The Pentagon plans to continue a new effort to support small defense companies, if needed, to ensure the government retains the critical capabilities they uniquely provide.
Brett Lambert, the deputy assistant secretary of defense for manufacturing and industrial base policy, said yesterday that the Pentagon has found several “key points of vulnerability” in the defense industrial base and has “intervened” by bolstering lower-tier companies.
“And you’ll see more interventions in (the) budget coming up, but only when absolutely necessary,” he said at a Washington think tank event yesterday.
Those so-called points of vulnerability–where the organizations were in the only ones that could provide needed capabilities–were discovered during the Pentagon’s extensive sector-by-section, tier-by-tier analysis of the industrial base.
Lambert said the Pentagon intends to provide such financial support in “select instances where there are absolutely no alternatives, there’s no traditional market and it’s something that’s more of a bridge.”
“We will investigate small, niche investments to sustain critical capabilities,” he told Defense Daily after the event hosted by the Atlantic Council think tank.
He said such support in private industry is “really a measure of absolute last resort.”
“Usually, rather than just sustain what you have, you can look for alternatives, which we do in most cases,” he said. “Or you can look to the commercial market to find an alternative.”
Such interventions were made starting in the Pentagon’s fiscal year 2012 budget last year and will continue, he said. The Pentagon has an industrial-base sustainment fund designed for that very purpose.
While much is uncertain with the Pentagon budget–because of possible sequestration budget cuts and a continuing resolution funding it so far in FY ’13–Lambert expressed optimism about the work his office has done to support the industrial base.
The Pentagon, for example, will be rolling out a new 5000.02 instruction in the coming weeks. The document that covers the operation of the defense acquisition system will reflect “a new way to look at” industrial-base analysis and policy, which will impact every major program, he said.
“So instead of thinking about (the) industrial base as an afterthought once program decisions are made, industrial-base considerations will now be inculcated, will be part of major decisions,” Lambert said.
A new body called the Defense Management Action Group will meet in the coming weeks. Lambert said his office will work with the military services to implement “criticality and fragility indexes” for every major program, looking mainly at the sub-tiers and component suppliers.
The Pentagon also plans in the near future to release a final document for its Better Buying Power 2.0 initiative. That’s an updated version of a program to make the defense acquisition system more efficient that Deputy Defense Secretary Ashton Carter created two years ago. Many of the changes in the upcoming final document will reflect industry comments, Lambert said.