One of the biggest lessons learned during the COVID-19 pandemic is that the supply chain is vulnerable to offshore suppliers, particularly adversaries like China, a senior Pentagon official said.
The U.S., its allies and partners, now have a better understanding of the fragility of the supply chain, said Ellen M. Lord, undersecretary of defense for acquisition and sustainment, participating in the discussion via video.
“Critical military systems depend on rare-earth mineral processing and microelectronics made in China or fabricated and packaged there,” she said.
In addition to problems uncovered in the manufacturing of military components, adversarial capital is coming in that involves intellectual property theft, and merger and acquisition activity that involves takeovers of critical companies in the U.S., and its allied and partner nations, she said.
“We need to make sure we re-shore as much as possible,” she said … bringing as much of the defense industrial base back to U.S. shores as is feasible, while still relying on allies and partners for their contributions. Canadian, Mexican and European partners produce military hardware for the U.S., she noted.
When the Defense Department goes out for bids for a system, DoD officials like to have as many competitive bids as possible, to bring down cost and to have more options, Lord said. If just two companies are bidding, she said, she’d prefer that one is domestic.
One of the most important aspects of the U.S. industrial base and the trans-Atlantic industrial base in Europe is frequent and transparent communications, Lord said. She added she’s in constant communication with her European counterparts to bounce ideas off of them on reform and modernization, and issues of interoperability and countering malign Chinese influence.
“When we go to war, we go together,” Lord said. “We need to be interoperable. Unless we’re working on these systems together, we will not be interoperable.”