The year 2025 will go down as a year of transformation for the US Army — quite literally, thanks to the Army Transformation Initiative and its sweeping acquisition overhaul. With this came new programs, more funding and shifts to how the Army potentially plans to work with its vendors.
Here are my five top Army stories from 2025, ranging from Army Secretary Dan Driscoll’s attitude toward prime vendors to a new way the service is trying out software acquisition.
[This article is one of many in a series in which Breaking Defense reporters look back on the most significant (and entertaining) news stories of 2025 and look forward to what 2026 may hold.]
1. The defense industry ‘conned the American people and the Pentagon’: Army Secretary
Shortly after Breaking Defense was the first to report on the Army’s dramatic and sprawling acquisition overhaul, Driscoll doubled down on his stance that the Army is looking to do less business with traditional prime defense vendors and more deals with smaller, Silicon Valley-like contractors. Driscoll said primes “conned the American people” into thinking that it only needs bespoke military solutions when “in reality, a lot of these commercial solutions are equal to or better.”
This wasn’t the first time Driscoll took a shot at primes, as he set the industry atwitter in May when he said it would be a “success” if a prime contractor died while he was in office. But his comments at the end of the year set the tone that 2026 may be a troublesome one for the traditional defense industry.
2. Army launches VC-style model FUZE program to invest early in promising military tech
Prior to the service’s acquisition shakeup, Army leaders announced the launch of the FUZE program. It’s a venture capital-like acquisition model designed to speed up the private development of emerging technologies for use by soldiers, Matt Willis, director of Army Innovation Programs, told Breaking Defense at the time.
FUZE aims to invest $750 million per year in emerging, nontraditional, or “bleeding-edge” tech firms, through four existing initiatives: the xTech program, the Small Business Innovation Research program, the Tech Maturation Initiative and the Manufacturing Technology office.
The birth of FUZE comes as VC has become more prevalent in the second Trump administration. VC-backed startups like Anduril, Palantir and others have begun to establish themselves as major players in the defense industrial base, with Anduril winning big-ticket Army contracts with the Soldier Borne Mission Command system and the service’s Next Generation Command and Control program, and Palantir winning a massive Enterprise Service Agreement to aid the service in speeding up software acquisition.
3. Army seeks hefty boost in network funding in Pentagon procurement proposal
In this summer’s Pentagon budget proposal, the Army sought out more money than ever before for its network modernization. The biggest jump was seen for the management initialization and service portfolio, with a jump from $49 million in fiscal 2025’s request to $244 million in FY26. The request also saw a significant increase in its tactical network communications portfolio from $378 million in FY25 to $866 million for FY26.
The uptick in procurement funding comes as the Army rushes to modernize its IT and communications networks, namely through its Next Generation Command and Control (NGC2) program which aims to combine intelligence, C2 and fires all in one system so commanders can have information more readily available. Though 2026’s defense budget has yet to be passed, NGC2 remains the service’s No. 1 modernization priority — as the budget increase reflects.
4. Inside six helo companies gunning for the Army’s Flight School Next program
As the Army moves forward with its Flight School Next initiative — a new program for training aviators down at Fort Rucker — Breaking Defense spoke with six companies who plan to enter their helos into the competition: Airbus, Bell, Leonardo, Robinson Helicopter Company, MD Helicopters and Enstrom Helicopter.
The program is looking for a new aircraft and also a new curriculum, with the service wanting to make an award by the end of September 2026. It’s looking to ultimately ditch Airbus’ Lakota aircraft, as senior leaders have said it is too advanced for a trainer, and create an entirely new contractor-owned, contractor-operated model. With such a model, some helicopter vendors are looking to serve as the prime contractor for Flight School Next, but most are serving as a subcontractor. For example, Boeing is competing as a prime contractor with Leonardo’s TH-73 trainer.
The winner will be tapped to provide training for 900 to 1,500 rotary wing pilots per year, with a period of performance of 26 years — so it’s no surprise there’s a lot of focus, both from industry and from the Army, as the program moves forward.
5. Army consolidates dozens of Palantir software contracts into one deal worth up to $10 billion
Over the summer, the Army announced Palantir has been awarded up to $10 billion over 10 years for a new type of contract vehicle deemed an Enterprise Service Agreement — a move the Army says will help reduce cost and complexity when acquiring software. Through the agreement the Army plans to consolidate 75 contracts — for 15 of which Palantir is the prime contractor and 60 of which it is a subcontractor — into one massive single software contract.
Such an agreement will allow the service to buy software at a discount as one Army acquisition official, Danielle Moyer, said that buying a bulk of software will inherently cost less than buying one software entity or package at a time. The move came after the Pentagon announced a department wide-push to streamline the acquisition of software.
Though this was a bulk buy, Moyer argued at the time that it will give the service more flexibility and transparency over what it gets from Palantir. The service will no longer need to buy a package of software that includes capabilities or tools it predicts it won’t use. Moyer also said at the time that the Army was looking at establishing more ESA-type buys.
