National Defense:

DOD Assessments of Supplier-Base Availability for Future Defense Needs

GAO-10-317R: Published: Jan 27, 2010. Publicly Released: Feb 26, 2010.

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The Department of Defense (DOD) relies on thousands of suppliers to ensure it has the weapons and supporting equipment needed to meet U.S. national security objectives. Congress has provided DOD with a variety of authorities to allow it to maintain information on its suppliers and to take actions to ensure that its suppliers can deliver needed items. In October 2008, we reported on our assessment of DOD's efforts to monitor the health of its supplier base and identify and address gaps and recommended that DOD develop a departmentwide framework and consistent approach, which DOD has begun to implement. In light of increased globalization in the defense industry and consolidation of the defense supplier base into a few prime contractors, Congress requested that we review DOD's efforts to assess supplier-base availability for future defense needs.

Both DOD and Commerce conduct assessments of supplier-base availability for defense needs that generally focus on the next 5 years. Several offices within DOD and Commerce's Office of Technology Evaluation have a role in assessing supplier-base availability, primarily conducting short-term assessments of selected sectors or existing weapon programs. In 2004, DOD's Office of Industrial Policy conducted a one-time series of comprehensive DOD-wide assessments of supplier-base availability that forecasted 10-20 years into the future. According to DOD and Commerce officials, assessments of future supplier-base availability for defense needs beyond a 5-year time frame can have limitations, in part, because it can be difficult to predict technologies and whether investment in the supplier base will be needed to support these technologies. Recently, the National Research Council and an industry association recommended that DOD continually assess the supplier base from a more strategic perspective to include its availability for long-term defense needs. DOD has not acted on these recommendations; however, DOD plans to incorporate industrial-base considerations into its 2010 Quadrennial Defense Review to raise awareness of long-term, future, supplier-base availability for defense needs.

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