The Department of Defense's shift to Portfolio Acquisition Executives, outcome-based requirements, and OTA-first buying demands a fundamentally different capture strategy from every contractor in the federal market. If your BD cadence is still organized around recompete cycles with rotating contracting officers and specification-based SOWs, you are building pipeline on a foundation that DoD is actively demolishing.
On November 7, 2025, the Secretary announced the memo "Transforming the Defense Acquisition System into the Warfighting Acquisition System to Accelerate Fielding of Urgently Needed Capabilities to Our Warriors" [1]. It directs the establishment of PAEs by reorganizing existing PEOs, makes other transaction authorities (OTAs) and other flexible funding mechanisms preferred contracting vehicles, sets commercial offerings as the default acquisition approach, aligns contracting officer accountability to the portfolio chain of command, and puts PAEs and program managers on minimum four-year terms [2]. That combination rewards sustained performance and punishes short-term BD sprints.
This article walks through what these changes mean for your capture process, your past performance library, your proposal structure, and your quarterly BD plan.
What PAEs Actually Change About Who Decides and How Long They Stay
A Portfolio Acquisition Executive is not just a renamed program executive officer. PAEs oversee consolidated portfolios aligned by mission, technology, or operational integration, report directly to their Service Acquisition Executive, and have authority to shift funding, waive standards not mandated by statute or safety concerns, and make trade-offs to expedite delivery [2]. Instead of separate program offices each managing their own acquisitions, a PAE oversees the portfolio and makes trade-offs across the capability set.
The practical effect on contractors is continuity. PAEs and program managers serve minimum four-year terms, and contracting officer accountability is aligned to the portfolio chain of command [2]. Under the old pattern, program leadership could change between contract actions, and a mediocre performance period might not follow you to the next decision.
That safety net is shrinking. A portfolio leader on a four-year term will remember that your team missed three CDRLs in year one. They will also remember that your competitor's team delivered an unsolicited capability brief that solved a real operational gap. Relationship depth compounds over multi-year tenures, and the contractor who invests early captures disproportionate trust.
| Dimension | Old BD Cadence | New BD Cadence (PAE Model) |
|---|---|---|
| Leadership continuity | Program leadership could change between contract actions | PAEs and program managers on minimum four-year terms |
| Touchpoint frequency | Burst around recompete milestones | Continuous quarterly engagement |
| Customer knowledge depth | Limited to current contract cycle | Cumulative across multiple program actions in the portfolio |
| Risk of being outmaneuvered | Lower when relationships reset with turnover | Higher when competitors build trust with the same leaders |
| Past performance memory | Fades with turnover | Persists with the portfolio leadership |
The bottom line: your BD team can no longer treat government relationships as disposable assets that reset every procurement cycle.
Reframing Past Performance: Mission Outcomes Over Deliverables
DoD's move toward outcome-based requirements doesn't just change how solicitations are written. It can change how evaluators read your past performance volume when Section M rewards mission outcomes. A CPARS narrative that says "delivered 47 servers on schedule and under budget" tells an evaluator you can manage logistics. It says nothing about whether you solved a mission problem.
Under outcome-based evaluation, the same performance needs to read like this illustrative rewrite: "Reduced sensor-to-shooter latency by [measured percentage] across [number] commands by deploying 47 edge-compute nodes integrated with existing C2 infrastructure." Same contract. Same deliverables. A different story for the evaluator, as long as every bracketed value comes from your program records.
The framework for rewriting past performance is straightforward but requires effort. For each citation, identify three elements: (1) the operational problem the contract addressed, (2) the measurable change in mission capability your work produced, and (3) the scope of military impact (number of users, combatant commands, or operational theaters affected).
If your original SOW was specification-based and never mentioned mission outcomes, you still have the data. Pull it from program reviews, CDRLs, user feedback, and quarterly performance reports. Interview your program managers and task leads. The mission impact existed even if the contract didn't measure it explicitly. Your job is to reconstruct and document it.
For teams managing large past performance libraries, a structured content reuse system keeps outcome data next to each citation, so a rewrite does not start with a hunt for retired PMs.
OTA-First Buying: How Traditional Contractors Get In the Door
Other Transaction Authority agreements (10 U.S.C. 4021-4022) are not FAR-based procurement contracts. There is no FAR Part 15 source selection, no sealed bidding, and no mandatory LPTA evaluation. The November 2025 memo makes OTAs and other flexible funding mechanisms preferred contracting vehicles [2].
For traditional contractors who have spent decades building FAR-based proposal machines, this feels like the ground shifting under their feet. But there are entry paths worth checking.
