Updated December 20, 2018
Defense Primer: U.S. Defense Industrial Base
The Department of Defense (DOD) relies on a wide-
report to Congress on such assessments (10 U.S.C. §2504).
ranging and complex industrial base for products and
The assessment includes a description of sectors and
services required to support DOD’s stated mission “to
capabilities of the NTIB and their underlying infrastructure
provide the military forces needed to deter war and to
and processes. In practice, the DASD/IP has performed the
protect the security of our country.” This defense industrial
assessment. In conducting the assessment, the Secretary is
base comprises public-sector (government-owned,
required to consider factors such as:
government-operated) facilities and private-sector
(commercial) companies.
present and projected financial performance of
industries;
The commercial companies that contract with DOD are
whether DOD acquisition program requirements can be
diverse, ranging in size from small businesses to some of
met with current and projected NTIB capacities;
the world’s largest corporate enterprises. These commercial
the degree to which DOD acquisition program
companies provide a wide variety of products to DOD,
requirements can be met with current and projected
encompassing everything from complex military-unique
capacities of—
platforms such as aircraft carriers to common commercial
items such as laptop computers, clothing, and food. They
o industries supporting the sectors or capabilities in
also provide a wide variety of services, including
the assessment, and the extent to which they are
everything from routine services (e.g., information
comprised of only one potential source; and
technology (IT) support) to highly specialized services
o industries not currently supporting DOD programs,
(e.g., launching space vehicles). Domestically owned firms
and the barriers to participation of those industries;
and foreign-owned firms that engage in direct investment,
and
hire U.S. workers, and are governed by U.S. laws are part
technological and industrial capabilities and processes
of the nation’s defense industrial base.
that may be unable to support the achievement of
DOD’s Role
national security objectives.
Chapter 148 of Title 10, United States Code (U.S.C.),
Selected Industrial Base Authorities
addresses policies and planning related to the “national
The following discussion surveys selected industrial base
technology and industrial base” (NTIB), which it defines as
authorities that are fundamental to DOD stewardship of the
“persons and organizations that are engaged in research,
NTIB.
development, production, integration, services, or
information technology activities conducted within the
Industrial Base Fund
United States, the United Kingdom of Great Britain and
10 U.S.C. §2508 directs the Secretary of Defense to
Northern Ireland, Australia, and Canada.”
establish an Industrial Base Fund (IBF). The IBF is subject
The Secretary of Defense is required (10 U.S.C. §2501) to
to annual appropriations and was established to:
develop a national security strategy for the NTIB and
support the monitoring and assessment of the industrial
directs the strategy to be “based on a prioritized assessment
base;
of risks and challenges to the defense supply chain.”
address critical issues in the industrial base relating to
Specific responsibility for “establishing policies for access
urgent operational needs;
to, and maintenance of, the defense industrial base and
support efforts to expand the industrial base; and
materials critical to national security, and policies on
contract administration”
is assigned to the Under Secretary
address supply chain vulnerabilities.
of Defense for Acquisition and Sustainment (USD/A&S) by
Defense Production Act (DPA) of 1950
10 U.S.C. §133b. The Deputy Assistant Secretary of
Defense for Industrial Policy (DASD/IP) serves as the
The DPA of 1950, as last reauthorized in 2018, provides the
principal advisor to the Under Secretary on matters related
President with a number of authorities that he or she may
to the defense industrial base, to include establishing
utilize to influence domestic industry in the interest of
policies for the maintenance of the U.S. defense industrial
national defense. The authorities most relevant to NTIB are:
base and monitoring and assessing the impact of foreign
investments in the United States.
Title I: Priorities and Allocations, which allows the
President to require persons (including businesses and
Annual NTIB Assessments
corporations) to prioritize and accept contracts for
The Secretary of Defense is required by 10 U.S.C. §2505 to
materials and services as necessary to promote the
conduct annual assessments of the NTIB’s capability to
national defense.
attain national security objectives and requires a yearly
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Defense Primer: U.S. Defense Industrial Base
Title III: Expansion of Productive Capacity and
2018 Defense Industrial Base Report
Supply, which allows the President to incentivize the
In July 2017, President Donald J. Trump issued Executive
domestic industrial base to expand the production and
Order 13806, which required a whole-of-government
supply of critical materials and goods. Authorized
assessment of the United States’ manufacturing capacity,
incentives include direct purchases and purchase
defense industrial base, and supply chain resiliency. The
commitments. The President may also procure and
assessment, published in October 2018, identified a number
install equipment in private industrial facilities.
