Measuring the Impact of Sequestration and the Defense Drawdown on the Industrial Base
Abstract
The United States has long recognized the importance of supporting and sustaining an advanced defense industrial base for the purposes of maintaining global technological superiority. Maintaining this technologically superior industrial base requires a wide vendor pool from which to produce products, conduct research and development, and provide services for the Department of Defense (DoD). However, since the implementation of the 2011 Budget Control Act s (BCA) mandatory reductions to the federal budget, Congressional, DoD, government oversight, and industry officials have all expressed concerns over the health and future of the defense industrial base. These cuts affect not only the top tier of the industrial base (the prime contractors), but also the more numerous lower-tier suppliers (subcontractors) that are so often the sources of critical technological advances. This research aims to analyze the impact of the defense drawdown on the various tiers and sectors of the defense industrial base through analysis of prime and subprime contract trends. The expected results of this research are fourfold and each result offers significant benefit to the public. First, this research will provide significant new data and analysis on the impact of the defense drawdown on the tiers of the industrial base, a topic of extensive public interest. Second, both the analysis and dataset will be made available publicly, helping to illuminate the little understood dynamics of subcontract awards. Third, this proposed effort will contribute to the academic discussion on how markets reorganize in response to shocks. Finally, the analysis found in the final report will provide lessons learned to those facing future market shocks. This research will proceed under a methodology that combines data from both qualitative and quantitative efforts, consisting of the following four separate but interconnected tasks: (1) review the academic and business literature on industrial base reorganization following external market shock; (2) analyze the publicly available prime and subprime contracting obligations trends; (3) analyze the response of select companies to the most recent defense drawdown; (4) and combine the data from the previous tasks to formulating recommendations and conclusions to include assessment of the drawdown by industry sector, as well as case studies analyzing how different companies responded.
Document Details
- Document Type
- DoD Grant Award
- Publication Date
- Mar 09, 2016
- Source ID
- N002441610002
Entities
People
- Andrew Hunter
Organizations
- Center for Strategic and International Studies
- Office of the Secretary of Defense