the past two decades, the solid rocket motor (SRM) industrial base has
undergone various changes including consolidation and recent expansion.
Specifically, since 1995, the industry has consolidated from six U.S.
manufacturers to two U.S. manufacturers. With regard to expansion, a
foreign supplier entered the market in 2012, and in 2017, a U.S. firm,
which is ultimately foreign-owned, was also established. According to
the Department of Defense (DOD) while it supports competition, its
current demand for SRMs can only sustain two manufacturers. Although at
this stage it is too early to know how, or if, these new entrants will
impact the economic viability of the more long-standing U.S.
aIn September 2017, Northrup Grumman announced plans to acquire Orbital ATK, Inc.
consolidation in the SRM industrial base has also been accompanied by a
decrease of suppliers throughout the supply chain. For example, one SRM
manufacturer estimated a decrease in suppliers, from approximately
5,000 to 1,000, over the last 20 years. This increases the risk of
production delays and disruptions in the event that key components and
materials available from a single source become unavailable from that
source. GAO found that DOD and industry are taking steps to identify and
mitigate these risks, such as by establishing alternative sources and
requiring advance notice when suppliers are considering exiting the
In its annual industrial capabilities reports to
Congress, DOD has consistently stated that the limited number of new
missile development programs inhibits its ability to provide
opportunities to help SRM manufacturers maintain their workforce
capabilities. Specifically, with few new missile programs being
initiated, engineers have had fewer opportunities to develop their
engineering skills related to SRM concept designs, system development,
and production, which are critical if SRM performance issues arise.
However, in 2016, DOD funded a 4-year project to enhance engineering
design skills for less experienced engineers working for the two U.S. manufacturers and help them develop advanced SRM technologies.
Why GAO Did This Study
relies on a multi-tiered supply chain to provide SRMs, the propulsion
systems behind the various missile systems that provide defense
capabilities to meet U.S. national security objectives. The SRM
industrial base includes manufacturers that turn to an extensive network
of suppliers that provide the raw materials, components, and subsystems
needed to build SRMs. DOD is responsible for developing a strategy for
the national industrial base that ensures that defense contractors and
their suppliers are capable of providing the goods and services needed
to achieve national security objectives.
GAO was asked to review
the state of the U.S. industrial base for SRMs. This report addresses
(1) SRM industry trends, (2) single source supplier risks, and (3)
opportunities for SRM manufacturers' engineering workforce development.
GAO analyzed DOD's annual industrial capabilities reports to Congress
for fiscal years 2009 through 2016, which reflect DOD's most current
information on SRM risks, and reviewed DOD budget data and information
from missile prime contractors and SRM manufacturers. GAO also
interviewed missile prime contractors, SRM manufacturer representatives,
and officials from DOD and the military departments.