PROBLEMS AND ISSUES
This research represents only the latest in a succession of assessments both internal and external that apply to the Army's industrial base and the business practices that surround it. While addressing a much broader scope than the Army's industrial base, the recent Quadrennial Defense Review provides a mandate for change that includes the Army activities under review here.1
The Defense Department has recognized the need to transform its business practices and support structure as well as its operational fighting forces. The 2001 QDR offered the following DoD self-diagnosis, arguing for an overarching strategy to improve business practices:
An infrastructure that needs to be streamlined to match the new reality, financial systems that limit the ability to see and manage the enterprise, and processes that discourage action and reasonable risk at the working level are hallmarks of a mature enterprise that must be transformed. While America's businesses have streamlined and adopted new business models to react to fast moving changes in markets and technologies, the Defense Department has lagged behind without an overarching strategy to improve business practices. (QDR, 2001, p. 49)
The report goes on to argue for a more exclusive definition of functions that should remain government-owned. It also recognizes the deeply cultural attachment to continued ownership of certain functions that was illustrated in the last chapter.
Only those functions that must be performed by DoD should be kept by DoD. Any function that can be provided by the private sector is not a “core” government function. Traditionally, “core” has been very loosely and imprecisely defined and too often used as a way of protecting existing arrangements.