National Defense Industrial StrategyThe purpose of this National Defense Industrial Strategy is to drive development of an industrial ecosystem that provides a sustained competitive advantage to the United States over its adversaries. This strategy outlines why a modernized, 21st Century defense industrial ecosystem contributes to the NDS objective of Integrated Deterrence by organizing, establishing, and building the foundational elements of military capability. In building these foundational elements, the United States sends a message of reassurance to our international allies and partners and of warning to our adversaries. Building on the strategic framework, the NDIS outlines four priorities that will catalyze the changes needed to build a modernized defense industrial ecosystem. Each of the four priorities has associated long-term actions that promote flexibility and dynamic capabilities as we build this ecosystem. This strategy will describe the priorities and actions as well as the risks posed if we fail to act. Department of DefenseDoD_5e8dcfdc-5d6a-11df-839d-400e7a64ea2aKathleen H. HicksDeputy Secretary of DefenseAn industrial ecosystem that is dynamic, responsive, state-of-the-art, resilient, and a deterrent to our adversaries_f5274d5c-b35e-11ee-a41c-9d042083ea00To drive development of an industrial ecosystem that provides a sustained competitive advantage to the United States_f5274e24-b35e-11ee-a41c-9d042083ea00StandardizationThe process of developing and agreeing on (by consensus or decision) uniform engineering criteria for products, processes, practices, and methods for achieving compatibility, interoperability, interchangeability, or commonality of materiel. InteroperabilityInteroperability is a requirement that a program's system interact with other systems through transport of information, energy, or matter. DynamismResponsivenessResiliencyIntegrationCompetitive AdvantageDeterrenceIntegrated Deterrence ~ As defined in the National Defense Strategy, integrated deterrence is the Department’s approach to aligning the Department’s policies, investments, and activities to sustain and strengthen deterrence -- tailored to the specific competitors and coordinated to maximum effect inside and outside the Department.Products, Services & TechnologiesSecurely produce the products, services, and technologies needed now and in the future at speed, scale, and cost_f5274eb0-b35e-11ee-a41c-9d042083ea001Priority Defined: The DIB can securely produce the products, services, and technologies needed now and in the future at speed, scale, and cost. ^^ The 2022 National Defense Strategy defines resilience as the ability to withstand, fight through, and recover quickly from disruption.7 Dynamic production is primarily concerned with managing production processes and capacities to meet the changing demands of our warfighters, allies, and partners at speed and at scale. Resilient supply chains and dynamic production share the goals of adaptability, responsiveness, and scalability. The near-term efforts of the interagency Supply Chain Disruptions Task Force have helped to break down silos and achieve new forms of collaboration between Federal departments and agencies and with allies and partners, enabling timely action to address supply chain disruptions. Long-term efforts, however, require further steps to institutionalize supply chain resilience throughout the DIB, DoD, and extend through the USG and our allies and partners. ^^ The DoD must balance the needs for speed and scale with cost and requires resilient, healthy, diverse, dynamic, and secure supply chains to ensure the development and sustainment of capabilities critical to national security. Currently, the health of sub-tier suppliers, manufacturing capacity, and lack of visibility into our critical supply chains create unique challenges that must be addressed to meet national security objectives. This is a particularly acute issue for small businesses who face various obstacles in helping DoD meet its challenges. Unreliable cash flow to small businesses makes the DIB more fragile and less secure, and this is driven by a range of issues from appropriation delays to commonly used contracting practices. Regulations and business practices can be difficult to understand, costly to implement, and in a myriad of ways often create barriers to doing business with DoD. Some of these barriers include confusing points of entry into defense markets, improper bundling and consolidation of contracts, and convoluted regulations. These barriers strain the relationship between the DoD and small businesses. By working with both large and small businesses and more strategically utilizing the Organic Industrial Base (OIB), the DoD will achieve a more resilient, modernized industrial ecosystem that is economically and environmentally sustainable, receives predictable demand signals, and does not depend on adversarial foreign sources of capital, technology, raw materials, and critical inputs. ^^ Ensuring the health of sub-tier suppliers is crucial to a healthy, diverse, and modernized DIB. The DoD must explore ways to better assess the health of the subcontractor industrial base, while at the same time applying the full range of authorities and opportunities available to develop innovative acquisition techniques that strengthen mechanisms to ensure prime contractors are accountable for meeting their small business subcontracting plans. The DoD will continue accelerating payments to small businesses and seek ways to incentivize large prime contractors to do the same with small business subcontractors, to include assessment of ways to address slow cash flow through existing accounting practices and business systems. ^^ In addition to enabling integration of small businesses, the DoD must leverage the USG-owned OIB,8 which complements the commercial DIB by providing a ready and controlled source of technical competence to support the force structure and requirements identified by strategic and contingency plans. These core logistics capabilities are those necessary to support reconstitution in a national emergency or contingency requirement. The OIB performs a wide range of important roles from manufacturing items such as gun-tubes, to producing explosives, propellants, and munitions, to providing depot-level maintenance for complete rebuilds on such items as aircraft, ground vehicles, and engines, to major overhauls on nuclear-powered submarines and aircraft carriers. The OIB also sustains older platforms that are not profitable to the private sector. The OIB further provides rapid surge capability and capacity to support contingencies, and it is revitalized and enlarged when greater sustained commitment is called for, as in the present threat environment. ^^ OIB infrastructure has gradually degraded over time, with many critical facilities dating to World War II or before, and depot equipment often becoming obsolete. This lack of modernization has impacted cycle times, depot efficiency, and capacity. While the Military Services are modernizing OIB facilities and tools, these efforts will require substantial resources to meet future warfighter needs. For example, the Army is preparing to invest $4.5 billion over the next 15 years to modernize its OIB capabilities. This will be similar and complementary to the substantial investments required to modernize commercial DIB facilities and capabilities.ResilienceIncentivize industry to improve resilience by investing in extra capacity_f5274f28-b35e-11ee-a41c-9d042083ea001.1Spare production capacity refers to the excess capacity a company or organization maintains beyond its current production needs. This capacity can be essential for accommodating increased demand, including demand from allies and partners, handling unexpected disruptions, or supporting growth. The key components of spare production capacity are physical infrastructure (production facilities, machinery, storage space to support increased production), workforce (available and flexible pool of skilled labor), input materials (inventory, stockpiles, supply), cyber defense and protection, and management systems (demand, supply chain, production, quality assurance, risk/ scenario, optimization, financial). Technological modernization can confer production flexibility, allowing rapid conversion from one production item or type to another; and bring greater production output and logistics throughput. Developing spare production capacity can include diversifying suppliers. ^^ Encouraging defense suppliers to build substantial spare production capacity will require a coordinated effort by industry, Congress, DoD, and other federal departments and agencies; a public recognition of the associated burden to the taxpayer and the economy itself; and a broad acceptance of the defense industry, including our global industrial partners, as vital for national defense. Congress can explore allocating additional funding for contracts and other incentives (tax incentives, regulatory relief, long-term contracts) aimed specifically at building and maintaining spare production capacity. Such funding can be used to modernize and expand facilities and develop flexible production. The DoD will seek to establish risk-sharing mechanisms and technology-sharing structures to jointly fund, develop, and secure spare production capacity. The DoD will also plan for needed spare production capacity and to provide oversight authority to ensure successful development and sustainment follow-through.Partnerhips, Mechnisms & StructuresEstablish public-private partnerships, risk-sharing mechanisms, and technology-sharing structures to jointly fund and develop spare production capacity_267ac248-b405-11ee-9bfa-6d040383ea001.1.1LegislationShape legislation to plan for spare production capacity needed and to provide oversight authority to ensure successful development and sustainment follow-through_267ac432-b405-11ee-9bfa-6d040383ea001.1.2Inventory & StockpileManage inventory and stockpile planning to decrease near-term risk_267ac568-b405-11ee-9bfa-6d040383ea001.2StockpilesIncrease stockpiles of strategic and critical systems_267ac7a2-b405-11ee-9bfa-6d040383ea001.2.1The DoD maintains stockpiles of strategic minerals, critical chemicals, medical supplies, critical parts, and essential technology. These inventories and stockpiles act as shock absorbers for the supply chain and help to mitigate near-term risks, including from unanticipated demand spikes or supply