Want to solve supply chain security? Doing Business Differently – Breaking the Defense Breaking the Defense


F-35 Production Line (File)

At this point, you would be hard pressed to find anyone in the DC defense establishment who doesn’t think the acquisition system needs reform, with an emphasis on the introduction of new commercial technologies on the battlefield. But as Stephanie Halcrow argues in this editorial, there are a few simple steps the Pentagon could take right now to start the process and improve the health of the defense industrial base.

In 2018, the Ministry of Defense submitted a unique report on the defense industrial base in response to Executive Decree 13806. The results were not encouraging: the review warned that macro forces at work in the industrial base produced a “degradation of American capabilities” and that there was “a surprising level of foreign dependence on competing nations”.

The DoD’s subsequent reports on industrial capabilities to Congress in 2019 and 2020 were equally pessimistic, and the defense industrial base agrees with this assessment; the National Defense Industrial Association gave the defense industrial base a “C” rating in the Vital Signs 2020 and Vital Signs 2021 annual reviews.

There are steps the DoD can and must take now to begin addressing these challenges.

The ministry can start by better leveraging and expanding the industrial base for trade defense. But to attract new business entrants, the Department of Defense must adopt business practices, not try to impose DoD practices on business companies. Specifically, DoD needs to evolve market research to leverage commercial products and services, take removing and streamlining regulations seriously, and take a little more risk.

There are several market research organizations at DoD, such as the Defense Innovation Unit, that focus on commissioning and scaling commercial technology for the U.S. military. The department should build on organizations like DIU and use its geographic presence across the United States to intensify its engagement with the commercial industry. More importantly, the DoD’s market research efforts should be guided by its National Security Strategy for the Defense Industrial Base and be focused on addressing the gaps and vulnerabilities identified in its ongoing monitoring of the DOD chain. ‘supply.

In addition to expanding market research, the department needs to remove complexity, restrictions, and scrutiny from its procurement and contract management processes to attract new business entrants. Some would advocate finding workarounds to the current process, but a long-term sustainable solution is to streamline the current process to make it less cumbersome.

To his credit, the Pentagon recently took steps to address the regulatory burden. NDIA’s Vital Signs 2021 rightly praised the DoD for reducing regulatory burdens in the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS). In fact, NDIA reported that the “paperwork” burden score had declined in each of the past three years.

However, there is still a long way to go. There are even more opportunities to remove outdated regulations, and administration and department heads should work together to undertake a focused, long-term effort to first streamline, and then reduce, regulations in FARs. and DFARS.

Here’s a simple example: FAR includes a clause encouraging entrepreneurs to develop policies to ban texting while driving. While this is a reasonable goal, should it really be a FAR clause? It might make the roads safer, but it’s not exactly about national security.

To embark on a reform effort like this is difficult and time consuming, much more than bypassing the current process. But the dividends are far greater and longer lasting than using workarounds. Streamlining and reducing regulations will save taxpayer dollars, speed up the acquisition process, make the Pentagon more attractive to the commercial industry, and ultimately improve the safety of the supply chain.

While this effort is underway, the DoD should prioritize the use of commercial procurement procedures, including the use of standard terms and conditions as an easy way to remove regulatory hurdles and solidify the partnership with the commercial industry.

Finally, the DoD needs to be comfortable taking more risks and moving beyond awarding pilot and prototype contracts only to the commercial industry. This is not the way forward to improve the health and resilience of the defense industrial base or strengthen supply chain security. Instead, the DoD must award supply contracts to new commercial entrants to bring in the best of American manufacturing to address national security concerns.

It’s comfortable to do business as usual, but comfort and business as usual is a sure way to fall behind. It is time to stop admiring the problems of our defense industrial base and to do business differently.

Stephanie Halcrow is a former professional staff member of the House Armed Services Committee where she covered procurement and industry base policies. She has also served on the United States Senate staff and is a retired US Air Force officer.


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