>Also I have no idea what this has to do with “diversity” or what you even mean by that.
Diversity, or "the condition of having or being composed of differing elements"[1], in this case a wide variety of suppliers.
I assume most of us are speaking English here.
[1]: https://www.merriam-webster.com/dictionary/diversity
>Limiting themselves to a few expensive and stagnant vendors is a way to lose in the future.
You win wars by buying your equipment from the most capable suppliers. If that happens to be a centralized cabal of suppliers (this stuff is expensive, after all), then it is what it is. It's not the mission of the DoD to diversify the economy, its mission is to win wars as effectively as possible at any cost.