Because of its sophistication, diversity and capacity to innovate,
the U.S. Defense Industrial Base remains the envy of the world, Deputy
Secretary of Defense Kathleen H. Hicks said today.
Speaking virtually in the keynote address at the 30th annual
Pennsylvania Showcase on Commerce, the deputy secretary addressed
members of the Johnstown Area Regional Industries Procurement Technical
Assistance Centers and the Cambria Chamber of Commerce.
"Every day, people like you and others across this country are
designing, building and producing the critical materials and
technologies that ensure our armed forces have every advantage they
need," she said.
The Defense Department's industrial policy doesn't involve five-year
plans or a command economy approach, but instead believes market signals
and clear investment priorities can unlock the power of American
entrepreneurship, technological breakthroughs and individual
achievement.
DOD's research and procurement revolve around broad-based stakeholder
coalitions and public-private partnerships, Hicks said, adding, "These
have the ability to strengthen defense supply chains and catalyze
economic growth across many communities."
Pennsylvania contributes a great deal to DOD's efforts, the deputy
secretary said, and noted DOD invests more than $18 billion in the
commonwealth, because "this state knows how to deliver."
"Companies in Pennsylvania manufacture a wide variety of products
that are instrumental to critical DOD weapons systems, including
munitions, missiles, artillery and explosives," Hicks said. "Here in
Johnstown, you enable our radar, ground vehicle, armored weapons system
capabilities and more."
The deputy secretary talked about how industry can continue
supporting DOD's national security priorities, and what DOD can do to
improve its partnerships in commerce to create and modernize its
military force.
"To defend the nation, the United States must overcome a multitude of
challenges," Hicks said. "The Department of Defense is prioritizing
China as our long-term pacing challenge. Beijing has demonstrated
increased military confidence and a willingness to take risks.
Simultaneously, we face other advanced and persistent threats emanating
from Russia, Iran, North Korea and other transnational and non-state
actors."
We are all part of "a new age of technology," she emphasized. Many
factors, such as the internet, additive manufacturing, analytics,
robotics and more are transforming the way the DOD does business, she
added.
"DOD is renewing its efforts to posture ourselves for the ‘future
fight.' A vibrant defense industrial base will be critical to our
success," Hicks said.
DOD wants to harness from the very best of America in sourcing a
broad, diverse set of potential partners and suppliers — especially
small businesses, she said.
And small businesses lead the nation in innovation — producing 16.5
times more patents than large patenting firms, Hicks said, adding that
small businesses deliver rapid operational concepts, prototypes and
demonstrators that allow DOD to respond with agility and efficiency.
DOD has made significant achievements in its work with small
businesses, Hicks said: The department received an "A" from the Small
Business Administration for meeting its contracting goals for seven
straight years; DOD spent $80.3 billion with small businesses, with 45%
of those awards going to disadvantaged or woman-owned businesses; and in
the past 10 years, DOD dramatically increased small business spending
in research and development by 83%. In that same time, DOD expanded
spending in small business manufacturing by 28%, she added.
"Yet, over the past decade, small businesses in the defense
industrial base shrunk by over 40%. The data shows that if we continue
along the same trend, we could lose an additional 15,000 suppliers over
the next 10 years," the deputy secretary said.
"I realize that doing business with DOD is not always easy. Because
of our unique security requirements and procurement practices, we can be
a challenging customer," Hicks said.
But DOD is committed to examining the administrative barriers small
businesses face in working with the department and will take action to
remove barriers where it can, she said.
"To do that effectively, we need your engagement," Hicks said. "This
week, we are putting out a notice in the Federal Register seeking
industry input on the barriers you face."
DOD has made significant strides to make its acquisition efforts more
agile, but it needs industry to help the department understand where it
can make additional progress, she noted. Such input will go into DOD's
small business strategy, which Hicks said she intends to announce before
the end of this year.
The deputy secretary also has created a DOD innovation steering
group, which is focused on how DOD can better engage with innovators
across the country — whether it's an established defense company or
small business that's not familiar with DOD.
DOD is also reinvigorating its small business programs to provide
streamlined, easier-to-use entry points into the defense marketplace,
and is ensuring better long-term planning for its small business
programs, Hicks said.
That means leveraging DOD's small-business program website as a single point of entry — at business.defense.gov — which contains an expanding set of toolkits to help companies get started, she added.
Additionally, DOD is enhancing its nationwide network of Procurement
Technical Assistance Centers. DOD has 95 PTACs across the nation —
including the Johnstown Area Regional Industries PTAC — that help
businesses pursue contracts with DOD and other federal agencies, Hicks
said.
"And we will continue to leverage programs like Small Business
Innovation Research which, on average, commercializes $7 billion of
small business innovations that are connected directly to our
warfighting capabilities," the deputy secretary emphasized.
DOD is working alongside the White House, the Small Business
Administration and other federal agencies to create more opportunities
for onboarding small businesses on our contracting vehicles, Hicks
said.
"This [Biden] administration will leverage the purchasing power of
the federal government to ensure equity and inclusion of small
businesses in our underserved communities," she added.
That includes increasing the share of dollars that the federal
government spends on small, disadvantaged businesses — tripling the
contracting goal to 15% by 2025, Hicks noted.
"Simultaneously, the secretary of defense and I will continue to
increase outreach to underserved communities to foster additional
potential connections, opportunities and investments," the deputy
secretary said.
Additionally, DOD has made sure its fiscal year 22 budget request
protects its mentor protégé program, which provides opportunities to
both mentor and mentee firms, she said.
"Even as the department continues to focus on increased supply-chain
resilience and innovation and modernization, we remain committed to
working with local communities where we see opportunity," Hicks said.