DoW Pivots Acquisition Focus from Output Activity to Mission Outcomes

This policy pivot directly addresses a persistent structural flaw in defense procurement: paying for effort rather than operational impact. Data from the Standish Group reveals that 87 percent of large government software projects fail to deliver intended mission value, often despite meeting budget, schedule, and milestone criteria on paper. Legacy contracting mechanisms—including firm-fixed-price contracts structured around level of effort—frequently compensate vendors for hours logged and story points completed, leaving the government to absorb the operational risk when delivered software goes unused or fails to alter mission effectiveness.

For industry partners and government acquisition leaders, this shift necessitates a fundamental redesign of contracting structures. Buying outcomes demands that baseline operational performance and targeted changes in user or system behavior be written directly into performance work statements. Vendor evaluation will increasingly center on validated production outcomes rather than capability demonstrations. Emerging industry approaches, such as Rise8’s outcome factory model, underscore a broader transition toward risk-sharing structures that tie contract performance to measurable mission improvements within strict timelines.

For executive leadership across defense, government, and industry, program governance must shift from tracking deliverables to auditing operational change. Governance reviews that declare programs "on track" based on milestone completions or story points are insufficient under current guidance. Leaders must systematically measure how much end-user workflows have improved against baseline metrics to ensure capital investments produce genuine mission value. (Source: Air & Space Forces Magazine)