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Principles for Congress
The following principles comprise the right framework for maintaining access to the industrial resources necessary for the U.S. armed forces in the 21st century.
PRINCIPLE #1: Excessive central control is inconsistent with national security and should be avoided. Generally, national security is hampered by excessive legislation and regulation, which hurts the ability of the military industrial base to produce goods and services quickly and efficiently.
PRINCIPLE #2: Policies on the domestic military industrial base should focus on critical technologies, industries, and skills that are not readily available in the global market. In Congress, debate relating to the military industrial base is caught between free-market trade and protectionism. However, in this policy area, Members of Congress should be concerned primarily with reducing risk for military forces and enhancing the security and defense of the U.S., not protecting local economies or politics.
PRINCIPLE #3: Incentives and open competition in critical technical areas can provide a disproportionate return on investment, encourage the development and furthering of hard science skills, and broaden defense-related industrial capabilities. The U.S. should identify, develop, and sustain the intellectual capital necessary to support a robust and evolving military industrial base. The military industrial base will lag behind non-defense industrial trends without a cadre of vibrant intellectuals that understands how traditional industrial practices must change to fit 21st century defense requirements.
PRINCIPLE #4: A comprehensive divestiture strategy can generate growth in new technology and manufacturing areas.The United States invests too many resources in old technology. By moving beyond or divesting from these programs, the Pentagon can reinvest those resources in new, more relevant programs. With the right strategy, the technology base will not get bogged down by yesterday’s investments and always be focused on the latest technological trends.
PRINCIPLE #5: The U.S. should impose research and development costs and manufacturing costs on potential adversaries. The U.S. should actively look for opportunities to redefine areas of competition through those defense products that industry manufactures domestically. By playing to its strengths, the U.S. can force potential enemies to incur research and development costs as they attempt to counter new or improved U.S. capabilities.
PRINCIPLE #6: Stop paying more for decreasing returns. Procurement policies should support defense-related manufacturing that can remain profitable and competitive. Members of Congress need to view the global defense market in much the same way they view the market for everyday goods and services. If a manufacturer does not produce a defense product that works better at less cost, it should expect the Department of Defense to look for another supplier, whether inside and outside of the U.S.
PRINCIPLE #7: Assured access to the global industrial base is necessary for long-term national security. Industrial independence should not be a national security objective. Maximizing access to the global industrial base and the wide range of products, services, and materiel available advances national security.
PRINCIPLE #8: Not all trading partners are equal. America’s closest allies should be considered reliable trading partners/allies for nearly all defense materials. However, geostrategic military and economic alliances will change, and the U.S. must be prepared to adapt. In developing the manufacturing, supplier, technology-sharing agreements and alliances, the U.S. should carefully consider how global strategic alliances might change over the next century.
PRINCIPLE #9: Greater supply chain transparency is a prerequisite to understanding industrial base vulnerability. The United States must understand where supplies originate and how they are moved before it can undertake any accurate assessments. Without greater supply chain transparency, risk and vulnerability factors are invisible to planners. Primary and secondary suppliers are largely understood, but third-, fourth-, fifth-, and sixth-tier suppliers are often not as well understood.
PRINCIPLE #10: The military industrial base requires an amalgam of approaches to ensure both access to vital goods and services and reasonable prices. Given the diversity of goods and services used by the U.S. armed forces, neither a pure free-market approach nor a protectionist approach is adequate to sustain the long-term health of the military industrial base. Instead, the U.S. should rely largely on markets to determine who provides which military goods and services, except for an extremely limited number of functions that should be sustained domestically.
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