By Marina Malenic
Raising concerns that the U.S. defense industry has “consolidated around 20th century platforms,” the Pentagon’s latest sweeping strategy and weapons purchasing assessment asserts the need to rethink the department’s relationship with its industrial base.
“The decades-long primarily hands-off approach to the U.S. defense industrial base cannot be remedied quickly, and will require a long-term approach undertaken in partnership with industry and Congress,” reads a December draft of the forthcoming Quadrennial Defense Review.
The authors blame “the federal government as a whole” and “the Pentagon in particular” for neglecting to address changes within both the industry and the department’s needs in the new strategic environment.
“The result has been that America’s defense industry has consolidated and contracted around 20th century platforms,” according to the report, “rather than the broad and flexible portfolio of systems today’s security environment demands.”
Aerospace industry advocates saw the development as largely positive.
“We’ve been very pleased that DoD is looking at this,” said Richard Sylvester, the vice president for acquisition policy at the Aerospace Industries Association, a group that promotes the interests of U.S. aerospace companies. “Industrial base issues and concerns are something we think should have been included all along.”
While QDR draft states that the department will “rely on market forces” to shape and sustain industrial capabilities, it also states that the government “must be prepared to intervene when absolutely necessary to create and/or sustain competition, innovation, and essential industrial capabilities.”
“Our engagement with industry does not mean the Department of Defense will underwrite sunset industries nor prop up poor business models,” the study adds. “It does mean the Department will create an environment in which our industries, a source of our nation’s strength, can thrive and compete in the global marketplace.”
The document also recognizes the importance of the financial sector to business development, stating that the department “must ensure that we do not take this access to capital for granted and work to form a more transparent view of our requirements and long-term investment plans.”
Sylvester noted that the Pentagon’s concern with the health of its industrial base is “kind of cyclical or spotty” and that it has often been “kind of an afterthought.”
“This is different in the sense that they seem to be making it part of the planning process,” he explained. “It’s a good step forward. It was more reactive in past, and this seems to be more proactive.”
The document also says the DoD recognizes the importance of second-, third- and fourth-tier suppliers that manufacture the smaller systems and components for large, complex weapon systems. The Pentagon must examine impacts of its program decisions on these companies, the draft states.
Sylvester said one area the draft is silent on is perishable skills the industry relies on.
“That’s one of the things I would have expected to see,” he said. “I hope it will be included in the final version.”