Long-Term Impacts of Military Drawdown on the Industrial Base
Technical Report,01 Aug 2014,24 Mar 2016
AIR FORCE INSTITUTE OF TECHNOLOGY WRIGHT-PATTERSON AFB OH WRIGHT-PATTERSON AFB United States
Pagination or Media Count:
Since World War II, competition in the defense industry has fallen by over 90 percent. With the recent defense budget cuts, and reduced procurement spending, each year prime contractors fight over an shrinking piece of the procurement pie, with potential deleterious effects on national security if these contractors go out of business or further consolidate through mergers. This study used data from the Federal Procurement Data System and the Securities Exchange Commission to track 13 of the DoDs top 100 contractors from 2010 through 2015 to determine if a relationship exists between this reduced procurement spending and financial indicators of the tracked companies. Three of the six models developed showed a relationship between procurement spending and financial indicators at the .05 significance level those of Price-to-Earnings ratio, revenue, and revenue growth. The results of this study show cause for further research to ensure that current strategic management of procurement funding will maintain a healthy defense industrial base.
- Logistics, Military Facilities and Supplies
- Economics and Cost Analysis