Executive Summary

Reform is necessary within the US defense industrial base (DIB) to deliver effective weapons on time and within budget. A large body of work exists assessing the problems, root causes, and possible solutions to the greatest challenges facing the DIB. Yet because of system complexity and data disaggregation, it is difficult for analyses of the DIB to be based on data while capturing system-wide dynamics. Most analyses are either data based, but with a narrow focus, or are DIB-wide, but rely on high-level conceptual synthesis and inference. This report conducts a medium-scope evaluation of the challenges faced by the US DIB, combining a literature review with event-based evidence from acquisition programs to construct a novel framework. The framework covers the development, program management, production, and workforce aspects of DOD’s acquisition process. Although this report places special focus on the Navy, the framework can be applied to the programs of all services.

We applied our framework to two specific examples: the development of the Air and Missile Defense Radar (AMDR) (or AN/SPY-(V) 1) and the Columbia-class submarine program. The first example was chosen because it demonstrates success in terms of budget, capability, and timeliness, and the second was chosen because it is a high-importance, high-cost, and high-complexity program that has faced significant disruptions. Applying the framework to the AMDR program shows how pragmatic design choices (e.g. sacrificing capability for achievability, prioritizing versatility) helped the program meet expectations, then expand to achieve economy of scale. Program management was also important to the AMDR program, where highly complex software (a major risk factor to AMDR) was developed successfully through iterative coordination between test organizers and software developers. Applying the framework to the Columbia program reiterates well-known production issues, where a small and inexperienced workforce has contributed to slower work and costly mistakes. However, it also emphasizes the less-discussed effects of design and program management, where unrealistic planning, substandard design tools, simultaneous design and production, and communication deficiencies, among other factors, contributed to delays and increased costs.

 By developing and applying our framework, we found that there are many paths to strengthening the DIB, including targeted training programs, facility improvements, iterative testing, critical sector investments, and implementing best-practice requirements. Although external industry factors strongly affect the US DIB, internal factors also determine program success. Although external challenges (e.g., workforce shortages, multinational supply chain disruptions) often occur late in the program lifecycle, mistakes due to internal factors (e.g., DOD organizational structure, policy, design decisions) occur early and have compounding effects. Unlike external DIB factors, internal factors are directly under DOD’s control. To improve acquisitions, DOD must change its internal operations.