No. 19. How Not to Alienate Business Partners: A Framework for Addressing Factors Impacting Retention of Defense Contractors


Current government acquisition rules are depriving DoD from consistently getting the benefits of the best industry talent, the best commercial capabilities, and quicker transition and deployment of needed capabilities. If the regulatory burden and negative incentives are not addressed head on, no amount of outreach or training will bring businesses back into the defense marketplace—or keep them from leaving.

In 2022, DoD issued the report State of Competition within the Defense Industrial Base. We believe DoD got it backwards in that report. The question is  not, what is the state of competition within the defense industrial base to win DoD’s business? It is, what is DoD (and Congress) doing to compete with commercial market buyers to induce industry to work with DoD? 

Until the federal government looks inward and matches policies to the realization that it cannot dictate to industry the terms of contracts, DoD will often get what it pays for: goods and services that are more focused on meeting compliance requirements and driving to lowest cost than they are on innovation, capability, and speed. Those results will not position the United States military to deter, defend against, or dominate adversaries. 

In this decisive decade, acquisition regulations and policy must be streamlined to deliver outcomes and informed by data gathered through continued analysis of the shrinking defense industrial base from multiple perspectives—and most importantly, through difficult conversations with industry partners.

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