USPAE Launches $42M DoD Consortium
The I-Connect007 editorial team recently interviewed Chris Peters, Kevin Sweeney and Shane Whiteside, members of the U.S. Partnership for Assured Electronics (USPAE), about the award the association received from the Department of Defense to create the Defense Electronics Consortium. In this conversation, they discuss the objectives of the consortium, which was created to help the government identify and address potential risks in the electronics industry.
Nolan Johnson: Gentlemen, you released some news recently that USPAE received a large grant to establish a new consortium. Can you tell me about that?
Chris Peters: Certainly. We received a $42 million award from the Department of Defense to create the Defense Electronics Consortium and launch the lead-free initiative, which is its first project. The DEC is an Other Transaction Agreement, or OTA, that helps the government get access to an industry, especially non-traditional defense manufacturers, companies that haven’t worked with the DoD in recent years. One of the unique things about our award is that while most of those contracts focus on research and prototype actions, ours allows companies that are engaged in a prototype with the DoD to move right into production without having to go out for recompete. That is a significant difference for our award.
Johnson: This Defense Electronics Consortium: you’ve just given us a sense for the mission. How do the consortium and the USPAE work together? How are they connected?
Peters: USPAE is a nonprofit industry association really focused on helping increase the global competitiveness of the U.S. electronics industry, to help ensure that the U.S. government has access to trusted and assured electronic supply chains. We are the recipient of that award from the Department of Defense. USPAE is the manager of this Defense Electronics Consortium.
Johnson: What do you see as the primary drivers for creating this consortium?
Peters: It’s been a challenge for the government, especially the DoD for a while, to have an understanding of the industrial base, especially with electronics. Electronics are very complex, the supply chain especially is diverse, and it’s not very visible to the DoD. One element of the consortium is to give the government greater access to the industry, to help identify and address risks and gaps. That way, the DoD has greater access to the electronics industry and greater assurance that industry will be there when needed.
Johnson: That is something that we’ve found to be very real here in the last 12 to 18 months, haven’t we?
Peters: That’s exactly right. The COVID crisis was a wakeup call. When we could not ramp up production of ventilators in this country because most of the printed circuit boards came from outside our country, that was a wake-up call. Within the DoD and other government agencies, it really started to raise the question, “Wait a minute, where do our printed circuit boards come from that we use for our weapons and communication systems? The bottom line is, in a lot of cases, we don’t know.” It’s raised awareness of the need to know where everything in the supply chain is coming from and where there might be risks that would impact us like the COVID crisis.
Dan Feinberg: I have a question about the lead-free initiative. We all know that there are some applications where leaded solder, for example, is superior due to reliability. There are other things that are important, but are you seeing lead as a possibility again where reliability is extremely important?
Shane Whiteside: I think it’s understood, Dan, or it’s becoming more widely understood, that lead does have a place, particularly for tin whisker mitigation and extreme environments. But will there be a supply chain availability of leaded components? I believe that’s the current state of affairs with components right now.
Peters: Keep in mind, too, that the rest of the world, by and large, has gone to unleaded. What happens if we have an F-35 that lands in a country that does not allow any work on leaded electronics, but the jet needs some maintenance? Will we be denied the ability to maintain that aircraft in that country because it has leaded electronics? That’s just one example of many risks we face. Another is that fewer and fewer companies are re-balling and putting lead on electronics. The reliance on leaded electronics also keeps the DoD from taking advantage of the latest technology. If the commercial world is lead-free, and we can’t take advantage of that because we have to rely on lead, that impacts technology refresh rates and availability for the DoD.
Feinberg: About four or five years ago, I was in a conversation with some guys involved in similar manufacturing for defense, and it was the first time that I had heard this warning. They said they had determined that some circuit boards for defense devices were found to have hidden components on them. Is this a continuation of that discussion? Does that have anything to do with this right now?
Peters: There was an article several years ago in Bloomberg about an unexpected component being inserted on boards, and it’s been a concern within the DoD that a bad actor could insert something onto a printed circuit board that could essentially put a kill switch on a satellite. I envision that some DEC projects will help address this issue, but I’m not sure that the lead-free initiative addresses it directly.
Kevin Sweeney: Dan, it’s a continuation of a long-term concern that particularly the DoD—but I would say the federal government in general—has had for many years, both at the classified and unclassified levels. The risks associated with bad actors and, let’s face it, we’re primarily talking about one major country—China—that was stealing intellectual property, potentially corrupting databases, replicating, counterfeiting, and so forth. The vulnerabilities are pretty significant, and they are a national security risk. But up to this point, I would suggest that many OEMs, many of the large defense contractors looked at this as one cost of business and the cost of doing business with government. They’ll absorb it.