One on-ramp is consortium membership. The statute recognizes prototype transactions that include subprojects awarded to a consortium of United States industry and academic institutions [3]. Organizations such as NSTXL, SOSSEC, and the Space Enterprise Consortium act as consortium managers. Each consortium's agreement with the government sets how requirements are posted, what members submit, and how evaluation and award work, so read the terms of the consortium that serves your target portfolio.
Don't Wait for the RFP That Will Never Come
Competitors can capture prototype positions through OTA consortia while traditional contractors wait for FAR Part 15 solicitations. Under 10 U.S.C. 4022(f), a follow-on production contract or transaction may be awarded to the participants in a prototype transaction without the use of competitive procedures if competitive procedures were used to select the participants and they successfully completed the prototype project [3]. A delay in joining the right consortium can mean watching a competitor earn that follow-on path.
If your company has never executed a prototype agreement, check whether the consortium asks for prior OTA experience. Each consortium sets its own membership terms and fees, so read them before you commit. Expect to need a relevant technical capability and the willingness to respond to consortium-posted opportunities on short timelines.
The critical strategic point: a prototype OTA win can create a legal pathway to production awards without competition [3]. The contractor who captures the prototype position is well placed for the follow-on. Waiting for a traditional recompete on a program that started as an OTA prototype is waiting for a competition that may never happen.
Modular Open Systems: Why Proprietary Lock-In Now Kills Your Score
The Modular Open Systems Approach (MOSA) requirement in 10 U.S.C. 4401 says a major defense acquisition program that receives Milestone A or Milestone B approval after January 1, 2019, shall be designed and developed, to the maximum extent practicable, with a modular open system approach, and that other defense acquisition programs shall also be designed that way to the maximum extent practicable [4]. This isn't aspirational guidance. It is law, and solicitations can turn it into evaluation criteria.
Consider an illustrative recompete: an incumbent's ISR processing system uses proprietary data formats and unpublished interface specifications, and the new solicitation evaluates MOSA. The incumbent cannot credibly demonstrate an open architecture, while a competitor offers published APIs and government-owned interface control documents. The incumbent's familiarity with the mission no longer offsets the architecture risk the evaluators see.
To audit your current solutions, map each major system against these compliance attributes:
- Published interface specifications: Are your APIs documented in government-accessible ICDs?
- Widely supported standards: Do your data formats use open standards (JSON, XML, NATO STANAG) or proprietary encodings?
- Modular decomposition: Can the government replace your component with a competitor's without re-engineering adjacent modules?
- Government data rights: Does the government hold sufficient technical data rights to enable future competition at the module level?
- Conformance verification: Can you demonstrate compliance through testing, not just assertion?
If your current solutions fail two or more of these attributes, you need a MOSA remediation plan before your next pursuit. Creating compliance artifacts that demonstrate open architecture conformance is now as critical as traditional Section L/M compliance.
Rebuilding Your BD Cadence for Long-Tenured Portfolio Leaders
The old BD model was episodic. You surged engagement 12 months before a recompete, built relationships during the pre-solicitation phase, then retreated after award until the next cycle. With portfolio leaders on four-year terms, this burst pattern is not just inefficient; it is visible to the people deciding. They know who shows up only when money is on the line.
The new cadence requires continuous value delivery. Specific activities that compound over multi-year relationships with portfolio leadership:
- Quarterly capability briefings aligned to the PAE's portfolio priorities, not your company's product catalog
- White papers addressing specific operational gaps the CO's programs face, submitted unsolicited and unclassified
- Industry day attendance with prepared follow-through: not just showing up, but delivering a written response to the CO's stated challenges within 10 business days
- Prototype demonstrations using internal R&D funding to prove concepts before the government spends money
Track relationship depth with the portfolio's contracting officers and program leaders as an actual capture metric. Contact frequency alone is meaningless. Score each relationship on a five-point scale: (1) CO knows your company name, (2) CO can describe your relevant capabilities, (3) CO has seen a demonstration of your work, (4) CO has referenced your capability in internal planning documents, (5) CO has provided informal feedback on your technical approach. If your top three pursuits are all at level 1 or 2, your capture position is weaker than you think.
Restructuring Proposals for Outcome-Based Evaluation Criteria
Where Section M is written around outcomes, it changes what evaluators are looking for. Instead of "does this proposal comply with every SOW paragraph," the question becomes "will this contractor actually solve the mission problem." That shifts the evaluation from compliance checking to solution credibility.
Your proposal structure must reflect this. Lead with the operational concept and mission thread. Show the evaluator how your solution fits into the warfighter's workflow from alert to action. Then demonstrate technical approach. Then map compliance.
