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05 Feb 21. Global Posture Review Will Tie Strategy, Defense Policy to Basing. American service members are based around the world and some of those overseas bases have been occupied since World War II. But are the troops still needed there?
President Joseph R. Biden Jr. has tasked Secretary of Defense Lloyd J. Austin III to conduct a global posture review to ensure the footprint of American service members worldwide is correctly sized and supports strategy.
Biden also envisions the Defense Department and the State Department working more closely together. Diplomacy and defense must go hand-in-hand, Austin said in a written statement after the president’s speech.
“We in the Department must be ever-ready to buttress the hard work of diplomacy, to support it with the capabilities our nation needs to make clear our determination and to secure our interests when challenged,” he wrote. “If we must fight, we must win. That requires a laser-focus on talent and training, innovation and leadership, forward presence and readiness.”
Part of this reshaping will depend on the global posture review, Pentagon Press Secretary John F. Kirby said during a news conference today. The global posture review will examine the U.S. military’s footprint, resources and strategies. “This review will help inform the secretary’s advice to the commander-in-chief about how we best allocate military forces in pursuit of our national interests,” Kirby said.
The global posture review will be led by the acting undersecretary of defense for policy in close coordination with the chairman of the Joint Chiefs of Staff.
U.S. officials will consult often with allies and partners around the world as they perform the review, Kirby said. The review should be finished by mid-year.
The review will use American defense strategy and look where service members are based, and if this is the best place to be based. This will, of course, take into consideration any treaty or agreement. Commitments — like the rotational forces in Poland and Korea — will be considered and those deployments will continue even as the review goes on. President Biden said the movement of U.S. forces from Germany will stop until the review is completed.
It is not just forward-deployed land or air forces that will be considered. Naval forces and where they operate will be part of the equation, Kirby said.
There are on-going operations in Afghanistan and Iraq and each country has about 2,500 U.S. troops based there. The footprint will be considered, but no decision will be made without discussions with NATO allies and other partners, Kirby emphasized. (Source: US DoD)
05 Feb 21. Navy CNO On Rooting Out Extremists.
“We have a responsibility to educate those that are leaving the service that they are going to be recruited by these people, and they need to be aware that they’re going to have people reach out via email or social media” Adm. Mike Gilday says.
Following Defense Secretary Lloyd Austin’s order to military leaders to identify and confront hate groups operating within the ranks, the Navy’s top admiral says he’s focused on not only rooting out extremists, but finding ways to keep them from joining in the first place.
“We absolutely have to understand those within our ranks that are involved in those organized activities, as well as take further actions to stem the accession of people that belong to those kinds of groups,” he told Breaking Defense in his first comments on Austin’s new marching orders, which include a 60-day stand-down to discuss the issue across the services.
The issue of neo-Nazi, far-right and other racist hate groups working and recruiting inside the military has increasingly alarmed the Pentagon, backed by a Military Times poll last year in which one in three active-duty service members who responded reporting they have “personally witnessed examples of white nationalism or ideological-driven racism within the ranks in recent months,” an increase from the previous year’s survey.
“They’re organized, they have an organizational structure, and in some cases, they have an oath,” Gilday said. “They have mission statements. And so it’s really disturbing to have organizations of like-minded people who are moving forward on potential objectives here that are counter to the values of the US military.”
The CNO said that not only does he want to stop them from coming in and recruiting while inside, but it’s critical to let those leaving the Navy know that they’re prime targets for recruitment.
“We have a responsibility to educate those that are leaving the service that they are going to be recruited by these people, and they need to be aware that they’re going to have people reach out via email or social media.”
Headlines last month made clear the scope of the issue after a number of veterans identified as taking part in the Trump-inspired storming of the Capitol, raising serious concerns about the extent of support in the armed services for extremist views and organizations.
Among them were a retired Air Force officer who played a leading role in breaching the Senate floor, a Navy vet and a conspiracy-minded retired Air Force vet who was shot and killed by a Capitol Police officer while trying to break into Speaker Nancy Pelosi’s office.
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Using social media as a recruiting and propaganda platform, hate groups and cults like QAnon have been able to organize and plan, often using encrypted messaging platforms to come together.
Service members can be particularly vulnerable when it comes to retire or separate from the military. It can be a tough time for some as they leave the tight-knit military community and might look for ways to recreate that in the civilian world, the CNO told me: “They’ll find them as they’re leaving a close cadre that they’ve belonged to, whether it’s been just for a four-year hitch, or whether it’s been 20 [years] or three decades. There’s a certain esprit de corps, and now there’s going to be a gap. And so these extremist groups will look to fill that gap.”
