Industrial Base Analysis and Sustainment

Abstract

Global supply chain disruptions have become more common, with recent events highlighting risks and vulnerabilities that undermine our national security. The February 24, 2022 report on Executive Order (E.O.) 14017, “America’s Supply Chains”, and the 2022 Industrial Capabilities Report (ICR) report each outline strategic focus areas and enabling capabilities, their associated vulnerabilities, and provide recommendations to strengthen the defense industrial base. The FY 2025 IBAS budget reflects the DoD’s commitment to ensuring our supply chains can provide our warfighters with decisive advantage. This budget includes investments to respond to E.O. 14017 and ICR findings and recommendations, emerging and modernization priorities and technologies, and other defense requirements. This is the result of significant coordination for each strategic focus area via the program review teams (PRTs). These PRTs developed an integrated and prioritized investment strategy to address the most pressing needs for each focus area, to include mapping to investment authorities. The FY 2025 IBAS budget reflects the outcome of the PRT recommendations and has been coordinated to complement adjacent investments of related programs including the Defense Production Act (DPA) Title III, Manufacturing Technology (ManTech) program, and at the Military Service level. Accordingly, investments in the following strategic focus areas will establish, sustain, and expand domestic capabilities and capacities to build more sustainable and resilient supply chains. Workforce – the DoD relies on a skilled workforce to innovate, produce, and sustain our weapon systems. Decades of erosion across workforce development pipelines jeopardize and threaten our industrial base’s ability to remain competitive. Efforts will continue to focus on recruitment, training, placing and retaining skilled workers in support of defense priority states/regions; and coordinating with other interagency programs and leveraging authorities from the Departments of Labor and Education to support priority defense programs. FY 2025's primary effort will be a continuation of a major, multi-year, joint OSD-Navy endeavor begun in FY 2023 focused on ensuring the health and capacity of the DoD’s submarine industrial workforce. Critical Minerals -critical minerals are used in a broad range of DoD weapon systems. Like other industrial sectors such as microelectronics, there is a critical materials market concentration in China which makes U.S. economic and national security vulnerable to disruption. To mitigate risks, the DoD will pursue four lines of effort: 1) Develop and foster new sustainability standards for strategic and critical material intensive industries; 2) Expand sustainable domestic production, and processing, metallization, and magnetization capacity, including non-traditional mining and recycling; 3) Strengthen U.S. stockpiles and 4) Work with allies and partner nations to promote the sharing of technology, capability, and resources. FY 2025 primary efforts will include new starts on metallization & magnetization capabilities and continue prior year initiatives related to scaling domestic processing of Heavy Rare Earth Elements (HREE) and Light Rare Earth Elements (LREE). Kinetic Weapons – kinetic capabilities, including hypersonic weapons, are essential to deterring America’s adversaries, who continue their military buildups including their own hypersonics capabilities. Current supply chains are vulnerable to raw materials and chemicals shortages; fragile, foreign, and/or sole-source suppliers; and technical challenges of transitioning hypersonic capabilities into production. The DoD will launch efforts to: 1) Address supply chain vulnerabilities of the most critical chemicals; 2) Update material specifications, including production and quality testing requirements; and 3) Foster sub-tier suppliers and competition in the hypersonic industrial base to enable affordable production. FY 2025 primary focus efforts will improve and expand the hypersonics industrial base. Energy Storage and Batteries – due to the small DoD market share and customized battery requirements the DoD is unable to fully leverage the large commercial investment in state-of-the-art energy storage technology. The nearly 100% foreign battery supply chain limits the DoD’s ability to field battery enabled weapons/platforms free of adversary supply chain control. To mitigate these risks, DoD is investing to develop domestic assured access to batteries through three focus areas: 1) Initiate studies to define the aggregate demand for energy storage and batteries across the DoD; 2) Pivot to commercial standards and batteries to the maximum extent possible; and 3) Establish internal DoD safety testing capacity for energy storage and batteries for future weapons systems. FY 2025 primary efforts will initiate deep dive DoD demand analysis and identify commercial sourcing synergies. Castings and Forgings (C&F) – machine tools and cast and forged parts are critical to the development, procurement, and sustainment of all major defense systems. Cast and forged parts are found in 20 percent of the products representing the U.S. Gross Domestic Product. Continuous industry consolidation and offshoring since the 1960’s have hollowed out domestic capability, reducing or eliminating competition and increasing our dependence on other nations, including China. To mitigate these risks, the DoD will: Invest in four strategic lines of effort: 1) Metalworking research and Infrastructure supporting production and research in the Organic and commercial industrial base; 2) Workforce Development to improve the C&F workforce’s size, capacity, and skills; 3) Upstream Supply Chain Security to provide timely , assured access to reliable sources of supply for the raw, refined, and semi-fabricated metals, materials, and related capabilities required to produce C&F and alternative parts for DoD; and 4) Strategy Refinement, informed by tools and analyses that enable DoD decision makers to sense evolving conditions and adjust efforts as needed. Microelectronics -components are the foundation of a modern economy and military systems. Various vulnerabilities such as lack of domestic advanced manufacturing capabilities diminished capacity threaten the DoD’s ability to source microelectronics needed to sustain programs of record. To prepare the Department for increased global economic and strategic challenges, the DoD must take action to ensure access to the microelectronic components needed to sustain our defense programs and systems effectively and affordably. The Department also needs a better strategy to transition leading edge technology developed by both government and industry to DoD programs of record, to ensure the Department maintains a competitive edge. To respond to the threat and establish a secure and assured domestic supply chain, the DoD will pursue multiple lines of microelectronics efforts. Efforts in IBAS are 1) Expanding the number of qualified domestic lower-tier suppliers providing leading edge microelectronics and packaging technologies; 2) Onshoring a trusted, pure-play, and open-access advanced packaging ecosystem for low-volume/high-mix advanced packaging; 3) Establishing a data repository to manage obsolescence; 4) Bolstering the domestic printed circuit board defense industrial base; and 5) Developing digital engineering methodologies to modernize the way that the DoD specifies and acquires microelectronics.

Document Details

• Document Type: Project
• Publication Date: Oct 01, 2025
• Source ID: 819_0607210D8Z_7_0400_PB_2025

Tags

Readers

• Defense Acquisition Program Management
• Defense Technology Research and Development.
• Industrial Economics

Technology Areas

• Hypersonics
• Microelectronics