How Politics And Regulations Can Severely Impact An Industry

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Due to strict government regulations and political variables, military supply sources for textile products are an industry in peril. MMI Outdoor CEO & president David Cobb shares his ideas on how to fix these problems.

For 15 years, MMI Outdoor has enjoyed designing and manufacturing specialty products for our U.S. Military. From small, one-person combat shelters to holster systems, backpacks, and related accessories, we consider it an honor to create innovative products for the men and women that defend this country. However, obstacles peculiar to our industry make it extremely difficult for many companies such as MMI Outdoor to be effective sources of supply. Here are the big factors that hurt both the industry and the warfighter:

Berry Amendment Compliance – The Berry Amendment requires the Department of Defense (DOD) to give preference in procurement to U.S.-produced, manufactured, or home-grown products, such as food, clothing, fabrics and other products. This strict “100% US-made content requirement” is unique to the United States military. We fully support this federal regulation because of its aim to keep as much industry as possible in the USA. This is good for our economy and necessary for our national security, but the cost of producing textiles in this manner makes these products prohibitively expensive for the commercial market, as they are often double the cost of the same product made in Asia. This cost of production makes the U.S. Military the sole customer for textile products that are 100% U.S. made. Other products made specifically for the U.S. Military are only applicable to the U.S. Military.

Sole Customer Status– For the reasons listed above, an entire vertical industry is completely reliant on the U.S. Military for business, from yarn production, to weaving of fabrics, to cutting and sewing these fabrics into products often applicable only to our military. U.S. factories can only stay open and people can only remain employed when the DOD issues purchase orders.

Indefinitely Delivery/Indefinite Quantity (IDIQ) Contracts– These contracts are typically issued to our company and other manufacturers by the DOD. There are no solid purchase projections from DOD, therefore no ability to plan consistent production schedules, which would keep the same workers employed, taking advantage of experienced workers to maintain efficient production at the cut-and-sew level. Solid purchase and production projections would also maximize efficiencies for fabric-weaving and other raw goods related to production (i.e. – aluminum tent poles, metal zippers, backpack frames, tent stakes, etc.).

“if this situation is not addressed with a strong business-based plan from the DOD, the U.S. Military may be forced to buy its uniforms, tents, backpacks, etc., from China or other Asian countries.”

These IDIQ contracts give such unrealistically wide parameters, and no predetermined order placement, that manufacturers are unable to set production schedules that are efficient and can consistently take advantage of skilled workers. Instead, production is ramped-up after raw goods arrive (sometimes 6 to 8 weeks or more after the order is placed) and new workers are trained, only to be shut down again after a few weeks or a few months. This is not only inefficient, making the products more expensive to produce, it is also creates a wildly unstable business environment for companies. Additionally, the long lead times required to fulfill sudden orders can sometimes mean the military customer does not receive the product needed in time for deployment.

Making the Military a Political Football–  In addition to the above factors, the political whims of Presidents and members of Congress that do not highly value the U.S. Military, or truly understand its role, make an already wildly unstable business environment even more chaotic. The massive cuts to the military during the previous administration drove a lot of textile companies out of business, including raw goods suppliers. As of now, there is only one Berry compliant yarn producer left in the United States, and many of the U.S. sewing facilities that existed 10 years ago are gone; their skilled workers scattered to new areas and different occupations.

I do not exaggerate when I say that, if this situation is not addressed with a strong business-based plan from the DOD, the U.S. Military may be forced to buy its uniforms, tents, backpacks, etc., from China or other Asian countries at some point in the near future.

What Industry Needs from the Department of Defense

I believe that DLA is made up of good people who want to provide excellent service to the members of our U.S. Military, but they are constrained by rules and regulations that were formed without a global approach to the logistics and supply of products that are specific to the military. If industry is to survive and U.S.-made production is to be assured for the DOD, industry must have the following:

  • Annual projections for product acquisition: A twelve-month forecast/purchase order allows industry to set up production at a steady rate, training and keeping the same workers, while also allowing the raw goods suppliers to plan a continuous flow of materials. Gains in efficiency will also result in a reduced price to the government, saving money and assuring that a US-based industry will be around to serve their needs. This also increases the likelihood that our military personnel will receive the products in a timely manner.
  • An end to IDIQ contracts for products that have no other market outside the US Military. This includes tents, backpacks and specialized items like ammo pouches, holster systems, etc.
  • A commitment from DLA to stock inventory if the military customer does not immediately need the amount of the product projected.

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