Accession Number:

ADA272906

Title:

Effects of the DoD Drawdown on Small Business

Descriptive Note:

Final rept.,

Corporate Author:

LOGISTICS MANAGEMENT INST BETHESDA MD

Report Date:

1993-01-01

Pagination or Media Count:

8.0

Abstract:

This paper analyzes how the changing magnitude and composition of Department of Defense DoD purchases of goods and services GS will impact small businesses between 1991 and 1997. While defense-related work performed by small businesses will almost certainly decrease as defense budgets are reduced, the degree of that decline is not certain. We estimate that defense work obtained by small businesses is likely to decline in constant dollars by 18.7 percent between 1991 and 1997. In comparison, we project that total DoD purchases of GS from both small and large business will decline by 19.6 percent during the same time frame. Small businesses will obtain less total DoD- generated business but they will increase their share of the shrinking defense budget for the following reasons Small businesses historically capture a low percentage of defense-related work in industries that produce specialized military end items such as missiles, aircraft, and weapons - DoD spending on those products receives a disproportionately large cut during the period between 1991 and 1997. Conversely, DoD spending on construction declines very little small businesses perform more than 56 percent of the defense-related work in this procurement category.

Subject Categories:

  • Economics and Cost Analysis
  • Military Forces and Organizations
  • Logistics, Military Facilities and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE