(Editor's note: This story has been updated to include information from a press briefing with senior Pentagon officials.)
The Pentagon released its first-ever National Defense Industrial Strategy today aiming to boost U.S. weapons manufacturing within the next three to five years. Some defense industry advocates, however, say the strategy must be followed up by more detailed investment plans.
The strategy, an early draft of which was first obtained by Inside Defense in December, is to be followed by a classified implementation plan, though parts of that plan, like an executive summary or overview, are expected to be unclassified.
The strategy’s release has been teased for weeks and was highly anticipated by defense contractors and Washington think tanks.
A forward written by Deputy Defense Secretary Kathleen Hicks states the NDIS is “a strategic vision to coordinate and prioritize actions to build a modern defense industrial ecosystem” and “calls for sustained collaboration and cooperation between the entire U.S. government, private industry and our Allies and partners abroad.”
Industry executives who saw an early draft of the strategy, which appears to be mostly unchanged, privately criticized the document for offering more in the way of “observations” and not enough specific planning.
Eric Fanning, president and CEO of the Aerospace Industries Association, released a statement saying AIA “appreciates” the Biden administration’s focus on bolstering the defense sector.
“The details will be critical, and we will continue to engage with the Department of Defense to ensure both sides fully understand the intent and impact of the recommendations,” he said.
“The defense industrial base we have today is the result of policy and investment decisions made over many years,” Fanning continued. “Steps to ensure its health and resilience will require a long-term approach rooted in consistency and more clear demand signals.”
Capacity itself, Fanning said, is capability.
“The Pentagon’s success in this effort, and the health of the industrial base more broadly, rely on sustained investment that matches the strategy and reflects how industry operates,” he said.
The strategy, meanwhile, calls for “generational change” as crises like the war in Ukraine and the COVID-19 pandemic have highlighted shortcomings in the U.S. defense industrial capacity.
“This will require real and meaningful cooperation and participation of new domestic and international entrants into the defense industrial fold,” the strategy states. “We must transform our DIB into a robust, resilient, fully capable 21st century defense industrial ecosystem.”
The NDIS, the document states “aims to provide a vision and strategic framework” to approach the challenge over the next three to five years.
Unclassified ‘overview’ coming
Assistant Secretary of Defense for Industrial Base Policy Laura Taylor-Kale told reporters that the classified implementation plan would be complete in March but pledged to release an unclassified “overview” next month.
“We can no longer afford to wait,” she said. “The time for action has come and we are starting with this strategy.”
Halimah Najieb-Locke, who is Taylor-Kale’s acting deputy, said the implementation plan would include more than two dozen “discreet, specific actions.”
“The plan is going to focus on actualizing the four strategic priorities laid out in the strategy,” she said. “Now is the time to build a modernized industrial base and our industrial ecosystem is tied to our national security.”
The strategy lays out four key areas where it wants to achieve progress: resilient supply chains, workforce readiness, flexible acquisition and economic deterrence.
One of the priorities listed in the report involves incentivizing industry to invest in extra capacity, partly through the use of tax incentives.
Taylor-Kale said specific tax proposals have not been decided.
“Encouraging defense suppliers to build substantial spare production capacity will require a coordinated effort by industry, Congress, DOD, and other federal departments and agencies; a public recognition of the associated burden to the taxpayer and the economy itself; and a broad acceptance of the defense industry, including our global industrial partners, as vital for national defense,” the strategy states. “Congress can explore allocating additional funding for contracts and other incentives (tax incentives, regulatory relief, long-term contracts) aimed specifically at building and maintaining spare production capacity.”
Additionally, the strategy states that DOD will “seek to establish risk-sharing mechanisms and technology-sharing structures to jointly fund, develop, and secure spare production capacity.”
Taylor-Kale said the NDIS is “meant to really outline a strategic vision” that encourages Congress and the administration to “to explore all avenues that are possible.”