When the Pentagon lacks visibility into who can make what, where, and at what scale, its system naturally defaults to what it already knows: large original equipment manufacturers (OEMs) and legacy suppliers who are specialized exclusively for Department of War (DoW) manufacturing.
These big firms play an important role in this process. But the nation’s strong base of small- and medium-sized manufacturers offers something more: strategically important depth, flexibility, innovative practices, and cost-effective approaches. Exclusive reliance on OEMs and legacy suppliers who tout that they know “the system” explains why the Pentagon once purchased an infamous $90 hammer.
More troubling, this tendency also explains how the defense industrial base has become dangerously concentrated. DoW is one foreign investment away and one bankruptcy removed from a catastrophic supply chain failure that puts at risk the U.S. government’s ability to produce what it needs to defend the nation.
In a February interview, House Armed Services Committee Chairman Mike Rogers (R-AL) crystalized the importance of expanding the defense industrial base (DIB). He said the Pentagon should rely more on small- and medium-sized manufacturers to fight and win the next war rather than scaling the nation’s largest prime contractors. This would take advantage of the nearly 250,000 small- and medium-sized manufacturers across the U.S.
If war occurs, we will have to expand the DIB to include more non-traditional manufacturers. Currently, the DIB does not have the capacity to surge to the extent that would be required to support sustained combat operations with a near-peer adversary. The good news is this vulnerability is not inevitable.
A clear path exists to expand the U.S.’s defense industrial base with these small- and medium-sized manufacturers. But doing so requires deliberate action and a shift in how the DoW approaches industrial capacity. As Congress begins drafting the fiscal year 2027 National Defense Authorization Act, three steps should be considered.
First, the DoW must invest in a comprehensive mapping of the U.S. manufacturing base to match its vital needs from parts to platforms. Building and maintaining a continuously updated picture of domestic manufacturing capabilities – including tooling, materials, workforce skills, and surge capacity – must become a core national security imperative. Such a comprehensive view of U.S. manufacturing would allow the DoW to rapidly respond to vulnerabilities with alternative U.S. suppliers. Industrial mapping is foundational to infrastructure investment and modern defense planning.
Second, the DoW must lower barriers to entry for small- and medium-sized manufacturers. Today’s defense acquisition system is often inaccessible to smaller firms because of complex compliance requirements, long contracting timelines, unpredictable demand signals, and unattractive high-mix, low-volume order history. Simplifying contracting pathways, expanding use of flexible acquisition authorities, and providing clearer demand forecasts would allow more manufacturers to participate in the defense marketplace. Acquisition reform must be coupled with efforts to leverage Title III and Title VII of the Defense Production Act incentives, including priority ratings, capital investment and educational orders.
Third, the DoW must treat small- and medium-sized manufacturers as strategic assets, not ancillary suppliers. That means integrating them into long-term industrial planning, investing in workforce development, and supporting capital investment that enables dual-use production. A resilient defense industrial base is one that can operate at-scale in wartime without hollowing out the civilian economy. Small- and medium-sized manufacturers are uniquely positioned to enable exactly that.
If the U.S. fails to take these steps, the consequences will be severe. Risk will be consolidated, domestic capacity will be eroded, and supply chain disruptions will be exploited by U.S. adversaries.
Indeed, during the next military conflict, speed, scale, adaptability, and resilience will matter as much as advanced technology. National strength is synonymous with industrial strength.
To scale the defense industrial base, the federal government should build strategic depth into the U.S. manufacturing base. If it does not, the next war might not be lost on the battlefield but in America’s factories – before the first shot is fired. Our nation’s small- and medium-sized manufacturers are the backbone of the DIB.
Bret Boyd is a West Point graduate, a post-9/11 combat veteran, and Chief Executive Officer of Sustainment Technologies. Chris Hill is a retired U.S. Air Force Brigadier General and President of Sustainment Technologies, Federal and Defense.
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