optimize the F-15EX production schedule.
The program office is also working with Air Combat Command and the National Guard Bureau to create a coordinated bridging strategy to cover the Air Force’s operational requirements, until the F-15EXs arrive.
Our Take: Rather than newly designed jets coming off the line, it seems the F-15EX baseline has become aged. There will be real unplanned costs for achieving the new production targets and keeping this aircraft viable long-term. The Air Force may not have many options either since the F-15EX was not designed with modularity in mind but rather follows the template of aircraft like the F-35 and other legacy jets.
After Concerning Losses, Air Force Pushes to Replace Reaper Faster
BLUF: Following steep losses of the MQ-9A Reaper in recent combat operations against Iran, Air Force officials are accelerating efforts to replace the venerable drone with a new unmanned aircraft at a price of $10M each.
At least 45 Reapers, a quarter of the Pentagon’s inventory, have been lost since the launch of Operation Epic Fury in February.
The cost of an MQ-9, which can reach $50M a piece depending on its payload, prompted the Pentagon to kickstart the Mass Modular Aircraft (MMA) program.
The requirements included a one-way range of 8,000 nautical miles (about 9,206 miles), high degrees of modularity and both a producibility and price point that permits commanders to tolerate losses.
The goal is to get 20 mission-ready drones by fiscal 2031. The Air Force eventually wants to get to at least 180 aircraft.
The Air Force is aiming to get the cost of its Collaborative Combat Aircraft (CCA) drones to $20M a piece, and MMA drones “closer to half of that.”
Combatant commanders “love” the Reaper for features like long endurance and the ability to execute multiple missions such as reconnaissance and strike.
Air Force officials envision aircraft being developed in successive increments and using government reference architectures for hardware and software upgrades.
Schiess Takes Command of Space Force as the Service Prepares for Expansion
BLUF: Gen. Douglas Schiess took over as the Space Force’s third chief of space operations on Sept. 3, succeeding Gen. Chance Saltzman at a ceremony at Joint Base Andrews, Maryland.
Schiess takes charge as the service enters a larger procurement and force expansion cycle, with rising demands for new satellites, weapons, personnel and closer integration with the rest of the U.S. military.
In his first message to the force Schiess portrayed his tenure as the next stage in the development of the Space Force, as it moves from its initial focus on building a new military service toward preparing forces for combat.
“Integrating into the Joint Force demands a rapid scaling of both our manpower and space capabilities. We must grow with intention, leveraging our industry partnerships to advance our weapon systems and the way we fight.”
Space Force Struggling to Integrate Commercial Space Data: Officials
BLUF: Despite the Space Force’s growing efforts to acquire commercial technology, products and data, the service is struggling to be able to integrate these capabilities into its day-to-day operations.
Officials have noted that there are at least 3 barriers:
Requirements
Classification
Operational Integration
There were also worries from some about “licensing costs, perceived use restrictions, and concerns over long-term access to the data.”
These concerns persist despite the ongoing efforts of the Joint Commercial Operations Cell (JCO), the main service office responsible for buying commercial data and services, to expand its portfolio.
JCO not only buys commercial data and services for the Space Force, but also for the US combatant commands and a number of other government agencies.
Its acquisitions go through the contractor-operated Global Data Marketplace and currently are focused on data and services to support space domain awareness and “tactical surveillance, reconnaissance and tracking (TacSRT)” missions.
The problem with integrating commercial space data is representative of a more systemic, and long-standing, gap in communications and understanding between the service’s acquisition corps and its operational units.
Our Take: The miscommunication between the acquisition community and operators is still perplexing since one of the authors served in a space operations squadron and had daily discussions with the program office. The challenges of requirements and classification are well-known and does often require senior officials to break that loose since the acquirers and lower-level operations personnel may be limited in how much they can reasonably change.
Speed to Field Starts Below the Prime
BLUF: The Pentagon is rightly challenging industry to increase production and shorten delivery schedules for critical defense capabilities. But asking a prime contractor to deliver faster does not automatically mean every supplier underneath that program can move faster.
