The U.S. Department of Defense (DoD) has several ways to reduce or change its reliance on private tech contractors, but none is a universal contractor-free substitute. It can build some capabilities with government employees, use DoD laboratories or specialized research centers, reuse or buy existing software, require open interfaces, or bring commercial firms in through different procurement routes. The right choice depends on what “building” means: research, software development, integration, testing, production, and long-term sustainment can use different models within the same program.
“Alternatives” can mean different things
Some alternatives change who does the work; others change what is built, how it is designed, or how outside companies are engaged. These approaches can be combined. A government team, for example, might integrate an existing commercial product into a system designed around open interfaces, while a specialized research center supports the engineering work.
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| Approach | What it changes | Typical question it helps answer |
|---|---|---|
| Government workforce and service labs | Who performs engineering and software work | Can the government retain the expertise and capacity for this work? |
| FFRDCs and UARCs | Which specialized institution supports research, analysis, and transition | Is there a long-term or specialized need not met as effectively in-house or by ordinary contractor resources? |
| Reuse, purchase, or open-source software | Whether the government creates new software or uses existing code | Does a suitable capability already exist, and what rights and security conditions apply? |
| Government-wide code sharing and public open-source release | Who can access and use custom-developed code | Should code be shared among federal agencies, released publicly, or both? |
| Modular design and open interfaces | How components connect and can be replaced | Can the system preserve interoperability and future competition? |
| DIU and other eligible procurement pathways | How outside firms participate in prototyping and transition | Can a commercial capability be tested and moved toward use through a suitable route? |
These are not interchangeable choices. A procurement route still involves outside providers; an open-source license does not itself establish that software is secure or suitable; and an open interface does not determine who builds or maintains the system.
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Who can do the engineering work?
Government-employed teams and service laboratories
Government engineers and software teams can give the DoD direct technical capacity and preserve knowledge about a system inside the organization responsible for it. Service laboratories and DoD test facilities can contribute research, engineering, or evaluation capabilities, depending on the mission and facility. This can make sense when the work requires sustained government oversight or when retaining design and integration knowledge is important.
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In-house staffing is not automatic capacity. In its review of selected DoD software programs, the Government Accountability Office (GAO) identified staffing challenges. A government-led model therefore depends on recruiting and retaining the necessary expertise as well as providing the authorities, tools, and continuity to use it effectively. The findings are program-specific and do not establish that every DoD organization has the same staffing problem. GAO-21-105298
Federally funded research and development centers and university-affiliated research centers
Federally funded research and development centers (FFRDCs) and university-affiliated research centers (UARCs) are specialized resources for research, development, systems analysis, engineering, and moving technologies toward military use. They are not a general replacement for every contractor role. The Federal Acquisition Regulation describes an FFRDC as one intended to “meet some special long-term research or development need which cannot be met as effectively by existing in-house or contractor resources.” The center’s operator may be a university, nonprofit, or industrial firm, so using an FFRDC does not necessarily mean eliminating private organizations from the work.
The Congressional Research Service reported a National Science Foundation count of 43 active FFRDCs, including 10 sponsored by the DoD, in February 2023. That is a dated count, not a current 2026 inventory. CRS describes DoD reliance on FFRDCs and UARCs to identify, assess, develop, and transition technologies and concepts for military use. Congressional Research Service, The U.S. Defense Industrial Base
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Adopt, buy, or create
The DoW Code.mil FAQ summarizes the software policy framing as “Adopt, Buy, Create”: consider existing software before building a new capability, and assess commercial offerings—including open-source software (OSS)—alongside proprietary options. OSS is treated as commercial computer software and is to receive equal consideration with proprietary commercial software. Equal consideration does not mean a particular open-source product must be selected; mission fit, security, integration, maintenance, and applicable rights still matter. DoW Code.mil, DoW Open Source Software FAQ
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Reusing or purchasing software can avoid duplicating work when an existing product meets the requirement, but it does not eliminate integration or sustainment. The government still needs to determine whether the software can operate in the system, be maintained over time, and meet relevant security and mission requirements. Creating new software remains an option when existing code cannot meet the need.
