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Jeran Binning
   Total:   1 hour 15 min   Lesson 1: Industry Landscape   Learning Outcomes:       Students will be able to explain...
• 1.0 Students will be able to explain how the scope  and diversity of the current industry landscape  influences companie...
• Compare differences in• business/market strategies,• priorities, and• processes between large, medium, small companies.
• Compare differences in business operations and  strategies between companies focused on• weapons systems,• commercial pr...
• Describe defense companies’ core offerings.
• Differentiate between public and private companies.   Public: Lockheed Martin   Private: General Atomics
   The company is a designer and manufacturer of    unmanned aircraft systems (UAS) with names like    Predator, Avenger,...
• Describe the core businesses and focus of the  current largest defense companies.• http://washingtontechnology.com/topli...
   1    Lockheed Martin Corp.                      $10,888,633,000   2    Northrop Grumman Corp.                     $8,...
• Explain potential company strategic options in  reaction to mission and budget changes, such as  consolidation, restruct...
• Describe macro issues that drive DoD industry today.
• Explain how industry can be vulnerable to economic    trends, such as technology breakthroughs,    workforce skill avail...
• Explain how global competition impacts US industry  market opportunities.
• Describe recent revenue and profit trends in the US  defense industry.
• Describe how DoD funding profiles impact  competitive outlook for defense industry.
• Describe tools and regulations that enable the  Government to preserve a competitive base.• Full and Open Competition• S...
   3 minutes   Film Clip   Clip from to highlight an example of how an    arsenal product was developed and used in ear...
   70 minutes   Lecture   Brief overview of the history of defense industry growth, arsenal to military-industrial comp...
   The activities of the Cannon Committee    showed that Congress realized the need for a    reliable source of armaments...
   The army’s Detroit Arsenal produced more    than 22,000 of the 88,000 tanks made in WWII.   At the beginning of the w...
   After the Revolution the infant Republic    continued to rely on imported weapons for    many of its military requirem...
Although these facilities were largely able to satisfy governmentrequirements during periods of relative calm, they could ...
   North and South forced to procure arms from    abroad   North declares a naval blockade to prevent    smuggling of ar...
• The Civil War, like the wars that preceded it, proved to be  an enormous boon to the private arms industry. Once the  wa...
Although the U.S. government did not always take advantage of thisburgeoning capability, other governments were less inhib...
   The capacity of American military firms to produce large quantities of weaponry    in a relatively short amount of tim...
   Harpers Ferry National    Armory was both an    armory and an arsenal.   An arsenal is a place for    the storage and...
   As the largest government-    owned weapons manufacturing    arsenal in the western world, the    Rock Island Arsenal ...
   By the time of U.S. entry into World War    I, 843,239 of these rifles had been produced    at Springfield Armory and ...
   Development
   Springfield Armory   Winchester   Harrington & Richardson   International Harvester   Beretta   Breda[1]   F.M.A...
   Expanded the operations of the Naval Aircraft    Factory
• The Arsenal of Democracy" was a propaganda slogan coined by  U.S. President Franklin D. Roosevelt, in a radio broadcast ...
   From 1918 to 1924 the navy built submarines    in conjunction with civilian contractors.   Electric Boat Company, Gro...
   BUILT BY:   Electric Boat Co., CT;   Portsmouth NSY, NH;   Mare Island NSY, CA;   Boston NSY, MA;   Manitowoc Shi...
From tank-automotive and armamentsweapons systems research anddevelopment, through procurement andfielding, to sustainment...
   Built in the 1920’s and 1930’s at    Rock Island Arsenal, or under it’s    direction.   Manufacturers included: Whit...
   In July 1869, the    Secretary of the    Navy announced    the establishment    of the Naval    Torpedo Station    on ...
The mission of the Naval Undersea Warfare Center Division,Keyport is to Provide advanced technical capabilities for testan...
   It took twenty-one months to isolate and correct all    of the Mark-14’s defects—less time than it took the    OSRD to...
   From the War of 1812 until World War    II, government arsenals produced almost all    the ordinance for the U.S Army ...
   Between July 1, 1940 and June 30th 1945, the    navy added 10 battleships, 18 large aircraft    carriers, 9 small airc...
   Performance of    industrial activities in    military depots and    shipyards can be    detrimental to the    nation’...
   The Army Materiel Command oversees a    network of 20 depots, arsenals and    ammunition plants involved in diverse   ...
   The biggest organic industrial facilities operated by    the Army are its five overhaul and repair depots, which    ea...
   Puget Sound Naval Shipyard – Bremerton, Washington   Norfolk Naval Shipyard – Portsmouth, Virginia   Portsmouth Nava...
   Detroit Arsenal, MI   Picatinny Arsenal, NJ   Pine Bluff, AR   Redstone Arsenal, AL   Rock Island Arsenal, IL   R...
   Adelphi, MD   Natick, MA   Selfridge Garrison, MI
   ALAAP, AL   Badger, WI   Cornhusker, NE   Crane, IN   Holston, TN   Indiana, IN   Iowa, IA   Joliet, IL   Kans...
   Detroit Tank Plant, MI   Lima Tank Plant, OH   Stratford Engine Plant, CT
   Highland Industrial Park   Highland Industrial Park, a storage and testing facility for Defense    Department contrac...
   In 1802, the first great American powder    factory, DuPont de Nemours, Pere et Fils; et    Cie (later renamed E. I. D...
Air Force Laboratories Before and After Merger[9]                           Pre-Merger                                    ...
   The Office of Naval Research    (ONR), headquartered in Arlington, Virginia    (Ballston), is the office within the Un...
   The U.S. Armys corporate research laboratory. ARL is    headquartered at the Adelphi Laboratory Center (ALC) in    Ade...
   On May 14, 1861, Meigs was appointed    colonel, 11th U.S. Infantry, and on the    following day, promoted to brigadie...
   His corruption was so notorious that    Congressman Thaddeus Stevens, when    discussing Camerons honesty with Lincoln...
   Three main externalities encouraged the development of a    permanent defense industrial base centered on for-profit d...
   The U.S. Army retains organic facilities to provide a    significant part of its ordnance materiel and    ammunition. ...
   Over several decades    and across multiple    administrations, the    Pentagon’s acquisition    system has developed ...
   First, the requirements for new systems are too often set at the far    limit of current technological boundaries. Suc...
   Second, the Pentagon’s acquisition workforce has been allowed to    atrophy, exacerbating a decline in the critical sk...
   Third, our system of defining requirements and developing capability too    often encourages reliance on overly optimi...
   Fourth, effective and efficient delivery of logistical support to our    men and women in the field is an enduring pri...
Source: Federal Procurement Data System; analysis by CSIS Defense-Industrial Initiatives Group.
   The first trend is government promotion of small, disadvantaged, and    disabled-veterans businesses. Since 1997, the ...
   Organizational conflicts of interest (OCI)   Since 2001, the transaction volume of M&A deals in the services sector  ...
   One area that is still expected to experience    growth, however, is the expansion of DoD’s    in-house contracting an...
   An issue that has more recently captured the    limelight is service contracts for operations in    Iraq and Afghanist...
   The shipbuilding industrial base sector, consisting of six major U.S.    shipyards building nearly all of the Navy’s s...
   In the space industrial base sector, fifteen of the top U.S. space    companies remain financially healthy.   The com...
   Since many Americans of the    revolutionary generation had    strong distrust of permanent    or standing armies, the...
   The American Civil War was one of    the earliest true industrial wars.    Railroads, the telegraph,    steamships, an...
   From 1865 to about 1913, the    U.S. grew to become the    worlds leading industrial    nation.   Land and labor, the...
German efforts to use its submarines ("U-boats") toblockade Britain resulted in the deaths of Americantravelers and sailor...
   Pershing wanted an American force that could    operate independently of the other Allies, but his    vision could not...
On the battlefields of France in spring 1918,the fresh American troops wereenthusiastically welcomed by the war-wearyAllie...
   The first and most important mobilization decision was the size of    the army. When the United States entered the war...
   Once the size of the Army had been determined, the demands on    the economy became obvious, although the means to sat...
   Food Administration:   created by the Lever Food and Fuel Act in August 1917. Herbert Hoover, who had already won int...
   The international economic position of the United States was    permanently altered by the war. The United States had ...
   To meet its overwhelming expansion schedule for the    Aviation Section, the United States was forced to take    drast...
Americas greatest technological contribution to thewar effort was the development and mass productionof the 12-cylinder Li...
   On 2 April 1917 President Woodrow    Wilson cited Germany’s refusal to    suspend unrestricted submarine    warfare in...
   The United States entered World War I in April 1917.    Within days, the federal government created the    Emergency F...
   The EFC was a subject of controversy. The    armistice took effect before the yards, Hog Island    being by far the la...
Country          Public Debt %GDPJapan            220%Italy            119%United States    91.6France           84.3%Cana...
   This system of outsourcing has greatly benefited our military operations in many respects, providing an    abundance o...
NY Times Sunday 24 July 2010By Elisabeth BumillerWashington –Like everything else, war is a lot more expensive than it use...
