Pentagon may jettison defense industrial base survey

By Tony Bertuca  / December 19, 2017

The Pentagon may not survey companies to obtain new data for a major defense industrial base review, opting instead to rely on information gathered in the past, according to a Defense Department spokesman.

The review, spurred by an executive order signed by President Trump this summer, directs DOD to lead a whole-of-government effort to identify, assess and make recommendations for ensuring a robust and secure defense industrial base.

A detailed defense contractor survey, posted in the Federal Register in October, was expected to be part of the review, but Adam Stump, a DOD spokesman, said the department may not conduct it.

"The team is initially focused on the data we (the government) already have, so we can be as targeted as possible in what additional information we are trying to gather and from whom," he told Inside Defense in an email.

Stump said the review consists of two inter-related efforts. The first phase is "a comprehensive, multi-agency risk assessment of the industrial base" involving a dozen working groups from across the federal government "looking into specific sectors (e.g. shipbuilding) and industrial base-wide enablers (e.g. manufacturing tools)."

The second phase is a "scenario-based micro-economic modeling exercise of specific supply chains to dimensionalize the risks identified in phase 1," he added.

The Pentagon expects to have an initial report by the April deadline laid out in the executive order.

"The working groups will analyze the data, make recommendations and, where they find data gaps, we will conduct targeted focus groups, town halls, and listening sessions with industry to gather additional insight," Stump said.

David Melcher, chief executive of the Aerospace Industries Association, told reporters last week the Pentagon had encountered challenges in creating the survey.

"I think [DOD was] having a hard time pulling together the right set of questions in a way that would protect information from large swaths of industry. That was the difficulty with just doing a broad survey," he said. "Companies don't like to provide proprietary data or too much information about their supply chain."

Still, Melcher said it would be wise for defense companies to contribute to the review.

"Given the right conditions and the right approaches from DOD, [contractors] are going to be willing to do that because they know this is maybe a once-in-a-decade opportunity to talk about what are the issues with the supply chain," he said.

Melcher said AIA has formed an industrial base working group comprised of member companies to address the review.

"We intend to make sure that our industry input -- unvarnished -- goes to the department, and they can merge it with what they've looked at from studies, what they've looked at possibly from some surveys or interactions point-by-point with industry to get some clarity on what's the health of the industrial base," he said. "I'm hoping that all that comes together in a very clear picture of what we need to do."

Additionally, the National Defense Industrial Association is working with defense companies to collect and anonymize the data they want to contribute to the industrial base review.