Total Demand: Integrating Foreign Military Sales and Domestic Acquisition to Fortify the Defense Industrial Base and Strengthen Alliances

Abstract

This paper examines the historical structural separation between U.S. domestic defense acquisition and foreign military sales (FMS) and its impact on the defense industrial base. Traditionally, domestic procurement has been planned through internal Department of War processes, while allied demand is generated through partner-initiated FMS requests, resulting in fragmented and reactive demand signals for industry. As allied procurement has become an increasingly significant share of total demand, this bifurcated system has contributed to production instability, supply chain fragility, and delayed capability delivery. To address these challenges, the paper proposes a “Total Demand” framework that integrates domestic and allied procurement into a unified planning construct. Leveraging advances in artificial intelligence and data analytics, this approach aggregates data from program planning, partner requests, readiness indicators, and industrial capacity to generate predictive demand forecasts. The analysis demonstrates how integrated demand signals can stabilize production, enable economies of scale, and strengthen supply chain resilience. The paper concludes that adopting a Total Demand framework would enhance industrial readiness, improve the efficiency of defense exports, and reinforce alliance interoperability, positioning the United States to better support coalition operations in an era of strategic competition.