Quite frankly, there was, and still is, a lack of transparency as you go down to tier two and tier three components, where we don’t know where they’re coming from. We don’t know the provenance, as you mentioned, and the vulnerabilities could be not just a single on/off switch that would force a component to fail, but real-time ongoing vulnerabilities of essentially streaming data and information back to bad actors who would like to challenge us. We saw that in the cybersecurity space, with the most recent example of that something that happened to us just a couple of weeks ago. You need both an appreciation and awareness of our vulnerabilities in the supply chain, everything from making Band-aids and aspirin to high-tech equipment, whether it’s a vulnerability broadly for the nation or more specific on the defense side.
One of the outcomes from the COVID-19 pandemic has been a dialogue across the board about those concerns. There’s also the interaction now between DoD with Congress, so “the bill payers” in a good way. This is a bipartisan issue; the concerns are legitimate, and it involves both sides of the aisle. The key word in our title is “partnership,” and that applies to both DoD and the industry and serving as a conduit of information for the government. At the end of the day, we want to reduce risk, provide some certainty for our industry, and strengthen our play globally.
Feinberg: There was a period of time in the ‘90s where price was everything. Price drove the changes. Price is always going to be a factor, but would you say it’s becoming less so?
Sweeney: From the government side, and from my experience over the past couple of years within the acquisition world, price will no longer be completely dominant. That goes for resiliency, assuredness, and timing, as well. Those all need to be balanced now. Pricing will always remain a factor, but perhaps not the same dominant factor that it has been in the past.
Peters: Price is always going to be an issue, but the great thing about the Defense Electronics Consortium is that it gives us a contract vehicle for many different kinds of projects. Some of those projects could be opportunities to identify new technologies, processes, or capabilities that can help U.S. manufacturers make the things we need faster, cheaper, better. There’s a great opportunity for the DEC to really help drive that response.
Johnson: Is it fair to say that this boils down to the entire system working within desired specifications? Bad actors are a special case of electronics working outside of the desired specs, but you have the much more mundane task of making sure that the design is working within spec for the very stringent requirements within defense and military.
Sweeney: Specifications and standards, Nolan, are critical, and I think what we’ve done in DoD recently is look at a very archaic, bureaucratic approach to acquisition and development in which we had the same standards to build a new tank as we did to build a new software operating system or a satellite. They aren’t the same. We realize that what we did to the industry, quite frankly, was tough. It’s exposed the vulnerabilities, and it’s something that we have to be accountable for within the acquisition process, particularly for DoD here. With supply chain and subcontractors, we need to have confidence that what the DoD is buying and using is, in fact, what we thought it was. It gets down to one word: risk. We’re not going to eliminate risk obviously, but we’re trying to drive it down long-term.
Johnson: Under this Consortium, are there programs that are already underway?
Peters: The first project to flow through this Consortium is the lead-free initiative, which was funded by Congress, and we’ve already started on that with Purdue University, University of Maryland, Auburn University, and Binghamton University. Congress just allocated another $10 million in the 2021 National Defense Authorization Act in December, so that’s our very first project and it’s already launched. We’ll have the kickoff meeting here in a few weeks. Once we have the initial meetings with the Department of Defense, especially the Office of Industrial Base Analysis and Sustainment, we will have more direction about their other priorities, a better understanding of what we need to prioritize for recruiting members, and about some of the projects that would likely flow through the Consortium. The 2020 Industrial Capabilities report from DoD to Congress identifies a number of electronics industry needs that the DEC could help address.
The great thing about these consortia is that they are a partnership. Government will talk about some of the challenges they have—maybe it’s a capability, a technology, or a risk. The industry will say, “Well, listen, we’ve been working on these kinds of solutions or these kinds of answers.” And together, they determine the best fit and the types of projects that need to be funded to benefit both government and industry quickly.
Johnson: That begs the question: As a U.S.-based manufacturer, what is in it for me in this program?
Whiteside: I think that the value proposition for USPAE’s private sector members is access to U.S. government-funded opportunities. The DEC is going to provide this vehicle to identify future priorities that they’d like to fund. Members are going to have access to use those funds to conduct and collaborate with DoD and each other. It provides an above-board collaboration consortium where companies can work together on behalf of national security priorities and use that funding to engage in activities that they otherwise probably wouldn’t do if they were just looking after their own business interests.
Peters: One of the key things that Kevin mentioned earlier is that a lot of companies in the electronics sector are buried several layers down in the supply chain, and they typically don’t have access to the DoD. They’re working for another company who’s maybe working for a prime contractor, and so on. The DEC is a way to help the industry get a direct connection to the DoD and vice versa. It’s good for the DoD to have that connection as well because it gives them exposure to things they might not see otherwise. At USPAE we want to help companies understand where the leaders in technology are going. From the DoD, NASA, the Department of Energy, for example, bringing in technical leaders that are talking about what they see maybe two to five years down the road for their electronics needs, so that industry can better understand that and decide how they want to position themselves to help support those needs.
Johnson: That means that if a company is involved in electronics manufacturing and has some involvement somewhere in the supply chain for defense or mil-aero—and many of them do—there needs to be coordination between them.
