FISCAL YEAR 2019 INDUSTRIAL CAPABILITIES REPORT TO CONGRESS PREPARED BY: The estimated cost of this report or study for the Department of Defense is approximately $91,000 in Fiscal Years 2019 - 2020. FY2019 INDUSTRIAL CAPABILITIESOSD REPORT A&S INDUSTRIAL TO CONGRESS POLICY 1 This includes $46,000 in expenses and $45,000 in DoD labor. JUNE 23, 2020 Generated on 2020Jun23 RefID: 1-6A0A3FA 2 FY2019 INDUSTRIAL CAPABILITIES REPORT TO CONGRESS FISCAL YEAR 2019 INDUSTRIAL CAPABILITIES REPORT TO CONGRESS FY2019 INDUSTRIAL CAPABILITIES REPORT TO CONGRESS 3 4 FY2019 INDUSTRIAL CAPABILITIES REPORT TO CONGRESS TABLE OF CONTENTS CONGRESSIONAL REQUIREMENT ....................................................................................................................... 8 FOREWORD ............................................................................................................................................................ 9 INTRODUCTION ....................................................................................................................................................10 Office of Industrial Policy .....................................................................................................................................11 Mission .................................................................................................................................................................12 Organizational Structure .................................................................................................................13 Roles and Authorities .....................................................................................................................14 International Engagement ...............................................................................................................16 Supply Chain Risk Management ......................................................................................................18 WGs and IPTs ................................................................................................................................22 EO 13806 ..........................................................................................................................................25 Purpose ........................................................................................................................................26 Macro Forces & Risks .....................................................................................................................28 Implementation .............................................................................................................................28 Office of Technology & Manufacturing Industrial Base (TMIB) .................................................................29 Organizational Structure .................................................................................................................30 Roles and Authorities .....................................................................................................................32 DEFENSE INDUSTRY OUTLOOK ..........................................................................................................................33 Characteristics of the Market ...............................................................................................................34 A&D Sector Performance 2013-2019 ................................................................................................34 Supplier Assessment ......................................................................................................................35 Big-6 Revenue ...........................................................................................................................35 EBITDA Margin of the Big 6 .........................................................................................................36 Big 6 – Revenue Breakdown ........................................................................................................36 Sales of Big 6 DoD Primes ...........................................................................................................37 Big 6 Capital Deployment ............................................................................................................37 Defense Sector and Department of Defense Investment .................................................................38 DoD RDT&E and Big 6 Average R&D Spending ...............................................................................38 DoD Spending Trends .....................................................................................................................39 Obligations by Product, Service, and R&D .....................................................................................39 Top US Industries Influenced by Department of Defense Spending ......................................................40 FY2019 INDUSTRIAL CAPABILITIES REPORT TO CONGRESS 5 DoD Purchase Projections by Top Industries .................................................................................................40 DoD Import Requirement Projections by Top Industries ..............................................................................40 Global Defense Markets ..............................................................................................................41 Global Military Spending .............................................................................................................41 US & China Defense Spending .....................................................................................................42 Global Arms Trade ........................................................................................................................43 Global Arms Exports ...................................................................................................................43 2018 Top 25 Defense Revenue.....................................................................................................44 Global Defense Investment ..............................................................................................................45 Top Ten Countries by R&D Spending ............................................................................................45 Chinese M&A into the US by Industry ...........................................................................................46 SECTOR ASSESSMENTS .....................................................................................................................................47 Aircraft .........................................................................................................................................48 Chemical, Biological, Radiological, Nuclear ........................................................................................56 Ground Systems ............................................................................................................................58 Missiles and Munitions ...................................................................................................................64 Nuclear Matter Warheads ................................................................................................................72 Radar and Electronic Warfare ..........................................................................................................74 Shipbuilding ..................................................................................................................................78 Soldier Systems .............................................................................................................................84 Space ...........................................................................................................................................88 Materials ......................................................................................................................................94 Cybersecurity for Manufacturing ....................................................................................................100 Electronics ..................................................................................................................................104 Machine Tools .............................................................................................................................110 Organic Defense Industrial Base ....................................................................................................114 Software Engineering ...................................................................................................................120 Workforce ...................................................................................................................................124 CRITICAL EMERGING TECHNOLOGIES .............................................................................................................131 Sec. 1793, FY2019 NDAA ..................................................................................................................132 Sectors ...........................................................................................................................................132 Hypersonics ................................................................................................................................132 Microelectronics ..........................................................................................................................133