Iran War Spotlights Need for Defense Shopping, Not Defense Procurement

There is an enormous opportunity to save money, increase innovation, and provide a better defense system at dramatically lower cost.Compare shopping at Amazon or Walmart with the United States Defense Procurement System. You will immediately realize there are tremendous levels of regulated waste that weaken our defenses by spending money inefficiently.Consider the Ukrainian production of 7 million drones this year — and their ability to respond to new Russian weapons in as little as 14 days — you begin to have a yardstick for thinking through a dramatically better American defense purchasing system.The scale of change we need in procurement and logistics is so great that it should be considered replacement rather than reform. I use the term “defense shopping” to distinguish it from “defense procurement.”The great retail systems have dramatically lowered the cost of regular goods for retail customers. Paper goods and many grocery items are cheaper on Amazon than at your local grocery store. In many cases, they can be delivered on the day you order them. The civilian market is clearly living through a revolution in cost and customer experience.We desperately need a similar revolution in defense purchasing and logistics. We simply can’t afford the American system of exquisitely capable and extraordinarily expensive weapons systems. Orders are often delivered with cost overruns and delays — and then systems cost more in maintenance life cycle than the original purchases. We are being constantly reminded in Ukraine and Iran that numbers matter. This includes numbers in the quantitative sense of having enough equipment and numbers in the cost sense of the exchange rate between our weapons and an enemy’s.During our period of dominance coming out of the Cold War, we became a remarkably high-tech system. In many ways, we are capable of doing amazing things that no other country could match. The raid into Venezuela that captured Nicolás Maduro and the remarkable rescue of the two F-15 pilots from Iran were extraordinary achievements that no other country could have pulled off.While elegance in specific tactical settings is exciting (and makes for good movies) once you get into a big war, quantity becomes a quality all its own.Admiral Horatio Nelson made clear the importance of quantity when he wrote just 16 days before the great victory at Trafalgar, “numbers only can annihilate.”Nelson’s opinion on how to win annihilating victories is important. In the age of sailing ships, there were only three battles of annihilation — and all three were won by Nelson. At the battles of the Nile in August 1798, Copenhagen in April 1801, and Trafalgar in October 1805, Nelson shattered the fleets which opposed him. In his planning and training, Nelson always wanted to be able to decisively eliminate any threat to Britain. He knew this required a level of resources for training and equipping that were indispensable to defeating the opposition.This rule that “numbers only can annihilate” is as true today as it was in Nelson’s time.Reports that America’s military in 2025 faced a production shortage of 155 millimeter shells should be a national scandal. Our reported inability, too, to provide enough Patriot Missiles for current needs in Ukraine and other conflicts should lead to a thorough congressional inquest. The issue is not just numbers. It is also a question of relative cost. Firing a $4 million to $5 million Patriot Missile against a $35,000 Shahed drone is an impossible misallocation of resources. Even the richest country in the world cannot sustain this kind of financial mismatch.The Patriot Missile is extraordinary — and currently unmatched in its ability to defeat sophisticated attackers. However, the most common attacks in the evolving world are inexpensive and unsophisticated.So, we have a costly design problem and a costly acquisition and sustainment problem.There are huge volumes of simple purchases — toilet paper, retail software, or noncombat trucks — which could be procured for radically less than what the current system delivers.America needs to move away from its highly regulated, bureaucratic, slow, and expensive defense procurement system. For all but the most sophisticated requirements, it should shift to a defense shopping system.The defense shopping system should be open source, require some kind of bonding or guarantees for performance, and be open to startups, entrepreneurs, and civilian markets.The focus on strengthening the defense industrial base is dramatically too narrow.As the Ukrainians and Israelis have proven, there is a lot of dual use capability that can meet military requirements faster, cheaper, and with much greater speed of innovation than the current defense industrial base.The Pentagon should look at the huge systems of retail sales and how they interface with thousands of suppliers, including relatively small new startups.This flexibility, fluidity, ingenuity, and innovation — with constant pressure to lower prices and increase performance — should be our goal in developing a new model.

Iran War Spotlights Need for Defense Shopping, Not Defense Procurement

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