On October 23, a day after President Obama vetoed the National Defense Authorization Bill for 2016, and three days after a Brookings forum featuring Senator McCain and Congressman Thornberry to discuss that legislation, the Brookings national defense industrial base working group convened to discuss the state of acquisition reform. That subject featured prominently in the defense authorization bill, with its attention on giving greater authority and responsibility to the individual military services, on encouraging greater use of commercial contracts in military acquisition, and on encouraging new entrants into the defense procurement process.

Matt Chandler of Palantir initiated the discussion and I moderated. Since the conversation proceeded along Chatham House rules, and because no effort was made to achieve consensus among the participants, the observations offered here are simply intended to give a sense of the discussion and of some of the ideas that were voiced in its course. They should not be attributed to any specific individual.

Several questions were put on the table at the outset of the conversation. They included whether the reforms in the National Defense Authorization bill were particularly important, whether the Department of Defense would really behave differently in light of the proposed reforms, and whether there were specific types of military programs that should be particularly identified as top candidates for new acquisition procedures.

Among the key opinions and observations raised in response to these and other questions were the following:

• At the risk of belaboring the obvious, the uncertain budgetary environment, combined with the ongoing use of continuing resolutions to fund the Department of Defense, creates a context in which high-level fiscal forces could do considerable harm to the defense industrial base. These problems could trump many of the benefits of even well-conceived acquisition reforms.
• That said, it would be desirable to find a way to resuscitate the acquisition reforms in the defense bill even after the veto—there was little dissent in the room on this basic point, even among those who did not expect the reforms to accomplish great things. Most saw them as a net positive in aggregate.
• Areas of military technology where reforms like those in the 2016 defense bill might yield the greatest benefit include software and robotics/autonomous systems.
• For certain other types of programs—like traditional large platforms—acquisition reform might yield less. Indeed, for such areas of technology, there might be just as much benefit from improvement maintenance practices, such as greater use of performance-based logistics contracts, as from acquisition reform per se.
• The private sector, and the commercial world, are of course not always successful in their technology development. Thus, changes in acquisition practices that involve more commercial approaches will sometimes produce failure themselves. Indeed, as many as 90 percent of all software startup efforts fail. But Silicon Valley is a place where the culture is to “fail fast, fail small” and this is a better way to operate in the software world than to commit irrevocably to big mega-systems that are likely to encounter major problems and thus huge remedial costs as well as long delays.
• The defense bill’s greater emphasis on giving the service chiefs primary responsibility (or at least greater responsibility) for the success of weapons programs met with more hopefulness than criticism from the group. But there was some skepticism that this would amount to a major change in how business is done, or how well it is done, given that the services have had greater acquisition authorities at times in the past and not always performed well.
• For Silicon Valley firms, and many other companies, working with the Department of Defense may not be an appealing prospect in many ways, but the combination of technological challenges associated with major military programs, together with patriotic sentiment and an awareness of the importance of defense programs for national security, make a number of such companies willing to consider entering into the defense sector even when the strict merits of the idea in business terms may be dubious. Silicon Valley is not categorically opposed to working with the American armed forces!

The overall tenor of the conversation was hopeful—at least, as hopeful as it could be a day after a presidential veto of a defense authorization bill and seven short weeks before the current continuing budget resolution is due to expire. It is therefore still far too early to reach a verdict on the year’s overall efforts in defense acquisition reform.

      

 

 

During the past five years, the Department of Defense (DOD) has experienced nearly constant budgetary turmoil. The large and sudden sequester cuts of 2013 and the government shutdown in that same year constitute the best known events. Other instances are less well known but contributed to disruption. They include creating plans to shut down DOD on five different occasions, creating two budgets for the same year on several occasions because of uncertainty about the ultimate size of the appropriation, a major out-of-cycle planning process, and accommodating budgets that were six months late in enactment during two of the past five years. While this paper focuses on past budgetary turmoil at DOD, that turmoil unfortunately continues today.

Author Robert Hale, a fellow at Booz Allen Hamilton, believes that this budgetary turmoil imposed a high price on DOD and therefore on the nation it serves. The price was not measured in dollars, since DOD certainly didn't get any extra funding to pay the costs of the turmoil. Rather, the price took the form of harm to the efficiency and effectiveness of the department’s mission. The 2013 sequestration led to adverse effects on military readiness, leaving the military less prepared than it should have been had a major contingency occurred. The 2013 back-to-back furloughs for sequestration and shutdown led civilian employees to wonder whether the department still valued their efforts. That year’s sequestration and government shutdown imposed costs that siphoned money away from more useful purposes, not to mention about $400 million in wasted civilian personnel costs. Finally, the budgetary turmoil consumed substantial amounts of the time of thousands of managers already burdened with managing the wars in Iraq and Afghanistan, thereby delaying their efforts to bring about long-term improvements such as audit readiness.

What should be done about the harm caused by budgetary turmoil? Past events cannot be reversed, but there must be an end to the threat of future turmoil. As soon as possible, and no later than the next month or so, the president and the Congress need to reach a two-year budget agreement that provides reasonable budgetary certainty. The country also needs a long-term and broader budget agreement that ends the threat posed by sequester cuts, government shutdowns, and budget delays. That agreement will no doubt have to wait until after the 2016 election, but it should be a high priority for the next administration.

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• Budgetary turmoil at the Department of Defense from 2010 to 2014: A personal and professional journey

      

 

 

The Digital Revolution is not over. Rapidly emerging technologies continue to disrupt manufacturing and services across global markets. Despite the pace of change, the United States’ military-industrial complex (MIC) remains dominated by a highly consolidated base of “traditional” prime contractors and has proven to be nearly impervious to smaller, and in many cases more agile and more diversified, “non-traditional” companies.

Indeed it is difficult to overstate how formidable the barriers to entry are for “non-traditional” companies in the context of evolving 21st century global markets. These barriers significantly limit the government’s access to human capital, intellectual property, and potentially disruptive innovation in other more agile segments of the economy.

In order to sustain long-term global technological advantage, the future MIC must leverage the full strength and depth of the rapidly evolving U.S. technology sector, particularly in places like Silicon Valley, which by almost all measures remains the world’s leading innovation ecosystem.

Current leadership in both the Pentagon and Congress seem to acknowledge this imperative and have spoken of the need to diversify the MIC with faster-moving, more commercially diversified companies from places like Silicon Valley. Unfortunately, this is easier said than done.

Considering this context, what are the most significant barriers to entry for “non-traditional” companies, and how can they be lowered in order to attract new entrants, increase competition, and help ensure future military technological superiority? How do “non-traditional” companies in Silicon Valley view prospects for doing business with the federal government in defense, and how can this inform efforts inside the beltway to reform defense acquisitions?  

