Combat information center on the USS John Finn

Balancing Switching Costs and Opportunity Costs: Market-Based Architectures for Defense Acquisition

By Marin Halper , Glenn Daly

The rise of “Software-Defined Warfare” has reignited the debate on the fundamental design trades needed to meet evolving mission requirements. This includes the value of “Owning the Technical Baseline” and a modular open systems approach. What’s needed: a more adaptive and nuanced framework.

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Future systems must be designed for continuous modification—emphasizing speed, modularity, and open interfaces for seamless technology upgrading and integration. DoD must adopt new architectural principles that balance adaptability, interoperability, and mission effectiveness, including:

  • Open access to federated data to foster competition based on capability rather than exclusive access to government-owned data
  • Defining modular boundaries to align mission outcomes with market dynamics
  • Prioritizing Measures of Effectiveness (MOE) over Measures of Performance, to balance immediate needs with long-term adaptability
  • Balancing intellectual property rights and sourcing flexibility, while leveraging MOEs in decision-making

This strategy will equip warfighters with best-in-class capabilities—now and into the future—while maintaining the agility to pivot as challenges and technologies evolve.

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May 7-8, 2025

Breaking Barriers in Defense Acquisition

A summit for defense capabilities and tech thought leaders and forward-thinking acquisition experts.