chain disruptions. However, recent geopolitical events have spotlighted gaps in national stockpiles and challenges in replenishing existing ones. To mitigate vulnerabilities in the supply chain, the Department will embrace an expanded approach to stockpile and inventory planning. Working with industry, the DoD will expand existing and establish new stockpiles of the critical parts, finished goods, and commodities needed to meet production requirements for conducting sustained campaigns against adversaries. The DoD will also identify stockpiling requirements for critical minerals and critical components necessary to continue production in cases where international conflict or crisis may inhibit normal functioning of the supply chain.Working GroupsEnsure effectiveness of ad hoc working groups tasked with rapidly expanding production and building inventories_267ac950-b405-11ee-9bfa-6d040383ea001.2.2DoD production- and capability-focused working groups bring leaders and subject matter experts from across the DoD, other agencies, and industry together to mitigate critical near-term defense production and supply chain risks. The DoD and other organizations have done critical work with ad-hoc committees to coordinate supply chains through a network of symbiotic relationships with commercial and government-owned suppliers and manufacturers. DoD will regularly evaluate the efforts of these working groups to ensure their utility. These evaluations will aid in providing a comprehensive view of the relevant supply chains to confirm whether producers are making appropriate prioritization decisions and acting to avoid production bottlenecks and disruptions. They will also aid in identifying inventory shortfalls whether due to shortages of source materials, production capacity or capability constraints, acquisition issues, or logistics management mechanisms. Additionally, the DoD will establish a top-down common methodology to calculate source material availability and upstream production requirements, including capacity requirements. This will support effective and timely stockpile and inventory replenishment and downstream production goals, particularly as material requirements cross multiple production efforts or require prioritization of critical and limited materials.Domestic ProductionContinue and expand support for domestic production_267acab8-b405-11ee-9bfa-6d040383ea001.3Accelerator ProgramsPromote accelerator programs to foster innovation_267acd06-b405-11ee-9bfa-6d040383ea001.3.1Promote Accelerator Programs to Foster Innovation: DoD organizations like the Defense Innovation Unit (DIU) speed up the development and production of emerging technologies and products, such as autonomous systems, quantum technology, artificial intelligence, and advanced materials that can serve the needs of both the military and the civilian economy. They do so by fostering collaboration between typically nontraditional companies and established contractors, research institutions, and government agencies for focused problem solving with clearly defined objectives and to address pain points that can limit integration and scale. The Department will seek opportunities to expand these efforts. Since many defense technologies require extended research, development, and testing timelines, the DoD will also consider longer program durations to accommodate the unique, lengthy, and costly challenges of defense innovation and post-program support, such as access to follow-up funding, business development opportunities, and continued mentorship. DoD will continue to facilitate non-programs of record as part of the FMS program to provide allies and partners with relevant priority capabilities to support their own national security needs.Funding MechanismsDeploy innovative funding mechanisms to revitalize the OIB_267aceb4-b405-11ee-9bfa-6d040383ea001.3.2The OIB is the network of U.S. government-owned defense industrial facilities including both government-owned, governmentoperated (GOGO) and GOCO sites. The OIB serves two primary purposes: (1) production of items such as missiles, munitions, and gun tubes, that are not economical for private enterprise to manufacture; and (2) depot-level maintenance, typically requiring complete overhaul, including armored ground systems, sea-going ships, and aircraft.9 DoD is funding the recapitalization and modernization of Army and Navy OIB missiles and munitions production plants, all of the Services’ maintenance depots, and the Navy’s shipyards using innovative funding mechanisms.10 This strategy is regenerating required capacity and capability and will guide the Department as it works with Congress to fund the full modernization and resourcing of OIB infrastructure, process improvements, and workforce. DoD will work to establish a better understanding of the conditions that cause long-term modernization programs to encounter unexpected increases in cost estimates and schedule delays and exercise patience accordingly.Suppliers & MethodsDiversify supplier base and invest in new production methods_267acfea-b405-11ee-9bfa-6d040383ea001.4RelationshipsExpand relationships with companies and industries not traditionally in the DIB_267ad238-b405-11ee-9bfa-6d040383ea001.4.1Today America has unique economic and technological advantages in information technology, advanced analytics, materials science, and advanced fabrication technologies, as compared to the manufacturing capabilities of the Machine Age that led to our victory in World War II. An important aspect of this change is that the era where technological breakthroughs were primarily dependent on government research and development funding is in the past. Some of the advanced capabilities that the Department would like to leverage to support warfighters can come from the commercial sector. Commercial entities now make significant investments in advancing capabilities in critical technology areas such as artificial intelligence, advanced computing, and biomanufacturing. Many of the companies or organizations engaged in these areas are not traditionally considered part of the defense industrial base. Additionally, there are businesses from socio-economic categories that are underutilized in the DIB.11 Data from the Small Business Administration (SBA) shows that federal contracting to small businesses owned by underrepresented socio-economic groups accounts for less than 10% of all federal contracting dollars. These suppliers come from diverse industries and can bring technological, production, and process advancements to the defense sector. Expanding services and industrial capabilities carries significant investments and requires access to materials and market development. To leverage these nascent relationships and the opportunity for capability and capacity growth, DoD will build and deepen relationships with commercial industries not traditionally involved in defense work. Not only will working with these "nontraditional suppliers" broaden the DIB, but it will also foster competition within the defense market. Cybersecurity CostsMitigate cybersecurity costs of entry to work in the defense industrial ecosystem_267ad3e6-b405-11ee-9bfa-6d040383ea001.4.2High barriers to entry disincentivize the types of small or sub-tier suppliers that help to diversify and make the industrial base more resilient from doing business with the DoD. Contracting with the DoD also requires small businesses to incur additional costs, such as maintaining appropriate cybersecurity measures. These costs, which can more easily be borne by larger firms, can dissuade smaller companies from participating in the DIB. The DoD will seek to improve communications and outreach through public-private partnerships so that small businesses are aware of not only DIB cybersecurity regulations, policies, and requirements but also available DoD and industry cybersecurity services and support. The Department is committed to reducing barriers to entry for small and medium-sized businesses, including impediments associated with implementing and maintaining cybersecurity. The DoD, in collaboration with the DIB, will seek to identify opportunities so that commercial cybersecurity services and solutions can better address the needs of small businesses. ^^ The Department will explore opportunities to expand programs that mitigate costs of entry for promising, small and non-traditional businesses that improve DoD’s technology edge and capabilities. Examples of these programs and offices include the Defense Production Act (DPA) loan and loan guarantee programs; the Office of Strategic Capital; Readiness and Environmental Protection Integration Program (REPI); DoD DIB Cybersecurity Program; Resilience Project Funding; Mentor Protégé Program (MPP) and APEX Accelerators to help small businesses with technical and business developmental assistance, and programs to help DoD-focused small business with design and production. Additionally, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs invest more than $1 billion annually in small business technology.12 These programs can, in connection with mentor programs, help small business to navigate qualification and be worthwhile barrier reduction programs.Manufacturing AutomationPromote investment in advanced manufacturing automation_267ad53a-b405-11ee-9bfa-6d040383ea001.4.3Advanced manufacturing automation streamlines and compresses development and production processes, reduces human intervention, lowers unexpected downtime, and improves overall manufacturing performance. Today’s advanced manufacturing automation is the result of decades of symbiotic interactions between the public and private sectors and separate independent private sector-driven advances. Some elements of the DIB, however, have yet to adopt advanced manufacturing technologies, due to either post-Cold War industry atrophy, offshoring, or redirection of available investment capital. Through new initiatives like Advanced Manufacturing (AM) Forward as well as continued work in advanced manufacturing applications in production and sustainment of key components, the DoD seeks to produce more advanced technologies in the U.S. through investments in regional manufacturing ecosystems. DoD will expand efforts to incentivize, invest in, and otherwise promote the use of advanced automation technologies by defense suppliers to reduce total life cycle costs and increase readiness, and, as appropriate, to fill workforce gaps.Data AnalyticsLeverage data analytics