Announcing Austin’s 60-day stand down across the force on Wednesday, Pentagon spokesman John Kirby said plans for addressing the issue were in the early stages, and a lot of discretion was being left to commanders in how they’ll address the issue.
In 2020, the FBI opened 143 investigations into troops and veterans, 68 of those for domestic extremism Kirby said, adding, “even though the numbers might be small, they may not be as small as we would like them to be, or we believe them to be,“ Kirby said.
But the storming of the Capitol has changed the equation inside the Pentagon from seeing extremism as something to be dealt with, to something that has to be confronted head-on. “The events of Jan. 6 served as a wakeup call,” Kirby said. “It had an electric effect here in the Department of Defense.”
Kirby told reporters on Jan. 28 that the FBI opened 143 investigations into troops and veterans in 2020, 68 of those for domestic extremism.
Austin met with the Joint Chiefs on Wednesday to give them direction on how to move out on the issue. “He was very clear that he wants commands to take the necessary time” to figure out how to handle it.
Gilday said the problem needs to be directly addressed now, but also cautioned that the services need some time to shape their approach for the long haul. “The services are working together with OSD so that we have a consistent approach here,” he said. “And we’ve been pretty good at doing that. If you think of how we’ve dealt with COVID…we’ve learned together and stumbled together and have improved together. And we need to do the same thing with extremist behavior or extremist groups within the ranks as well.” (Source: Breaking Defense.com)
05 Feb 21. Boeing, Raytheon missile sales to Saudi Arabia paused by Biden administration. The Biden administration has paused indefinitely two precision guided munition sales to Saudi Arabia, worth as much as $760m, as part of a new policy aimed at curtailing violence in Yemen, Defense News has learned.
However, that policy, announced Thursday by President Joe Biden, left open the possibility for future sales that are considered vital for Saudi Arabia’s national defense, a fine line that would mean some munitions sales will continue.
“We are ending all American support for offensive operations in the war in Yemen, including relevant arms sales,” Biden said during a speech at the State Department. “At the same time, Saudi Arabia faces missile attacks, UAV strikes, and other threats from Iranian-supplied forces in multiple countries. We’re going to continue to support and help Saudi Arabia defend its sovereignty and its territorial integrity and its people. ”
The two deals include a foreign military sales case for 3,000 Boeing-made GBU-39 small diameter bombs, which was cleared by the State Department in late December with an estimated price tag of $290m. according to a source familiar with the matter. The second is a direct commercial sale for Raytheon Technologies munitions, likely the reported $478m sale of 7,000 Paveway IV smart bombs.
Raytheon CEO Greg Hayes foreshadowed the move in a Jan. 26 investor call, when he said the company was backing off the sale of an “offensive weapon system” to an unnamed middle eastern customer because it did not believe a license would be granted by the new administration.
Boeing did not immediately respond to a request for comment.
It is possible that further Saudi weapon sales may be paused or outright cancelled in the future, as the Biden administration has announced a wide-ranging review of weapon sales cleared by the Trump administration. According to a White House spokesperson, arms sales to Saudi Arabia will go back to the traditional arms sale oversight process, after the Trump administration pushed multiple weapon sales through over objections by Congress.
“All arms sales to Saudi Arabia will return to standard procedures and orders including with appropriate legal reviews at the State Department,” the spokesperson said. “We have reestablished an interagency process for working through the details of individual cases, led by the White House and with all relevant agencies at the table, bringing expertise, discipline, and inclusivity back to our policymaking on these issues.”
Added an administration official, speaking on background, “we are ending all American support for offensive operations in Yemen, including relevant arms sales. Importantly, this does not apply to offensive operations against either ISIS or AQAP.
“It does include both materiel and terminating our intelligence sharing arrangement with Saudi Arabia regarding the war in Yemen. You’ve seen that we have already paused two arms sales with Saudi Arabia to ensure while we examine whether they meet our objectives and policies.”
Since 2015, the Arab Sunni nations of Saudi Arabia and the United Arab Emirates have led a coalition of states in Yemen against rebel Houthi forces, which are backed by the Shia government of Iran. Aligned with former Yemeni President Ali Abdullah Saleh, the Houthis took over Yemen’s capital, Sanaa, in September 2014.
