DoD Officials Announce Defense Industrial Policy
The U.S. Department of Defense released a lofty goal of modernizing the military’s industrial base ecosystem through its first National Defense Industrial Strategy (NDIS). Over the next several years, the department will guide implementation of the NDIS, which is designed to foster resilient supply chains, workforce readiness, flexible acquisition and economic deterrence in the face of growing competition from adversaries such as China and, to a lesser extent, Russia, North Korea and Iran.
The Assistant Secretary of Defense for Industrial Base Policy Laura Taylor-Kale and Acting Principal Deputy Assistant Secretary of Defense for Industrial Base Policy Halimah Najieb-Locke announced the policy to media at the Pentagon and via teleconference on January 11, 2024.
“The DoD has been involved in industrial policy for decades, going back to 1922, and the creation of the Army-Navy Joint Munitions board that coordinated procurement between the two services,” said Taylor-Kale. “But this is the first time that we really put pen to paper to map out a strategy and a vision to create a modernized, resilient, innovative defense industrial ecosystem. Today, America faces great threats to national security. Our adversaries are building up their military power to levels not seen since World War II.”
Najieb-Locke sees the NDIS as building on the National Defense Strategy and the DoD’s small business and cybersecurity strategies. The officials worked with the private sector to solicit feedback and incorporate specific information from over 1,000 comments.
“We have briefed the strategy to key stakeholders, industry, staffers and members of Congress and other external stakeholders, such as associations,” she said. “This is really a reflective document of deep collaboration across the defense enterprise. The NDIS is grounded in the National Defense Strategy with a special emphasis on integrated deterrence and building that resilient ecosystem.”
Last year, the Pentagon created the position of assistant secretary for industrial base policy, with Taylor-Kale stepping into the role after Senate confirmation in March 2023. The leaders, Najieb-Locke’s office and other officials, started drafting the NDIS that month.
The effort is one of many that the DoD is undertaking to be able to face and succeed against China and other adversaries.
“China's increasingly aggressive use of gray zone tactics across all elements of national power threatens to upend existing international order,” Taylor-Kale said. “The United States and its allies continue to supply Ukraine with weapons and munitions to fight against Russian aggression. We also now stand with Israel in this existential fight against Hamas. We are implementing the National Defense Industrial Strategy now to ensure that our defense industrial base continues to be up to both strengthen our national security here at home while reassuring and supporting allies and partners in the direct path of adversarial influence and aggression.”
The leaders see the NDIS as a “strategic vision for what we need to meet our warfighter needs.” The policy, which will be accompanied by classified and unclassified implementation plans in February and March respectively, will serve as the strategy for the next three to five years. The leaders will employ metrics to measure progress of the implementation of the NDIS.
In regard to fostering supply chain resilience, the DoD intends to “incentivize industry to improve resilience by investing in extra capacity; manage inventory and stockpile planning to decrease near term risk; continue and expand support for domestic production; drive investment in the organic industrial base and production accelerators; diversify the supplier base and invest in new production methods; leverage data analytics to improve sub-tier visibility to identify and minimize strategic supply chain risks and to manage disruptions proactively; engage allies and partners to expand global defense production and increase supply chain resilience; and improve the Foreign Military Sales process,” according to the policy.
For workforce improvements, the DoD has set high goals of increasing access to apprenticeship programs and internships, reducing the negative “stigmatization of industrial careers, and increasing personnel recruitment from non-traditional communities."
Additionally, the department intends to improve its arduous acquisition process, with more of a focus on soliciting commercial-off-the-shelf, or COTS, solutions and a more “flexible” acquisition process.
“To address this priority, DoD will work to broaden platform standards and interoperability; strengthen requirements to curb 'scope creep'; prioritize off-the-shelf acquisition where applicable and reasonable; increase DoD access to intellectual property and data rights to enhance acquisition and sustainment; consider greater use and policy reform of contracting strategies; continue to support acquisition reform; and update industrial mobilization authorities and planning to ensure preparedness.”
Overall, the military is looking to bring in a “broader” selection of companies that can provide services and capabilities more quickly, at a reduced cost and at scale.
“Flexible acquisition will lead to the development of strategies that strive for dynamic capabilities while balancing efficiency, maintainability, customization and standardization in defense platforms and support systems,” the policy stated. “Flexible acquisition strategies would result in reduced development times, reduced costs, and increased scalability.”
Lastly, the DoD is looking to create economic deterrence, improve economic security agreements, fortify alliances and strengthen enforcement against adversarial ownership, among other goals. “As a result of effective economic deterrence, fear of materially reduced access to U.S. markets will sow doubt in the mind of potential aggressors,” the policy stated.