   A quick calculation shows that the United    States has been at war for 47 of its 230 years,    or 20 percent of its h...
   Truman was somewhat taken aback at the costs associated with    the reports recommendations. As a politician, he hesit...
   According to the report, the United States should    vigorously pursue a policy of "containing" Soviet    expansion. N...
   Significant foreign policy challenges persisted into    Truman’s second term. The President committed the    United St...
 The invitation received by about 15 defense industry chief  executives in 1993 to drop by the Pentagon for dinner was si...
TIMELINES PHOTOS 3 STEPS                                  Hog Island Naval Shipyard Philadelphia      Ship Mass Production...
TIMELINES PHOTOS 3 STEPS    WW II Production Bombers                49,123                                  Levingston Shi...
   DOD relies extensively upon contractors to support    overseas contingency operations.   As of March 2011, DOD had mo...
   The modern process of preparing armies for war originated in the middle of the    nineteenth century. The recruitment ...
   The very size of the forces assembled during the Civil War, with millions    of men under arms at one time or another,...
   In 1923 the General Staff produced its first peacetime plan for the assembly of an    army. The plan called for six fi...
   The plans first thorough revision in 1925 failed to correct this shortcoming. In    fact, the 1928 plan represented a ...
   By 1930, procurement planning had gone far enough that War Department attention could turn to a system for    presiden...
   Each version centered on national agencies that would control production. Early editions included four    superagencie...
   By late 1942 it was clear that Nelson and the WPB were unable to fully control the    growing war economy and especial...
   The total cost of the war to the federal government between 1941 and 1945 was    about $321,000,000,000 (10 times as m...
   Four main-assembly factories:   Two Boeing operated plants at:     Renton, Washington, and     Wichita, Kansas,   ...
   Aerospace provides one crucial example. American heavy bombers, like    the B-29 Superfortress, were highly sophistica...
   Bombers                                     49,123   Fighters                                    63,933   Cargo     ...
   Shipbuilding offers a third example of    innovations importance to the war economy.    Allied strategy in World War I...
   Though important and gigantic, the Manhattan    Project was an anomaly in the broader war economy.   Technological an...
   Reconversion from military to civilian production had    been an issue as early as 1944, when WPB Chairman    Nelson b...
   The most obvious effect of reconversion was    the shift away from military production and    back to civilian product...
   The high level of defense spending, in turn,    contributed to the creation of the "military-    industrial complex," ...
Before the war the center of theTIMELINE                                                   world capital market was       ...
Timeline            1942                   1943                         1944                          1945Pearl Harbor / M...
Bay of Pigs                                                                                      SR-71             Timelin...
The Cold War                                                                                                   Soviet Inva...
Just Cause Panama                                                                                               U.S.      ...
The U.S.                            Petraeus rejects                                                        returns       ...
   Marvin A. Kreidberg and Merton G. Henry, History of Military    Mobilization in the United States Army, 1775-1945 (195...
   Five combatant commanders have    geographic area responsibilities.   These CINCs are assigned an area of    operatio...
The new design replaced much riveting, which accounted for one-third of the labor costs, with welding.During World War II,...
U.S. Navy Active Ship Force Levels, 1938-1944DATE                        6/30/38             6/30/39       6/30/40       1...
This ideology goes back to the first years of the Cold War. During the late 1940s, theU.S. was haunted by economic anxieti...
   In its conclusions, NSC-68 asserted:   "One of the most significant lessons of our    World War II experience was tha...
   On May 1, 2007, the Center for Economic and Policy Research of    Washington, D.C., released a study prepared by the g...
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History of Governmet Contracting 4 31 jan 12 2
History of Governmet Contracting 4 31 jan 12 2
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History of Governmet Contracting 4 31 jan 12 2

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A survey of government contracting and the evolution of the military industrial complex. Research for a module in a new course being developed by the Defense Acquisition University called Business Acumen.

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History of Governmet Contracting 4 31 jan 12 2

  1. 1. Jeran Binning
  2. 2.  Total: 1 hour 15 min Lesson 1: Industry Landscape Learning Outcomes:  Students will be able to explain how the scope and diversity of the current industry landscape influences companies’ methods of competing for defense contracts.  Compare differences in business/market strategies, priorities, and processes between large, medium, small companies.  Compare differences in business operations and strategies between companies focused on weapons systems, commercial products, and/or services.  Describe defense companies’ core offerings.  Differentiate between public and private companies.  Describe the core businesses and focus of the current largest defense companies.  Explain potential company strategic options in reaction to mission and budget changes, such as consolidation, restructures, diversification, mergers, acquisitions, divestitures, leave the market, etc.  Describe macro issues that drive DoD industry today.  Explain how industry can be vulnerable to economic trends, such as technology breakthroughs, workforce skill availability, energy issues, raw material supplies, etc.  Explain how global competition impacts US industry market opportunities.  Describe recent revenue and profit trends in the US defense industry.  Describe how DoD funding profiles impact competitive outlook for defense industry.  Describe tools and regulations that enable the Government to preserve a competitive base.
  3. 3. • 1.0 Students will be able to explain how the scope and diversity of the current industry landscape influences companies’ methods of competing for defense contracts.
  4. 4. • Compare differences in• business/market strategies,• priorities, and• processes between large, medium, small companies.
  5. 5. • Compare differences in business operations and strategies between companies focused on• weapons systems,• commercial products,• and/or services.
  6. 6. • Describe defense companies’ core offerings.
  7. 7. • Differentiate between public and private companies. Public: Lockheed Martin Private: General Atomics
  8. 8.  The company is a designer and manufacturer of unmanned aircraft systems (UAS) with names like Predator, Avenger, and Gray Eagle, as well as airborne intelligence, reconnaissance, and surveillance (ISR) sensor systems, including the Lynx multi-function radar and the Highlighter sensor for detecting improvised explosive devices. The company also manufactures solid-state digital ground control stations and provides UAS training and field operations support services. Additionally, it is developing lasers for rangefinding and marking targets. GA-ASI is an affiliate of privately-held General Atomics.
  9. 9. • Describe the core businesses and focus of the current largest defense companies.• http://washingtontechnology.com/toplists/top-100- lists/2010.aspx
  10. 10.  1 Lockheed Martin Corp. $10,888,633,000 2 Northrop Grumman Corp. $8,212,891,000 3 Boeing Co. $5,051,984,000 4 General Dynamics Corp. $4,576,415,00 5 Raytheon Co. $4,095,309 6 KBR Inc $3,546,554,000 7 L-3 Communications Corp. $3,332,433,000 8 Science Applications International Corp. $3,280,980,000 9 DynCorp International Inc. $2,398,874,000 10 Hewlett-Packard Co. $2,344,325,000 11 Booz Allen Hamilton $2,344,325,000 12 CACI International Inc. $2,059,613,000 13 Harris Corp. $1,993,623,000 14 Computer Sciences Corp. $1,828,670,000 15 ITT Corp. $1,808,674,000 16 Fluor Corp. $1,742,216,000 17 BAE Systems Inc. $1,381,184,000 18 Dell Inc. $1,263,236,000 18 ManTech International Corp. $1,167,928,000 20 United Technologies Corp. $1,121,492,000
  11. 11. • Explain potential company strategic options in reaction to mission and budget changes, such as consolidation, restructures, diversification, mergers, acquisitions, divestitures, leave the market, etc.
  12. 12. • Describe macro issues that drive DoD industry today.
  13. 13. • Explain how industry can be vulnerable to economic trends, such as technology breakthroughs, workforce skill availability, energy issues, raw material supplies, etc. Energy see RAND on biofuels Rand on Titanium Lockheed Workforce Slide
  14. 14. • Explain how global competition impacts US industry market opportunities.
  15. 15. • Describe recent revenue and profit trends in the US defense industry.
  16. 16. • Describe how DoD funding profiles impact competitive outlook for defense industry.
  17. 17. • Describe tools and regulations that enable the Government to preserve a competitive base.• Full and Open Competition• Source Selection Criteria• Incentives• Small Business Set Asides.
  18. 18.  3 minutes Film Clip Clip from to highlight an example of how an arsenal product was developed and used in early WWII – military-industrial complex transition. Need to acquire film clip from DAU video services Content is new. Reference: * Operation Pacific (John Wayne)
  19. 19.  70 minutes Lecture Brief overview of the history of defense industry growth, arsenal to military-industrial complex Brief review of course read-ahead (consider the industrial base changes and trends to evaluate the industry playing field).  Frame this review with discussion prompts Transitioning from a Pre-WWII government run arsenal system to nationalization of industrial capacity to mobilize for WWII, to military-industrial complex growth, the 1990s consolidation of industry capacity in the 90s to where we are today facing another drawdown. During this discussion a simple picture card recognition game will be used to assess students’ pre-reading assignments. This will be followed by a discussion (10 minutes) of macro issues currently driving industry with impacts to overall revenue and profits over time and summary of expected CBO and DoD budget profiles to illustrate ongoing downsizing. Company differences will be compared with a focus on the largest companies, their core offerings, and vulnerabilities to economic trends. A comparison of company product focus and strategic options in light of government budget changes will be explored. Finally a look at what government tools exist and under consideration to preserve the health of our defense industry. Need to identify pre-course reading (excerpt that talks about evolution of industrial base) Need 15-20 slides framing this lecture
  20. 20.  The activities of the Cannon Committee showed that Congress realized the need for a reliable source of armaments. In 1778 Congress authorized its first facility in Springfield, Massachusetts to provide and store gun powder for the Continental Army
  21. 21.  The army’s Detroit Arsenal produced more than 22,000 of the 88,000 tanks made in WWII. At the beginning of the war, the Springfield Armory produced 1000 M-1 rifles per day, but by the end of the war, it was producing 3,000 per day.