While much has been written on the federal government’s attempts to increase competition through acquisition reform, little research has been done to assess this issue from the perspective of Silicon Valley executives and venture capitalists. This paper offers a comprehensive overview of barriers to entry from the perspective of Silicon Valley technology executives and venture capitalists.  

Findings suggest Silicon Valley executives see exceptionally high barriers to entry in defense, not because of ideological objections, but rather because of an acquisitions system and culture heavily biased in favor of larger, “traditional” defense contractors. The current system neither works in their favor nor is remotely consistent with the speed and agility these companies need to simultaneously compete in broader and in many cases more liquid global technology markets. Sadly, most executives and venture capitalists interviewed do not see a way to “win” in the current system.

This paper concludes with a number of policy recommendations, including more comprehensive and politically difficult initiatives, as well as those that can be executed by better leveraging existing authorities and capabilities.

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• There's no app for that: Disrupting the military-industrial complex

      

 

 

These days, at the Pentagon and on Capitol Hill, reform in the way the Pentagon buys weaponry remains a hot topic. Under Secretary of Defense Frank Kendall released his “Better Buying Power 3.0” vision for improvements in how the Department of Defense acquires weaponry, Chairmen Thornberry and McCain of the House and Senate Armed Services committees are leading the way on respective bills to change legal code for such acquisitions, and industry as well as many other actors and voices are pushing their ideas.

On June 10, Brookings convened a group of some 20 specialists from the think tank world, industry, and government circles to discuss various ideas for moving forward. Some of the ideas expressed in the discussion are summarized here, according to Chatham House rules, by which the comments of specific individuals are not revealed but the general substance of the conversation is conveyed. Jeff Jeffress of Censeo Consulting Group helped me kick off the discussion; a wide range of other viewpoints were added to the mix as well.

My own ideas, as recently published in a Brookings paper called “Pentagon Acquisition Policy: Three-Quarters Right, One-Quarter Broken,” include the following recommendations:

• Use Federal Acquisition Regulations (FAR) Title 12 more often, to allow purchases of commercial or commercial-like goods by the Pentagon, with far fewer regulations and requirements than for traditional “Title 15” goods,
• Streamline oversight by Pentagon officials for certain types of contracts (for example, when there is competition, or a close commercial equivalent, to provide some market-based discipline on pricing, making detailed documentation of costs by a unit like the Defense Contracts Management Agency less important),
• Follow the “JIEDDO model” for more technologies—accelerating purchases of key technologies in the way that the Joint Improvised Explosive Device Defeat Organization developed and bought mine-resistant ambush-protected vehicles (MRAPs) and other technologies with fewer requirements for documenting attainment of various milestones, in order to protect troopers in Iraq and Afghanistan as quickly as possible,
• Break down information technology purchases into smaller batches, using open-source and modularity concepts to make sure that various “batches” can subsequently talk to each other, and
• Protect the intellectual property rights of firms selling technologies to the government, especially when most of the investment was conducted by those firms themselves, perhaps for commercial technologies that are close analogues to the systems built for the Department of Defense.

Some of these ideas beg other questions, such as which specific Pentagon contracts can in fact be transformed from their current character into something like a Title 12 or JIEDDO arrangement? There are other big issues I did not address in my paper, such as what changes to the DoD acquisition workforce would be most sensible at this stage?

Thus, the group at Brookings was asked to help generate a number of ideas and observations—and to help Brookings do its part to keep the current national conversation about DoD acquisition reform moving forward. I would group the ideas into two categories—concerning people and DoD organizational/bureaucratic issues on the one hand, and concerning types of contracts and contractors on the other. Specifically, these were some of the key points:

People and organization

• The multiple lines of communication within the DoD acquisition world are excessive, involving program managers, deputy executive officers, executive officers, and then the higher ranks of the DoD acquisition, technology, and logistics office. Perhaps one of these layers could be eliminated.
• Certainly, the amount of paperwork required of these acquisition executives should be scaled back. Undoubtedly, a culture of excess caution and fear of approving projects prematurely should be modified to expedite efficiency and timeliness as well. Often, processes and procedures put in place to prevent abuse are based on just one or two past problems, or mistakes that are not likely to recur. Creating special procedures to be sure they don’t recur may not be worth the time and trouble.
• Within the acquisition workforce, younger professionals should probably have the opportunity to do rotations to learn from best practices in other parts of the broader defense community. But once good program managers are found, they should often be kept on the same job for longer than the 18 to 24 months that is now the norm, to enhance continuity and expertise.
• The total size of the DoD acquisition workforce may not be excessive given the amount of work, and paperwork, demanded of it today.
• However, if one could streamline oversight on most projects and programs, and dramatically reduce it on others, perhaps the workforce could be scaled back at least modestly.
• The acquisition workforce is often seemingly biased against seeing industry make much of a profit. It also tends to feel discouraged from open communications with industry. Both of these realities can be counterproductive.
• In terms of Congressional action, the Senate has often tended to want to prevent abuses and mistakes—adding procedures to reduce the likelihood of such problems, even at the cost of more regulation. The House has wanted, especially this year, to accelerate the pace at which weapons are developed and procured. In some ways, these instincts run at cross-purposes with each other.
• Moreover, one key idea in circulation on the Hill now—moving more responsibility for overseeing programs from the Pentagon’s Acquisition, Technology, and Logistics (AT&L) office to the military services—has engendered significant resistance from the Pentagon. It is not clear that the services have the capacity to carry out such new responsibilities; if assigned them, they might need in effect to recreate (or borrow) much of the existing AT&L workforce to handle the job. But perhaps they would also be somewhat less stringent in the application of various oversight mechanisms, thereby simplifying and speeding the acquisition process. So there could be pros and cons to such a change.

Contracts and contractors

• It is desirable to foster competition and more actors/players in the DoD acquisition world.
• That said, DoD must be careful not to spin its wheels soliciting additional bids for contracts where the additional bids tend just to add time to the process; similarly, the protest process after a competitive bid is awarded adds time as well, even if it is necessary at some level.
• Since the majority of costs for most systems are in the operating/maintenance domains, it is important for DoD not to overlook ways in which the procurement process can lower subsequent operation and maintenance costs, if a system is built in a way that makes it more durable and serviceable. Creating the possibility for greater use of performance-based logistics contracts for maintenance should be a major consideration in acquisition policy.
• DoD needs to be careful not to allow relatively minor modifications of a system originally built according to commercial code (Title 12) to disqualify it, subsequently, for continued Title 12 status. This happens too often, even for systems that are clearly still commercial in their main character.
• It is essential to use Title 12 and related mechanisms for computer contracts if new players are to be induced to compete for DoD contracts. But even that may not be enough to persuade many firms in Silicon Valley and elsewhere to compete for Pentagon contracts. Specifically, even if legislation and regulation allow greater use of commercial computer hardware and software, many firms will doubt that DoD is committed to employing these options, so it will also be important that the Pentagon create successful precedents that DoD takes special care to encourage and shepherd.
• As a rule, having two firms make a given system, in order to encourage efficiency and lower costs through a dual-buy approach to competition, is smarter when DoD need not spend huge sums on duplicative research and development efforts. It is less likely to be desirable when research and development costs are high.