A spacecraft, radar, interceptor or electronic warfare system can contain thousands of specialized components and technologies produced across multiple tiers of the industrial base.
Some require specialized manufacturing. Others have lengthy qualification cycles.
Some depend on materials or suppliers with limited capacity. And electronics can become obsolete long before the platform they support reaches the end of its lifecycle.
Recommendations:
Push the demand signal deeper. Critical suppliers cannot make significant investments in facilities, automation, equipment, workforce or supply-chain capacity based solely on the possibility that demand may materialize. Often, meaningful demand signals weaken as they travel down the supply chain.
Build second sources before they are needed. The worst time to discover that a program needs a second source is after the first source has become a constraint. For specialized defense technologies, products may need to be redesigned, integrated, tested and qualified before they can enter production. That takes time.
Invest before the constraint appears. Increasing defense production will also require capital. New equipment, automation, facilities, tooling and workforce development require investment well before additional units begin moving through a production line.
Design for production and change. Increasingly, we also need to ask how design decisions affect producibility, supply resilience and future technology insertion in lieu of just optimizing performance.
Speed is a shared responsibility. The broader industrial base can invest ahead of demand, increase automation, build capacity and identify second-source opportunities if the Government provides clearer and earlier demand signals.
The most effective model is not government investment or private investment. It is shared commitment around a clearly understood mission requirement.
If we want critical capability to reach orbit and the warfighter faster, we must build speed, adaptability and resilience into the entire system.
Our Take: Fantastic advice here.
German Auterion and Ukrainian Airlogix Begin Production of 5,000+ Drones for Ukraine
BLUF: Production of more than 5,000 long-range strike drones for Ukraine has begun at the joint Airlogix and Auterion facility in Germany.
The order is being financed by the German government and is worth approximately €300 million.
The production program includes two different models of kamikaze drones. One is designed to strike targets at medium range, while the other has a flight range of up to 1,500 km. The systems are likely the Seth-X and Anubis.
Under the division of labor, Airlogix supplies the hardware and airframes, while Auterion equips the systems with specialized software and an operating system.
The drones will be equipped with artificial intelligence, allowing them to strike targets even in conditions of active electronic warfare countermeasures.
Next-Gen Combat Jet Program Emerges From Budget Turbulence
BLUF: The Global Combat Air Program to develop a sixth-generation fighter jet is in ascent following a substantial funding commitment and a new contract that takes the program through the end of 2027.
The goal of the program is to deploy the new combat aircraft by 2035.
The program has recently struggled with funding delays, mainly due to the holdup of the United Kingdom’s Defence Investment Plan.
GCAP International Government Organization awarded Edgewing a 4.6B pound, 18-month contract to complete the program’s concept and assessment phase and advance the next stage of the aircraft’s design and development process.
The new contract takes Edgewing to the end of 2027, which is when the detailed design phase is scheduled to start.
Edgewing is working to establish a top secret-level communications network to enable more efficient information sharing and co-designing capabilities between the three nations.
Edgewing is also making a concerted effort to find and partner with smaller companies to identify, test and integrate cutting-edge technologies.
Japan’s Record FY2027 Budget Request: Focus on New FFM, ASEV & Submarines
BLUF: Japan’s 2027 budget request places particular emphasis on AI and unmanned assets as Japan seeks to adapt to what the ministry calls “new ways of warfare.”
It includes a number of major programs related to the Japan Maritime Self-Defense Force (JMSDF), including:
New FFM and Taigei-class submarine construction
Acquisition of 17 MQ-9B SeaGuardian long-enduranc
Strengthening of stand-off and undersea warfare capabilities.
Two Aegis System Equipped Vessels (ASEVs) currently under construction and scheduled to enter service in 2027 and 2028.
Construction of Sakura-class offshore patrol vessels (OPVs).
Construction of a Taigei-class submarine.
Modifications of Izumo-class helicopter carriers.
