The Pentagon has been keeping a concerned eye on Defense-related M&A activity since at least 2008, monitoring the U.S. industrial base to ensure that it maintained some level of diversity of suppliers. The Department of Defense (DoD) has long been concerned with the small number of large firms able to bid on major weapon systems acquisition: four major contractors bid for the F-15, five for the F-16. But the F-22 and F-35 programs attracted only two bidders each. Last week, Pentagon leaders began to voice warnings to the industry: Secretary Carter told the press that “it [is] important to avoid excessive consolidation” and that he “[does not] welcome further consolidation among the very large prime contractors.”
Changes in Defense-Related M&A
Of all the measures outlined in the President’s latest state of the union address, the three measures below are the most likely to pass the Republican controlled Congress.
1. Authorization for the Use of Military Force (AUMF)
During his address, President Obama asked the Congress to pass an AUMF specific to combating ISIL in Iraq and Syria. The President has been in consultation with members of Congress with respect to a new AUMF since late December of 2014, and Speaker of the House John Bohner has indicated a vote will be held on the AUMF by spring of 2015 (Bennett, 2015). A point of contention between Congressional Republicans and Democrats in negotiating an AUMF is the level of discretion the bill will afford to the President, particularly the measures that would prohibit the deployment of ground troops.
The ISIL related AUMF will greatly augment the President’s legal justification for Operation Inherent Resolve, which has been previously justified by the nearly 14 year old AUMF passed after September 11th 2001. Since combat operations in late 2014, the US has launched over 1,800 airstrikes in both Syria and Iraq at a total cost of $1.2 billion.
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