Performing Industrial Base Analyses Volume I: Methodology

In November 1994, the Secretary of the Navy asked the Assistant Secretary of the Navy (Research, Development and Acquisition) [ASN(RD&A)] to assess the minimum essential industrial base that the Department must sustain. The assessment was to become part of the FY97 Program Review (PR-97). In turn, ASN(RD&A) asked CNA to help support the assessment process. In addition to PR-97 support, the sponsor asked CNA to develop a framework for addressing industrial base questions because the Navy Department is required to perform many of these industrial base assessments. This paper proposes a CNA methodology for conducting industrial base studies. It is designed as an instructional document to guide analysts in capturing economic sources of industrial base risks. This framework helps to identify likely problems and then to tailor feasible solutions. The framework is general enough to be applied to a wide variety of industrial base items. The goal of this paper is to separate the important factors regarding the industrial base from the extraneous ones. By highlighting the key elements and economic dynamics, the methodology can support Navy and Marine Corps decisions on critical industrial base issues.