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Published: 2008

Total Pages: 35

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The Department of Defense (DOD) relies on thousands of suppliers to provide weapons, equipment, and raw materials to meet U.S. national security objectives. Yet, increased globalization in the defense industry and consolidation of the defense supplier base into a few prime contractors has reduced competition and single-source suppliers have become more common for components and subsystems. For this report, GAO (1) assessed DOD's efforts to monitor the health of its defense supplier base, and (2) determined how DOD identifies and addresses gaps that might exist in its supplier base. To conduct its work, GAO reviewed supplier-base related laws, regulations, and guidelines; met with officials from DOD's Office of Industrial Policy, defense contractors, and other DOD officials; and surveyed 20 major DOD weapon acquisition program officials on potential supplier-base gaps. GAO is recommending that DOD fully apply criteria to identify and monitor supplier-base concerns and create reporting requirements for when to elevate concerns about supplier-base gaps. DOD agreed to fully apply and publish criteria for elevating supplier-base concerns, but does not agree that formal reporting requirements are needed for prime contractors. We maintain that DOD needs a mechanism to ensure that information flows to the program office and higher levels within DOD as needed.