"Small and medium sized firms can be valuable contributors to our nation's defense manufacturing needs. The NEMSC Initiative is a critical tool in giving these companies the support they need to compete with larger firms and submit successful bids on defense contracts," Senator Collins said. "By funding this program, our nation will be able to increase production of high quality defense equipment at a low cost by utilizing the resources of additional companies."
Following is the text of the letter:
Dear Chairman Warner and Ranking Member Levin:
As you begin consideration of the fiscal year 2006 Defense Authorization bill, we request your continued support for the New England Manufacturing Supply Chain (NEMSC) Initiative.
Item: New England Manufacturing Supply Chain Request: $9,000,000 Account: RDT&E, Defensewide Line: 39 Budget Activity: PE0603712S
The NEMSC Initiative works with small and medium manufacturers in the six New England states to build their capacity to supply equipment and products to the Department of Defense (DoD). The National Coalition for Advanced Manufacturing, in a 2002 report, found that the loss of small and medium-sized firms (SMEs) that participate in the defense supply chain is taking its toll on our nation's defense readiness as many makers of components and spare parts for the larger defense contractors have left the marketplace, or are ill-prepared to respond to swift increases in orders. There is no known source of supply for over 11,000 products used by the Department of Defense. The report also found that the nation needs to maintain sufficient surge production capacity to meet unanticipated national defense needs. The production of platform systems, components, and munitions is constrained by the surge capacity of prime contractors and the capabilities of the supplier base. Being able to provide for these defense needs is vital to our military. Lastly, to increase participation in defense production, small manufacturers need assistance adapting commercial production practices and techniques to the needs of the defense industrial base.
The solution to rebuilding our nation's supply chain capability is to tap the vastly underutilized capacity of SMEs to meet the growing needs of the defense industry. The New England Manufacturing Supply Chain (NEMSC) program is a crucial part of the solution. The objective of this innovative program is to minimize the hurdles that prevent the majority of SMEs from submitting bid proposals to the DoD and prime defense contractors.
The NEMSC Initiative, with the $16.9 million provided by the Congress, has accomplished the following:
1. Collected manufacturing capabilities and capacities on more than 4,100 SMEs, or 18 percent of New England manufacturers. By having a better understanding of what SMEs can manufacture, not what they manufacture, this project is assisting SMEs in diversifying their product lines, and therefore their revenue sources, by preparing them to pursue contract opportunities that they would never have otherwise realized. 2. Successfully matched SME's capabilities and capacities to the manufacturing specifications of the procurement requirements, and provided follow-up assistance to the SMEs to ensure they address concerns before submitting their bids. This matching process is achieving a 60% success rate in winning DoD procurement bids, compared to the historical rate of 5%-10%. 3. Developed breakthrough technology that reduces the time required by the SME to translate manufacturing requirements into an actual bid and successfully pursue defense contract opportunities. This levels the competitive playing field for SMEs and helps DoD and defense prime contractors, who are having difficulties identifying alternate suppliers and sourcing new suppliers in the U.S. for weapons programs. 4. Designed an innovative solution to address the national skills shortage in Computer Numerically-Controlled (CNC) operators, programmers and machinists, workers necessary for the metals fabrication industry to survive. The Department of Labor is projecting 44,000 more job openings in these CNC fields by 2012. Efforts to meet this challenge are falling short because the demand for increased skills is rising much faster than the capacity of companies, workers, or the nation''s educational system to respond. The NEMSC Initiative developed an on-site training program for workers to become competent CNC programmers/operators and produce high quality machined parts for the defense and homeland security industrial base. For SME's employers, the training is less expensive and typically requires two weeks, compared with the months to years under the current standard approach. The NEMSC Initiative, based on its recent successes as described above, is establishing the New England Center for Supply Chain Integration as a one-stop program to provide SMEs the necessary engineering and manufacturing technical assistance to speed up the process of submitting successful bids to the DoD and defense prime contractors. Both the Defense Logistics Agency and the Department of Labor expressed interest in replicating the Center in other regions of the country. In its first start-up year, the Center will help a minimum of 85 SMEs across New England secure over $100 million in defense related contracts.
With the $9.0 million authorization we are requesting in the fiscal year 2006 Defense Authorization Bill, the fully deployed New England Center for Supply Chain Integration will help 150-300 SMEs every year across New England secure over $300-$600 million in defense related contracts. A majority of the SMEs that enter defense supply chains through this program are entering those supply chains for the first time. Moreover, a majority of the successful bids will be proposed through teaming arrangements between New England SMEs and complimentary minority and non-minority SMEs in New England and across the country. Teaming arrangements also will include SMEs that are successful in defense supply chains and want to expand their opportunities by partnering with other SMEs that have yet to enter defense supply chains but have complimentary capabilities and capacities necessary to win bids.
Funding for this program will help DoD meet shortages and surge demand with reliable, accelerated delivery of high quality equipment and parts for the logistics and weapons systems requirements at the lowest possible cost while strengthening the defense industrial base. Thank you for your consideration of this program.
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