Acquisition of ship-launched improved Type 12 missiles.
Acquisition of submarine-launched missiles.
Related Article: Japan Targets Record Defense Spend as China Pressure Grows
Javelin Joint Venture and Tata Advanced Systems Signs Agreement for Missile Co-Production in India
BLUF: Tata Advanced Systems Limited and the Javelin Joint Venture (JJV), a partnership between Raytheon, an RTX business, and Lockheed Martin (NYSE: LMT), have entered into a memorandum of understanding (MOU) for the co-production of the Javelin All Up Round (AUR) in India.
The establishment of in-country co-production will strengthen India’s defense industrial base by bringing final assembly and integration of the Javelin AUR to Indian facilities and suppliers.
This agreement will also enhance regional security in the Indo‑Pacific by ensuring a reliable, locally sourced supply of the proven Javelin weapon system, supporting faster fielding and sustained readiness for partner nations in the region.
German Navy Tests Ballistic Missile for the First Time at Sea
BLUF: The German Navy for the first time launched a ballistic missile from a frigate in the North Atlantic, in what a top admiral called a new chapter in Europe’s deterrence against Russia.
At least two LORA (Long Range Attack) ballistic missiles were successfully fired from the F125 frigate Sachsen-Anhalt.
The canister-launched weapon is produced by Israeli defense contractor Israel Aerospace Industries (IAI).
IAI describes LORA as a long-range ground-to-ground artillery weapon that can conduct precision strikes against targets at sea or on land.
Danish Intelligence Says Russia Planning Sabotage in Denmark
BLUF: Danish authorities have uncovered plans and preparations for Russian sabotage in Denmark. Companies in the defence industry linked to military aid for Ukraine are among the main targets.
Moscow Likely Behind Drone-Factory Arson
BLUF: Polish officials confirmed that a fire at a Polish drone factory supplying weapons to Ukraine was “deliberate arson,” and Russia is likely behind the attack.
WB Electronics, where the fire broke out on Monday morning, is one of Poland’s largest private defense companies.
It produces reconnaissance drones and loitering munitions, including FlyEye and Warmate, used by Ukraine against Russian forces.
The fire was soon extinguished, leaving no casualties.
A second fire broke out at a JFG Composites facility in Lublin Poland which produces composite components for aircraft and helicopters.
China Orders Military Supply Chain Checks in Self-Reliance Push
BLUF: China will start checking the security of its military supply chains, joining other nations in ramping up self-reliance of their defense industries.
The survey of military hardware, supplies and special production equipment by the Central Military Commission and departments under the State Council is required by the revised National Defense Mobilization Law passed Friday.
The changes that take effect Oct. 1 also require officials to take measures that improve supply chain resilience.
More broadly, China has been pushing the use of homemade tech in sectors involving sensitive data, including in the military and at state-owned firms.
China’s Huge WZ-X Stealth Drone’s Strange Wing Configuration Confirmed
BLUF: New imagery appearing out of China provides the best look yet at one of the country’s most enigmatic aircraft: the very large, low-observable, flying-wing drone widely referred to as the WZ-X.
Rather than tapering continuously from the center section toward the tips, the wing effectively becomes much more slender over its outer portion in a ‘step down’-like fashion.
The resulting planform gives the aircraft an exceptionally long, narrow outer wing.
The wing arrangement differs from the B-2 and other stealthy flying wing designs because it has two outer wing sections instead of just one.
For an aircraft intended to spend long periods at high altitude, a very long overall span combined with a relatively narrow outer wing could be advantageous.
Such an arrangement would increase effective aspect ratio and reduce induced drag during efficient cruise, improving endurance and high-altitude performance.
It may also allow the designers to concentrate structural mass and internal volume closer to the center of the aircraft while still achieving a very large span.
There is a potential low-observable tradeoff, however.
nitial analysis of satellite imagery put its wingspan at approximately 170 feet, roughly comparable to the 172-foot span of the B-2.
