Abstract : A handful of prime contractors dominate the United States military aircraft industry today. Whereas during the first several decades after World War II, more than a dozen firms competed to develop and produce U.S. military aircraft, now only three domestic contractors develop, produce, and sustain complex fixed-wing military manned aircraft. One major firm supplies unmanned aircraft, three major firms supply avionics, and three contractors produce large turbofan engines. For at least two decades, policymakers have expressed concerns that further consolidation could erode the competitive environment for military aircraft and degrade the industry s abilities to develop, manufacture, and support innovative designs. In 2001, at the request of the U.S. Senate, the Department of Defense (DoD) asked RAND s National Defense Research Institute to study the implications of having little or no competition in the fixed-wing military aircraft industry. RAND performed that evaluation and published its results in 2003. Policymakers concerns have persisted in the years since publication of that study, and in 2009 the Committee on Armed Services of the House of Representatives requested that RAND s 2003 analysis be updated. This project responds to that request. Carried out for the Under Secretary of Defense for Acquisition, Technology, and Logistics, the project reviewed RAND s earlier evaluation of the risks and costs of the United States having little or no competition among companies involved with designing, developing, and producing fixed-wing military aircraft and related systems; examined changes in industrial-basestructure and capabilities that have taken hold since that analysis was performed; and determined how these and future changes will affect the industrial base.
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