State Of Competition Within The Defense Industrial Base PDF Download

Competition within the DIB is vital to the Department for several reasons. When markets are competitive, the Department reaps the benefits through improved cost, schedule, and performance for the products and services needed to support national defense. During initial procurement, incentivizing innovation through competition drives industry to offer its best technical solutions at a best-value cost and price. During contract performance, the expectation that contractors will have to compete against other firms in the future encourages them to perform effectively and efficiently. Competition is also an indicator of the necessary industrial capability and capacity to deliver the systems, key technologies, materials, services, and products the Department requires to support its mission. Insufficient competition may leave gaps in filling these needs, remove pressures to innovate to outpace other firms, result in higher costs to taxpayers as leading firms leverage their market position to charge more, and raise barriers for new entrants. Moreover, having only a single source or a small number of sources for a defense need can pose mission risk and, particularly in cases where the existing dominant supplier or suppliers are influenced by an adversary nation, pose significant national security risks. For all these reasons, promoting competition to the maximum extent possible is a top priority for the Department. This report lays out five broad recommendations to spur increased competition in the DIB. Section 1 of this report provides an overview of the state of competition in DIB and introduces cross-cutting challenges and recommendations related to M&A, IP, and reliance on commercial items. Section 2 focuses specifically on the health of the small business DIB and recommendations to increase the small business vendor base. Section 3 provides a sectoral assessment across five priority areas, with recommended mitigations across each of these areas.