INDUSTRIAL BASE

Pentagon Official Sheds Light on Ongoing Industrial Base Study

9/8/2017
By Yasmin Tadjdeh

Photo: Getty

Certain defense sectors will undergo stress tests as part of a study about the state of the industry that was recently ordered by the White House, a Pentagon official said Sept. 6. 

“We’re going to be pressure testing the defense industrial base,” said John McGinn, acting deputy assistant secretary of defense of the office of manufacturing and industrial base policy in the office of the undersecretary of defense for acquisitions, technology and logistics. “We’re going to be … looking at different [operational] scenarios” to see how they would react to different contingencies, he added.

The assessment is required under an executive order signed by President Donald Trump on July 21. The Pentagon, working with other agencies including the Departments of Commerce, Labor, Energy and Homeland Security, has 270 days to finalize a report.

“A healthy manufacturing and defense industrial base and resilient supply chains are essential to the economic strength and national security of the United States,” the order said. “Modern supply chains, however, are often long and the ability of the United States to manufacture or obtain goods critical to national security could be hampered by an inability to obtain various essential components.”

A loss of more than 60,000 American factories, key companies and millions of manufacturing jobs since 2000 “threatens to undermine the capacity and capabilities of United States manufacturers to meet national defense requirements,” the order said.

The assessment is a way for the Trump administration to take a step back and examine the industry on a wide scale, McGinn said during remarks at the annual ComDef conference that was held at the National Press Club in Washington, D.C.

Working harmoniously with industry will be critical as the department conducts the study, he said. “We’re going to aggressively solicit your input,” he said. “We are going … to meet with associations, companies … up and down the spectrum because we want to get perspectives from the aluminum producers, from the miners, from the electronics folks about all these industrial base issues. So we’re really looking for your assistance on this thing and that will be critical in helping us.”

Industry has a better sense than the government does about what kind of contracting mechanisms work well for certain scenarios, or what are the best practices for competitions in specific markets, he added.

McGinn said his office had two teams working on the effort. One works with the White House and Alexander Gray, the special assistant to the president for defense policy, he said. That group includes an interagency task force and meets biweekly.

They “develop our data collection priorities, our scope, our assumptions,” he said. “We’re defining those now.”

The other group is made up of personnel from McGinn’s office that meets on a weekly basis. “It has been a quick process,” he said. “We’re a fast moving train. … So far it has gone quite well.”

McGinn noted that his new boss, Ellen Lord, who was recently confirmed as undersecretary of defense for acquisition, technology and logistics, is keen on developing the assessment.

The study will differ from previous defense industrial base assessments that became too cumbersome, he noted. One led by the Commerce Department “became very, very difficult” and ultimately wasn’t practical, he said.

“We’re going to a different model where we’re requesting voluntary input from” industry, he said. “We’re going to establish … [ a request for information], put that out. We’re going to collect input … [about] industrial capacity, capabilities from you all, as well as suggestions on where we should focus.”

Topics: Industrial Base, Defense Contracting