One thing the nation has learned in helping Ukraine fight Russia, is how fragile our defense industrial supply base really is. From javelin missiles to major platforms, in a conflict the U.S. would run out in days or weeks. And then what? For some fix-it ideas, the Federal Drive with Tom Temin turned to the executive director for the Center for Government Contracting at George Mason University, Jerry McGinn.

Interview transcript:

Tom Temin Jerry, I guess we should start with the idea that maybe the Ukraine situation has shown us something in stark reality that people might have known of but didn’t really pay that much attention to.

Jerry McGinn That’s correct. Tom, it’s great to be back with you. The fact of the matter is, we just don’t have enough industrial base capacity for the challenges facing us today. And this is, as you as you allude to, has been known for some time. But the Ukraine situation showed in stark reality that if we’re supporting allies and partners in a conflict and that depletes our armaments, munitions stockpiles, that’s really is very problematic for a major contingency impacting our forces.

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Tom Temin And just an operational question, there are stockpiles of everything from nine millimeter handgun ammo to missiles and javelins and so forth. A lot of that is used in practice and training. So is there a constant replenishment to keep it at a sort of ever normal level?

Jerry McGinn Yes, there is.  And in training, they use training rounds in general, so that they use less of the high explosive that you would use actually in combat or they do once in a while. But the challenge has been to look in the pitch of how we procure munitions. Year over year the change in how many munitions of different types we buy changes as much as 50%. So can you imagine if you’re running a government program, or if you’re an industry, if you’re trying to produce these weapons. This kind of whipsaw year to year, you just cannot, not one on a railroad and that’s something that needs to be addressed.

Tom Temin And is there a certain level that they need or that they feel that should be in the stockpile at a given time? And does the stuff go stale, such that you have to rotate it periodically?

Jerry McGinn Yeah, there is. You can you can only stockpile for so long. So, essentially, we just need to start producing more in a number of different ways. And this goes beyond munitions. It goes to even end items. We produce F-35s, the fighter jets.

Tom Temin And someday they may work.

Jerry McGinn Yes, that’s true. But they’re producing as quickly as they can. But still, it’s not enough. If you look at the models of unclassified models of scenarios in major conflict, we would lose half or more of our fighter jets in a couple of weeks because of the the modeling. So we don’t have enough ready kind of systems for major contingencies.

Tom Temin And using a platform like that, say, is an example. An average budget might say, well, this year you can add 300 F-35s or sometimes it’s 600 and sometimes they posit. But say just for purposes of argument, 500, they’re authorized to buy in a given fiscal year. How long does it actually take to make those 500?

Jerry McGinn It takes a while. They’re producing, I think right now, don’t quote me, but it’s in the 170 per year, and that’s a full rate reproduction. You’ve got three final assembly and check out locations around the world. One in Japan, one in Italy and one in Fort Worth. And they’re producing the maximum they can. So to raise that, you have to add a production line, which is going to take some time.

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Tom Temin Yeah. So it seems like there’s a mismatch between acquisition and supply philosophy, and the reality of what would happen if, say, a Straits of Taiwan conflict actually engaged the United States.

Jerry McGinn Right. If you look at it, Under Secretary of Defense for Acquisition and Sustainment, Dr. William LaPlante recently stated that, since the late eighties we were spending 7% of [Gross Domestic Product (GDP)] on defense. We’re spending about 3% now. So when you have that, that puts in stark reality. So we just don’t have, and we’ve spent the last 20 plus years focusing on cost and efficiency to produce Lean Six Sigma and so on. So we’re producing the best systems just enough to meet the program needs, but then that’s it. So when you try to squeeze that much, then if you want to increase capacity, it’s harder to do. So we’re not producing enough and that has to be increase across the board. But it’s not just system, but it’s also like how we fight. So another thing I talk about in my piece, is the importance of how do we partner platforms with unmanned systems? Like UUV’s, underwater unmanned vehicles, [Unmanned aerial vehicles (UAV’s)] and so on. So how do you partner them, F-35 with unmanned aircraft, and likewise, with subs and so on. So these are kind of ways you can get more capability using kind of more charitable systems.