This does not mean your compliance matrix becomes irrelevant. It means the compliance matrix shifts from the primary organizing principle of your proposal to a secondary validation artifact. Evaluators still verify compliance, but they evaluate the proposal on mission impact first.
Here is a concrete restructuring example. A traditional proposal volume for a C4ISR integration contract might organize sections as:
- SOW paragraph 3.1.1 compliance response
- SOW paragraph 3.1.2 compliance response
- Technical approach summary
- Management approach
An outcome-based restructuring of the same proposal:
- Mission thread: how our solution shortens the kill chain timeline, stated with measured before and after values
- Operational concept of employment across INDOPACOM theater
- Technical approach with architecture decisions mapped to mission outcomes
- Compliance traceability matrix (appendix, demonstrating full SOW coverage)
The evaluator reads the same information. But the first structure makes them hunt for the "so what." The second structure answers it in the first three pages.
Frequently Asked Questions
Do PAE changes apply to all DoD acquisitions?
Not all at once. The memo has the Military Departments and other components move major acquisition activities into PAE portfolios through transition plans [2], so check which portfolio covers each program you pursue. The direction toward portfolio management and outcome-based buying is clear even where the transition is incomplete.
Can small businesses compete under OTA vehicles?
Often, but check. Membership rules vary by consortium, and a shorter submission can be easier for a small firm to produce than a full FAR Part 15 volume. Read each consortium's membership terms for specifics.
How do I rewrite past performance if my CO won't update CPARS?
You cannot change the CPARS narrative itself without CO cooperation. But your proposal's past performance volume is where you control the story. Use the past performance citation to provide context, explain mission impact, and connect deliverables to operational outcomes. Evaluators read both CPARS and your narrative.
Does MOSA compliance matter for services contracts?
It can. When a services contract for software development, systems engineering, or IT modernization produces system interfaces or data architectures, the solicitation may ask how your work supports a modular open system approach. Read Sections L and M for it.
Your 90-Day Capture Strategy Migration Plan
Weeks 1-2: Pipeline Audit. Classify every active pursuit in your pipeline as traditional FAR, OTA-eligible, or hybrid. For each OTA-eligible pursuit, identify the relevant consortium and determine your membership status. If a meaningful share of your pipeline is OTA-eligible and you have zero consortium memberships, you have an urgent gap.
Weeks 3-4: Past Performance Rewrite. Take your top five past performance citations and rewrite them in outcome-based format. For each citation, identify the operational problem, the measurable mission impact, and the scope of warfighter benefit. If you cannot find outcome data, schedule interviews with former PMs and task leads.
Weeks 5-8: Consortium Entry. Join at least one relevant OTA consortium. Submit your capability statement. Assign a BD lead to monitor consortium-posted opportunities weekly. Set an internal SLA: any relevant consortium posting gets a go/no-go decision within 72 hours.
Weeks 9-12: PAE Engagement. Identify the PAE-assigned COs for your top two to three active pursuits. Prepare outcome-focused capability packages (not generic company overviews) and request briefing opportunities. Track each CO relationship on the five-point depth scale described above.
The metric to track starting this week: percentage of active pursuits with outcome-based past performance narratives versus deliverable-based narratives. If most active pursuits still rely on deliverable-based narratives by day 90, your capture strategy hasn't actually migrated.
The contract you won last year under the old rules may not be the contract you win next year. Contractors who restructure their capture cadence, rewrite their past performance, join the right OTA consortia, and build lasting relationships with portfolio leadership put themselves in a stronger position as the November 2025 reforms take hold. Waiting for a familiar FAR Part 15 RFP may mean waiting for a solicitation that comes through a different vehicle, or not at all.
References
- [1]Inside Government Contracts (Covington), "From DAS to WAS: Secretary Hegseth's Acquisition Overhaul and What It Means for Industry." https://www.insidegovernmentcontracts.com/2025/12/from-das-to-was-secretary-hegseths-acquisition-overhaul-and-what-it-means-for-industry/
- [2]Holland & Knight, "War Secretary Announces Strategy Regarding Defense Acquisition Reform." https://www.hklaw.com/en/insights/publications/2025/11/war-secretary-announces-strategy-regarding-defense-acquisition-reform
- [3]10 U.S.C. 4022 Authority of the Department of Defense to carry out certain prototype projects. https://www.law.cornell.edu/uscode/text/10/4022
- [4]10 U.S.C. 4401 Requirement for modular open system approach in major defense acquisition programs; definitions. https://www.law.cornell.edu/uscode/text/10/4401