Small Suppliers Under the Hood of America’s Defense Base
The Small Business Administration and the Pentagon have formally launched the Smaller War Plants Commission to secure financing, expand production, and strengthen domestic supply chains across the defense sector. Under the hood, the initiative targets a segment of the military-industrial complex that rarely makes headlines despite carrying the weight of actual production.
As ever, the technical reality is that small businesses account for more than 70 percent of the U.S. defense industrial base, according to the Small Business Administration. Ninety-eight percent of America’s manufacturers meet the small business definition, according to Small Business Administration Administrator Kelly Loeffler. The Smaller War Plants Commission was formally established in August 2026 to help these companies secure financing, expand production, and strengthen domestic supply chains.
History Repeating in Federal Mobilization
The initiative returns the agency to its historical roots, according to Small Business Administration Administrator Kelly Loeffler. The Small Business Administration traces its history to federal efforts during and after World War II to mobilize smaller manufacturers. The Smaller War Plants Corporation helped smaller companies participate in defense manufacturing when the country needed to dramatically increase industrial output.
Decades of shifting manufacturing overseas have weakened domestic industrial capacity and created vulnerabilities in critical supply chains. Major contractors like Lockheed Martin, Boeing, RTX, and General Dynamics depend on extensive networks of smaller manufacturers that produce parts, materials, and specialized components. Firearms manufacturer SIG Sauer works with approximately 1,200 small suppliers, illustrating the interconnectedness of modern defense manufacturing.
Financing Production and Managing Supply Networks
One of the commission’s central objectives is improving access to financing for manufacturers that have the technical expertise. A disruption affecting even a relatively small supplier can have consequences throughout the production process. The Pentagon has also held preliminary discussions with major American manufacturers, including General Motors, Ford Motor Company, GE Aerospace, and Oshkosh Corporation, regarding the potential expansion of their role in producing military equipment and munitions.
Private capital is essential to sustainably scaling defense industrial capacity, according to Benedetta Berti, Secretary General of NATO’s Parliamentary Assembly. Public investment alone will not be sufficient to finance the scale-up required across the security, defense, and resilience sectors. Strengthening cooperation between defense actors, small and medium-sized enterprises, start-ups, and technology firms can accelerate innovation and help build a more resilient and competitive defense industrial ecosystem, according to Benedetta Berti.
Partnership And Commission Details
The Smaller War Plants Commission is a result of the partnership between the Small Business Administration and the Pentagon, aiming to secure financing, expand production, and strengthen domestic supply chains across the defense sector. According to Small Business Administration Administrator Kelly Loeffler, the commission draws its name from the Smaller War Plants Corporation, established during World War II, which helped smaller companies participate in defense manufacturing.
The commission’s objectives include improving access to financing for manufacturers with technical expertise and production capabilities. As stated by Benedetta Berti, Secretary General of NATO’s Parliamentary Assembly, private capital is essential to sustainably scaling defense industrial capacity, and public investment alone will not be sufficient to finance the scale-up required.
The partnership between the SBA and the Pentagon also involves preliminary discussions with major American manufacturers, including General Motors, Ford Motor Company, GE Aerospace, and Oshkosh Corporation, regarding the potential expansion of their role in producing military equipment and munitions. This initiative is part of broader efforts to strengthen the U.S. defense industrial base amid increased demand driven by ongoing conflicts.
Transatlantic Defense Industrial Cooperation
The transatlantic defense industrial base remains a critical strategic asset for both Europe and North America, according to Benedetta Berti, Secretary General of NATO’s Parliamentary Assembly. It underpins interoperability, reinforces transatlantic cohesion, and provides an essential foundation for NATO’s collective defense. As Europe strengthens its own defense industrial capacity, this should be seen as complementary to, rather than separate from, the broader transatlantic ecosystem.
Sustaining and strengthening transatlantic cooperation will require continued joint investment, research and development, and collaborative production efforts, according to Berti. These are mutually beneficial initiatives that enhance resilience, innovation, and military readiness on both sides of the Atlantic. Defense cooperation should also leverage partnerships beyond the Alliance, particularly with Ukraine, whose wartime experience in accelerating innovation, production, and capability development can benefit the wider Alliance.
Europe’s defense industrial base needs to grow, requiring Allies to continue increasing investments in defense and sending a clear and sustained demand signal backed by tangible contracts, according to Berti. While stronger defense budgets create incentives for industry to expand production, sustained growth also requires greater multinational cooperation through joint procurement, development, and acquisition. Reducing fragmentation and aggregating demand are key to achieving scale.
Small Businesses as the Backbone of Defense Production
The defense industrial base relies on a vast network of organizations and resources to provide materials and services for military forces. While major contractors often lead these efforts, the actual production of military equipment and munitions depends heavily on companies that many Americans have never heard of. These small manufacturers produce a wide range of items, including precision-machined components, specialized materials, and electronics, which are necessary for the military’s most advanced weapons systems.
The interconnectedness of this industrial base is significant, as even large defense contractors like Lockheed Martin, Boeing, RTX, and General Dynamics rely on extensive supply chains of smaller firms to function. According to Small Business Administration Administrator Kelly Loeffler, the importance of these smaller manufacturers is mission-critical to deterrence and strengthening the warfighter. Because a disruption affecting even a relatively small supplier can have consequences throughout the entire production process, the Smaller War Plants Commission is focused on ensuring these businesses can effectively contribute to the nation’s defense needs.
Sources
- Defense industrial base
- SBA and Pentagon Target 70% of Defense Industrial Base in Manufacturing Push
- "Private capital is essential to sustainably scaling Europe's defense industrial capacity" – Atlantik-Brücke e.V.
Photo: Shixart1985 (CC BY 2.0)