Lots is happening in Pentagon acquisition policy, and Brookings, along with its dedicated colleagues making up the national security industrial base working group, intends to continue to follow and contribute to the debate.

      

 

 

The American defense debate is afflicted by a certain schizophrenia about how the Pentagon buys its weapons and other equipment, and about the state of America’s defense industrial base. On the one hand, the media narrative often fixates on horror stories concerning $600 toilet seats, billion-dollar aircraft and ships, fighter jets costing three times what was originally expected, and programs canceled for poor performance. The Department of Defense went into the Iraq and Afghanistan wars only moderately well prepared, in terms of equipment and training, for the kind of fighting that ensued, and took several years to find its stride. Eisenhower’s warnings of a military-industrial complex bilking the taxpayer and putting the nation’s economy at risk still echo today—but now it is the military-industrial-congressional complex that adds parochial politics and log-rolling appropriators to the witches’ brew as well.

Defense acquisition reform has been a major preoccupation of planners for more than half a century—and will likely remain that way for at least as long into the future—given the complex nature of the defense research, development, and procurement enterprise. But even gradual, incremental progress is worth striving for—and it is also of considerable value to the taxpayer, the armed forces, and the nation. And in some areas such as IT acquisition, where the technologies are newer and change faster, the opportunities may be particularly ripe for exploitation if DOD can truly learn to do business better. The system is not broken, but it can do better:

• Use Federal Acquisition Regulations Title 12 more often, rather than falling back on Federal Acquisition Regulations Title 15. In theory, the Pentagon is supposed to buy commercial goods, as under the so-called FAR 12 code, whenever possible, and avoid the complex and cumbersome FAR 15 rules that involve negotiated contracts.

• Streamline oversight when the Pentagon can rely on competition to discipline firms about price. The competitive process can provide the discipline—just as it does in the commercial market—and oversight can be scaled back enormously. DOD can base its future-years purchases of a given weapon in part on which of two companies may be providing a better buy at present.

• Follow the JIEDDO model for other technologies. When so many Americans were being hurt or killed by improvised explosive devices in Iraq and Afghanistan, the congress allowed the Department of Defense to create special, expedited acquisition procedures and ultimately the Joint Improvised Explosive Device Defeat Organization to research and produce relevant technologies quickly.

• Break down information technology purchases into smaller batches. By using open-source and modularity concepts, making sure different systems can talk to each other but allowing more discrete and smaller buys by various agencies, the Department of Defense may do better.

• For technologies that have commercial analogues but certain military-specific attributes up to a certain percentage of value, allow firms to keep their intellectual property rights rather than sharing all relevant data with the government. In such cases, the government cannot really claim to have generated the relevant expertise and information, so it makes more sense to keep it proprietary.

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• Pentagon acquisition policy: Three-quarters right, one-quarter broken

      

 

 

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The Department of Defense (DoD) acquisitions process has been called outdated, under-resourced, and unnecessarily confusing–among other things. Given Secretary of Defense Ashton Carter’s recent service as DoD's chief operations officer, the prospects for reform may be promising. Removing barriers to entry in order to foster innovation, as well as specialized approaches like expediting procedures related to information technology are seen as key issues in the time ahead. Early plans for new reforms were recently unveiled by the House Armed Services Committee.

On April 13, the Center for 21st Century Security and Intelligence at Brookings hosted a discussion on the acquisitions procedures at the Department of Defense and the need for reforms. The event opened with a keynote address by Frank Kendall, undersecretary of defense for acquisition, technology, and logistics at DoD. Secretary Kendall has been a leader in strengthening best practices while at DoD, managing Better Buying Power–aimed at bettering productivity, eliminating bureaucracy, and promoting competition–among other initiatives. Following Kendall’s remarks, and a short discussion with the audience, a panel will further discuss the ideas for reform. Participants included William Lynn of Finmeccanica, and Brookings Federal Executive Fellow Jason Tama. Michael O’Hanlon, co-director of the Center for 21st Century Security and Intelligence, moderated the panel.

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• Acquisition reform: Increasing competition, cutting costs, and out-innovating the enemy

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• Uncorrected Transcript (.pdf)

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• 20150323_dod_acquisitions_transcript

      

 

 

Congressman Mac Thornberry, the new chairman of the House Armed Services Committee, is unveiling this week a set of proposed reforms for the way the Department of Defense buys equipment and contracts for other services. This is a very welcome focus for a new committee chairman at this juncture in history. Combined with the reformist instincts of his fellow chairman, Senator John McCain of the Senate Armed Services Committee, as well as the background of Secretary of Defense Ash Carter and his top team, there is likely to be real progress in the months ahead. But to complement all these efforts, we also need a broader policy debate that engages Washington beyond just the defense community and that focuses more on the big picture. The changes being discussed now generally look good, but trend towards the more modest side of the possible and desirable reform agenda.

First, though, give credit where it is due. The Pentagon is already well into its better buying-power initiatives, which focus on the broad articulation of a number of common-sense reforms like better education for the acquisition workforce and clearer emphasis on affordability in the development of contracts. Combined with kindred spirits on Capitol Hill, further progress is likely in a number of areas. For example, paperwork requirements can be simplified enormously on many types of contracts, and more of the Pentagon’s smaller contracts can be awarded and executed without the formal accoutrements of the Department of Defense’s notorious milestone system. Some recent proposals have also included ideas like bringing the military service chiefs back directly into the weapons-buying decision-making process.

All these ideas are generally well motivated. They are also generally about as apple-pie as rooting for the Orioles or Nats, or your other favorite home team, on opening day in April. If I have a concern, it is that they sound so unassailable as to make one wonder where the rubber really meets the road. In other words, if no one can be against them, do they really have teeth? There are so many of them—I count thirty-two in Better Buying Power 3.0 alone—that it is hard to know which ones represent the real priorities. Moreover, most of the themes and ideas behind them date back to the earliest post–World War II days of acquisition-reform policy under Secretary McNamara and others. There is often less new here than would meet the eye.