The armed conflict in Yemen has resulted in the largest humanitarian crisis in the world, according to Human Rights Watch.
Citing the Yemen Data Project, HRW says that during the Saudi-led air war in Yemen, more than 17,500 civilians have been killed and injured since 2015, and a quarter of all civilians killed in air raids were women and children. More than 20 million people in Yemen are experiencing food insecurity; 10 million of them are at risk of famine. (Source: glstrade.com/Defense News)
05 Feb 21. Majority of voters support ICBM replacement alternatives, new poll finds. A new poll has found a majority of Americans support alternatives to the Pentagon’s planned program to replace intercontinental ballistic missiles with the Ground Based Strategic Deterrent.
The new research, exclusively shared with Defense News by the Federation of American Scientists and ReThink Media, found the majorities of both Republicans and Democrats polled would be in favor of alternative solutions, including potentially extending the life of the current Minuteman III ICBM arsenal.
In September, Northrop Grumman was awarded the engineering, manufacturing and development contract for the Ground Based Strategic Deterrent, or GBSD, which will eventually include more than 650 missiles and will reportedly cost about $264bn over the life span of the program. The company was the sole bidder, after Boeing dropped out from the competition in July 2019. GBSD is set to begin replacing the Minuteman III by 2029.
Supporters of the program, including top Pentagon officials, have argued that the Minuteman III program is too old to safely extend its life, and that GBSD is vital to American security interests. But the system has been a target of progressives in Congress, and there is hope among the nonproliferation community that the Biden administration may be willing to either cut the program or entirely eliminate the ground-based leg of the nuclear triad — despite statements of support for the nuclear triad from incoming Defense Department nominees.
The survey talked to 800 registered voters between Oct. 12 and Oct. 20, and included an oversampling of 200 registered voters in the states of Colorado, Montana, North Dakota, Nebraska and Wyoming to gain deeper insight into how residents of states with ICBMs think about the weapons. The margin of error was plus or minus 3.4 percent.
In response to the question “What do you think the government should do about ICBMs? Which of the following comes closest to your personal view, even if none are perfect,” 30 percent supported refurbishing existing ICBMs rather than replacing them, 26 percent polled supported the full ICBM replacement plan, 20 percent supported eliminating ICBMs altogether and 10 percent supported eliminating all nuclear weapons.
Republicans (38 percent) were more supportive of the GBSD program than Democrats (19 percent). But that still means support for alternative policies — 60 percent overall — to the current GBSD program cuts across both parties, representing a plurality of respondents, said Matt Korda, who along with Tricia White led the polling effort for the Federation of American Scientists. “There’s a reason why a majority of poll respondents supported alternative policies to the GBSD, and it’s the same reason why a growing number of top military and civilian officials are openly questioning the program today: These missiles no longer play a role in addressing the most important security challenges of our time,” Korda said. “Is this truly the best investment in our collective safety that we could be making right now? Our survey results suggest the opposite.”
“Before his election, Joe Biden indicated that he would likely be conducting a full review of U.S. nuclear policy, and it seems that his nuclear policy team might be interested in taking a close look at the status of the GBSD program as well as the future role of ICBMs in U.S. nuclear strategy,” Korda added. “Now that his administration has begun, these polling results suggest that the public would overwhelmingly support this effort.”
In any poll, how a question is asked is important and can skew results. In this case, the question included the statement that the GBSD contract “is being awarded to a single company, which is highly unusual because a lack of competition generally means that program costs increase significantly,” and that “there is no precedent for a sole-source contract of this size,” which could have impacted respondents’ answers.
A second question — on whether to delay the GBSD program for an overall review while continuing to extend the life of the Minuteman III ICBMs — was more definitive, with 64 percent of respondents in favor of the idea and 18 percent opposed.
More broadly, the pollsters asked respondents to rank the issues that would make them feel safer. COVID-19 topped the list; but while issues such as national unity and better health care ranked high, the three military-related options — a larger Defense Department budget, modernized nuclear weapons and an increased conventional arsenal — ranked dead last.
As with all defense projects facing potential changes, the factor of economic impact is a major consideration — particularly in Congress, where members from Colorado, Montana, Nebraska, North Dakota and Wyoming all have ICBMs in their backyards as part of the so-called nuclear sponge.
