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There is no single contractor-free replacement for building U.S. military systems. The Department of Defense can use government-employed teams and laboratories, specialized research centers, existing software, modular open-system designs, or faster pathways for commercial prototypes. These are different choices for different stages—and several still involve private organizations.
What counts as an alternative?
“Building a system” can mean research, software development, integration, testing, production, or long-term sustainment. A government lab might lead early research, for example, while a commercial vendor supplies production hardware and another team maintains software. An alternative to a private contractor for one stage is not necessarily a replacement for private industry across the system’s entire life.
The main options differ in what they change: who does the work, whether software is reused or created, how system components fit together, or how the government brings in outside firms.
| Approach | What changes | Best fit to consider |
|---|---|---|
| Government-employed teams and service laboratories | More engineering work and expertise reside inside government. | Building enduring in-house capacity and retaining technical knowledge. |
| FFRDCs and UARCs | A specialized research or engineering organization supports the government. | Long-term or specialized needs that are not met as effectively by in-house or contractor resources. |
| Adopt or buy software | The government reuses or acquires existing software instead of creating every component. | Capabilities that an existing product or open-source project can meet. |
| Share or publicly release code | Custom-developed code is made available for reuse within government or, under separate rules, released publicly. | Reducing duplicated development where sharing and security rules allow. |
| Modular open systems | Components connect through defined interfaces, making it easier to replace or compete parts. | Systems expected to evolve, integrate with others, or draw on multiple suppliers. |
| DIU and other prototype pathways, including OTAs | The government uses a route designed to bring outside commercial technology into prototyping and transition. | Testing promising commercial capabilities and moving suitable prototypes toward use. |
Can the government build systems with its own employees?
Yes. Government-employed software, engineering, acquisition, and test teams can give the department direct technical capacity and preserve institutional knowledge. Service laboratories and other government facilities can contribute research, development, and testing expertise.
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In-house capacity is not automatic: it requires recruiting and retaining people with the right skills, maintaining tools and infrastructure, and giving technical teams enough authority to work effectively. GAO found software-staffing challenges in the programs it reviewed. In its 2021 report, which described data reported through June 2021, only six of 36 weapon programs reporting Agile use said they delivered software to users in less than three months. That is a historical sample, not a current department-wide performance measure. GAO-21-105298
Government teams can also work alongside contractors rather than displacing them. The key question is which technical responsibilities the department needs to own directly—such as requirements, architecture, integration, or software maintenance—and whether it can staff those responsibilities over the system’s life.
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What are FFRDCs and UARCs?
Federally Funded Research and Development Centers (FFRDCs) and University Affiliated Research Centers (UARCs) are specialized organizations that support government research, analysis, engineering, and technology development. They are not simply government departments, nor are they a universal substitute for contractors; their operators may include universities, nonprofits, or industrial firms.
The Federal Acquisition Regulation describes an FFRDC as intended to “meet some special long-term research or development need which cannot be met as effectively by existing in-house or contractor resources.” Congressional Research Service (CRS) says the Department of Defense relies on FFRDCs and UARCs to identify, assess, develop, and transition technologies and concepts for military use. CRS reported 43 active FFRDCs, including 10 sponsored by the Department of Defense, based on a National Science Foundation count in its February 2023 report. That dated figure is not a 2026 inventory. CRS, The U.S. Defense Industrial Base
Can the military use existing or open-source software?
Yes, when the software meets mission, security, integration, and support needs. The Department’s policy framing is “Adopt, Buy, Create”: consider reusing existing software, buying a suitable product, or creating software when the first two options do not meet the need. The DoW Code.mil FAQ says open-source software qualifies as commercial computer software and should receive equal consideration with proprietary commercial offerings. Equal consideration does not mean every open-source or commercial product is suitable for a particular military system. DoW Code.mil, Open Source Software FAQ
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For software that is not part of a National Security System, the FAQ describes an open-by-default policy, subject to conditions and exceptions. That is a policy direction, not a blanket instruction to publish sensitive code without review. Classification, operational security, intellectual property, and other applicable restrictions still matter.
Does government code sharing mean public open source?
No. Government-wide code sharing and public release under an open-source license are separate practices.
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- Government-wide sharing: The SHARE IT Act, enacted on December 23, 2024, requires covered custom-developed code to be shared across the federal government with rights sufficient for federal access, sharing, use, and modification. A repository restricted to federal employees can satisfy the sharing requirement; the Act does not itself require public release under an open-source license.
- Public open-source release: Separately, a 2022 Department of Defense CIO memorandum directs that software for systems other than National Security Systems should be open by default and released under an open-source software license unless specified conditions apply.
The Code.mil FAQ notes exclusions to the SHARE IT Act’s requirements, including classified code, code primarily for National Security Systems, and intelligence-community elements. The precise treatment depends on the applicable law, policy, and security review. DoW Code.mil, Open Source Software FAQ
Can modular design reduce dependence on a single supplier?
Modular open-system approaches divide a system into components connected through defined interfaces, often based on standards. If interfaces and relevant data rights are managed well, the government can have more room to integrate components, compete work, or replace a part without redesigning the entire system. GAO has described potential benefits including interoperability, innovation, reduced development time, and lower lifecycle costs.
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Those gains are not guaranteed. GAO also identified implementation challenges, including a preference for proprietary systems, gaps in expertise, and difficulty tracking implementation. A nominally modular design may still leave the government dependent on a supplier if interface information, technical skills, or rights needed to change components are unavailable. GAO-14-617R
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Do DIU and OTAs eliminate private contractors?
No. The Defense Innovation Unit (DIU) and Other Transaction Authority agreements (OTAs) are ways to engage outside providers, not contractor-free alternatives. They can help the government prototype and transition commercial or nontraditional technology under qualifying conditions. GAO describes OTAs as more flexible than Federal Acquisition Regulation procurement contracts for certain purposes, including prototyping. It also reports that nontraditional firms have cited government-specific processes and contract burdens as obstacles; that finding came from GAO interviews published in 2017, not a claim about every firm today. GAO-17-644
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How should the government choose among the options?
There is no evidence here of a head-to-head comparison proving that one model is universally cheaper, faster, safer, or better. A practical choice starts with the particular system stage and mission constraints:
- Define the work: Decide whether the need is research, a software capability, integration, testing, production, or sustainment. Different stages may call for different providers.
- Establish what can be shared: Determine classification, National Security System status, releasability, and applicable security and intellectual-property restrictions before planning reuse or code release.
- Check whether to adopt, buy, or create: Assess whether existing open-source or commercial software meets mission and support requirements before funding new development.
- Set the government’s role: Identify the technical knowledge and decision-making capacity that government staff must retain, and assess whether existing teams can perform that work.
- Plan architecture and rights: Specify interfaces, interoperability needs, software and data rights, and what would be required to maintain or replace components later.
- Choose an engagement route: For specialized long-term research, consider whether an FFRDC or UARC fits its defined niche. For suitable commercial prototypes, consider whether DIU or an OTA is appropriate; these routes still involve outside organizations.
- Account for the full lifecycle: Compare the workforce, oversight, budget flexibility, technical maturity, iterative-delivery needs, and long-term support each approach requires.
The acquisition question is therefore not simply “government or contractor.” It is which work the government should own, which capabilities it can reuse, what expertise a specialized center can provide, and where external participation remains necessary. GAO’s 2025 testimony frames the broader challenge this way: “The acquisition system has reached a critical juncture.” GAO-25-108528
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