Defense Primer: U.S. Defense Industrial Base

Defense Primer: U.S. Defense Industrial Base

Defense Primer: U.S. Defense Industrial Base

Updated December 15, 2025 (IF10548)

The Department of Defense (DOD), which is "using a secondary Department of War designation," under Executive Order 14347 dated September 5, 2025, relies on a large and complex defense industrial base (DIB) for the materials, products, and services that enable the department's warfighting capabilities and business operations.

Defining the Defense Industrial Base

The DIB encompasses all organizations and facilities that provide DOD with materials, products, and services. The composition of the DIB is diverse and includes entities such as small and medium-sized businesses, university laboratories and research centers, and large multinational corporations. DIB functions are similarly varied, ranging from the production of complex platforms unique to the military (e.g., aircraft carriers) and the provision of highly specialized services (e.g., intelligence analysis) to the provision of general commercial products and routine services (e.g., issuing laptops and providing information technology support).

Many analysts and experts distinguish between a domestic DIB and a global DIB. The domestic DIB refers to those commercial, nonprofit, and public sector organizations and facilities that provide goods and services to DOD and are located in the United States. The global DIB includes commercial and nonprofit organizations located outside the United States, as well as certain facilities operated by foreign governments with which the United States maintains formal defense cooperation partnerships.

Together with the domestic DIB, "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, New Zealand, and Canada" form the National Technology and Industrial Base (NTIB), as established by Title 10, U.S. Code, Section 4801 (for more on the NTIB, see CRS In Focus IF11311, Defense Primer: The National Technology and Industrial Base). For fiscal year (FY) 2023, DOD reported that the top five domestic recipients of defense contracts were Lockheed Martin ($61.4 billion), RTX Corporation ($24.1 billion), General Dynamics ($22.9 billion), Boeing ($20.1), and Northrop Grumman ($16.3 billion).

Policy Framework

DOD's Role

Subpart I to Part V of Title 10 of the U.S. Code addresses policies and planning related to the domestic industrial base and the NTIB. Per Title 10 U.S.C. §4811, the Secretary of Defense, who is using "Secretary of War" as a "secondary title" under Executive Order 14347 dated September 5, 2025, is to develop a national security strategy for the NTIB "based on a prioritized assessment of risks and challenges to the defense supply chain." Per 10 U.S.C. §133b, the Under Secretary of Defense for Acquisition and Sustainment (USD (A&S)), who is using "Under Secretary of War" as a "secondary title" under Executive Order 14347 dated September 5, 2025, is responsible for "establishing policies for access to, and maintenance of, the defense industrial base and materials critical to national security, and policies on contract administration."

Assistant Secretary of Defense for Industrial Base Policy

The Assistant Secretary of Defense for Industrial Base Policy (ASD (IBP)), who is using "Assistant Secretary of War" as a "secondary title" under Executive Order 14347 dated September 5, 2025, serves as the principal advisor to USD (A&S) on matters related to the DIB, to include conducting assessments and developing policies to maintain industry's ability to meet DOD requirements. Prior to creation of the ASD (IBP) position by the FY2021 National Defense Authorization Act (NDAA; P.L. 116-283 §903(b); 10 U.S.C. §138(b)(6)), many of its functions had been carried out by the now-defunct Deputy Assistant Secretary of Defense for Industrial Policy.

Within the ASD (IBP) organization, the Deputy Assistant Secretary of Defense for Industrial Base Resilience (DASD (IBR)), who is using "Deputy Assistant Secretary of War" as a "secondary title" under Executive Order 14347 dated September 5, 2025, is responsible for policies and investments to strengthen resilience, while the Deputy Assistant Secretary of Defense for Industrial Base Development & International Engagement (DASD (IBD&IE)) is responsible for conducting engagement and managing partnerships with domestic DIB entities as well as foreign governments and industry. ASD (IBP) also oversees the Office of Small Business Programs, which manages policy, funding, and coordination of programs intended to increase small-business participation in the DIB.

