Govini: Despite DOD efforts to 'reshore,' Chinese suppliers have dramatically increased

By Marjorie Censer / August 20, 2020 at 1:02 PM

A new report by data firm Govini finds that the number of Chinese companies in the Pentagon's supply base has increased dramatically since 2010.

According to the report, Chinese suppliers totaled 655 in 2019, up 420% from 2010. The number of U.S. companies totaled 2,219, up 97%, according to Govini.

The report said Chinese suppliers' share of critical industries grew to 9% in 2019, up from 6% in 2010.

"The prevalence of China-based companies across the Department's supplier base will make it difficult to identify with certainty all of the cases where they are a single-source provider of a key technology or material," the company wrote.

In an interview with Inside Defense this week, Tara Murphy Dougherty, Govini's chief executive, said she was surprised by the study's findings.

"I don't think anybody knew this is what the numbers would look like," she said.

Dougherty noted that the Pentagon is increasingly focusing on reshoring parts of its supply base and looking to address vulnerabilities. She argued that its efforts to address the COVID-19 crisis should be linked.

"If the department is spending billions of dollars assisting companies that are in the industrial base and are critical suppliers to DOD, they can't think of the reshoring effort as a parallel engagement," she said. "My recommendation based on what the data shows would be that the department should be achieving their reshoring goals through the application of the COVID dollars."