In fairness, and to stay with the baseball theme, much about acquisition reform is inherently a lot of small-ball improvements that collectively may save the Department of Defense only a few percent of its total procurement budget in the best of cases. That is not meant as a damning criticism. To a large extent, for a country that continues to field the best weaponry in the world and to spend only about 3.5 percent of its GDP on its military in the process, the system is not fundamentally broken, so complete overhaul has not been seen as necessary. All that said, there is a case for more fundamental change in some areas and it would be good to see future acquisition-policy discussions consider some of these.

As former Deputy Secretary of Defense Bill Lynn has argued recently in the pages of Foreign Affairs, DoD now depends on a small base of largely defense-oriented American companies, not only to produce weapons, but for future military innovation as well. This defense industrial base consists of very good firms, to be sure. But the nation’s dependence on them may have gone too far. Moreover, while these firms have clearly learned how to navigate the Pentagon’s labyrinths of bureaucracy and paperwork, even they suffer from its onerous rules and regulations. For instance, DoD sometimes seems more interested in suppressing their profit than in getting maximum benefit for the taxpayer and warfighter.

As such, while Washington continues to debate acquisition reform, let’s get ourselves into the technical weeds when necessary, but let’s also focus on the bigger picture. Here are several ideas that are worth considering as legislators, regulators and other interested parties haggle over change in coming months:

– Use Federal Acquisition Regulations Title 12 more often, rather than falling back on Federal Acquisition Regulations Title 15. In theory, the Pentagon is supposed to buy commercial goods, as under the so-called FAR 12 code, whenever possible, and avoid the complex and cumbersome FAR 15 rules that involve negotiated contracts. In these FAR 12 cases, the Pentagon can in theory behave like a normal customer and avoid the complex steps and onerous paperwork involved in a major weapons procurement process. But the tendency is still to define requirements in such a way that there are enough military-unique characteristics for whatever radio or phone or jeep or compute is at issue that the FAR 15 code is used almost by default.

– Streamline oversight when the Pentagon can rely on competition to discipline firms about price. Today, for example, the Defense Contracts Management Agency has an on-site presence in many factories; its personnel literally tabulate what it thinks weapons should cost, based on all sorts of details about the production process. This may make sense for complex weapons being built by just one supplier. But for cases in which there is a commercial equivalent OR two producers, the competitive process can provide the discipline—just as it does in the commercial market—and oversight can be scaled back enormously. DoD can base its future-years purchases of a given weapon in part on which of two companies may be providing a better buy at present.

– Follow the JIEDDO model for other technologies. When so many Americans were being hurt or killed by improvised explosive devices in Iraq and Afghanistan, the Congress allowed the Department of Defense to create special, expedited acquisition procedures and ultimately the Joint Improvised-Explosive-Device Defeat Organization to research and produce relevant technologies quickly. Deputy Secretary of Defense Paul Wolfowitz and others championed the effort, to great effect. This concept could be used, especially for lower-risk technologies that nonetheless are important to build quickly.

– Break down information technology purchases into smaller batches. There are times when creating a huge common computer infrastructure with the same machines or software across hundreds of thousands of users may make sense. There are other cases where this big approach puts too many eggs in one basket. By using open-source and modularity concepts, making sure different systems can talk to each other but allowing more discrete and smaller buys by various agencies, the Department of Defense may do better.

– For technologies that have commercial analogues, but certain military-specific attributes up to a certain percentage of value, allow firms to keep their intellectual property rights rather than sharing all relevant data with the government. In such cases, the government cannot really claim to have generated the relevant expertise and information, so it makes more sense to keep it proprietary. This principle could apply to anything from aircraft engines to smart phones to space boosters. It could help convince many companies wary of doing business with the Pentagon to reassess.

Nothing about acquisition reform is easy. But if we combine the tedious technical detail that often afflicts these debates with some bigger-picture conceptual thinking, and examples not only of problems that exist today but specific programs that could work better under a different set of rules, we may be able to help broaden and strengthen the consensus for major reform. America will then have a better chance of keeping its impressive global lead in defense technology for many years and decades to come.

This opinion originally appeared in The National Interest.

      

 

 

Introduction:

The numbers that make up what the United States spends on its military are large to be sure. In 2011, $549 billion was in the main Defense Department budget, with another $159 billion in the “supplemental” budget that funds wartime operations in places like Afghanistan and Iraq. The sum total of $708 billion that the United States spends on its defense is actually 43% of all the military spending in the world, distantly followed by China (7.3% of world military spending share), UK (3.7%), France (3.6%), and Russia (3.6%).

That the United States spends so much on its military may strike some as unreasonable, but it reflects decisions made by the American public and its leaders about the role the US should play in the world. It reflects the global commitments of a superpower and the requirements that go into meeting them via a modern and, importantly, professional (as opposed to draft-based) force equipped with some of the best military equipment in the world. It is also not a huge share of the nation’s economic output. At just over 4 percent of GDP, it is substantially less by this measure than defense spending during the Reagan years (6 percent) or the 1950s and 1960s (typically 9 to 10 percent). Indeed, it is somewhat less than the 4.5 percent figures that characterized the US armed forces during the post-Vietnam days of a “hollow Army.”

Since the attacks of 9-11, these military commitments, and the ensuing costs, have shot upwards, with the Pentagon’s budget effectively doubling. Ten years in, and with the American economy faltering, however, the budget situation is poised for a sea change. With the United States coming to a political and then economic crisis related to its debt and deficit, America’s leaders came to a begrudging compromise in the summer of 2011. In tense, last minute, negotiations between the Obama White House and congressional Republicans, the two sides agreed to continue to finance the growing U.S. debt beyond the old ceiling. But the deal also came with a catch: they would also engage in a massive search for budget savings as well as explore how to deal with the underlying problems in America’s entitlement and tax policies that were truly driving the crisis.

The deal agreed that somewhere between $400 billion and almost $1 trillion dollars worth of spending on national security over the next decade will have to be cut from the budget. $400 billion in cuts were agreed to in the debt ceiling deal reached at the end of summer 2011. And another roughly $500 billion in cuts is potentially on the table, dependent on how the Congress deals with the sequestration commitment it made as part of the debt limit deal.

In short, the fiscal and political reality is that the United States will again undergo a post-war defense budget reduction of the type that has followed every major war in its modern history. The numbers remain to be resolved, but the most likely scenarios are that the annual resources available to the military and the wider defense industrial base will decline significantly over the coming years.

