WASHINGTON, DC Today, U.S. Representatives John Garamendi (CA-03) and Mark Pocan (WI-02) sent a letter to Secretary of Defense Lloyd Austin requesting him to scrutinize mergers in the defense industry. This comes after a Department of Defense report in February 2022 that identifies consolidation in the defense industry as a threat that can reduce the availability of key supplies and equipment, diminish vendors incentives for innovation and performance in government contracts, and lead to supply chain vulnerabilities.
We write to express concern with defense industry consolidation and urge the Department to assist the Federal Trade Commission in assessing past merger impacts on defense programs; namely [
] the 2018 Northrop Grumman - Orbital ATK merger, the lawmakers wrote. In January 2022, the Federal Trade Commission blocked the proposed merger of Lockheed Martin and Aerojet Rocketdyne over concerns that Lockheed would use its control of Aerojet to increase prices, and the increased industry consolidation would result in lower quality goods and services to the Department of Defense.
The lawmakers continued, We remain concerned that the 2018 merger between Northrop Grumman and Orbital ATK poses the same threats [
] Post-merger, Northrop enjoys virtually unilateral power to set prices on some of the most expensive military weapons on the planet, nuclear weapons [
] It is critical that this merger, and all defense industry mergers, are subject to adequate scrutiny, both to keep defense contractor profiteering at bay and to advance national security priorities.
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