A multi-agency task force studying U.S. military contractors has an April 17 deadline to deliver its report, but has already identified some causes for concern over the health of the domestic defense industrial base.
The Defense Department’s spending has been hampered and made erratic by nearly a decade of fiscal years begun with stopgap funding measures and the ongoing threat of across-the board sequestration budget cuts, according to Jerry McGinn, principal deputy director of the Office of Manufacturing and Industrial Base Policy (MIBP) in the Office of the Under Secretary of Defense for Acquisitions, Technology and Logistics.
Photo: Lockheed Martin.
“That makes it hard for companies to plan and makes the defense marketplace unattractive,” to all but the largest and most traditional military contracting firms, he said Feb. 26 at a forum on the defense industrial base hosted by the New America Foundation in Washington, D.C.
“We need to be more proactive about how we shape our national security innovation base … how we incentivize industry, non-traditional industry, new entrants to be able to enter the defense marketplace,” McGinn said.
Potential adversaries like China are very public about the investments they are making in basic research and military modernization and are willing to invest in U.S. manufacturing, he said. That international competition further threatens domestic industry.
The U.S. industrial base has shed five million manufacturing jobs since 2000, McGinn said. That is exacerbated by an ongoing shortage of skilled labor and professionals trained in science, technology, engineering and math fields, he said.
“To maintain our technological advantage, we have to maintain a secure, robust, innovative and resilient national security innovation base,” McGinn said. “When you think of that [defense industrial base] you think of metal benders, the shipbuilders, the folks at Oshkosh in Wisconsin that make ground vehicles for our forces. The department is increasingly looking at commercial technologies, because that’s where the innovation is happening.”
McGinn’s office is leading the industrial base analysis ordered last year by the Trump administration. The report, due April 17, will look at capacity and resiliency of the manufacturing and defense industrial bases and related supply chains for national security and make recommendations to the president and department heads for improvements in these areas.
In addition to DoD, the Departments of Commerce, Energy, Homeland Security and Labor will work on the assessment, and will consult with the Departments of Interior and Health and Human Services, the directors of the Office of Management and Budget, National Intelligence, National Economic Council, Office of Trade and Manufacturing Policy, and the National Security Adviser.
McGinn said an interim readout of the report’s preliminary draft by the interagency task force was conducted recently for administration officials in the Eisenhower Executive Office Building next to the White House. Interim findings from various working groups on risk factors and vulnerabilities to the industrial base were briefed at that meeting, he said.