Risky companies fall through the cracks as US speed up defence procurement
The US Government Accountability Office (GAO) has warned against dependence on ambiguously sourced materials and parts from foreign suppliers.
While the public spending watchdog acknowledged that the government has implemented measures to increase supply chain visibility in defence, the GAO recommends that the Department of Defense (DoD) coordinate these efforts in a report published on 24 July 2025.
This geostrategic vulnerability comes at a time when the current administration is overhauling the defence apparatus in order to hasten the acquisition of lethal weapon systems.
With a mandate to demolish all bureaucratic impediments, the GAO’s call for additional structures – including a new office – to increase visibility of the supply chain will doubtless go unheeded by the US Defense Secretary Pete Hegseth, whose doctrine contradicts these recommendations in practice.
FPDS offers limited data
Nonetheless, the GAO discovered that the primary government-wide database for procurement – the Federal Procurement Data System (FPDS) – contains summary level contract information on goods. There is limited information about the countries of origin for these goods.
Typically, the system does not explore the contribution of subcontractors, for example.
“These efforts are uncoordinated and limited in scope and provide little insight into the vast majority of suppliers, including those that provide raw materials and parts,” the independent reviewer found.
Contesting the figures
It is worth noting that the GAO report does not explicitly point to any specific foreign suppliers as a risk to US national security and defence but instead emphasises the risks already seeping into defence procurement.
The GAO pointed to the F-35 Lightning II programme in which the FPDS considers the US as the country of origin for 114 out of 115 contracts related to the far-reaching fifth generation combat aircraft programme in fiscal years (FY) 2020 to 2024.
In reality, F-35 is a global product behind which there are more than 290,000 jobs and 1,900 suppliers (1,000 of which are small businesses), spanning more than ten countries outside the US. The UK alone claims that approximately 15% of every F-35 jet is built in Britain.
Furthermore, the DoD, through Lockheed Martin, found that magnets included on some F-35s originated from China, an adversary and military competitor whom the government considers a strategic rival on the world stage.
In this backdrop, the US is also struggling to untangle an intricate web of military-civilian fusion. This is an underlying, predatory policy in China that will enhance the People’s Liberation Army by deriving innovation and knowledge from inside the US defence industrial base.
Implausibly, FPDS even considers the US as the country of origin for approximately 96% of obligations for goods that the DoD procured between FY2020-24 based on dollar value.
Likewise, according to GAO analysis, the FPDS identifies the US as the palce of manufacture and country of origin for nearly 100% electronic microcircuits worth $1.3bn in the same time period.
However, DoD officials insist that 88% of the production and 98% of assembly, packaging, and testing of all microelectronics are performed overseas—primarily in Taiwan, South Korea, and China.
Burning bridges
“DoD recognizes that there are serious national security implications for not knowing where components of the goods it procures are manufactured,” the report accepts. “This potentially includes losing access to critical materials for weapon systems.”
Nevertheless, the current administration has take up a policy of protectionism to its own detriment.
Since April, President Donald Trump has made negotiations on different levels of tariffs with countries around the world. Even the UK has come through scathed by a 10% tariff with some limited exceptions, such as Rolls Royce engines needed for various American defence platforms.
Some companies have mitigated the impact of global tariffs by having a footprint in the United States industrial base. BAE Systems, a British-based prime, expects minimal impact because it is embedded within the defence procurement system.
Likewise, the tactless diplomacy of the current administration, with threats to annex Canada and Greenland, will only impede US efforts to strengthen its defence supply chain. There are numerous critical minerals sourced responsibly from countries such as Canada, for example, including materials such as tungsten, a metal used for its hardness and heat resistance.
