Capability Of Us Defense Industrial Base

The U.S. defense industrial base is deteriorating. Long lead times to procure weapon systems, high costs, uncertain quality, and dependence on procurement of electronic components from other countries are symptoms of a decline in the capability of the U.S. defense industrial base. A primary cause of this decline is the failure of the Department of Defense (DOD) and its contractors in the U.S. defense industry to invest sufficiently in manufacturing technology. The lack of investment reflects DOD's history of concentrating its resources and attention on product technology rather than process technology. As we described in our initial report, The Role of the Department of Defense in Supporting Manufacturing Technology Development, existing procurement policies and regulations do not provide sufficient investment incentives to contractors. Therefore, direct funding for some manufacturing technology development will have to be provided by DOD.

Since the start of the cold war the defense industrial complex has been a substantial contributor to the military element of U.S. national power. However while the U.S. military demonstrated superb performance in Afghanistan and Iraq many were surprised by disappointing examples of the defense industry's failures to respond to surge requirements and its reliance on foreign suppliers. There are many reasons for the failures both on the industry side and on the department of defense (DoD) side but is the defense industry in decline? While the current business environment presents challenges for defense contractors such as globalization mergers reduced demand and pricing pressure from foreign sources the DoD is also experiencing challenges associated with transformation budget pressures and an unanticipated level of deployment requirements associated with a new threat and the global war on terrorism. Without adequate and practical assessment tools and policy adequate funding and an industry transformation to address these challenges U.S. security could be at risk. This paper examines the current defense industry and the national security environment and it suggests recommendations to set conditions to enable the defense industrial base to provide innovative and affordable capabilities to the nation at war while transforming.

Since World War II, the Department of Defense (DoD) has been able to count on America's defense industrial base (DIB) always being ready to design and produce the world-class weaponry on which the U.S. military has long relied. But the U.S. DIB is considerably smaller today than it was following the Cold War's end. Now the Pentagon confronts a period of shrinking defense budgets at the same time the international security environment is posing new military challenges, such as the emergence of anti-access/area-denial capabilities, the growing threat to space-based systems, and the proliferation of weapons of mass destruction. The Defense Department has never had a coherent, long-term strategy for sustaining the defense industrial base's core competencies. Absent a strategy that proceeds from deciding first what to keep rather than what to cut, the possibility is growing that a day will come when the country's industrial base will no longer possess all the critical design and manufacturing capabilities that the U.S. military needs. This study provides a diagnosis of the military competitions most likely to dominate military relationships between the United States and prospective adversaries over the next decade or two, and the corresponding DIB competencies where the U.S. military will need to sustain advantage.

"This report, the fifth and final in the initial Defense Industrial Base Capabilities Study (DIBCS) series, employs a logical, systematic methodology to do this"--Page vii.