To counter this argument, the poll included a question for residents of those five states, asking whether they would support removing ICBMs if it came with guaranteed job and income for anybody whose job is displaced as a result. Forty-eight percent of respondents in those states strongly or somewhat supported the drawdown in that case.
But is such an economic replacement possible? The authors noted that such economic trade-offs feature in efforts such as the New Green Deal and fit into the “Build Back Better” motto of the Biden administration, and so they think the idea could gain traction.
“For the $260 billion life-cycle cost of the GBSD program, the United States could be creating over 3 million additional jobs if that money were directed towards other industries,” White said. “This polling indicates that Americans care more about job security than they do about defense security, and rightfully so. If we want to continue reducing disproportionate defense spending, the Biden administration has the evidence and the policy platform to make that a reality while simultaneously protecting job stability for the American public.” (Source: Defense News)
05 Feb 21. U.S. State Department approves first potential weapons sales under Biden, says Pentagon. The U.S. State Department has approved the first potential sales of weapons under the Biden administration, including communications equipment for NATO and missiles for Chile, in deals with a combined value up to $150m, the Pentagon said on Friday.
The sales are the first foreign military sales to be announced since U.S. President Joe Biden took office, but since sales take months to process, the genesis of the deals likely dates back to the Trump administration.
Since taking office, the Biden administration temporarily paused some pending arms sales to U.S. allies like Saudi Arabia and the United Arab Emirates in order to review them, despite having been approved by the Trump administration.
The Pentagon’s Defense Security Cooperation Agency notified Congress of the possible sales to Chile and NATO on Friday.
The NATO Communications and Information Agency package includes 517 AN/PRC-158 Manpack UHF SATCOM radio systems for field communications, with an estimated cost of up to $65m, including training and spares.
Separately, Chile could buy as many as 16 Standard Missile-2 (SM-2) Block IIIA missiles, supporting equipment, spares and training for $85m, the Pentagon said. SM-2 missiles are considered medium-range and are often used by ships against enemy aircraft.
Despite approval by the State Department, the notification does not indicate that a contract has been signed or that negotiations have concluded.
Raytheon Technologies was the prime contractor for the weapons. (Source: Reuters)
05 Feb 21. ‘America is back’ – Biden touts muscular foreign policy in first diplomatic speech. U.S. President Joe Biden on Thursday promised a new era after the scattershot foreign policy of his predecessor, Donald Trump, declaring “America is back” on the global stage in his first diplomatic address as president.
U.S. President Joe Biden delivers a foreign policy address as Vice President Kamala Harris listens during a visit to the State Department in Washington, U.S., February 4, 2021. REUTERS/Tom Brenner
In his speech, Biden signaled aggressive approaches to China and Russia, urged Myanmar’s military leaders to halt their coup, and declared an end to U.S. support for a Saudi Arabia-led military campaign in Yemen.
“American leadership must meet this new moment of advancing authoritarianism, including the growing ambitions of China to rival the United States and the determination of Russia to damage and disrupt our democracy. We must meet the new moment … accelerating global challenges from the pandemic to the climate crisis to nuclear proliferation,” said Biden.
Trump angered European and Asian leaders with tariffs, fracturing of global alliances, and threats to withdraw U.S. troops. He did little to push back against a wave of authoritarianism in some countries.
After a Trump-inspired mob attacked the U.S. Capitol on Jan. 6, protesting Biden’s election win, foreign allies and rivals alike expressed doubts about the health of American democracy.
Biden’s speech on Thursday was a full-throated attempt to vanquish those doubts, and convince Americans of the value of a forceful international approach.
“Investing in our diplomacy isn’t something we do just because it’s the right thing to do for the world,” he said. “We do it in order to live in peace, security and prosperity. We do it because it’s in our own naked self-interest.”
Biden’s choice of the State Department as venue for his first big diplomatic address was an important symbol of the value he places in career diplomats, who Trump largely saw as opponents.
“American alliances are our greatest asset. And leading with diplomacy means standing shoulder to shoulder with our allies and key partners once again,” Biden said.
Biden in his early days has attempted to repair what he has called the damage to America’s standing around the world, rolling back Trump policies. He is working to revive the Iran deal, and renewed U.S. membership in the Paris accord and the World Health Organization.
He challenged Russian President Vladimir Putin.
“I made it clear to President Putin, in a manner very different from my predecessor, that the days of the United States rolling over in the face of Russia’s aggressive actions, interfering with our elections, cyberattacks, poisoning its citizens, are over,” he said.
