The Department of Defense continues to explore the economic health of the nation’s defense industrial base through the use of a tool that they call S2T2. The DoD is mapping its contractors sector-by-sector, tier-by-tier (S2T2). The department recognizes that it has had very little insight into the financial situation of lower tier defense suppliers, those small businesses that supply the big businesses that supply DoD.
In Congressional testimony in May 2011, Frank Kendall, principal deputy under secretary of defense for Acquisition, Technology, and Logistics, discussed how S2T2 will replace intuition driven assessments with data driven ones. In a June 2011 presentation, Zachary J. Lemnios, Assistant Secretary of Defense for Research and Engineering, talked about S2T2 being used to develop a “holistic mapping of the industrial landscape”.
Brett Lambert, the Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy (MIBP), testified before Congress on November 1, 2011, on the DoD’s activities to “sustain the health, vibrancy, and efficiency of the U.S. defense industrial base”. The S2T2 program is one such activity.
Federal News Radio quotes Lambert’s testimony on S2T2 as focusing on the second and third tier companies. One situation described is that where there are two prime contractors but each use the same sub supplier at a much lower level. Supporting either or both primes does nothing for that vital, smaller supplier.
By understanding the technologies, supply chains and nuts and bolts of the companies at every level of DoD supply, the department will be able to identify small but vital areas where support is required. This is important so that a key capability or piece of technology is not lost to the nation’s defense through the failure of a small company. The S2T2 program suggests that small companies in the defense industry can expect more financial and other support from the DoD as their contributions up the supply chain are mapped.
Charles Simmins brings thirty years of accounting and management experience to his coverage of the news. An upstate New Yorker, he is a free lance journalist, former volunteer firefighter and EMT, and is owned by a wife and four cats.
