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Defense Primer: U.S. Defense Industrial Base


The Department  of Defense (DOD) relies on a large and
complex  defense industrial base for the materials, products,
and services that enable the Department's warfighting
capabilities and business operations.

Defining the Defense Industrial Base
The defense industrial base (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 (e.g., laptop computers) and routine
services (e.g., information technology support).

Many  analysts and experts distinguish between a domestic
DIB  and a global DIB. The domestic DIB refers to those
commercial, non-profit, and public sector organizations and
facilities that provide goods and services to DOD and are
located in the United States. According to the National
Defense Industrial Association, in 2021 the domestic DIB
included nearly 60,000 companies employing
approximately 1.1 million individuals. For fiscal year (FY)
2021, DOD  reported that the top five domestic recipients of
defense contracts were Lockheed Martin ($39.2 billion),
Boeing ($23.6 billion), Raytheon Technologies ($21.4
billion), General Dynamics ($16.9 billion), and Northrop
Grumman   ($15 billion).

The global DIB includes commercial and non-profit
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, the domestic DIB and
any 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, United States Code, §4801 (for
more on the NTIB, see CRS In Focus IF11311, Defense
Primer: The National Technology and Industrial Base).

Poliy Framework

DOD's   Role
Subpart I to Part V of Title 10 of the United States Code
(U.S.C.) addresses policies and planning related to the
domestic industrial base and the NTIB. Per Title 10 U.S.C.
§4811, the Secretary of Defense must develop a national


Updated April 17, 2023


security strategy for the NTIB that reflects 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)) 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)) 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 the creation of
the ASD  (IBP) position by the FY2021 National Defense
Authorization Act (NDAA;  P.L. 116-283 §903; 10 U.S.C.
§ 138), many of its functions had been carried out by the
now-defunct Deputy  Assistant Secretary of Defense for
Industrial Policy position.

Within the ASD  (IBP) organization, the Deputy Assistant
Secretary of Defense for Industrial Base Resilience (DASD
(IBR)) 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 a
number  of authorities that allow Congress and DOD to
exercise stewardship over the DIB, including:

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.

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