Defense industry heaps praise on Hegseth's weapons-buying reformation

Pete Hegseth is right now the belle of the defense acquisitions ball.

Why it matters: The defense secretary's Friday speech — invoking Donald Rumsfeld; roasting the way the U.S. military assesses and purchases weapons; warning that companies unable to modernize will "fade away"; promising to put portions of the Pentagon on a "wartime footing" — was the antithesis of his Quantico rally just weeks ago.

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• While that address was heavy on nostalgia and MAGA ideology, this latest one avoided such trappings. It instead offered an ambitious roadmap.
• "This is the equivalent of the 'Ninety-five Theses' posted to the door of Castle Church in Wittenberg, Germany, in 1517," Steve Blank, a founding member of the Gordian Knot Center for National Security Innovation, told Axios.
• "This whole game is changing."

Driving the news: Alongside Hegseth's speech, the Pentagon this week shared the Acquisition Transformation Strategy and three related memos, each detailing changes to a system critics say is designed for industries and wars of yesteryear. Among the planned updates:

1. Awarding bigger, longer contracts to companies to stimulate internal investment in production capacity and workforce training.
2. Replacing program executive offices (PEOs) with portfolio acquisition executives (PAEs), a "single accountable official" with more decision-making power, as Hegseth put it.
3. Amending the contract protest process to discourage frivolous claims and accelerate adjudication.
4. Delivering realistic cost estimates, as projects continuously overrun their initial price tags and deadlines.
5. Trading a predilection for bespoke, one-off products for a preference for commercially available and tested systems.
6. Aligning the Defense Security Cooperation Agency and the Defense Technology Security Administration with the Undersecretary of Defense for Acquisition and Sustainment.

What we're hearing: Praise for Hegseth and the broader reformation poured in from builders, coders, industry groups, financiers, think tankers, startups and primes. (Few other Pentagon actions in recent memory have garnered such uniform reaction or so much LinkedIn pontification.)

• "By removing barriers that have, for too long, slowed innovation and deployment across the defense industrial base, Secretary Hegseth is positioning a broader range of firms to contribute to our national security strategy," said Keith Webster, president of the U.S. Chamber of Commerce's Defense and Aerospace Council.
• "Secretary Hegseth's speech is the most promising announcement for defense-tech innovators since the creation of Defense Innovation Unit itself," said Anshu Roy, the chief executive at Rhombus Power.
• "Treating weapons more like software — modular, upgradeable and built across a network of trusted factories — means we can field better kit in weeks, not years," said Chad Steelberg, the co-founder of Tiberius Aerospace. "Open up competition on the parts that matter, protect the IP and let performance decide the winners."

The intrigue: The business-first turn and corporate stylings were inevitable. The Trump administration is studded with businesspeople turned defense officials.

• Deputy Defense Secretary Steve Feinberg co-founded Cerberus Capital Management.
• Navy Secretary John Phelan was the chairman of private investment firm Rugger Management.
• Army Secretary Dan Driscoll was COO at a $200 million venture capital fund.
• Pentagon chief technology officer Emil Michael was chief business officer at Uber and served on the Defense Business Board.

Friction point: None of these changes happen overnight.

What we're watching: How the average Joe deep inside the Pentagon or at a PEO digests the changes — or the degree to which these roles and the folks holding them look different months from now.

• "There may be some challenges in the early days, but this is a pivotal moment for defense-tech companies and the investors who already know how critical it is to move quickly from innovation to adoption," said Veronica Daigle at Red Cell Partners.

More from Axios:

The Pentagon's software-hardware tug of war

Trump's Pentagon pick wants to "Make America Lethal Again"

What Hegseth thinks of Russia and China as he takes the Pentagon reins