Arsenal of democracy in the face of change: Issues and policy options in industrial preparedness planning

This paper is one of a set of working papers that serves as a background material to a FEMA-sponsored study of Industrial Mobilization planning. It identifies issues that will lead to policy alternatives in support of industrial preparedness. To do this, a simple framework cross classifying types of economic interaction between the DOD and the private sector, given peacetime, surge, and mobilization requirements. Next, policy recommendations from ten recent studies are examined. These came from a variety of different groups and focused on potential actions by DOD, FEMA, Congress, the Navy, and others. These are summarized and restated to match the cross classification framework. The planning framework is then used to organize a set of recommendations around three themes --- acquisition and public/private sector relationships technology and factor input enhancing activities, and offshore sourcing and international competitiveness. The DOD has already addressed the acquisition issue at great length and has implemented the bulk of its findings. These will undoubtedly increase the effectiveness and efficiency of its operations. It cannot, however, by itself fully rationalize the acquisition process so that incentives to achieve greater efficiency are fully passed on to contractors. DOD can, however, revise its acquisition process so that surgemore » provisions are a deliberate step in the contract of each sensitive procurement, and could require a surge analysis for each action, steps that would highlight preparations for surge. DOD should consider the creation of a new institution similar to, but more generic than SEMATECH to handle its activities that directly enhance the defense industrial base. It should also support the creation of a body whose goal it is to identify non-neutralities in government policy. 23 refs., 1 fig., 15 tabs.« less