Defense supply chains in need of overhaul; task force recommends action

Vulnerabilities in the international networks that supply goods and services needed for finished products used by the Department of Defense were exposed to a higher degree during the pandemic, and became the subject of a congressional Armed Services task force. The bipartisan Defense Critical Supply Chain Task Force was established to make the security of the U.S. supply chain a legislative priority, and their recent report details actionable legislative proposals to mitigate risks that could be considered for the FY 2022 National Defense Authorization Act (NDAA).

The task force held a series of roundtables that solicited input from former and current DOD officials as well as leading experts representing major industry associations, think tanks, academia, and non-traditional industry and found that DOD lacked visibility on the supply chain and, thus, cannot build resilience and mitigate risk without a firm understanding of where its materials and supplies are sourced and manufactured. However, the task force reports that the information is within reach and that DOD must use the available tools, scale efforts, and partner with industry to achieve supply chain transparency and make strategic assessments. They considered vulnerabilities in the workforce and four critical supplies: semiconductors and critical electronic components; Rare Earth Elements (REE); energetic materials (propellants and explosives and supporting chemicals); and, active pharmaceutical ingredients (APIs) and therapeutics.

The six recommendations that could be included in the NDAA include:

• A statutory requirement for a department-wide risk assessment strategy and system for continuous monitoring, assessing, and mitigating risk in the defense supply chain;
• A statutory requirement for the department to employ commercially available tools to map the defense supply chain within one year of enactment;
• A statutory requirement to identify supplies and materials for major end items that come from adversarial nations and implement a plan to reduce reliance on those nations;
• A statutory requirement for DOD to establish a coalition among industry groups representing defense industrial base contractors, education partners, organizations providing workforce training and development, and other federal partners to focus on career development within manufacturing fields and other areas necessary to secure critical supply chains;
• Updating statutory authority to emphasize the value of a broad collaboration with the National Technology and Industrial Base (NTIB) allies beyond acquisition, to strengthen the alliance; directing the NTIB Council to identify particular policies and regulations that could be expanded to the NTIB allies, in order to use the NTIB as a test bed for closer international cooperation and supply chain resiliency; and authorizing an NTIB “International Council” to harmonize industrial base and supply chain security policies; and,
• DOD should deploy the full range of American innovation to secure the supply chains involving rare earth elements, and the task force recommends that research and development funded by the Department of Energy and Department of Interior include a requirement for the Secretary of Defense to coordinate with both the Secretaries of Energy and Interior to ensure research and development includes the DOD’s interest.