Impact of Budget Constraints

Leveraging data and acquisition expertise, DIIG analyzes the effects of the defense drawdown on the defense industrial base.

The presence of a technologically superior defense industrial base has been a foundation of the U.S. strategy since the end of World War II. However, since the implementation of the 2011 Budget Control Act’s mandatory reductions to the federal budget, Congressional, DoD, government oversight, and industry officials have all expressed concerns over the health and future of the defense industrial base. Yet this discussion has largely been anecdotal and lacking in empirical support. Through analysis of trends in prime and subprime DoD contract data and ongoing discussions with acquisition experts, DIIG’s research effort seeks to measure the impact of the current defense drawdown across the industrial base. This research benefits both academics and industry, as both groups seek to better understand the ripple effects of an external market shock, such as the current defense budget drawdown, on an industrial base.