FARNBOROUGH, England — U.S. Deputy Secretary of Defense Patrick Shanahan has signed off on the reorganization plan for the Pentagon’s Acquisition and Sustainment Office, which will include notable changes to the industrial base office.

Speaking at the Farnborough Airshow on Monday, two top A&S officials — Assistant Secretary of Defense for Acquisition Kevin Fahey and Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy Eric Chewning — previewed a few of the big changes to come out of the reorganization effort.

The Pentagon’s legacy acquisition, technology and logistics office split into two new offices on Feb. 1 (the undersecretaries of Research and Engineering; and Acquisition and Sustainment, the latter a title held by former Textron executive Ellen Lord. However, both offices had to submit their plans for a redesign of the various assistants and deputies to Shanahan for approval.

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Big changes are coming to the Manufacturing and Industrial Base Policy office headed by Chewning. The manufacturing aspect, including the Department of Defense Manufacturing Technologies (ManTech) program, is being split off and heading to the R&E side, while the Office of Small Business Policy is being folded into the newly rechristened MIBP team.

“Given where we are right now in the world there’s a real need to get back to what I’ll call a real industrial policy capability within the Pentagon, to address the sorts of problems that we know we’re going to face going forward,” Chewning said.

He called it a “back to the future” moment to focus on “core competencies” at a time when the defense-industrial base is under constant attack from abroad, as well as the need to innovate at home.

“In the past our industrial policy essentially was our acquisition policy. It was what we bought and how we bought it,” Chewning said. “What I’d like to be able to do is get out in front of that and think about how do we help inform acquisition policy with an industrial policy in support of our modernization objectives.”

Chewning will also keep oversight on the CFIUS foreign investment rules and manage merger and acquisition attempts, among other existing authorities.

Under the reorganization, Fahey’s main focus will be on what he calls “portfolio management” of major weapon systems and ongoing programs. However, he will have far fewer systems to focus on than in previous years; as part of the split of AT&L, oversight of all but 11 major defense programs have been delegated down to the armed services.

He will also have a new deputy-assistant-secretary-of-defense-level office, focused on “acquisition enablers.” In essence, it will be focused on getting things done — defining commercial items to help companies come into the Pentagon, sort out intellectual property issues and keep track of what contracting methods, such as Other Transaction Authority, are successful.

In addition, the Defense Acquisition University will report up to Fahey, with a greater emphasis on real-world education and less on compliance.

“As you can imagine, reform is our focus is how do we change to be able to deliver capabilities at the pace of innovation,” he said.

Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.

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