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• January 26, 2012, 9:00 AM - 12:00 PM EST

Following the Obama administration’s recent announcement of a new defense strategy, many questions remain about the future of both the U.S. military and of the national security industrial base. A smaller and leaner U.S. force will still need to be agile and ready for conflicts, and, importantly, must stay technologically advanced. With the knowledge that annual resources available to both the military and the industrial base will decline, decisions on which areas to emphasize and how to advance them are critical.On January 26 the Brookings Institution and the Defense Education Forum of the Reserve Officers Association (ROA), hosted a discussion on the future of the U.S. national security industrial base in the context of changing American defense strategy, declining budgets and a transforming international security environment. The event featured a keynote address by Rep. Mac Thornberry (R-Tex.), vice chairman of the House Armed Services Committee. Panelists included Brookings Senior Fellows Peter W. Singer and Michael O’Hanlon; Mackenzie Eaglen of the American Enterprise Institute; Robert Haffa of Haffa Defense Consulting; David Morrison of Boeing; and David Worn of Palantir Technologies. After each panel, speakers took audience questions.

      

 

 

Event Information

Following the Obama administration’s recent announcement of a new defense strategy, many questions remain about the future of both the U.S. military and of the national security industrial base. A smaller and leaner U.S. force will still need to be agile and ready for conflicts, and, importantly, must stay technologically advanced. With the knowledge that annual resources available to both the military and the industrial base will decline, decisions on which areas to emphasize and how to advance them are critical.

On January 26 the Brookings Institution and the Defense Education Forum of the Reserve Officers Association (ROA), hosted a discussion on the future of the U.S. national security industrial base in the context of changing American defense strategy, declining budgets and a transforming international security environment. The event featured a keynote address by Rep. Mac Thornberry (R-Tex.), vice chairman of the House Armed Services Committee. Panelists included Brookings Senior Fellows Peter W. Singer and Michael O’Hanlon; Mackenzie Eaglen of the American Enterprise Institute; Robert Haffa of Haffa Defense Consulting; David Morrison of Boeing; and David Worn of Palantir Technologies.

After each panel, speakers took audience questions.

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• The Future of the National Security Industrial Base
• The Future of the National Security Industrial Base
• The Future of the National Security Industrial Base

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• Uncorrected Transcript (.pdf)

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• 20120126_national_security_industry

      

 

 

INTRODUCTION

It seems hard to believe: at a moment of historic highs in defense spending, there is growing concern about the future of American defense industry as well as the national security industrial and scientific base more generally.  How can this be so?  Of all the economic sectors in the United States, how could the very sector that has benefitted from a trillion dollars of war spending over the last decade and that is presently enjoying the fruits of a cumulative defense budget 50 percent greater in real-dollar terms than the Cold War average, truly be in trouble?

But the cold, hard reality is that there are serious causes for concern. It was with this in mind that over the course of 2010, Brookings convened a working group of top public and private leaders and thinkers, across the political spectrum, representing a variety of firms, the Pentagon, and think tanks as well as the Congress to explore the key issues facing the defense industrial base in the years and decades ahead. The intent was to move past the “bumper sticker” discussion that usually surrounds the issue, of focusing on the implication of single programs at single firms in single budget cycles, and instead look at overall trends and futures of the industrial base as a whole. The seminars explored everything from likely Pentagon buying plans in the years ahead, and the ability of the American education system to supply the needed human capital, to Wall Street’s investment plans relating to this sector.

When one takes a look at the big picture, moving beyond a focus on the implications of a program buy or cut for a single firm or individual congressional district, it becomes clear that the underlying strength, health, flexibility, and dominance of a prized national security asset for the country is facing deep and significant challenges, arguably more so than perhaps ever before in its post-World War II history. 

The significance of this runs counter to how issues in security are often framed. We are accustomed in the American public debate to praising men and women in uniform and yet we often ignore or even pillory those who equip and support them—the scientists, engineers, industrialists, investors, and workers who make the equipment that has allowed the United States to dominate most forms of warfare for the last few decades.  To be sure, there have been abuses in the defense corporate sector, as well as an absence of adequate regulation for many of the overseas operations of contractors.  But the fact remains that American troops have been successful in the field wielding the weapons of war manufactured for them primarily by U.S. firms. And an additional reality looms—many of these firms, and thus many technology areas of excellence for the nation, could soon be in serious trouble.

High defense budgets are good for the defense industry and defense investors at one level.  They are dangerous, however, at another level.  The stock market does not treat firms well when their sector of the economy is expected to go into significant decline in the coming years, as is the case with defense—even if current spending is reasonably robust.  Companies do not enjoy laying off workers and shutting down facilities in communities that have been loyal to them.  The workers and communities obviously enjoy the process even less.  And in a free-market system, beyond these painful realities of the bust-and-boom cycle of industries that are vulnerable to such roller-coaster dynamics, there is also the concern that cutbacks will be uncoordinated and unpredictable in effect.  The national asset represented by research, development, and production capabilities at not just the prime contractors, but also their many subcontractors could be jeopardized.  Capabilities could be lost, and once lost, could be difficult, costly, and slow to replace if and when they are needed again.  The future taxpayer could suffer.  Even more to the point, the nation’s future security could be jeopardized, especially in an environment where rising powers and entrepreneurial adversaries will be constantly attentive to any American weaknesses.

We must also remember that the defense industry also is a key engine in the American economy, most specifically as an engine of trade and innovation. To use just one example, if it was not for the defense industry’s role in everything from Global Positioning System (GPS) to the Internet to the jet engine, we would not have global trading networks or the “Just In Time” strategy that has raised so many organizations' returns on investment, quality, and efficiency. Indeed, each of the major firms in this sector spin out literally thousands of copyrights and inventions.

Put more specifically, and numerically, the dilemma might be described in this way:  Current American defense spending including war-related expenditures totals more than $700 billion a year.  Of that amount, just over $100 billion is normal procurement, about $80 billion is normal research, development, testing and evaluation, and another $80 billion or so sustains acquisition costs related to the war budget. The overwhelming share of these combined amounts, totaling more than a quarter trillion dollars a year, is directed to American firms. In addition, defense companies garner several tens of billions of dollars a year more from accounts in the operations and support budgets—most notably, operations and maintenance—in the war theaters and at home. All told, American defense companies have gross revenues of well over $300 billion a year from Department of Defense (DoD) contracts. And yet, all the analysis and data points to a current industrial base at a crossroads.

Even more, in the coming years, two separate and powerful dynamics are expected to push these numbers significantly downward.  First, war costs are likely to decline dramatically—quite likely by 80 percent or more--as American troops are further reduced in Iraq and begin to decline in Afghanistan. Second, as part of the country’s efforts to reduce enormous budget deficits, other defense accounts (from the base or “peacetime” budget) might decline by 5 to 10 percent given the most current ideas and plausible projections now available. Taken together, these two effects could reduce funds directed to American defense companies by well over $100 billion a year, or at least one third. These are admittedly rough predictions, but as of this writing they seem well within the realm of the plausible and certainly constitute a realistic scenario that planners in and out of government and industry need to consider.

