The Defense Department on Thursday rolled out what it called an industrial-base strategy in an effort to coordinate action on supply-chain bottlenecks and draw new companies into a sector where thousands have left over the past decade.
The plans mainly involve ongoing efforts that have led to billions of dollars being pumped into the defense industry to build new factories to make shells and other munitions, reducing reliance on materials and components coming from China with more domestic production and leaning on allies such as the U.K. and Australia.
The Pentagon is also trying to lure more companies from outside its traditional supply base, many backed by private equity and venture capital.
Industry leaders broadly back the thrust of the effort, though some are wary it could impose additional burdens that increase costs to vet suppliers, tighten cybersecurity and produce more in the U.S.
Some critics also contend that slow decision-making at the Pentagon and in Congress, and the lack of budget reform, will torpedo the initiative that builds on work started during the Trump administration.
Pentagon officials said they have speeded up awarding deals—sometimes running contracts over multiple years—to provide a clearer demand signal and to assuage industry concerns that the current surge in orders for weapons and equipment will dissipate, as it has in the past. “I have seen this movie before,” said Dan Grazier at the Project On Government Oversight, a nonpartisan watchdog. “Every year we hear dire warnings about the need to spend more to bolster the industrial base, and then Congress inevitably passes a bigger budget than the year before, but the problem never seems to be solved.”
