Key Takeaways
- •Current funding plans allocate 97% to high-cost munitions, prompting committee calls to increase the 3% share for low-cost alternatives to build affordable mass for potential peer-level conflict.
- •Elizabeth Seiko Okano (Principal Military Deputy Assistant Secretary of the Navy) stated the MACE program aims to deliver air-launched weapons for under $300,000 per round by 2027.
- •Sen. Wicker (R-MS) pressed Steven P. Whitney (Director of Force Structure, Resources and Assessment, J8, Joint Staff) to define an ideal funding ratio between exquisite and low-cost munitions.
- •Sen. Reed (D-RI) questioned a $1 billion equity investment in L3Harris, while Sen. Sheehy (R-MT) criticized the "sclerotic" acquisition process for making U.S. munitions more expensive than Russian equivalents.
- •The Department of Defense will utilize multi-year procurement authorities and non-traditional contractors to scale production of low-cost cruise missiles and interceptors to replenish depleted global munitions stockpiles.
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Hearing Analysis
Overview
A closed hearing to examine low-cost munitions Committee: Senate Armed Services Hearing Date: 2026-03-24T13:30:00Z
HEARING PURPOSE The Senate Armed Services Committee convened to examine the Department of Defense’s (DOD) transition toward a "high-low mix" of munitions, specifically focusing on the development and procurement of low-cost, high-volume alternatives to traditional "exquisite" weapon systems. The hearing addressed the need for deeper magazines to sustain potential peer-level conflicts, the integration of non-traditional defense contractors, and the acceleration of acquisition timelines.
Key Testimony
KEY TESTIMONY Witnesses from the Joint Staff and the three military departments emphasized that while high-end, expensive munitions remain necessary, the current security environment requires a massive increase in affordable, scalable options. Lt. Gen. Steven P. Whitney (Director of Force Structure, Resources and Assessment, J8, Joint Staff) testified that low-cost munitions must complement traditional arsenals to create a resilient force.
Elizabeth Seiko Okano (Principal Military Deputy Assistant Secretary of the Navy for Research, Development and Acquisition) detailed a three-phased strategy for the Navy: stabilizing the existing industrial base for systems like the Tomahawk and Standard Missile 6 (SM-6), diversifying through "pathfinder" programs like MACE and CHAOS to bring in agile new companies, and scaling production by driving down supply chain risks. She noted a target price of $300,000 per round for the Multi-mission Affordable Capacity Effector (MACE).
Frank J. Lozano (Portfolio Acquisition Executive Fires, U.S. Army) highlighted the Army’s engagement with venture capital-backed firms, specifically citing Castillion’s work on the Blackbeard ground launch system. He emphasized the use of Other Transaction Agreements (OTAs) to bypass traditional procurement hurdles. Robert P. Lyons III (Portfolio Acquisition Executive for Weapons, U.S. Air Force) discussed the rapid development of the Extended Range Attack Munition (ERAM) and the Family of Affordable Mass Munitions (FAMM), noting that the "Rusty Dagger" cruise missile was developed in just 16 months compared to the traditional five-to-ten-year cycle.
Policy Proposals
POLICY PROPOSALS Several legislative and regulatory shifts were discussed: - The "One Big Beautiful Bill Act" was cited as a source of supplemental funding, providing $688 million for Tomahawk procurement and $250 million for its supplier base. - Witnesses advocated for "budget flexibility," requesting that appropriators allow the services to shift funds within the year to meet evolving battlefield needs rather than being tied to two-year-old budget requests. - The implementation of Portfolio Acquisition Executives (PAEs) under the FORGED Act was praised for streamlining command and accelerating contract definitization. - Multi-year procurement (MYP) authorities were identified as critical for providing the "demand signal" necessary for industry to invest capital.
Overview
INDUSTRY & SECTOR IMPACT The hearing signaled a significant shift in the defense industrial base. While traditional primes like Raytheon (Tomahawk/SM-6) and L3Harris (solid rocket motors) continue to receive massive funding, there is an aggressive push to integrate "new entrants" and non-traditional contractors. Sectors involved in autonomous systems, solid rocket motor manufacturing, and open-systems architecture software will see increased opportunities. The move toward "vertical integration" by new companies was highlighted as a way to reduce supply chain risk.
ORGANIZATIONS & ENTITIES - Joint Staff: Represented by Lt. Gen. Whitney, the Joint Staff is overseeing the strategic "high-low mix" and providing military advice on force structure. - U.S. Navy: Discussed regarding its three-phase munitions strategy and the deployment of low-cost counter-UAS systems on destroyers. - U.S. Army: Focused on integrating non-traditional partners and testing systems like Blackbeard. - U.S. Air Force: Highlighted for rapid prototyping of cruise missiles and palletized munitions. - L3Harris: Mentioned regarding a controversial $1 billion government equity investment to spin off its solid rocket motor business to ensure production capacity. - Castillion: A venture-backed company praised by the Army for its rapid testing and construction of a new production facility in New Mexico for the Blackbeard system. - Zone 5: Credited with developing the "Rusty Dagger" cruise missile in 16 months using open systems architecture. - Anduril & Co-Aspire: Identified as innovative companies participating in the new "business recipe" for rapid munitions development. - DIU (Defense Innovation Unit) & SCO (Strategic Capabilities Office): Mentioned as partners with the Navy for testing low-cost undersea effectors. - Eglin Air Force Base: Cited as a key location for accelerated testing of the ERAM.
PARTISAN DYNAMICS The hearing was largely bipartisan in its support for increasing munitions stockpiles. However, Chairman Roger F. Wicker (R-MS) expressed sharp concern over the current funding balance, noting that the November 2025 Munitions Acceleration Council (MAC) plan allocated 97% of funds to "exquisite" munitions and only 3% to low-cost alternatives. Ranking Member Jack Reed (D-RI) raised concerns about the $1 billion equity deal for L3Harris, questioning whether government investment in a dominant player might stifle competition from smaller firms.
Notable Exchanges
NOTABLE EXCHANGES Sen. Tim Sheehy (R-MT) challenged the witnesses on the "cost delta" between U.S. munitions and those of adversaries, noting that Russia produces artillery shells at roughly 8% of the U.S. cost. He argued that the U.S. "sclerotic process" drives up costs without necessarily improving capability. Another significant exchange involved Chairman Wicker pressing the witnesses to commit to a specific "right mix" percentage (e.g., 50/50) for high-low munitions; the witnesses declined to provide a specific number, citing the early developmental stage of many low-cost programs.
Policy Proposals
NEXT STEPS The Air Force plans to conduct further testing on palletized cruise missiles this spring, potentially involving the Air National Guard. The Navy is expanding the installation of low-cost counter-UAS systems to eight additional destroyers. Witnesses committed to providing further analysis on the L3Harris equity deal and continuing the implementation of PAE structures to accelerate acquisition.
Transcript
The committee will come to order. I have an opening statement which I will submit for the record without objection. Senator Reed.
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