Keeping a Competitive U.S. Military Aircraft Industry Aloft

Findings from an Analysis of the Industrial Base

by John Birkler, Paul Bracken, Gordon T. Lee, Mark A. Lorell, Soumen Saha, Shane Tierney

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For at least two decades, policymakers have expressed concerns that further consolidation could erode the competitive environment for military aircraft and degrade the industry's abilities to develop, manufacture, and support innovative designs. This monograph responds to a request by Congress to evaluate programs to ensure that more than one aerospace company could support design, development, and production of fixed-wing military aircraft in the future. It reviews a 2003 RAND evaluation of the risks and costs of the United States having little or no competition among fixed-wing military aircraft companies; examines changes in industrial-base structure and capabilities that have taken hold since that analysis was performed; and assesses how these and future changes will affect the industrial base. The authors find that only by involving two prime contractors equally in performing RDT&E (research, development, test, and evaluation) on a new large program, such as a bomber, could DoD sustain two firms through 2020 with RDT&E funding and through 2025 with procurement funding.

Table of Contents

  • Chapter One:

    Introduction

  • Chapter Two:

    The Current Status of the Fixed-Wing Military Aircraft Industrial Base in the United States

  • Chapter Three:

    Fostering Innovation in a Changing Defense Industry: What We Can Learn from Commercial Trends

  • Chapter Four:

    Prospects for Innovation and Competition in the Fixed-Wing Military Aircraft Industry: Programs of Record and Alternative Future Programs

  • Chapter Five:

    Policy Options Open to the Department of Defense

  • Appendix A:

    F-22 Foreign Military Sales: Implications for the U.S. Fixed-Wing Military Aircraft Industrial Base

  • Appendix B:

    RDT&E and Procurement: RAND 2003 Funding Projections Compared with Actual Funding, FY 2003–2010

  • Appendix C:

    RDT&E and Procurement Funding: Contractor Shares in Program of Record and Projected Outlays for New Programs in the FY 2011 FYDP

  • Appendix D:

    U.S. Total Military Air Vehicle Procurement Quantities, FY 2012–2021

The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted within the RAND National Defense Research Institute, a federally funded research and development center sponsored by OSD, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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