  22. 22.  After the Revolution the infant Republic continued to rely on imported weapons for many of its military requirements. To reduce this reliance, Congress voted in 1794 to establish government-owned facilities for the manufacture of firearms. These installations, most notably the army arsenals in Springfield, Massachusetts, and Harpers Ferry, Virginia (now West Virginia), gradually acquired expertise in the mass production of rifles and carbines.
  23. 23. Although these facilities were largely able to satisfy governmentrequirements during periods of relative calm, they could not producesufficient weapons in times of war—as during the War of 1812 and theMexican War of 1846–1848.To supplement production at Springfield and Harpers Ferry, the WarDepartment contracted with private gunmakers such as Robbins andLawrence of Windsor, Vermont, and Remington Arms, of Ilion, NewYork—thus giving a significant boost to the development of acommercial arms industry in the United States.Many of these firms failed or were absorbed by others whengovernment contracts disappeared, but others survived by embracingnew technologies and finding foreign customers for their innovativeproducts.
  24. 24.  North and South forced to procure arms from abroad North declares a naval blockade to prevent smuggling of arms to the south
  25. 25. • The Civil War, like the wars that preceded it, proved to be an enormous boon to the private arms industry. Once the war ended, however, the U.S. government sharply reduced its procurement of commercially manufactured weapons.• To survive in this new environment, private arms companies such as Remington, Winchester, and Colt looked to the civilian market and to foreign customers for the orders needed to survive.• This in turn spurred the introduction of new gun designs and manufacturing processes. As a result, American gun firms became adept at the mass production of cheap, reliable, and highly effective firearms.
  26. 26. Although the U.S. government did not always take advantage of thisburgeoning capability, other governments were less inhibited.Samuel Remington, the president of Remington Arms Company,opened a sales office in Paris and secured lucrative contracts for thesale of rifles and ammunition to several European countries.Other U.S. firms, including Winchester, also obtained significantcontracts from European governments.During the Franco-Prussian War of 1870–1871, for example, the Frencharmy ordered 100,000 rifles and 18 million rounds of ammunition fromthe Union Metallic Cartridge Company of Bridgeport, Connecticut(later a division of Remington Arms).
  27. 27.  The capacity of American military firms to produce large quantities of weaponry in a relatively short amount of time was next tested in 1914, when World War I broke out in Europe. Although the U.S. government initially adopted a policy of neutrality in the conflict, President Woodrow Wilson allowed American firms to sell arms and ammunition to the Allied powers. Desperate to supplement their own manufacturing capabilities, Britain, France, and Russia then contracted with American companies to produce large numbers of guns and cartridges. The British, for example, ordered one million Enfield rifles from Remington. As one such order followed another, American military exports jumped from $40 million in 1914 to $1.3 billion in 1916 and $2.3 billion in the final nineteen months of war. This marked the first time that U.S. arms manufacturers played a truly significant role in the international weapons trade.
  28. 28.  Harpers Ferry National Armory was both an armory and an arsenal. An arsenal is a place for the storage and the production of arms and military equipment while an armory is just a place of storage for such equipment. Photo: http://www.wvculture.org/history/thisdayinwvhistory/0630.html
  29. 29.  As the largest government- owned weapons manufacturing arsenal in the western world, the Rock Island Arsenal [RIA] provides manufacturing, logistics, and base support services for the Armed Forces. The Arsenal is an active U.S. Army factory, which manufactures ordnance and equipment for the Armed Forces. Some of the Arsenals most successful manufactured products include the M198 and M119 Towed Howitzers, and the M1A1 Gun Mount.
  30. 30.  By the time of U.S. entry into World War I, 843,239 of these rifles had been produced at Springfield Armory and Rock Island Arsenal.
  31. 31.  Development
  32. 32.  Springfield Armory Winchester Harrington & Richardson International Harvester Beretta Breda[1] F.M.A.P. Springfield Armory, Inc. (civilian)
  33. 33.  Expanded the operations of the Naval Aircraft Factory
  34. 34. • The Arsenal of Democracy" was a propaganda slogan coined by U.S. President Franklin D. Roosevelt, in a radio broadcast delivered on December 29, 1940. Roosevelt promised to help the United Kingdom fight Nazi Germany by giving them military supplies while the United States stayed out of the actual fighting.• Previous policies such as the Neutrality Acts had already begun to be replaced by intensified assistance to the Allies, including the cash and carry policy in 1939 and Destroyers for Bases Agreement in September 1940.• The Lend-Lease program began in March 1941, several months after the Arsenal of Democracy address. After the Japanese attack on Pearl Harbor in December 1941—less than a year after the Arsenal of Democracy address—the United States entered the war.
  35. 35.  From 1918 to 1924 the navy built submarines in conjunction with civilian contractors. Electric Boat Company, Groton, CT and; Lake Submarine Company of Bridgeport, CT
  36. 36.  BUILT BY: Electric Boat Co., CT; Portsmouth NSY, NH; Mare Island NSY, CA; Boston NSY, MA; Manitowoc Shipbuilding Co., WI; Cramp Shipbuilding Co., NJ
  37. 37. From tank-automotive and armamentsweapons systems research anddevelopment, through procurement andfielding, to sustainment andretirement, TACOMs associates provide"cradle-to-grave" support to Americas armedforces.The entire complex that houses TACOMsheadquarters is located on what is known as theDetroit Arsenal.
  38. 38.  Built in the 1920’s and 1930’s at Rock Island Arsenal, or under it’s direction. Manufacturers included: White Motor Company; Marmon-Herrington; Joseph Cunningham Son & Company Studebaker Pontiac International Harvester LaSalle Luxury Division of GM
  39. 39.  In July 1869, the Secretary of the Navy announced the establishment of the Naval Torpedo Station on Goat Island in the harbor of Newport, Rhode Island,
  40. 40. The mission of the Naval Undersea Warfare Center Division,Keyport is to Provide advanced technical capabilities for testand evaluation, in-service engineering, maintenance andindustrial base support, fleet material readiness, andobsolescence management for undersea warfare.
  41. 41.  It took twenty-one months to isolate and correct all of the Mark-14’s defects—less time than it took the OSRD to develop and field the first acoustic homing torpedo, the Mark-24, from scratch. Part of the reason it took so long to correct the Mark-14’s defects was that each problem masked the remaining ones. after operational units began experiencing problems with the weapon on combat patrols, the Navy’s Newport Torpedo Station resisted realistic testing. “The scandal was not that there were problems in what was then a relatively new weapon, but rather the refusal by the ordnance establishment [ashore] to verify the problems quickly and make appropriate alterations.” As Clay Blair documented in 1975, each of the Mark-14’s major defects was largely “discovered and fixed in the field—always over the stubborn opposition of the [Navy’s] Bureau of Ordnance.
  42. 42.  From the War of 1812 until World War II, government arsenals produced almost all the ordinance for the U.S Army and a good share of the ordnance and ships for the U.S. Navy.
  43. 43.  Between July 1, 1940 and June 30th 1945, the navy added 10 battleships, 18 large aircraft carriers, 9 small aircraft carriers, 110 escort carriers, 2 large crusiers, 10 heavy crusiers, 33 light cruisers, 358 destroyers, 504 destroyer escorts, 211 submarines and 82, 028 landing craft.
  44. 44.  Performance of industrial activities in military depots and shipyards can be detrimental to the nation’s broader economic goals
  45. 45.  The Army Materiel Command oversees a network of 20 depots, arsenals and ammunition plants involved in diverse industrial activities. Much of this activity entails the manufacture of items the service believes cannot be reliably or affordably procured from private-sector sources, such as chemical and biological weapons protective gear and specialized ammunition.
  46. 46.  The biggest organic industrial facilities operated by the Army are its five overhaul and repair depots, which each specialize in the support of particular types of systems such as rotorcraft, ground vehicles and electronic equipment. Although the repair depots spend extensively on capital equipment and training of skilled personnel, they tend to lag behind private sector sources in efficiency. One way the service has sought to keep its industrial facilities current is by partnering with big technology companies such as General Dynamics and Raytheon.
