Washington Post – Is the Pentagon still a competitive enterprise? At last count, only a slender majority of Pentagon spending, about 52 percent, was awarded after competitive bidding. The number of prime arms contractors shrank from 51 in 1950 to five today.This consolidation of defense industrial base has several roots: After the Cold War, both Congress and the Pentagon encouraged weapons-makers to merge in part to preserve expertise in vital technologies but also help ensure that surviving firms remained solvent. More recently, though, weapons-makers became the targets of M&A firms: Private equity outfits with access to cheap capital shopped aggressively for smaller contractors and stray units of the big arms-makers and created holding companies as a way to build value for investors.
Pub K
An Uncompetitive Defense Industrial Base Puts the Nation at Risk