Tom Temin We’re speaking with Jerry McGinn. He’s executive director for the Center for Government Contracting at George Mason University. And, of course, the bigger the platform, the more kind of sclarodic it really is. You look at carriers as the ultimate platform. It takes 20 years from keeling to when you can actually put it into service. And it’s hard to believe this is the same nation. We built 14,000 B-24 bombers and about 12,000 B-17 bombers, just in the space of three and a half, four years in World War II. Do you envisioned that kind of capacity ever be needed?

Jerry McGinn It’s a great point, Tom.. And there’s people talking about rebuilding, quote unquote, America’s arsenal. So we go back to the liberty ships and these kind of tremendous capabilities. I don’t quite see that. But what I recommend is that we relook the model of the MRAP, The Mine Resistant Anti-Personnel vehicle from the Gulf War. Secretary Defense Bob Gates said listen, I want survivable vehicles, I need multiple produced, and I need it by this time. So the requirements were much less, and there were multiple producers. It cost money, but you produced more. He had a much more lively industrial base, and then they delivered and it saved lives. We’re going to have to go to that kind of model, where we kind of start producing multiple systems or ways that you can produce multiple systems. So we have the industrial base that we need to support it. Because right now we are not there.

Tom Temin Yes, because I guess the philosophy has been fewer, but really smart. And therefore, survivable, and that will take care of us. But there’s also a certain power and simply mass, isn’t there?

Jerry McGinn Yeah, there is. We definitely have the capabilities. That’s been our focus. But capacity is in and of itself really important. And we do not have.

Tom Temin This as China is doing large volumes of pretty much everything.

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Jerry McGinn Yeah, that’s correct. That’s where the pacing threat and to be able to face that and the logistical hurdles and so on. We just have to have more capacity to be able to address that threat.

Tom Temin And let’s talk about procurement for a moment. There was the 809 Commission, and some of those things have been followed. Some of them are still on the shelf. Then there’s the whole budgeting planning program, execution review, and there’s some recommendations out on that. But the Pentagon’s got to move quickly on some of these things. It can’t take ten years for reform.

Jerry McGinn That’s correct. And I think some of this, there are pieces here and there. Like you say, budget reform needs to happen, because right now it’s two and a half years from the time of an idea to you can actually start executing. We’ve got to be able to condense that in certain areas. You’ve got to be able to acquire systems when you need them at time to need. And not have detailed requirements where you spend two and a half years developing the exact right thing. We need to be able to iterate field, iterate field test, iterate and execute. So we just have to do more of that. These things are starting to happen, but we just need them to accelerate and be more on the scale that we need to the threats we face.

Tom Temin And then we’re having kind of an environmental crisis of affordability, because the gross domestic product is going to be smaller than the debt pretty soon. Does that figure into this at all?

Jerry McGinn It does a sense of prioritization, half of discretionary spending is defense. But as you allude to the amount of discretionary spend is decreasing, that that piece of the pie is not what it was in the sixties, seventies and eighties. Because of debt and because of the more of the deficit spending.

Tom Temin And 5,000 people a day coming on to Social Security.

Jerry McGinn Yeah. So it makes it harder, but the the threat is as strong or stronger than it has been. And that was really kind of closely seen by what Mr. Putin did in Ukraine. And then for us, it’s the challenge in Taiwan and other places.

Tom Temin One of the points that you make, too, is by allied. That is to say, some of these NATO nations could step up a lot more than they have, even in the Ukraine situation.

Jerry McGinn Yeah, there’s been a focus on increasing manufacturing or industrial base capacity in the U.S. And that’s been really good. The challenge is that we can’t do it all here, and in some countries have a competitive advantage, in terms of mining or whatever capabilities. So we should really embrace that and work with our close partners and allies the Brits, the Aussies, the Japanese and so on. And we’re already producing some systems with them, the F-35 is one of them. Like I said, it’s being produced and delivered in Japan and Italy. More of that will help our partisan allies. Because if we start producing, let’s say, unmanned systems and submarines in Australia. Australia is one of our closest partners, and that is in and of itself a threat to say something to the Chinese. So there you’re getting, if we do things as we build as an allied kind of build as a as an approach, we get more kind of benefit for us, for the United States, as for well as for our partners by kind of working across with those countries.

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