  47. 47.  Puget Sound Naval Shipyard – Bremerton, Washington Norfolk Naval Shipyard – Portsmouth, Virginia Portsmouth Naval Shipyard – Kittery, Maine Pearl Harbor Naval Shipyard – Hawaii
  48. 48.  Detroit Arsenal, MI Picatinny Arsenal, NJ Pine Bluff, AR Redstone Arsenal, AL Rock Island Arsenal, IL Rocky Mountain, CO Watertown Arsenal, MA Watervliet Arsenal, NY
  49. 49.  Adelphi, MD Natick, MA Selfridge Garrison, MI
  50. 50.  ALAAP, AL Badger, WI Cornhusker, NE Crane, IN Holston, TN Indiana, IN Iowa, IA Joliet, IL Kansas, KS Lake City, MO Letterkenny, PA Lone Star, TX Longhorn, TX Louisiana, LA McAlester, OK Milan, TN Mississippi, MS Radford, VA Ravenna, OH Riverbank, CA Scranton, PA St. Louis, MO Sunflower, KS Twin Cities, MN Volunteer, TN
  51. 51.  Detroit Tank Plant, MI Lima Tank Plant, OH Stratford Engine Plant, CT
  52. 52.  Highland Industrial Park Highland Industrial Park, a storage and testing facility for Defense Department contractors in East Camden, is in Calhoun and Ouachita counties. The 17,000-acre park contains 600 munitions storage bunkers. Used for testing and storing Navy ammunitions during World War II, much of the former depot now functions as the Highland Industrial Park, where several Defense Department contractors store munitions and conduct tests. This site has been referred to by a number of names including Shumaker Ordnance Plant, Camden Naval Ordnance Plant, Naval Operations Camden-Shumaker, and U.S. Naval Ammunition Depot - Shumaker, Camden, Arkansas.
  53. 53.  In 1802, the first great American powder factory, DuPont de Nemours, Pere et Fils; et Cie (later renamed E. I. DuPont de Nemours and Company) opened in Delaware. The new company prospered from the beginning, and its mills turned out 600,000 pounds of powder in four years.
  54. 54. Air Force Laboratories Before and After Merger[9] Pre-Merger Post-MergerWeapons Laboratory, Kirtland AFB, NM Phillips LaboratoryGeophysics Laboratory, Hanscom AFB, MA Kirtland AFBAstronautics Laboratory, Edwards AFB, CAAvionics Laboratory, Wright-Patterson AFB, OH Wright LaboratoryElectronics Technology Laboratory, Wright-Patterson AFB, OH Wright-Patterson AFBFlight Dynamics Laboratory, Wright-Patterson AFB, OHMaterial Laboratory, Wright-Patterson AFB, OHAero Propulsion and Power LaboratoryWright-Patterson AFB, OHArmament Laboratory, Eglin AFB, FLRome Air Development Center Rome LaboratoryGriffiss AFB, NY Griffiss AFB, NYHuman Resources Laboratory, Brooks AFB, TX Armstrong LaboratoryHarry G. Armstrong Aerospace Brooks AFB, TXMedical Research Laboratory, Wright-Patterson AFB, OHDrug Testing Laboratory, Brooks AFB, TXOccupational and EnvironmentalHealth Laboratory, Brooks AFB, TX
  55. 55.  The Office of Naval Research (ONR), headquartered in Arlington, Virginia (Ballston), is the office within the United States Department of the Navy that coordinates, executes, and promotes the science and technology programs of the U.S. Navy and Marine Corps through schools, universities, government laboratories, and nonprofit and for-profit organizations.
  56. 56.  The U.S. Armys corporate research laboratory. ARL is headquartered at the Adelphi Laboratory Center (ALC) in Adelphi, MD. Its largest single site is at Aberdeen Proving Ground, Maryland. Other major ARL locations include Research Triangle Park, North Carolina, White Sands Missile Range, New Mexico, Orlando, Florida, and NASAs Glenn Research Center, Ohio and Langley Research Center, Virginia.
  57. 57.  On May 14, 1861, Meigs was appointed colonel, 11th U.S. Infantry, and on the following day, promoted to brigadier general and Quartermaster General of the Army. Meigs established a reputation for being efficient, hard-driving, and scrupulously honest. He molded a large and somewhat diffuse department into a great tool of war. He was one of the first to fully appreciate the importance of logistical preparations in military planning, and under his leadership, supplies moved forward and troops were transported over long distances with ever-greater efficiency.
  58. 58.  His corruption was so notorious that Congressman Thaddeus Stevens, when discussing Camerons honesty with Lincoln, told Lincoln that "I dont think that he would steal a red hot stove". When Cameron demanded Stevens retract this statement, Stevens told Lincoln "I believe I told you he would not steal a red-hot stove. I will now take that back."
  59. 59.  Three main externalities encouraged the development of a permanent defense industrial base centered on for-profit defense companies. First and foremost was the onset of the Cold War, whose central feature was the U.S.-Soviet competition in nuclear arms. A second catalyst was the determination of U.S. post-war leaders— including President Harry Truman, George Kennan, Dean Acheson, George Marshall and Paul Nitze—to “create an international system with American power at its center” in order to minimize the possibility of major power conflicts as destructive as the two world wars had been.31 And, third, the North Korean dictator Kim Il-sung’s invasion of South Korea in June 1950 precipitated a rapid increase in military spending.
  60. 60.  The U.S. Army retains organic facilities to provide a significant part of its ordnance materiel and ammunition. What should the future hold for these 16 facilities — five of them government-owned, government-operated, the rest government-owned contractor-operated? This briefing looked at four options (in addition to maintaining the status quo): privatization, creating a Federal Government Corporation, consolidation, and recapitalization. After looking at the pros and cons of each, the authors concluded that all four were feasible and that a mixed strategy probably offered the best possibility for achieving the Army’s aims.
  61. 61.  Over several decades and across multiple administrations, the Pentagon’s acquisition system has developed four major problems that hamper our ability to acquire critical platforms and capabilities in a timely manner and at acceptable cost.
  62. 62.  First, the requirements for new systems are too often set at the far limit of current technological boundaries. Such ambition can sometimes help produce breakthrough developments that can significantly extend America’s technological edge. But far too often the result is disappointing initial performance followed by chronic cost and schedule overruns. The Department and the nation can no longer afford the quixotic pursuit of high-tech perfection that incurs unacceptable cost and risk. Nor can the Department afford to chase requirements that shift or continue to increase throughout a program’s life cycle.
  63. 63.  Second, the Pentagon’s acquisition workforce has been allowed to atrophy, exacerbating a decline in the critical skills necessary for effective oversight. For example, over the past ten years, the Department’s contractual obligations have nearly tripled while our acquisition workforce fell by more than 10 percent. The Department also has great difficulty hiring qualified senior acquisition officials. Over the past eight years the Department has operated with vacancies in key acquisition positions averaging from 13 percent in the Army to 43 percent in the Air Force. There remains an urgent need for technically trained personnel— cost estimators, systems engineers, and acquisition managers—to conduct effective oversight.
  64. 64.  Third, our system of defining requirements and developing capability too often encourages reliance on overly optimistic cost estimates. In order for the Pentagon to produce weapons systems efficiently, it is critical to have budget stability—but it is impossible to attain such stability in DoD’s modernization budgets if we continue to underestimate the cost of such systems from the start. We must demand cost, schedule, and performance realism in our acquisition process, and hold industry and ourselves accountable. We must also ensure that only essential systems are procured, particularly in a resource-constrained environment. There are too many programs under way. We cannot afford everything we might desire; therefore, in the future, the Department must balance capability portfolios to better align with budget constraints and operational needs, based on priorities assigned to warfighter capabilities.
  65. 65.  Fourth, effective and efficient delivery of logistical support to our men and women in the field is an enduring priority and an area where continued improvements must be made. DoD is working to improve the integration of joint logistics to provide operational commanders with the flexibility and sustainability required to better support unity of effort within the joint force and between multinational, interagency, and nongovernmental elements. Wartime innovations in logistics rules, tools, and processes have helped support high levels of long- term deployments, and has enhanced operational freedom of action.
  66. 66. Source: Federal Procurement Data System; analysis by CSIS Defense-Industrial Initiatives Group.
  67. 67.  The first trend is government promotion of small, disadvantaged, and disabled-veterans businesses. Since 1997, the Small Business Administration has had a goal of awarding 23 percent of government contracts to small businesses. In 2010, 22.7 percent of government contracts were awarded to small businesses, and in 2009 it was 21.9 percent The second trend is the significant growth of companies with annual revenue greater than $3 billion. While some of this growth is internal, a significant share is through mergers and acquisitions of smaller companies; in 2010, small companies represented 75 percent of government services acquisitions. As a result of these two trends, a viable cadre of mid-tier companies is being squeezed out of the federal services market
  68. 68.  Organizational conflicts of interest (OCI) Since 2001, the transaction volume of M&A deals in the services sector has doubled The government has grown increasingly concerned about the potential for OCI. Such conflicts arise when employees of the acquired firm assume oversight responsibilities over a sister firm as a result of a preexisting federal contract. As a by-product of this activity, several scientific engineering and technical assistance (SETA) contractors were absorbed by larger firms, sometimes supervising their parent or sister companies for the federal government. Efforts are currently underway to limit OCI in contracting.
