The Myths of the Last Supper

How a longer view of history can lead to better answers today to improve defense acquisition

Despite an ever-growing and very large budget, the military does not use the most modern technology at scale. The industrial base cannot meet production demand. And the timelines for procurement are astonishingly long.

Washington can’t agree on much, but there is bipartisan consensus that defense acquisition is broken. The second Trump administration has made acquisition reform a focus of its first 100 days. The Biden administration worked to bridge the Valleys of Death and improve speed and scale of innovation acquisition, with important initiatives like Replicator, among others. Industry leaders from Mike Bloomberg to Alex Karp agree: more work is needed to improve how and what DoD buys.

Many diagnoses invoke a similar origin point: the so-called “Last Supper,” a 1993 dinner hosted by President Clinton’s Secretary of Defense, Les Aspin, and Deputy Secretary of Defense, and future Defense Secretary, William Perry. At that fateful meal, Aspin and Perry gathered senior defense industry leaders to make clear that with the end of the Cold War, the United States needed a peace-dividend and industry should consolidate.

According to this narrative, following the dinner, the companies began a flurry of mergers and acquisitions. By the end of the 1990s, the once robust and healthy defense industrial base had collapsed into five enormous companies. This consolidation into what is now known as the “primes” decreased competition, stifled innovation, destroyed the industrial base, and led to a split between DoD and Silicon Valley. The Last Supper, many claim, is why the U.S. cannot produce drones or munitions or rapidly field new technology.

It’s a great story: It focuses on a single, vivid moment, and it has a catchy name.

But the “Last Supper” narrative is less like history than it is mythology. In my new white paper, I show that the reality is that the defense sector’s problems run deeper and are much worse than people think – and until we bust the myths of the Last Supper, we won’t be able to fix the system.

Myth-Busting Number 1: The Last Supper didn’t cause defense sector consolidation. The reality is that the defense sector was similar to many other sectors that consolidated in the 1990s. Globalization, financialization, and a shrinking federal budget weakened the defense industry in the 1980s, and made the sector increasingly dependent on DoD. The Last Supper and DoD’s policy encouraging consolidation may have accelerated the trend, and helped some mergers avoid antitrust challenges, but it’s better understood as an attempt to salvage critical parts of a weak industry that was already under strain.

Myth-Busting Number 2: The Last Supper didn’t trigger the end of industry-wide surge capacity. The U.S. lost resiliency in a slow-burn over a half-century. Over and over again, policymakers chose to prioritize lowering costs over preserving capacity in the structure of procurement contracts. Over and over again, they chose efficiency over capacity in the maintenance of the DoD’s organic industrial base. Over and over again, they picked privatization over public production. As David Norquist told the House Armed Services Committee, “If you want somebody to have a capacity to surge, then they need to have it priced into the contract or treated as an allowable cost.”

Myth-Busting Number 3: The Last Supper wasn’t the source of a break with the tech sector. Concerns over an isolated defense sector and a DoD that can’t acquire the newest technology are certainly valid - but also not new. In fact, the Clinton administration was so concerned about a gap between government and new technologies they championed closer ties between the military and commercial industry, advancing a number of Reagan-era reform recommendations. Legislation like the Federal Acquisition Streamlining Act and the Clinger-Cohen Act decreased requirements for commercial companies, expanded what was considered a commercial item, and aimed to simplify information technology acquisition. Every administration since then has also attempted to shrink the distance between tech and government. And yet, DoD is still unable to access emerging technology quickly at scale.

Myth-Busting Number 4: The government is not going to run like a business. For decades, the government has streamlined, restructured, divested from its own capacity in an attempt to make it more business-like and to turn over more of its responsibilities to business. Starting in the 1970s, the government turned to private contractors for more and more. The government also decreased the size of the federal workforce leading to more expansive service contracts to fill in gaps. As obligations grew, the government did not build an acquisition workforce that matched the contracting growth but rather turned to that portion of the workforce for cuts and savings, as well. This all happened during a tech revolution, which the government suddenly found itself underprepared to benefit from despite its desire to do so. For defense acquisition, this meant more, and more complicated, contracts to be administered by fewer people, severely hindering even the best laid plans of well-intentioned procurement reformers.

The reality–The Long Supper: Rather than a “Last Supper,” commentators would be better off talking about a “Long Supper.” By focusing on a single convening and policy choice at the expense of systemic and repeated choices–privatization, cutting budgets, stripping down DoD’s organic capacity– leaders risk learning the wrong lessons and doubling down on policies that are at best inadequate, and at worst destined to fail spectacularly. Instead of attempting to create a slimmer system, we need to build a stronger one.

A serious agenda for defense reform through a “Long Supper” lens must start from two truths: (1) defense is not a normal “market” and therefore normal thinking about markets will fail, and (2) state capacity is essential to building a strong defense sector that meets America’s needs.

In 1989, defense acquisition scholar and future Pentagon undersecretary, Jack Gansler, wrote that the “‘free-market myth’ has historically been one of the primary causes of the problems of the American defense industry.” Soon after, scholar Donald Kettl provided the solution for this constraint: “The further the government moves away from the basic assumptions underlying market competition, the harder the government must work to substitute other mechanisms if it is to obtain the benefits that market competition promises.” Both Gansler and Kettl advocated for greater government involvement to create conditions for the sector to function optimally and for the government to have the capacity to do so well. Their advice must no longer be ignored.

Extensive privatization and elimination of expertise within the government has led to many problems. Those who want to give commercial tech acquisition a fair shot should push the hardest for building back acquisition talent, research and systems engineering, software development, and systems design, among many other skill sets in government. A stronger and smarter government will be a better advocate for the taxpayer and better able to take advantage of private-sector expertise. Warfighters deserve a government that can deliver for them – and that means policymakers have to put aside easy and convenient myths and legends and instead accept the hard lessons of history.

Read the full paper here.