Trump had initially sought a warm relationship with Chinese President Xi Jinping but differences over trade, Hong Kong and what the U.S. military calls Beijing’s destabilizing and aggressive behavior in the South China Sea prompted a rift.
China, which is expanding its military and working to grow its influence around the world, is perhaps Biden’s biggest international challenge as he begins his presidency. He called Beijing “our most serious competitor.”
“We’ll confront China’s economic abuses, counter its aggressive, coercive action to push back on China’s attack on human rights, intellectual property and global governance. But we’re ready to work with Beijing when it’s in America’s interest to do so,” he said.
Not all U.S. allies may be happy at the sharp turn in U.S. foreign policy, including Poland, where Trump once pledged to deploy U.S. troops, or a host of nations that have criticized heavy-handed intervention by Washington in the past.
“We are a country that does big things. American diplomacy makes it happen and our administration is ready to take up the mantle and lead once again,” said Biden. (Source: Reuters)
04 Feb 21. Statement by Secretary of Defense Lloyd J. Austin III on the Initiation of a Global Force Posture Review. President Biden’s call today for American leadership on the world stage, and in particular his belief that diplomacy should be our first tool of choice, is reassuring not only to the men and women of the Department of Defense, but to our fellow citizens as well. It means the United States, never afraid to fight when we must, will also never be afraid to engage in difficult discussions and negotiations.
Of course, it also means that we in the Department must be ever-ready to buttress the hard work of diplomacy, to support it with the capabilities our nation needs to make clear our determination and to secure our interests when challenged. If we must fight, we must win. That requires a laser-focus on talent and training, innovation and leadership, forward presence and readiness.
At the direction of the President, the Department will therefore conduct a global force posture review of U.S. military footprint, resources, strategy and missions. It will inform my advice to the Commander-in-Chief about how we best allocate military forces in pursuit of national interests. The review will be led by the Acting Under Secretary of Defense for Policy, in close consultation with the Chairman of the Joint Chiefs of Staff.
We will consult our allies and partners as we conduct this review. As I said on my first day in the job, no one succeeds at this business alone. From Afghanistan and the Middle East, across Europe, Africa and our own hemisphere, to the wide expanse of the Western Pacific, the United States stands shoulder-to-shoulder with allies old and new, partners big and small. Each of them brings to the mission unique skills, knowledge and capabilities. And each of them represents a relationship worth tending, preserving and respecting. We will do so.
As President Kennedy once observed, diplomacy and defense are not mutually-exclusive. They complement one another. They each make the other stronger. And each alone will likely fail.
Today, President Biden reminds us that risk of such failure is still high, and that the costs of American leadership — also high — are still worth paying. He reminds us that the American people are safer when we act in concert with our allies and in accordance with our values. And he challenges us to remember that, while force may be the final, diplomacy must be the first arbiter of our peace and security. (Source: US DoD)
02 Feb 21. Commandant Calls Marine Corps Tech Refresh ‘Urgent.’ Sending the Marines Corps into battle with the legacy equipment it has on hand would be “irresponsible,” Commandant Gen. David Berger said Feb. 2.
“There is an urgent need for innovation and rapid change. We are being driven by a pacing threat. And we have to do it with no additional funding, no additional resources,” he said at the Virtual Expeditionary Warfare Conference, organized by the National Defense Industrial Association.
Berger outlined technology requirements that he said were needed for Marines to fight advanced adversaries such as China and Russia. Long-range fires, advanced sensors, a new amphibious warship and robotic systems topped the wish list.
“I am convinced that yesterday’s force will not compete effectively with tomorrow’s adversary, especially in the maritime gray zone. In other words, putting it bluntly, just making our legacy platforms better, or just making more of them available will not allow us to maintain an advantage against either China or Russia in the maritime domains,” he said.
“Operating in an expeditionary, distributed operational environment … with just repurposed kit or repurposed equipment — that would be irresponsible,” he added.
Berger has been actively promoting a Force Design 2030 blueprint — released in March 2020 — that recommends “sweeping changes” carried out by eliminating several legacy platforms, while adding advanced technologies such as robotics. Without these changes, the service would be at a disadvantage taking on peer or near-peer competitors in highly contested battle zones.
“We can’t continue to invest in programs that don’t support Force Design,” he said. A new improved version of a light armored vehicle is not going to solve the service’s problems, he added.