  69. 69.  One area that is still expected to experience growth, however, is the expansion of DoD’s in-house contracting and acquisition corps. The insourcing of functions, higher oversight scrutiny, as well as the declining requirement for support services in contingency operations are likely to have a limiting effect on spending for services contracting.
  70. 70.  An issue that has more recently captured the limelight is service contracts for operations in Iraq and Afghanistan. Services account for well over sixty percent of the value of federal contracts performed in those two countries and their theaters. GAO has scrutinized inadequacies of some of the practices employed for service contracts in support of operations in these theaters
  71. 71.  The shipbuilding industrial base sector, consisting of six major U.S. shipyards building nearly all of the Navy’s ships, continues to produce the most capable warships in the world. While the quality of the ships being produced for the Navy has remained high, the quantity of ships the domestic shipbuilding base can produce in one year pales in comparison to the leading international shipyards. A low volume of production makes it extremely difficult for U.S. shipyards to match the improvements in technology and productivity seen in the international shipyards. Serial production and a stable design are key elements that U.S. shipyards must have to increase productivity and reduce the cost of shipbuilding for the U.S. Navy.
  72. 72.  In the space industrial base sector, fifteen of the top U.S. space companies remain financially healthy. The companies were generally profitable at a five percent return on assets or better with all companies having positive gross profit margin. All but one of the companies had increased backlog from the previous year, indicating guaranteed work in the queue. While about half the companies had debt ratios above 60 percent (two of which appear to have high leverage and low liquidity), most were liquid with quick ratios close to or above one.
  73. 73.  Since many Americans of the revolutionary generation had strong distrust of permanent or standing armies, the Continental Army was quickly disbanded after the Revolution. General Washington, who throughout the war deferred to elected officials, averted a potential crisis and resigned as commander-in-chief after the war, establishing a tradition of civil control of the U.S. military.[9]
  74. 74.  The American Civil War was one of the earliest true industrial wars. Railroads, the telegraph, steamships, and mass-produced weapons were employed extensively. The practices of total war, developed by Sherman in Georgia, and of trench warfare around Petersburg foreshadowed World War I in Europe.
  75. 75.  From 1865 to about 1913, the U.S. grew to become the worlds leading industrial nation. Land and labor, the diversity of climate, the ample presence of railroads (as well as navigable rivers), and the natural resources all fostered the cheap extraction of energy, fast transport, and the availability of capital that powered this Second Industrial Revolution.[12] The average annual income (after inflation) of nonfarm workers grew by 75% from 1865 to 1900, and then grew another 33% by 1918.[13]
  76. 76. German efforts to use its submarines ("U-boats") toblockade Britain resulted in the deaths of Americantravelers and sailors, and attacks on passenger linerscaused public outrage.Most notable was torpedoing without warning thepassenger liner Lusitania in 1915. Germany promised not torepeat but decided in early 1917 that unrestricted U-boatwarfare against all ships headed to Britain would win thewar, albeit at the cost of American entry.When Americans read the text of the German offer toMexico, known as the Zimmermann Telegram, they saw anoffer for Mexico to go to war with Germany against theUnited States, with German funding, with the promise ofthe return of the lost territories of Arizona, New Mexico,and Texas.Congress voted on April 6, 1917 to declare war, but it wasfar from unanimous.[1]
  77. 77.  Pershing wanted an American force that could operate independently of the other Allies, but his vision could not be realized until adequately trained troops reached Europe. In order to rush as many troops as possible to France, the AEF left its heavy weapons behind and used French and British equipment. Particularly appreciated were the French canon de 75, the canon de 155 C modele 1917 Schneider and the canon de 155mm GPF. American aviation units received the SPAD XIII and Nieuport 28 fighters and the US tank corps used the French Renault FT17 light tanks. Pershing established facilities in France to train new arrivals with their new weapons.[5] The Renault FT The Nieuport 28 (N.28C-1) Canon de 75 modèle 1897
  78. 78. On the battlefields of France in spring 1918,the fresh American troops wereenthusiastically welcomed by the war-wearyAllied armies in the summer of 1918.They arrived at the rate of 10,000 a day, at atime that the Germans were unable to replacetheir losses.After the Allies turned back the powerful finalGerman offensive (Spring Offensive), theAmericans played a central role in the Alliedfinal offensive (Hundred Days Offensive).Victory over Germany achieved on November11, 1918.[2]
  79. 79.  The first and most important mobilization decision was the size of the army. When the United States entered the war, the army stood at 200,000, hardly enough to have a decisive impact in Europe. However, on May 18, 1917 a draft was imposed and the numbers were increased rapidly. Initially, the expectation was that the United States would mobilize an army of one million. The number, however, would go much higher. Overall some 4,791,172 Americans would serve in World War I. Some 2,084,000 would reach France, and 1,390,000 would see active combat.
  80. 80.  Once the size of the Army had been determined, the demands on the economy became obvious, although the means to satisfy them did not: food and clothing, guns and ammunition, places to train, and the means of transport. The Navy also had to be expanded to protect American shipping and the troop transports. Contracts immediately began flowing from the Army and Navy to the private sector. The result, of course, was a rapid increase in federal spending from $477 million in 1916 to a peak of $8,450 million in 1918. The latter figure amounted to over 12 percent of GNP, and that amount excludes spending by other wartime agencies and spending by allies, much of which was financed by U.S. loans.
  81. 81.  Food Administration: created by the Lever Food and Fuel Act in August 1917. Herbert Hoover, who had already won international fame as a relief administrator in China and Europe, was appointed to head it. The mission of the Food Administration was to stimulate the production of food and assure a fair distribution. Fuel Administration: Created under the same Act as the Food Administration. Harry Garfield, the son of President James Garfield, and the President of Williams College, was appointed to head it. Its main problem was controlling the price and distribution of bituminous coal. Railroad Administration: The Wilson Administration nationalized the railroads and put them under the control of the Railroad Administration in December of 1917, in response to severe congestion in the railway network that was holding up the movement of war goods and coal. Wilsons energetic Secretary of the Treasury (and son-in-law), William Gibbs McAdoo, was appointed to head it. The railroads would remain under government control for another 26 months War Industries Board: In March 1918 the Board was reorganized, and Wilson placed Bernard Baruch, a Wall Street investor, in charge. Baruch installed a "priorities system" to determine the order in which contracts could be filled by manufacturers. Contracts rated AA by the War Industries Board had to be filled before contracts rated A, and so on. Although much hailed at the time, this system proved inadequate when tried in World War II. The War Industries Board also set prices of industrial products such as iron and steel, coke, rubber, and so on. This was handled by the Boards independent Price Fixing Committee.
  82. 82.  The international economic position of the United States was permanently altered by the war. The United States had long been a debtor country. The United States emerged from the war, however, as a net creditor. The turnaround was dramatic. In 1914 U.S investments abroad amounted to $5.0 billion, while total foreign investments in the United States amounted to $7.2 billion. Americans were net debtors to the tune of $2.2 billion. By 1919 U.S investments abroad had risen to $9.7 billion, while total foreign investments in the United States had fallen to $3.3 billion: Americans were net creditors to the tune of $6.4 billion.[7] Before the war the center of the world capital market was London, and the Bank of England was the worlds most important financial institution; after the war leadership shifted to New York, and the role of the Federal Reserve was enhanced.
  83. 83.  To meet its overwhelming expansion schedule for the Aviation Section, the United States was forced to take drastic action to acquire raw materials. For example, more than 27,000 officers and men were assigned to the Spruce Division (working in forests and lumber mills) to supply sufficient wood for building planes. Since castor oil was needed for lubricating airplane engines, 100,000 acres of land in the southern United States had to be planted in castor beans. Also, to acquire material for lining flying clothing, 450,000 Nuchwang dog skins were purchased from China.
  84. 84. Americas greatest technological contribution to thewar effort was the development and mass productionof the 12-cylinder Liberty engine.During a five-day period beginning May 29, 1917, Mr.J.G. Vincent of Packard Motors and Mr. E.J. Hall of Hall-Scott Motors redesigned an experimental 8-cylinderengine previously built and tested by Packard.Weighing only 710 pounds but delivering 410 hp, theLiberty far surpassed all other aviation engines in theworld.Production lines were set up by various automobilemanufacturers and by the end of 1918, they had built17,935 Liberties, 5,827 of which had been sent toEurope.The engine was destined to be a mainstay in the U.S.Air Service for 10 years following WWI.Major Henry H. Arnold with first Liberty V12 engine completed
  85. 85.  On 2 April 1917 President Woodrow Wilson cited Germany’s refusal to suspend unrestricted submarine warfare in the North Atlantic and the Mediterranean in his request for a declaration of war on Germany. In that April 1,250,000 deadweight tons were sunk with 122 ocean going ships sunk in the first two weeks after that declaration of war. British losses in that period equaled an average round trip voyage loss of 25%. Allied losses had already been heavy before U.S. entry so that construction in yards outside the U.S. was unable to sustain current losses.
