Pentagon seeks to boost competition in shrinking defense contractor base -Breaking
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© Reuters. FILEPHOTO: Aerial view of Washington’s Pentagon building, June 15, 2005/File Photograph WASHINGTON (Reuters] – Tuesday’s report by the Biden administration outlines recommendations to increase competition in defense industries. Rapid consolidation of these bases has led to a security threat.
According to the report, 51 prime contractors in aerospace and defense to the Defense Department (a group also known as defense industrial base) have declined from 1990 to 1995. According to the report, 90% of missiles originate from just three sources.
The report stated that having only one source for your defense needs can “pose mission risk” and, especially, if the dominant supplier or suppliers influence an enemy nation, could pose serious national security threats.
According to President Joe Biden’s executive order of July, the document is required. The document also states that lack competition reduces incentive firms to invent and increases costs for taxpayers.
This paper follows the U.S. arms manufacturer Lockheed Martin Corp (NYSE) cancels plans to buy rocket engine manufacturer Aerojet Rocketdyne Holdings Inc (NYSE:) Inc at $4.4 billion due to opposition by U.S. antitrust enforcers.
According to this document, the Pentagon should work closely with antitrust regulators. This will prevent excess mergers and entice newcomers onto the market.
This report calls for the Defense Department, among other things, to strengthen its supply chains in key areas like missiles and batteries as well as critical materials, microelectronics, and so forth.
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