Defense Industrial Base

Pursuant to a congressional request, GAO reviewed the: (1) existence of a viable U.S. industrial base to meet future defense needs; and (2) access to critical items and capabilities produced or controlled by foreign countries.
GAO found that: (1) the Department of Defense's (DOD) strategy to rely on free market forces to restructure the defense industrial base is not realistic, since DOD is responsible for developing and implementing defense policy and industrial base requirements; (2) many defense contractors do not have the experience needed to shift between commercial and military production; (3) DOD has greater expertise and access to defense industry related information to assess factors affecting the industrial base, such as international political developments, emerging military threats, and future development of defense-related technology and military doctrine; (4) although DOD is implementing guidance to ensure that critical defense capabilities will not be lost, it has not taken a proactive role in ensuring access to critical items and capabilities or assessed U.S. reliance on foreign sources for its defense needs; and (5) DOD systematic reviews did not maintain data on lower production firms that provide specialized technology, lacked information and criteria for determining acceptable levels of foreign dependence, and failed to address present and future U.S. competitiveness in critical technological areas.