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Industrial Base Issues Need QDR Consideration

July 13, 2009

The U.S. industrial base provides our nation essential military capabilities that need to be considered in the Quadrennial Defense Review, a new report by the Aerospace Industries Association concludes.

“The Unseen Cost: Industrial Base Consequences of Defense Strategy Choices” examines the effects of alternative strategic postures on various industry sectors in each phase of the acquisition lifecycle. 

“The industrial base is the heart of our ability to supply our nation with the weapons systems it needs,” AIA President and CEO Marion Blakey said. “It is not a static entity, and as this study demonstrates, is highly vulnerable to market conditions and decisions by the Defense Department.”

The Defense Department has not considered the industrial base in past QDRs, an oversight that industry believes may have unexpected consequences. The report urges future strategy decisions be made with full awareness and appreciation of the likely effects on industry capability to avoid situations that could take decades to reverse.

According to the report, a significant gap has developed between DoD’s view of industry as an always-ready supplier of military equipment and how industry makes decisions on what capabilities to offer. That gap is widening as military technologies become more specialized, industry continues to consolidate and DoD’s procurement and research budgets begin to decline.

The report offers six recommendations: 

•    Institutionalize defense industrial base considerations into strategic processes, such as the National Security Strategy, the National Defense Strategy and future QDRs.
•    Better account for defense industrial base considerations in the acquisition and planning, programming, budgeting and execution (PPBE) processes.
•    Restore the Secretary of Defense/industry CEO forum.
•    Continually assess the industrial base from a more strategic perspective.
•    Reinvigorate congressional oversight/review of defense industrial base issues.
•    Ensure that the military services and industry focus research and development on competitive design and development and efficient production.

“The Unseen Cost: Industrial Base Consequences of Defense Strategy Choices” is available on AIA’s Web site at www.aia-aerospace.org/industry_information/reports_white_papers/