Report Suggests Multiple Approaches To Better Integrate Allied Defense Industrial Base

New exemptions for controlled goods, program licensing, integration of performance based logistics contracting, and improving standards to better enable open systems architecture among international partners are among the key recommendations in a new report aimed at furthering integration of the defense industrial bases of the U.S., Australia, Canada and the United Kingdom.

Another recommendation based on the information collected for the report is the need to strengthen the capabilities of the acquisition workforces of the partner nations so they are “in a place to implement these kinds of approaches well,” Andrew Hunter, director of the Defense Industrial Initiatives Group at the Center for Strategic and International Studies (CSIS), said at the outset of a panel discussion about the report last Friday.CSIS Logo

Hunter said common acquisition workforce training as well as side-by-side training among the international partners should be components of better integrating the National Technology and Industrial Base (NTIB).

Congress, in the FY ’17 National Defense Authorization Act, directed the Defense Department to develop a plan to lower the barriers to integrate the persons and organizations that are part of the NTIB. John “Jerry” McGinn, principal deputy director for Manufacturing and Industrial Base Policy at the Pentagon, said during the panel discussion the implementation plan has been completed and approved by Ellen Lord, under secretary of Defense for Acquisition and Sustainment.

The implementation plan will be made public in DoD’s annual industrial base capabilities report, McGinn said. The report is typically released in the spring timeframe.

In addition to McGinn, the panel also included government representatives from Australia, Canada and the U.K. Simon Gadd, counselor for Defence Acquisition and Technology on the British Defense Staff, pointed out that the industries of the respective countries “tend to integrate anyway,” adding that small changes over time should be made to further strengthen integration. Roger Grose, counselor for Defence Material with Australia’s DoD, mentioned the need to adhere to free trade principles.

Ultimately, according to the 72-page CSIS report, “Participants saw integration of the NTIP as an opportunity to maximize delivery of capability to the warfighter to protect against common threats. They also noted that no one nation has a monopoly on ideas, high technology, or STEM (science, technology, engineering and math) talent, and further integration will allow the NTIP to leverage a broader industrial capacity and to accrue economic gains for mutual benefit.”

Hunter pointed out that the U.S. and Canada have been partners on defense trade for 70 years, which provides a model for helping to further integrate Australia and the U.K. into the NTIB. The report points out that Canada already has exemptions to U.S. arms control regulations embodied in the International Traffic in Arms Regulations that could be adapted for Australia and the U.K.

In the area of open systems architecture, the report recommends first taking the time to develop a common understanding of what the term means before transitioning to more technical aspects. It also cautions against trying to make standards perfect at the expense of the good, suggesting that in the short-term the focus should be on standards “interoperability.”

Some of the barriers to further integration of the NTIB mentioned in the report include protectionist policies for certain areas of each country’s respective industrial base, small business set asides within each country, export controls, ineffective bilateral defense cooperation treaties, and challenges in the U.S. foreign military sales process.





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