WASHINGTON, D.C. – U.S. Sen. Sherrod Brown (D-OH) is urging the Department of Defense (DOD) to keep oversight of an important defense manufacturing initiative in Ohio. The Manufacturing Technology Division of Wright-Patterson’s Air Force Research Lab helps run a key defense manufacturing program that allows the federal government to support defense related manufacturing when domestic capabilities aren’t able to meet national security needs.
The program being carried out at Wright-Patt was created under the Defense Production Act (DPA) and helps ensure that the Air Force can work with DOD to ensure that there is enough defense manufacturing capacity to need the needs of the Department. Last month, DOD announced that it was shifting management from the Air Force to the Pentagon and other uniformed services. In a bipartisan letter, Brown and his colleagues warned that this change to the Air Force’s decades-long oversight of the program would put future investments at risk and jeopardize the execution of more than 30 active projects being carried out under the program. The Air Force Research Lab supports Ohio jobs and brings investments to the region through contracts awarded to the program.
“The Wright-Patterson Air Force Research Lab helps create jobs and support our defense capabilities by carrying out this important manufacturing initiative,” said Brown. “The workers at the Lab have the institutional knowledge and experience we need to continue making these defense manufacturing investments, and to make sure current projects are a success.”
The Senate Banking Committee – on which Brown is the lead Democrat – and the House Financial Services Committee have jurisdiction over the DPA. Brown was joined on the letter by Banking Committee’s Chairman Mike Crapo (R-ID), House Financial Services Chair Jeb Hensarling (R-TX), and Ranking Member Maxine Waters (D-CA).
Full text of the letter is available below and here.
The Honorable James Mattis
Secretary of Defense
Washington, DC 20301-3010
Dear Secretary Mattis:
As Chairmen and Ranking Members of the Senate Committee on Banking, Housing, and Urban Affairs and the House Committee on Financial Services, with oversight jurisdiction over the Defense Production Act (DPA), we write to express our serious concerns about the near and long-term viability of the DPA Title III program in light of a July 1, 2017, Deputy Secretary of Defense memorandum (attached) directing that the Air Force no longer serve as DOD Executive Agent for the Title III program. In our judgment, this decision to rescind the Air Force’s executive agent role could pose real risks to ongoing and future Title III projects vital to ensuring that the domestic defense industrial base meets national defense and homeland security needs deemed essential by the President. In a worst-case scenario, we are concerned that the future of the Title III program could be put at risk by such a major change in program management.
Enacted in 1950, the Defense Production Act (50 U.S.C. App. § 2061 et seq.) provides robust legal authority for the President to ensure the timely availability of essential domestic industrial resources to support national defense and homeland security requirements. When domestic industrial capabilities that impact essential national defense and homeland security do not exist, are at risk of being lost, or are insufficient to meet national defense needs, and the private sector is unable or unwilling to create or expand the needed production capacity/capability, then DPA Title III authorities may be employed to address the shortfall. Title III actions stimulate private investment in domestic production by reducing risks associated with capitalization and investments required to establish needed production capacity. These projects range from providing for process improvement, to purchase guarantees or other measures necessary to improve U.S. production capabilities to support national defense.
The President’s DPA Title III authorities are delegated to the heads of Federal departments and agencies in Executive Order 13603. These authorities have, in turn, been delegated within the Department of Defense under DoD Directive 4400.1E, dated October 1, 2001. Under this directive the Air Force, through the Air Force Research Laboratory Materials and Manufacturing Directorate, has managed a range of Title III project development and execution activities including financial management, project structuring to achieve project goals; acquisition contracting; technical and business performance monitoring of Title III contractors; contract administration, and disposition of government-owned equipment, products, and materials. The Air Force has successfully fulfilled this role for three decades, and managed the program through a significant period of growth.
Title III is unique in that it is the sole DOD program focused on creating, maintaining, protecting, expanding, or restoring domestic production capacity to strengthen domestic industry and to establish the industrial base capacity for essential national defense capabilities. This unique set of program capacities is located nowhere else in the federal government and took years to develop and refine, capacities that will not exist in the various services when the July 1 order becomes effective. This could prevent project overseers’ ability to identify projects, develop business plans, and in many cases secure the personal approval of the President before any funding is obligated. Executing this unique authority requires specialized personnel with expertise in financial management, acquisition contracting, technical and business performance monitoring, materials and manufacturing process management, and contract administration that few DOD entities possess. We are concerned that the July 1st decision to rescind the Air Force as the DPA Title III Executive Agent poses a significant risk to the execution of the more than 30 active Title III projects, and has the potential for disorganized and haphazard development and execution of future Title III projects, including those currently in the pipeline.
Removing the Air Force as Executive Agent also poses challenges for Title III efforts involving other Federal departments/agencies. Those projects are critical to the protection of the homeland and ensuring that our intelligence agencies have a robust industrial base to provide technologies essential to carry out their missions. The monitoring of disparate disbursement and execution of Title III activities across the Federal government will require establishment and expenditure of significant oversight resources to ensure accurate information regarding project development and funds execution are properly captured and reported to Defense authorities and Congressional committees. To our knowledge, that oversight structure does not exist outside the Air Force. The Air Force DPA Executive Agent serves to focus DoD resources on a specific area of responsibility, thereby minimizing duplication, confusion, and wasted resources.
Over the past 30 years the Air Force has had a successful track record of mitigating difficult industrial base shortfalls through Title III on behalf of various Federal agencies. We are concerned that the removal of the Air Force as the Title III Executive Agent jeopardizes execution of essential domestic industrial resources to support national defense and homeland security requirements. We are also troubled that the memo effecting this change was issued without any notice, explanation, or consultation with our committees with jurisdiction over Title III. For these reasons, we urge you immediately to reinstate the Air Force as the DPA Title III Executive Agent. We intend to conduct a review of these and other program changes in the context of the upcoming DPA Title III reauthorization process.
Thank you for your consideration. We look forward to hearing your response to our request.