The Defense Industrial Base

Gao ID: 115862 July 21, 1981

GAO reported on the ineffectiveness of the Department of Defense (DOD) Industrial Preparedness Program. Recent events have underscored the fact that a strong industrial base is essential to the U.S. economic and military welfare in both peacetime and in war. Over the years, the DOD Industrial Preparedness Program has been studied by a number of organizations. Despite these past studies, few changes have been made and the program remains ineffective. Many of the problems identified have been known by DOD for years. However, it is not a question of knowing the problems, it is a question of priority. Given limited peacetime defense budgets, funds are first allocated to meet current operational needs. As a result, a lower priority and minimal funds are allocated to industrial preparedness planning. The new administration has placed renewed emphasis on the industrial base, and DOD is devising a plan of action to improve the effectiveness of its program. Failure to adequately plan with industry to assure supply may impair the U.S.ability to fight a conventional war. Should combat consumption be greater than expected or the war prolonged, an unresponsive industrial base might limit U.S. defensive options. GAO believes that these issues are of vital national importance and that a clearly defined and comprehensive national policy regarding industrial preparedness should be established. GAO also believes that once such a policy is established, a concomitant funding commitment is needed.

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