DoD industrial base plan targets weak links in supply chains

WASHINGTON — U.S. defense officials said Oct. 29 the Pentagon is evaluating measures to address critical vulnerabilities in the defense industrial supply chain. This includes supply constraints in the space sector that are hampering the manufacturing of military satellites.

“This is an incredibly important issue,” Carla Zeppieri, Deputy Assistant Secretary of Defense for Industrial Base Resilience, said during a Pentagon press briefing.

“Single sources of supply is a problem across the industrial base,” noted Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy.

Zeppieri said risks tied to “single sources” and “fragile sources” of critical components in the defense supply chain are among the issues addressed in the newly released National Defense Industrial Strategy Implementation Plan.

The unclassified version of the plan highlights measures to strengthen domestic manufacturing for defense purposes and increase supply chain resilience against adversarial threats.

DoD anticipates an increasing need for resilience in the supply chain, including within the space sector. “We are very much aware and doing analysis on that,” Taylor-Kale said.

Details about specific vulnerabilities are reserved for the classified version of the report.

Supply risks in the space sector are of concern to the Pentagon as the Space Development Agency prepares to deploy a low Earth orbit (LEO) satellite constellation for military communications and surveillance. The demand for small satellites, needed for the LEO constellation, has placed a strain on suppliers who face limited capacity and an increased need for components.

The military space sector has become increasingly dependent on a small number of specialized suppliers, particularly for advanced technologies such as satellite propulsion and secure encryption components. Space components require high reliability as even minor defects can lead to costly failures in orbit.

To mitigate risks, DoD’s industrial strategy implementation plan advocates for a more self-reliant domestic supply chain and decreased reliance on foreign suppliers, especially those linked to potential adversaries. “Adversarial infiltration” in supply chains, the report states, is a significant threat and underscores the need to build a resilient U.S. industrial base.

Among the initiatives to support the domestic space industry is the Defense Production Act (DPA), with nearly $400 million requested in the 2025 defense budget, including $12 million for space industry support. Title III of the DPA grants the President broad authority to reinforce domestic capabilities essential for national defense.

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Additionally, the Pentagon’s Office of Strategic Capital (OSC) is inviting companies that develop critical space technologies to apply for loans.

OSC Director Jason Rathje, speaking at a Washington Space Business Roundtable event, indicated that loans ranging from $10 million to $150 million are available for capital investment and equipment. The OSC, established in 2022, provides debt financing for companies advancing dual-use technologies with both commercial and military applications.

The OSC, which currently manages approximately $984 million in total loan authority, collaborates with other agencies, such as the Small Business Administration (SBA), to extend funding opportunities. Through the SBA’s Small Business Investment Company Critical Technologies initiative, OSC aims to engage private sector investment in defense-oriented technologies.

“We’re expanding,” Rathje said, noting that the OSC’s staff of about 50 is set to double next year as loan programs grow.

The OSC recently supported a venture in partnership with the U.S. Navy to invest in Ursa Major, a company specializing in rocket propulsion. By leveraging financial instruments like loans and loan guarantees, said Rathje, OSC aims to stimulate industry investment in dual-use technology critical to U.S. national security.