FIRST STEPS TO BETTER HEALTH: Recommendations Based On Vital Signs 2021.

• Author: Hallman, Wes
• Position: Viewpoint

* In February, the National Defense Industrial Association released Vital Signs 2021: The Health and Readiness of the Defense Industrial Base--an annual measure of the defense industry's health through eight conditions describing the business environment defense firms coped with over the preceding year.

Like the four traditional vital sign conditions physicians use to assess the status of life-sustaining functions--temperature, pulse, respiratory rate and blood pressure--we believe these eight conditions are essential to a well-functioning defense industrial base: demand, production inputs, innovation, supply chain, competition, industrial security, political and regulatory environment, and productive capacity and surge readiness.

Unlike the traditional medical vital signs measured in real time, the conditions and overall grade are measured using data gathered over the previous year. Still, they reflect the state of the defense industrial base as the COVID-19 lockdowns began in March 2020.

By compiling publicly available data, we converted each indicator into an index score on a scale of 0 to 100, like academic grades. These indicators show the environment we ask the defense industrial base to operate in received a "C" letter-grade for health and readiness--a barely passing grade.

The Vital Signs study makes conclusions but does not offer recommendations with an intent to prompt dialogue amongst the industrial base's stakeholders. However, the data and those conclusions indicate some important policy prescriptions.

First, the acquisition system is putting U.S. technological superiority at risk. Last year, the House Armed Services Committee-led Future of Defense Task Force noted that "China represents the most significant economic and national security threat to the United States over the next 20 to 30 years." To cope with this challenge, the Defense Department's acquisition process must adapt to further the ability to dominate across all warfare domains.

The emergence of digital engineering, advanced manufacturing, the importance of intellectual property, and the incentive structure created by the planning, programming, budgeting and evaluation system must all be considered for ongoing reforms.

To help solve these problems, Congress should direct the independent advisory panel on weapon system sustainment, established by Section 345 of the fiscal year 2021 National Defense Authorization Act, to develop recommendations on the impacts of digital engineering and...