With the consequences of the "Last Supper" still reverberating through industry, the U.S. Defense Department's new procurement czar says improving the relationship with aerospace contractors and shoring up program management are among his top priorities.

Four months after taking his post, Ashton Carter, the undersecretary of defense for acquisition, technology and logistics, says the partnership between the aerospace industrial base and DOD had atrophied and that he wants to reverse course. "I am not of the camp that the defense industrial base and the Defense Dept. are on opposite sides of the fence," Carter said told Aviation Week during a Sept. 2 interview. "We won't always agree, but we [must] still have an open dialogue. I'd like to see more of that than we've seen in recent years."

The Aerospace Industries Association, a leading industry lobbying group in Washington, in July issued a white paper voicing concerns that companies lacked a voice in the Pentagon. They cited recent decisions to terminate or curtail a host of programs as an area of concern, and they said they were not getting good feedback from the Pentagon on whether industrial base concerns would factor into future DOD decision processes.

Carter says he wants to promote as much competition as possible. And, he has asked his industrial policy office to ramp up its research into the industrial base. "What will tomorrow's industrial structure be for the defense industry? As I sit here, I don't have a good answer to that. That is something I am very interested in exploring." Carter says he plans to strengthen the office, widely seen as industry's voice inside the Pentagon.

Carter acknowledges that some decisions in the Fiscal 2010 budget request will impact industry. Specifically, the termination of the USAF Transformational Satellite competition between Lockheed Martin and Boeing to design a high-data rate, secure space-based communications infrastructure is leaving a gap in work for this specialized skill base. Also, Carter mentioned concern about the stealthy aircraft design base after Defense Secretary Robert Gates sidelined the Air Force's Next-Generation Bomber program.

Carter says he "wishes" there was more competition in the industrial base. He attended the so-called "Last Supper" in 1993, a meeting between DOD officials and business leaders that became infamous for setting off a wave of industrial consolidation last decade. Then-Deputy Defense Secretary William Perry warned leaders of industry that there was an impending budget downturn for defense after the Cold War. "At the Last Supper, there was a very clear idea of what going to happen as a result of the circumstances that were then emerging and I would like to know what the circumstances now emerging in the defense marketplace are going to do to the structure of the defense industry," Carter says.

"At the end of the day we are totally dependent on that defense industry. The government doesn't make our weapons, private industry makes our weapons." Carter also says he considers European products part of a "global industrial base" that deserve consideration, especially if these designs can be procured for less cost.

Carter acknowledges that rebuilding the industrial base will require deliberate oversight. "It isn't about jobs. It is about particular kinds of jobs involving particular kinds of skills," he says. "The part about the industrial base that matters the most are those things, which, if allowed to erode, will be very difficult to restore and that can't be found in the commercial industrial technology base," he says.

Carter and Defense Secretary Robert Gates recently traveled to Texas to see Lockheed's F-35 final assembly facility in Ft. Worth and L-3 Communications' MC-12W Project Liberty modification plant in Greenville, and Carter says he plans to make more of these visits to reach out to contractors.

Photo: DoD