Signal Magazine, July 1, 2024
The Department of Defense (DoD) may be missing a piece of the puzzle when considering mergers and acquisitions (M&A) in the defense space.
“What we found is that there are hundreds of mergers and acquisitions in the defense space. When you look at it through the lens of how many are getting flagged through the regulatory process, it’s a small percentage,” said William Russel, a director at the Government Accountability Office (GAO).
According to a report by this agency, company transactions below the $111 million threshold receive less attention from authorities, and adversarial actors could participate in the DoD’s procurement processes through those participants.
The document has four recommendations for the DoD to assess the risks and benefits behind defense industrial base M&A:
- Provide direction as to which defense suppliers should be prioritized to conduct M&A assessments.
- Adequately resource the M&A.
- Analyze the risks and benefits in DoD’s M&A policy.
- Monitor the effects of concluded M&A.
The DoD still has time to address these issues, as the original material was published in late 2023, according to Russel, the author of the report and the GAO’s Contracting and National Security Acquisition team lead.
The impacts of M&A in the defense industrial base go beyond primes and reach suppliers of parts, materials and technologies essential for producing and maintaining military capabilities…