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.
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).
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."
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.
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:
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
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:
Established in 1956, the ManTech program (10 U.S.C. §4841) provides funding to:
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.
Congress has passed several domestic sourcing laws, including the following:
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.