Secretary Mattis has delivered the Department of Defense’s report, in response to Executive Order 13806 on Assessing and Strengthening the Manufacturing and Defense Industrial Base and Supply Chain Resiliency of the United States, to President Trump. This rigorous assessment, which sought to identify risks and propose solutions, was ordered with the recognition that in a renewed era of great power competition, the ability to arm our Warfighters with the lethality and dominance to meet new and unforeseen strategic challenges is dependent upon a healthy and resilient defense industrial base.
The response to the Executive Order involved over 300 experts from the Department of Defense (DoD), Department of Commerce (DOC), Department of Labor (DOL), Department of Energy (DOE), Department of Homeland Security (DHS), and other agencies and offices. The effort, chaired by the Office of Trade and Manufacturing Policy and led by the Department of Defense, conducted a thorough and unprecedented assessment of the U.S. defense industrial base across traditional sectors (e.g. shipbuilding) and cross-cutting enablers (e.g. workforce).
The assessment utilized available government data such as DOC’s Bureau of Industry Security surveys, DOL Bureau of Labor Statistics, DOE data, and DoD industrial base assessments. The team also gathered insight from industry through more than a dozen listening sessions, facilitated by trade associations.
The effort identified five (5) macro forces in the industrial base, which cause ten (10) risk archetypes.
- Sequestration and uncertainty of U.S. government spending
- Decline of U.S. manufacturing capabilities & capacity
- Deleterious U.S. government business & procurement practices
- Industrial policies of competitor nations
- Diminishing U.S. STEM and trade skills
- Sole source
- Single source
- Fragile supplier
- Fragile market
- Capacity constrained supply market
- Foreign dependency
- Diminishing manufacturing sources and material shortages (DMSMS)
- Gap in U.S.-based human capital
- Erosion of U.S.-based infrastructure
- Product security
The sixteen working groups tasked with the assessment uncovered hundreds of gaps and vulnerabilities, many of which appear across sectors, such as the inability to retain workers in fields ranging from software engineering to industrial welding. Risk archetypes such as “sole source” and “fragile supplier” characterized by the existence of a single source capable of providing a required capability and a supplier in a financially distressed industry, respectively, manifest themselves throughout the industrial base and constitute single points-of-failure for a multitude of platforms and weapons systems.
In order to address the identified risks, the working groups proposed a set of comprehensive actions, some of which are already underway, to be taken by the government in partnership with industry. For example, DoD will expand its use of the Defense Production Act Title III and the Industrial Base Analysis and Sustainment programs to address critical bottlenecks, support fragile suppliers, and mitigate single points-of-failure across multiple industrial base sectors.
The full complement of recommendations, included in a classified annex to the unclassified report, demonstrate the inextricable linkage between economic security and national security outlined in the Administration’s National Security Strategy. Upon delivery of the Executive Order 13806 report on October 5, 2018 at the White House, the President signed a Cabinet Memo instructing the identified Cabinet secretaries to execute the proposed actions, ensuring our military continues to be supported by the greatest technological, manufacturing and industrial capabilities in the world.
You can find the Executive Order 13806 report here.