Still, Broitman, and Kendall previously, have acknowledged that many or even most of those investments did not make it into production.
Broitman also addressed the Pentagon’s policy regarding industry mergers and acquisitions (M&A), and reiterated that the implicit ban on prime contractors consolidating will continue. But with mid-tier and third-tier companies – many of which provide niche technologies or supplies – showing lower profits, higher debt leverage and “a lot of concern,” the department will look to both using its own funds or allowing M&A to help make sure the goods remain available.
“We’re going to commit to looking at every case on its merits,” Broitman said.
Moreover, while traditional U.S. defense M&A was weighed with an eye toward maintaining enough domestic competition, the Pentagon increasingly will consider global competition in its approval calculations. In other words, more domestic consolidation could occur through the supply chain because the Pentagon feels there is a foreign provider it considers reliable and trusted enough to provide comparison. Also, foreign buyers will not necessarily be turned away. “We’re not against transnational transactions at all,” she said.