American ingenuity at work: The Army’s Strategic Capital Initiative

WASHINGTON — The Army is rewriting the playbook on how it partners with the private sector. At a contemporary military forum on the Strategic Capital Initiative during the Association of the United States Army 2026 Annual Meeting, senior Army leaders and commercial executives sent a clear, unified message: the Army is doing business differently than ever before.

The panel explored how SCI is bridging the gap between national defense and private capital focused on six strategic pillars. Panelists highlighted how the Army is cutting through red tape and rigid acquisition rules by actively leveraging Commercial Solutions Openings (CSOs), public-private partnerships and enhanced use leases (EULs) to work at the speed of trust and capital.

Panel members echoed Acting Secretary of the Army Adam R. Telle opening remarks that the service “needs to build adaptable and symbiotic relationships with both industry and service partners to maintain a strategic advantage over the nation’s adversaries.”

Lt. Gen. Gavin Lawrence, deputy commanding general and acting commander of Army Materiel Command, emphasized that AMC is leaning heavily into these innovative, particularly across the Army’s 23 Organic Industrial Base sites.

“The government defines a problem, we send it out to commercial industry, and we let commercial industry do what they do best – innovate and bring solutions,” said Lawrence. “We're not bounding commercial industry by our constraints. We give them the clearly defined problem, what it is important, and then let American ingenuity go to work.”

Lawrence outlined four critical lessons the Army and private industry must embrace to make these CSOs successful.

First, he noted that the Army has a responsibility to clearly define its requirements and problem sets, but conversely, industry must feel empowered to speak up if there is a lack of understanding. Ensuring clear conversations and a shared vision upfront prevents costly misalignments down the road.

Second, he highlighted the importance of understanding statutory guardrails and respecting the legal boundaries that distinguish government operations from the private sector. He said for example, within the OIB, certain core functions are inherently governmental, and operations must comply with statutory regulations like the 50-50 rule, which dictates the balance of military and commercial depot maintenance work.

Third, Lawrence called for a clear, mutual understanding of the value proposition on both sides from the very beginning. He said, while the Army is focused on increasing production capacity, lowering acquisition costs, and accelerating capability delivery to the warfighter, the military must also recognize that commercial partners have obligations to their stakeholders, including expectations for return on investment and profit.

Fourth, he emphasized the need to balance these guardrails without binding or inhibiting the innovation that commercial industry brings. He explained that the government must establish boundaries without over-constraining its partners.

‘We need to be working at the speed of trust, and trust is based on communication and understanding each other,” said Lawrence. “Speed absolutely matters, so if there is something we are not thinking about, help us get to the right place.”

Under the SCI framework, the Army is already utilizing CSOs to implement advanced manufacturing flexible lines to resolve parts obsolescence and enhance readiness. At Red River Army Depot, a partnership with Hadrian is establishing a flexible line for battery production to support drone dominance and manufacture tactical wheeled vehicle repair parts. Additionally, Anniston Army Depot is collaborating with Siemens to onshore manufacturing capabilities for small Unmanned Aircraft System stator systems and produce parts for heavy armored fleets.

Industry panelists echoed the enthusiasm for this collaborative evolution. Chip Chattelier, Vice President, Business and Technology Strategy, FedEx Dataworks, commended the Army's willingness to lean in.

“The single most effective way to accelerate private investment is to bring industry in earlier, even before putting pen to paper, to understand the ground truth of the mission,” said Chattelier. “By doing so, partners can move past reactive, static dashboards and implement ‘predictive logistics intelligence’ to anticipate supply chain disruptions and prevent readiness impacts before they happen.”

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