Hearing Entitled: Field Hearing on the Defense Production Act
House Financial Services Subcommittee on National Security, Illicit Finance, and International Financial Institutions
2025-08-13
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Source: Congress.gov
Participants
Transcript
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Warren Davidson
illicit finance and international finance institutions will come to order without objection the chairman is authorized to declare a recess of the committee at any time today's hearing is titled securing the supply chain the defense production act in focus without objection all members will have five legislative days within which to submit extraneous materials for inclusion in the record i now recognize myself for four minutes for an opening statement Good morning and welcome to today's National Security Subcommittee hearing, Securing the Supply Chain, the Defense Production Act in Focus, which is devoted to evaluating the Defense Production Act ahead of its expiration in September. This year, this subcommittee has had a June hearing and a July briefing that provided fundamental overview of DPA for members of Congress. We convene here today at Wright-Patterson Air Force Base because of its significance in implementing DPA's Title III through Wright-Patt's hosting of major Air Force commands involved in defense acquisition. This ensures that Title III funded capabilities are integrated into operational systems. It affects the base's sustainment activities and enhances its ability to address national industrial base vulnerabilities. My colleagues and I are grateful for the opportunity to address the critical role of Wright-Patterson Air Force Base in executing DPA's Title III authorities and the urgent need to modernize and enhance these powers to strengthen our national security. We will feature two panels, the first offering military officials perspective on the current DPA functionality, and the second panel incorporating feedback from civilian defense contractors from our region on today's procurement landscape. Enacted in 1950 during the Korean War, DPA was designed to secure America's industrial base for national emergencies, prioritizing domestic production over foreign reliance. Today, as our dependence on foreign critical materials, semiconductors, rare materials, pharmaceuticals grows, the DPA's importance is undeniable.
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Warren Davidson
However, from 2018 to 2024, there's been a significant change in the pace of some of the Title III activity. The COVID-19 pandemic exposed a reactive posture proving that waiting for a crisis results in a delayed response and not always well thought out. Modernizing DPA demands a proactive approach to bolster domestic capabilities. RightPAT is central to addressing these challenges through the Air Force Research Labs Executive Agent Program Office. Wright-Patt manages Title III projects to expand manufacturing capacity for advanced materials, but also for older technologies. Nevertheless, limitations persist. Streamlining the DPA process could enable faster agreements and expand flexible contracting. Increasing funding flexibility would allow RightPat to prioritize emerging technologies as well as improving existing supply chains. Reauthorizing DPA offers a chance to reset and realign its authorities with today's threats. By enhancing Right Path's role through simplified procurement, expanded funding, and proactive collaboration, we can rebuild a more resilient industrial base. I urge this committee to reconsider the Defense Production Act and the opportunity we have before us to modernize it. I would now yield my time and I will recognize the chairman of the full committee, French Hill, for one minute.
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J. French Hill
Well, thank you, Mr. Chairman. It's great to be here in your home state of Ohio and here at Wright-Patterson with our colleagues. America is navigating one of the most dangerous and complex global threat environments in recent history. Our adversaries are accelerating innovation, scaling production, and heavily investing in their national defense capabilities. It's critical that America keeps pace and expands our dominance as the leader in the free world. That requires not just military might, but economic resilience, financial agility, and industrial strength. During today's field hearing, we'll explore ways to use the Defense Production Act to secure supply chains and strengthen our domestic industrial base. while ensuring that our federal agencies have the tools they need to meet 21st century threats. The DPA needs to be anchored in its strategic goals embedded in the Truman administration, but be modernized, reorganized, and focused for these 21st century challenges. I thank Chairman Davidson for his leadership on our subcommittee and look forward to today's discussion. I yield back.
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Warren Davidson
Thanks, Chairman Hill. Today, we will divide our witnesses into two panels. For the first panel, we welcome the testimony of Mr. Jeffrey Frankston, the acting Deputy Assistant Secretary of Defense for Industrial Base Resilience at the Office of the Assistant Secretary of Defense for Industrial Base Policy. Also, Dr. Charles Ormsby, Acting Director of the Materials and Manufacturing Directorate at Air Force Research Laboratory. We thank you both for taking time to be here. You will each be recognized for five minutes to give an oral presentation of your testimony. Without objection, your written statements will be made part of the record. Mr. Frank, Mr. Frankston, you're now recognized for five minutes for your oral statement.
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Mr. Jeffrey Frankston
Thank you, sir. Chairman Hill, Vice Chairman, Committee Chairman Huizenga, Subcommittee Chairman Davidson, Representative Moore, good morning. Thank you for the opportunity to speak with you today on the critical role the Defense Production Act plays in ensuring the United States maintains the industrial strength needed to support the interim national defense strategic guidance and sustain its competitive edge. It's an honor to speak to you for this aviation geek in this facility to talk about the industrial base and building back to where we need to be. Unlike some of the airplanes in this facility, the DPA is not a Cold War relic. It is a vital statutory tool, one that enables the department to identify and respond to industrial shortfalls, reinforce supply chain integrity and resilience, and accelerate production in support of urgent operational needs. In an era where geopolitical competition is intensifying, particularly from China, industrial capacity remains a key determinant of our deterrence. We continue to see challenges that test our industrial resilience. and we have seen renewed cyber attacks targeting U.S. aerospace and shipbuilding firms, expanded Chinese restrictions on exports of critical minerals, and mounting cost pressures on cross-defense manufacturing. Our shipyards are overburdened, our munitions suppliers are operating at maximum throughput, but still falling short of surge demands. These challenges are cumulative and compounding, and they demand more than reactive procurement. They require flexibility and coordination between government and industry, and the DPA provides that and more. revitalizing the defense industrial base is foundational to restoring deterrence and rebuilding our military. Under this administration's leadership, we are executing a deliberate data-driven strategy to rebuild U.S. defense production capacity and shore up domestic supply chains. We're leveraging key authorities like DPA Title III to address fragile nodes across priority sectors like munitions and strategic and critical minerals. We have reduced barriers to entry, to expand participation in the defense industrial base for small businesses and non-traditional vendors through other transactional authorities, flexible acquisition vehicles, and improved acquisition guidance.
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Mr. Jeffrey Frankston
We are fostering competition and accelerating innovation. These vehicles offer a unique ability to scale the department's effort to foster competition and collaboration between the government, traditional businesses, and non-traditional vendors. Efforts like this are about more than improving industrial capacity. They are part and parcel to ensuring a resilient, responsive, and adequately distributed defense complex capable of meeting both wartime demands and maintaining a credible military posture that effectively deters our adversaries. DOD uses the DPA every day in our mission to safeguard vital U.S. national interests. Title I authorizes the President to require industry to accept and prioritize contracts and orders to promote the national defense. We leverage the Title I authorities for priority capabilities, including long-range fires, integrated missile defense, and replenishment of critical munitions. We are taking active steps to continue to improve the defense priorities and allocation system including clear onboarding guidance for new suppliers, rapid internal approval processes, and streamlined compliance mechanisms for small and midsize vendors. Title III is a force multiplier where market dynamics alone are insufficient to ensure our domestic industrial base has the capabilities we need for national defense. In fiscal years 2020 through 2024, approximately $2.8 billion was awarded to 194 projects under this program. So far in FY25, the program has made awards totaling more than $500 million, and these investments are complemented by $88 million in total recipient cost shares since the beginning of the fiscal year. These investments go, just a sample, go towards restoring critical chemical production, expanding domestic manufacturing for solid rocket motors, establishing secure supply chains for strategic and critical minerals and materials, and in concert with our allies and partners. These investments are also designed to improve economic viability where sustained demand is critical to maintaining a healthy market and resilient industrial base. Title VII is a key enabler of investment screening and supply chain protection.
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Mr. Jeffrey Frankston
The department co-leads approximately 6% of all committee on foreign investment of the United States, or CFIUS, reviews and has referred more than 75 non-notified transactions just in the past year. These authorities allow us to identify and prevent adversary of capital from gaining control over sensitive production pathways. The recent expansion of CFIUS review over more real estate sites is a good first step, but we need to build on this foundation. The department strongly supports full reauthorization of the DPA. Let me close by underscoring that deterrence is built long before the potential for conflict emerges. It is built in our factories, on our shop floors, and in the continuity of our supply chains. The DPA is how we turn strategic priorities into industrial reality. It's how we ensure our warfighters are not waiting for parts, materials, or radios itself. I look forward to your questions and continued collaboration in this shared mission.
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Warren Davidson
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Dr. Charles Ormsby
Subcommittee Chairman Davidson, Committee Chairman Hill, Vice Chairman Huizenga, and Representative Moore, good morning. Thank you for the opportunity to testify today. I'm happy to speak regarding the Defense Production Act Title III program. I will discuss the Executive Agent Program Office, our role, our history, and the status in executing the Defense Production Act Title III. I serve as the Acting Director of the Materials and Manufacturing Directorate within the Air Force Research Laboratory, headquartered here at Wright-Patterson Air Force Base. And in this position, I lead the Defense Production Act Title III Executive Agent Program Office. The Executive Agent Program Office is staffed by a multidisciplinary team, including program managers, scientists, engineers, national environmental policy experts, purchase agreement specialists, financial managers, and other subject matter experts required to execute often complex and unique projects. The Executive Agent Program Office is central to the practical execution of Defense Production Act Title III investments for the Department of Defense. While the Executive Agent Program Office manages the operational and technical aspects, the projects are authorized and funded by the Office of the Under Secretary of Defense for Acquisition and Sustainment. Specifically, the Manufacturing Capability Expansion and Investment Prioritization Directorate within industrial-based policy is responsible for the Title III program and its funding. this organizational structure indicates a clear division of labor with industrial-based policy providing the strategic guidance and financial oversight and the materials and manufacturing directorate that i represent serving as the primary technical and execution arm i'm pleased to have mr jeffrey frankston acting deputy assistant secretary for industrial-based resilience joining me today The Executive Agent Program Office initiates project solicitations through a funding opportunity announcement. We issued a hybrid funding opportunity announcement in July of 2019, which allows for both unsolicited inputs from industry and government-initiated calls for specific proposals addressing vetted requirements.
