By Steve Escaravage and Frank Cristinzio

This paper outlines the urgent need to continue modernizing the defense technology acquisition system to close the gap between commercial innovation and operational capability. It presents Booz Allen’s perspective on expanding the definition of commercial items, accelerating commercial investments, and reducing regulatory burdens to deliver mission-ready capability with speed.

Acquisition reform is more urgent than ever. As global threats intensify and adversaries advance, modernizing how we acquire, integrate, and deliver technology to the warfighter is essential.

For years, there has been bipartisan agreement the U.S. defense acquisition system is too slow, too complex, and too risk-averse for today’s threats. For too long, process has taken precedence over delivery.

We applaud the meaningful progress made by the Administration and Congress, including the recent push to maximize the use of fixed-price and performance-based contracts, as well as the urgency demonstrated by Pentagon leadership. The FoRGED and SPEED Acts reflect a growing consensus the system must evolve to meet the demands of global competition. But the central question remains: Have we gone far enough—and are government and industry prepared to operate differently and invest accordingly?

We also believe it is good business. That belief has guided our investments for nearly a decade, as it became clear that commercial innovation in cloud, data, and AI would outstrip anything purpose-built within government. Conflicts in Ukraine and Iran have reinforced the need for a rapid innovation cycle to quickly bring commercial tech to the battlefield at scale and with speed. The era of the $5,000 drone is here.

But commercial technologies are not designed out of the box for contested environments, classified networks, or mission-specific use. Bridging that gap—turning commercial innovation into operational capability—is where Booz Allen is accelerating change and advancing new models. We are moving from commercial systems integration to building on top of commercial technologies, and ultimately to investing in and developing our own commercial offerings.

We focus on improving the operational viability of commercial products through last-mile engineering, cyber hardening, and mission-tailored integration. And we’re already seeing the impact this approach can deliver by bringing advanced capabilities to the battlefield faster and more effectively for America’s warfighters.

Booz Allen is also reshaping how we partner with the commercial sector and investing $700 million with urgency. Booz Allen Ventures, our in-house $300 million venture fund, has backed more than a dozen warfighting tech startups to scale secure solutions and deliver new capabilities to the battlefield. We’ve also committed $400 million to a new Andreessen Horowitz (a16z) fund to accelerate the adoption of commercial technologies across the Department of War (DoW).

At the center of this effort are our workshops for transforming commercial innovation into mission-ready capability: three flagship engineering facilities building mission-ready technology today, not years from now. These sites support scalable production, rapid prototyping, and long-term sustainment of complex warfighting systems. This work is reinforced by a network of more than 20 advanced R&D labs, enabling on-site testing across critical fields from robotics and autonomy to warfighter performance.

Congress should expand the definition of commercial products to include the modifications required for warfighting-specific operational use. DoW needs to procure integrated, mission-ready solutions built on commercial technology that meet operational requirements on day one.

An expanded definition recognizes the oft-cited concern that commercial technology alone isn’t sufficient. It must be adapted to operate in contested environments, across classified networks and within mission-specific workflows. Narrowing the gap between commercial capability and operational outcomes is now a central requirement of acquisition, and we need clear paths for procuring solutions that address this need.

Booz Allen built its model to bridge this gap. Through dedicated solution engineering teams, manufacturing and production facilities, and partnerships with leading companies such as AWS, Databricks, and NVIDIA, we translate commercial innovation into deployable mission solutions. This “last mile engineering” adapts commercial products to harden cloud, data, and AI solutions for contested and classified environments.

Strengthening partnerships that connect commercial capabilities with mission outcomes can unlock additional private investment. Many commercial companies want to bring their technology to the fight as a component or subsystem but need the supplemental mission expertise for product viability. That’s why cutting-edge commercial technology companies want to work with Booz Allen: we translate their innovation into operational advantage. 

Decades of cost-accounting standards and excessively audit-heavy oversight have restricted defense industrial base companies—like Booz Allen—from partnering with new market entrants and deploying the best commercial tech. We are already overcoming this constraint through our in-house venture investments and partnerships with firms like a16z.

However, to fully unlock industry’s potential, DoW must create a viable off-ramp from legacy cost contracts. We welcome the focus on establishing fixed-price contracts as the default and preferred method of procurement. We believe it makes good sense to transition existing FAR-based cost-contract portfolios into modern contracting frameworks that reward speed, innovation, and mission impact. For missions where requirements evolve, contracts should evolve with them, shifting to outcomes-based models at natural intersections such as gate reviews, option exercises, and recompetes. 

For the limited portion of uniquely government work appropriate for cost-contract procurement—such as research and pre-production development of major systems—policymakers should continue to mercilessly challenge the extensive regulatory burdens inflating costs for both government and industry.

Over decades, we have built an oversight edifice—business-systems rules, cost-accounting standards, and extensive, overlapping audits—meant to prevent another “$500 hammer,” without delivering the measurable savings that oversight was meant to achieve. These burdens slow acquisition and divert resources away from technology delivery. Today, businesses are required to comply with more than 1,200 pages of DFARS business system rules, inflexible noncommercial requirements, and audit regimes that drive administrative costs far beyond what is necessary for accountability. New entrants bringing innovation to the market are now struggling with the costs of highly complex cost-accounting standards. This is widening the valley of death for some new technologies.

Indeed, the system is so complex that we are, in effect, paying for a $500 hammer precisely because of the regulatory overhead required of both industry and the government to ensure we don’t. DoW should conduct an honest assessment of whether the oversight value gained outweighs the immense cost imposed on both government and industry. 

By accelerating commercial technology adoption, reducing or replacing cost contracts, and relentlessly questioning regulatory burdens across the industrial base, DoW can deliver the speed required by today’s warfighters. A modernized acquisition system will strengthen national security, drive economic growth, and reinforce America’s technological leadership in an era defined by threats to our republic and the rapidly evolving character of war. Booz Allen is energized by the resolve and urgency leaders in the Department of War and Congress are bringing to this reform discussion. We are deep into our own transformation and ready to lead the way in adopting new ways of doing business to evolve how we provide the capabilities the nation needs.  

Steve Escaravage is president of Booz Allen’s Defense Technology Group. 

Frank Cristinzio is Booz Allen’s director of Government Relations.

This Booz Allen Policy Position is designed to provide stakeholders with clear analysis and perspective on priority policy issues across government and industry. The information reflects our assessment and the best available data as of the publication date, May 8, 2026.

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