Defense Industrial Base: An Overview of an Emerging Issue

DOD has taken the position that free market forces generally will guide the restructuring of the defense industrial base. We believe that this is not a realistic strategy for ensuring that government decisions and industry adjustments will result in the industrial and technological capabilities needed to meet future national security requirements. A key reason for this is that defense company officials are understandably concerned with maximizing the returns for investors and are not specifically accountable for how the long-term changes in the defense industrial base affect national security. In recent guidance, DOD reiterated its free market strategy but stated its intention to assess and monitor the defense industrial base and take action to preserve a needed critical capability in those exceptional situations where it may be lost and cannot be recovered in time to meet an emerging threat.