Peters: That’s exactly right, and so we have a significant recruiting effort that we’re just now cranking up. We already have a number of companies that represent PCB. We have EMS companies. We have materials manufacturers. We’ll soon have academic institutions in here. I expect to announce a couple of prime defense contractors that’ll be joining here shortly as well. We’ve got a good cross mix, but we’re really looking to grow the membership.
Feinberg: Is there any involvement with other industry associations, like IPC or any others?
Peters: USPAE was actually spun out from IPC, so we have that connection there. But because they are a global organization, we do have firewalls in place to make sure that we protect the information that flows through USPAE. We do have connections with other organizations. The National Defense Industrial Association is one. I sit on the electronics division for that and several of the committees as well. We’ll be looking to establish connections with other associations along the way. But keep in mind, we’re still fairly new, and so we’re getting a lot of these things in place.
Johnson: Is there a threshold in company size, or is this the sort of situation where anybody in this space—no matter how big—can get involved?
Peters: There’s no limit on size, but we do have requirements. You have to be organized in the U.S. or one of the allied countries, according to the Defense Federal Acquisition Regulation supplement; and if you design, assemble, or manufacture electronics, you have to become certified to the IPC-1791 standard within a year of joining. That was a standard that was developed in collaboration with the Department of Defense’s Executive Agent for Printed Circuit Boards and Interconnect Technology. Now, some of the projects may have tighter requirements, but those are the requirements to get into USPAE.
Johnson: For an organization interested in connecting, what is the most effective way for them to reach out and connect with the Defense Electronics Consortium?
Peters: Through our website is one of the best. That’s up today at USPAE.org, and we’re going to relaunch the site here in a few weeks with even more information and resources. We’re also about to launch a members-only portal with other resources. From our website, you can get information on how to call or email us.
Johnson: You mentioned doing some outreach to Congress as well. What’s happening there?
Peters: Well, IPC has been raising a lot of these issues, along with its members, up on the Hill. They’ve taken a keen interest in what we’re doing at USPAE and now with the Defense Electronics Consortium. I have a briefing next week with staffers for both the House and Senate Armed Services Committees, so they’re very interested in what’s going on.
There is now a greater recognition, not just in the Pentagon, also on the Hill, of the risks and liabilities we have around electronics. In the past, much of the focus on electronics has been on the semiconductor. What we’ve been doing is help them realize that you need to be thinking about the entire electronics ecosystem or supply chain, because at any point in that supply chain, whether it’s a half-cent capacitor or a cable or whatever it might be, any issue with constraint or compromise at one of those nodes can result in problems for the entire component or system.
Sweeney: I want to emphasize there’s great value across the board here. I mean, this truly is a nonpartisan effort, a partnership. The government, and in particular DoD, needs an extra voice out here. With a new administration, there will be a new team coming into the Pentagon. There’ll be some new initiatives and efforts, and they’re going to need entities like USPAE to be a conduit within Congress and the Pentagon, and then back within the industry.
We haven’t really talked about cybersecurity, but it’s the same thrust. It’s going to come to, at some point, a cost for industry to invest for the future. Ultimately that may be the entry card to compete for contracts. Timing is everything, and by establishing USPAE at this time, you couldn’t have found a better time for us to be effective here, helping across the board and serving as a bridge.
Johnson: My wrap-up question for you: When will this program be considered a success?
Peters: I think that we will have small successes along the way when we’re helping companies connect to new opportunities, whether they be government or commercial in nature. Members will be able to quickly find new companies to partner with, and then go after opportunities that they couldn’t have done on their own. They will also gain connections to prime contractors through the USPAE network. We’ll see successes on the part of the Department of Defense as they start to identify and address the gaps and risks in the electronics supply chain.
But when I think about the big picture, and how we measure success, it’s going to be when our U.S. electronics industry becomes more globally competitive, which will give the DoD, and the U.S. government, a trusted and assured electronics industrial base they can rely on. .
As for the companies, this success can be measured in terms of revenue, profits and exports. For the government, you’re going to measure that in terms of shorter lead times, lower costs, greater resiliency in the face of disruption, and the ability to respond to surges in demand.
Sweeney: Nolan, I think, ultimately, that intermediate or incremental successes will be in trust. It will be when the government trusts what USPAE brings forward, when we’re in the room and we’re part of the dialogue about important issues with regards to the industry standards. We don’t need to be big to do that, but I do think that’s when you can say this organization has fulfilled its mission and is a success.
Whiteside: The one thing I would add is the emphasis on partnership. I mean, it’s in the name, and success looks like success for everybody in all aspects of the partnership. It’s in all of our collective interests, as partners to optimize that and to improve that. It’s got to be a success for the entire partnership.
Johnson: Gentlemen, thank you for taking the time to talk about this new Consortium.
Peters: Thanks for having us.