  86. 86.  The United States entered World War I in April 1917. Within days, the federal government created the Emergency Fleet Corporation (EFC) to construct a fleet of merchant ships. The EFC hired the American International Shipbuilding Corporation to build and operate the largest shipyard in the world: Hog Island, near Philadelphia. This badge identified the wearer as a member of the World War I Hog Island shipbuilding team.
  87. 87.  The EFC was a subject of controversy. The armistice took effect before the yards, Hog Island being by far the largest and most publicized, reached full production and the expense was very large. The wooden ship program in particular resulted in a Some of the several designs are large number of hulls with no useful purpose that commonly named Ferris Designs were then a disposal problem. after Theodore E. Ferris, the official Gearing up for wartime production produced a glut naval architect for the USSB. of ships and a market problem with peace. Ferris designed both steel and wood In retrospect some considered the entire effort waste. There were allegations of fraud, with one ships for mass production. One involving charges and civil suits against Charles W. design, 1001, was for wooden 3,500 Morse. ton steam freighters built largely of precut, numbered components of The USSB and EFC are used by both those of the opinion government is too close to industry in pine or Douglas fir. collaboration for war projects and those with the view government should stay out of such matters and a source of waste even in national emergency.
  88. 88. Country Public Debt %GDPJapan 220%Italy 119%United States 91.6France 84.3%Canada 84%Germany 80%United Kingdon 101.3%
  89. 89.  This system of outsourcing has greatly benefited our military operations in many respects, providing an abundance of support (arguably the U.S. mission in Iraq is now among the best supplied and equipped in history), while avoiding added pressures on the active and reserve forces that would occur if there was not so much contracting. Additionally, the ad hoc manner in which this system has grown and the lack of an overall DoD strategy concerning contracting missions has incurred great costs. The Pentagon estimates that as much as $10 billion dollars have gone missing or been misspent by private military contractors in Iraq. Literally thousands of weapons have similarly disappeared in Iraq and Afghanistan, with some even ending up in the hands of local insurgents or transnational terrorist groups. As many as 15 or more U.S. troops have died inside U.S. bases as a result of shoddy electrical work performed or improperly supervised by logistics contractors. And, at the strategic level, contractors were involved in many of the most egregious and embarrassing incidents in the war, including Abu Ghraib and the Nisour Square shootings in September 2007. These incidents matter not only because of the consequent embarrassment to the nation, but also because many military officers believe private contractors have undermined our counterinsurgency goals, reflecting negatively upon U.S. grand strategy across in the region. The Regulation of New Warfare Defense, Defense Strategy, U.S. Military, U.S. Department of Defense Peter W. Singer, Director, 21st Century Defense Initiative The Politic Brookings Institute
  90. 90. NY Times Sunday 24 July 2010By Elisabeth BumillerWashington –Like everything else, war is a lot more expensive than it usedto be.
  91. 91.  A quick calculation shows that the United States has been at war for 47 of its 230 years, or 20 percent of its history. Put another way, Americans have been at war one year out of every five.
  92. 92.  Truman was somewhat taken aback at the costs associated with the reports recommendations. As a politician, he hesitated to publicly support a program that would result in heavy tax increases for the American public, particularly since the increase would be spent on defending the United States during a time of peace. The outbreak of the Korean War in June 1950, however, prompted action. Truman signed NSC-68 into policy in September 1950. As one State Department official noted, "Thank God Korea came along," since this act of communist aggression was believed to be crucial in convincing the public to support increased military spending. NSC-68 remained the foundation of U.S. Cold War policy until at least the 1970s.
  93. 93.  According to the report, the United States should vigorously pursue a policy of "containing" Soviet expansion. NSC-68 recommended that the United States embark on rapid military expansion of conventional forces and the nuclear arsenal, including the development of the new hydrogen bomb. In addition, massive increases in military aid to U.S. allies were necessary as well as more effective use of "covert" means to achieve U.S. goals. The price of these measures was estimated to be about $50 billion; at the time the report was issued, America was spending just $13 billion on defense.
  94. 94.  Significant foreign policy challenges persisted into Truman’s second term. The President committed the United States to the defense of South Korea in the summer of 1950 after that nation, an American ally, was invaded by its communist neighbor, North Korea. The American military launched a counterattack that pushed the North Koreans back to the Chinese border, whereupon the Chinese entered the war in the fall of 1950. The conflict settled into a bloody and grisly stalemate that would not be resolved until Truman left office in 1953. The Korean War globalized the Cold War and spurred a massive American military build-up that began the nuclear arms race in earnest.
  95. 95.  The invitation received by about 15 defense industry chief executives in 1993 to drop by the Pentagon for dinner was signed by Defense Secretary Les Aspin. It was, as the saying goes, an invitation one simply couldn’t refuse. The events that took place that evening forever changed the character of the U.S. defense industry. After a brief introduction by Secretary Aspin, the presentation was largely made by Deputy Secretary Perry. He indicated the government had no intention of paying ballooning overhead costs as companies tried to preserve their headquarters and corporate aircraft fleets, even as their factories and labs disappeared. Ironically, no one seemed particularly concerned at the time.
  96. 96. TIMELINES PHOTOS 3 STEPS Hog Island Naval Shipyard Philadelphia Ship Mass Production Liberty Ship Construction Ship Type 2751 Liberty’s from 1941-1945 Eighteen Shipyards Four Major Types
  97. 97. TIMELINES PHOTOS 3 STEPS WW II Production Bombers 49,123 Levingston Shipyard Orange, Texas Inspecting Ammunition Fighters 63,933 Cargo 14,710 Total 127,766 Aerospace Shipbuilding Munitions
  98. 98.  DOD relies extensively upon contractors to support overseas contingency operations. As of March 2011, DOD had more contractor personnel in Afghanistan and Iraq (155,000) than uniformed personnel (145,000). Contractors made up 52% of DOD’s workforce in Afghanistan and Iraq. Since December 2009, the number of DOD contractors in Afghanistan has exceeded the number in Iraq. 7-5700 www.crs.gov R40764
  99. 99.  The modern process of preparing armies for war originated in the middle of the nineteenth century. The recruitment of volunteers to fill the ranks no longer sufficed. Governments turned to conscription, created huge forces, and harnessed their national economies to conduct war. The word mobilization was first used in the 1850s to describe the preparation of the army of Prussia for deployment. The American Civil War marked the appearance in the United States of the draft and mass armies, along with the organization of productive resources to sustain them. The volunteer tradition of the minutemen was on its way to becoming little more than a sacred memory, and the logistical simplicity of the American Revolution was gradually falling by the wayside. The era of mobilization, the reallocation of a nations resources for the assembly, preparation, and equipping of forces for war had arrived.
  100. 100.  The very size of the forces assembled during the Civil War, with millions of men under arms at one time or another, bespoke a new era. Moreover, the principle of a national military obligation was successfully asserted by both sides, and the Confederacy sought to organize its economy to prosecute the war. In the years that followed as the United States became an industrial power with interests beyond its borders, this growing stature and the wartime experience in Cuba, the Philippines, and along the Mexican border compelled Congress and military leaders to think more about mobilization issues. In 1903 the Army acquired a General Staff, whose mission included planning for mobilization and defense. Thereafter, signs of a broader conception of the Armys role appeared in revised field service regulations and in training exercises involving ever-larger troop organizations.
  101. 101.  In 1923 the General Staff produced its first peacetime plan for the assembly of an army. The plan called for six field armies with a strength rising from 400,000 on the day of mobilization known as M-day to 1.3 million in four months and increasing every month thereafter. It acknowledged that the availability of supplies and equipment determined the rate at which troops could be absorbed. However, the plan neglected the critical issue of the resources needed to create the supplies on which mobilization depended. It assumed that production would adjust to strategic plans, expanding when necessary and contracting when not. It also left unresolved the question of whether different plans were needed for different contingencies. This initial plan incorporated the outmoded World War I concept of M-day as the basis for planning. In the summer of 1914 the European armies, one after the other, had mobilized on specific M-days, triggering complex and apparently irreversible processes that followed rigid timetables. These mobilizations generated similar responses from adversary armies and made hostilities almost inevitable. But M-day as a concept and tool for planning was more convenient than helpful. It made no allowances for gradual changes in preparedness or a measured transition to a mobilized state. Instead it posited an overnight complete conversion. In the interwar period the M-day fixation kept American planners from visualizing any situation that required implementation of mobilization measures before the official outbreak of war.
  102. 102.  The plans first thorough revision in 1925 failed to correct this shortcoming. In fact, the 1928 plan represented a step backward giving supply a secondary position and putting the emphasis back on manpower. Materiel, only recently considered the pacing factor, was assumed to take care of itself. Men would simply be equipped supplied and trained as they entered service. While these plans for the assembly of forces for war were being developed separate plans for wartime procurement were under way in the War Department. The assistant secretarys office relied on the supply services for detailed planning on wartime procurement, a task that was clearly understood to be part of the military mission. Procurement Planning for mobilization involved assessing the types of supplies and equipment needed to meet given emergencies and calculating quantities needed at specific intervals. Each supply branch had its own procurement planning section as early as May 1921. In the 1920s the needs of the War Department represented the bulk of requirements for a war production program. The supporting mobilization plans for raw materials, labor, power, fuel, and transport, as well as the associated development of economic controls, were seen as derivative functions.
