TCS Daily


Reform Acquisition To Protect Defense's Industrial Base

By Ken Adelman - April 2, 2001 12:00 AM

"We know about the military threat, but there's another threat and that's the [defense] industrial base of America," Chairman of the Senate Armed Services Committee John Warner said at Donald Rumsfeld's confirmation hearing last January.

Sen. Warner -- who graciously helped launch Defense Central in the Senate hearing room last Wednesday -- told of the defense industry's being "put to a tremendous task of trying to survive in the face of a dozen years of decline in defense spending."

Rumsfeld could not have been more supportive of the chairman's view: "With respect to the study on the defense industrial base, let me say that I agree with you. ... It is a very serious problem. I mean, the return on investment in the defense industry today is not sufficient to attract investment."

Rumsfeld proceeded to point out that "the government doesn't make things" but relies upon private firms to do so. That "industry has to be there. And to be there, it has to be viable from an economic standpoint, or people are not going to invest in it. And it is a very serious problem."

What's the problem? And what's the solution?

The problem is clear: Throughout the Cold War decades, the defense industrial base was assumed. Now it must be actively cultivated. Many companies have already fled the defense business, while others are diversifying and becoming weaker.

Less noticeable but no less troublesome is how the critical second and third tiers of defense suppliers are vanishing. Prime contractors have fewer suppliers available for vital components that they need to give Americans in uniform the best equipment to protect both their lives, and our interests.

The solution lies in wholesale reform of the acquisition process. Such reform must protect the defense industry against what Norman Augustine, ex-chairman and CEO of Lockheed Martin, called "procurement's four horsemen of the apocalypse: turbulence, adversarialism, inadequate personnel, and insufficient margins." (Source: The Defense Revolution by Norman Augustine and Ken Adelman in 1990).

The solution must include:
  • Encouraging more commercially-available components and systems in defense systems; in short, the Department of Defense must learn to live off the land.


  • Manufacturing and deploying all systems that go beyond research and development prototypes into engineering development.


  • Producing all systems that receive such production go-ahead at the most efficient rate to their specified capacity, and then shutting down the production lines; decreasing numbers purchased and/or extending the production time adds enormous cost, thereby making the system more politically vulnerable and wasting loads of scarce defense dollars.


  • Once programs have passed this stringent "go ahead" gate, firing the first person or organization that begins to meddle with the funding, schedule or requirements of the system, and resisting all pressures from Congress to make changes.


  • Toughing out production problems and finishing all systems once started.


  • Prolonging the life of all platforms so produced, whether aircraft, ships, or tanks, as long as possible, by regularly introducing new technology as subsystem upgrades; this keeps platforms that must last 40-plus years up-to-date with technologies that have a half life of under 10 years.


  • Applying this new technology both to increase operational capability and to lower cost.


  • Pushing more cooperative programs with friends and allies in NATO or Australia and Israel, to stretch defense dollars and help keep production lines warm; we might have to add U.S. countermeasures to some of those systems.
The Rumsfeld Team has already signaled its intention to push most of the research, development and production activities out of the Office of the Secretary of Defense into the military services. By granting such authority to the secretaries of the Army, Navy, and Air Force, such a transformation can occur throughout the gigantic defense acquisition process.

In this manner, the clear intentions of Chairman Warner and Secretary Rumsfeld can go from Senate confirmation concerns to real-life implementation.

The big winners will be the American taxpayer and, especially, the men and women who wear the uniform. They deserve the best tools to fulfill their critical mission, for us all.
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