The ‘Shrinking’ Defense Industrial Base
TABLE 8. PRIMARY REASON FOR DEFENSE INDUSTRIAL BASE EXIT Response Number
Percent
The entity stopped bidding for work with DoD due to an unfavorable characteristic of working with DoD. The entity is still bidding for work but has not won anything current. The previous contract was only ever expected to be a single- time event (e.g., purchase order). DoD stopped issuing solicitations for the entity's product/service. The entity has become only a subcontractor to DoD prime contractors.
165
24%
127
19%
78
11%
78
11%
59
9%
Other (please specify).
34
5%
The entity was originally set up to serve a single, specific contract that was completed (i.e., joint venture). The entity was party to a merger or acquisition but still conducts business with DoD under a new name or through a parent entity. The entity changed strategic direction and is no longer seeking defense-related work. The entity is still bidding for work but has identified an issue working with DoD. * The entity closed the business due to reason(s) other than financial difficulties.
25
4%
22
3%
16
2%
14
2%
13
2%
The entity has exited due to SAM.gov issues. *
11
2%
The entity no longer provides the product/service it once did for DoD. The entity rebranded under a new name (not due to a Mergers and Acquisitions transaction) but still conducts business with DoD under this new name.
10
1%
7
1%
The entity "lost" a certain status and the work with it. *
6
1%
The entity has exited due to General Services Administration issues. *
6
1%
The segment of the entity conducting work with DoD was sold, and this segment represented all defense-based business for the entity.
5
1%
The entity went bankrupt.
2
0%
The entity received a cure notice and is on probation.
1
0%
Total 100% Note. * denotes categories created by researchers during post-hoc analysis (not included in the original survey as an answer choice). 679 Top Five Reasons for Contractor Exit The top five reasons given by respondents accounted for nearly 75% of all responses (507 out of 679). The most frequently cited reason for a contractor exiting the DIB was an unfavorable working condition with DoD (165 responses for 24% of the sample). This is concerning and will
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Defense ARJ, Summer 2025, Vol. 32 No. 2: 194—223
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