  103. 103.  By 1930, procurement planning had gone far enough that War Department attention could turn to a system for presidential control and direction of industry in an emergency. Moreover, with the Army finally using up its World War I surplus stocks, new procurement was becoming critical. Depression-era retrenchment, most severe in 1933-34, still held back purchasing. However, an upward trend in appropriations followed and procurement planning expanded. It included surveys and the allocation of manufacturing plants among the procuring services, along with production studies and even occasional "educational" orders small actual orders that gave manufacturers experience with military specifications and standards and other aspects of providing needed supplies to the Army. This process added realism to the program. Industrial mobilization planning, as understood by the end of the 1920s, concerned all activities necessary to ensure the success and minimize the burdens of wartime procurement. The series of industrial mobilization plans that started in 1930 and culminated in 1939 finally came to grips with the old assumption that supplies would simply be available when needed. The plans also went beyond the role of the Army and examined how the nation should organize the control of industry in war. Implicit was the expectation that management of the economy and particularly, control of industry in wartime were presidential functions that would be exercised through temporary agencies run and largely staffed by civilians. This assumption reflected a realistic understanding of the American political system and the transcendent character of industrial mobilization. The issue was bigger than any one service or department. The plans showed familiarity with the tools for wartime economic control, from preference lists and priorities for facilities and commodities, to control of foreign trade, and as a last resort, to the establishment of government corporations, price controls, and seizures. The editions of 1930, 1933, 1936, and 1939 amounted to administrative blueprints for wartime civilian control and direction of the nations resources.
  104. 104.  Each version centered on national agencies that would control production. Early editions included four superagencies, managing war industries, selective service, public relations, and labor. By 1936, the War Industries Administration, which was understood from the start to be the largest and most important wartime agency, had been renamed the War Resources Administration. Its responsibilities were to include control of war finance, trade, labor, and price control organizations, with only the selective service and public relations still autonomous. The superagency, which would have powers beyond those of the War Industries Board also would be responsible for acquiring and controlling strategic and critical materials. The plans greatest flaw lay in its failure to consider effective control over the allocation of basic materials, such as steel, copper, and aluminum. In the development of these plans the Army-Navy Munitions Board showed its usefulness. With the Navy an increasingly active participant but the office of the assistant secretary of war still the driving force, the board sponsored the industrial mobilization plans of the 1930s. In so doing, it actually became a transitional agency, until the establishment of the projected civilian superagency at the outset of war. As such, the board drew up lists of critical materials, studied raw material needs, and eventually obtained modest appropriations for importing and stockpiling critical materials. The board also made industrial surveys and apportioned productive capacity of firms and industries whose products were sought by both services. By mid-1939, President Franklin D. Roosevelt recognized the boards importance by placing it in the executive office of the president. Thereafter, Roosevelt had direct control of the board which in turn enjoyed unanticipated prestige and visibility. By 1939, the industrial mobilization plans broke free of the M-day concept. That years plan stipulated that the War Resources Administration should be established as early as practicable when an emergency was envisioned. No longer would economic mobilization for war be tied to the actual outbreak of hostilities. The policy change tacitly recognized the increasingly hostile international environment and the long lead-times necessary to produce the increasingly sophisticated tools of war.
  105. 105.  By late 1942 it was clear that Nelson and the WPB were unable to fully control the growing war economy and especially to wrangle with the Army and Navy over the necessity of continued civilian production. Accordingly, in May 1943 President Roosevelt created the Office of War Mobilization and in July put James Byrne — a trusted advisor, a former U.S. Supreme Court justice, and the so-called "assistant president" — in charge. Though the WPB was not abolished, the OWM soon became the dominant mobilization body in Washington. Unlike Nelson, Byrnes was able to establish an accommodation with the military services over war production by "acting as an arbiter among contending forces in the WPB, settling disputes between the board and the armed services, and dealing with the multiple problems" of the War Manpower Commission, the agency charged with controlling civilian labor markets and with assuring a continuous supply of draftees to the military (Koistinen, 510).
  106. 106.  The total cost of the war to the federal government between 1941 and 1945 was about $321,000,000,000 (10 times as much as World War I). Taxes paid 41 percent of the cost, less than Roosevelt requested but more than the World War I figure of 33 percent. The remainder was financed by borrowing from financial institutions, an expensive method but one that Congress preferred over the alternatives of raising taxes even higher or making war bond purchases compulsory. In consequence the national debt increased fivefold, amounting to $259,000,000,000 in 1945. The Revenue Act of 1942 revolutionized the tax structure by increasing the number who paid income taxes from 13,000,000 to 50,000,000. At the same time, through taxes on excess profits and other sources of income, the rich were made to bear a larger part of the burden, making this the only period in modern history when wealth was significantly redistributed
  107. 107.  Four main-assembly factories: Two Boeing operated plants at:  Renton, Washington, and  Wichita, Kansas, The Bell plant at Marietta, Georgia ("Bell-Atlanta"), and The Martin plant at Omaha, Nebraska ("Martin-Omaha").
  108. 108.  Aerospace provides one crucial example. American heavy bombers, like the B-29 Superfortress, were highly sophisticated weapons which could not have existed, much less contributed to the air war on Germany and Japan, without innovations such as bombsights, radar, and high- performance engines or advances in aeronautical engineering, metallurgy, and even factory organization. Encompassing hundreds of thousands of workers, four major factories, and $3 billion in government spending, the B-29 project required almost unprecedented organizational capabilities by the U.S. Army Air Forces, several major private contractors, and labor unions (Vander Meulen, 7) Overall, American aircraft production was the single largest sector of the war economy, costing $45 billion (almost a quarter of the $183 billion spent on war production), employing a staggering two million workers, and, most importantly, producing over 125,000 aircraft, which Table 6 describe in more detail.
  109. 109.  Bombers 49,123 Fighters 63,933 Cargo 14,710 Total 127,766 Source: Air Force History Support Office
  110. 110.  Shipbuilding offers a third example of innovations importance to the war economy. Allied strategy in World War II utterly depended on the movement of war materiel produced in the United States to the fighting fronts in Africa, Europe, and Asia. Between 1939 and 1945, the hundred merchant shipyards overseen by the U.S. Maritime Commission (USMC) produced 5,777 ships at a cost of about $13 billion while navy shipbuilding cost about $18 billion.
  111. 111.  Though important and gigantic, the Manhattan Project was an anomaly in the broader war economy. Technological and scientific innovation also transformed less-sophisticated but still complex sectors such as aerospace or shipbuilding. The United States, as David Kennedy writes, "ultimately proved capable of some epochal scientific and technical breakthroughs, [but] innovated most characteristically and most tellingly in plant layout, production organization, economies of scale, and process engineering" (Kennedy, 648).
  112. 112.  Reconversion from military to civilian production had been an issue as early as 1944, when WPB Chairman Nelson began pushing to scale back war production in favor of renewed civilian production. The militarys opposition to Nelson had contributed to the accession by James Byrnes and the OWM to the paramount spot in the war-production bureaucracy. Meaningful planning for reconversion was postponed until 1944 and the actual process of reconversion only began in earnest in early 1945, accelerating through V-E Day in May and V-J Day in September.
  113. 113.  The most obvious effect of reconversion was the shift away from military production and back to civilian production. As Table 7 shows, this shift — as measured by declines in overall federal spending and in military spending — was dramatic, but did not cause the postwar depression which many Americans dreaded.
  114. 114.  The high level of defense spending, in turn, contributed to the creation of the "military- industrial complex," the network of private companies, non-governmental organizations, universities, and federal agencies which collectively shaped American national defense policy and activity during the Cold War.