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Dr. Charles Ormsby
We are also executing other transactions using a Washington headquarters services procurement vehicle. We are executing 109 technical investment agreements from the funding opportunity announcement. Additionally, we are processing one other transaction prototype award that will include project management support, and we are providing purchase agreement agreements officer representative, and project management support for an additional other transactions to be awarded by the Washington Headquarters Services. The Executive Agent Program Office executes from six funds, including core Title III dollars, CARES Act Supplemental, Ukraine Supplemental, Inflation Reduction Act, Indo-Pacific Security Supplemental, and Israel Security Supplemental. These funds have varying structures. For some funds, obligation and expenditures have no expiration dates. For others, there are expiration dates stated. The Executive Agent Program Office's diverse staff of engineers and scientists are proud to provide critical technical depth for assessing industrial base capabilities and ensuring investments achieve a resilient defense industrial base. Notably, recent examples include a project that significantly improved production of gallium nitride monolithic microwave integrated circuits, achieving a threefold yield improvement at a 76% cost reduction. Another project expanded domestic nickel production, identifying the purest nickel in the United States and perhaps globally. The purity was so good, examples were placed in the Smithsonian just last week. Our expertise extends to managing projects across critical chemicals, critical minerals and materials, hypersonics, radiation-hardened microelectronics, castings and forgings, and energy storage and battery value chains. The Executive Agent Program Office employs over 60 government civilians and contractors
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Dr. Charles Ormsby
to support the program in full-time and part-time positions. Executive agent program office personnel benefit from a strategic understanding of their technical fields that extends to science and technology projects they support outside of the Title III program. This enables our team to initiate materials and manufacturing technology programs of great value to the Department of Defense. The Materials and Manufacturing Directorate, through the Executive Agent Program Office, takes pride in our 33 years securing the defense industrial base for our nation. I thank you for the opportunity to testify today and I look forward to your questions.
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Warren Davidson
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Mr. Jeffrey Frankston
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Warren Davidson
For the most part, it's been deletions and not additions over the years. But Title I for simplicity, prioritization, Title III for investments, and Title VII for screening. I wonder if you could highlight particularly an example, maybe a cost share example of how you're deploying capital to address a DPA priority for the supply chain and how that works. How do you screen for it? How do you decide to make the investment? How does that work out? You highlighted 88 million that you're deploying in the market, maybe one of those projects that is addressing a critical shortage.
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Mr. Jeffrey Frankston
Sir, thank you very much for the question. The DPA gives us flexibilities to attack a number of different key priority areas. One of those that we have been focusing on intently of late is critical and strategic minerals and materials, given some of the supply chain challenges that have been highlighted due to Chinese export restrictions and controls. We have recently put out a couple of projects just in the last few weeks, but previously to those, we have a number of projects where we give just a little bit of dollars with DPA and that comes to a cost share either from a private equity or venture capital uh for those projects a lot of times we are just giving a signaling to the company to show that we have a sustained interest in this priority capability or mineral in this particular case and that is what these companies are needing for their own investments or to get outside banking health and support to sustain their uh their critical mineral production
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Warren Davidson
Yeah, thank you for that. And you highlight critical minerals, and obviously that's a shortage for the country. It's a crisis, not just for the defense supply chain, but maybe more broadly. And given that this is the first time we're updating DPA post-COVID, maybe you could talk about some of the other areas that you look at in terms of prioritization or investment in healthcare, pharmaceuticals, other sectors that maybe are on your radar screen. So thank you.
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Mr. Jeffrey Frankston
Our current priorities are critical minerals, missiles and munitions are at the top of our list. There are many other sectors where we have critical shortfalls in our defense industrial base. Minerals and materials are at the basis and the fundamental nature of everything that we do. If we do not have a particular mineral, it doesn't matter if we have 95% of all the other ones for a particular weapon system, We're still short because of that requirement. And so that has our direct key focus and attention. Missiles and munitions are our direct way to project force and enable capability. And so we have challenges to meet the needs that our nation demands for the conflicts and the adversaries that we may face. And so we are deploying our capital, deploying DPA to get after key shortfalls, to expand capacity ahead of a conflict so that we are not short once the balloon goes up.
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Warren Davidson
Yeah, thank you. I mean, it's an adaptation of a different quote, but you go to war with the supply chain you have, not the one you wish you had, right? And Dr. Ormsby, you've highlighted both cutting edge technology and then more mature technologies like castings and forgings. And I wonder if you could highlight in your work how you balance those needs to really meet the national security threats that we need to address.
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Dr. Charles Ormsby
Yes, sir. Thank you for the question. I would say that first off, it is absolutely a partnership with Mr. Frankston. He sets the priorities. We execute the programs. So he sets the balance of the portfolio. But we do have a number of of projects in the last several years that have focused on castings and forgings for Navy applications, for Air Force applications, as well as I said, you know, balance across microelectronics needs, hypersonics needs, you name it, really set by the priorities coming out of OSD. And then we go out and work with the industry partners to actually execute the programs.
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Warren Davidson
Yeah, thank you and not only is is right pat central to the capability to run procurement and the materials command the cutting edge procurement at AFRL. We also have capability at threat assessment and so it was nice to bring some colleagues in and highlight the capabilities here at right pad. So again, thanks to the team for hosting. I'll yield my time and now recognize Chairman Hill. Mr French Hill is the chairman of the full committee. and represents an area of Little Rock, Arkansas.
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J. French Hill
Thanks 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. Mr. Frankston, 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?
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Mr. Jeffrey Frankston
It'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. All 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. But we work daily with our services and our industry counterparts to be responsive when an issue is raised, when there's a conflict, uh on a particular prioritization uh that in and of itself giving it a priority rating doesn't solve the issue uh if uh there's still a challenge in the supply chain itself that's where dpa title iii and the other uh authorities that we have to go resource that supply chain come in but we will flag it and raise it for attention and these have our highest priority to be responsive when a bottleneck is raised
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J. French Hill
Does that mean that you really have a super priority system? Should 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, and make that distinction so that instead of $2.5 million priorities over the last five years that they're, you know, fewer that are directly related to the specific benefits of Title III, for example?
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Mr. Jeffrey Frankston
Sir, there's two ways we approach this. So one is we have something called the DX rating. It does not actually stand for anything, but that is our highest priority systems. And so there's eight... handful of those because to your point there is only so many silver bullets you could spend from a prioritization but these are given to our most sensitive critical urgent capabilities and so they do have a little bit of a step above the rest alternatively we also have within title one something called special priorities uh allocations where we work down at the lower component level so where we find that there's a bottleneck or a key widget or item that is um choke point in supporting multiple programs, we can work to prioritize that, work with the services, work with industry, and then if necessary, given a capacity shortfall or other challenge, we then would deploy DPA Title III to help.
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J. French Hill
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Mr. Jeffrey Frankston
So we have a very small but highly skilled and empowered team. I only have a handful of people on our side, and it's similar, I would think, with AFRL. I have one DPA Title III manager. I have a couple other civilians that are assisting. I have one D-PASS, so our prioritization manager. We have several billets that we're trying to fill, and then we have A handful of contractors behind that with the support from the Congress and our administration leadership, we have support to expand that, but it's necessary to manage the breadth and scope of both the program and then the challenge in front of us.
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J. French Hill
Well, given the pressure on the supply chain from the current conflicts around the world that you've talked about in your opening statements, and then this existential threat to reshore or friendshore our strategic needs that are so competitive, how many additional staff do you think you need that would accelerate the application processing? And how do you quantify what is the right speed on application processing?
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Mr. Jeffrey Frankston
Thank you for the question, Chairman. We feel that at least two more civilians for each of the programs and prior end titles would be useful. We're conscious of not becoming a large staff that adds bureaucracy to the process, but a couple of trained, skilled civilians. Luckily, we have support for our leadership to move out on this. and then with some requisite contractor support, but then also we rely on the partnership with our services, like AFRL, but then all the other military services who are helping us evaluate, assess, and ensure that when we make an investment or plan to make an investment, that there is a receiving end of that investment, whether through an industry partner or a program office, to ensure that that investment is worthwhile.
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J. French Hill
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Warren Davidson
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Bill Huizenga
Thank you, both Chairman Davidson and Chairman Hill. I appreciate the opportunity to be down here. I actually represent the Battle Creek Air National Guard facility up in Battle Creek. We had a briefing earlier with someone from the 110th Air Wing, and I just want to say thank you and extend my gratitude to them. They operate the MQ-1s and 9s. out of Battle Creek, and obviously that is part of the portfolio that we're talking about here. I want to try to touch on a couple of things. It might seem a little disjointed, but based on some experience that we had had previously going through reworking of CFIUS, I'd like to know more about specifically for Mr. Frankston how your operations fit into that CFIUS operation and that review.
