The USAF Acquisition Modernization Push - Challenges and Priorities
The Air Force (DAF) has been aggressively pushing for the modernization of its networks, legacy systems, and software; in line with these efforts is an equally robust acquisition overhaul designed to speed up procurement of everything it buys, from weapon systems to cloud services and digital applications. For IT companies, this shift is creating new opportunities but also means new expectations, greater competition, and challenges.
The Evolving DAF Acquisition Landscape
In alignment with the Pentagon’s acquisition reform initiative, the DAF is implementing changes to its acquisition strategy by prioritizing speed and commercial-first solutions to meet warfighters’ needs and enhance capabilities.
Portfolio Acquisition Executives (PAEs)
Program Executive Officers (PEOs) roles are consolidating into a smaller number of PAEs. This shift prioritizes the portfolio/ mission construct rather than the program-by-program construct. In early 2026, the Air Force introduced seven portfolio executive offices aligning with seven specific mission areas. These include:
- Command, Control, and Communications, and Battle Management (C3BM)
- Fighters and Advanced Aircraft
- Nuclear Command, Control, and Communications (NC3)
- Propulsion
- Weapons
- Space Access (Space Force)
- Space-Based Sensing and Targeting (Space Force)
Seven officers will oversee each of these areas and apply their expertise, authority, and resources to ensure acquisition will rapidly support the mission requirements. These procurement leaders are solely responsible for their portfolio’s outcomes and performance. For industry or IT companies, it will be essential to understand which PAE owns the mission area and to tailor their sales pipeline, demos, and roadmaps to that portfolio’s priorities. Keep in mind that an entire mission or procurement related to software, data, and infrastructure upgrades can be terminated or accelerated by a single portfolio acquisition officer.
Wartime Footing and Commercial-First Emphasis
The Air Force’s acquisition overhaul emphasizes wartime or conflict preparedness and prioritizes a Warfighting Acquisition System that favors rapid delivery of effective combat capabilities instead of the traditional compliance-based model. This shift opens opportunities 1 for more small and non-traditional businesses, allowing for a more agile procurement process. Leadership is placing greater importance on existing commercial technologies and providing innovative solutions into the hands of warfighters quicker, bypassing longer development cycles.
The Software Acquisition Pathway (SWP), a DoW 2025 mandate, is becoming the default approach for how the DAF procures software solutions. Under this pathway, Commercial Solutions Openings (CSOs) and Other Transaction Authorities (OTA) are key instruments that IT companies will find opportunities. In addition, vendors and partners should be aware that “good enough” solutions that can be integrated into operations and missions quickly will be of interest to the DAF, as opposed to highly customized offerings. Established, field-tested commercial SaaS, PaaS, and DaaS models are more likely to meet the DAF’s requirements with minimal tweaks. For small IT companies and startups, the Small Business Innovation Research (SBIRs) Phase III contracts can also be an effective tool to directly sell to the DAF, where a traditional prime-to-sub relationship is not required.
Efficiency and Budget Pressure
The Pentagon is emphasizing spending efficiently to achieve mission-critical priorities across its agencies. In 2025, several large consulting contracts were terminated and determined as ones that could instead be performed by the agency’s own workforce and existing resources. Among these was a consulting contract with the Air Force supporting enterprise Cloud IT services valued at $1.4 billion. This move reflected the agency leadership’s direction and intent to negotiate with vendors for better pricing in software and cloud services and cut what it considers wasteful spending related to “Diversity, Equity, and Inclusion (DEI), Climate, Covid-19 response, and non-essential activities”. The agency has also emphasized that industry should treat it no differently than other American enterprises in terms of pricing for their products and services. For vendors and partners selling to the DoW/DAF, this suggests greater price competition for IT solutions, particularly in commercial-off-the-shelf (COTS) software deals. To win proposals, offerings should demonstrate compelling capabilities, coupled with fair pricing and demonstrable savings for the DAF. It’s noteworthy that the FY26 Defense Appropriation Bill allocated greater spending than originally requested by the Air Force. These increased funds will go toward the procurement of aircraft programs ($14.4B) and RD&E ($3.9B). Significant increases in research and development efforts will focus on technologies such as AI, hypersonic propulsion, anti-drone capabilities, sensors, low-earth orbit defense, and radar/sensor technologies. IT companies offering capabilities like AI, cyber, cloud/edge computing, communication networks, interoperability and systems integration, data analytics, and sensors will particularly be in a strong position to partner with the Air Force.
Acquisition and Training Support
The DAF is currently experiencing a shortage of acquisition personnel, particularly contracting officers and financial managers, because of a reduction in force (RIF) that occurred in 2025. While FY26 budgets and authorities are increasing to support acquisition transformation, the Air 2 Force and Space Force are still recruiting for the skillset and trained workforce needed to execute contracts that can deliver an integrated combat capability, not just the normal contract scope of work, like cost and performance tracking. IT companies should expect delays in awards, modifications, and schedules. However, this also presents opportunities for companies that can offer program management, acquisition services, and workforce training. Vendors and partners that can augment DAF teams with contractual expertise in systems integration and digital modernization will have a clear advantage.
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About the Author:
Toan Le is a Senior Market Insights Analyst on the DLT Market Insights team covering DOD and IC domain-centric trends across the Public Sector.
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