  115. 115. Before the war the center of theTIMELINE world capital market was London, and the Bank of England was the worlds most important Three main externalities encouraged the development of a permanent defense industrial base centered on for-profit financial institution; after the war defense companies. leadership shifted to New York, and the role of the Federal First and foremost was the onset of the Reserve was enhanced. Cold War, whose central feature was the Manhattan U.S.-Soviet competition in nuclear arms. Project A second catalyst was the determination of U.S. post-war leaders— including President Harry Truman, George Kennan, Dean Acheson, George Marshall and Paul Nitze—to “create an international system with American power at its center” in order to minimize the possibility of major power conflicts as destructive as the two world wars had been. Borrowing from individuals And, third, the North Korean dictator Reliance on Allies Kim Il-sung’s invasion of South Korea in and governments. Equipment for AEF June 1950 precipitated a rapid increase in Inflationary aspects of Competing with the British Eddie Rickenbacker’s SPAD military spending. Guns and Butter for domestic suppliesRevolutionary War Civil War WW I WW II Korea Cold War/ Vietnam First Industrial War Johnson had another motive for playing down the commitment in North blockades the Military –Industrial Complex Southeast Asia. After the Democrats won by a landslide in south and retains most the 1964 election, the president believed he had a two-year domestic means of Income Tax window of opportunity to push During the Revolutionary War, the National Security Act of 1947 through Congress legislation for his Continental Congress borrowed production. Draft Created DoD, Great Society. He was painfully money from Americans, such as aware of what happened to Robert Morris and Haym Salomon, as well as foreign governments, such as Rationing The CIA Wilsons and Roosevelts comparable programs when they France, Spain, and the Netherlands. The National Security Council fell victim to "guns-over-butter” . The Continental Congress printed and the USAF Incrementally escalating the war in Vietnam, Johnson was able to have money, but as the war went on, the "guns and butter" without value of that money continued to go increasing taxes to pay for both down causing a rapid rise in prices of Arsenal of Democracy projects. This decision had a every type of good and service. profound impact on the American economy. British control of the sea which made exporting and importing difficult and Willow Run Detroit, MI expensive contributed to the high prices. When the war ended the newly freed United States was forced to come to grips with high prices and a large public debt.
  116. 116. Timeline 1942 1943 1944 1945Pearl Harbor / Midway Tarawa / Rabaul Iwo Jima Hiroshima Battle of Leyte Gulf Nagasaki 2013 2014 2015 2016 2017 1 2 3 6 7 9 10 11 12 Africa Italy Normandy Paris Berlin
  117. 117. Bay of Pigs SR-71 Timeline Rhyolite/Aquacade Soviets in Afghanistan All Volunteer Force 1950’s 1960’s 1970’s 1980’s Polaris Détente Korea Cold War Space Gap Mercury Sputnik 1 Apollo Iran–Contra affair 13 Panama InvasionJoseph McCarthy U-2 Shoot down Iranian Hostage Crises Cambodia Watergate Pentagon Papers 12Alger Hiss Berlin Wall Korea Vietnam Rolling Thunder Spies 1950-1954 Berlin Wall Falls 1961 1975 John A. Walker Robert Hanssen Mỹ Lai KH-11 Keyhole Aldridge Ames Christopher Lee Boyce Lt William Calley Nixon in China USS Pueblo
  118. 118. The Cold War Soviet Invasion of Hungary NSC -68 1956 Policy of "containing" Soviet expansion. NSC-68 Korean War Julius and Ethel Rosenberg executed recommended that the United States embark on 1950-1953 Korean armistice. rapid military expansion of conventional forces and Soviets explode hydrogen bomb. first artificial the nuclear arsenal, satellite to be put including the Fidel Castro Titan I (SM-68A) ICBM into Earths orbit by development of the new B-52 First Flight overthrows the Batista hydrogen bomb. the Soviet Union regime in Cuba U-2 piloted by Francis Gary "Open Skies" Powers is shot down over the U.S.S.R. 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 Chinese forces capture Seoul USS Nautilus U.S.Chinese Inchon Truman fires Douglas McArthur MarinesCommunist AQUATONE into U.S. tests U-2 LebanonVictory Development first aerial Lockheed hydrogen bomb First Successful test of Polaris French defeat at Dien Bien Phu Events during the Cold War
  119. 119. Just Cause Panama U.S. launches TIMELINES PHOTOS missile attacks on targets in 1993 World Trade Center bombing Sudan and Operation Uphold Democracy Afghanistan followingIraq invades Kuwait CIA’s Counter terroristleading to the Gulf War. Terrorism attacks on USS Cole The Gulf War is waged in the Middle East, by a Center creates a U.S. U.N. coalition force Haiti special unit Kosovo embassies in from thirty-four focusing nations, led by the U.S. U.S. soldiers are killed in Kenya and specifically on and United Kingdom, ambush by Somali Tanzania against Iraq. militiamen in Mogadishu bin Laden. U.S. and Soviet Union sign START I treaty 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1999 Operation Desert Shield. began on 7 August 1990 Oklahoma City Bombing when U.S. troops were Somali sent to Saudi Arabia Operation Desert Storm Bosnia U.S. launches air strikes on Bosnia to prevent ethnic cleansing. 66 cruise missiles rained down on the training camps. An additional 13 missiles were fired at a pharmaceutical plant. Multilaterial if we can unilateral if we must.
  120. 120. The U.S. Petraeus rejects returns suggestions that the TIMELINES PHOTOS President Bush sovereignty U.S. shift from a counterinsurgency to an interim operation to trainingUSS Cole (DDG-76) is signs legislation governmentbombed in Yemeni waters, Iraqi forces andkilling seventeen U.S. sailors. creating a new in Iraq, but fighting terrorists. cabinet maintains Instead, he says the department of roughly U.S. must continue Homeland 135,000 Hurricane Katrina all three missions BP Oil Spill Security. troops in the World Trade Center country to fight a growing Credit Markets Meltdown insurgency 201 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0 G.W Bush elected by 537 votes in Florida George W. Bush orders a troop surge which Invasion of Iraq Invasion Rumsfeld Resigns substantially increases the number of U.S. Afghanistan troops in Iraq and Operation ultimately leads to reductions in casualties "Enduring and major victories for coalition and Iraqi Freedom" forces, against the insurgency. 2000 -2010
  121. 121.  Marvin A. Kreidberg and Merton G. Henry, History of Military Mobilization in the United States Army, 1775-1945 (1955). Civilian labor is covered in The Army and Industrial Manpower, by Byron Fairchild and Jonathan Grossman (1959). R. Elberton Smith, The Army and Economic Mobilization (1959), covers resource allocation, contracting, and procurement, Lenore Fine and Jesse A. Remington, Construction in the United States (1972), deal with building of troop facilities and industrial capacity. Buying Aircraft: Materiel Procurement for the Army Air Forces (1964), by I. B. Holley, Jr., provides separate treatment of purchasing and production for the air arm.
  122. 122.  Five combatant commanders have geographic area responsibilities. These CINCs are assigned an area of operations by the Unified Command Plan and are responsible for all operations within their designated areas: U.S. Joint Forces Command, U.S. Central Command, U.S. European Command, U.S. Pacific Command, and U.S. Southern Command.
  123. 123. The new design replaced much riveting, which accounted for one-third of the labor costs, with welding.During World War II, there were nearly 1,500 instances of significant brittle fractures.Twelve ships, including three of the 2,710 Liberties built, broke in half without warning, including the SS John P. Gaines which sank on 24 Novembe
  124. 124. U.S. Navy Active Ship Force Levels, 1938-1944DATE 6/30/38 6/30/39 6/30/40 12/7/41 12/31/42 12/31/43 12/31/BATTLESHIPS 15 15 15 17 19 21CARRIERS, FLEET 5 5 6 7 4 19CARRIERS,ESCORT - - - 1 12 35CRUISERS 32 36 37 37 39 48DESTROYERS 112 127 185 171 224 332 3FRIGATES - - - - - 234 3SUBMARINES 54 58 64 112 133 172 2MINE WARFARE 27 29 36 135 323 551 6PATROL 34 20 19 100 515 1050 11AMPHIBIOUS - - - - 121 673 21AUXILIARY 101 104 116 210 392 564 9SURFACEWARSHIPS 159 178 237 225 282 635 8TOTAL ACTIVE 380 394 478 790 1782 3699 60EVENTS• WWII begins in Europe when Germany and the USSR invade Poland September 1939.
  125. 125. This ideology goes back to the first years of the Cold War. During the late 1940s, theU.S. was haunted by economic anxieties. The Great Depression of the 1930s hadbeen overcome only by the war production boom of World War II. With peace anddemobilization, there was a pervasive fear that the Depression would return. During1949, alarmed by the Soviet Unions detonation of an atomic bomb, the loomingcommunist victory in the Chinese civil war, a domestic recession, and the lowering ofthe Iron Curtain around the USSRs European satellites, the U.S. sought to draftbasic strategy for the emerging cold war.The result was the militaristic National Security Council Report 68 (NSC-68) draftedunder the supervision of Paul Nitze, then head of the Policy Planning Staff in theState Department. Dated April 14, 1950, and signed by President Harry S. Trumanon September 30, 1950, it laid out the basic public economic policies that the UnitedStates pursues to the present day.
  126. 126.  In its conclusions, NSC-68 asserted: "One of the most significant lessons of our World War II experience was that the American economy, when it operates at a level approaching full efficiency, can provide enormous resources for purposes other than civilian consumption while simultaneously providing a high standard of living."
  127. 127.  On May 1, 2007, the Center for Economic and Policy Research of Washington, D.C., released a study prepared by the global forecasting company Global Insight on the long-term economic impact of increased military spending. Guided by economist Dean Baker, this research showed that, after an initial demand stimulus, by about the sixth year the effect of increased military spending turns negative. Needless to say, the U.S. economy has had to cope with growing defense spending for more than 60 years. He found that, after 10 years of higher defense spending, there would be 464,000 fewer jobs than in a baseline scenario that involved lower defense spending.

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