The Victory Plan Reborn: How the DoW is Mobilizing the Electronics Industrial Base
Innovation gets applause, manufacturing gets contracts.
by Ed Dodd
We’re almost out of time. That is the message underlying US Department of War Secretary Peter Hegseth’s “Arsenal of Freedom” speech on acquisition reform last month.1 We’ve spent a long time chasing “perfect,” with successful programs creating low volumes of some of the most exquisite military systems in the world. These military systems have allowed us to dominate non-peer adversaries with little attrition. Recently, the war in Ukraine and threats in the Indo-Pacific have resurrected the threat of near-peer conflict. They have shown us what to expect from modern battlefields and have exposed a fundamental flaw in the DoW’s acquisition approach: slowness.
The DoW and Secretary Hegseth address this issue head-on. His opening remarks were borrowed from former Defense Secretary Donald Rumsfeld, describing a system plagued by gridlock and institutional inertia, declaring that the Pentagon bureaucracy is “an adversary that poses a … very serious threat to the United States of America.” In response to this threat, he announced a transformation of the government acquisition system, one that prioritizes speed and delivery.
That speed will be achieved by looking beyond the traditional prime contractors and engaging the broader industrial base, dominated by small and mid-sized businesses (SMBs). The traditional large prime contractors will likely continue to be engaged on the big-ticket items relied on for technical superiority. But more than 95% of US manufacturing companies are small businesses,2 and these latest acquisition reforms seem focused on making it easier for them to supply the government.
Other Transaction Authorities (OTAs) have been a path to reducing requirements for prototype programs. These OTAs encouraged participation from companies that didn’t normally seek government work, or nontraditional manufacturers. Recent years have also seen a flood of venture-backed defense startups winning contracts that used to go to the larger primes.3 The Department of War is now doubling down on previous efforts to involve SMBs, pushing a “Commercial-First” policy to leverage the industry’s commercial efforts and avoid long custom design cycles also promotes speed.
The bottom line for readers with small and mid-size tech companies: The Pentagon isn’t just begging the usual suspects to go faster. They want your speed and innovation. And they are willing to take on more contracting risks to get it. As Secretary Hegseth said, “We mean to increase acquisition risk in order to decrease operational risk. By taking greater calculated risk in how we build, buy and maintain our systems, we will gain speed.”
But this speed push is about more than just prototypes. It’s more than getting a new technology fielded on time. Speed is important because when we manufacture with speed, we can make more. Speed is a prelude to scale.
If the recent global conflicts have taught us anything, it’s that we can no longer rest on our high-tech laurels. The low-volume exquisite systems that have enabled a relatively uncontested airspace and our resulting ground dominance are no longer enough. It turns out that near-peer warfare looks a lot like the wars of the past, where the creative use of low-cost systems in high volumes can overwhelm those exquisite systems. If we are to deter the conflict many see as inevitable in the near term, or in the unfortunate event that deterrence fails, the US industrial base must be able to match the enemy in volume.
From Aircraft to Circuit Boards
During the Covid-19 pandemic, the industrial base was mobilized under Operation Warp Speed, with many companies committing to producing items they would not normally make. Distilleries made hand sanitizers; automotive companies made masks, respirators and ventilators.4 During times of emergency, the need for solutions is clear and the US industrial base has always answered the call. While participation and intent are always high however, these efforts are challenging to coordinate. Just like donations during natural disasters, the efforts do not always match requirements at the point of need. Preparing to surge manufacturing ahead of time, when there isn’t yet a visceral urgency, that’s a much bigger challenge. But it’s one we’ve seen before.
On the evening of Dec. 29, 1940, President Franklin Delano Roosevelt addressed the nation in one of his famous fireside chats, giving what would become known as the Great Arsenal of Democracy speech.5 The similarity to Hegseth’s Nov. 7 speech was no accident; it was clearly meant to draw the attention of those who notice it to the intention of the new policy. In 1940, the US was still a year away from entering WWII. Public sentiment, though divided, leaned toward the idea that “the wars in Europe and Asia [were] of no concern.” Then, as now, we were asked to turn the economic might of the United States’ industrial base to the purpose of arming defenders against totalitarian aggression. Then, as now, we turn to our manufacturing base to produce enough to deter our enemies and contribute to the victories of our allies. President Roosevelt explained the situation like this:
The people of Europe who are defending themselves do not ask us to do their fighting. They ask us for the implements of war, the planes, the tanks, the guns, the freighters which will enable them to fight for their liberty and for our security. Emphatically, we must get these weapons to them, get them to them in sufficient volume and quickly enough so that we and our children will be saved the agony and suffering of war which others have had to endure…. We are planning our own defense with the utmost urgency, and in its vast scale we must integrate the war needs of Britain and the other free nations which are resisting aggression.
The unprecedented industrial conversion of the 1940s was the last great successful example of industrial scale. In the years between 1940 and the end of the war, the US produced more than 300,000 aircraft, 86,000 tanks and 12.5 million rifles, accounting for two-thirds of all allied equipment, and accounting for a doubling of US industrial production.6,7
The growth in US manufacturing scale did not happen overnight. It required years of planning, resource estimation and the kind of political will imparted by Roosevelt’s speech to move from small-scale production to mass volume. In the 1991 “Gearing up for Victory” Colloquium, Major Charles E. Kirkpatrick’s analysis of the Victory Plan of 1941 reveals that this scale was not a sudden miracle, but the result of disciplined, bureaucratic foresight.8 The greatest hurdle wasn’t the technological superiority of American design, but the political and logistical coordination required to integrate thousands of independent suppliers into one massive, coordinated, industrial effort that delivered overwhelming volume.
