Pete Hegseth, secretary of the Department of Defense and a 2025 Wash100 awardee, has released a memorandum directing DOD to adopt the Software Acquisition Pathway, or SWP, to speed up the development, procurement and delivery of software and other weapons systems to warfighters.
“While commercial industry has rapidly adjusted to a software-defined product reality, DoD has struggled to reframe our acquisition process from a hardware-centric to a software-centric approach,” Hegseth said in the March 6 memo. “When it comes to software acquisition, we are overdue in pivoting to a performance-based outcome and, as such, it is the Warfighter who pays the price.”
Reports on the DOD memo first emerged in late February.
Use of CSO, Other Transactions
In line with the SWP adoption, the memo titled Directing Modern Software Acquisition to Maximize Lethality calls for the department to align its contracting strategies and maximize its use of contracting authorities.
The DOD secretary directs the department to advance the use of Commercial Solutions Openings, or CSO, and Other Transaction, or OT, authorities as the “default solicitation and award approaches for acquiring capabilities” under the pathway.
The memo also calls on the under secretary of defense for acquisition and sustainment to coordinate with the head of the Defense Innovation Unit to develop and submit an implementation plan within 30 days.
DIU’s Use of CSO, OTs
During a Friday media briefing on the memo, a defense official said DIU has awarded over 500 OT agreements using the CSO process since 2016.
The official noted that 88 percent of those contracts went to nontraditional defense contractors and 68 percent were awarded to small businesses.
With the new memo, the Pentagon official stated that the department expects an “uptick” in the demand for DIU projects.
“The second way, which I think is actually the more important way in which this will impact DIU is that we think the real path to scale is to train and educate other acquisition professionals so that they can also use the CSO OT model rather than just relying on DIU to do it for them,” the official added.
Directive’s Impact on DOD Programs
When asked by a reporter about how the memo will affect software-intensive programs like the Technology Refresh 3, or TR3, software and hardware upgrades to the F-35 fighter jet program, another DOD official said the document applies to any program that is “heading into the planning phase” of SWP or that has achieved a “natural transition point to adopt a new acquisition pathway.”