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Mr. Jeffrey Frankston
Thank you for the question, Vice Chairman. So CFIUS is managed by one of our sister offices. So still within the umbrella of our industrial-based policy office, we collaborate with them daily. The CFIUS reviews, they have the lead on how they work with the Department of Commerce and the other inter-agencies that review each of these potential cases. But a lot of that is informed by where a adversary or a foreign partner may want to make an investment. We need to be aware of that as we're targeting our own supply chains too. It helps us to know where China or another adversary is trying to gain leverage against a key shortfall that we may have or something else. So there is a constant exchange of data.
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Bill Huizenga
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Mr. Jeffrey Frankston
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Bill Huizenga
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Mr. Jeffrey Frankston
Yes, it absolutely is a direct bearing where our adversaries are. So that land that might be next to a base or that might be next to an industrial facility may just be an opportunity for espionage or a different... Probably not just sheer coincidence that the Chinese are interested in picking up land next to a facility.
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Bill Huizenga
Okay, I'm going to... track over to Dr. Ormsby here a little bit, because I think this is something that, as we've gone through discussions of DPA previously, kind of famously, at least in Michigan, there was discussion when we saw the shortfall in ventilators, for example, during COVID. and the supply being cut off by China, there was discussion of implementing DPA to compel our manufacturers to go into that specific manufacturing. Ford, as my recollection, actually voluntarily stepped up and changed some of their production to be able to fulfill that. But that's outside of sort of the traditional role of DPA and certainly what you've been talking about with these core six funds, you know, the core title $3. I'm more interested in how you see how the CARES Act supplemental funds, how the Inflation Reduction Act funds fit into that. And then we see the foreign policy side of this with Ukraine supplemental, the Indo-Pacific security supplemental, and the Israel security supplemental funds. So explain to everybody that might be watching this, and certainly for us up here, where you see these different funds and how they fit. And you had mentioned there's expiration dates on those. And if you could outline that.
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Dr. Charles Ormsby
Yes, thank you for the question, Vice Chairman. I think a lot of that really does go to Mr. Frankston, where we're setting the priorities within the legal authorities that we get and the funding authorities that we get. And then in our office, we execute the priorities, basically. So I would say the various funds do apply to needs that we have. You know, as we look at replenishing munitions, replenishing stocks, it does help. The expiration date issue that you bring up can be a bit of a challenge. an execution hindrance for us, to be honest with you, in that, especially as we get large dollar infusions coming in, and I don't wanna say unplanned, but maybe not expected well in advance, right? With restrictions on how you can use them, then we have to fairly rapidly come up with a strategy and we have to get those funds on agreements and issued, which causes us to have to do some prioritization of who we're working with, when we're working with them. with our limited staff.
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Bill Huizenga
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Warren Davidson
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Tim Keith Moore
Thank you, Mr. Chairman, and thank you for hosting us here. This has been an incredible visit, and this is an absolutely amazing facility, an amazing base. I'll tell you, with the continued consolidation of our domestic industrial base, it seems to me more important than ever to recognize and support the critical role of our existing industry. Like back home in North Carolina, for example, we have a lot of companies that contribute greatly to the supply chain when it comes to national defense. In Shelby, which is actually my home county, we actually have one of the very few copper smelting and refining facilities in the United States. There's talk about the availability of rare earth minerals, but you also have to have the capability to produce those. And so they actually have a facility that produces 100% of pure copper from copper scrap. And the Department of Defense, of course, has identified high purity copper as a strategic metal resource. essential to our national security. So, Dr. Ormsby, with copper being DOD's second most utilized material, which China, though, currently controls, as I understand, 50% of the global smelting capacity, what are the national security consequences when our domestic smelting and refining capabilities lack behind those of our global competitors?
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Dr. Charles Ormsby
Sir, thank you for the question. I think you're hitting on the critical issue, honestly, that Mr. Frankston brought up early on about the priority for critical chemicals, critical minerals, critical materials. We are seeing a number of issues exactly like the one that you bring up in our supply chains, particularly down very far into the supply chains, often at levels below where our prime contractors would even recognize that there is an issue that they can't get that specific material that is necessary for our weapons systems. And that's where the priority on the critical chemicals, minerals, materials really plays into our strategy here and where we're investing, because it is a big issue for the department.
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Tim Keith Moore
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Dr. Charles Ormsby
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Tim Keith Moore
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Dr. Charles Ormsby
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Mr. Jeffrey Frankston
So thank you very much. I'm happy to help. So as Dr. Ormsby noted, it's not just at the mine itself. It's not just at the processing itself. It's across the entire supply chain for critical minerals and materials. And China has absolutely been manipulating the market, has been placing export controls. And so that is one of the reasons why we've placed such a high priority. It's why one of the earliest executive orders from this administration was on critical minerals it's why we have a presidential determination a waiver to be able to use dpa for critical minerals and materials across the entire supply chain so that we can rebuild or reinforce our domestic capability and capacity or in the case of uh so for uh for the mines itself and where these minerals are coming out of the earth uh geography matters and some of this isn't just always not available in the u.s and so that's why it's leveraging key partners and allies that we can utilize, certainly at the mine level, but then build the processing and the supply chain capabilities internal to the U.S.
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Tim Keith Moore
And to that point, even beyond metals, I think it's equally important that we be able to identify, for example, and be able to source textiles. You don't think of textiles a lot of time when you're just talking about national defense. But the ability to have the proper uniforms, the proper material for our fighting men and women is critical. And, of course, the Berry Amendment requires the DOD to procure textile and clothing products made with nearly 100% U.S. content. It ensures a stable domestic supply chain that will protect us from other nations that seek to manipulate it. So I guess it's kind of a softball question here. But how does maintaining – how important is maintaining – an independent domestic textile supply chain improve the resiliency in the event of a near-peer conflict? And either of you want to take it or not.
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Mr. Jeffrey Frankston
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Tim Keith Moore
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Warren Davidson
I thank the gentleman. We'll go ahead and start our second panel now, and so I'll record our second round, not the second panel, second round for this panel. to be more precise, so recognize myself for five minutes and Talking about flight. You know they do have some beautiful real estate in North Carolina But we do have the engineers here in Ohio so that I Knew I did start it is here in the in the birthplace of aviation now the The dialogue with Mr. Huizenga really, I think, highlights the coordination necessary across multiple federal agencies. And of course, on Article 7, or Title 7, When you're looking at CFIUS, for example, threat assessments, things like that, it's important.
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J. French Hill
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Dr. Charles Ormsby
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Warren Davidson
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Mr. Jeffrey Frankston
Mr. Frankson. All right. Thank you very much for the question. So there is a monthly working group that FEMA hosts for all of the federal agencies that has DPA authorities. DOD happens to have the vast majority of actual DOD appropriation or appropriation for DPA. But we work hand in hand with our partners. challenges or areas that occur or incidents that occur that cross into one of our other interagency partners. We have a fantastic working relationship where we can reach out to someone like energy or transportation to identify opportunities to collaborate. This can be strengthened. We could work at an even higher level at the executive level more collaboratively, but again, we work across the interagency. I will add in particular on DPA Title I, Commerce has the lead role, and we have a phenomenal working relationship with Commerce. When we get a prioritization, when we need their help and request, we turn that quick ourselves, and they're turning it back to even quicker to us. So it is a really, really strong relationship.
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Warren Davidson
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Dr. Charles Ormsby
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Warren Davidson
When you think about not just the appropriations and the status quo that we have, not just in DPA, but in the procurement, one of the things that DPA does at times is sort of bridge the gap between status quo thinking. And a lot of times, the supply chain functions at least adequately for the status quo. The real question is when you have those moments of crisis where you have to surge, how resilient is the supply chain? How important is it to maybe use some of what we're learning from DPA to look at the rest of the procurement process or be able to waive even our own procurement process? And I think just to illustrate, you know, SpaceX out there, you know, gave us deep space launch capability that we were for a while dependent on Russia. Atlas is still under development using status quo traditional procurement operations. So at a certain level, the supply chain arbitrage was really part of the success story there. So how do we make this better?
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Dr. Charles Ormsby
Yes, Chairman Davidson, thank you for the question. I think you're hitting on a key issue that we have right now. These authorities can really help us to address supply chain issues. But I believe Mr. Frankston said earlier, what we really need to get to, and to your point earlier, if you go to war with the supply chain you have, we need to be more proactive and looking forward, right? Because we've already identified a number of strategic problems in our supply chain where we need to address those issues. These authorities have been very helpful to us in doing that. I think they're just part of the puzzle, to be honest with you. There are a number of other tools that we have also from our science and technology portfolios to other investment opportunities. But I believe we need a whole of nation approach, honestly, that looks at everything that we have. to be able to start to proactively prepare for a surge. What we saw during COVID, as the fund jumped up significantly in importance and number of projects, number of dollars invested, et cetera, we mobilized very quickly. It was an all hands on deck kind of effort. And we have a number of lessons learned in how we've organized now that we've continued to try to be more effective and efficient in identifying issues and setting priorities. But I believe we have to keep that going into the future.
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Warren Davidson
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J. French Hill
My time's expired, and I now recognize Chairman Hill for five minutes. Mr. Davidson, thank you. And I do recognize that Ohio is the birthplace of aviation, but the actual aviation took place in North Carolina at Kitty Hawk, I think. And the University of Michigan's aeronautical engineering program was started by people who were connected with the right, so. All the states here, we're all in good stead by being here at the birthplace of aviation. Mr. Frankston, current industrial base, does it have surge capacity? Where are we the weakest in our defense industrial base? Going back to my earlier point that we have wars underway with supply chain constraints and we have strategic supply constraints. So down at the Pentagon, what worries you the most about surge capacity?
