Is defense acquisition at an 'inflection point?'

It's been a good two-year stretch for defense contracts, but future budget constraints could tame the trend.

A new Center for Strategic International Studies report  found that in just two years, fiscal 2015 through 2017, Defense Department’s contract obligations grew more than double the rate of total obligation authority with the Big Five defense companies reaping the benefits.

Defense contract obligations increased more than 13 percent, three points higher than non-defense contracting. DOD’s total obligation authority grew just 5 percent.

Starting in FY 2018, DOD put its focus on reform efforts and major organizational changes, namely acquisition system reform, moving to a commercial cloud (JEDI), and the 2018 defense spending bill's general push for information technology services.

Overall, the CSIS report found that defense acquisition is at “an inflection point that will likely transform the defense acquisition system and the supporting defense industrial base for the next 10 to 20 years.”

However, despite a two-year bounce back from sequestration and budget caps, future growth is uncertain and could impede recent years of acquisition reform efforts.

“Defense contracting may have rebounded these past two years, but there are unanswered questions about continued defense budget growth and the long-term effects of the last few years’ acquisition reform efforts,” the report states.

“Furthermore, the current administration's decisions on balancing competing priorities of readiness and modernization will inform U.S. force construct planning for the next 30 years. Cumulatively, these decisions will inform the likely transformation of the U.S. defense acquisition system.”