**Huntsville**: In a roundtable discussion, U.S. defence sector leaders highlight urgent reforms in procurement and supply chain policies as competition with China intensifies, stressing the need for stability to support small businesses crucial to the industry’s health and national security.
In a roundtable discussion held at Cummings Research Park in Huntsville, representatives from leading companies in the U.S. defence sector emphasised the urgent need for overhauls in procurement, budgeting, and supply chain policies. The meeting, convened by the House Select Committee on China, included notable industry leaders from RTX Corp., Boeing Co., Lockheed Martin Corp., and Northrop Grumman Co., as well as Alabama Representatives Dale Strong and Robert Aderholt.
As competition with China escalates, participants highlighted the industry’s pressing demand for stability and predictability. Raymond Sharp, vice president for missile defence solutions at Northrop Grumman, pointed out that smaller players in the supply chain require assurance on funding and programme continuity, stating, “It’s not just the double-digit billion-revenue companies, we’re talking about some of the smaller ones you see here in Huntsville where you’re looking at $1 million or $2 million in annual revenue. Asking them to invest with uncertainty is tough.”
The impact of this uncertainty is particularly significant regarding small businesses in the defence industrial base. Parker Chapman, senior director of legislative affairs at the Aerospace Industries Association, noted a 40% decline in these smaller entities over the past decade. He cautioned that while Congress might view appropriations and budgets as clear signals to contractors, the realities for industry players are more complex. Chapman explained that “from industry’s standpoint, we’re also looking at how [the Department of Defense] is taking that money and putting it out in contracts and … making directional change.”
He pointed out that small suppliers often lack the financial resilience to wait for contracts, resulting in their withdrawal from the supply chain, which in turn affects larger contractors reliant on their products. Brian O’Connor, Lockheed Martin’s vice president of global supply chains, illustrated the consequences of such exits by referencing rayon, which is a critical material in the production of carbon fibres for rocket motors: “Yet it’s not made in the United States – and what happens, he asked, when China is the sole remaining source?”
Committee member Carlos Gimenez from Florida echoed this concern, suggesting that dependence on Chinese production could lead to rapid supply disruptions. He stated, “If the Chinese are the only ones creating rayon, then … we need to face the fact that China will cut us off when it meets their interests.”
Perce Leher, vice president in the space and intelligence systems sector at Boeing, raised similar alarms regarding the supply of essential chemicals needed for energetic materials, remarking on the urgency to identify potential bottlenecks in times of crisis.
In light of these discussions, Rep. Dale Strong called for a shift towards more consistent and predictable ordering patterns within the defence procurement process. He emphasised, “When an order is placed, it can’t be … 50 this year, none the next, 100 the next year, that is an impossible situation, and it doesn’t work in any business model.”
The roundtable underscored the critical intersections between national security, industry stability, and international relations, as defence leaders sought to navigate the complexities of a changing global landscape.
Source: Noah Wire Services
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