AIA makes industrial base recommendations

The Aerospace Industries Association says Congress should repeal statutory budget caps and the Pentagon should embrace a streamlined acquisition system if they are to maintain a healthy defense industrial base.

In a new report, AIA, which represents the largest defense companies in the world, recommends Congress repeal the 2011 Budget Control Act spending caps for defense because they prohibit the requisite growth needed to execute the National Defense Strategy.

"DOD needs at least 5 percent annual growth above inflation to fulfill the NDS," AIA states.

Defense Secretary Jim Mattis said last year the department would need between 3 percent and 5 percent growth between fiscal year 2019 and FY-23, but Deputy Defense Secretary Patrick Shanahan recently said DOD is not planning for such an increase.

Congress is poised to adhere to a bipartisan agreement to grant the federal government an FY-19 topline of $716 billion in defense spending, or $80 billion above statutory spending caps. In FY-20, however, the caps are set to return and will limit total defense spending to $576 billion. The caps do not expire until FY-21.

Along with repealing the BCA for defense, AIA recommends DOD increase its use of lot buys and multiyear procurements to "yield significant savings for the government and enable greater predictability and efficiency for contractors and their supply chains."

AIA also calls for long-term research and development infrastructure investments.

"Current DOD test ranges and facilities have insufficient capability and capacity to meet DOD's desires for increased prototyping and experimentation activity, nor testing and evaluation of new technologies," AIA states. "For instance, the director of the Defense Advanced Research Projects Agency recently called for increased funding to support test infrastructure for hypersonic missiles, noting such tests are only performed at one facility."

Additionally, making such infrastructure investments could further encourage industry to commit "significant independent research and development (IR&D) funds" in pursuit of new defense technologies.

The White House is currently mulling a comprehensive defense industrial base study completed by the Pentagon and the office of trade and manufacturing policy. A portion of the report is set to be made public in mid-May.