of external and internal challenges driving risk within the
NTIB, including:
Title VII: General Provisions, which defines salient
terms and provides several distinct authorities, including
“…uncertainty of government spending; the decline of
the authority to establish voluntary agreements with
critical markets and suppliers; unintended consequences
private industry and the authority to block proposed or
of U.S. government acquisition behavior; aggressive
pending foreign corporate mergers, acquisitions, or
industrial policies of competitor nations; and the loss of
takeovers that threaten national security, through the
vital skills in the domestic workforce.”
Committee on Foreign Investment in the United States
(CFIUS).
The report found that these challenges have “led to impacts
primarily in [NTIB] sub-tiers,” and further identified a
Manufacturing Technology (MANTEC) Program
“surprising level of foreign dependence on competitor
Established in 1956 by 10 U.S.C. §2521, MANTEC is
nations.” In response, the report made a series of
intended to further the national security objectives of 10
recommendations, including expanding “direct investment
U.S.C. §2501. The purpose of the program is to (1) reduce
in the lower tier of the [NTIB],” through DPA Title III
equipment acquisition and supportability costs and
authorities, MANTEC, and DOD’s Industrial Base Analysis
manufacturing and repair timelines by providing centralized
and Sustainment program.
guidance and direction to the military departments and the
defense agencies, and (2) focus DOD support for the
Relevant Statutes
development and application of advanced manufacturing
Title 10, U.S. Code, Chapters 148 and 149
technologies that are essential to national defense.
Established by 10 U.S.C. §2521, the Joint Defense
Manufacturing Technology Panel is responsible for tasks
such as:
CRS Products
CRS Report R43767, The Defense Production Act of 1950:
conducting comprehensive reviews and assessments of
History, Authorities, and Considerations for Congress, by Jared T.
defense-related manufacturing issues being addressed by
DOD’s
Brown and Moshe Schwartz
manufacturing technology programs and related
activities; and
CRS Report R43354, Domestic Content Restrictions: The Buy
American Act and Complementary Provisions of Federal Law, by
executing strategic planning to identify opportunities for
David H. Carpenter and Erika K. Lunder
increased cooperation in the development and
CRS Report R44850, Buying American: Protecting U.S.
implementation of technological products and the
Manufacturing Through the Berry and Kissell Amendments, by
leveraging of funding for such purposes with the private
Michaela D. Platzer.
sector and other government agencies.
CRS Report RL33388, The Committee on Foreign Investment in
the United States (CFIUS), by James K. Jackson
Domestic Sourcing Mandates
With the aim of protecting American manufacturing and
manufacturing jobs associated with the defense industrial
base, Congress has passed several domestic sourcing laws,
Other Resources
including:
DOD Industrial Base Policy Office,
https://www.businessdefense.gov/.
The Buy American Act of 1933, which generally
requires federal agencies – including DOD – to purchase
Assessing and Strengthening the Manufacturing and Defense
“domestic end products” and use “domestic construction
Industrial Base and Supply Chain Resiliency of the United States,
materials” on contracts exceeding the micro-purchase
http://defense.gov/StrengtheningDefenseIndustrialBase
threshold (typically $3,500) performed in the United
States.
Please note: for questions on the Defense Production Act,
The Berry Amendment (10 U.S.C. §2533a), which
congressional clients may contact Jared Brown. For
requires textiles, clothing, food, and hand or measuring
questions on domestic sourcing mandates, congressional
tools purchased by the DOD to be grown, reprocessed,
clients may contact Michaela Platzer.
reused, or produced wholly in the United States.
The Specialty Metals Clause (10 U.S.C. §2533b), which
Moshe Schwartz, Specialist in Defense Acquisition
requires that any specialty metals, defined as certain
Heidi M. Peters, Analyst in U.S. Defense Acquisition
metal alloys, contained in any aircraft, missile and space
Policy
system, ship, tank and automotive item, weapon system,
ammunition, or any components thereof, purchased by
IF10548
DOD be melted or produced in the United States.
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Defense Primer: U.S. Defense Industrial Base
Disclaimer
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congressional committees and Members of Congress. It operates solely at the behest of and under the direction of Congress.
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