Democracy's Arsenal

Abstract

An expert explains why the security needs of the twenty-first century require a transformation of the defense industry of the twentieth century. New geopolitical realities—including terrorism, pandemics, rogue nuclear states, resource conflicts, insurgencies, mass migration, economic collapse, and cyber attacks—have created a dramatically different national-security environment for America. Twentieth-century defense strategies, technologies, and industrial practices will not meet the security requirements of a post-9/11 world. In Democracy's Arsenal, Jacques Gansler describes the transformations needed in government and industry to achieve a new, more effective system of national defense. Drawing on his decades of experience in industry, government, and academia, Gansler argues that the old model of ever-increasing defense expenditures on largely outmoded weapons systems must be replaced by a strategy that combines a healthy economy, effective international relations, and a strong (but affordable) national security posture. The defense industry must remake itself to become responsive and relevant to the needs of twenty-first-century security.

IV. The Regulation and Control of Defence Businesses

“…One analysis concluded that of 330,000 US acquisition programmes reviewed only 372 were considered problematic, a statistically insignificant value. 63 Another source concurs that fewer than 0.1 per cent of the 15 million annual acquisition purchases in the US involve some kind of fraud or abuse. 64 The data therefore indicate that the challenges for US defence acquisition are not to be found in incidences of fraud or malpractice.…”

Does the Defense Industrial Base Environment Create Strategic Risk?

“…The post-cold war decrease in defense budgets and procurements were the largest decrease since World War II. 19 Between 1985 and 1995 tank procurement went from 720 systems to 0 systems in 1995. 20 Furthermore, during this same period, defense contractors underwent a significant merger process with the number of major defense contractors dropping from over 50 to 6.…”

“…28 An example of how this process has failed to work took place in 2003 when Boeing included a small export controlled computer chip (an item with dual military and commercial application) on a commercial airline sold to China, and subsequently received a fine of $15 million for violating export controls. 29 This situation demonstrates a dilemma for potential DoD suppliers. If a supplier produces a commercial item that is used in a weapons system, then this item falls under more stringent export control laws, which frequently discourage producers from going into the DoD market.…”

“…One of the impacts is to limit commercial sales of a product that could have dual use. 78 For example, a supplier to the DIB could develop a product for commercial use and if this item were used in a defense item, it would fall under export control.…”