Transitions of this scale are inherently difficult. That is true even if much of the recent increase in spending was unexpected, and in some ways a boon to parts of the industry—and even if the end of such a period of largesse is to be expected at some point. It is also true even if the likely remaining funds available to industry will be substantial in historical perspective. Many of today’s weapons systems are inherently more complex, and thus inevitably more expensive, than those of previous eras, so the same number of real dollars does not guarantee the same health of the industry. To be sure, industry has some hand, and some responsibility, in driving up the unit costs of weaponry. But much of this is desired by the customer, and most of it does in fact provide a war fighting advantage for American GIs even if at times it arguably goes too far. The key point, though, is that whether one welcomes or opposes likely steep cutbacks in defense funding, the health of the nation’s research, developmental, and production sectors in the defense industry will not stay healthy automatically through the process.

This paper proceeds as follows. First, it briefly reviews the nation’s science, engineering, and industrial state of health, with an eye towards identifying ongoing American strengths as well as weaknesses. The message here is mixed—despite an ongoing process of industrial decline, the United States remains a formidable technological power with key areas of strength including in aerospace and related fields. This suggests that the nation’s defense industrial base, while at some risk, is hardly on an inevitable path towards demise or fundamental weakening—meaning that good policy should be able to do a great deal to keep it solid and healthy, if that good policy can be adopted and sustained. The paper then hones in more directly on defense issues, attempting to identify both future requirements for the U.S. defense establishment and also likely future resources available to it. Finally, the paper hazards some preliminary thoughts on steps that might be taken—or at least seriously explored—in the coming years to ensure the future health, strength, excellence, and flexibility of the American national security industrial base.

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On October 25, the National Security Industrial Base working group held a meeting on the implications of the federal debt and deficit on the national security industrial base, with Alice Rivlin (the first director of the Congressional Budget Office; former director of the White House’s Office of Management and Budget; and former vice chair of the Board of Governors at the Federal Reserve System) opening the discussion with a presentation on her own work and the ongoing efforts of several experts and bipartisan leaders panels.

The concerns are real that—as Admiral Mullen has argued, as well as Secretary Gates—the federal fiscal plight has become serious enough to have direct national security implications.  As such even defense hawks arguably need to think hard about whether it is possible to place some curbs on defense spending as part of a broader effort at fiscal discipline.

While the U.S. has long had deficit issues, the combination of the most recent recession and various recovery mechanisms of the last two years has driven up U.S. debt from about 40 percent of GDP to 60 percent, with the current set of conditions and policies potentially leading us to figures of 80 to 100 percent over the coming decade absent remedial action. The key is that long-term demographic shifts (especially in aging of population combined with high medical costs) are combining to make the debt grow faster than GDP. While a number of nations have experienced both short- and long-term crises from such a scenario of debt (which often culminates with a fast-moving currency crisis), we have never seen a major power go through this situation before. 

Various goals for the effort at fiscal discipline are possible and likely to be turned to as answers, either as part of a planned long-term transition or in the feared event of responding only after a crisis. One is to cap debt at roughly 60 percent of GDP and ensure that it does not exceed that figure thereafter (barring another major crisis such as a war). These figures may in fact be less important than establishing a process to force action, and keep long-term focus on debt reduction.

In looking for answers, it is clear that demographic change combined with federal entitlements—especially in the retirement and healthcare systems— and an inefficient tax system are the main drivers of this long-term fiscal challenge. But defense and domestic discretionary accounts are all sizeable parts of the budget, too, and as such would likely all have to be part of any realistic solution to the current predicament. The main lesson learned from other nations’ experiences, and most likely political compromise, is to “spread the pain” across a number of areas. What is clear is that some of the policy solutions of past eras, like pay as you go or "PAYGO," won't work when entitlements are the main challenge—or at least, such measures won't be adequate. 

One can debate what level of defense spending reduction would be appropriate as DoD's "fair share" of the deficit reduction effort and this debate should also be couched within a larger debate over the nation’s strategic goals. However, since it is between 1/5 and 1/6 of total federal spending, it follows that DoD's contribution to the approach might be expected to be an ask of $50 billion or so in savings in the annual budget, relative to what would otherwise likely occur. This is one notional estimate that came out of the discussion, though of course it is possible to argue for smaller or larger cutbacks. A key question is how to weigh in any presumed savings from reducing wartime costs in the coming years.

It may be unlikely Congress could act to impose such measures as those suggested above, absent a major crisis such as a fleeing of foreign investment from the United States—a possibility that cannot be dismissed, and that can happen very fast once it begins. But the risks of being so beholden to foreign lenders are serious enough that the nation arguably should not be content to continue its current path, which it is generally agreed is unsustainable and incredibly risky not just to the broader economy, but to the long-term future of the industrial base. Given these trends, and especially the dangerous dependency upon other nations like China and other states buying American bonds, those interested in national security should be concerned about not only the raw size of the deficit, but also about the nation's deep vulnerability now to the decisions made in both the U.S. and in foreign capitals.

     

 

 

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The fourth session of the national security industrial base working group focused on the current internal health and financial standing of the industrial base itself. Discussion was as always according to the Chatham House rule, with Robert Trice of Lockheed Martin and Pierre Chao of Renaissance Strategic Advisors making brief presentations to initiate the conversation.

A number of points came up in discussion:

• That the U.S. national security industrial base has greatly downsized, with the aerospace and defense sector now employing somewhat more than 600,000 workers in contrast to numbers twice as large in the fairly recent past
• That this sector is a high-wage and high-export sector for the U.S. economy
• That profit margins are often only about half of what is commonly believed due to certain costs that cannot be billed to the government and related matters

In fact, the sector averages profit margins of about 9 percent, less than many industries that tend to achieve margins in the teens. Whether this is a reasonable and fair state of affairs or not is debatable. Some suggest that companies with a sure customer and dependable market (the U.S. government) shouldn't be entitled to as much profit as those operating in a more unpredictable marketplace, whereas others counter that the U.S. government is hardly a consistent customer or an easy customer to work with.

The national security industrial sector is overall not unhealthy. But stocks are relatively underpriced, perhaps, as Wall Street has already incorporated expectations about declining defense budgets into the valuations of virtually all defense firms. And there are other concerns as well (to which we return below).

The current DoD interest in moving back to fixed-price contracts causes some a good deal of worry.  uch an approach was attempted two decades ago with unfortunate results for the industry. But there are mitigating factors. For example, most of today's top defense executives cut their teeth in the industry during that previous downturn, so they are experienced at dealing with tough periods. Also, the industry has numerous survival skills. For example, greater use of fixed-price contracts by the department may lead to higher bids for a given system (as contractors try to ensure that any unexpected cost growth will not prevent them from achieving a profit).