to improve sub-tier visibility to identify and minimize strategic supply chain risks and to manage disruptions proactively_267ad788-b405-11ee-9bfa-6d040383ea001.5Supply chain visibility is the ability to track parts, materials, and services from prime contractors back to sub-tier level suppliers and sources—effectively from the raw materials to the endproduct. This includes the associated transportation and warehousing logistics chain for the prime contractor and their suppliers. The goal of supply chain visibility is to better manage the DoD’s supplier base by reducing the effect of supply chain disruptions on military readiness. ^^ In a 2022 report, the DoD acknowledged that as its supply chain became more global, prime contractors lost sight of their own sub-tier supply chains and faced the risk of sourcing resources from potential adversaries. Furthermore, the pandemic demonstrated that seemingly minor disruptions in the DoD’s supply chain can cause massive ripple-effect bottlenecks owing to limited supply sources. In recognition of this limited visibility into its sub-tier supply chains,13 the DoD initiated efforts to ensure supply chain visibility, particularly in sub-tiers, and intends to further this capability throughout all tiers of the supply chain. DoD will leverage this greatly expanded supply chain visibility to mitigate risks and to manage disruptions proactively, aggressively, and systematically. Additionally, DoD recognizes the critical role played by defense primes in bringing sub-tier suppliers into the defense production fold and will work collaboratively with them to achieve enhanced supply chain visibility and function. Complementing greater supply chain visibility, the DoD will also improve the sharing of supply chain risk indicators across the DoD and the interagency where appropriate. This can help establish methods for the Department and the whole of government to better share identified supply chain risk indicators with industry.Supply Chain VisibilityLeverage greatly expanded supply chain visibility to mitigate risks and to manage disruptions proactively, aggressively, and systematically_267ad9f4-b405-11ee-9bfa-6d040383ea001.5.1Production & Supply ChainEngage allies and partners to expand global defense production and increase supply chain resilience _267adc42-b405-11ee-9bfa-6d040383ea001.6AlliesPartnersThe global activity of pacing threats increasingly requires a global approach to defense industrial relationships, concerns, and competition. International allies and partners, each with their own robust defense industries, will continue to be a cornerstone of the DoD’s concept of Integrated Deterrence. Indeed, the global system of alliances and partnerships is central to the NDS, which calls to incorporate allies and partners at every stage of defense planning. Such linkages and relationships will continue to be a cornerstone of Integrated Deterrence in resisting and, if necessary, defeating known and emerging threats. ^^ However, since February 2022, we have uncovered material gaps in the ability of this international DIB to rapidly scale production. Our global supply chains are critical components of our defense industrial ecosystem, yet they are vulnerable, particularly in their sub-tiers. Developing secure alternative sources can involve years-long lead times to reach production scale. Proactively developing, growing, and sustaining multiple, redundant, production lines across a consortium of like-minded nations is imperative for the U.S. to ensure adequate production capability and capacity while mitigating exposure to supply disruptions or changing production requirements. The DoD must develop a networked cooperative framework that enhances defense industrial output by working with allies and partners to de-risk supply chains and advance our ability to engage in cosustainment, maintenance, repair, and overhaul.International RelationshipsStrengthen international defense production relationships_267adeb8-b405-11ee-9bfa-6d040383ea001.6.1The DoD must work with allies and partners through both multilateral and bilateral agreements to boost defense production, innovation, and overall capability. With these priorities in mind, the United States is collaborating with our allies and partners to develop policies and arrangements that strengthen our respective DIBs and improve supply chain resilience. These mechanisms include Security of Supply Arrangements (SOSAs), which allow the Department and our foreign partners to request priority delivery of defense critical components from each other’s respective industrial bases – promoting government-to-government and international industrial cooperation and collaboration. The Department will continue to engage allies and partners globally to increase the number of such enabling arrangements in effect. Moving forward, DoD is committed to strengthening and expanding existing alliances and to forging new partnerships to enable the Joint Force and the forces of our allies and partners to increase capabilities and ensure redundant and secure sources of supplies for future needs. Collaboration MechanismsBuild production strengths via multiple international collaboration mechanisms_267ae098-b405-11ee-9bfa-6d040383ea001.6.2The DoD must also work with allies and partners to strengthen global supply chains through the multiple mechanisms at their disposal. These include exploring means to aggregate and amplify U.S. ally and partner demand signals for common munitions and weapon systems; minimizing customized solutions where appropriate and standardizing exportability; investing in materiel solutions ahead of foreign demand and beyond Military Service requirements; licensing production of U.S. systems; and expanding foreign defense company production within the United States. Further, the DoD will work with partners and allies to commit to a renewed emphasis on interoperability, interchangeability, and materiel standardization to ensure not only that our forces are interoperable, but also that our respective DIBs can be mutually reinforcing. Foreign Military SalesImprove the Foreign Military Sales (FMS) process_267ae214-b405-11ee-9bfa-6d040383ea001.7The FMS program is a critical tool used to achieve U.S. foreign policy objectives, as well as strategic outcomes identified in the NDS. As previously noted, a central premise of the NDS is that the United States operates by, with, and through its unmatched network of allies and partners. Integrated Deterrence requires close collaboration with allies and partners and deepens interoperability across the full spectrum of capabilities. FMS has the additional benefit of helping to achieve economies of scale by sharing some of the burden of acquisition and sustainment across the lifecycle of defense platforms, which in turn strengthens the global DIB. In an era of increased strategic threats, the Department is committed to improving planning for and the timely delivery of military capability to allies and partners. ^^ To this end, the Department is accelerating the responsiveness of the FMS system, in cooperation with interagency partners, to better meet the global capability requirements of our allies and partners. These measures include: improving the Department’s understanding of ally and partner requirements; enabling efficient reviews for release of technology; providing allies and partners relevant priority capabilities; accelerating acquisition and contracting support; expanding DIB capacity; and ensuring broad USG support to improve the FMS process. The FMS Continuous Process Improvement Board will provide guidance and oversight to identify and implement opportunities for improved FMS planning and processes. To reduce production timelines, the Department will incorporate ally and partner requirements into acquisition and contracting guidance and into ongoing efforts to expand DIB production capacity. The aim is to incentivize DIB investment in production capacity and building surge capability of high-demand, low-supply platforms, systems, munitions, and services informed by total U.S. and allied partner demand levels.Commercial SustainabilityCollaborate with Departments of Commerce and State to enable FMS to drive commercial sustainability_267ae48a-b405-11ee-9bfa-6d040383ea001.7.1Department of CommerceDepartment of StateIndustrial CybersecurityEnhance industrial cybersecurity_267ae688-b405-11ee-9bfa-6d040383ea001.8The Department, working with industry, will build upon and improve current regulations, policies, requirements, programs, services, pilots, communities of interest, public-private partnerships, and interagency efforts to address challenges and evolving cyber threats. This effort will be specifically guided by the DoD DIB Cybersecurity Strategy.Regulations, Policies, Requirements & ProgramsBuild upon and improve current regulations, policies, requirements, programs, and other efforts to address challenges and evolving cyber threats_267ae80e-b405-11ee-9bfa-6d040383ea001.8.1Workforce ReadinessA skilled and sufficiently staffed workforce that is diverse and representative of America._267aeaac-b405-11ee-9bfa-6d040383ea002Labor continues to be a major challenge for industry as baby boomers retire and younger generations generally show less interest in pursuing manufacturing careers or lack the science, technology, engineering, and math (STEM) skills needed for industrial work. The labor market lacks sufficient workers with the right skills to meet domestic production and sustainment demand. This directly affects military readiness. For example, labor shortages are a major reason why ship maintenance timelines routinely exceed their schedules. These shortages extend from skilled laborers to engineers and other STEM fields needed to drive innovation and capacity development. This will be a challenge as the United States invests in onshoring domestic production through initiatives such as the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act, the Bipartisan Infrastructure Law, and the Inflation Reduction Act. ^^ By fostering workforce development programs, both academic and occupational, the DoD aims to work aggressively to renew interest in industrial jobs and maintain a well-trained and sufficiently staffed workforce to achieve our national defense goals. To improve forecasting, trend analysis, and the capture of best practices, the Department will engage our international partners to share workforce training and management lessons learned