The Department of Defense’s (DoD) Defense Industrial Base (DIB) entered the COVID-19 pandemic in a “weakened state” and received a “C” rating on its overall health and readiness score, according to a recent report.
The Vital Signs 2021 report from the National Defense Industrial Association (NDIA) and Govini, a data company, used data from before the pandemic, as well as surveys from August 2020 to produce its scores.
Gen. Hawk Carlisle, president and CEO of NDIA outlined the DIB’s challenges highlighted in the report and said, “These challenges include but are not limited to intense industrial security threats highlighted by the recent SolarWinds hack attributed to Russia, along with myriad breaches attributed to China; expected flat budgets going forward; decreased investments in the basic science that fuels U.S. innovation; skilled, cleared workforce shortages; and increased regulatory burdens and barriers to entry for those seeking defense contracts.”
According to Carlisle, the defense industry is “struggling today to survive in order to produce in the future for our nation’s military and our nation’s security,” especially as it faces these challenges during the COVID-19 pandemic.
Although the “C” grade is considered a passing grade, the report says the DIB has struggled to meet the challenges thrown its way and about 71 percent of survey respondents said they experienced “negative business effects from COVID-19.”
Of the eight categories included in the report, industrial security scored the lowest with a 56.
“Industrial security has gained prominence as massive data breaches and brazen acts of economic espionage by state and non-state actors plagued defense contractors and the entire U.S. economy in recent years,” the report said.
However, the report was not all negative and highlighted the competitive environment and the demand for defense goods and services as areas of confidence for DIB. DoD contractors received a score of 91 for competition and the demand for defense goods and services received a score of 93.
“Several high-scoring indicators drove the strength of market competition conditions, including the low level of market concentration of total contract award dollars, the relatively low share of total contract award dollars received by foreign contractors, and the high level of capital expenditures in the defense industrial base,” the report said.
The report attributed the high score for demand to the recent increase in contract obligations issued by DoD.