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Mr. Jeffrey Frankston
Thank you for the question, sir. I'm a naval historian and analyst by education and trade, and Navy capacity, shipbuilding and ship repair capacity. We made some very interesting decisions from the peace dividend at the end of the Cold War, and we have a much reduced capacity for ship repair and ship construction. And this has been a priority of this administration through the Maritime Dominance EO, And other critical areas that our office is supporting. As Dr. Ormsby mentioned, there's been a number of investments in castings and forgings. We have workforce training programs to expand because that is something I'll also emphasize. For as much as we have the actual facilities and the equipment challenges and we need to expand capacity, we need the people involved. that need to be hired and retained in these industries and have good, high-paying, quality, high-skilled jobs and be there when we need to surge.
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J. French Hill
Proud to be on a very, very cold winter day at Newport News last year to see the USS Arkansas christened our newest fast attack sub. Proud to have her name back on a ship in the fleet. Dr. Ornsby, Title III grants, As someone responsible for executing that big picture strategy, do you receive feedback from businesses about how well mass production is working under Title III? Just a practical feedback question.
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Dr. Charles Ormsby
Yes, Chairman Hill, thank you for the question. We do. What we really get from industry a lot because they do recognize that we execute a lot of the projects is those white papers and those recommendations of places where they see need for investment. uh where they are having issues in their supply chains um and we facilitate them uh getting in touch with mr frankston's office to actually make proposals either through the other transactions or through our open funding opportunity announcement
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J. French Hill
That's good. How does the research labs man tech program sort of bridge the gap between early stage innovation and scalable industrial capacity? I see this as a constant complaint in Congress is breaking into the supply chain, which the president's taking action on, which I'm fully supportive of. But once in the supply chain, if you're in early stage innovation, development company, how you can scale up. Tell me about your bridging there.
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Dr. Charles Ormsby
Yes, sir. Thank you for that question. That's a nice tie between our science and technology investments, which are a different appropriation that I also control, where we can invest with our industrial-based partners to develop manufacturing processes to either get faster production, lower cost, or to develop a domestic source for production if one doesn't exist. Four things in my case that are important to the Department of the Air Force, Space and Air Force. There is a main tech program in every service so that you can take the cookie cutter to the other services. Once we can develop that initial manufacturing process, then frequently we see a need to now scale it. And that's where the Title III authorities really come to play and help to now get you to the full scale that we need.
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J. French Hill
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Dr. Charles Ormsby
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J. French Hill
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Warren Davidson
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Bill Huizenga
So let's go back and unpack the six sort of funds that we have. And we have Title III, which I think is self-explanatory. We then have what I would say maybe are conflict-related supplementals, Indo-Pacific, Israel, and Ukraine. And then we have, I'm not sure quite what category to put this in, CARES Act and the IRA. Dr. Ormsby had said there were some lessons learned from COVID. We can get into those, but I really want to know, what do each one of those various buckets of funding, what do they cover? What are they being used for?
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Mr. Jeffrey Frankston
Thank you for the question. So we have a number of different similar but but different funding priorities within each of those buckets of money and the Ukraine and Israel supplementals. Much of that went towards our missiles and munitions productions where we found that when we tried to surge some of the key weapon systems that were supporting and providing in support of those conflicts, the dollars went to those, whether through solid rocket motors or castings and forgings. To expand capacity? Yes, sir. Okay. But generally to expand capacity, just when we knew that we weren't able to ramp as much as we needed to based on the numbers that we needed for our own needs and then what we were providing overseas.
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Bill Huizenga
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Mr. Jeffrey Frankston
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Bill Huizenga
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Mr. Jeffrey Frankston
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Bill Huizenga
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Mr. Jeffrey Frankston
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Bill Huizenga
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Mr. Jeffrey Frankston
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Bill Huizenga
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Mr. Jeffrey Frankston
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Bill Huizenga
Okay. Title III, I think, was self-explanatory. I want to touch on this remaining little couple of minutes here on chips and production. Obviously, as you were saying, the critical minerals and then the missiles and munitions were sort of the focus. You don't have missiles and munitions if you don't have chips. You don't have chips unless you have critical minerals. So explain to me how that might factor into what we're doing here.
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Mr. Jeffrey Frankston
uh thank you for the question microelectronics and chips are uh essential to just about every weapon system that that we have and make and so there's been a number of investments uh within dpa but then as dr ormsu is mentioning some of the other funds that are out there and then some of the service investment themselves have made in this. There's been several programs that were being used to resource both large-scale chip production and then some of the more niche microchips for some of the more exquisite weapon systems and some of the more exquisite capabilities that we have. There's still a lot of work to go so that we can continue to launch more.
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Bill Huizenga
Because we're not there yet, right, in our production capability. I mean, that was part of these various... previous buckets that we were talking about. We were talking about shortfall because we'd sent off a lot of our weapon systems, but then it also seems that we have some gaps that need to get filled, correct? And is DPA trying to fill those specifically when it comes to chips production vis-a-vis what we see production here in the United States versus what is produced overseas?
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Mr. Jeffrey Frankston
Yes, sir. And it ranges across the supply chain, too, just because whether it's the actual foundry or the production of the wafer itself or the mineral, as you mentioned, that goes into it, we need to secure both the supply, not just of the raw material, but the processing. much of which went to China over the last 30 years. And so it is a concerted effort to bring back not just the material, the mineral itself, but where that chip is being manufactured in all aspects of its supply chain.
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Bill Huizenga
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Mr. Jeffrey Frankston
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Bill Huizenga
But CFIUS is part of that review? Yes, sir. Okay. And I'll maybe reserve my question about where we are currently on CFIUS review of the H20s and other chip capabilities and some recent announcements as to where those are being shipped. My time has expired, but we'll continue this later. Thank you. You're back.
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Tim Keith Moore
Thank you. Mr. Moore from North Carolina is now recognized for five minutes. Thank you, Mr. Chairman. I wanted to follow up with Mr. Frankston about the discussion about the shipbuilding. One of our colleagues, Representative Jen Keegan from Virginia, was one of the members that frankly brought me up to speed on the fact of how far behind we are, particularly China, in terms of the production of ships between the two nations. What is the administration looking at to ramp that up? What is the short-term plan and what is the long-term plan to facilitate that?
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Mr. Jeffrey Frankston
I appreciate the question on shipbuilding. This is an area of deep concern and passion to me. The maritime dominance EO, I don't recall the date that it came out, was one of the longest ones ever written due to where we are on shipbuilding and the state of shipbuilding. So it's looking across the board at both, not just for defense requirements, but then also on the commercial side. There is weekly meetings across each of the aspects of that EO. executive order working for commercial shipbuilding, working for U.S. military shipbuilding, the military sea lift command, the maritime administration through the Department of Transportation. All of that is critical because it's the same limited industrial base supporting each of those components so that when we work together to go target a pump or a valve manufacturer, it doesn't matter uh if that's going to be at a company that's uh supporting a commercial vendor right now that valve or or pump that's so far down the supply chain could easily be turned to build capacity for u.s shipbuilding so there's a number of different efforts both within our um presidential budget and what we build in our process looking to expand our shipbuilding capability capacity because this administration recognizes that we have a particular challenge to match what China has ramped up their own capacity.
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Mr. Jeffrey Frankston
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Tim Keith Moore
And then in terms of, Mr. Huizenga asked you a question, I think similarly on the same lines, but the question had to do with IRA and CARES. Have you been able to go through and look at some of the procurement and find some areas where funds can be repurposed? Perhaps funds are going to areas that are not as critical. Were you able to repurpose that in some of the other areas where we do see some shortfall, at least in the immediate timeframe?
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Mr. Jeffrey Frankston
We continue to look for opportunities on where our funding has been aligned, whether from a previous priority that may have changed based on real world events. We are always looking at our portfolio to support not just where we see things, but where our leadership is directing us. So we have some very strong internal guidance from. our Department of Defense leadership on their key priorities. So critical minerals and missiles and munitions are two at the top. And so we are looking across our resourcing areas because, again, you cannot build a missile, a fighter plane, a jet, a tank, a ship if you don't have the raw materials, the raw minerals, nor if you have the weapons to actually use from that platform.
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Dr. Charles Ormsby
Yes, sir. Thank you. I appreciate the question. I would simply add, not only reevaluating the priorities and continually looking at the portfolio, but then there are also times when, for various reasons, we start down a path of making an award and In the end, the company doesn't agree to the terms. They change their business strategy. Our priorities change, what have you. And then that gives us another opportunity as well to then redeploy those funds for a different priority.
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Tim Keith Moore
What I would ask is that as you supply further response, as appropriate, provide advice for Congress in terms of ways to streamline the process or to improve efficiencies. One thing this Congress has worked very hard on, as well as the administration, is improving government efficiency, getting rid of waste, just trying to cut through the bureaucracy. If there are things that would require congressional action that would improve I don't know, get rid of some of the shackles that are slowing the ability to be more nimble and respond, particularly as other nations take very rapid actions. Please let us know that because I'm certainly interested, and I think probably most of my colleagues are as well. With that, I yield back, Mr. Chairman.
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Warren Davidson
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Unknown
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Warren Davidson
Institutions will come to order. I'd like to thank our thanks again to our first panel of witnesses. And so now I'd like to welcome our second panel of witnesses. First, Mr. Robert Faxon is the chairman of the board at Consolidated Boring Inc. And Mr. Gordon Fallon is the chief product officer at Beehive Industries. We thank you both for taking time to be here and you'll each be recognized for five minutes to give an oral presentation of your testimony. Without objection, your written statements will be made part of the record. Mr. Faxon, you're now recognized for five minutes for your oral statement.
