ARTICLE

March 2003

NDIA Lists Top Defense Issues for 2003

by Benjamin Stone

NDIA’s Board of Directors has approved the association’s “Top Issues for 2003.” The issues—which were proposed by NDIA’s Government Policy Advisory Committee, whose membership includes all chapter presidents, as well as the chairs of all committees and divisions—are as follows:

Issue 1: Funding America’s Defense for Wartime and Transformation.

Defense spending increased by $50 billion for fiscal year 2003. However, 80 percent of the increase does nothing more than make necessary, fact-of-life adjustments that do not contribute to the modernization of the nation’s warfighting capability.

The chairman of the Joint Chiefs of Staff, Air Force Gen. Richard Myers, noted in his 2003 posture statement to Congress that the Defense Department “should spend $100 billion to $110 billion per year for several years to come to re-capitalize today’s force structure.”

Failure to provide adequate funds for research and development and procurement could cause an already consolidated defense industrial base to lose even more capacity to design, develop and produce future weapons.

While the defense budget must continue to grow significantly, every effort also must be made to keep improving military efficiency and to apply the savings to increased warfighting capacity.

Issue 2: Sustaining the Defense Industrial Base

In order to meet its requirements for leading-edge capabilities at affordable prices, the Defense Department must increase investment spending, while strengthening the financial health of the defense industrial base.

However, if a transformation-minded Pentagon is to retain or gain access to the best technology that industry has to offer, many challenges remain.

The department should look upon these challenges as opportunities, as it continues to develop an understanding of the demands and pressures of the defense marketplace, as well as a closer partnership with its private sector suppliers.

Rapidly developing demands for the very different capabilities associated with the services’ transformation plans require a fresh assessment of how to accomplish this relatively long-term evolution.

Such an assessment should consider the appropriate balance between the public and private segments, the technology and production base of each sector and the program phasing necessary to sustain each.

Issue 3: Protecting the Defense Industrial Base

To date, the department’s critical infrastructure program has only begun to focus on the defense industrial base. This base is itself dependent upon a network of critical infrastructures—electrical power, water supply, transportation and communications—whose vulnerabilities currently are being examined.

Interdependencies among base components, however, have yet to be analyzed in detail. As a result, few risk-mitigation measures are now in place to reduce the probability of a terrorist attack against any single component or to ensure continuity of operations.

Assessing the vulnerabilities of the defense industrial base will require industry participation. But for industry to participate fully, these vulnerabilities must be protected from public disclosure.

Issue 4: Improving the International Competitiveness

As part of a comprehensive assessment of U.S. defense trade policies, the administration is examining all export-control laws, regulations and administrative practices to ensure that they appropriately balance national security requirements with continued viability of the defense industrial base.

NDIA strongly supports this assessment. The defense industry has been burdened for many years by inadequacies in the current export-control process. Any new export-control regime adopted as a result of the review, however, must not reduce the international competitiveness of U.S. contractors. Doing so would undermine the defense industry, reduce trade, and limit national security and foreign policy options.

Issue 5: Transforming Training and Logistics

The experience of U.S. forces in the asymmetrical conflict sparked by September 11 underscores the fact that the most demanding challenge facing the armed services is to be prepared for a broad range of hostilities. In order to maintain proficiency in a wide variety of missions and tasks, units need more effective ways to train.

The effectiveness of live training is eroded continually by environmental and political pressures upon military training ranges, but increased use of simulation and training devices often provides an excellent alternative.

Despite an increased focus recently on training, however, there has been no change to the acquisition process, which scrutinizes new training equipment at each milestone review.

The department has mandated implementation of a Performance-Based Logistics (PBL) approach to improve the readiness of new and legacy weapons systems and equipment.

Achieving improved results from PBL, however, will require cultural changes both within government and industry.

Issue 6: Implementing a Reasoned Strategy for Network Centric Operations

National defense, homeland security and electronic government are all dependent on the seamless flow of information. While the current administration has placed increased emphasis on integrated enterprise systems, government agencies and the military services remain locked in stove-pipe, legacy systems, which are inadequate to support a robustly networked, collaborative environment and hinder information sharing through network centric operations.

The information-technology industry recognizes the critical value of information sharing and the need for developing integrated data systems that deliver secure, timely and accurate information.The industry believes the strength of America’s information infrastructure must be leveraged to accelerate a network centric transformation within the government.

Issue 7: Utilizing Small Businesses

One third of NDIA’s member companies categorize themselves as small businesses. These companies are responsible for supplying the military services with myriad products and services.

The department has spearheaded government initiatives to nurture small businesses and expand their capabilities. Nevertheless, it must continue to increase contracting opportunities for this segment of the industrial base, if it is to capitalize on the many innovations introduced by the small business community. The department also must continue to make improvements to the crediting of small business participation in its contracts.

In addition to these seven issues, NDIA members recognize the critical value of acquisition policies and procedures that ensure effective and efficient acquisition and management of goods and services required to sustain national defense. Consequently, NDIA and its affiliates are committed to an open dialog with Congress and the Defense Department to ensure that industry’s concerns are fully understood.

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