Dan Cohen, ADC

The outlook for lower-tier suppliers in the nation’s defense industrial base is troubling, with DOD facing “limited capabilities, insecurity of supply, lack of R&D, program delays and an inability to surge in times of crisis,” according to the Trump administration’s long-awaited interagency study of the defense base. The report, which is scheduled to be formally released Friday afternoon, paints an unsettling picture but many of the shortcomings in the industrial base had previously been identified, reports Defense News.

Most notably, the document calls for extending direct investment by the federal government in the industrial base’s lower tiers through DOD’s Defense Production Act Title III, manufacturing technology, and industrial base analysis and sustainment programs. That type of intervention would address “critical bottlenecks, support fragile suppliers and mitigate single points-of-failure.”

The report, which underscores the threat posed by China, outlines five overriding trends shaping the defense industrial base:

  • statutory spending caps and uncertainty in the congressional budgeting process;
  • a decline in domestic manufacturing capacity, which cascades throughout the supply chain;
  • ineffective federal procurement processes;
  • industrial policies of competitor nations, including explicit targeting by China; and
  • a drop in science, engineering and manufacturing skills within the domestic workforce.