Chairman Rogers said that companies in the defense industrial base merged and some atrophied. “Skilled talent left the workforce leaving hundreds of thousands of defense manufacturing jobs unfilled,” he said. [Opening Remarks]
The comments suggest Rogers is aware of a structural industrial decline, even though he is focused on the defense contractor. Of course, this makes sense given his committee assignment and the theme of the hearing. However, this argument can also be made for the use of protective tariffs, incentives for reshoring, and an overall industrial strategy to compete against China – and more broadly – low cost, massive scale Asian manufacturing.
The one witness testifying at the hearing – Michael Duffey, Under Secretary of Defense for Acquisition at the Secretary of Defense – said the government’s use of the Defense Production Act (DPA) sends a demand signal to industry. He also touted the defense budget allocations in the National Defense Authorization Act for 2026, signed into law in December of last year.
“For too long, industry has navigated the uncertainty of fluctuating commitments and budgets. Thanks to the NDAA, we are using multiyear procurement authority to provide stable, clear demand signals to industry, to give them the confidence and stability to invest their own funds,” he said.
A state-directed market signaling is a well-known industrial policy tool the government can use for a whole host of items deemed critical to economic security. The DPA provides the President with the authority to ensure the availability of industrial resources to meet our national defense requirements. The Department’s DPA Title III program works in partnership with industry to identify and mitigate critical shortfalls in the domestic supply chain related to defense procurement, primarily.
In mid-February, President Trump waived certain requirements allowing for textiles to be allowed Title III program orders if making military uniforms, for example. That’s not a guarantee of a purchase order. It is more of a relaxation of the “busy work,” the bureaucratic hurdles once needed to make that happen.
Rep. Joe Courtney (D-CT-2) said that DPA and NDAA were all good, and provided a lift to a submarine market that died with the end of the Cold War. But ‘Cold War 2’ with China has led to more funding. Despite this, Courtney told Duffey that “procurement instability” is a headwind, especially for shipbuilders.
Courtney represents the district where General Dynamics Electric Boat is building the new Virginia-class nuclear powered attack submarines. He was pushing for the so-called Block VI phase of a Navy procurement order, which has nothing to do with DPA. The contract is important for shipyard production and labor force, and delivering on orders promised to Australia.
“Procurement instability has been just consistently identified within industry as the biggest sort of reason why there’s hesitation for companies to invest,” Courtney said. “That’s very true in shipbuilding because it is a long game and also because the post-Cold War experience in that industry is still felt. There is a lot of hesitation out there right now. We authorized those contracts in 2023. We are very late in terms of executing the contract.”
Defense Production Act to Be Part of Re-Industrialization Strategy, House Armed Services Hearing Confirms
The Chairman of the House Armed Services Committee framed American industrial policy through the lens of defense procurement, Defense Production Act funding, and multiyear contracts to buy goods. The one thing missing in the hearing was the use of trade policy tools like tariffs or tax incentives to entice reshoring and investment in production. Wednesday’s hearing – titled ‘Speed to Scale: Revitalizing the Defense Industrial Base’ – revealed an interesting gap in Washington. Industrial policy is increasingly getting discussed through the narrow prism of national security as it relates to defense contractors, rather than through a broader commercial strategy aimed at protecting and rebuilding the nation’s manufacturing base.
On Capitol Hill, the defense narrative clearly gets legislators’ attention. It remains the surest way to get Members of Congress thinking about reindustrialization and rebuilding domestic supply chains.
Chairman Rogers said that companies in the defense industrial base merged and some atrophied. “Skilled talent left the workforce leaving hundreds of thousands of defense manufacturing jobs unfilled,” he said. [Opening Remarks]
The comments suggest Rogers is aware of a structural industrial decline, even though he is focused on the defense contractor. Of course, this makes sense given his committee assignment and the theme of the hearing. However, this argument can also be made for the use of protective tariffs, incentives for reshoring, and an overall industrial strategy to compete against China – and more broadly – low cost, massive scale Asian manufacturing.
The one witness testifying at the hearing – Michael Duffey, Under Secretary of Defense for Acquisition at the Secretary of Defense – said the government’s use of the Defense Production Act (DPA) sends a demand signal to industry. He also touted the defense budget allocations in the National Defense Authorization Act for 2026, signed into law in December of last year.
“For too long, industry has navigated the uncertainty of fluctuating commitments and budgets. Thanks to the NDAA, we are using multiyear procurement authority to provide stable, clear demand signals to industry, to give them the confidence and stability to invest their own funds,” he said.
A state-directed market signaling is a well-known industrial policy tool the government can use for a whole host of items deemed critical to economic security. The DPA provides the President with the authority to ensure the availability of industrial resources to meet our national defense requirements. The Department’s DPA Title III program works in partnership with industry to identify and mitigate critical shortfalls in the domestic supply chain related to defense procurement, primarily.
In mid-February, President Trump waived certain requirements allowing for textiles to be allowed Title III program orders if making military uniforms, for example. That’s not a guarantee of a purchase order. It is more of a relaxation of the “busy work,” the bureaucratic hurdles once needed to make that happen.
Rep. Joe Courtney (D-CT-2) said that DPA and NDAA were all good, and provided a lift to a submarine market that died with the end of the Cold War. But ‘Cold War 2’ with China has led to more funding. Despite this, Courtney told Duffey that “procurement instability” is a headwind, especially for shipbuilders.
Courtney represents the district where General Dynamics Electric Boat is building the new Virginia-class nuclear powered attack submarines. He was pushing for the so-called Block VI phase of a Navy procurement order, which has nothing to do with DPA. The contract is important for shipyard production and labor force, and delivering on orders promised to Australia.
“Procurement instability has been just consistently identified within industry as the biggest sort of reason why there’s hesitation for companies to invest,” Courtney said. “That’s very true in shipbuilding because it is a long game and also because the post-Cold War experience in that industry is still felt. There is a lot of hesitation out there right now. We authorized those contracts in 2023. We are very late in terms of executing the contract.”
Washington increasingly recognizes the need for “reindustrialization” and government procurement as a tool to make that happen. But too often the conversation stops at Pentagon procurement instead of addressing the trade policies that allowed critical manufacturing capacity to move offshore in the first place. This is a similar narrative across committees on Capitol Hill, and not just something the Armed Services Committee would, naturally, focus on as a matter of course.
If lawmakers want to restore America’s industrial capacity, defense procurement policy is a great tool to do it. Trade policy must also be part of the conversation, which is what Duffey alluded to when discussing the nuclear submarine supply chain deal with the U.K. and Australia under the so-called AUKUS agreement inked in 2021 during the Biden administration.
The Pentagon lens when thinking about industry remains an acceptable bipartisan framing of reindustrialization and reshoring while tariffs remain politically sensitive on Capitol Hill. Congress admits to the problem of fragile to non-existent critical supply chain ecosystems at home, but as the Armed Services Committee shows, it is mainly acted upon when framed as a national security matter for the defense industrial base.
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