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Mr. Robert Faxon
Thank you, Chairman Hill, Chairman Davidson, and members of the subcommittee. Thank you for the opportunity to testify today. My name is Robert Faxon, Chairman of the Board for Consolidated Boring Incorporated, a company formed in 2021 from the acquisition of Faxon Machining in Cincinnati, Ohio, and a division of ATI now called American Flow Forming Machining in Billerica, Massachusetts. These two companies represent almost 100 years of combined manufacturing. My testimony represents the most accurate and truthful representation of the current situation that I can offer, based on my personal interactions with both government and industry, and is totally of my own opinion and may or may not represent the balance of the CBI team. I bring over 47 years of hands-on manufacturing experience, including over 25 years specifically in the defense industry. starting at the age of 13, working part-time in family business in Cincinnati. Faxon Machining, located in Cincinnati, Ohio, operates 185,000 square foot facility, manufacturing warheads and precision components for critical defense programs, such as the GBU-57 Massive Ordnance Penetrator, which reproduced seven of the 14 30,000 pound bunker buster bombs using the Iranian nuclear facility strike. Blue 137, 2,000-pound bunker busters, the GMLS Unitary Warhead. Faction machining played a key role in the Blue 136 Next Generation Area Attack Weapon Program, from concept and development all the way through full-rate production as a prime contractor for the U.S. Air Force. Companies also advancing modernization efforts in artillery production with plans for a state-of-the-art facility capable of vertically integrated manufacturing, producing up to 450,000 modular artillery shells annually to support evolving military requirements. Faxon Machining supports major defense contractors, including General Dynamics, ARA, Lockheed Martin, Northrop Grumman, U.S. Government, and many others. American Flowform Machining, based in Billerica, Massachusetts, operates a 65,000-foot facility focused on manufacture of large-diameter steel rocket motor cases and many smaller rocket motor cases. Over 1 million rocket motor cases have been produced in this facility since its inception. AFM supplies parts for missile systems, including Stage 1 MK-72 rocket motor case for the SM-3 and SM-6 missiles, Stinger tow rocket motors, and is launching production of rocket motor cases for systems like the ground launch SDB-1 for Andral.
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Mr. Robert Faxon
AFM also has been contacted to produce MK-104 and Gem-T Patriot rocket meter cases. Additionally, AFM supports programs such as Zuni, MK-22 mine clearing systems, just to name a few. We're actively engaged in innovative companies to support projects like Golden Dome and Iron Dome. national security and defense industrial-based challenges. The demand for large steel rocket motors, especially those 13 inches and larger in diameter, is growing rapidly due to today's evolving geopolitical environment. For example, the combined demand for the MK-72, MK-104, and GemT Patriot cases is approximately 3,000 units annually, far exceeding current AFM capacity of 350 to 400 large rocket motor cases. AFM is uniquely positioned to address this shortage with a proposed vertically integrated rocket motor case factory capable of producing 3,000 cases per year. The facility will strengthen supply chain resilience by internalizing all manufacturing processes and steps, reducing dependence on external suppliers and support surge capacity during times of crisis. The new factory will create roughly 300 skilled manufacturing jobs in Massachusetts that generate significant cost savings for the government. Additionally, this factory will play a key role in supporting current and future defense programs, including the administration's proposed Golden Dome initiative. experience with Title III funding and recommendations. AFM has worked closely with the Defense Production Act Title III Office during its efforts to secure funding for this factory expansion and has submitted a Title III funding request for a new facility. While the potential impact is significant, the process from application to award has proven lengthy and complex, which can be discouraging for smaller companies to pursue these opportunities. This delay risks leaving critical defense manufacturing capacity unmet amid urgent national security needs. To address this, I recommend multi-year predictable funding and streamlined application process to reduce uncertainty and incentivize timely project starts. If industry is being asked to move at the speed of war, then our partners, being the US government, will also have to move at the speed of war. While the primary focus of this funding is the defense industrial base, it's equally important to support and strengthen the broader industrial base, including commercial and non-DOD manufacturers, so that these companies remain financially viable in the marketplace and can rapidly pivot to defense production if needed. This approach not only enhances national security, but also promotes reshoring, supports high-skilled jobs, and ensures a more resilient and competitive manufacturing ecosystem overall.
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Mr. Robert Faxon
Conclusion, the investment reforms I've described are vital to steering our nation's defense industrial-based manufacturing future. With the right support, Consolidated Boeing Incorporated, through its operating companies, FACTS and MACHINE AFM, stands ready to deliver the critical capabilities our military requires and respectfully requests that the Title III submission, already accepted but not yet funded, be funded not only for the original amount, but also for the additional amount necessary to meet current demands. This is not only important for our company, but the entire defense industrial base. These efforts can take years to complete under normal circumstances. Several of the key pieces of equipment necessary for the rocket motor factory will need to be manufactured from the ground up. Designed, built, tested, run off, and installed, and in some cases will take well over two years to complete before additional production can begin. If anything were to occur that impedes a normal operating environment, these timelines could stretch even further, potentially delaying completion by several years. The stakes are too high to risk such delays. Failure to act now could leave the United States without sufficient rocket motor production capacity to sustain a prolonged or high-intensity conflict, placing both our national security and our warfighters at unacceptable risk. We must act now to be responsible stewards in meeting the known and immediate needs our military leaders have clearly challenged us with in order to properly support our warfighters and our allies. Thank you for your time. I look forward to your questions.
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Warren Davidson
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Mr. Gordon Follin
All right. Thank you, Chairman Davidson, Chairman Hill, and distinguished members of the committee, including Representatives Huizenga and Moore. I appreciate the opportunity to speak with you today on the critical role that the Defense Production Act has in strengthening our nation's defense. I'm Gordy Fahl, and I'm the Chief Product Officer of Beehive Industries. At Beehive, we're a US-based manufacturing company with over 300 employees at locations in Denver, Knoxville, and also in Cincinnati. In fact, we just opened an expanded facility down in Loveland, about 30 miles south of here, last week, so it's great to be with you today. We specialize in additive manufacturing of jet engines for uncrewed weapon systems, counter UAS platforms, and drones. Beehive's mission is powering American defense, and we're all in on helping the U.S. and allied nations replenish their weapons stockpiles, which have been depleted over the last decades by global conflicts. Let me provide just a little example to put this challenge in context. Every month, Russia bombards Ukraine with over 700 drones, launched in swarms of hundreds at a time, wreaking havoc across the country. The Ukraine to defend itself relies on advanced missile defense systems like the Iron Dome and the Patriot systems provided by the US and its allies. These systems work great, but there's two big problems. First of all, the Russian drones come from Iran. They cost about $50,000 a piece and they can make 6,000 plus a year. The projectiles used in the Ukraine systems to shoot them down cost between one and $4 million a piece. And right now we can only make about 2000 a year. So problem one is it currently costs the Ukraine about 50 times more to defend itself than it costs Russia to attack it. That's the opposite of deterrence. Problem number two is even if Ukraine could afford it, Russia is able to send three times more things at it than they can shoot down. So they're definitely disadvantaged in this conflict. And this is just one example. Future examples could include, in the not so distant future, a U.S.
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Mr. Gordon Follin
conflict with China, which would face a similar challenge. And traditional manufacturing processes can't solve these problems. The Department of Defense estimates that to rebuild stockpiles with existing systems would take more than 13 years and $430 billion, which is time and money we just don't have. But additive manufacturing can help solve that challenge. By designing engines in a new way to fully leverage the potential of additive, we see engines that are 25% more efficient, less than half the cost. They can be developed, tested, and fielded in one quarter of the time. They can be scaled up to produce more than 10,000 engines a year in less than three years. at less than 20% of the cost of scaling conventional supply chains. And by printing jet engines domestically from raw powder, we eliminate the risk of foreign source components disrupting supply of these critical systems. The Defense Production Act, and especially Title III, is essential in making this possible. Without it, scaling complex capital-intensive manufacturing processes like ours is extremely risky. Beehive has benefited or will benefit in four ways from DPA Title III. First of all, it allows us to respond rapidly to new threats. The traditional acquisition process can take three plus years to go from a good idea that we know we need to do to actually starting. With DPA, you can start in less than a year. So it's a great tool for that. It also provides preemptive investment, which allows us to invest in developing new products and scaling production capacity ahead of demand. Like you said, when you go to war, you go to war with the supply chain you have, not the supply chain you want. It gives you a way to build that supply chain in advance. It also creates capital security for companies like ours that are privately funded by extending our financial runway. And also it signals DOD commitment, which encourages future private investment. That's really key for companies like ours. It also secures access to critical materials like high temperature metals, which Beehive relies on to make its products. To maximize the benefit and effectiveness of Title III, Beehive, we have four recommendations for the committee.
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Mr. Gordon Follin
One, preserve and clarify Title III authority to support innovation that delivers capability at scale, also called prototype to production transitions. This is how we get capabilities to the field faster with lower costs and risk. Our second recommendation is tailored Title III programs for agile, advanced manufacturers. Make it more accessible to nontraditional defense companies by streamlining contracts through OTAs, adjusting cost share requirements, things like that. Recommendation three is continue to strengthen domestic supply chains for high-temperature alloys, nickel superalloys, and titanium. I think we've talked about that quite a bit today. Good progress does need to continue. Those inputs are vulnerable to geopolitical risk, yet essential to products like propulsion. And the final recommendation align title three efforts with allied industrial based initiatives, especially NATO in August. One great thing about additive manufacturing is it allows flexible distributed manufacturing, but it can only happen if there's standardization and coordination across nations. So in summary, the Defense Production Act is the government's most important tool for rapidly responding to defense needs in times of crisis to protect our country and secure our future. Beehive urges the committee to act decisively in reauthorizing and modernizing this essential law. Beehive Industries stands ready to partner with the Department of Defense, our allies, and this committee to confront these new challenges and ensure our war fighters have the tools and technologies they need when they need them.
