By the Strategic Materials Advisory Council
President Obama’s fiscal year 2014 budget request includes $615 billion in military spending but is largely silent on key strategic and critical material programs. This silence has raised concerns among some national security and industry experts who recognize the risk associated with strategic and critical material shortfalls and now must struggle to decipher the Pentagon’s mixed messages in this area. Though defense officials claim to take strategic materials threats seriously, the government’s disjointed past approach to solving this problem addresses the issue piecemeal and without an understanding of the larger picture. Even the National Defense Stockpile’s latest report to Congress, which projected shortfalls for many materials essential for national defense, did not recommend a realistic solution.
With its current passive approach, the government is ensuring future shortfalls of strategic materials and putting our military’s qualitative edge and, by extension, our nation’s security at risk. Industry leaders have been concerned about the situation and have continued to call for the development of complete and secure supply-chains.
Examining the current budget request, including requests within the Defense Production Act (DPA) Title III projects, the National Defense Stockpile, and additional research programs, it is evident the FY14 budget does not do nearly enough to ensure a secure supply chain in the interest of national security.
Despite numerous past statements indicating a commitment to developing a secure supply chain of strategic materials, the government has done relatively little to make that concept a reality. The President’s budget was short on details, and Pentagon officials do not appear to be in any rush to shed light on their plans for the future. Without such details, industry analysts and subject matter experts cannot identify trends or uncover any Pentagon plans to provide long-term solutions for defense material needs.
What do we know about the $615 billion requested for the Department of Defense? Much of the information released to date appears to support the status quo on strategic and critical materials – providing patchwork fixes, such as procuring materials from existing suppliers, which will allow foreign powers to maintain their dominant market position. For example, the National Defense Stockpile, which holds strategic and critical materials to supply the military, industrial, and essential civilian needs for national defense, did not receive any particular attention in the budget request. Instead, the Stockpile will continue operating under its own transaction fund, without any infusion of dollars to avoid projected shortfalls. Even though the Stockpile’s recent report raised significant concerns and identified nearly $1.2 billion in materials shortfalls, the budget maintains the status quo and provides no serious attempt to close that materials gap. Once again, a realistic solution to halt U.S. dependence on unreliable foreign sources of strategic materials has not been funded.
The Department of Defense often points to spending at the Air Force Research Laboratory or the Army Research, Development and Engineering Center as evidence of its response to materials security. The basic principle of supply chain security, however, is that a single weak link at any point can disrupt production or even derail a program entirely. Current DoD policy addresses some materials vulnerabilities but leaves other gaping weaknesses, such as the expansive gap in rare earths, untouched. Without a comprehensive solution that addresses all materials across the entire supply chain, the government’s policy will continue to be inadequate.
Shortages in strategic materials create vulnerabilities, which ultimately lead to an inability to produce new technologies. Moreover, a lack of domestic and allied nation producers along the supply chain increases overreliance on undependable producers, who may not prioritize U.S. national security requirements. The Department of Defense has acknowledged these risks but has done little to remedy the situation. As Congress considers this request, it would do well to consult with experts in the strategic materials sector. These experts understand the need for complete and secure supply-chains and grasp that the current approach to these issues is providing unacceptable results and ongoing dependence. It is time to change.
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