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The Narrowing of the Defense-Industrial Base Has Reached Critical Levels

By: Stephen P. Bucci/Defense News

The Senate Armed Services Committee has finally given the green light to purchase two new missile subs. This is great news. One can only hope that now the defense-industrial base can actually get it done. There is reason for concern.

Much has been written about how few major defense contractors are left on the playing field. Where once robust competition occurred, now there is little to drive excellence. Consolidations, mergers and changes of business focus has this critical business sector at the breaking point. A pending call by the Department of the Navy to adjust the procurement process for the vital Columbia-class submarines to make it a block buy puts this issue even more into the spotlight. This alone warrants a deeper look into this problematic area.

While the strain can be seen throughout the vital defense-industrial base, the prime example is the looming crisis that is raising concerns for the Navy’s Virginia- and Columbia-class submarine programs. The present sub fleet is the envy of the world. Our boats are a marvel and can easily over match five to 10 of the subs of any one of our adversaries. This sounds great, doesn’t it? Except that on any given day, enemies like Russia and China can put nearly 10 boats in the water for every one of ours. 

Think about that. That is, at best, a dead heat; or put a different way, a “fair fight.” That is the last thing we ever want to have. Therefore, improving our fleet and getting more top-line boats at sea is vitally important.

Today, that is at risk. The importance of a credible deterrent is not an academic concept. The nuclear triad depends on these subs, and the way we choose to build ships is critical to ensuring we have an effective and trustworthy deterrent.

In the face of this situation, we cannot tolerate any glitches or slowdowns in the very tight production schedules in the two submarine programs. Unfortunately, that is exactly what we are facing because of the previously mentioned lack of diversity and restricted options in the defense-industrial base. The complex schedule and the challenges that already exist to keep these programs on time are daunting. The Virginia and Columbia classes will have to be constructed at the same time, and complex carrier builds are also ongoing.

A specific recent example of the defense-industrial base problems is the critical missile tubes that are the main armament of both of these world-class vessel types. They are the critical path for production, with the rest of the boat literally being built around them. If the tubes are “late,” the entire production cycle is held up. That is exactly what is happening, and it is putting our national security at risk. This is not an inconvenience, folks — people’s lives are at stake.

A recent Government Accountability Office report states “the Navy recognizes that its supplier base remains high risk and is committed to increased oversight on manufacturing issues and readiness assessments.” The firm BWX Technologies is the main missile tube subcontractor for both programs, and it has the lion’s share of the tube production, with almost no one else in the competition.

Unfortunately, BWX Technologies has twice delivered tubes that have not met the exacting acceptable standards of the program. Its tubes were rejected. The company is claiming it cannot make any profit, and wants to walk away from the project.

The Navy is left between a rock and a hard place. What is it to do?

We need more diversity, and we need it now. Business as usual is a no-go, and the Navy needs to start using imagination and creativity. It cannot simply reach out to the normal (tiny) number of producers and hope that this will be sufficient. Tactical-level fault does lay with BWX Technologies, but the larger problem is with the Navy and the defense-industrial base writ large.

The focus must be quality over cost. The quality of engineering and manufacturing is supremely important for this program, and those attributes should override any quibbling over cost. Congress appropriated somewhere around $570 million to the sub community to specifically provide financial support in order to incentivize new suppliers. It appears that only about $10 million has been used for that purpose, the remainder seemingly going to the afore-mentioned narrow field of existing suppliers.

That poor use of most of the money has only further exacerbated this challenge and defies Congress’ intent when establishing the fund. 

The nation should not and cannot take risks here, which could otherwise be mitigated. They must go with known competence. The Navy should look to known suppliers who have developed complex, new technologies. It must diversify the industrial base because growing the size of the industrial base is essential for the long-term stability of this program and others.

The bottom line is simple, but clearly not easy. The leadership of the Navy, at the highest levels, must step into this issue. Anyone too mired in “the usual” ways of doing things should not be trusted to solve it. The aperture of options needs to be opened widely, to seek solutions from sources that are not on the tip of the tongue, and priorities (and money) needs to be shifted to fix this now.

We have allowed the shipbuilding capacity of the nation to atrophy; it must be rebuilt. That will take time. This problem must be addressed in the present. Pay the price: The nation’s security requires it.

Steven P. Bucci is a visiting fellow at The Heritage Foundation. He previously served as a U.S. Army Special Forces officer and is a former deputy assistant secretary of defense for homeland defense.

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