Selected Industrial Base Authorities

Beyond specific contracting processes established by law (and contracting regulations more generally), there are authorities that allow Congress and DOD to exercise stewardship over the DIB, including the following:

Industrial Base Fund

10 U.S.C. §4817 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, authorizes the President to influence domestic industry in the interest of national defense. The authorities most relevant to the DIB are:

Title I: Priorities and Allocations, which allows the President to require persons (including businesses and corporations) to prioritize and accept contracts for materials and services as necessary to promote the national defense.

Title III: Expansion of Productive Capacity and Supply, which allows the President to incentivize the domestic industrial base to expand the production and supply of critical materials and goods. Authorized incentives include direct purchases and purchase commitments. The President may also procure and install equipment in private industrial facilities.

Title VII: General Provisions, which defines salient terms and provides several distinct authorities, including the authority to establish voluntary agreements with private industry and the authority to block proposed or pending foreign corporate mergers, acquisitions, or takeovers that the President deems to threaten national security, through the Committee on Foreign Investment in the United States (CFIUS).

Manufacturing Technology (ManTech) Program

Established in 1956, the ManTech program (10 U.S.C. §4841) provides funding to:

1. develop and apply advanced manufacturing technologies that are essential to national defense.

2. reduce acquisition and supportability costs and reduce manufacturing timelines by providing centralized guidance and direction to the military departments and the defense agencies.

Per DOD Directive 4200.15, ManTech investments are intended for cases in which industry "cannot or will not commit private funds to establish manufacturing technology and make it available on a timely basis." ManTech programs are managed by the service secretaries, the Defense Logistics Agency, and the Office of the Secretary of Defense, which is using "Office of the Secretary of War" as a "secondary" designation under Executive Order 14347 dated September 5, 2025.

Selected Domestic Sourcing Mandates

Congress has passed several domestic sourcing laws, including the following:

The Buy American Act of 1933 (41 U.S.C. §§8302-8303), which, subject to certain exceptions, generally requires federal agencies—including DOD—to purchase "domestic end products" and use "domestic construction materials" for contracts exceeding the micro-purchase threshold.

The Berry Amendment (10 U.S.C. §4862), which generally prohibits DOD from purchasing covered items, including textiles, clothing, food, and hand or measuring tools, unless they are grown, reprocessed, reused, or produced wholly in the United States.

The Specialty Metals Clause (10 U.S.C. §4863), which generally bars DOD from purchasing a specialty metal or any aircraft, missile and space system, ship, tank and automotive item, weapon system, ammunition, or any components thereof containing a specialty metal, unless the specialty metal is melted or produced in the United States. Section 4863 defines specialty metal to include titanium, nickel, zirconium, and steel alloys.

Issues for Congress

Industry consolidation. According to a 2022 DOD report, the number of U.S. aerospace and defense prime contractors shrank from 51 to 5 since the early 1990s. Some analysts and policymakers suggest that this consolidation has harmed the health of the DIB by reducing overall production capacity, limiting competition, and undermining supply chain resilience. Others view the current composition of the DIB as a necessary consequence of both recent defense spending patterns and the complexity of modern weapon systems. Congress may consider assessing the impact of declining prime contractors on the security of the DIB, reviewing in particular proposals to diversify the domestic DIB, increase oversight of mergers, change intellectual property provisions in defense contracting, and strengthen incentives for small businesses and new DIB entrants.

Production constraints and surge capacity. Following the 2022 Russian invasion of Ukraine, some Members of Congress and others have expressed concern about the ability of the DIB to meet sudden upticks in demand. Much of this attention has focused on munitions production due in large part to high rates of expenditure. Congress may consider how munition demands for Ukraine might affect DIB capacity and the extent to which sustained munitions supply to Ukraine might necessitate a review of DIB authorities, including those related to procurement, investments in industrial facilities, and sources for constrained products.

Supply chain security and resilience. Some analysts and policymakers argue that U.S. defense supply chains are not resilient or secure enough to meet military requirements. A 2021 White House report found "long-standing vulnerabilities in [U.S.] supply chains," driven by such factors as insufficient manufacturing capacity, misaligned incentives, other nations' industrial policies, concentration of global sourcing, and limited international coordination. Related issues facing Congress include proposals to strengthen defense-critical supply chains, including increasing investments for domestic suppliers and modifying sourcing requirements.

Former CRS Analysts Heidi M. Peters and Luke A. Nicastro contributed to the original version of this product.