Summary: Despite the spate of recent defense mergers and acquisitions, consolidation in the defense industry--which is now more concentrated than at any time during the past 50 years--has not adversely affected military programs. Many defense industry mergers and acquisitions are recent, so little evidence exists to suggest that the increased consolidation has adversely affected current Defense Department (DOD) programs. As the single customer for many products, DOD must be able to identify and address potential harmful effects of mergers and acquisitions. Antitrust reviews have identified some problems, and remedies have been implemented. However, the consolidation could pose future problems unless DOD strengthens its ability to identify problem areas and devise alternative ways to maintain competition in defense acquisition programs. DOD can take several steps to maintain competition. For example, it can design acquisition strategies to compete missions rather than products and provide funding to develop alternative suppliers or technologies. However, DOD cannot know what action to take unless it has adequate visibility into the industrial base--particularly at the lower tiers. Progress has been slow in gaining that visibility.