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Warren Davidson
Thank you and I welcome your questions. Thank you both. So we'll now turn to member questions. I recognize myself for five minutes. You both highlighted the need to surge and surge capacity. And, you know, Mr. Faxon, you've certainly been part of that supply chain over the last few years as we've surge things to various areas, Ukraine in particular with munitions. I wonder if you could highlight how you could use capabilities that are in DPA to possibly refine and provide a bridge for capabilities with the existing kind of status quo acquisition programs. If you look at arsenals or other programs, how do you use the private sector to provide surge capacity and how can DPA help us do that?
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Mr. Robert Faxon
That's a good question. Thank you. One of the concepts that we had is it really, if you look at the defense industrial base, it was undermined by the commercial industrial base. All of our factories that made sewing machines made 45s in World War II. So there was a conversion of the commercial industrial base to the defense industrial base. Now we're focused very intensely on the industrial base, which is fine. I understand this committee. But if we were to invest in a facility to increase defense industrial base, if we added funding to increase commercial in a modern technology-driven, cost-effective factor of the future, that commercial aspect not only offsets financial requirements for that facility to maintain its solvency, but it also can be converted back to defense if necessary. And if the defense gets good and everything gets better, then you take the defense and you convert it back over into the commercial industry. This supports our reshoring efforts that the tariffs and the current administration is pushing. It develops the commercial industrial base. So this is the seed for private investment to grow that commercial sector. I think focusing strictly on defense has limitations. And I think that the financial obligations later is going to be the word sustainment. They're going to have their hand out for sustaining these facilities. If we build a factory such as the artillery factory that we proposed, it would serve as a model to any other component. It could be aircraft. It could be automotive. It could go in a washing machine. But the automation necessary takes funding to develop. It's a bleeding edge. following it will be a leading edge so dpa funding to support a known requirement such as modular artillery components not your standard 795 deep forge but your modular artillery rounds that manufacturing technology we would open our doors and have competitors and other industries come in and view it and duplicate that mentality and put that into other commercial applications that's how dpa funding could set a tone for a commercial base
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Warren Davidson
yeah thank you for highlighting that and you look at the capability flexible factories and the adaptive nature of some of the technology you guys are employing on your factory floors uh really is the tip of the iceberg in terms of what's possible and if we can incorporate that with with our approach here i really think we can respond to the to the times we're in uh mr fallen you you highlighted you know how Title III helps you turn around a project faster. Instead of three years, you can do it in the first year. How does that cost sharing approach not just attract companies like Beehive or other private sector operators, but also the suppliers of capital, whether that's banks or venture or other sources of capital to have the confidence that this has got scalability?
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Mr. Gordon Follin
Yeah, so banks, I mean, banks and other investors, they're trying to evaluate companies for risk in order to make investments. And the cost of that investment depends on the perceived risk of the company. So I would say when there's government investment in projects, it has a double benefit. One is it reduces the amount of capital you need to go raise. And second of all, it shows alignment with government priorities and pull from the government for the products that you're manufacturing. And so it reduces the perceived risk of the company. And so therefore, you're able to to raise capital more quickly at a lower interest rate and have better runway for the company in the future.
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Warren Davidson
Yeah, so it's one thing, though, to send a demand signal. I mean, clearly the government wants these things. So why isn't demand enough? Why do taxpayers need to provide seed capital to certain sectors? And how do you strike the balance between that and just turn it into a planned economy where you've got some central planner picking winners and losers? How do you get that right?
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Mr. Gordon Follin
Yeah, I think the defense industrial base has been through cycles, and we hear about forecasted ramps in production demand, but these are very, very expensive systems to ramp up for, right? You're talking tens or hundreds of millions of dollars of investment. So private industry will naturally want to wait until The signal is here to start investing because essentially they're borrowing that money until the demand arrives and sometimes it doesn't arrive. So I think, you know, basically this allows us to go out and secure, make those investments, secure that and not have to carry the risk of those investments actually getting put into full production at the timing expected.
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Warren Davidson
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J. French Hill
Thanks, Chairman Davidson. Mr. Faxon, just continuing that same theme, you made some comments in your prepared statement about multi-year and sustained funding. Those were comments that you made. And then the speed of war, Mr. Moore and I were at a meeting earlier this week out in in Wyoming where that topic came up with some Silicon Valley presenters that they were very impressed with the Trump administration's approach to this issue, which is, you know, we're gonna start working. We're not gonna talk about it. We're gonna take action and being a much more action-oriented But you got to balance that with the comments Mr. Davidson just made about things that we need in the supply chain ramp up so that it's not government directing things, you know, that... maybe don't have long-term viability. So how do you balance all that? I just want to let you continue your conversation you were having with Mr. Davidson. You got 47 years of manufacturing experience. So what does DPA need to have changed in either the statute or its policy to...
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Mr. Robert Faxon
I think components of that answer, thank you for the question. The components of that are actually built by several other questions that already came up. What is the requirement of private investment versus DPA funding? How do those go together? What is the longevity? What is the risk? And quite honestly, if you look at normal business growth, if you're double digit on a CAGR, you're doing really well at 10%. We're asked to quadruple in a year. So these ramp up cycles aren't conducive to your typical business growth. As a matter of fact, if you tried to do that in a normal manufacturing business, and I'm not talking about a high tech or something like that, but in hardcore manufacturing high capital businesses, if you go to the bank and say, I'm going to quadruple in a year, I think they'd rip up your application and throw you out. So these ramp up rates are a key component. The industrial base of it, when we look at what the longevity is, how long will you commit to how many rockets you want to buy? We don't really have that, and we don't make this back in a year or two. In fact, our investment in the factory, because of vertical integration and cost savings, offers approximately a 10% per unit cost reduction. So if you really looked at a business cycle of ROI for what we're asking for, the government, at that pace, would be paid back in 10 years on cost reductions of purchased products. So financial feasibility is not just welfare, give me money and I'm leaving. It's I'm going to give back to you. Now, if the government doesn't require that quantity over that period of time, you don't get your return on investment. That's true, but you're the one asking for it. I don't go broke because the bank wants me to answer for it when I'm not really the one who's demanding the product. So that circle of debt, longevity, and flexibility with the commercial viability, I can't emphasize that enough. Leading edge technology, whether it's software, hardware, physical presses, or technology, is in most cases transferable. And when we're gonna reshore things, we're not gonna do it at twice the cost. We're gonna have to be competitive to make that successful, no matter what anybody says. They say buy American, but there's a price tag associated. We have to be more competitive. We can take these specific demands, put them in a true ROI, and if it does or doesn't pan out, we still lead engineering and manufacturing to a higher level and a higher capability level.
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J. French Hill
Can I get you to break that down and use a practical example? You cited in your testimony, for example, that normal production of motor cases was 350 to 400 or something like that, but the demand was 3,000. Yes. So talk practicality here. To get up to a 3,000 motor case run rate, What kind of investment had to be made and over how many months did it take to achieve that? Just to use that practical example you referenced in your testimony.
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Mr. Robert Faxon
High level, our original was around the $80 million investment for 1300, which is roughly 110 per month. When you look at the scalability for that, You wanna start with a greenfield for the efficiency and the long-term return. You don't wanna put a bandaid on something you currently have. You go ground up. So the facilitization in the first year is pretty much non-return on quantity. There's minor improvements. In year one to two, certain pieces of equipment can be acquired, take our original capacity and supplement that within year one to two. That helps significantly. In year two, most equipment is on the floor and gets evaluated and run off in year two to three. So you have a small incremental step in year one to two, Year zero to one is not really a high return. Year three is where you really see your highest return. And that's where you consolidate all the equipment. These machines, in some cases, will take weeks and months to move and years to get. So what you don't want to do is incrementally fund four small steps and not get to where you want to be. What we are offering and what I think needs to happen with companies like ours, because I'm familiar with them, great company. We're offering a national asset. We're offering something for the next 30 years, not four. This is not a five-year investment. This is setting a tone and a departure from typical manufacturing. We're not going to win if we keep doing what we've done. If we buy what we've had 10 years ago and it lasts 20 more, this world doesn't stay still for 30 years. Thank you. We'll continue this discussion.
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Warren Davidson
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Bill Huizenga
You're going to hear a central theme on this. I leaned over to Chairman Davidson when he finished and I said that's... Virtually exactly what I had written down as my question. I was just going to use slightly less pejorative language when it comes to central planning, but I think that's a lot of the question, concern, feedback that I think not just from colleagues, but from taxpayers that we hear, which is why are we making these investments into an industry that isn't needed? Well, you can't predict war, right? Well, he can't predict mass war or something like conflict like what was happening in Russia and Ukraine. And I want to I want, you know, Mr. Faxon, you did a phenomenal job explaining it from from your perspective on what was what was sort of the ramp up in the need. Mr. Fallon, I'd like you to. Maybe expand on that or give us your take as well. I mean, you talked about perceived risk that really this is sort of in a way the government funding might be that bell cow, as some might say, right? Others are going to follow that. They're going to view that as a lead. Oftentimes, though, when we are doing our appropriations, we want to see, you know, end of fiscal year production. We have a much different timeline than you might have. And I'm really curious, do you believe that the programs that we have, one, allow you to build the capacity for not just an immediate, but for long term? How do we maintain that? Two, do you have the flexibility to innovate and explore within those programs? And one of the sort of the central themes of a truly free market is the ability to fail. and learn from that failure. We don't like that when we're sending taxpayer dollars.
