The Army manages a large industrial base consisting in part of 14 governmentowned plants that manufacture ammunition or are laid away to do so following hostilities, and 2 arsenals that manufacture ordnance materiel such as gun tubes, gun mounts, and other weapons-related items. These facilities occupy about 230,000 acres of DoD-owned land, about 1 percent of DoD's 24 million acres. They generate revenues of more than $1 billion a year. The oldest of the 16, Watervliet Arsenal, dates to 1813. The ammunition plants are of more recent vintage; most represent the residual of 77 government-owned, contractoroperated plants and works built or expanded to meet the needs of World War II, although three were opened during the Korean War or since. Three of the ammunition plants and the two arsenals are operated by government employees rather than contractors.
Today, the Army retains more capacity than the nation needs or anticipates that it will need. Furthermore, much of the equipment in these facilities is old, and, partly as a result of this obsolescence, they are expensive to operate.
The Army has long recognized these problems, and it has asked RAND Arroyo Center to assess options for managing this part of its industrial base. Initially, the research focused on reducing excess capacity at the two arsenals. That research suggested that downsizing through elimination of excess equipment and manufacturing space, while worthwhile, leaves the facilities with certain disadvantages that are inherent in continued government ownership of these manufacturing activities, which are peripheral to the Army's primary missions and functions. Hence, the research led to the more central issue of governance and ownership.
Later, during the conduct of the research, the Army initiated a review of its entire industrial base and folded this research into the new effort, called the Industrial Base Program Review (IBPR). The IBPR has as its mission to identify