Industrial Base Isn’t Broken, But

The Cold War drove the creation of the first “peacetime defense industry of significant proportions” and ushered in a period of “long-term strategic advantage” for the US, according to a new Center for Strategic and Budgetary Assessment report by senior fellow Barry Watts. At the report’s unveiling last week, Watts said the question today is whether the US defense industrial base will remain a source of strategic advantage. The answer is elusive, according to Watts, because there’s never really been a consensus on how best to manage the industrial base among its various stakeholders, which range from Congress to DOD and service requirements and budgeting communities. He noted that the hand’s-off approach taken in the 1990s set the stage for a proliferation of “monopolies or duopolies” as the industrial base imploded, with only a few major firms surviving in many product lines. He believes the government must produce a more consistent and long-term approach that includes a shift from cost-based to time-based metrics for acquisition programs, as recommended by the report from the Defense Acquisition Performance Assessment, led by retired Air Force Lt. Gen. Ronald Kadish. While development times and production runs would likely decrease, more frequent new starts would benefit contractor design efforts and make losing a competition less of a threat to a given company’s existence, he said. Earlier this year, the Pentagon’s own Defense Science Board said there is a critical need for DOD to establish a national security industrial vision for the 21st century.