Many companies are showing greater interest in the most lucrative or least capital-intensive parts of the DoD acquisition agenda—service contracting, IT and cybersecurity, exports, and so on. By contrast, it may be harder to hold onto expertise in expensive production facilities.

Some argued that the "big 5" and other larger firms are likely to find ways to survive the coming expected downturn. By this argument, the greatest fallout is likely to affect certain subcontractors (the most vulnerable of which are hard to identify in advance—that is, unless "revolving door" restrictions are relaxed or circumvented so that customers and industry can talk to each other more easily). 

Others worry about the primes too, for a number of reasons:

• the vicissitudes of defense spending levels,
• increasing burdens from regulation and oversight,
• the difficulty and cost of starting large new production lines,
• the difficulty of turning profits based on R&D and prototyping,
• demographic trends in the defense workforce (with many experienced workers retiring en masse), and
• the uncertainty of attracting new talent into a business that may not be as likely to produce new systems in the future as in the past. A case in point: for the first time in the history of aviation, the United States currently does not have a manned aircraft program in the development phase. 

In light of all the above, one consistent message from the group was that greater communication—and clearer guidance—from the Pentagon towards industry would serve the interests of all. The Gates Pentagon, through Under Secretary Carter and others, has moved in this direction but substantially more effort as well as a sustained effort would be beneficial. This situation underscores the ongoing need for gatherings like the current Brookings working group, among other initiatives.

     

 

 

Event Information

On July 22, the national security industrial working group held its third meeting, this one focused on the future human capital issues of the industry. Chancellor Michelle Rhee of the District of Columbia Public Schools system and Senior Fellow Darrell West of Brookings’ Governnance Studies Program helped kick off the discussion with presentations on the education system and immigration policy as they relate to the current and future science and technology workforce of the United States; Daphne Dador presented information from recent Aerospace Industries Association studies as well.

The general tone of the meeting was serious and deeply worried about where trends lines were headed. There was general concern about the state of science, technology, engineering, and mathematics skills in the United States—as well as the availability of specialized vocational skills. These were seen as not only necessary to the industry’s ability to build high quality weapons systems and deliver complex services, but also for the U.S. to simply maintain national economic competitiveness.

The United States ranks in the range of 20th to 30th in the developed world in its reading, math, and science scores in its public schools and, even worse, is on a downwards trajectory. Many major school districts have so many children in trouble, operating at grade levels below national standards, let alone international ones, that they are unable to raise these scores. The general problems reverberate even more, in that schools are thus also unable to nurture the higher-achieving students who need Advanced Placement classes and the like if they are to be science and technology leaders of tomorrow. Part and parcel of the problem is that teachers’ skillsets in these areas are in need of help as well.

The private sector has a vested interest in this issue and it was suggested could play a greater role in strengthening schools’ abilities to offer advanced, or even remedial, technical training, as well as volunteer mentoring and sponsorship of various challenges that draw students into the STEM fields. A challenge, though, has been teacher’s union resistance to outsiders.

Some concerns were questioned, such as whether in aggregate, science and tech workers in the U.S. have just as high unemployment rates as anyone else, suggesting no particular shortage of such abilities in general. Others pushed back, however, noting current and future challenges by defense firms in finding skilled labor, especially among U.S. citizens who can also attain clearance, and also noting the contrast of the huge endeavors at strategically spurring innovation made by places like Singapore, China, Poland, and Malaysia. The attractiveness of the STEM field for young adults choosing career paths was also raised as an issue. The lesser appreciation for scientists and engineers in modern American culture, and worries about a job’s long-term career stability, especially as compared with the excitement over science and technology matters during earlier periods (e.g., the space exploration period of the 1960s, the Cold War, etc.) were described as barriers to overcome.

Darrell West’s book Brain Gain, about which he spoke, proposes that, while education reform to deal with the above is certainly necessary, in order to address shortfalls in science and technology expertise among Americans, the United States must also rethink its immigration policies. Current immigration policy has not been strategic and the political debate on it has become deeply disappointing. Since 2005, only 6.5% of U.S. visas have gone towards high-skilled workers; comparatively, Canada set aside 58%, using its visas as part of a drive to fill needed skills gaps and aid long-term economic growth and competitiveness. Reorienting policy towards greater efforts to attract workers with needed skills should be prioritized. In addition to matters such as H-1B visas, it was also noted that the U.S. already makes a massive investment in many foreign PhDs (approximately $300,000 per graduate) that is presently lost. The idea was proposed of offering such foreigners who have obtained advanced science and technology degrees in the U.S. at American university or taxpayer expense automatic green cards to help induce them to stay on for the long-term. This and related ideas attracted considerable interest from the group.

     

 

 

EXECUTIVE SUMMARY

There is no shortage of discussion or concern over America’s industrial base as it relates to national defense.  The majority of the discussion has addressed the acquisition of major weapon systems, while comparatively far less debate has been devoted to the sustainment industrial base, which has a multitude of statutory requirements and competing stakeholders.  Having the appropriate mix of public and private sustainment capacity and capabilities will play a crucial role in providing the DOD the ability to respond to the nation’s security requirements.  As even a brief discussion on each of the many facets of 21st Century weapon system sustainment could fill volumes, this work will attempt to highlight the importance of broader sustainment activities through a more narrow discussion of depot maintenance.

The projected decline in major weapon system acquisition in a fiscally constrained defense budget environment will present many challenges.  As weapon systems are maintained for longer periods of service, often beyond their designed life-cycles, sustainment of those aging weapon systems will be integral to Joint Force readiness.  Strategic vision regarding the public/private mix of the capabilities needed to sustain those systems will be critical to risk mitigation and weapon system availability.

The United States needs a national vision that articulates for leaders in government and industry what the future of the defense sustainment industrial base will look like.  The vision should outline a strategic process for determining industrial base capacity, capabilities, and where those capabilities should reside within the public and private sectors.  The vision should take into account the momentum of the DOD’s current efforts to in-source previously contracted activities, include sustainment capabilities necessary for weapon system risk mitigation, and address partnerships with industry.  Successful vision implementation should effectively manage expectations and inform the decision makers who facilitate investment decisions and plan sustainment strategies that are inextricably linked to weapon system readiness.

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On June 14, the 21st Century Defense Initiative at Brookings hosted the second session of its national security industrial base working group. The focus of the session was on the future national security environment and the "demands" from the "customer side" of the equation.  Speakers included Andrew Krepinevich, president of the Center for Strategic and Budgetary Assessments and Peter W. Singer, senior fellow at Brookings.