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Mr. Gordon Follin
Yeah, thank you for that question. It's a great question. I'll start with the last piece first. In terms of the ability to fail, I think when you use DPA Title III dollars to support development, then it allows the government to partner with industry as they're developing the product as we're understanding what are the risks and challenges that it takes to bring that product into full production. And then we can kind of navigate that together as we learn and come up with solutions to solve problems that invariably come up through the development phase. So I think DPA allows us to partner in that phase versus if we were doing it on our own dollars, we'd be trying to figure it out on our own. And sometimes the government can have solutions or resources they can bring to bear to also help in those situations.
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Bill Huizenga
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Mr. Gordon Follin
Yeah, so my personal experience is primarily with DPA for defense. So I can't comment necessarily on the percentage of funding that they make outside of defense. I would say that my experience so far is that it is focused on the priorities of the administration of the DoD. So in our case, like we're working on these critical munitions that I think we've heard talked about as a priority from from the other folks in their earlier testimony. So I feel like it is focused in areas that are important. I think it could be improved. I'm sure it could. What I would say is in terms of, you know, does the funding support ramping up to actually support the rates? What happens if volume changes? How fast can you change? I would say one of the advantages of additive is it can ramp up very quickly. It doesn't require like big mega foundries in order to scale it up, you're basically buying things that look like inkjet printers, right? They're bigger, they're more industrial, but they look kind of like that. In terms of timing, in 15 months, so in 15 months we can double production. So right now we have the ability to make about 2000 engines a year. In 15 months, we'll ramp that up to be close to 5,000. And then another 15 months after that, we could be ready to support close to 10,000, which is what we've been given by the DOD as a target. So again, you compare that to 100 years of manufacturing things conventionally, and we can make 2,000 a year, right? So it's really promising, I think, what it can offer. The other advantage of additive is it's easy to distribute. What that means is Once you have a design and once you've kind of validated how to manufacture it, there's 3D printers all over the world, right? So in a time where you need a surge, we can take the design, we could export it to a DoD facility or another industrial facility, and they could make the design from from our design just by putting it in their printer. It's a pretty automated process. You don't need a lot of specialized labor to do that. So it's pretty easily scalable. And the other big advantage is a lot of conventional manufacturing requires very bespoke, expensive, long lead tooling.
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Mr. Gordon Follin
in order to make a part, the 3D printer doesn't care what it's printing. It can print key chains one day and print gen engines the next day. It doesn't care. It doesn't have a memory. It's not targeted for anything specifically. The other advantage of that is as priorities for the DoD change, we can change what that capacity is being used for. So Beehive has picked this mission because this is a big priority for the DoD, and we think it's probably the area where additive manufacturing is most fertile. But as priorities change, the capacity could change with the priorities to support what's being needed.
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Warren Davidson
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Tim Keith Moore
I'd like to recognize Mr. Moore from North Carolina for five minutes. Thank you, Mr. Chairman. One of the things that I've heard from folks is that they feel like the way the procurement process is set up, and you all alluded to this in your comments, really is geared toward large companies as opposed to small and medium-sized businesses. And if I think about... probably no better example than really here in Dayton when I think of a small business. I mean, two guys in a bicycle shop are what led to the birth of aviation. I mean, and that's the story of American ingenuity. And if you look at how small and medium-sized businesses can be more nimble and agile and dealing with market change and other things, obviously capitalization and financing the challenge, Mr. Faxon, you mentioned earlier. I just wonder, any suggestions as guys who are in the trenches of ways that the process can be improved in terms of the procurement and ways to really take advantage of this amazing, uniquely American thing that we have in terms of the small and medium-sized business? I think, frankly, that's one of the advantages we have over China and other places. Any suggestions on how we change that to fully utilize that?
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Mr. Gordon Follin
you both are welcome to respond so yeah thank you for that um i think a couple of things i referred to this in my testimony as well i think the first is um you know far 15 contracts can be very complex lots of flow down requirements it requires in some places a lot of systems be put in place before you can start uh can really slow down the process i think using otas wherever possible is much more small business friendly. I think in our experience so far, that's been the case, but it's not always the case. So I'd say continue to do that. The other big one is if there's a way to reduce cost share, I think it absolutely makes sense. You want companies to have skin in the game as well, right? You don't want them just to be gambling with government dollars. But right now, I think on average, Beehive's cost share on its programs is between 50% and 80%. And so again, these are still large investments. I mean, Beehive's invested over $300 million to date. There's not a lot of companies that can do that. Not a lot of small businesses that can raise $300 million to put ourselves in the position we're in. So I think from my perspective, those are the two big ones. Also, I think for a new small business, the process is pretty complex. And so maybe a little more support navigating the process early on would be good as well, just to make sure that the flow down of the requirements and the expectations are clear. Those would be my suggestions. Thank you.
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Mr. Robert Faxon
Mr. Fax. I think from a bureaucratic standpoint, I wouldn't have any really strong input. What I would think is there are a lot of people out there that if the DPA committee a search for key capabilities and targeted the mid to small size businesses get out and go see them take people with enough authority and understanding to make an evaluation on the spot give them a checkbook give them authority get in front of the people have a discussion evaluate them quickly face to face size up the companies see what they can do ask them bring them into the fold go see them i think that would be my encouragement to it it's it's not a meeting that we'd all leave here and go to our different worlds go see them, solicit them, bring them in, show them the path to be able to do what they want. There's many Americans out there today that are highly talented, work 12, 15-hour days, if given the chance and the avenue. I think going out to see them eye to eye, that would be my suggestion.
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Tim Keith Moore
And then in terms of doing that, so a small company develops, for example, the prototype. Ms. Vaughn, you mentioned about the 3D printing that can be done, but it sounds like maybe the capitalization to take that prototype which is needed into full ramp production. All right, what do you see in this working along those lines right now? And where do you see where there's still the shortcomings specifically at that level?
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Mr. Gordon Follin
Yeah, I think in our specific case, I think DPA and OSD were very creative in finding a way to support what we're trying to do. So typically, Title III dollars are really for capacity expansion. So it's infrastructure. In our case, you'd buy printers or you'd buy CNC machines or whatever. One of the things that I thought was a really great innovation was looking at, hey, current suppliers can't meet capacity. So part of expanding capacity is we have to develop a new option. So it included dollars for actual R&D so we can develop an option that then we can scale. So in our case, about 70% of the funds were for actually working on the innovation and getting it ready to take to production. The other 30% was for capacity. So I think that's a nice change from the status quo and something that should continue, I think.
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Tim Keith Moore
Thank you, Mr. Moore. Look, Mr. Faxon, when you were speaking earlier, I recalled a conversation with my banker at one point who said, did you ever think about growing more slowly and maybe playing more golf or whatever? I was growing a little too fast for the taste of the bankers and, frankly, for the taste of the bank regulators who wanted to start treating my line of credit as if I was using 100% of it. And what I think, Mr. Fallon, you highlight the amount of capital raise you've been able to do. It's a lot easier to raise capital for something new and sexy that could turn into a giant market someday than for old technology. And, you know, as promising as additive manufacturing is and capability, it still can't do everything that you can do with a cast part. And certainly getting the hardness and capability out of forgings, that's old, not so sexy tech. How do you raise the capital for things like that? And how important is it that DPA or other means do it? Because the private sector market has plenty of demand for castings, forgings, injection molded parts or metal stamped parts. But if we lose that capability, which largely at scale we have already, we don't have surge capacity in our country. So maybe if you guys could highlight and touch on that.
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Mr. Gordon Follin
Sure. I mean, you know, in a missile, only a small part of it is printable. Right. So I think to the point made earlier, if you're missing one part from a system, then you don't have the system. Right. So I think it's not a one size fits all approach. I think you have to look at kind of holistically across the whole system. Where are the bottlenecks and how can you address those bottlenecks? So our view is like additive manufacturing does play a key role, but it's not the only one. And there are other areas that are going to need support as well. So businesses like Mr. Faxon's, right, they make a part of the weapon as well. And it's not additively manufactured for the most part. It's got conventional manufacturing, but those things also have to be ramped up in order to support the ultimate final demand.
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Mr. Robert Faxon
Thank you. I think something I would add is when we talk about the defense industrial base, there's really a broad variety of technologies. I'm incredibly impressed with the capability of additive. We're not going to make a 30,000-pound bunker buster bomb through additive. That's not on next week's agenda. But what is important is to say what companies can fit what roles. There are companies like Boeing and Northrop. If you want a fighter plane, don't talk to me. But if you talk about subcomponent and component levels, and it's block and tackle, needs to be done, takes a lot of hours, equipment, it's just work. then you can go to these other places and i think if you really want to increase the capacity you've got to define where the requirements of the work scope is we don't make satellites we don't communicate with laser beams but what we do is we make metal parts if you can allocate some of that capacity to this mid-level small business they'll bleed for you they'll be dying to get that business now that leaves capacity and other things for the more technical things that the larger companies Really are good at. So I think that's important to differentiate what the work scope is. It's not all the same.