and identify opportunities for enhanced partnerships to meet the industrial demand of a dynamic threat environment. Over the coming months, the Department will also develop a framework that integrates the acquisition and sustainment workforce strategies, building a community of practice that delivers a ready and capable workforce needed to meet and address the challenges identified in this strategy. This will complement and enable the DIB workforce to ensure there are pathways and partnerships between these critical communities to implement the NDIS objectives.Technological InnovationPrepare workforce for future technological innovation_267aecaa-b405-11ee-9bfa-6d040383ea002.1Upskilling & ReskillingInvest in upskilling and reskilling programs_267aee44-b405-11ee-9bfa-6d040383ea002.1.1: Upskilling or reskilling workers is especially important as manufacturing becomes more dynamic and technologically advanced. Providing employees with training opportunities to expand or develop advanced industrial skills and enhance their careers helps to rebalance critical skill levels to better meet industry needs, boost workplace productivity as new technologies are adopted, and improve low retention rates. In surveys, most CEOs who introduced workforce upskilling reported increased productivity and an overall improvement in retention.14 The Department will look for opportunities to assist companies with upskilling and reskilling workers to help better meet national security needs. By providing incentives to companies that do so, the Department can increase the number of enterprises that invest in employee education and thereby prepare them for future technological innovation.Workforce PipelinesInvest in advanced manufacturing workforce pipelines_267af0f6-b405-11ee-9bfa-6d040383ea002.1.2The DoD’s Manufacturing Innovation Institutes (MIIs) connect organizations and activities to promote affordable, rapid transition and delivery of new and emerging defense-essential technologies. The institutes’ programs offer guidance, workforce development content, and education activities that increase workforce preparedness for advanced manufacturing occupations such as highly skilled technicians, skilled production workers, technical engineers, scientists, and laboratory personnel. In 2021, DoD MIIs benefited over 80,000 participants, including students, educators, and professionals across the nation.15 To reach more people, DoD will explore expanding investment in MIIs, including supporting public-private partnerships with colleges and universities, high schools, and large and small enterprises. Skill SetsContinue targeting defense-critical skill sets in manufacturing and STEM_267af308-b405-11ee-9bfa-6d040383ea002.2The Department will continue to invest in institutions and programs that support workforce development to address current and forecasted skills gaps in defense-related manufacturing and STEM jobs -- jobs representing the core human capital component of the DIB. Furthermore, as manufacturing innovations such as advanced fabrication and the Internet-of-Things take root and grow in importance, they will change the way we work. This places even greater -- and accelerating -- demand for employees with high tech skills. At the same time, however, workforce training pipelines have decreased as manufacturing has advanced, resulting in declining numbers and atrophying skills.Defense-Essential SkillsInvest in defense-essential industrial skills_267af4ac-b405-11ee-9bfa-6d040383ea002.2.1The Department acknowledges that targeting critical skills in manufacturing and STEM cannot be a one-off approach. As a response to this, the National Imperative for Industrial Skills (NIIS) was established in Fiscal Year 2020 as an umbrella framework to help focus integrated efforts to partner with industry, other government stakeholders, and regional communities to attack the DoD's most pressing industrial workforce challenges. This growing initiative has an annual investment profile exceeding $300 million and is well positioned to be the flagship workforce initiative underpinning this NDIS. The goals of this initiative are to: ^^ * Promote prestige of manufacturing and related careers while inspiring the next generation; ^ * Accelerate workers into and through training/development pipelines, at appropriate scale and velocity; and ^ * Elevate U.S. manufacturing to world-leading status. ^^ Investment and policy actions across these three operational objectives are systematically prioritized to address greatest need and produce highest returns for the DoD and the nation. By continuing to invest in the NIIS initiative and identifying opportunities to replicate successes, the DoD will continue to support worker development programs to meet the needs of the U.S. manufacturing and adjacent industrial sectors. Manufacturing USAContinue leveraging the Manufacturing USA (MFG USA) network_267af77c-b405-11ee-9bfa-6d040383ea002.2.2Manufacturing USA NetworkThe MFG USA Network is leading the way in developing the STEM workforce needed to grow the advanced manufacturing sector. The MFG USA institutes collaborate not only with major universities and private sector companies but also with community colleges, local nonprofits, education groups, state governments, and youth groups such as the Girl Scouts. Other DoD-sponsored programs for defense-related STEM and workforce development include Project MFG, photonics certification, the Innovation Driven Research/Education Ecosystem for Advanced Manufacturing for the Defense (IDREAM4D), Microelectronics Security Training Center (MEST Center), and Scalable Asymmetric Lifecycle Engagement (SCALE). Apprenticeships & InternshipsIncrease access to apprenticeship and internship programs_267af998-b405-11ee-9bfa-6d040383ea002.3Apprenticeship programs, including those that collaborate with federal facilities (e.g., Oak Ridge National Laboratory), ensure that workers learn high-demand skills through hands-on experience and training. Currently, the DoD has a variety of apprenticeships tailored toward naval warfare, army engineering, and fleet readiness. For example, the Naval Fleet Readiness Center Southwest Apprenticeship program provides on-the-job training combined with related instruction to develop highly skilled, Navy-oriented, U.S. Department of Labor-certified workers. Apprenticeships are offered from a high school level to a recent graduate level and represent an opportunity to gain the experience of working for the DoD. ^^ The DoD will prioritize continued investment in critical skill sets through apprenticeships. By expanding engagement with industry, academia, and other private/public relationships, the DoD can boost workforce exposure to the DIB and ensure the workforce pipeline has the critical skill sets that are needed for today and the future. The DoD will also work with key interagency partners to identify and collaborate on existing and emerging programs, including with the Departments of Veterans Affairs, Education, and Commerce.InvestmentsPrioritize continued investment in critical skill sets through apprenticeships and internships_267afb50-b405-11ee-9bfa-6d040383ea002.3.1Industrial CareersDestigmatize industrial careers_267afe20-b405-11ee-9bfa-6d040383ea002.4The DoD will continue to support programs that showcase opportunities in manufacturing and technology fields with local high schools, colleges, and universities, as we work to change the present stigma associated with being an industrial worker. Often people believe these jobs are low-wage, low-skilled, monotonous, and dangerous, and that they are a poor alternative to nonindustrial jobs. In fact, industrial jobs contribute directly to the national security mission while being interesting and providing stability and competitive wages. Promoting industrial careers early is important to confront negative stereotypes and increase visibility. ^^ Educational institutions can address the stigma by showing youth what manufacturing looks like today. For example, AIM Photonics partners with Stonehill College and Bridgewater State University on the Advanced Manufacturing & Integrated Photonics Technician Certificate program. Recent classes placed 100 percent of their students in professional internships and jobs at top manufacturing and photonics companies. In collaboration with other Federal departments and agencies, the DoD will continue to promote and invest in partnerships with educational institutions to increase awareness of the value of manufacturing and industrial careers.StigmaPartner with high schools, colleges, and universities to challenge stigma associated with trade occupations_267b00e6-b405-11ee-9bfa-6d040383ea002.4.1High SchoolsCollegesUniversitiesIndustrial CareersPromote and invest in partnerships with educational institutions to increase awareness of the value of industrial base careers_267b02b2-b405-11ee-9bfa-6d040383ea002.4.2Educational InstitutionsRecruitmentExpand recruitment of nontraditional communities_267b0596-b405-11ee-9bfa-6d040383ea002.5Nontraditional CommunitiesDiversity & InclusionBroaden the industrial workforce through diversity and inclusion efforts_267b07da-b405-11ee-9bfa-6d040383ea002.5.1Although industrial base participation among women and minorities has improved, these groups are still underrepresented in the ranks of both ownership and the broader workforce.16 Lack of diversity indicates that companies may not be targeting diverse groups for employment, which in turn limits the available pool of talent from which the industrial base can draw. Lack of diversity leads to a lack of new ideas and innovation.17 Diversity, Equity, and Inclusion (DEI) is important to ensure that we have an industrial base that reflects the nation itself. According to a 2022 Department of Labor survey, the overall manufacturing workforce is 29.3 percent female, 78.7 percent White/Caucasian, 10.8 percent Black/African American, 7.4 percent Hispanic, and 17.4 percent Asian.18 In addition to gender and racial gaps in the industrial base, reentry groups also lack representation. By supporting efforts to expand representation, the DoD can assist companies in expanding the industrial workforce and creating a workplace that is representative of the United States.Research & EducationInvest consistently in DoD Research and Education Program (REP) for Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MIs)_267b09a6-b405-11ee-9bfa-6d040383ea002.5.2Historically Black Colleges and Universities (HBCUs)Minority Serving