Annual Industrial Capabilities Report To Congress

The Department of Defense relies on a robust and capable defense industry to develop, field, and maintain high quality goods and services vital to our national security. Just as we depended on a healthy and stable industrial base to build the "Arsenal of Democracy" during World War II, today we continue to rely on the defense industrial base to ensure that our military personnel are supplied with the world's best equipment, logistics support, and information systems. The current strategic environment facing our nation dictates that more must be done to change the way the Department of Defense does business. Over the past two decades, the Department has consolidated and contracted around platforms that possessed singular capabilities with little to no cross-mission functionality. The Department's future requirements demand timely investment in a broad and flexible portfolio of systems, capable of detecting, deterring, and when necessary, defeating both conventional and unconventional threats across the entire spectrum of conflict. The Department will continue to rely on market forces to create, shape, and sustain the industrial, manufacturing, and technological capabilities necessary to provide our fighting forces with systems that can engage and win full-spectrum warfare. However, when absolutely necessary the Department will intervene to create and/or sustain competition, innovation, and essential industrial capabilities. On April 6, 2009, Secretary Gates offered the most fundamental restructuring of the Department of the past twenty years, taking the unprecedented step in post-Cold War history of terminating or restructuring major acquisition programs that were not meeting performance, cost, or whose schedule rendered them no longer essential in the rapidly changing threat environment.