A revolution in the US Navy. Pentagon simplifies purchases and accelerates ship programs

The Pentagon has been launching one of the largest purchasing system reforms in the US Navy for decades. The new model aims to simplify decisions, shorten contract paths and accelerate ship delivery for the fleet.

Decisions closer to the programme, not the system

This could be the biggest change in the US Navy purchasing system in decades. A key element of the reform is the establishment of new purchasing management structures – the so-called Acquisition Executives Program (PAE). It is they who are to take over a large part of the competences previously concentrated in system command, such as Naval Sea Systems Command (NAVSEA).

In practice, this meant shifting the decision-making burden closer to ship programmes and their managers. The new PAE offices receive not only supervision of projects, but also real control of contracts, technical support and maintenance of equipment throughout the life cycle.

It's a fundamental change. Until now, programmes have often been dependent onexternal structureswhich controlled both the budget and technical decisions. Now responsibility and competence are to be concentrated in one place.

New Responsibility Architecture

Interestingly, the reform is not a complete dismantling of the system, but a reorganization. NAVSEA and other system leadership will continue to play an important role in engineering, infrastructure and technical support.

However, the difference was that most personnel and operational functions would be assigned directly to the new PAE structures. It is estimated that this may affect up to 70 percent of human resources and competences.

From an organisational perspective, this means moving away from the "decision intermediaries" model. Instead of a multilayer chain of command, decisions are to be taken closer to the place where the real problem arises – that is, at programme level.

Five new pillars of the system

In the first stage, five main PAE areas were created, responsible for the key segments of naval activity:

• Maritime Systems (Maritime),
• underwater capabilities (Undersea),
• Industrial Operations,
• strategic deterrence systems,
• development and capabilities of the Marine Corps.

Each of these areas will be managed by high-ranking officers and officials who will receive direct access to the highest decision-making level – without having to pass through an extended intermediate structure.

Flatten structure – theory or practice?

In theory, everything looks coherent: fewer levels, faster decisions, greater responsibility. In practice, however, the question arises whether such a deep reorganization will cause momentary chaos.

Despite media interest, it will be crucial whether new structures will actually be able to take over competences that have been dispersed in different institutions for decades. Contract management and integration of technical processes andlogistics.

Political and operational pressure

It is no secret that the reform fits into the wider context of changes in the Pentagon. The U.S. administration is clearly pushing for faster purchasing processes and shorter delivery times to operational units.

In practice, this means moving away from a model where programmes go on for years and costs increase faster than combat capabilities. The new system is to be more "warry" – geared to the end result rather than to procedures.

What does that mean for industry?

From the perspective of the ship industry, the change may prove to be as important as the Navy itself. The focus of contract competences in the hands of PAE in practice means faster decisions, but also significantly more pressure on contractors.

A key element here will be to reduce the decision-making path – from demand to contract signing. That thing,what industryShe's been waiting for years.

Direction: speed and responsibility

Although the full effects of the reform will not be known for a few years, the direction of change is clear. The U.S. Navy is attempting to adapt its purchasing mechanisms to the realities of the modern battlefield – where time and not just procedure matter.

Although the organisational risk is real, it is difficult not to notice that the current system has reached its limits. The new model is supposed to change that.

The question is whether it will really speed up the delivery to the fleet – or just transfer the problems to another level of structure.