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Last Friday, national defense leaders were in Southern California for the rollout of the B-21 bomber and the annual Reagan National Defense Forum. While in town, William LaPlante, the undersecretary of defense for acquisition and sustainment, also visited the Marvin Group, a longtime Defense Department contractor based in Inglewood.
“Marketplace” host Kai Ryssdal met the Pentagon’s chief weapons buyer on the site’s manufacturing floor to discuss supply chains, the war in Ukraine and the annual defense funding bill. The following is an edited transcript of their conversation.
William LaPlante: Companies like these guys are the central point of our hierarchy of needs because what they do are the critical interfaces of, say, pylons between aircraft and certain weapons and other systems aircraft carry. So these are kind of the important middlemen or middleperson in our weapons systems. And they are the backbone of our industrial base, companies like this.
Kai Ryssdal: I don’t want to get too technical here, but when you say “the pylons between the aircraft and weapons,” it’s literally the launchers, right? It’s the launch racks and the ejector racks?
LaPlante: Yes, that’s right. And it has to work on multiple different airplanes with multiple different weapons.
Ryssdal: So when I say “defense industrial base” to you, which is your lingua franca, right? That’s your thing. Translate that to the wider audience and make them understand why it matters.
LaPlante: Yeah, so the term “defense industrial base” traditionally refers to companies that do contracting with the Department of Defense. But having said that, increasingly we’re seeing that the blurring is between what does defense industrial base and just the regular economics in the United States.
Ryssdal: Talk to me about this moment, about No. 1, the current political climate, and No. 2, Ukraine and what the American defense establishment is doing in Ukraine.
LaPlante: Yeah, so I think coming out of COVID — and we’re still obviously dealing with COVID — all of us have recognized and seen in our lives that the just-in-time economy, the minimized inventory — it’s not resilient. That’s the big change we’re seeing. I think what we’re seeing in the political climate is a recognition that the industrial base of the United States needs this attention. And we do need and can bring more manufacturing back to United States, just like in defense, manufacturing and design, I think have to be much more integrated.
Ryssdal: You want to onshore your supply chain.
LaPlante: As much as you can. Or friend-shore, as they say.
Ryssdal: I want to ask about Ukraine. And I want to ask about the support the American defense establishment is giving. And I want to talk about whether you have the capacity, because they are going through — as you know better, probably, than anybody — huge numbers of American weapons over there, the Javelins and the artillery shells, they’re going through our entire inventory. It’s your job to fill the shelves back here. Are you doing it?
LaPlante: Yes, yes. Thanks to a lot of action by the Congress, we’ve gotten billions of dollars in different categories. One is we’ve gotten $4 billion we put on contract to replenish our inventories of equipment we have sent to Ukraine. But the second piece of it is we’re looking at what equipment, and this happens every day, that would affect what the Ukrainians are needing in the fight. And that has changed since February.
Ryssdal: But just to take one weapon system, which is really high-profile — the Javelin antitank weapons system, right? They’ve gone through, I think the number I saw was 8,500 of them. And we make 850 a year. How can you keep up with that?
LaPlante: Well, so there’s two numbers to think about. No. 1 is, what is your production rate? Which is what you just referenced. But more importantly, what is your stockpile to begin with? We look at both of those. We look at what is the risk that can be taken if we draw down. In some cases, we have had excess capacity or plenty of capacity where drawing down has been fine. At the same time while we’re doing all this, we are working on near-term and longer-term solutions. For Javelin, for example, bringing more contracts, second suppliers online, helping with obsolescent parts.
Ryssdal: You gave a speech last month, middle of last month, I think that I saw described as “feisty.” You were clearly in a mood about how we do defense contracting in this country. And you talked about this idea of doing it one year at a time is insane, we need multiyear contracting authority. And I guess my question is, with the amount of money you’re spending — not you, but your department — how confident are you that the Congress of the United States is going to let you do multiyear contracting with that amount of money in a changing political environment, when our conflict response is kind of dependent on world affairs?
LaPlante: Yeah. So a couple things on that. I would say point No. 1, we need a budget. We don’t have a budget right now. So I would urge the Congress to get us a budget. We’re operating off of continuing resolution as we have too many times. The second point I would make is, the amount of money is one thing, but what we have to do is think through the contracting approaches, which is where you’re going that gives industry and suppliers a chance to say, “This is not a fly-by-night endeavor. They are going to be in this for three years.” So they can go back to their boards or investors and make capital improvements. Because I think what you’re hearing from industry is demand signal. They want to see that next year, it’s not going to go away.
Ryssdal: Do you think the average American reading the newspaper about — and I’m going to, you know, poke you in the eye here — reading the newspaper about the $847 billion that they’re talking about for the defense authorization bill, right? Somebody’s reading that and saying, “A trillion dollars? Are you kidding me?”
LaPlante: Yeah, certainly the size of any budget is something people should be asking about. All I would say to that is No. 1, we have right now a conflict where either the second- or third-greatest military power is right now in an existential threat with a country that we’re partnered with. This is one of those national moments that both sides of the aisle where we’re standing up to do it. Is it an investment by the United States? Absolutely. Was the Marshall Plan and others? You know that we’ve done this before. But the question always should be answered, and the Defense Department, like every other department, should have to defend its budget. And the questions always should be looked at.
Ryssdal: You’re at the table when the secretary of defense and possibly the president are thinking about national defense strategy. In your billet as the acquisitions guy, what is your advice to them as to where we need to be spending our money?
LaPlante: So my advice, if you look at the national defense strategy, it really talks about what’s called “integrated deterrence,” which is we have to invest in capabilities that adversaries will see and will actually deter them from acting. The second piece is, in many ways, China’s the pacing threat. There’s as much about that as economics as it is military. And I think it’s caused us to look at — and we saw this during COVID — look at our supply chain through the context of the global competition. Not just the defense supply chain, but all supply chains. And the other thing is I encourage is yes, we have a near-term issue right now with Ukraine. But let’s also take the longer-term perspective. So three, four years from now, we will end up with a modern 21st century industrial base. That’s my biggest thing, this is an opportunity for us to get that 21st century industrial base.
Ryssdal: I’ll get the plug in here: Economic security is national security.
LaPlante: They’re the same. You can’t separate them. When you get down to the second- or third-tier suppliers, on one day they’re a mom and pop shop doing stuff for us. And then the second day, they’re doing it for somebody else. It is intertwined.
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