The Pentagon has released a report saying that extreme levels of mergers and consolidation among defense contractors have reduced competition and elevated risks to U.S. national security, while recommending a series of actions to spur increased competition in America’s Defense Industrial Base (DIB). The State of Competition in the Defense Industrial Base report (pdf), released Feb. 15, notes that, since the 1990s, there has been a substantial level of defense sector consolidation, with the number of aerospace and defense prime contractors dwindling from 51 to just five. It also indicates that just three sources account for 90 percent of U.S. missiles. “As a result, DoD is increasingly reliant on a small number of contractors for critical defense capabilities,” the report says. “Consolidations that reduce required capability and capacity and the depth of competition would have serious consequences for national security.” The report outlines the current state of competition in the …
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