At the top of his technology wish list are long-range precision fires that can protect U.S. forces and attack adversaries on land or at sea, he said.
“It’s a combination of ground-based and anti-ship missile [capability] that’s on the back of some kind of vehicle and it’s very expeditionary. And it’s also a cruise missile or some kind of variant of it. It could be a maritime strike Tomahawk or something like that that allows us to control maritime terrain. We don’t have that right now,” he said.
Improved sensors are second on Berger’s list. He envisioned a kind of sensor warfare where the Corps and its adversaries were constantly attacking each other’s ability to do surveillance.
“I think there’s no question that global sensors are going to proliferate. They’re also going to be threatened. So we’re going to find ourselves in a fight for surveillance of the other side. They are as well. Both of us are going to try to deny each other sensors,” Berger said.
The Marine Corps needs a new unmanned aerial vehicle to perform reconnaissance missions, he noted.
“We’re moving towards a medium-altitude, long-endurance capability that are truly the eyes and ears forward, where the standing force is going to operate,” he said.
“I know there are counterpoints about that [suggesting] those platforms are not going to be survivable in a high-end fight. I understand all of that. The fact of the matter is you need sensors forward,” Berger said.
Third on his list is the Light Amphibious Warship, which is in the early stages of development.
‘We need vessels on the water that allow us to move from an operational to tactical environment. Things like the Light Amphibious Warship. We don’t have that right now at all. We have L-class ships and then we have connectors. We need the things in the middle,” Berger said.
Finally, he advocated for more robotic systems in the Marine Corps inventory. “I’m a believer in manned and unmanned teaming. I think that’s where we’re headed,” he said.
“We have got to move at an uncomfortable pace in unmanned systems,” he said, adding that the service needs a variety of systems such as aerial drones, unmanned surface vessels and unmanned underwater systems. That includes automated systems that are armed, he suggested.
Currently, Defense Department policy calls for a human to always make the final call when to pull the trigger on a weapon system.
“We have programs right now — capabilities right now — that allow for fully automatic processing of sensor-to-shooter targeting, but we don’t trust the data,” Berger said. “And of course with each intervention by humans we’re adding more time, more opportunities for mistakes to happen.”
“With long-range precision fires, combine that with the mobility of things like our amphibious combat vehicle and light amphibious warships, unmanned surface and undersea vehicles. Now you have a survivable option. Now you have the ability to buy time for the remainder of the joint force to bring the rest of the cavalry to the fight,” he said.
Currently, the Force Design 2030 goals have been reflected in authorizing and appropriations legislation before Congress, Berger said.
Lawmakers “support the direction we’re going,” he said. “What they’re concerned about is the oversight to make sure that — especially in the research-and-development phase of things … we’re not going left and right, and left and right, and using authorities in the wrong way or an inappropriate way or an inefficient way.”
“It’s challenging for us to keep [congressional] members informed … but we have to move quickly,” he added. (Source: glstrade.com/National Defense)
02 Feb 21. Study Finds U.S. Defense Industrial Base on Negative Trajectory. The National Defense Industrial Association’s second annual Vital Signs report on the health of the U.S. defense industrial base was released Feb. 2. To download a copy, please click HERE.
For the second year in a row, the defense industrial base is a on a negative trajectory and faces significant challenges including industrial security and supply chain problems, according to a new report released Feb. 2.
In the study “Vital Signs 2021: The Health and Readiness of the Defense Industrial Base,” researchers gave the industrial base a “C” grade. The overall score was 74, slightly lower than last year’s 75.
“While passing, the ‘C’ grade reflects a business environment that is characterized by contrasting areas of concern and confidence,” said the annual report, which was created by the National Defense Industrial Association and big data analytics firm Govini. “It also reflects the state in which the defense industrial base entered the novel coronavirus (COVID-19) pandemic, which dramatically disrupted the daily lives of every American as well as the flow of American and global commerce.”
The United States relies on a productive and vibrant industrial base, but it is currently facing a number of headwinds, said Hawk Carlisle, CEO of NDIA.
These include ongoing industrial security threats, highlighted by the recent SolarWinds attack which has been attributed to Russia and intellectual property theft from China and others, he noted during an online discussion unveiling the annual report.
The study looked at eight different conditions that shape the performance of defense contractors including: demand, production inputs, innovation, supply chain, competition, industrial security, political and regulatory, and productive capacity and surge readiness.
