Defense Department officials are carefully studying how they will revise government efforts to keep their industrial base healthy, the Pentagon’s top official for such issues said last week.
“Right now, we have a need for more insight before we offer a proposal for more oversight,” Pentagon Director of Industrial Base Policy Brett Lambert said at a Feb. 5 forum sponsored by the Center for Strategic and International Studies in Washington.
Earlier this month, the department released a sweeping strategy and weapons purchasing assessment that asserts the need to rethink the department’s relationship with its industrial base. The Quadrennial Defense Review (QDR) raises concerns that the U.S. defense industry has stagnated around the production of Cold War-era weapon systems.
“The decades-long primarily hands-off approach to the U.S. defense industrial base cannot be remedied quickly, and will require a long-term approach undertaken in partnership with industry and Congress,” reads the 2010 QDR.
The authors blame “the federal government as a whole” and “the Pentagon in particular” for neglecting to address changes within both the industry and the department’s needs in the new strategic environment.
“The result has been that America’s defense industry has consolidated and contracted around 20th century platforms,” according to the report, “rather than the broad and flexible portfolio of systems today’s security environment demands.”
Lambert said a new industrial base policy is in the making, but that “solutions will take time.”
“The Pentagon needs a better understanding of our industrial base,” he said.
While QDR draft states that the department will “rely on market forces” to shape and sustain industrial capabilities, it also states that the government “must be prepared to intervene when absolutely necessary to create and/or sustain competition, innovation, and essential industrial capabilities.”
Lambert said a new policy will not entail too much government intervention in private industry.
Jeffrey Bialos, who oversaw Pentagon industrial affairs during the Clinton administration, spoke at the same event. He drew parallels to the 1990s, when defense spending contracted, causing massive consolidation in the industry. He expressed approval of the three-page section in the 2010 QDR devoted to industrial base issues and called it “evolutionary” rather than “revolutionary.”
Lambert also reiterated statements in the QDR warning firms that the government will not “underwrite sunset industries nor prop up poor business models.”