Report: Industrial base must be part of defense review

The Defense Department should begin incorporating in its budget and policy decisions factors that affect the U.S. industrial base to ensure that weapons-making capabilities are available in future years, according to a new report from the Aerospace Industries Association (AIA).

Specifically, the report urges DOD to address current industrial base issues in its 2010 Quadrennial Defense Review (QDR) now underway, the report states. DOD will submit the report to Congress early next year.

Because the industrial base is “highly vulnerable to market conditions and decisions by the Defense Department” it is imperative that top DOD officials address its needs, Marion Blakey, AIA’s president and chief executive officer, said in a statement July 13.

The QDR gives a long-term, strategic view of DOD and what capabilities it will need to maintain U.S. national security. The secretary of defense provides direction for the QDR, while the chairman and vice chairman of the Joint Chiefs of Staff provide direct oversight.

DOD has not considered the industrial base in past QDRs, and continuing on such a course might have dire consequences, AIA said.

Future strategy decisions should be made with an appreciation of the likely effects on industry capability to avoid situations that could take decades to resolve, the report states.

The report also states that a significant gap has opened between DOD’s view of industry as an “always-ready supplier” of military weapons and equipment and how industry makes decisions on what capabilities to offer. This gap continues to widen as military technologies become more specialized, industry consolidation continues and DOD procurement and research budgets decline, AIA said.

To remedy the situation, AIA said DOD should:

• Institutionalize defense industrial base consideration 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 processes.
• Restore the Secretary of Defense/Industry CEO Forum.
• Continually assess the industrial base from a more strategic perspective.
• Reinvigorate congressional oversight and 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.