Eric Fanning, President and CEO of the Aerospace Industries Association (AIA), recently testified before the House Armed Services Committee. The hearing focused on strengthening the defense industrial base and its ecosystem.
Fanning emphasized the need for an "all-of-the-above" approach to reforming the acquisition process. He stated, "Every morning, more than two million Americans employed by the aerospace and defense industry go to work with one mission in mind: to enhance deterrence by increasing the lethality, survivability, and chance of victory for the warfighter... We must ensure the system positions the whole industrial base – primes, new entrants, suppliers, and commercial companies of all sizes – to meet the warfighter’s needs and the nation’s expectations."
He highlighted that transforming this process requires reviewing regulations at every level. "I think there are different categories here. Regulations are a requirement that could be changed right away," he said.
Fanning also pointed out how continuing resolutions and appropriation uncertainty harm especially small businesses within the supply chain. He remarked, "If I only had one headline for what we need for the defense industrial base is that we need a clear, consistent and sufficient demands signals so that the industrial base and private capital can line up for DOD requirements."
Securing critical minerals was another key point. Fanning noted their importance but acknowledged challenges: "Critical minerals are one of our key priorities in industry and in Congress... it’s going to take an investment to get that started."
On workforce development, he stressed creating high-skill jobs: "We know that we have jobs that pay 50 percent more than the national average... we need to have that pipeline that feeds into STEM."
Small businesses face significant challenges due to inconsistent demand signals. Fanning stated, "Small businesses in particular are operating on smaller margins... Anything we can do to be consistent helps small businesses."
Regarding spectrum reallocation, he urged caution: "Spectrum is a longstanding issue... when it impacts DOD, we have to be cautious about it."
Finally, Fanning advocated restoring research and development tax credits as crucial for innovation: "In previous tax reform... they switched or sunset R&D tax amortization... This affects not only big companies but very small companies."