Government-wide sharing is not the same as public release
The SHARE IT Act, enacted on December 23, 2024, requires covered custom-developed code to be shared government-wide with rights sufficient for federal access, sharing, use, and modification. A private repository available to federal employees can meet that sharing requirement; the Act does not by itself require publication under an open-source license. The FAQ notes exclusions for classified code, code primarily for national security systems, and intelligence-community elements. DoW Code.mil, DoW Open Source Software FAQ
Public OSS release is a separate policy question. A 2022 DoD CIO memorandum directs that software for systems other than National Security Systems should be open by default and released under an OSS license unless specified conditions apply. Security review and the relevant exceptions still matter. Thus, “government-wide reusable,” “publicly open-source,” and “software that uses OSS” describe different things, not a single status. DoW Code.mil, DoW Open Source Software FAQ
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Can open interfaces reduce dependence on one supplier?
Modular systems and standards-based interfaces
A modular system separates components and defines how they connect through open interfaces based on standards. If implemented well, this can make components easier to integrate or replace, support interoperability, preserve competition among suppliers, and potentially reduce development time and lifecycle cost. It can also give the government more room to introduce new technology without redesigning an entire system.
Those benefits are not guaranteed by labeling a design “open.” GAO’s review of DoD and private-industry experience found implementation challenges, including a cultural preference for proprietary systems, gaps in expertise, and difficulty tracking progress. Ownership of proprietary designs and limited control over interface information can also constrain competition. Open architecture is therefore a technical and program-management decision: interface definitions, data and software rights, conformance, and the ability to test replacements have to be addressed in practice. GAO-14-617R
How can commercial firms participate without the usual route?
DIU and other transaction authorities
The Defense Innovation Unit (DIU) and other transaction authorities (OTAs) can provide routes for prototyping and moving commercial technology toward military use. GAO describes OTAs as more flexible than Federal Acquisition Regulation procurement contracts under qualifying conditions, including prototype projects. They can help engage commercial or nontraditional firms, but they are procurement mechanisms for outside participation—not contractor-free alternatives. Eligibility, project purpose, and applicable conditions determine whether an OTA is available.
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DIU reported that 62 prototype agreements had transitioned to production awards or contracts through fiscal year 2023, as reported by GAO in 2025. That is a reported transition count, not an independent measure of project success or a current annual transition rate. GAO also noted that nontraditional firms interviewed in its 2017 work described government-specific process and contract burdens; those historical interviews should not be read as evidence that every such company faces the same barriers today. GAO-25-108528 GAO-17-644
What the evidence says about implementation
Choosing a model on paper does not ensure that it will deliver capability quickly. In June 2021 data reported by GAO, only six of 36 weapon programs that reported using Agile said they delivered software to users in less than three months. This is a historical sample, not a current department-wide performance rate, but it illustrates the difference between adopting a development label and achieving a working delivery process. GAO-21-105298
In 2025 testimony, GAO said, “The acquisition system has reached a critical juncture,” in framing its argument for iterative approaches to delivering capabilities with speed. That observation supports attention to delivery and acquisition practices; it does not establish that one sourcing model is best for every system. GAO-25-108528
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How to choose a sourcing mix
Instead of asking whether a system should be “government-built” or “contractor-built” as a single decision, determine which functions need to be sourced and controlled at each stage. A program may use an internal team for integration, an FFRDC for specialized analysis, a commercial product for a mature component, and an outside firm for a prototype.
- Mission classification and releasability: Identify restrictions on the system, its data, and its code before considering reuse or publication.
- Stage of work: Distinguish research, software development, system integration, testing, production, and sustainment; needs and viable providers can differ by stage.
- Maturity and delivery needs: Decide whether the requirement calls for exploratory research, a prototype, an existing product, or iterative updates to deployed software.
- People and oversight: Check whether the responsible government organization has the engineering, security, integration, and program-management capacity to direct the work and retain knowledge.
- Rights and interfaces: Specify software and data rights, interface control, documentation, and the ability to test or replace components.
- Lifecycle and competition: Consider interoperability, future supplier choice, maintenance, upgrades, and the cost of sustaining the system over time.
There is no established head-to-head comparison across all military system types proving that these alternatives are universally cheaper, faster, or safer than private contracting. GAO’s testimony on acquisition reform emphasizes iterative delivery, while its findings on staffing, Agile implementation, open systems, and nontraditional-firm barriers show that outcomes depend on execution as well as the chosen route. The defensible decision is a mission-specific mix with explicit responsibility for integration, rights, security, and long-term support.
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