L3Harris CEO Chris Kubasik (L) and Embraer CEO Francisco Gomes Neto pose in front of a KC-390 model during the 2022 AFA Conference. (L3Harris)

WASHINGTON — If the incoming Trump administration is serious about using the Department of Government Efficiency (DOGE) initiative to drive cost savings and drill down on Pentagon bureaucracy, it should start by rolling back government accounting rules as well as requirements on defense contractors to serve up detailed price data, the CEO of L3Harris wrote in an open letter.

L3Harris CEO Chris Kubasik’s letter to DOGE heads Elon Musk and Vivek Ramaswamy, published on the company’s website on Wednesday, marks the first foray by an executive at a legacy defense prime into the emerging discourse on how the incoming administration can revitalize the American defense industrial base — a discussion that has typically been largely dominated by leaders from defense technology startups eager to shake things up such as Palantir, Anduril and SpaceX founder Musk.

“America’s current defense acquisition system is slow and bureaucratic and does not provide our warfighters with new capabilities at the speed of relevance to the threats they are facing. It has a structure and a culture that stifles innovation and discourages risk-taking,” wrote Kubasik, a defense industry veteran with stints at Lockheed Martin. “I write to you today to express my desire to help the DOGE make America’s national defense ecosystem great again.”

Kubasik’s letter outlines four ways he believes DOGE could reduce burdensome regulations on defense contractors and increase efficiency in the defense acquisition process.

First, he calls for the elimination of government Cost Accounting Standard (CAS) requirements, which Kubasik argues are duplicative of the Generally Accepted Accounting Principles that defense contractors are already required to follow and impose a “significant labor and cost burden on defense technology companies.” Although CAS requirements were originally established to reduce the risk of companies overcharging the government, Kubasik argues that the Pentagon’s transition from cost-plus contracts — a form of contracting used on developmental projects, where companies are paid for all expenses on a project — to fixed-price contracts — which cap the government’s financial contribution on a project — have already remedied this issue.

“Because CAS is mostly duplicative of GAAP, reasonable accounting standards and practices will still be maintained while greatly reducing regulatory burden, including a significant number of government audits that often take years to complete,” he wrote, adding that contractors will be able to reinvest audit-related savings into developing new technology.

Kubasik also suggests reducing requirements for defense contractors to provide certified cost or pricing data, stating that current regulations add up to two years to the acquisition process and that the DoD already has a base of cost data it can use. Specifically, he recommends mandating such data only for large sole source acquisitions of platforms like naval ships or aircraft, or to raise the threshold for requiring cost data from $2 million to $500 million.

“By eliminating this requirement for a large number of acquisitions and negotiating costs in a free-market way, just like a consumer would do with any other commercial business, we can deliver critical capabilities into the hands of warfighters significantly faster and at a lower cost,” he wrote.

Kubasik’s third recommendation is to create a central contracting organization in the Office of the Secretary of Defense that would be responsible for managing joint procurement programs for portfolios such as Joint All Domain Command and Control (JADC2). By merging the requirements of the military services under a single umbrella, the Pentagon will be able to make acquisition decisions and tradeoffs faster and more effectively, Kubasik argues.

Finally, he recommends limiting the number of times a company can protest a contract award to three times per year, with contractors responsible for paying for the Government Accountability Office review if the protest is denied.

“This would discourage the obstructionist behavior we have seen in recent years and force contractors to utilize the protest option in only the most egregious cases. Most importantly, it will help prevent significant delays in delivering crucial capabilities to our warfighters,” he wrote.

In a Jan. 16 note to investors, Robert Stallard of Vertical Research Partners called Kubasik’s recommendations “all very sensible and relatively boring — so we’ll see if the First Bro [Musk] sees these as splashy enough to pursue.”

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Kubasik’s letter follows the October 2024 publication of Palantir CTO Shyam Sankar’s blueprint for defense reformation, a Martin Luther-inspired “18 Theses” that posits that consolidation in the military industrial base during the 1990s and 2000s has resulted in five bloated and ineffective defense primes. In 2022, Anduril published its own mission statement and call for defense industry rehabilitation, Rebooting the Arsenal of Democracy.

Regardless of whether Musk or Ramaswamy decide to follow up on Kubasik’s specific suggestions, the L3Harris CEO’s letter could be a signal that executives at major legacy defense firms may be growing tired of playing second fiddle to their upstart counterparts in Silicon Valley and are seeking a more prominent and visible positioning near President-elect Donald Trump and his closest associates.

If that’s the aim, Kubasik’s letter breaks from previous statements of defense prime CEOs in a key way. While execs typically keep their public comments apolitical or broadly supportive of White House leadership — as defense spending and national security issues are backed by both Republicans and Democrats — Kubasik at one point in the letter criticizes the Biden administration by name.

“During his first term, President Trump released a visionary plan for a 500-ship Navy that would include hundreds of unmanned maritime vessels, an efficient action designed to expand defense capability and leverage technology without the concurrent addition of more costly naval personnel,” he wrote. “The Biden administration curtailed these plans despite near continual harassment of our ships in open waters by our nation’s enemies.”

In the end, it’s unclear how much power DOGE will have in reorienting the Pentagon bureacracy. Lawmakers have previously made clear that while efficiency is always good, they’re skeptical of handing too much authority to Musk and Ramaswamy. Speaking at the Reagan Defense Forum, Republican Sen. Deb Fisher and Independent Rep. Angus King both essentially said that dealing with programmatic issues was Congress’s job.

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Kubasik’s call for less regulation — particularly the recommendations that could reduce transparency into the costs of making defense products — also might not have as receptive an audience within the Defense Department or with oversight bodies, due to past cases of defense contractors overcharging the Pentagon. In an interview with Breaking Defense, Space Force acquisition czar Frank Calvelli said that industry is not always truthful about the costs incurred during a program.

“I think, on any cost plus contract that we do, industry lies, okay? I mean, they do, they lie. It’s a known fact at least, least, I grew up at the NRO [National Reconnaissance Office] knowing that fact. I’m not quite sure the Space Force knows that fact yet. Or the Department of Defense,” Calvelli said. “They seem to trust industry more than they probably should.”