Shrinking Defense budgets and strategic uncertainty combine to risk depleting the national security industrial base to the point where key contractors might no longer be counted on as vital links in the Pentagon’s supply chain, says a coming study.
“Many national security people who’ve never worked as contractors are strongly inclined to assume the base will be there ready and willing whenever we need them,” said Barry Watts, a former Northrop Grumman executive, in a briefing with reporters about his new paper for the Center for Strategic and Budgetary Assessments. “That was a safe assumption since World War II. It’s not now clear [if this] assumption will hold as we go forward.”
The paper, “Sustaining the U.S. Industrial Base as a Strategic Asset,” will be released Wednesday on Capitol Hill.
What is needed, Watts writes, is a clearer strategy from the Office of the Defense Secretary to simplify the “core competencies” expected from the shifting array of shareholder-owned companies that for decades have made up the industrial base. This would require a “detailed mapping of the industrial base,” a task that the Pentagon OSD’s Manufacturing and Industrial Base Policy office embarked upon several years ago, but which has yet to bear fruit, in large part because “there’s no agreement across services,” Watts said.
Such mapping should include paying attention to industry design teams and the supply chains, he said.
The list “of what should be kept for the long run” should be short, Watts added. “If a company has 50-60 or 150 core competencies, you can’t focus, so it probably needs to be in the single digits,” Watts notes, taking the core competencies concept from an influential 1990 Harvard Business Review paper/.../