Institutions (MIs)The untapped potential of underrepresented groups can be crucial, especially as the worker shortage increases. To combat this, the Department recently allocated $61.7 million to HBCUs and MIs under the REP HBCU/MIs program. Secretary Austin stated that "to sharpen America's technological edge and to strengthen America's outstanding military, the Department is committed to investing even more in HBCUs and minority-serving institutions." The REP aims to: ^^ * Enhance research programs and capabilities in scientific and engineering disciplines critical to the national security functions of DoD; ^ * Enhance HBCU/MI participation in DoD research programs and activities; and ^ * Increase the number of graduates, including underrepresented minorities, in science, technology, engineering, and mathematics fields important to the defense mission. ^^ By increasing investments in HBCUs and MIs, the DoD can help expand recruitment for DIB jobs and skillsets to underrepresented groups. Flexible AcquisitionAcquisition strategies that strive for dynamic capabilities while balancing efficiency, maintainability, customization and standardization in defense platforms and support systems. _267b0c9e-b405-11ee-9bfa-6d040383ea003Flexible acquisition strategies would result in reduced development times, reduced costs, and increased scalability. ^^ The Russian Federation's full-scale invasion of the Ukraine highlights how protracted attritional conflicts can rapidly deplete military resources. The DoD seeks to use a flexible acquisition approach to industrial planning where the DoD will strive to balance customization, production efficiency, and timing. Properly executed, flexible acquisition is crucial for scaling production swiftly and adjusting the production mix to achieve and maintain enduring advantage. A shift to flexibility will allow the DoD to optimize for dynamic production and capabilities that strengthen defense supply chains and bolster a modern industrial ecosystem. ^^ Prioritizing flexible acquisition strategies addresses inappropriate customization, which occurs when product acquisition requirements are insufficiently defined. This is often associated with design changes that increase capability or overcome perceived design flaws. Other causes can include mission or technology creep during protracted development cycle times and underestimating the difficulty of change requests. ^^ Delivering effective capabilities to the warfighter requires the development and maintenance of customized systems and platforms maintained by both the commercial sector and DoD’s organic industrial base (OIB). Inappropriately customized systems have lower battlefield and operational utility and are more expensive and difficult to maintain. Therefore, the DoD seeks an appropriate level of customization that can balance efficiencies and speed of fielding from commercial off-theshelf (COTS) capabilities with resilience, scale, and effectiveness through the life cycle of platforms. It also could contribute to better adaptation to emerging threats, protection against obsolescence of specific systems or parts, along with better logistics and maintenance capabilities. ^^ Flexible Acquisition relates strictly to DoD aiming to acquire an intelligent, balanced mix of platforms and systems, together with the benefits that accrue. It is vital to establish that the term Flexible Acquisition does not directly call for broad-based acquisition reform, which, while there is a periodic need for it based on shifting exigencies, is beyond the scope of this strategy.Standards & InteroperabilityBroaden platform standards and interoperability_267b0ee2-b405-11ee-9bfa-6d040383ea003.1PartnersGlobal Partners and Allies in Context: Standards, modularity, and interoperability are crucial elements that enable mutual support and collaboration within the global defense industrial ecosystem. These benefits include resource sharing, research, manufacturing, expertise exchange, technology transfer, and the development of common platforms. By working together effectively, we and our allies and partners can address capacity and capability gaps, enhance production capacity and capabilities, boost economic advantages, and reinforce alliances.21AlliesSmall Business SuppliersSmall Business and Non-Traditional Suppliers in Context: Standards, modularity, and interoperability, as well as multi-year contracts, can also factor in helping small businesses and non-traditional suppliers work with DoD. They reduce barriers to entry by simplifying product development and integration, making it functionally easier and less expensive for these suppliers to participate and compete, and focus on niche areas of expertise and contributing innovations to the broader defense ecosystem. This benefits DoD by reducing the risk of lock-in to a single supplier by allowing small businesses to offer components or systems that can be integrated into larger defense systems, which by extension, and together with multi-year contracts, mitigate business execution risk.22Non-Traditional SuppliersTo mitigate the risks of unnecessary customization, the DoD seeks an intelligent balance between customization and standardization. Standardization is the process of developing and agreeing on (by consensus or decision) uniform engineering criteria for products, processes, practices, and methods for achieving compatibility, interoperability, interchangeability, or commonality of materiel.20 Increasing standardization allows for economies of scale, streamlined production processes, and greater interoperability. It allows the DoD to use solutions and innovations being developed in commercial industry. Carefully managed customization addresses specific mission needs without compromising the broader efficiency and effectiveness of the defense sector. Striking this balance is essential for maintaining a strong, adaptable, and cost-effective defense industrial ecosystem that can supply the warfighter with mission-customized systems while mitigating downstream reliability, availability, and maintainability problems.ArchitecturePromote open architecture_267b10cc-b405-11ee-9bfa-6d040383ea003.1.1The Department will continue to encourage the adoption of open architecture principles in the design and development of platforms. Open architecture allows components to be modular and interchangeable, making it easier to integrate new technologies and updates across different systems. Industry StandardsDeploy and adopt industry standards_267b13ec-b405-11ee-9bfa-6d040383ea003.1.2The Department will leverage existing industry standards where applicable, rather than operating in isolation and inventing new standards. Utilizing widely accepted industrial standards will facilitate and simplify integration and production efforts.IncentivesIncentivize requirements for interoperability and exportability_267b164e-b405-11ee-9bfa-6d040383ea003.1.3DoD Instruction 5000.85 already requires interoperability and exportability considerations when making acquisition decisions. For future acquisitions and projects, it recommends that concise interoperability and exportability requirements be explicitly stated through the acquisition process. DoD will work with defense contractors to communicate the importance of interoperability requirements which could increase the breadth of systems that a contractor could work on, thereby opening more lines of business for individual contractors. R&DInvest in research and development_267b1888-b405-11ee-9bfa-6d040383ea003.1.4The Department will invest in research and development efforts that focus on enhancing interoperability among different platforms. This may involve advancements in communication technologies, data analytics, and artificial intelligence to improve coordination and decision-making.ExportabilityConsider exportability during system design rather than post-production_267b1bee-b405-11ee-9bfa-6d040383ea003.1.5The Department will encourage the inclusion of exportability features during system design, rather than postproduction. The war in Ukraine highlighted the need, not just for interoperability with allies and partners in conflict, but also the technical challenges, increased costs, and protracted timelines when considering exportability after the conclusion of the system development process.Scope CreepStrengthen requirements process to curb "scope creep"_267b1e64-b405-11ee-9bfa-6d040383ea003.2Ultimately, success in preventing undesirable scope creep depends on the implementation of, and adherence to, guidance such as DoD Instruction 5000.02, as well as the ability of program managers and stakeholders to effectively manage changes while maintaining the project focus and objectives.Adaptive AcquisitionImplement policies aimed at advancing adaptive acquisition reforms_267b2062-b405-11ee-9bfa-6d040383ea003.2.1The Department will rigorously implement DoD Instruction 5000.02: Operation of the Adaptive Acquisition Framework. 