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Washington Pulse
In Economic Downturn, Reasons to Worry About Suppliers
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By Sandra I. Erwin
The economic downturn this past year has some industry experts worried that many small but critical suppliers to the Defense Department may be going out of business.
“There’s a general concern across the board in that area,” said Army Lt. Gen.
Patrick O’Reilly, director of the Missile Defense Agency. “We continually monitor to the greatest extent possible the ability to maintain a viable industrial base ... especially we’re concerned about niche suppliers, there may only be one or two in the country.”
Some experts don’t believe the Pentagon is doing a good enough job of tracking the health of its supplier base.
“It’s an area that needs more study,” said Bob Mansfield, retired Air Force brigadier general and former director of Air Force supply operations. “Routinely we lose suppliers — due to economic reasons — and we don’t know about it until it’s too late.”
The Defense Department lacks “good mechanisms” to gauge whether certain supply chains are at risk, said Mansfield.
Similar concerns occur in civilian industries. The collapse of the auto industry prompted Ford Motor Co. to sign up for Grant Thornton International’s web-based business intelligence service that constantly monitors the financial health of Ford’s 1,400 suppliers.
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