Defense Conversion, Transforming the Arsenal of Democracy

Jacques Gansler takes a hard look at the need to convert the industry from an inefficient and noncompetitive part of the U.S. economy to an integrated, civilian/military operation.

Author of two widely-read books on the defense industry, Jacques Gansler takes a hard look at the need to convert the industry from an inefficient and noncompetitive part of the U.S. economy to an integrated, civilian/military operation. He defines the challenges, especially the influence of old-line defense interests, and presents examples of restructuring. Gansler discusses growing foreign involvement, lessons of prior industrial conversions, the best structure for the next century, current barriers to integration, a three-part transformation strategy, the role of technological leadership, and the critical workforce. He concludes by outlining sixteen specific actions for achieving civil/military integration.

In Gansler's view, the end of the Cold War with the former Soviet Union represents a permanent downturn rather than a cyclical decline in the defense budget. He argues that this critical transition period requires a restructuring of the defense acquisitions process to achieve a balance between economic concerns and national security, while maintaining a force size and equipment modernization capable of deterring future conflicts.

Gansler argues that for the defense industry to survive and thrive, the government must make its acquisitions process more flexible, specifically by lowering barriers to integration. This includes, among other things, rethinking the production specifications for new equipment and changing bids for contracts from a cost basis to a price basis.

Gansler point out that by making primarily political and procedural changes (rather than legislative ones), companies will be able to produce technology for both civilian and military markets, instead of exclusively for one or the other as has been the norm. This dual-use approach would save the government billions of dollars annually and would enable the military to diversify by utilizing state-of-the-art.

Jacques S. Gansler is the author of the influential books The Defense Industry, Affording Defense, and Defense Conversion: Transforming the Arsenal of Democracy, all published by the MIT Press. He is currently Professor and Roger C. Lipitz Chair in Public Policy and Private Enterprise in the School of Public Policy and Director of the Sloan Center Biotechnology Industry Center at the University of Maryland. He was Under Secretary of Defense for Acquisition, Technology, and Logistics from 1997 to 2001.