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Democracy’s Arsenal: Creating a Twenty-First-Century Defense Industry

Democracy’s Arsenal: Creating a Twenty-First-Century Defense Industry by Jacques S. Gansler. MIT Press, 2011, 434 pp.

Democracy’s Arsenal is a comprehensive review of the state of the defense industry, the historic path that led to its composition, and an outlook toward the future. The author promotes the ideas of defense industry integration and cooperation, competition in acquisition, and stronger incentives such as performance-based logistics (PBL) as ways to cut defense costs. The five main themes through the forward-looking text are future consolidations in the defense industry, shifts in technology, stronger emphasis on services instead of hardware, civil-military integration, and globalization.

Jacques S. Gansler is currently a professor in the School of Public Policy, University of Maryland. Previously, he served as undersecretary of defense for acquisition, technology, and logistics (1997– 2001), managing a budget of $180 billion. He has written three books about the defense industry in as many decades. This is the author’s home turf, and he knows the subject very well.

Early in the text Gansler explains the core basics of contemporary defense spending and the defense industry and connects the dots to the federal budget and the labor market. As a teacher he explains the historic path behind today’s Department of Defense budget, and without spelling it out, makes a case that defense spending cuts are coming. The graph showing the ebb and flow in defense spending (p. 10) builds the case—after every quick surge in spending comes a downsizing back to the original level. The graph lines up the Korean War, the Missile Gap, the conflict in Vietnam, Reagan’s surge in the Cold War, and the Iraq and Afghanistan wars as major spikes in defense spending. The spikes are directly followed by a reduction in spending. It does not take much guesswork to see that Gansler expects significant defense cuts after the Iraq and Afghanistan wars.

The book raises many issues about institutionally built-in inefficiencies, from the Alaskan Native Corporation’s (ANC) right to be awarded contracts without any competition to the disperse number of repair facilities and arsenals around the country lacking coordination with private-sector resources.

Gansler foresees a budget crisis in the DoD when overseas contingency operations (OCO) funds disappear after the current wars because these funds have, according to the author, served as a budgetary cushion. The book was written before the budget crisis, so the outlook relies on financial conditions that no longer exist. What the author considers upcoming reductions are already a reality. Does that undermine his line of thought or arguments? Not at all; the developments have instead strengthened these arguments. The quest for affordable defense is stronger now than it has been for decades.

The book speaks with a clear voice about waste, fraud, and abuse of public funds. Gansler is also frank and open about the effects of “pork spending” and earmarks. He cites many areas in defense spending where money could be saved. Several of his observations are identical with those identified by the Defense Business Board, such as redundancies, unnecessary overhead, and the need to improve DoD business dealings.

A valid point the author makes is the procedural costs in acquisition—or rather the cost of not following procedures. The changing of requirements during the procurement process, unrealistic expectations on outcome, failure to ensure competitive bidding, failure to engage in precontracting for likely events, and earmarks, all drive up costs significantly.

One example of precontracting relates to hurricanes, where it is likely that the shores of the Gulf of Mexico or Florida will be hit within a few years. Instead of having to lease, buy, and rent resources at noncompetitive prices in a crisis situation, prices could be negotiated well in advance and materials later bought when needed.

Gansler discusses the future of the US defense industry and defense procurement and proposes increased funding for research and development, especially in long-range projects. Swedish king, Gustavus Adolphus, who fought in the Thirty Years War in the seventeenth century, said you need three things to fight: money, money, and even more money. Democracy’s Arsenal is a well-thought-out piece on how America can maximize its war-fighting ability under a given budget. The book is a good reference, and the core benefit is the voluminous information which invites revisits.

Jan Kallberg, PhD

Richardson, TX

"The views expressed are those of the author(s) and do not reflect the official policy or position of the US government or the Department of Defense."

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