Navy assigning more high-level attention to small business in all of its programs

Original Article: FederalNewsRadio

Circling back to an earlier item in this week’s notebook: The military services, like Congress, are concerned about losing their small suppliers, particularly when they provide critical parts that are must-have components of modern weapons systems.

In the Navy’s case, the service has decided to tackle the problem by trying to make sure that it’s focused on small business not just as a headquarters policy matter, but by assigning the number two official within each of its program offices to be the small business advocate for whatever system they’re buying or building.

“Small businesses aren’t on the radar screen for most of our program managers, so we need to put it on the radar screen,” Sean Stackley, the assistant secretary of the Navy for research, development and acquisition, told the Senate Armed Services Committee last week. “Each deputy program manager in the Department of Navy has been assigned the responsibility to be the small business advocate for all things associated with this program, to have a watch on the health of his second tier, lower tier small businesses that are directly affected when we have ebb and flow in terms of cash on a program.”

While those ebbs and flows are a natural part of any acquisition’s lifecycle, Stackley and the other military services’ acquisition chiefs noted they’re seeing some critical suppliers go out of business entirely, in some cases, because they’ve hitched their entire business to one weapon system’s wagon.

“When we change our production rates of if we’re going to shut down production and go into a sustainment mode, we need to understand what that means not just to our primes and major subcontractors, but what’s happening down at that small business level,” Stackley said. “Because quite often, they’re not just unique, they’re the only source. When they go out of business, we have to go offshore.”

Heidi Shyu, the Army’s assistant secretary for acquisition, logistics and technology, said her service has tried to keep some of those critical businesses afloat by continuing to buy more of their parts than they actually need — in one case, building up enough stockpiles to last the Army the next seven years. In other cases, it’s explicitly advising small firms that they need to make themselves less dependent on DoD.

“We told one small company, ‘Hey, you’ve got to diversify. You can’t have all your eggs in our basket, right? That’s very risky.’ So over a period of two years, this particular supplier went from 90 percent dependence on the Army down to 50 percent, because that person diversified into the commercial space.”