Supply chain challenges impacting US military satellite programs, initially considered temporary, have become systemic, revealing weaknesses within the defense industrial base, according to Lt. Gen. Philip Garrant, head of Space Systems Command. “Coming out of COVID, we thought a lot of these supply chain issues were COVID issues,” he stated last week. “What we’re realizing is this is more than COVID; there are true industrial base concerns.”
The Space Development Agency’s (SDA) low Earth orbit constellation project illustrates these difficulties. As the Department of Defense (DoD) shifts towards commercial-like constellations, the need for increased components is substantial. “We need a lot more of those parts,” Garrant explained. “That’s a rather simplistic view, but it’s very, very factual.”
SDA Director Derek Tournear detailed the agency's proactive approach, directly engaging lower-tier suppliers and offering incentivized contracts to boost production. Similar problems exist across various defense sectors, including munitions and microelectronics. A significant challenge is the Pentagon’s limited oversight of its extensive, fragmented supply chain. This lack of visibility into lower-tier subcontractors leads to production delays.
Concerns over foreign dependency, particularly on adversaries like China, are growing. Frank Finelli, a senior advisor at the Carlyle Group, noted China's control over rare earth elements, lithium, and graphite, crucial for defense and green technologies. “We have a lot of single-source Chinese suppliers in our supply chains, and in a lot of cases, we’re not aggressively doing anything about it,” Finelli said.
Efforts to strengthen the defense industrial base are underway but still in early stages. David Rader, a senior advisor to the Defense Innovation Unit, described the situation as being “in the infancy of this.” Initiatives like the Office of Strategic Capital, providing loans for critical component production, aim to address lower-tier supply gaps. “There’s a growing recognition of the link between capital and national security,” Rader added.
Political disagreements over government involvement in industrial policy hinder progress. While Republicans criticize government overreach, Democrats see such measures as corporate welfare. The Pentagon's new industrial base strategy aims for a self-reliant domestic supply chain, but success depends on sustained funding, bipartisan support, and international collaboration. Rader cautioned, “We see what China is doing, and we do not want to be on the wrong side of this.”