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Warren Davidson
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J. French Hill
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Mr. Gordon Follin
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J. French Hill
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Mr. Gordon Follin
Yeah. So, for example, I mean, there's two... primary ways to do contracting one with for defense won't be like through a far 15 contract which requires uh much more detail in how you plan to allocate costs much more detail in how you roll up costs you have to have cost accounting audits performed on various components for a small business especially a small business that isn't in production yet being able to provide like validated costs for something that's not invented yet becomes extremely difficult right and so OTAs allow you to use engineering estimates, best judgment. You still have to substantiate it. I mean, it's still competitively bid, so nobody's taking advantage of the government, but it gives more flexibility when you don't have that background or you're making something that hasn't been made before.
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J. French Hill
Another piece of your testimony I thought was interesting. I do think we have to have critical elements made here, whether it's particularly in the defense arena, but I've also been someone who, you know, if it's made in other places that are allies of the United States, I think that's good. It might be at risk. For example, no one questions the extraordinary manufacturing capability in invention, hard work, dynamism in South Korea or Japan. But as a supply chain, if we were in a Pacific conflict, that would be not the ideal location. So this idea of friend-shoring I think is important to collaborate and spread that out, benefits the entire allied nation in case of a global conflict, whether it's in Europe or Canada or the U.S. or in Asia. So tell me a little bit about alignment. You make your point about the allied industrial base. So the work your two companies are doing and the designs you take, Those would be, as you say, duplicable in your particular case at Beehive in those other industrial bases. Is that right? And what do we need to be doing differently in DPA to reflect that?
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Mr. Gordon Follin
Yeah, I think... what I'm referring to in my testimony is really around like having like common standards so that when you're going to, if you're trying to offshore design, if we're going to take our design and send it to Australia as an example for them to manufacture, I mean, the closer the systems are together, like we use a certain kind of printer. If they use the same kind of printer, then the design is directly transferable. If they're using a different kind of printer, then there's a lot more development.
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J. French Hill
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Mr. Gordon Follin
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J. French Hill
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Warren Davidson
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Bill Huizenga
Thank you. And I'm going to actually kind of continue where the chair was going with this a little bit. Three of us up here have a side gig of being on the Foreign Affairs Committee as well. And I had actually been the author of the AUKUS submarine authorization. And we've seen some pushback on that because of a capability, or I'm sorry, not capability, but capacity issue. And I think it was Mr. Follin, you had talked about sort of the four recommendations that you and Beehive had. We've kind of gone over the support, the reauthorization of Title III. We talked a little bit about the more agile non-defense manufacturers being able to qualify. It seems like we are heading down that road of number four, the allied initiatives. how we align with those, and if you need to expand, either one of you expand on that. But I also want to go visit what I think was your number three recommendation, talking about high-temp alloys being needed. And so touch on number four with our allies, but then how do we then address this need for the high-temp alloys? Yeah.
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Mr. Gordon Follin
Thank you. So, yeah, I think the places where the alignment makes sense is, you know, do we have the same materials available at the partner nations, right? So, you know, the process for how you manufacture these things does require some commonality. So if the alloys are similar composition or preferably the same composition, meet the same specs, that helps the process a lot. Also, like I said before, the infrastructure, like different machines will require different programming, different interfaces, and so having some understanding of what that looks like at each location would enable you to be able to distribute the manufacturing much, much faster. And then there is still some specialized labor at the end of the day. You have to assemble these bits and pieces into an engine, and that takes some time. So if you can plan these things in advance and kind of manage it as a program, then you will, when you actually need to flip the switch, you get there a whole lot faster. So that's really what I'm referring to.
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Bill Huizenga
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Mr. Gordon Follin
I think it's yet to be determined from my perspective. How come? What needs to happen for you to determine that we have that? Yeah, I think again, my experience is limited just to beehives experience, I would say, but I think we're kind of pre-production. And so maybe we're not at the point yet where that would start to happen. I will say we have a contract with the Air Force. Part of that contract is to do a external production demonstration where we're going to take our design and send it to a third party and have them manufacture it. So I think that will be a U.S. party to start. So I think that's the first step in that direction. And then ultimately, I think it would be, hey, if we want to really take advantage of this forward, I won't call it forward deployment, but like distributed logistics, distributed manufacturing, then the next step would be to pull in these friendly nations and do a similar process, right, just to anticipate the problems in advance. I think we haven't done it because the process isn't there yet. We're probably a year away from being there, right? So it's something to think about for the future.
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Bill Huizenga
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Mr. Gordon Follin
Yeah, so I would say the number one problem we see are things like titanium. Most of the world's titanium comes from Russia and China, unfortunately. And titanium is a really common alloy in aerospace products. It's pretty high temperature capable. It's lightweight. And so there are North American titanium suppliers that are able to grow. I think investing more in those North American suppliers to scale up and be able to provide those materials is essential. There's also Canada has sources of titanium. There's other friendly nations. I think in the past they haven't been developed because there was a global supply and it wasn't needed. But I think it's one of the big challenges we face. I think Representative Moore, he talked about how in North Carolina, there's like one of the only copper smelting plants left in the country. There's an element called rhenium, which doesn't exist in nature. The only way you can get it is from the smelting of copper. And that rhenium is really what is like the secret ingredient in a turbine blade, which is the most critical component of a jet engine. So I think things like that, like how do we invest in those sources so that we can do it independently? In the past, I think, you know, some of the, you know, politics change. Like some of the countries that we're competitive with now, we weren't as competitive with 20 years ago, and it wasn't a problem. But we've kind of backed ourselves into a corner on a couple of these materials like titanium and rhenium.
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Mr. Robert Faxon
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Bill Huizenga
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Mr. Robert Faxon
OK, if I could add one thing. Our solution for this is not nearly as sexy. And everyone who says just in time is going to hate this. What we proposed in the DPA funding is not only for the equipment, but for buffer stock of material, because the lead time is months, months in some cases. So if we put a beautiful factory together and don't have material, we're going to twiddle our thumbs. So our issue was DPA funding. No business wants to hold six months of inventory. But if we're going to build a factory in a crisis mode, we better have material on the floor. So that one-time buffer to feed out of and feed into would be my suggestion because we don't have the versatility of some of the things. But we would build buffer stock, and DPA funding would be key for that. Thank you.
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Warren Davidson
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Tim Keith Moore
Thank you, Mr. Chairman. Actually, I don't have any questions. These two witnesses have done an amazing job. addressing, I think, the questions of the members. I just would offer up to either the gentleman, if there was something you wanted to say in response to any questions you didn't get a chance to do, I'm going to allow either of you to use my time to do so.
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Mr. Gordon Follin
Honestly, I don't have any questions back for you. This is my first experience doing a congressional hearing. I think it was an honor to be able to be with you guys today and understand a little bit how the process works. Like I said, I mean, our experience at Beehive is relatively limited to date. We haven't had a Title III contract yet. We're actually in the process of negotiating it now. But I would say overall, our experience with the process has been great. AFRL has been helpful. The Air Force has been helpful. OSD has been helpful. So just glad to contribute and help where we can. Thank you.
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Mr. Robert Faxon
I would second that. It's a pleasure to be here. It's an honor to be here today. Thank you for the invitation. I appreciate the chance to verbalize and share some of the thoughts that we have every day in our factory. And I appreciate your time and your commitment to hear that. And I would say if there was one word I could use, it's urgency. Don't overestimate capability because you open a checkbook. It may not buy time. So urgency is my message today. Thank you. Would the gentleman yield?
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J. French Hill
Absolutely. Just curious on the stockpile comment you raised. I thought it was quite a good one. And you have your own micro-parochial interests on stockpiles. But I think it would be good, Mr. Chairman, if we got DOD to send us, if it's classified or unclassified, an analysis of U.S. stockpiles and these critical minerals. But Mr. Faxon, do you want to comment on stockpiles a little further? And I'll yield back to my friend after your answer.
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Mr. Robert Faxon
Yes, because we speak about materials and that could go from the base alloys. It could be these titanium sponge to make titanium. It could be nickel base alloys for high temperature alloys. We can talk about the micro elements of mining, but we can also talk about stockpiles of raw material. But before we can machine it, we may have to go through processes such as forging, rolling mills, et cetera. So when we talk about lead time, there is a wide variety of saying, hey, we have material. But that doesn't mean it's ready to go into a factory. So these multi-month lead times and some of these constraints, like a forging house or a casting facility, these all have to be considered. So the reality and our push is to be vertically integrated so we weren't dependent on outside services to be able to meet your needs. And that material and that stockpile is really counterintuitive to typical business practice. We don't want material sitting too much. But in this case, because urgency of timing, I think it's a smart use of funds to buy that time and feed out of it. Once you do it one time, you don't have to do it twice. The buffer remains. It's first in, first out. You have to buy it once, though. And that's where the DPA funds could be very handy.
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Warren Davidson
I want to thank my colleagues. I want to thank our witnesses. I thank the staff that did all the work, both in the House, but here at Wright-Patterson Air Force Base and out at the DOD. Really nice to do a field hearing and bring this out in the community. I think it's a great way to highlight the capabilities, really from around the country, but in particular, again, right here in the heart of it all in Ohio. and the great capabilities at Wright-Patterson Air Force Base and our own supply chain. But we have a huge challenge. It's great to see that we're talking about a whole-of-nation approach to it and also with our allies. And so without objection, all members will have five legislative days to submit additional written questions to the chairman. The questions will be forwarded to the witnesses for their response. Witnesses, if you get them, please respond no later than September 17th. The hearing now is adjourned. you