Researchers analyzed more than 40 publicly available longitudinal statistical indicators, converted each of them into an index score on a scale of 0 to 100, and evaluated three years of scores for each.
With the exception of data from an August survey of NDIA members, the Vital Signs study’s data sets are “lagging indicators” that were fielded before COVID-19 struck the United States in March 2020, the report noted.
“These lagging indicators provide insight into how the defense industrial base entered the pandemic and will give future policymakers a baseline for evaluating the defense industrial base’s ability to cope with a crisis,” the report said.
Wes Hallman, NDIA’s senior vice president of strategy and policy, said next year’s report will capture how the environment has changed due to the challenges surrounding the pandemic.
He noted that he expected to some significant changes and didn’t expect them to be positive. “But we’ll see what the data bears out,” he said.
The DIB entered the COVID-19 crisis in a weakened state, according to the analysis.
“This year six of the eight conditions earned composite scores lower than 80, three of which earned scores lower than 70, which we consider failing grades,” said Nick Jones, NDIA’s director of regulatory policy.
The scores suggest that the DIB is increasingly struggling to meet the challenges it faces, the report noted.
Industrial security earned the lowest score, 56. It has become an increasingly important area as contractors face data breaches and espionage attacks from state and non-state actors, the report noted.
“Industrial security conditions continue to decline, losing ground on what was an already poor score,” the report said. “This decline reflects larger trends in the erosion of industrial cybersecurity despite increasing attention and resources being dedicated to combating the threat.”
This decrease is due to the worsening of information security conditions, including a number of newly report IT cyber vulnerabilities, it noted. However, on a positive note, the report said the threat to intellectual property rights is declining.
Defense industry production inputs also scored poorly with a 68, which has held steady since 2018, the study noted.
“Major production inputs include the skilled labor, intermediate goods and services, and raw materials used to manufacture or develop end-products and services for DoD consumption,” the document said. “Our estimate of the size of the defense industry workforce, currently about 1.1 million people, falls substantially below its mid-1980s peak size of 3.2 million.”
Innovation conditions within the DIB dropped two points from its 2018 evaluation and received a score of 71, researchers found.
“Industrial innovation conditions remained poor and continued a downward trend,” the report said. “The decrease in innovation investments stems from cuts made within the scientific R&D services industries — typically those focused on basic research.”
Hallman noted that this is particularly concerning because innovation “is the American way of war.” Instead of the government driving spending on basic science, innovation is largely coming from the commercial sector.
That puts the United States in a precarious position, he noted.
“Our competitors globally have closed the gap, and that gap closing over time is truly what concerns me,” he said. “If we want to maintain our superiority, …. that piece on innovation has to ramp back up because that’s where our strategic advantage over time, I believe, lies.”
Scores for political and regulatory conditions also dropped by 10 points since 2018 for a total score of 72. Researchers analyzed public opinion, congressional actions and regulatory actions to assess this area.
“All three indicators saw a score decrease from 2018 to 2020, with public opinion and regulatory conditions scoring particularly poorly,” the report said. “Two examples from the current environment are the implementation of Section 889 of the fiscal year 2019 [National Defense Authorization Act] and the Cybersecurity Maturity Model Certification framework, which have created additional regulatory burdens for all defense contractors.”
Additionally, there was a large decrease in public opinion related to the DIB, “possibly due to rising defense budgets,” it said.
Supply chain conditions decreased by six points since 2018 and received a score of 77 for 2020. While supply chain issues have been brought to the forefront due to the ongoing COVID-19 crisis, the report assessed them before the pandemic began.
“The overall industrial supply chain conditions for 2020 are worse than in 2018 but better than in 2019,” the report said. “Regardless, supply chain financial performance declined significantly since 2018. Cash conversion cycles lengthened, which led to a significant drop in supply chain financial performance akin to that of industry’s average inventory turnover ratio.”
The document noted that while financial performance and average turnover ratio scored a passing grade, the overall trends are of great concern.
“Moreover, the score for contract failure increased, possibly due to an uptick in the management and oversight of contract awards,” the report said. “Whereas this outcome constitutes the only positive change in the section, it represents the worst preforming indicator by far.”
While the productive capacity and surge readiness condition has seen a 12-point increase since 2018, it only received a score of 66, which is a large drop from 2019, the report noted.
“Capacity utilization remains high but is trending in the wrong direction,” the document said. “This trend has been slowly unfolding for a few years, finally appearing in scores through the trailing averages.”
