The Pentagon on Thursday released its first-ever National Defense Industrial Strategy (NDIS), detailing a range of priorities to “catalyze generational rather than incremental change” for bolstering weapons production.
DoD officials told reporters the strategy
, which includes steps to get after improved supply chain resiliency and enhanced cooperation opportunities with international partners, will be followed soon by an implementation plan with “near-term measurable actions and metrics to gauge progress.”
“The intention of the implementation plan is to create a prioritized list of tasks to actualize the strategy. We’ll have a mechanism and a methodology which we’re going to be harnessing to focus the department to buy down the risks that we’ve identified,” Halimah Najieb-Locke, acting principal deputy assistant secretary of defense for industrial base policy, said during a briefing on the new strategy.
Laura Taylor-Kale, assistant secretary of defense for industrial base policy, told reporters an unclassified overview of the implementation plan is likely to be released in February and DoD is aiming for the classified plan to be completed in March.
“The classified implementation plan will really reflect a lot of the authorities we have within A&S, and particularly within Industrial Base Policy. We plan to focus on the Defense Production Act and the [Industrial Base Analysis and Sustainment (IBAS) program] as two important tools and authorities we have,” Taylor-Kale said.
The NDIS lays out four long-term goals to ensuring the industrial base can meet requirements to produce capabilities “at speed and scale,” focused on resilient supply chains, workforce readiness, flexible acquisition and economic deterrence, while noting the department will track its successes over the next three to five years to ensure it’s on path to achieve those objectives.
“The National Defense Industrial Strategy (NDIS) offers a strategic vision to coordinate and prioritize actions to build a modern defense industrial ecosystem that is fully aligned with the NDS. It also calls for sustained collaboration and cooperation between the entire U.S. government, private industry and our allies and partners abroad,” Deputy Defense Secretary Kathleen Hicks says in the opening of the NDIS. “Developing and empowering this modern defense industrial ecosystem is key to integrated deterrence and building enduring advantages.”
The strategy lays out specific industrial base challenges the department is aiming to address, to include under-utilization of multi-use technologies, an inadequate workforce and domestic production, non-competitive practices, long lead times, fragility of sub-tier suppliers, lack of market share and limited visibility into international partner requirements.
“Commercial manufacturing and related supply chains migrated overseas, including materials and components relevant to military needs. Over three decades the People’s Republic of China became the global industrial powerhouse in many key areas – from shipbuilding to critical minerals to microelectronics – that vastly exceeds the capacity of not just the United States, but the combined output of our key European and Asian allies as well,” the department writes in the document. “The events of recent years dramatically exposed serious shortfalls in both domestic manufacturing and international supply chains. The COVID-19 crisis demonstrated America’s near wholesale dependency on other nations for many products and materials crucial to modern life.”
On the push to ensure the department has resilient supply chains, the strategy states DoD faces challenges with “the health of sub-tier suppliers, manufacturing capacity, and lack of visibility into our critical supply chains.”
The department includes specific actions it intends to take to solve those challenges, including incentivizing industry to invest in extra capacity, better managing of stockpile planning to “decrease near-term risk,” supporting bolstered domestic production capacity, diversifying supplier bases and looking to “leverage data analytics to improve sub-tier visibility to identify and minimize strategic supply chain risks and to manage disruptions proactively.”
The NDIS also suggests working with the State and Commerce Department on improving the Foreign Military Sales process to help “drive commercial sustainability” and engaging allies and partners to expand global defense production and increase supply chain resilience.
Bill LaPlante, the Pentagon’s acquisition chief, first detailed the NDIS last fall and noted the department is planning to pursue more co-development, production and sustainment arrangements with international partners in its effort to improve industrial base capacity (Defense Daily, Oct. 25).
“The global activity of pacing threats increasingly requires a global approach to defense industrial relationships, concerns, and competition,” DoD writes in the NDIS. “Proactively developing, growing, and sustaining multiple, redundant, production lines across a consortium of like-minded nations is imperative for the U.S. to ensure adequate production capability and capacity while mitigating exposure to supply disruptions or changing production requirements. The DoD must develop a networked cooperative framework that enhances defense industrial output by working with allies and partners to de-risk supply chains and advance our ability to engage in co-sustainment, maintenance, repair and overhaul.”
The NDIS specifically cites the experience working to boost munitions production capacity to support Ukraine in its fight against Russia’s ongoing invasion as a key blueprint in ensuring the industrial base is prepared to support potential future conflicts.
“Building off the global experience of the Ukraine conflict, there may be opportunities to similarly convene the leadership of allied and partner nations within the Indo-Pacific, to deepen multilateral collaboration on regional industrial base and manufacturing production challenges,” DoD writes. “Rather than wait for emergency circumstances, investing in these relationships now will yield fruit, should we collectively face a crisis in coming years. This is the power of production-oriented diplomacy.”
Similarly, the department notes its push to make use of new authorities for multi-year procurement (MYP) of critical munitions, citing it as a key tool to ensuring production line stability and a steady demand signal for industry.
“The DoD will seek to expand the use of multi-year procurement (MYP) to create sustained demand signals that will promote investment into the capacity of the industrial base, which have typically been reserved for only the most expensive acquisition types, such as procurement of large sea-going Navy ships. MYPs are a step in building a consistent and predictable demand signal that creates more transparency and less risk for both prime contractors as well as more fragile sub-tier suppliers,” the NDIS states.
Eric Fanning, president and CEO of the Aerospace Industries Association, released a statement on Thursday noting the organization will continue to engage with the Pentagon on the strategy and adding “the details will be critical.”
“Our shared goal is a faster, more resilient, more cost-effective industrial base, but we also must avoid additional burdens that will drive up costs and drive companies away from working with the Department of Defense,” Fanning said.
Later in the day, Taylor-Kale said at a think tank that elements of the forthcoming implementation plan will include efforts around building capacity for critical minerals and strategic materials, and addressing challenges posed by adversarial foreign capital and investments in the industrial base.
“So, we’re we’re thinking about the implementation from many different standpoints, but again, focusing on ultimately what are the needs of warfighters and how do we address sort of the key choke points and pain points in the supply chain to get there,” she said at an event hosted by the Center for Strategic and International Studies.