Rebuilding the Industrial Base’s Strategic Resilience

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It has been a productive few months at the National Defense Industrial Association. Thanks to your substantive contributions, NDIA provided valuable feedback to Congress on the impact inflation levels are having on your companies.

Your collaboration ensured the 2023 National Defense Authorization Act and the Defense Appropriations Act, which passed in December, carried both the necessary authorities and the associated funding to begin to address the systemic challenges inflation is having on our industry.

Combined, these provisions allow contracting officers to make economic adjustments to current contracts. The association will remain engaged with the Defense Department and Congress to provide educational information regarding the implementation of this important relief, so please continue to engage with us regarding how the process is — or is not — working for you.

In addition, NDIA releases Vital Signs 2023 this month. The purpose of Vital Signs is to encourage conversations at all levels of government and among Americans interested in national defense about the necessary policies and investments required to maintain the superior readiness of the U.S. defense industrial base. Read the report’s executive summary along with in-depth stories in the March issue of National Defense.

More than 170 NDIA member companies contributed to the Vital Signs survey. If you were one of them, thank you! NDIA remains committed to ensuring your voice is heard by government policymakers and external audiences.

The results of this year’s survey are unambiguous: the federal acquisition process is growing more — not less — cumbersome; the lack of budget stability is breaking companies and causing significant workforce uncertainty; and the challenges of finding and retaining talent are coercively impacting even our most strategic defense programs.

NDIA member companies reported in the Vital Signs survey that over the next year, 58 percent believed defense contracting business conditions would be about the same, and 29 percent reported the business conditions would get worse.

Put another way, 87 percent believed that despite the sense of urgency to re-posture the industrial base to deter and — if needed — decisively prevail in peer conflict, nothing is going to change … the calvary is not coming. Let us not forget. We are the calvary needed to revitalize urgency and to change the status quo. But we cannot do it without you.

The context of the Vital Signs results is equally important. The United States, along with its allies and partners, must be prepared to prevail in the return of great power economic and technological competition. One key area in which the U.S. must re-establish its competitive advantage is revitalizing a brittle defense industrial base.

The capacity of the defense industrial base to grow its output and fulfill a surge in military demands stands as a key test of its health and readiness. Currently, public policy is not oriented to build a defense ecosystem for peer conflict.

In fact, the Defense Department assessed in its 2020 annual “Industrial Capabilities Report to Congress” that without serious and targeted government intervention of capital investment — measuring in the billions, not millions — in facilities and in training and maintaining the workforce — the industrial base is simply unsustainable.

The Pentagon is now laser-focused on ensuring warfighters have modernized operational concepts, force structures, platforms, systems, services, technology and equipment for any potential peer conflict. The 2022 National Security Strategy identifies the People’s Republic of China as the pacing challenge for the United States in economic and technological great power competition because it is the “only competitor potentially capable of combining its economic, diplomatic, military, and technological power to mount a sustained challenge to a stable and open international system.”

At NDIA, we are receiving a clear demand signal from the department to help connect senior civilian and military leaders with industry partners who can help bridge the gap between what is currently in our arsenal and what is needed. It is also looking for industrial support to deepen operational interoperability and technological integration with U.S. allies and partners.

The combined need to make significant capital investments in industrial infrastructure, support sustained resourcing for major platforms and precision-guided munitions and build the right industry partnerships to integrate and scale emerging disruptive technology continues to drive both the association and its Emerging Technologies Institute’s work.

In closing, next month attendees have another wonderful opportunity to connect with some of the most critical senior civilian and military leaders looking to deepen their understanding of industry partnership opportunities. NDIA and the U.S. Indo-Pacific Command will be hosting the 2023 Pacific Operational Science & Technology (POST) Conference March 6-9, 2023, in Honolulu, Hawaii. The organizing theme is “Seizing the Initiative via Decision Superiority, Innovation and Collaborative Partnerships.”

This premier conference hosts the Indo-Pacific’s foremost experts in science, technology, and security to better understand and address the critical issues and challenges of the region. Moreover, this conference encourages academia, industry and government leaders to envision near-term solutions to such challenges.

The event will also showcase prototyping and experimentation in support of joint fires, information advantage, contested logistics and other joint warfighting challenges.

The U.S. military cannot afford for you — and the capabilities your companies bring to the fight — to miss this event. Please join us in March!

Michael Bayer is the National Defense Industrial Association’s board chair and the president and CEO of Dumbarton Strategies.

Topics: Defense Contracting, Defense Department