We now share a similar context with the America of 1940, moving our manufacturing base to a war footing ahead of actual hostilities as a means of both deterrence and preparation while supplying our allies with weapons. There are, however, key differences. In WWII, production was focused on steel fabrication for vehicles, where today’s warfighters need electronics, sensors, modular components and drones. Make no mistake: When the Pentagon talks today about surging to wartime production, electronics manufacturers are going to play a huge role.
Translating Speed into Scale
Secretary Hegseth’s reforms are explicitly designed to expand the defense industrial base by implementing three integrated pillars. Two of these pillars “Fuel the Arsenal of Freedom” (industrial expansion) and “Maximize Acquisition Flexibility” (regulatory reduction) are of special interest here. These two pillars target smaller companies that don’t normally supply the military by lowering the bureaucratic and financial barriers. Specifically, the reforms call out more aggressive use of OTAs and a “commercial first” policy to get innovative tech firms on board quickly. Critically, prioritizing the Middle Tier Acquisition pathway, which enables rapid prototyping and fielding, drastically cuts all the compliance overhead for small and mid-sized electronics businesses and reduces the time from concept to fielding from years to months.
Getting that concept to the right people is also going to get a lot easier. Traditionally, the networking required to identify and get all the decision-makers onside to even look at a new technology required a huge time commitment, a Ouija board and a magic eight ball. Now the Pentagon is allowing commanders at the colonel and captain levels far greater flexibility to purchase and validate commercial off-the-shelf (COTS) systems. For small businesses, that means a much more efficient discovery and sales process, permitting them to bypass years of pitch cycles. For the military, it accelerates initial validation by moving testing closer to the warfighter and shortening the feedback loop. Overall, faster agreement on the proof of concept and a faster assessment of the technology shorten the time to successful prototypes, moving quickly to scaled production. The government gets the equipment it needs and the electronics industry gets the demand signal needed for industrial expansion.
There are also financial programs and incentives being established to reduce the risk of expanding capacity. During the lead-up to WWII, the government could place what were called “educational orders.” These orders were used to “prepare commercial producers for wartime production by underwriting their purchases of special tools and giving their workers experience in working to military specifications.”9 As part of the acquisition transformation, the DoW is planning to leverage advance purchase agreements and direct loans to encourage capacity growth. Advance purchase commitments act like government-backed contracts that provide the certainty needed to justify capital investment in new tooling and factory expansions. The new Economic Defense Unit (EDU) will also play a role by offering grants and investments to make sure we are economically decoupling from China. It may be a little early to say. Still, given the US’s dependence on Chinese electronics manufacturing, it’s a safe bet that bolstering domestic electronics manufacturers is not out of the question.
The Competitive Edge
The new defense strategy hinges entirely on the ability of the industrial base generally, and electronics suppliers specifically, to convert speedy prototyping into scalable mass production. This new velocity is both a blessing and a demanding new mandate. The years-long window for slowly refining the production model while marketing to the Department of War is officially closed. The days of simply selling an idea are over. Now, you must be ready to sell volume.
The path to success is now clear: identifying a robust, scaled manufacturing process before approaching decision-makers is more critical than ever. Companies that cannot pivot quickly to high-volume manufacturing will inevitably be left behind. Conversely, those that can master that transition from R&D (speed) to proven production (scale) will secure a permanent, competitive place in this newly reformed defense market.
The good news is that the government is actively seeking new suppliers and funding expansion to make this transition possible. This is where the opportunity and the urgency meet: the nation’s capacity to deter or prevail hinges entirely on the rapid, successful transition from perpetual prototyping into immediate mass production. Electronics manufacturers that adapt their business models now will not only secure a generation of defense business but will become the foundational architects of the new Arsenal of Freedom.
References
1. Secretary Pete Hegseth, Hegseth at National War College, Washington, DC, 2025; https://www.rev.com/transcripts/hegseth-at-national-war-college.
2. Small Business Administration SCORE, “98.6% of American Manufacturing Companies are Small Businesses, Struggling to Hire,” May 23, 2019; https://www.prnewswire.com/news-releases/98-6-of-american-manufacturing-companies-are-small-businesses-struggling-to-hire-300856052.html.
3. C. Morgan, “The New Battlefield: Why VC-Backed Defense Tech Startups Are Outpacing Traditional Contractors,” Jul. 7, 2025; https://www.ainvest.com/news/battlefield-vc-backed-defense-tech-startups-outpacing-traditional-contractors-2507/.
4. M. Cerullo, “How Companies Pivoted from Making Dresses, Snowboards and Whisky to Face Masks, Gloves and Sanitizer,” Mar. 10, 2021; https://www.cbsnews.com/news/ppe-manufacturing-business-transformations.
5. F. D. Roosevelt, “The Great Arsenal of Democracy,” Fireside Chat, Dec. 29, 1940; https://www.americanrhetoric.com/speeches/fdrarsenalofdemocracy.html.
6. The National WWII Museum, “The Homefront during WWII,” http://enroll.nationalww2museum.org/learn/education/for-students/ww2-history/at-a-glance/home-front.html.
7. K. Burns and L. Novick, The War, Boston: PBS, 2007.
8. C. E. Kirkpatrick, “Computing the Requirements for War: The Logic of the Victory Plan of 1941,” Gearing Up for Victory: American Military and Industrial Mobilization in World War II, Colloquium on Contemporary History, Jun. 25, 1991.
9. T. C. Hone, “Fighting on Our Own Ground: The War of Production, 1920–1942,” Gearing Up for Victory: American Military and Industrial Mobilization in World War II, Colloquium on Contemporary History, Jun. 25, 1991.
Ed Dodd is vice president of business development at Cofactr (cofactr.com); ed.dodd@cofactr.com.