Program Executive Office Integrated Warfare Systems (PEO IWS) delivers the sensors that detect threats and targets, the combat systems that close the fire-control loop, and the weapons that engage the enemy. Success comes from seamlessly integrating those systems. The Black Sea and Red Sea conflicts have shown the effects on war at sea of rapid innovation—long-range missiles, unmanned surface vehicles, and drone swarms. Improving warfighting capability through innovation is critical.
The “Big 5” defense companies, while peerless in developing military platforms such as tanks, ships, and missiles, are not the nation’s leading innovators when it comes to sharing information across systems. The information revolution has instead occurred in the civilian sector, driven by companies outside the defense ecosystem who often perceive barriers to doing business with the Department of Defense.1 Therefore, PEO IWS is working across our portfolio to grow the weapon-system industrial base, drive competition, and connect the expertise of the traditional defense industry with the innovation and agility of commercial technology developers.
to broaden the industrial base for Navy missiles by integrating missiles developed for other services (e.g., Lockheed’s Patriot Advanced Capability-3 missile shown here during an Army test at White Sands Missile Range) with surface ship combat systems. U.S. Army (Darrell Ames)
With the end of the Cold War in 1991, the defense industry embarked on a wave of consolidation, and the number of prime contractors decreased from 51 to 5: Lockheed Martin, General Dynamics, Raytheon, Northrop Grumman, and Boeing.2 This consolidation reduced competition for major weapon systems—the number of companies producing missiles decreased from 13 in 1990 to 3 today, for example.3 Consolidation affects competition for defense contracts, especially for large contracts; half of defense dollar obligations are awarded via sole-source procurement, though 90 percent of individual contract actions are competed, meaning that the majority of competition occurs for smaller contracts.4 Decreased competition for critical defense systems leads to higher costs and less innovation; fewer competitors means fewer creative ideas for addressing operational requirements. Reversing this trend will not be easy.
The first step to growing the weapon-system industrial base is reestablishing government ownership of the technical baseline. Concurrent with the consolidation of the defense industry in the 1990s, acquisition reform efforts encouraged making prime contractors the “lead system integrators,” with the majority of the technical work and systems engineering occurring at the contractor. This limited the government’s insight into detailed system design and architecture and reduced the government’s ability to provide technical supervision, drive innovation, and spur competition for follow-on contracts.5
For decades, the Aegis Weapon System, including the legacy SPY-1 radar, had been produced by Lockheed under repeated sole-source contracts. To control costs and acquire the best technical solutions, IWS separately competed the radar and the combat systems. Raytheon won the radar contract and Lockheed, the combat systems. Previously, Aegis radar and combat system integration had been an internal Lockheed problem; now, IWS personnel need to be much more involved to achieve effective integration. The result has been a better understanding for PEO IWS of the technical baseline, which is enabling faster integration of SPY-6 on other classes of ships, including aircraft carriers, amphibious ships, and the new frigates. IWS’s efforts to retake the technical baseline are paying off.
It takes significant time and capital to enter the defense industry and deliver large, technologically complex platforms and systems. To expand the industrial base, PEO IWS has taken several steps by lowering the barriers for nontraditional companies to participate in the defense ecosystem. The U.S. economy has generated remarkable innovation and progress over the past several decades, most notably in the commercial computing hardware and software industries. Most of that innovation has occurred outside the defense industry, and having innovative companies join our efforts to develop and field the best possible weapon systems is a critical goal.
As part of our efforts to adopt best software and hardware development practices, PEO IWS established government-operated hardware and software factories (the Forge and the Foundry, for example) that enable nontraditional companies to participate in development of combat system and other software capabilities. Thirty-three companies—many of them small businesses—have done so, whereas previously all that work was conducted by a single prime contractor.
Because the government has better insight into software architecture and development, it can seek innovation from the commercial sector and reward companies that perform well with additional work. In addition, increased understanding of system architecture and development of more open and modular components enable us to connect sensors and weapons more efficiently. With the ability (and appropriate authorities and funding) to implement and field software changes rapidly, the PEO can work closely with operational commands and respond to their near-term requirements, without the long Pentagon programming and budgeting process required for major platforms.6
Opening the door to small businesses with innovative concepts is already paying dividends in the fleet. An example is the recent launch of an SM-6 from a containerized launcher on the flight deck of the USS Savannah (LCS-28), part of a series of experiments integrating government with large and small businesses to deliver new capabilities to the fleet.7
While there is a large pool of software companies ready to offer talent and innovation for defense systems, expanding the manufacturing base for critical systems is an ongoing effort. Consolidation of the defense industry has had a significant, negative effect on missile production, and, as the wars in Ukraine and the Middle East are showing, the demand for missiles exceeds the current production rates in the United States and other Western nations.8 Surface navy tactical missiles are almost exclusively produced by one company (Raytheon), and—while production rates are increasing—the Navy requires improvement in both production and affordability. Raytheon is increasing production and making capital investments in manufacturing facilities because of the clear demand PEO IWS’s multiyear contracting has begun to generate.
Simultaneously, we are broadening the industrial base for Navy missiles by integrating missiles developed for other services (e.g., Lockheed’s Patriot Advanced Capability-3 missile) with surface ship combat systems, as well as reducing barriers to entry to the missile industrial base. We are exploring public-private partnerships to develop and produce critical items (such as solid rocket motors) as well as engaging with the rapidly growing commercial space sector. A vibrant missile industrial base would feature multiple companies competing for missile development and production, providing ever-better products at lower costs. Just as with combat system software, IWS is focused on developing a missile ecosystem that reduces barriers to entry and increases innovation and affordability.
The Chief of Naval Operations has talked about the need for “more players on the field” to face the emerging threats at sea. The Navy’s acquisition enterprise needs more players on the field as well, delivering innovative and affordable solutions at a scale and pace necessary to meet the threat. Owning the technical baselines and reducing barriers to entry for new companies will result in a diverse defense industrial base poised to compete and deliver innovation affordably.
1. Christian Brose, The Kill Chain (New York: Hachette Books, 2020), 1–20.
2. Congressional Research Service, The U.S. Defense Industrial Base: Background and Issues for Congress, crsreports.congress.gov, 12 October 2023, 5.
3. Office of the Under Secretary of Defense for Acquisition and Sustainment (OUSD A&S), State of Competition within the Defense Industrial Base (Washington, DC: Department of Defense, February 2022), 5.
4. OUSD A&S, State of Competition, 3.
5. William A. LaPlante, “Owning the Technical Baseline,” Defense AT&L, July–August 2015, 18.
6. For more detail on what an alternative pathway for weapon system acquisition could look like, see Christian Brose, “Moneyball Military,” Hoover Institution Case Study (1-2023): 13–15.
7. Sam LaGrone, “Littoral Combat Ship Fires a Standard Missile 6 from Experimental Launcher at Sea,” USNI News, 25 October 2023.
8. Alistair McDonald, Doug Cameron, and Dasl Yoon, “The West Badly Needs More Missiles—But the Wait to Buy Them is Years Long,” Wall Street Journal, 3 January 2024.
