https://crsreports.congress.gov
Updated January 22, 2021
Defense Primer: U.S. Defense Industrial Base
The Department of Defense (DOD) relies on a wide-
ranging and complex industrial base for the products and
services that enable the Department’s warfighting
capabilities. Definitions of what this industrial base
encompasses vary in scope and emphasis.
Some analysts and experts distinguish between a domestic
defense industrial base (DIB) and a global DIB. The
domestic DIB includes public-sector (government-owned,
government-operated) facilities, academic institutions, and
private-sector (commercial) companies located in the
United States. Congress has taken some interest and action
to support and sustain the domestic DIB. The global DIB
includes foreign-owned companies and commodities
sourced from countries with which the United States
maintains formal defense cooperation partnerships, as well
as foreign-owned companies and commodities sourced
from countries without formal defense cooperation
relationships with the United States. Together, the domestic
DIB and portions of the global DIB form the National
Technology and Industrial Base (NTIB), as established by
10 U.S.C. §2500. The DIB entities that work with the DOD
as prime contractors and subcontractors are diverse, ranging
in size from small- and medium-sized businesses to some of
the world's largest corporations. Together, these entities
provide a wide range of products and services to the DOD,
encompassing everything from complex platforms unique
to the military (e.g., aircraft carriers) and highly specialized
services (such as launching military satellites), to all kinds
of commercial products (e.g., laptop computers and
semiconductors) and routine services (e.g., information
technology (IT) support).
DOD’s Role
Chapter 148 of Title 10, United States Code (U.S.C.),
addresses policies and planning related to the NTIB, which
it defines as “persons and organizations that are engaged in
research, development, production, integration, services, or
information technology activities conducted within the
United States, the United Kingdom of Great Britain and
Northern Ireland, Australia, and Canada.”
The Secretary of Defense is required (10 U.S.C. §2501) to
develop a national security strategy for the NTIB. The
strategy must be “based on a prioritized assessment of risks
and challenges to the defense supply chain.” Specific
responsibility for “establishing policies for access to, and
maintenance of, the [domestic DIB] and materials critical to
national security, and policies on contract administration” is
assigned to the Under Secretary of Defense for Acquisition
and Sustainment (USD/A&S) by 10 U.S.C. §133b. The
Deputy Assistant Secretary of Defense for Industrial Policy
(DASD/IP) has served as the principal advisor to the Under
Secretary on matters related to the DIB, to include
establishing policies for the maintenance of the domestic
DIB. The FY2021 National Defense Authorization Act
elevated the DASD/IP position to the Assistant Secretary of
Defense level (§903; H.R. 6395).
Annual NTIB Assessments
The Secretary of Defense is required (10 U.S.C. §2505) to
conduct annual assessments of the NTIB’s capability to
attain national security objectives and must report to
Congress yearly on these assessments (10 U.S.C. §2504).
The assessment includes a description of sectors and
capabilities of the NTIB and their underlying infrastructure
and processes. In practice, the DASD/IP has performed the
assessment. In conducting the assessment, the Secretary is
required to consider factors such as
present and projected financial performance of
industries;
whether DOD acquisition program requirements can be
met with current and projected NTIB capacities;
the degree to which DOD acquisition program
requirements can be met with current and projected
capacities of—
o industries supporting the sectors or capabilities in
the assessment, and the extent to which they are
comprised of only one potential source; and
o industries not currently supporting DOD programs,
and the barriers to participation of those industries;
and
technological and industrial capabilities and processes
that may be unable to support the achievement of
national security objectives.
Selected Industrial Base Authorities
The following discussion surveys selected industrial base
authorities that are fundamental to DOD stewardship of the
NTIB.
Industrial Base Fund
10 U.S.C. §2508 directs the Secretary of Defense to
establish an Industrial Base Fund (IBF). The IBF is subject
to annual appropriations and was established to
support the monitoring and assessment of the industrial
base;
address critical issues in the industrial base relating to
urgent operational needs;
support efforts to expand the industrial base; and
address supply chain vulnerabilities.
Defense Production Act (DPA) of 1950
The DPA of 1950, as last reauthorized in 2018, provides the
President with a number of authorities that he or she may
utilize to influence domestic industry in the interest of
national defense. The authorities most relevant to NTIB are