23 DoD Instruction 5000.02 was issued in June 2022 to ensure that requirements were defined and understood before a program is approved to start system development. It emphasizes the importance of well-defined and properly articulated requirements and the setting of clear milestones throughout the development process. This ensures that sufficient systems engineering analysis is conducted and resource trade-offs are made before the program enters the engineering and manufacturing phases of the Defense Acquisition System. DoD's current policy requires that appropriate trade-offs be made among cost, schedule, technical feasibility, and performance throughout the life of a program. These directives help ensure that the program stays focused and prevents unnecessary changes or additions that could lead to expanded capability requirements. This also covers appropriate change control processes, risk management, continuous review, and stakeholder engagement.MethodologiesIncremental development and advanced virtual modeling methodologies_267b23a0-b405-11ee-9bfa-6d040383ea003.2.2The DoD will aggressively implement policies aimed at preventing “scope creep” — the gradual additions to capability requirements that change the scope of work in systems development which result in cost overruns and delayed delivery timelines. Adopting agile and advanced virtual development methodologies can help manage scope creep by breaking development into smaller, more manageable increments or with fewer physical prototypes and greater optimization. This allows for regular review and adaptation to changing requirements without affecting the overall project significantly.COTSPrioritize off-the-shelf acquisition where applicable and reasonable _267b2616-b405-11ee-9bfa-6d040383ea003.3The DoD must find the best capabilities to support the warfighter, including commercially available solutions. Commercial off-the-shelf (COTS) procurement brings significant benefit to DoD, including creation and integration of new technology; greater product availability and reliability; reduced acquisition cycle times; lower life cycle costs; increased competition, and an expanded pool of innovative and non-traditional contractors who seek to do business with DoD. While certain DoD requirements cannot be fulfilled by commercial item procurement, commercial solutions are a vital tool to achieve our national objectives. ^^ The United States must seek commercial solutions and technologies from international allies and partners as well. Market research activities should include consideration of the global defense and commercial industry more broadly, factoring in solutions resident in ally and partner nations. The United States does not have a monopoly on innovation and new technologies. Many other national industrial bases have their own strengths and core competencies. ^^ Positive Impact on Innovation and Cost-Effectiveness: The DoD will leverage the advantages of COTS solutions by carefully evaluating how COTS systems may be used on their own, or to augment current capabilities. Embracing COTS solutions can drive faster procurement cycles, as the products are already developed and tested for commercial use. This can translate to quicker access to new technologies and innovations. Additionally, COTS products are often more costeffective compared to custom-built solutions, potentially reducing overall acquisition costs for the DoD. COTS products also tend to have fewer reliability, availability, and maintainability challenges as there is a market incentive to develop and maintain these products. Supplier BaseEmbrace COTS solutions to drive positive impact on innovation,cost-effectiveness, and expansion of the supplier base_267b28be-b405-11ee-9bfa-6d040383ea003.3.1Encouraging the use of COTS products can encourage new suppliers from the commercial sector to participate in defense procurement. This broadens the DIB by bringing in expertise and capabilities from various non-traditional industries, thereby fostering competition and reducing reliance on a limited set of traditional defense contractors. The DoD will review the potential for standalone utilization of COTS systems or augmentation of other bespoke capabilities using COTS systems. This will make maintenance easier and develop the modernized industrial ecosystem by introducing manufacturers and maintainers of COTS systems. The use of COTS systems ensures that new industrial partners have customers apart from the DoD for their commercial viability and can mitigate monopsony-like dynamics between the DoD and the traditional DIB.IP & DataIncrease access to intellectual property (IP) and data rights to enhance acquisition and sustainment_267b2c1a-b405-11ee-9bfa-6d040383ea003.4The DoD will integrate IP planning fully into acquisition strategies and product support strategies to protect core DoD interests over the entire lifecycle and seek to acquire only those IP deliverables and license rights necessary to accomplish these strategies, bearing in mind the longterm effect on cost, competition, and affordability. Modular Open SystemsUse modular open systems approaches (MOSA)_267b2ea4-b405-11ee-9bfa-6d040383ea003.4.1To proactively mitigate against IP-based restrictions on competition, DoD will look to use a modular open systems approach (MOSA) to manage proprietary components. MOSA combines system engineering open architecture techniques with open licensing and related legal and business considerations to isolate proprietary technology and prevent overleveraging of limited private investments from undermining return on government investment. MOSA enables the DoD to limit the impact of restrictions on privately developed components by treating those components as proprietary “black boxes” that are described with releasable “form, fit, or function” data and welldefined and described interfaces to the remainder of the system components. This allows other vendors to identify suitable alternatives for the proprietary black boxes, or, if necessary to contract with the OEM for support for those black boxes, limit such sole-source efforts to the black box itself.License AgreementsMitigate IP restrictions on proprietary components by negotiating specialized license agreements_267b30ca-b405-11ee-9bfa-6d040383ea003.4.2Alternatively, or in conjunction with MOSA, DoD will mitigate IP restrictions on proprietary components by negotiating specialized license agreements that better balance the Department’s and vendors’ interests. The Defense Federal Acquisition Regulation Supplement (DFARS) standard license rights or the vendor’s customary commercial license allows and encourages the parties to negotiate specialized license agreements for all data rights scenarios, including technical data and computer software for commercial and noncommercial products, for developmental and non-developmental technologies, or any combination of such characteristics. In all cases, the negotiation of any specialized license must occur through voluntary, mutual agreement of the parties. ^^ Accordingly, the DoD has a compelling interest in entering into such negotiations in a competitive environment to the maximum extent possible, to leverage its market power and incentivize the vendors to enter into agreements that encourage the competitor to develop business models and provide corresponding offers that better balance both parties’ interests in ensuring return on their technology investments, while promoting and enhancing DoD options for increased competition throughout the lifecycle of the program.Contracting StrategiesConsider greater use and policy reform of contracting strategies_267b3462-b405-11ee-9bfa-6d040383ea003.5A flexible requirements process permits changes to allow for technological advances on multi-year development and procurement programs. However, this flexibility must be balanced against other risks such as complexity, transparency and accountability, cost overruns (if poorly managed), limited competition, and administrative overhead. In the current, evolving threat environment, priorities often shift somewhat and traditional contract policies and regulations often involve funding adjustments, competitive procurement principles, compliance, reporting, and oversight. These can and should be applied to mitigate risks but can be adapted to meet speed and agility priorities. For instance, the software acquisition pathway enables DoD to execute rapid and iterative delivery of software capabilities by using modern development practices combined with existing contracting authorities. The DoD will look to use greater FAR- and non-FAR-based contract types, as appropriate, and seek to ensure contracting authorities align with present defense priorities. AuthoritiesWork with Congress to modify contract authorities to align with present defense production priorities_267b370a-b405-11ee-9bfa-6d040383ea003.5.1CongressAcquisition ReformContinue to support acquisition reform_267b3944-b405-11ee-9bfa-6d040383ea003.6IndustryAdvance acquisition strategies that elevate the health of the industry to high priority_267b3cd2-b405-11ee-9bfa-6d040383ea003.6.1The Department will seek to ensure that acquisition approaches consider the health, capacity, and capability of the domestic manufacturing base. Therefore, the Department will pursue acquisition strategies that streamline the process and communicate a sustained and transparent “demand signal” to both domestic and international suppliers. A streamlined and clear acquisition process will enable more businesses to navigate their way into and through the DIB to promote competition and increase diversity. A strong and stable demand signal will allow defense contractors and subtier suppliers to make longer-term production and resource allocation commitments—including for capital investment and operating budgets, research and development, manufacturing capacity, procurement of materials, and workforce hiring. Predictable demand will also help mitigate the effects of regulations compliance, security clearances, and other administrative barriers. ^^ DoD will broaden outreach to strengthen public-private partnerships,24 dedicated funding or set-asides, risk-sharing mechanisms (such as “secure by design”) and expanded use of flexible contracting approaches. This will include providing greater support in navigating DoD’s acquisition processes and expanding the use of existing small business programs in non-traditional industry sectors, especially those programs with a history of success working with non-traditional suppliers and new entrants into the DIB.25 Funding & MechanismsEmploy flexible funding and procurement mechanisms_267b3f84-b405-11ee-9bfa-6d040383ea003.6.2The DoD will seek to expand the use of multi-year procurement (MYP) to create sustained demand signals that will promote investment into the capacity of the industrial base, which have typically been reserved for only the most expensive acquisition types, such as procurement of large sea-going Navy ships. MYPs are a step in building a consistent and predictable demand signal that creates more transparency and less risk for both prime contractors as well as more fragile sub-tier suppliers. For example, the FY23 National Defense Authorization Act (NDAA) extended MYPs to support the greatly increased demand for munitions and now includes many low-cost weapons.26 OSD will also work with the Services to identify opportunities to propose MYPs in future budgets.Production CapacityOrient acquisition policy for aggressive expansion of production capacity_267b41c8-b405-11ee-9bfa-6d040383ea003.6.3The DoD’s acquisition process is a structured series of steps and activities used to acquire goods and services for the U.S. military. Typical peacetime acquisition reform tends to place more emphasis on greater efficiency, cost effectiveness, transparency, and accountability. Today’s threat environment, however, necessitates acquisition reform that includes efforts to revitalize the defense industrial base, and potentially, rapid