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Iran War Exposes Shortcomings in U.S. Military Industrial Base

May 19, 2026
in News
Iran War Exposes Shortcomings in U.S. Military Industrial Base

When he was defense secretary, Robert M. Gates railed against weapons that did too much and cost too much throughout his time in two presidential administrations.

He denounced weapons that offered a “99 percent solution” but took years to build, and called for a new generation of arms that were “75 percent solutions” but could be produced more cheaply in months.

Almost two decades later, little has changed. Patriot interceptor missiles can take up to 36 months and $4 million to build. So far in the Iran war, the U.S. military has fired more than 1,200 of them. Some were used to shoot down $35,000 Shahed drones, which Iran can churn out at a rate of at least 200 a month.

The war, and the quick pace with which the United States has burned through weapons, has brought Mr. Gates’s old critique to the current day and exposed deep shortcomings in America’s military industrial base and weapon procurement systems.

“Ukraine is going to produce seven million drones this year,” Mr. Gates said in an interview. “Come on. Why can’t we do that?”

The Pentagon and Congress have tried, and mostly failed, to address the problem for years. Now Defense Secretary Pete Hegseth is taking it on. The main difference is that while many defense secretaries, including Mr. Gates, argued for doing more with less money, Mr. Hegseth is pushing for a $1.5 trillion budget, the largest military funding proposal in modern U.S. history.

But, experts say, there are fundamental problems with how the military designs and builds weaponry that money alone might not be able to fix.

“The Pentagon needs to demonstrate real behavioral and cultural change,” said Rachel Hoff, the policy director at the Ronald Reagan Institute. “They have stood up so many new offices and announced new strategies, but ultimately if there aren’t real changes on contracting and acquisition, it’s all just rhetoric.”

There is plenty of blame to go around. But essentially, the Pentagon is a “finicky customer that buys in small batches and never achieves economies of scale,” said Mackenzie Eaglen, a military expert at the conservative-leaning American Enterprise Institute.

The equipment the Pentagon buys — not just ships and planes but also munitions — can take several years to build. When a war starts, Ms. Eaglen said, there is no “quick fix” to increase production.

“The system has no slack because it isn’t needed until wartime, or so the shortsighted thinking goes in government,” she said.

At the Defense Department, officials say they are ready for change. Mr. Hegseth has called for “an 85 percent solution” in weapons acquisition and criticized large defense contractors and the Pentagon bureaucracy, echoing Mr. Gates’s complaints.

Armed with a potentially huge increase in spending, Mr. Hegseth’s changes focus on prioritizing commercial sources, pushing for multiple suppliers and demanding that contractors improve their manufacturing capacity. So far his Pentagon has expanded the number of multiyear contracts aimed at tripling or quadrupling munitions production. And senior officials said they are finding ways to bring in new defense tech companies, eliminating bureaucratic barriers that have hindered them.

“As we increase production of exquisite systems, we are actively looking for innovative low-cost solutions that can complement our high-end munitions,” said Sean Parnell, the Pentagon spokesman. “By driving competition and new technology into the fold, we’re ensuring the industrial base expands to ensure everlasting battlefield overmatch for our war fighters.”

Inside the administration, the shortfall in interceptors, and the struggles to produce weapons fast enough, has prompted worries that adversaries could be emboldened and that allies could change their calculations, concerned the United States cannot defend them as effectively as they had thought.

The U.S. special operations forces raid that captured President Nicolás Maduro of Venezuela early this year gave the military an air of invincibility. According to American intelligence agencies, officials in Russia and China assessed that they could not have executed that operation. But the war in Iran has made the United States appear less formidable.

Struggles with the munitions stockpile are not new. According to a 2010 Army history of the munitions industrial base, the United States has undergone boom and bust cycles of arms production since World War I, as the Defense Department activated ammunition plants for a conflict only to decommission them shortly after hostilities ended.

In an interview from Williamsburg, Va., where Mr. Gates was inaugurating a new center at the College of William & Mary named in his honor that is aimed at promoting nonmilitary governmental solutions, the former defense secretary said the Pentagon needed to focus on building up its production muscle.

“Everybody seems to rhetorically recognize the problems with defense industrial capacity, whether it’s ship building or ammunition or anything else, but how fast are either existing factories being expanded or new factories being built?” Mr. Gates said. “The reason why I think shaking up the bureaucracy is critical is because speed at this point is so important.”

Winslow T. Wheeler, a former analyst at the Government Accountability Office, said the problem was a culture in which the Pentagon invests in very expensive weapons systems that are difficult to keep in the field.

“That is how you get up to a $1.5 trillion D.O.D. budget but still have a weapons inventory which is shrinking, aging and can’t be maintained,” he said.

With the exception of the LUCAS drone, America’s reverse-engineered knockoff of Iran’s Shahed drone, the weapons used against Iran were old technology — F-35 planes, Tomahawk missiles, Patriot systems — Pete Modigliani and Matt MacGregor, defense acquisition experts, wrote recently.

“It is very in vogue to say we need cheap drones, but we also need our legacy systems,” said Tara Murphy Dougherty, the chief executive of Govini, a defense software company that specializes in modernizing the U.S. defense acquisition process. “There is a tension. What we learned in Iran, the observation from Operation Epic Fury, is that we still have to sustain our fleet, full stop.”

Mr. Gates said that even in an era of rising budgets, there are hard decisions ahead.

It is critical, he said, that the Pentagon leadership decide which legacy systems to keep — and speed production of — and which to jettison. Last week, Mr. Hegseth told Congress he may back down from planned cuts to Army aviation programs. But Mr. Gates, who ruthlessly cut beloved projects from every military service, said that cultural change has to be driven by the top of the department.

“There are many people in the Pentagon who can slow things down, create obstacles or say no,” Mr. Gates said. “And there are only two people who can override all that, and that’s the secretary and the deputy secretary.”

Pentagon officials insist they are ready to take on more risks than their predecessors. But plenty of past defense secretaries promised change, only to see their ideas fizzle.

At a speech this month, Michael Cadenazzi, the assistant secretary for industrial base policy, said while the Defense Department would continue to buy weapons from traditional defense contractors, officials were looking for ways to purchase cheaper drones and munitions.

“There’s an opportunity to balance the portfolio and build more resilience across the entire ecosystem,” Mr. Cadenazzi said.

Pentagon leaders have said that for years. But experts said there is a chance things will be different this time. Struggles on the battlefield, new military spending, a generation of new defense tech companies and leadership willing to try different approaches could all combine to alter what, and how fast, the Pentagon makes weapons.

“The building blocks for systemic transformation are in place,” Ms. Hoff said. “We’re seeing new energy from leadership at the Pentagon, political support from Congress and the operational need in Iran. If this does not lead to the first real military modernization in a generation, we will likely miss the moment.”

John Ismay and Eric Schmitt contributed reporting.

Julian E. Barnes covers the U.S. intelligence agencies and international security matters for The Times. He has written about security issues for more than two decades.

The post Iran War Exposes Shortcomings in U.S. Military Industrial Base appeared first on New York Times.

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