[pjw] NEWS: Defense industry needs 5 percent annual budget growth to stay healthy (Defense News 4/25)

Peace and Justice Works pjw at pjw.info
Sun May 27 19:44:11 EDT 2018

Hello Peace and Justice Works supporters

As we brace ourselves for the flag-waving on Memorial Day tomorrow, it 
reminds me that we used to (circa 1992-2000) hold a Peace and Justice Fair 
on that holiday. The idea was to remmeber those who gave their lives in 
war by working toward a world without war.

The unpredictability of this particular administration doesn't much change 
this nation's history of wars for resources, regional/global dominance and 
"Just Cause" (that was the name for the Invasion of Panama for those who 
don't get the reference). But the below article jumped out at us during 
the Iraq Affinity Group meeting on May 14, because as it's always said, 
"Follow the money." The Defense industry is asking for 5% cost of living 
increases or they won't be able to manufacture killing hardware and make a 
profit. Boo hoo.

I also had downloaded links to a few pieces about the 15th anniversary of 
the invasion of Iraq. Jeremy Scahill made a documentary marking 15 years 
from the statue of Saddam Hussin being toppled in April.


Also, NPR (sometimes known as National Pentagon Radio, but, perhaps 
compared to Fox News not so much) did a few stories, one of which I heard 
back in March, about the anniversary. It had more insight about what 
happened to Iraqis than most pieces.

   We, the Liberators

OK, now here is the article about the Defense industry. Let's hope we can 
make war nothing more than a memory.
--dan h
peace and justice works

Defense industry needs 5 percent annual budget growth to stay healthy, says
new AIA report
    By: [47]Joe Gould   April 25

    WASHINGTON - The American defense-industrial base needs Pentagon
    budgets to grow at least 5 percent per year to remain healthy and
    stable, the industry's leading [48]trade group said in a [49]report
    released Wednesday.

    The report by the Aerospace Industries Association blames Budget
    Control Act cuts and Congress' repeated deferral to continuing
    resolutions for a [50]steep drop in the market's number of prime
    vendors. It's unclear exactly how smaller suppliers have been impacted,
    but "the detrimental impact of budget cuts have been felt throughout
    the supply chain," the report reads.

    Recent years marked by brief government shutdowns and lengthy
    continuing resolutions have yielded waste, disrupted major programs at
    key milestones and driven inefficient spending practices at the
    Department of Defense by forcing it to spend money faster, the report
    argues. That hurt the industrial base and produced a magnified effect
    at lower tiers of the supply chain.

    "We can fix whatever acquisition problems we see, but if we don't have
    stable, robust, balanced spending, our free-market economy will not be
    able to respond to DoD's needs in a timely, effective way," John Luddy,
    AIA's vice president for national security policy, told Defense News.
    "It doesn't all boil down to money, but it starts with that."

    The 5 percent figure intentionally hews to Defense Secretary Jim Mattis
    and Chairman of the Joint Chiefs of Staff Gen. Joe Dunford's [51]calls
    for sustained budget growth through 2023 to maintain the country's
    military edge over competitors Russia and China, Luddy said.

    AIA's 10-page report contains 20 recommendations for Congress and the
    Trump administration, all part of AIA's input into a governmentwide
    [52]study aimed at fixing gaps in the U.S. defense-industrial base,
    which President Donald Trump [53]ordered in July.

    AIA, which represents more than 340 major aerospace and defense
    companies and their suppliers, has welcomed the Trump administration's
    study and leaned in with its own industrial-base working group to aid
    the government.

    "It's giving a marquee level of interest to things we talk about every
    day," Luddy said.

    A government-spanning task force created by Trump's executive order has
    since presented internal interim findings, which identified risks in
    the industrial base. The government's effort has yet to publicly
    present its finding, but its conclusions are likely to influence future
    defense policymaking on Capitol Hill and within the administration.

    Upcoming for the study is a series of [54]war games to show how well
    certain industry subsets are prepared to surge in war scenarios and may
    yet include a [55]survey of defense firms.

    The in-depth review will reveal where America's supply chain relies on
    Russia or China, the two other great powers in the world.

    Broadly, AIA's recommendations for a robust defense-industrial base
    cover stable congressional appropriations, streamlined military
    acquisitions, targeted technological investments and a skilled

    "Our nation has entered an era of great power competition in which
    there will not be time to 'play catchup' or surge to meet our war
    fighters' needs," the report warns.

    A two-year budget deal contained a big boost for national defense,
    setting top lines for the Pentagon at $629 billion for 2018 and $647
    billion for 2019. But AIA remains cagey, as Budget Control Act caps for
    2020 and 2021 remain in place at $576 billion and $591 billion

    "We've seen it happen where they get to the edge of the cliff, and then
    they pass an agreement - and this [year] there was a very positive
    development for defense," Luddy said of Congress' budgeting process.
    "We have to hope that happens again, but we have to prepare for the

    AIA not only recommends repealing Budget Control Act caps for defense
    spending, but also embracing lot buys and multiyear procurement
    vehicles. Citing disproportionate reductions to the DoD's research,
    development, test and evaluation and procurement accounts, AIA
    advocates stronger support for long-term R&D and infrastructure

    Budget austerity and cost-based acquisition policies have left the
    defense industry feeling squeezed and "serve to restrict the
    competitiveness of the supply base, crowd out and tie up resources for
    investment in R&D, personnel and facilities in government and industry,
    and discourage new entrants and independently-funded technologies from
    being offered to DoD," the report reads.

    "Some acquisition practices aimed at controlling cost have merely
    established non-value-added bureaucratic requirements, tied up cash
    flow, erected barriers to commercial technology and investment, and
    imposed a de facto lowest price, technically acceptable environment,"
    the report states.

    As DoD officials seek an edge in new technologies - offensive and
    defensive cyber, [60]hypersonics, and access to trusted
    microelectronics - AIA points to Russia's efforts to dominate in
    [61]electronic warfare and [62]China's efforts to dominate in
    semiconductors and other technologies.

    Trusted microelectronics and hypersonics respectively require intensive
    investment in foundries and infrastructure - especially test facilities
    - that cannot be recouped outside of the DoD, the report warns.

    "In these areas industry will largely rely on [independent] R&D funds,
    which support industrial base health and national security objectives
    by enabling industry to take risk on defense-unique solutions," the
    report reads. "DoD should remove any barriers that directly or
    indirectly limit industry's ability to flexibly utilize [independent]
    R&D and earn sufficient returns on those investments."

    Among the 10 recommendations specifically aimed at fixing the DoD's
    often-sluggish acquisitions process, AIA wants to see the department
    establish an overarching strategy for intellectual property - a
    hot-button issue, as the DoD's been criticized for overreach in its
    pursuit of access to intellectual property.

    AIA also argues the DoD's blanket requirements for vendors to provide
    technical data, software rights and other information could undermine
    its efforts to attract new technology. Instead, the DoD needs to ensure
    its workforce is "asking for the right IP for the right reasons based
    on a program's acquisition strategy and sustainment considerations,"
    the report reads.

    Those recommendations come as the DoD [65]absorbs fundamental changes
    to its acquisition hierarchy mandated by Congress.

    The report also takes aim at the department's contract audit regime,
    which it regards as punitive and a hindrance to speedy purchasing.

    "We're not advocating that DoD or Congress give up their oversight, but
    everybody knows there are far too many people involved in every
    decision, far too many decision points on most things," Luddy said. "I
    think the department is working very hard on that also."

   59. https://link.defensenews.com/join/5ba/sign-up

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