Researchers noted that industry must be ready to respond to a surge in demand for its products. “The sudden arrival of the COVID-19 pandemic showed just how quickly surge capacity can be needed,” the study said.
Areas of confidence include the competitive environment and state of demand for defense goods and services, according to the report.
The Defense Department has recently averaged about 701,000 prime contracts each year and had over $394bn in prime contract obligations in 2019, the document said. The study gave the competition condition a score of 91 — an uptick of two points since 2018.
“Several high-scoring indicators drove the strength of market competition conditions, including the low level of market concentration of total contract award dollars, the relatively low share of total contract award dollars received by foreign contractors, and the high level of capital expenditures in the defense industrial base,” the report said.
Additionally, demand for defense goods and services received a score of 93 for 2020, which was a 16-point increase over the 2018 score, the document said.
“This high score for demand is a result of the recent increase in contract obligations issued by DoD,” the report said. Total contract obligations issued by the Pentagon grew from $329bn in fiscal year 2017 to $394bn in fiscal year 2019 — a 20 percent increase, the document noted. Additionally, foreign military sales increased by nearly 20 percent over the same time period. (Source: glstrade.com/National Defense)
02 Feb 21. Austin Directs ‘Zero-Based Review’ of DOD Advisory Committees. Secretary of Defense Lloyd J. Austin III has directed a “zero-based review” of all Defense Department advisory committees, DOD officials said today.
The officials, speaking on background, also said Austin directed all members of the committees to resign from the committees by Feb. 16.
The action does not include presidentially or congressionally appointed committees. So, while the Defense Policy Board will be affected, the visitors boards of the military academies will not.
There are at least 42 committees containing hundreds of advisors who are covered by the secretary’s ruling. These committees advise on a broad swath of issues within the department including policy, personnel, business, scientific education, training, health care and memorial activities, the official said.
The secretary was concerned “with the pace and the extent of recent changes to memberships of the department advisory committees done with a bit of frenetic activity in the final two months of the previous administration,” the official said. “I think it … gave him pause to consider the broad scope and purpose of these boards and to think about how they can best be aligned and organized and composed to provide competent, technical professional advice.”
Austin directed the interim director of administration and management, as well as the acting general counsel of DOD, to lead the study. They must have their recommendations to the secretary of defense by June 1. “These recommendations will include items such as retention, realignment, termination, changes to mission or function, membership, membership size, and even possible legislative changes to non-discretionary advisory committees,” officials said.
Officials said there is some overlap in the studies of many of the committees. They look at this study as a way to address that. (Source: US DoD)
01 Feb 21. DOD Announces Rare Earth Element Award to Strengthen Domestic Industrial Base. Lynas Rare Earths Ltd, the largest rare earth element mining and processing company outside of China, has been awarded a Defense Production Act (DPA) Title III technology investment agreement to establish domestic processing capabilities for light rare earth elements (LREE). LREEs are critical to numerous defense and commercial applications, including petroleum refining, glass additives, and magnets used in electric vehicle drivetrain motors and precision-guided munitions. Upon completion of this project, if successful, Lynas will produce approximately 25 perfect of the worlds’ supply of rare earth element oxides.
Through its wholly-owned subsidiary Lynas USA LLC, Lynas will establish LREE separation capacity in Hondo, Texas. Under the technology investment agreement, the Department of Defense is contributing $30.4m to the project. The Hondo, Texas facility will complement Lynas’ existing Australian and Malaysian operations and is expected to be co-located with the proposed Heavy Rare Earths separation facility.
This award aligns with the U.S. government’s strategy to ensure secure and reliable supplies of critical minerals under Executive Order 13817 and follows a series of rare earth element actions the Department of Defense has taken in recent years to ensure supply and strengthen defense supply chains. Specific actions include stockpiling, implementing Defense Federal Acquisition Regulations Supplement (DFARS) rules to transition defense supply chains to non-Chinese sources of rare earth element magnets, launching engineering studies with the Industrial Base Analysis and Sustainment program focused on re-establishing domestic heavy rare earth element processing, partnering with industry to re-establish domestic neodymium-iron-boron magnet production, and leveraging Small Business Innovation and Research and Rapid Innovation Funds to accelerate the development of new rare earth element processing technologies. The award to Lynas follows three previous DPA Title III awards to rare earth element producers announced in November of 2020. (Source: US DoD)
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