Key Points • The National Defense Industrial Strategy provides a vision for revitalizing the industrial base. Aligning the budget to the strategy is foundational to its success. • The procurement budget is central to regenerating the industrial base, and the supply chain that supports it, yet the Department of Defense (DOD) does not consistently invest in these accounts, resulting in a limited, vulnerable manufacturing capacity and hesitancy by new companies to work with DOD. • In addition to procurement investments, the 2025 budget submission should include bold decisions in funding the Defense Production Act, industrial base facilities, manufacturing and supply chain visibility, supply base expansion, and critical material stockpiles to aggressively signal seriousness in turning the strategic vision into real solutions the country needs now. Read the full pdf. Introduction As the Department of Defense (DOD) meets with industry to help shape its thinking on the crucial implementation plans for the National Defense Industrial Strategy (NDIS), it should also prepare to specifically explain how the budget aligns to the strategy. For the strategy to have a positive impact, it requires dollars and flexible, timely execution to put that money on contracts. Because the 2025 budget the White House anticipates submitting to Congress in mid-March is expected to be billions less than previously planned (to adhere to the Fiscal Responsibility Act caps), aligning sufficient resources to resuscitate the defense industrial base is itself a daunting challenge. The budget is inherently a measure of inputs, not outputs. It is also the actual expression of policy. Regardless of what the strategy says, the budget is the real measure of whether the department is taking industrial base recovery and resiliency seriously. The choices the department makes on how it proposes to spend money will either make the strategy real or relegate it to aspirational irrelevance. The budget is also the start of a story. The ultimate outcome is a commercial industrial base clamoring to do business with DOD and producing a military for a strong, safe America. To facilitate analysis of the vital connection between strategy and money, there are three key elements of the budget to watch: (1) What and how much does it buy? (2) What does it prioritize that is new and different for the NDIS? (3) Does it recognize and remove ancillary efforts and distractions in favor of money for core functions, aligning resources to federal departments according to mission? Read the full report.
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