During a House Financial Services Committee hearing on Wednesday, Rep. French Hill (R-AR) questioned Acting Deputy Assistant Secretary of Defense for Industrial Base Resilience, Jeffrey Frankston about threats to the United States' supply chain.
00:00Thanks for both of you being with us today and greetings from Little Rock Air Force Base and the 19th Air Wing in Little Rock to everybody here at Wright-Patt.
00:10Mr. Frankson, let me start with you. Looking at Title I, just on the priority setting, I'm a business guy, so I'm going to ask a pretty obvious question, which is if everything gets a priority rating, what's a priority?
00:22That's a great question, sir. Thank you very much for the opportunity to answer. So we spend a lot of time working with the services, hearing from industry about the prioritization matrix.
00:35All DOD orders are generally given a higher priority just to compete against civilian markets to ensure that we get the weapons and the capabilities that we need.
00:44But we work daily with our services and our industry counterparts to be responsive when an issue is raised, when there's a conflict on a particular prioritization.
00:54That in and of itself, giving it a priority rating, doesn't solve the issue if there's still a challenge in the supply chain itself.
01:02That's where DPA, Title III, and the other authorities that we have to go resource that supply chain come in.
01:07But we will flag it and raise it for attention, and these have our highest priority to be responsive when a bottleneck is raised.
01:13Does that mean that you really have a super priority system?
01:17Should the DPA process, should the advisory council, for example, you set DOD priorities, but you have a different grade that's a step above that one, there's a bottleneck, and it's a DPA priority?
01:32And make that distinction so that instead of 2.5 million priorities over the last five years, that there are fewer that are directly related to the specific benefits of Title III, for example?
01:46Sir, there's two ways we approach this.
01:49So one is we have something called the DX rating.
01:51It does not actually stand for anything, but that is our highest priority systems.
01:55And so there's a handful of those, because to your point, there is only so many silver bullets that you could spend from a prioritization.
02:03But these are given to our most sensitive, critical, urgent capabilities.
02:08And so they do have a little bit of a step above the rest.
02:12Alternatively, we also have within Title I something called special priorities allocations, where we work down at the lower component level.
02:19So where we find that there's a bottleneck or a key widget or item that is a choke point in supporting multiple programs, we can work to prioritize that, work with the services, work with industry.
02:31And then, if necessary, given a capacity shortfall or other challenge, we then would deploy DPA Title III to help.
02:38So in Title III, if you look back over the past five years, it has been very active.
02:43What's the civil service and contractor breakdown in your chain of command?
02:47So we have a very small but highly skilled and empowered team.
02:52I only have a handful of people on our side, and it's similar, I would think, with AFRL.
03:00I have one DPA Title III manager.
03:03I have a couple other civilians that are assisting.
03:06I have one D-pass, so our prioritization manager.
03:09We have several billets that we're trying to fill, and then we have a handful of contractors behind that.
03:15With the support from the Congress and our administration leadership, we have support to expand that.
03:21But it's necessary to manage the breadth and scope of both the program and then the challenge in front of us.
03:27Well, given the pressure on the supply chain from the current conflicts around the world that you've talked about in your opening statements,
03:33and then this existential threat to reshore or friendshore our strategic needs that are so competitive,
03:43how many additional staff do you think you need that would accelerate the application processing,
03:48and how do you quantify what is the right speed on application processing?
03:54Thank you for the question, Chairman.
03:56We feel that at least two more civilians for each of the programs in prior and titles would be useful.
04:05We're conscious of not becoming a large staff that adds bureaucracy to the process,
04:10but a couple of trained, skilled civilians.
04:14Luckily, we have support for our leadership to move out on this, and then with some requisite contractor support.
04:20But then also, we rely on the partnership with our services, like AFRL,
04:24but then all the other military services who are helping us evaluate, assess,
04:28and ensure that when we make an investment or plan to make an investment,
04:31that there is a receiving end of that investment, whether through an industry partner or a program office,
04:37to ensure that that investment is worthwhile.
04:38Good. Thank you, Mr. Chairman.
04:40I'll yield back and look forward to the second round.
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