expansion to prepare for pacing security challenges. This will require substantial changes to existing acquisition mechanisms. Correspondingly, there will need to be a change of acquisition mindset that includes increased flexibility and risk tolerances and embracing “fail fast” and similar concepts. Risk aversion must be replaced by aggressive, learning mindsets in both developing and fielding systems underpinned by strong commitments of accountability and responsibility. Crisis period acquisition policy reform tends to favor better resourced defense companies. As such, DoD will work to stimulate industry diversification through focused policy directives to help small businesses navigate the complex defense acquisition process. DoD will work to reform acquisition policies that unnecessarily burden or restrain the nation from rapidly attaining a proper, robust defense production posture while simultaneously fostering supplier diversification with a slate of programs referenced elsewhere in this strategy.27PreparednessUpdate industrial mobilization authorities and planning to ensure preparedness_267b456a-b405-11ee-9bfa-6d040383ea003.7To be prepared for future crises, the DoD must have all available tools at hand. Mobilization authorities refer to the legal and regulatory mechanisms that enable the United States government to rapidly expand, reconfigure, and draw on the defense industrial ecosystem in times of national emergency or war. Mobilization planning outlines how the government will work with the defense private sector and how the government will operate the OIB during times of crisis to ensure the timely production and distribution of essential materials, equipment, and services to support national security objectives. However, there is nothing rapid about mobilization; it is time and resource intensive. To best posture the government, industry, the Armed Services, and our allies and partners, we need to think now about the steps we can take today to set the conditions for potential mobilization in the future. The DoD needs to act now to set those conditions and consider mobilization requirements, and the associated authorities and plans, to successfully address the demands of the NDS.Laws & RegulationsSet up the legal and regulatory conditions today to ensure mobilization ability in the future_267b4830-b405-11ee-9bfa-6d040383ea003.7.1Economic DeterrenceFair and effective market mechanisms that support a resilient defense industrial ecosystem among the U.S. and close international allies and partners and contribute to economic security and integrated deterrence._3904cfe8-b40b-11ee-8afd-e1570483ea004Fear of materially reduced access to U.S. markets, technologies, and innovations sows doubt in the minds of potential aggressors. ^^ After World War II, the United States and its allies adopted a global order based on fair trade and free markets enshrined in the General Agreement on Tariffs and Trade (GATT), the precursor to the World Trade Organization and European Union. Today, the PRC, the Russian Federation, and others are challenging this system, flouting international legal and trade standards. Since the 1980s, the PRC has run massive trade surpluses against the U.S. and our allies and partners. Initially this was the result of differences in labors costs, exchange rates, trade policies, and relative consumer demand, but increasingly because the PRC engages in a host of market distorting activities.28 The sustained imbalance in trade weakened our domestic industries, displaced workers, hollowed out heavy industry, and contributed to the rapid increase in the U.S. national debt. ^^ The DoD is deeply concerned about the PRC's domination of critical markets. Such domination allows it to control commodity pricing and access to materials in strategically critical areas, and to erode the health of the heavy industries that the defense sector historically leveraged. Meanwhile, the traditional DIB has been contracting and consolidating because of post-Cold War defense budget cuts.29 Much of the civilian manufacturing sector and some of the defense sub-tier supply chain has moved offshore into a range of foreign producers, some of whom have become adversarial states. The DoD is also concerned that predatory adversarial investment and acquisition strategies, often focusing on critical or innovative technologies, further weaken U.S. industrial supply chains and the defense industrial ecosystem’s ability to provide capabilities and secure sensitive technologies. ^^ The compounding effects of unfair trade practices and predatory investments, combined with consolidation of certain defense markets, have significantly increased the risk and cost to U.S. and allied defense supply chains. The United States and our allies and partners now recognize that by continuing to adhere to the adversary-designed trade system with predatory and unfair practices without implementing appropriate safeguards, we put ourselves at a disadvantage. ^^ The United States supports a rule-based international system that allows for the free flow of goods and materials and assures access to advanced technologies, expertise, and materials vital to our national defense. The DoD will seek to advance policies aimed at deterring and countering adversaries from using economic means to weaken U.S. national security. DoD policy will catalyze a modernized defense industrial ecosystem -- both domestic and international -- and vibrant defense-related supply chains with mechanisms to guard against unfair trade practices, pilfering by adversaries, and generally heightened global competition... ^^ Optimizing for dynamic production and capabilities requires intentional actions aimed at promoting economic security and bolstering economic deterrence. To mitigate the impacts of trade and predatory investment practices in defense supply chains and innovative technologies, the DoD will also seek to partner more closely with allied nations with complementary resources and capabilities. These actions will contribute to building more dynamic production and capabilities and bolster a modernized defense industrial ecosystem. AgreementsStrengthen economic security agreements_3904d3d0-b40b-11ee-8afd-e1570483ea004.1The DoD should focus on leveraging existing bilateral and multilateral relationships, such as NATO, AUKUS, and the NTIB, and focus on sourcing from countries that are geopolitical allies ("friend-shoring") to reduce reliance on potentially adversarial or unstable nations for critical defense and strategic materials. This will assist in mitigating the risk of supply chain disruption due to trade disputes, embargoes, or political tensions. This would also strengthen international security, economic collaboration, and soft power. ^^ The United States has a complex web of friend-shoring-suitable alliances and partnerships around the world; a partial list includes Australia, Canada, the European Union, India, Israel, Japan, Mexico, South Korea, Taiwan, and the United Kingdom. The choice of which nations to continue or expand friend-shoring, defense-related sourcing from is predicated on a multitude of factors including history, shared values, public and political support, as well as security assurance, supplychain resilience, risk diversification, industrial capabilities, technological capabilities, and -- not least -- strategic goals, economic impact, and cost considerations. The DoD must work with other federal agencies to ensure continued access to key markets and source materials while reducing geopolitical risks. MaintenanceWork with other federal executive departments to ensure the maintenance of economic and national security alliances_3904d682-b40b-11ee-8afd-e1570483ea004.1.1Interoperability StandardsEnable international interoperability standards through active participation in standards-setting bodies_3904dba0-b40b-11ee-8afd-e1570483ea004.2Standards-Setting BodiesThe DoD, in collaboration with other federal agencies including the Departments of State and Commerce, will implement standards and interoperability programs as a form of economic and collective security-based systems integration. This emphasizes systems interoperability between U.S. forces and those of our allies and partners. Integration will make systems modular, upgradable, and maintainable by vendors and entities other than the original manufacturer. ^^ Interoperability among allies and partners also increases FMS opportunities, which further supports the defense industrial ecosystem. As part of this effort, the DoD will participate in bodies that set standards that can facilitate interoperability. Standards and interoperability programs will also enable fair and effective market practices with trading partners. Standardization will also support rapid industrial mobilization by enabling surge, expansion, or conversion at times of need. NATO standards provide an excellent example of international standards and interoperability programs, which have proven their value in shifting munitions inventories to support Ukraine in resisting the Russian Federation's aggression.PromotionWork in concert with the Department of State and the Department of Commerce to promote interoperability standards_3904dee8-b40b-11ee-8afd-e1570483ea004.2.1Department of StateDepartment of CommerceParticipation & LeadershipParticipate in standards setting-bodies, leading the development of international standards that facilitate interoperability_3904e2ee-b40b-11ee-8afd-e1570483ea004.2.2Standards Setting-BodiesScience & TechnologyFortify alliances to share science and technology_3904e8c0-b40b-11ee-8afd-e1570483ea004.3The DoD will work with other federal agencies, including the Departments of State and Commerce, to enhance existing alliances and generate new and emphasize existing mechanisms for sharing technologies and applications of scientific knowledge with other partners and allies. Scienceand technology-sharing agreements are necessary to build the trade and security alliances that are critical for achieving economic security. For that reason, the Department has developed an extensive structure with a variety of agreements and mechanisms to enable Research, Development, Test, and Evaluation (RDT&E) with international partners, from basic information sharing to complex cooperative activities. ^^ These include joint programs with allies and partners to nurture and retain technological superiority. Such institutional integration is a deeper form of integrated