White House report highlights serious flaws in US military supply chain

Uncertain budgets, a broken procurement system and an unfair trading environment have eroded the US defense industrial base to levels at which national security could be at risk, a long-awaited White House report concluded. , which released Thursday, bringing a new urgency to problem acquisition experts worried for years.

The report states that "all aspects of the manufacturing and defense industrial base are currently under threat" and that there are "industries close to national extinction", forcing the Pentagon to look for Help abroad. Senior procurement officials said the findings underscore the need to think more critically about its supply chain and US military relations with defense contractors.

"Without a strong, secure and resilient industrial base, you can not kill the fighter," said Ellen Lord, Undersecretary of Defense for Acquisitions and Sustainment. "Our industrial base is as strong as our department's relationship with the industry."

President Trump is expected to unveil a public version of the report Friday afternoon and sign a decree intended to solve the problems it raises. On a phone call Thursday night, Lord and Eric Chewning, Assistant Deputy Secretary of Defense and Defense at Manufacturing, declined to specify the exact amount of additional funds allocated to the defense, and abstained from directly answer the question of whether new subsidies would be allocated to the defense. companies could be part of the solution.

But a senior administration official, speaking on condition of anonymity to discuss the White House's reaction, described money injections to reinforce some of the weaknesses, including $ 70 million for a manufacturing company. firearms components and additional funding for the Abrams tank. rooms.

The report drew attention to longstanding problems with the defense industrial base, especially China. The report shows that the economic security and national security of the United States is inseparable, a line of thought that the Trump administration has also used to justify the erection of new trade barriers against Chinese steel and aluminum.

As the global economy became increasingly integrated across transnational borders, the vast supply chain serving the US military depended on low-cost, foreign components that were overly dependent, officials said. Trump administration. Foreign machines, infrared detectors and night vision systems are largely provided by foreign suppliers, officials said, highlighting whether the US military would have access to them during a protracted war.

The report also states that the years of declining defense spending under the Obama administration – when "sequestration" spending limited defense spending after 2013 – left "fragile" manufacturers facing security or flow problems cash, preventing them from meeting military standards. A wave of consolidation during this period meant that there was often only one supplier for some important pieces, forcing the government to turn to a monopoly supplier.

The report also highlighted the difficulty of attracting skilled workers to the US government, as engineers, software developers and skilled workers were rare. While these shortages have also affected much of the US manufacturing base, they are particularly troublesome for military suppliers, who often have to wait a year or more for these professionals to obtain security clearances to work on military programs. secrets.

The report identified nearly 300 supply chain vulnerabilities in which particular components are produced by a single company, a "fragile" supplier, or a foreign supplier. It distinguished obscure but important components such as submarine propeller shafts, weapon guns used for combat vehicles, and ceramics inserted into bullet-proof vests as potentially incapable of meeting the needs of the military. American army in a protracted war.

The warning came as the Pentagon's national defense strategy, after years of fighting insurgents in Iraq and Afghanistan, was placing increasing importance on Russia's and China's competition for global military dominance. For years, these potential adversaries have worked to reduce the technological superiority enjoyed by the United States since the Second World War. But now, these countries "seem to be gaining strength and capacity," the report said, adding that it was urgent to strengthen the Pentagon's suppliers.

Some of the issues identified in the report – such as the Pentagon's slow and bureaucratic procurement system – have been around for years. And others, such as the "declining core capabilities of US manufacturers," concerned Pentagon leaders under the Obama administration, who tried to defeat any further consolidation of the sector.

The Pentagon also sought to better exploit innovation by expanding its field of action to cities like Silicon Valley and Boston, hoping to convince companies that were abandoning the work of the federal government to become defense contractors, which has had mixed results.

The relationship between the Trump administration and the defense industrial base was largely positive, despite anticipated presidential tweets for Boeing and Lockheed Martin, which drove down share prices across the sector.

Trump administration policies generally resulted in increased profits for defense companies, which benefited from increased defense spending and corporate tax cuts. However, defense companies have sometimes been caught off guard by the Trump administration's efforts to erect new trade barriers. When the administration decided to raise high tariffs on steel and aluminum last March, Eric Fanning, president and chief executive officer of the Association of aerospace industries, said such obstacles would harm small and large defense companies and indirectly by retaliating against their US suppliers.

In response to Tuesday's report, leading defense industry associations welcomed his findings, while recalling weaknesses in their industry. The three main professional associations representing the defense industry – the National Defense Industries Association, the Professional Services Board and the Aerospace Industries Association – were all consulted as part of the report. , officials said.

NDIA President and CEO Hawk Carlisle, an Air Force retired general, called the report "sober" the health of the US defense industrial base.

"The dependence on a single producer within the supply chain, reliance on unstable or hostile foreign suppliers for essential components, and the misplaced presumption of maintaining the pre-eminence of US military superiority are examples of results that must be immediately taken into account, "said Carlisle. "In addition to these risks, the report highlights a drain on talent that is now pouring into new companies in Silicon Valley instead of defense-based industries."

Mr. Fanning of the Aerospace Industries Association praised the Trump administration's approach to integrating elements of economic security and national security.

"Ensuring the health of the US manufacturing and defense manufacturing base is a critical economic and national security priority as the United States battles current and future threats," Fanning said.