Historically the U.S. Government has implemented policies to protect the safety of jobs within the U.S. Defense Industry. For example, as taken from An Overview of Small Business Contracting, “During World War II and then again after the outbreak of fighting in Korea, Congress found that the existence of thousands of small business concerns was being threatened by war-induced shortages of materials coupled with an inability to obtain defense contracts or financial assistance. Concerned that many small businesses might fail without government assistance, in 1953, Congress passed, and President Dwight Eisenhower signed into law the Small Business Act (P.L. 83-163), which authorized the Small Business Administration (SBA).”[1]
Fast forward to July 13, 2018 when the Conventional Arms Transfer (CAT) Policy was signed into Congress. The CAT Policy describes an implementation plan specifically to assist in the prioritization of strategic competition, organization for success, and creation of conducive environments for the defense export community. Further, this policy seeks to strengthen our foreign partnerships to expand the U.S. global influence, enhance the ability of the defense industrial base with the beneficial goal (for employees like you and me) to create jobs and increase competitiveness within the arms trade global markets. [2]
Design for Exportability (D4E) is one topic that reinforces the goals of the CAT Policy. D4E, although a current lesser-known topic amongst the defense world, has become a re-occurring enabler of Foreign Military Sales and Direct Commercial sales. D4E takes a proactive approach to ensure system capabilities deemed critical to U.S. National Security are adequately protected from potential adversaries prior to export in the form of program protection or provisioning differential capability. To assist in the identification and adjudication of critical technologies for export, the U.S Government has established 13 Technology Security, and Foreign Disclosure (TFSD) processes. These processes or “pipes” are broken down by specific technology or policy and overseen by designated U.S. Government offices.
Once the technology “trips” one of the 13 TSFD pipes, the Defense Industry (Industry) can proactively perform an internal review and provide program protection or differential capability D4E recommendations to mitigate the TSFD requirements. This approach provides assistance to the USG reviewer and allows Industry to be part of establishing the “right sized” solution in order to enable export approval. Further if D4E is done early in the system technology development process, the TSFD requirements may have lesser impact on potential system redesign.
Now, you might be thinking, “This sounds great! I can proactively engage with the USG to receive a review on our systems technologies to ensure an approved export license!”, and you would be right! There are numerous benefits of proactive D4E. However, it still requires Industry to invest time and money during technology development where the return on investment would likely be multiple years down the road. Further, since the USG does not commit to export approval until export license is in hand, even the best D4E strategy is not 100% a sure thing. This is not to say the USG has not accounted for situations like this. The USG has implemented programs, such as Design for Exportability Funding (DEF) Program, that can assist with certain funding, however, the stipulations such as eligibility, cost sharing, and overall low funding levels are usually deter Industry from making the required investment.
Tying CAT Policy in with D4E, there are a few points to be made on behalf of both Small and Large Defense Companies. First, the gap in Industry conducting D4E seems to lie within an overall lack of understanding and awareness of the D4E process. With a lack of awareness and understanding, how does this provide and create a foundation for strategic competition, organization for success, and creation of a conducive environment? Second, with CAT Policy in mind and the majority of the DOD industry comprised of and/or supported by small businesses, there is an obvious concern for their success. Unlike their larger counter parts, these smaller defense companies may not have access to the necessary funding to allow them to implement the D4E process. Finally, how do we, as global defense industry leaders encourage competition, organization, and a conducive environment when one of the main processes to drive technology development is limited by overall lack of knowledge, funding, and understanding?
Although we may not currently have the perfect answer, it is clear we must start somewhere. It becomes a company’s responsibility to begin their own internal research to educate themselves on the benefits of D4E or contact subject matter experts in this area to be successful. If we do not begin to incorporate D4E into all of our defense technology development, we will never be able to compete on the international marketplace, whether it is financially with reduced cost, capability through interoperability with U.S. equipment, or speed to delivery to our allies.
[1] Congressional Research Service. February 12,2021. An Overview of small business contracting. June 23, 2021. (https://crseports.congress.gov.)
[2] Defense Technology Security Administration. Arms Transfer Policies and Treaties. June 23, 2021. (https://www.dtsa.mil/SitePages/promoting-engagement/arms-transfer-policies-and-treaties.aspx).
Comments