The ‘Shrinking’ Defense Industrial Base
Responses From Exiting Contractors Over Time A final observation from the two survey questions previously highlighted bears mentioning, namely the trend in responses based on the year in which the contractor exited. Tables 11 and 12 show the top five reported reasons for contractor exit and the top five unfavorable characteristics of DoD, respectively.
TABLE 11. TOP FIVE PRIMARY REASONS FOR DEFENSE INDUSTRIAL BASE EXIT, FY 2015–2021 2015 2016 2017 2018 2019 2020 2021
Key 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. Other (please specify).
TABLE 12. TOP 5 DOD UNFAVORABLE CHARACTERISTICS, FY 2015–2021
2015
2016
2017
2018
2019
2020
2021
Key DoD bureaucracy Cumbersome solicitation process Small business issues (including small business-specific policies) Not profitable or generally “worth it” Cost and pricing issues (e.g., Truth in Negotiations Act) Accounting requirements (DCAA, CAS, etc.) Defense Federal Acquisition Regulation Supplement (DFARS) rules Cybersecurity requirements (CMMC) Other (please specify) Note. CAS = Cost Accounting Standards; CMMC = Cybersecurity Maturity Model Certification; DCAA = Defense Contract Audit Agency.
Little variation is evident in the top responses across the fiscal years covered in the survey, which means contractors exhibited the same broad concerns regardless of the year in which they exited. For example, an unfavorable characteristic of working with DoD was ranked first by every
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Defense ARJ, Summer 2025, Vol. 32 No. 2: 194—223
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