The focus of the session was on the future national security environment and, hence, the “demands” from the “customer side” of the equation of the defense industrial base. A key trend affecting the potential security environment of 2025 - 2035 will be technologic. Certainly the trends in computers have already been remarkable and if "Moore's Law" continues to hold, there could be another billionfold increase in computing power within roughly 25 years. There may be comparable trends underway in areas such as microbiology and nanotechnology. These trends are providing the basis for the existing growth in systems like robotics to new ones like directed energy or nanotechnology.

The implications of this technologic trend are that the domains in which conflict will take place, and for which the military will be looking to buy solutions, will extend into new areas such as cyber, space, and changed global environs. This will connect to huge demographic trends to lead to another key domain where conflict will increasingly take place, and the customer will be looking for solutions, the urban hot zone. Urbanization trends will continue in general, with a strong majority of the world's future populations in major urban areas and some 50 new megacities (with populations of 10 million or more) around the world within a quarter century. Violence and national security threats are likely to be found emanating from such places, where hundreds of millions of individuals, many poorly educated and underemployed yet aware of all that the world offers that they cannot easily access, will represent potential recruits for various militant movements.

All of these technological developments have major implications for people. Operating these kinds of systems effectively, a traditional American strength, will require attracting technology-literate people even more than in the past. The United States armed forces also must think hard about how to attract and retain, and thus the nation’s universities and industry must figure out how to supply, individuals with a "Google mindset" who expect access to information as well as modern devices without all the bureaucratic encumbrances and hierarchical structures that traditionally afflict military organizations.

Another key aspect of this change is that the US will have no monopoly on power and some of these sophisticated technologies. The future period holds a greater spread of access-denial technology, cyberthreats and "GRAM" technologies (guided rockets, artillery, and mortars). Such a "democratization of destruction" will continue with small groups having greater access to lethal technologies. Even more, a “proliferated world” of WMD in the hands of a greater number of states seems a strong possibility. Nuclear campaign planning could become more important, as the likelihood that one or more nuclear weapons will be used somewhere probably grows. Finally, while non-state actors, globalization’s ills, and problematic states like Iran will likely continue to grow, another major force shaping the demand side in future years may be the return of great-power rivalry in East Asia.

Cyberwar was discussed in detail. The United States may be relying too much on deterrence as a strategy, and the military may be too focused on just protecting its own networks. Another key computer challenge is integration—not only within individual systems but across systems, and with flexibility to allow for modernization, adaptation and innovation. This, though, stands in contrast to another key demand, which is to build resilient networks that can resist and recover from attacks. This same growing DoD concern over cyber-assurance will likely grow on the hardware vendor side, as more and more investment and production moves from traditional US partners and suppliers to suppliers in Asia.

Not all is foreboding. Historically, the United States remains quite secure as a major power. In addition, with China the only plausible rising rival, we may not face major challenges anywhere except the Western Pacific—and some would debate the degree to which all of that region must concern us as a truly vital area of national security importance. Moreover, for all of China’s strengths in manufacturing, the United States still enjoys advantages of leadership in innovation. The ability to integrate across systems and technologies has been and will be a key strength, and we can use methods such as data mining to improve intelligence collection and the forecasting and tracking of threats. We have a history in the “black world” of remarkable game-changing inventions.

But the challenges are great. We do not have a national security strategy with clear priorities. The main customer, DoD, is often unsure of its clear wants and needs and thus companies should likely not expect clear demand signals. On the Congressional side, the main tendency loosely seems to be towards major platforms and towards minimizing the role for US ground forces, but again, it is unclear whether this links to the defined needs in a future environment. Few recognize that the national security industrial base is not Walmart, with immediate and easy ability to generate whatever is needed. Thus, the firms most likely to succeed will be those that can most accurately predict and/or most rapidly respond to changing customer demands.

As a final interpretive note, it appears difficult in a group of this size and sophistication to come away with a simple list of dominant future threats, but the confluence of trends discussed was notable. The discussion tended to emphasize the need for greater attention to new technologies and domains, most especially cyber issues, the proliferation and democratization of threats, the importance of human capital questions, and the need for innovation and experimentation. Flexibility, resilience, and rapidity of response were the factors that seemed most needed by the US military to succeed in this environment, and, in turn, most likely to be demanded of the future national security industrial base.

     

 

 

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In the 20th century, the phrase “Arsenal of Democracy” signified more than mere World War II propaganda. America’s industrial base—and the science, technology, engineering and education capabilities that undergirded it—became distinguishing sources of its superpower status, as well as its economic vitality.

Today, the industrial base as a whole is experiencing changes perhaps as never before. Many believe that the industry is at a strategic inflection point where its future can sharply change for better or for worse.

On May 4, the 21st Century Defense Initiative at Brookings held an opening meeting of a working group focusing on the U.S. national security industrial base. The working group comprises experts from academia, industry, the media, Congress, and the Executive Branch. Several short framing presentations were made, with the intention of then eliciting feedback from the group in order to develop an agenda for the rest of the year.

Transcript

• Presentation by Tom Davis (.pdf)

Event Materials

• 20100504_industrial_base_davis

     

 

 

• March 26, 2010, 10:00 AM - 4:00 PM EDT

On March 26, the 21st Century Defense Initiative at Brookings hosted its first annual Military and Federal Fellow Research Symposium, featuring the independent and cutting-edge research produced by members of each military service and select federal agencies during their time in think tanks and academia. Organized by the fellows themselves, the symposium provided a greater awareness of the valuable policy work our defense leaders are producing at think tanks and research institutions across the nation.The theme of this first symposium was “Defense Challenges and Future Opportunities.” Following a keynote address by Lieutenant General John M. Paxton Jr., director of strategic plans and policy for the Joint Staff and a former federal executive fellow at Brookings, panel discussions focused on the fellows’ independent research findings in the areas of irregular warfare, acquisition and logistics, alliance warfare, and manpower and infrastructure challenges. After each panel, participants took audience questions.View the full agenda » PRESENTATION NOTES: Panel I: Irregular Threats  Panel II: Acquisition and Logistics"A National Level Vision Needed for the Defense Sustainment Industrial Base" — Colonel Tom Miller, United States Air Force, Brookings Panel III: Alliance Warfare"Seabasing and 21st Century Alliances" — Commander Gregory Parker, United States Navy, Brookings"NATO’s Survival: Decisions for the Alliance" — Colonel Patrick Warren, United States Army, Brookings"U.S.-Japan Interoperability" — Colonel Hiroaki Uchikura, Japan Air Self-Defense Force, Brookings  Panel IV: Manpower and Readiness"The Repeal of 'Don't Ask, Don't Tell' Implementation Considerations for Quartering the Force" — Lieutenant Colonel Charles McLean, United States Marine Corps, Brookings