DoD to Request New Funds to Re-Energize Defense Industrial Base

The Pentagon plans to request additional funds in the FY’20 budget request to help address critical issues that are undermining the U.S. defense industrial base, officials said Oct. 4.

The department will utilize existing funds that fuel industrial base mitigation efforts, but will also need to add more to the pot to implement all of the recommendations laid out in the long-awaited report, titled “Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States.” Aerial view of the Pentagon, Arlington, VA

The report, released Friday via defense.gov, lays out over 300 risk points that are undermining the U.S. defense industrial base divided into 10 “risk archetypes,” per an advanced copy provided to the media (Defense Daily, Oct. 4). These risk archetypes include issues including single- and sole-source companies for certain resources, fragile markets, global competition from peer adversaries, widespread workforce challenges, and cybersecurity dangers.

Eric Chewning, deputy assistant secretary of defense for industrial policy, told reporters on Thursday that while there will be requests for additional money for specific tools to help boost the manufacturing sectors, the Pentagon must work to spend funds it already has more wisely.

“It isn’t a fact of just we’re not spending; sometimes we’re just not spending money in the right way,” he said.

The Pentagon is proposing some budget increases to existing programs, such as the Defense Production Act Title III authorities that provide the president with broad authority to support the domestic defense industrial base, Chewning said. Those details are included in the classified annex of the new report, he added. The Defense Production Act was appropriated $54 million in the FY ‘19 defense budget, according to congressional documents.

The department also plans to henceforth include an unclassified progress report on the health of the industry within its required annual industrial capabilities report, he noted.

Ellen Lord, undersecretary of defense for acquisition and sustainment, declined to provide an estimate for how much funding would be requested next fiscal year or how much money could be needed overall to incorporate the fixes included in the report. She noted that the risks outlined in the report are "policy issues, a technical issue, an education issue [and] a workforce issue. It’s a whole-of-government issue, and we’ll continue to work it that way.”

Analysts and industry stakeholders on Friday lauded the results of the defense industrial base report, but emphasized that its recommendations will require stable funding. Lord and Chewning commended the recent passing of the FY’19 National Defense Authorization Act (NDAA) and the ensuing $716 billion defense budget as a positive step toward implementing the recommendations of the report.

Aerospace Industries Association President and CEO Eric Fanning applauded the release of the report and its findings in a statement Friday, while acknowledging that the degree of success in enacting the recommendations rests on stable funding.

“A return to the spending levels imposed by the Budget Control Act will devastate the progress made by the Administration to foster a resilient and innovative manufacturing and defense industrial base that can sustain U.S. and allied forces in a severe and prolonged conflict,” he said.





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