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The
number of aerospace and defense prime contractors to the Defense
Department - a group known as the defense industrial base - has
shrunk from 51 to just 5 since the 1990s, the report said. It
added that 90% of missiles come from 3 sources.
Having only a small number of sources for defense needs "can
pose mission risk and, particularly in cases where the existing
dominant supplier or suppliers are influenced by an adversary
nation, pose significant national security risks," the report
said.
The document, mandated by a July executive order signed by
President Joe Biden, added that a lack of competition also
limits incentive for firms to innovate, and results in higher
costs to taxpayers.
The paper comes on the heels of U.S. arms maker Lockheed Martin
Corp calling off plans to acquire rocket engine maker Aerojet
Rocketdyne Holdings Inc for $4.4 billion amid opposition from
U.S. antitrust enforcers.
The document recommends the Pentagon work with antitrust
regulators to prevent an excess of mergers, entice newcomers
into the marketplace, and stop a handful of firms from
withholding key intellectual property.
The report also urges the Defense Department to shore up its
supply chain in crucial areas including missiles, batteries,
critical materials and microelectronics.
(Reporting by Alexandra Alper; Additional Reporting by Mike
Stone; Editing by Karishma Singh)
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