A recent report from the Department of Defense highlights the risk the U.S. national security posed by an increasing consolidation of Defense contractors.  According to the report,

• Since the 1990s, the defense sector has consolidated substantially, transitioning from 51 to 5 aerospace and defense prime contractors.  As a result, DOD is increasingly reliant on a small number of contractors for critical defense capabilities.
• 90% of missiles now come from just three sources
• Over the last 30 years, the number of suppliers for things such as tactical missiles, fixed-wing aircraft, and satellites have all declined dramatically.

The report notes that increased competition is essential and that additional innovation, including small business innovation must be brought back into the Department to reduce overall risk.  The report provides five fundamental recommendations:

• Strengthening merger oversight
• Addressing intellectual property limitations
• Increasing new entrants
• Increasing opportunities for small businesses
• Implementing sector-specific supply chain resiliency plans

At OODA, we continue to highlight how disruptive technology can provide innovation advantage and work hard to get new capabilities introduced into the Department of Defense and intelligence community through the OODA Network of Experts and through our work with organizations like MissionLink Next.

Our recent Salon with Jennifer Ewbank, Deputy Director of CIA for Digital Innovation

Full DOD Report:  State of Competition within the Defense Industrial Base

About the Author

Matt Devost

Matthew G. Devost is the CEO & Co-Founder of OODA LLC. Matt is a technologist, entrepreneur, and international security expert specializing in counterterrorism, critical infrastructure protection, intelligence, risk management and cyber-security issues. Matt co-founded the cyber security consultancy FusionX from 2010-2017. Matt was President & CEO of the Terrorism Research Center/Total Intel from 1996-2009. For a full bio, please see www.devost.net