Earth-Moon Space Laser Communication Verified at 248,000-Mile Distance
BLUF: In a new interplanetary optics development, Chinese scientists have officially bridged the 400,000-kilometer (248, 548 miles) abyss between Earth and the Moon with high-speed lasers.
Researchers at the Technology and Engineering Center for Space Utilization (CSU) under the Chinese Academy of Sciences have tested a two-way laser communication link between Earth and orbit across this vast distance.
Space missions typically use microwave radio signals to dial back home. But as humanity prepares to build permanent lunar bases and send astronauts back to the moon, radio bandwidth may not serve all the needs.
High-resolution observation maps, gigabytes of scientific readings, and live HD footage demand far more than standard frequencies can handle.
Laser beams have shown potential to solve these issues.
At a distance of 400,000 kilometers, even a microscopic wobble from the spacecraft or a brief shimmer in Earth’s atmosphere can bounce a laser beam miles off target.
“Earth-moon communication is like threading a needle from a thousand miles away.” Yang Lei, Technology and Engineering Center for Space Utilization, Chinese Academy of Sciences, Head of Laser Test Team
Congress Passes Short-Term Funding, Putting DOD’s $1.5T Budget on Hold
BLUF: With 30 days to go before the end of fiscal 2026, Congress passed a continuing resolution Sept. 1 to extend current spending levels through Dec. 11—putting on hold the Pentagon’s request for $1.5 trillion in spending authority.
Under a CR, some or all of the federal government is funded at the previous fiscal year’s levels.
CRs typically don’t allow for new programs to start, delaying contracts and slowing training events.
By extending the baseline 2026 budget, it will be working with a budget of $838.5B billion or 44% less than the request.
Because most of the funding for the Golden Dome for America missile defense shield was included in the reconciliation bill, the program now faces a crisis.
The F-15EX program faces a similar conundrum. Its fiscal 2026 procurement was almost entirely funded through reconciliation; under the CR, it will start 2027 with a topline of $115M, less than 5% of the $2.65B requested.
House appropriators advanced a base spending measure in June with $1.07T for defense, but their Senate counterparts have yet to agree on a topline.
Neither chamber has made any meaningful movement on the $350B reconciliation request.
The base budget for 2027 may not clear Congress “until spring 2027,” six or more months late.
“A CR doesn’t help me under Golden Dome because I don’t have a topline to fall back to.” - Gen. Michael Guetlein, Golden Dome DRPM
Our Take: This was the big challenge in relying so heavily on reconciliation funding for key programs. In retrospect, it would have been more strategic to spread the reconciliation dollars more evenly where the base budget could still cover a portion of the total request.
What Options Does the Pentagon Have to Cover its Mounting FY26 Operational Costs?
BLUF: With Congress headed on break, a continuing resolution in place through Dec. 11 and no hope for a near-term defense supplemental, DoW planners are scrambling to stretch available funds and make it through the end of the fiscal year.
One option is via DoD requests to reprogram money between coffers. ]
Broadly speaking, Pentagon officials have more legal wiggle room to reshuffle O&M as they see fit — cancelling training exercises, for example, is fully within the department’s decision space.
Another option is to seek Congressional approval to move dollars between accounts similar to what DoW did in July when it asked Congress for permission to reroute $4.3B from FY26 coffers in order to pay for “higher priority items.”
Another option on the table to cut costs by furloughing civilian workers or cutting back their hours.
Then there are more creative “maneuvers,” like using funds from the $152 billion reconciliation pot to pay the bills.
Our Take: It’s going to be a tough next 6 months for DoW as it struggles to meet its O&M commitments while also suffering through a CR.
Congressional Schedules
The House’s last schedule day before the midterms is Sept 17th. Leadership cancelled votes for the last two weeks in September. Members will return around Nov 9th.
The Senate will return on Sep 14th and remain in session until Oct 2 and expected to be out of Washington for almost all of October and the first week of November.
See our NDAA and budget posts for the latest insights and analysis.
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