deterrence cooperation requiring higher levels of trust, as it involves incorporating allies and partners into DoD decisionmaking processes. Working collaboratively with its interagency partners and Congress, the DoD can ensure the controlled dissemination of scientific knowledge and technological products and promote interoperability and exportability. Controlled dissemination would strengthen the United States and its allies and partners, promote integrated deterrence of aggression by adversarial entities, and support the dynamic capabilities for a modernized defense industrial ecosystem.Technologies & Scientific KnowledgeWork with other federal executive departments, and with Congress to foster existing alliances and generate new mechanisms for sharing technologies and applications of scientific knowledge with other partners and allies_3904ec26-b40b-11ee-8afd-e1570483ea004.3.1Federal Executive DepartmentsCongressAlliesEnforcementStrengthen enforcement against adversarial ownership and cyber attacks_3904eee2-b40b-11ee-8afd-e1570483ea004.4The mitigation of threats arising from foreign transactions must be balanced against the openness of the U.S. economy to foreign ideas, talent, and capital. The DoD must work with other federal executive departments to protect U.S. assets from ownership by commercial entities controlled or influenced by adversarial nations, and from cyber-attacks against entities involved in the maintenance of our national defense. The United States has five authorities/agencies for monitoring potential adversarial ownership and control: Export Administration Regulations (EAR), International Traffic in Arms Regulations (ITAR), Team Telecom, CFIUS, and the Office of Information and Communications Technology and Services (OICTS). Close cooperation with interagency partners can ensure that the DoD can provide nuanced reviews of foreign transactions while carefully limiting foreign involvement. Moreover, as close allies also work to address the challenge of adversarial ownership and predatory investment practices, the DoD can begin collaboration in support of their efforts to protect their own and shared supply chains. ^^ The DoD must also educate industry on the threats posed by foreign capital, adversarial ownership, and cyber-attacks and help them to prepare to deter, mitigate, and deflect such threats by improving defenses and lowering risk profiles. DoD supports companies, manufacturers, institutions, and organizations with a comprehensive, cost-effective resource for cybersecurity and foreign ownership, control, and influence (FOCI) information,30 tools, and training at nocost to the participant. At present, this is done via DoD's Project Spectrum, whose mission is to improve readiness, resiliency, and compliance for small manufacturers, the traditional DIB, the federal manufacturing supply chain, and the industrial sector. This provides supply chain visibility and compliance standards assurance while delivering the industrial cybersecurity resources and techniques that small- and medium-sized businesses need. Furthermore, the Department will coordinate with interagency partners to support industry in identifying, protecting, detecting, responding, and recovering from cyberattacks.U.S. AssetsWork with other federal executive departments to protect U.S. assets from ownership by commercial entities controlled by adversarial nations_3904f414-b40b-11ee-8afd-e1570483ea004.4.1Cyber-AttacksWork with other federal executive departments to protect U.S. assets from cyber-attacks against entities involved in the maintenance of our national defense_3904f770-b40b-11ee-8afd-e1570483ea004.4.2Federal Executive DepartmentsProhibited SourcesStrengthen prohibited sources policy • Work to ensure that the materiel required for national defense is not sourced from adversarial entities _3904fb12-b40b-11ee-8afd-e1570483ea004.5Dependence on adversarial sourcing poses a mounting national security challenge to the DIB and the components, systems, platforms, and munitions it produces. Counterfeit or substandard items could foster system failures while computing and networking technology “backdoors” may serve as intelligence pathways. Further, even if materials and parts are uncompromised, sole-source dependence on adversary-produced materials and parts present an obvious vulnerability. Various investigations have confirmed adversarial infiltration into defense supply chains is substantial. Some critical capabilities remain dependent on prohibited adversarial suppliers. ^^ Over the last decade, the DoD has struggled to curtail adversarial sourcing and burnish the integrity of defense supply chains. Despite these efforts, dependence on adversarial sources of supply has grown. DoD continues to lack a comprehensive effort for mitigating supply chain risk. ^^ Policy concerning prohibited sources today remains piecemeal, inadequate to address the current complexity of the DoD supply chain, and is often difficult to execute and enforce. Predictably, this approach has delivered only marginal results with DoD continuing to procure items from adversarial sources in line with low-cost free market principles but not in line with national security and resilience-oriented principles. ^^ As detailed in the National Security Strategy and NDS, the PRC is the United States’ pacing challenge. DoD must work with Congress, other executive departments, and global Allies and partners to eliminate defense industrial dependencies emanating from the PRC. The defense of the nation must not be held at risk by reliance on those who might seek to undermine it.Assessment & ReportingRoutinely and rigorously assess progress toward these priorities_39050058-b40b-11ee-8afd-e1570483ea00A&RThe NDIS aims to provide a vision and strategic framework for how the DoD will foster and drive dynamic production, and build and support a modernized industrial ecosystem over the next three to five years. Routine and rigorous assessment of progress toward these priorities will be critical for maintaining focus on them. Each priority is complex and many overlap and have interdependencies with other priorities. Furthermore, our priorities are long-term, perhaps requiring a generation of effort to achieve the desired effects. Because of this, it can be difficult to directly measure the outcomes and given the horizon for achieving our priorities, intermediate measures of success for the near-term actions over the next three to five years will be necessary to track progress toward the long-term goals and to inform updates to the NDIS.31 ^^ The assessment framework for the NDIS is built on the strategic framework beginning with each of the priorities... ^^ The United States and its allies and partners require modernized defense industrial capacity that strengthens national defense, and that reassures and supports those countries in the direct path of adversarial influence and aggression. This position of modern industrial strength is a core enduring advantage that will contribute substantially to Integrated Deterrence -- not just for the Department but across the U.S. government and with allies and partners. ^^ The NDIS addresses that imperative to mitigate and remedy critical vulnerabilities with intentional action, guided by a strategic vision and framework for how to revitalize, modernize, and expand the DIB. The actions proposed by this strategy lay out the generational changes needed to catalyze a modernized defense industrial ecosystem. This will require real and meaningful cooperation and participation of new domestic and international entrants into the defense industrial fold. We must transform our DIB into a robust, resilient, fully capable 21st century defense industrial ecosystem. ^^ As we execute the provisions of this strategy, we will remain mindful of -- and overcome -- the real impediments to our success. Within the Department, we will establish the conditions for success including by promoting appropriate, consistent, and predictable funding where possible. ^^ Additionally, the Department will improve information integration, workforce training and adequacy, and address manufacturing capacity and economic threats to supply chains. ^^ The nation needs to rally to the common defense. This NDIS is a call to both the public and private sectors for focused, dedicated efforts to build and secure the industrial capability and capacity necessary to ensure our military has the materiel available to deter our potential adversaries, and if necessary, defeat them in battle. This call to action may seem a great cost, but the consequences of inaction or failure are far greater.Intermediate MeasuresDevelop intermediate measures to align with specific actions or objectives within each priority_390503d2-b40b-11ee-8afd-e1570483ea00A&R.1To track progress for longer-term objectives, intermediate measures will be developed to align with specific actions or objectives within each priority.Strategic AlignmentLink intermediate measures the means to meet the objectives as well as the longer-term goals_390506b6-b40b-11ee-8afd-e1570483ea00A&R.2These intermediate measures will then be linked to the specific means used to meet the objectives and overarching longer-term goal. Illustrative outcomes and outputs are shown in Figures AA, AB, AC, and AD for each of the priorities and align to specific actions to gain insight into progress on meeting strategic goals. Detailed development of this assessment framework will be developed as part of the classified NDIS implementation plan.Other StrategiesProvide data to inform other strategies_39050cc4-b40b-11ee-8afd-e1570483ea00A&R.3The assessment tools that will be built to measure progress will also provide invaluable data to inform other strategies, such as the NDS.Industrial EcosystemSupport inputs to reports on and related to the industrial ecosystem_39051052-b40b-11ee-8afd-e1570483ea00A&R.4This strategy, and its associated metrics in the forthcoming classified NDIS implementation plan, will also support inputs to various reports on, and related to, the industrial ecosystem.Data CallsMinimize the data calls to industry when developing final metrics and measuring progress against them_39051340-b40b-11ee-8afd-e1570483ea00A&R.5The Department will coordinate across the government to minimize the data calls to industry when developing final metrics and measuring progress against them.2023-11-162024-01-15https://www.businessdefense.gov/docs/ndis/2023-NDIS.pdfOwenAmburOwen.Ambur@verizon.net