Peacetime Adequacy of the Lower Tiers of the Defense Industrial Base

Have the lower tiers of the U.S. domestic defense industrial base — that is, the subcontractors and suppliers — become inadequate to meet the needs of the Department of Defense (DOD)? This study examines the issue of lower-tier peacetime adequacy in terms of (1) the possibility of too few suppliers; (2) the ways in which the conduct of DOD business may be influencing suppliers to leave or stay in government business; (3) how DOD buying practices affect the efficiency of weapon systems acquisition; and (4) how the DOD, Congress, and courts interact in policymaking decisions that affect the adequacy and efficiency of the lower tiers. To compile data for the analysis, 13 system program offices were surveyed at two Air Force product divisions: Aeronautical Systems Division and the Space and Missile Systems Organization. Four communication satellite programs, two missile programs, and seven aircraft programs were included in the study. Based on the results of the survey, the authors conclude that fears about peacetime erosion of the industrial base are largely unfounded, but some buying practices do increase costs.