Podcast Show Notes

2026-06-30 Federal Market Insights Episode 62 — Session Overview

WPI Podcast Episode 62 Summary 

FMI June 30, 2026 Issues Facing the DIB 

This discussion focused on the Defense Industrial Base (DIB) and the challenges affecting businesses that support Department of Defense contracts, either directly or through supply chains. The speakers explained that the DIB has shrunk over time due to industry consolidation, supply chain complexity, workforce shortages, cybersecurity requirements, and uncertainty caused by irregular defense demand and budget delays. Businesses interested in federal contracting can benefit from understanding how DOD purchasing works, the expectations placed on contractors, and the importance of being financially prepared to manage contract performance and payment cycles. The conversation emphasized that government contracting is highly structured and requires companies to thoroughly review requirements, understand acquisition rules, and ensure they can meet delivery, quality, and compliance obligations. New entrants are encouraged to build commercial experience first, establish a strong track record, and demonstrate reliability before pursuing government opportunities.  

The speakers stressed that successful contractors are problem solvers who understand customer needs and proactively address challenges rather than simply reacting to them. Workforce development was identified as a critical issue, with partnerships between industry, educational institutions, and government programs helping to build the skilled labor needed to sustain the defense supply chain. The discussion also highlighted the value of diversified customer bases, which can make contractors more resilient during fluctuations in defense spending. Finally, Apex Accelerators and industry networking events were presented as valuable resources for helping businesses understand the market, connect with buyers, and successfully enter or expand within the federal contracting environment. www.wispro.org  

Two Most Important Ideas 

• Success in federal contracting requires preparation, compliance knowledge, financial stability, and the ability to consistently solve customer problems.  

• The Defense Industrial Base depends on strong supply chains, skilled workers, and stable demand signals, creating opportunities for businesses that can meet DOD requirements and demonstrate long-term reliability.  

Copilot:  Create a summary of the following transcript. Ignore time stamps and general greetings such as hello, how are you, introductions and statements related to signing off. Also ignore statements concerning upcoming WPI scheduled items. The summary should capture the value of the topic and how the topic can assist businesses interested in federal contracting. The summary should be no longer than 10 sentences. Below the summary provide the two most important ideas as bullet points.  

0:00 

And good afternoon everyone and welcome to Federal Market Insights the weekly podcast of Wisconsin Procurement Institute My partner there on the screen is Mark Villalante. 

0:11 

My name is Mark Dennis and purpose of this podcast is to look at issues that are directly in what you’d call straight contracting the over progression from Solicitation to proposal to to bidding, to getting awarded and performing on a contract. 

0:30 

That’s what you might call the main line of the railroad in contracting. 

0:35 

But there’s a lot of great side tracks. 

0:37 

And some of these can lead to business as well or actually be paths to get you into a contract and back on that main line of contracting that we all wanna be in as contractors. 

0:49 

So today, one of the terms that I remember when I couldn’t remember the acronym, what it stood for. 

0:57 

Everybody was   DIB this and   DIB that. 

0:59 

What’s the   DIB? 

1:00 

And I knew about   DIBBS, the online bulletin board of the DLA, Defense Logistics Agency. 

1:10 

But   DIB was an acronym. 

1:12 

It took a long time to stick with me. 

1:14 

And it stands for Defense Industrial Base. 

1:18 

So if your company is a manufacturer And you supply someone who maybe supplies someone else who supplies a defense prime contractor you’re in the   DIB and There is a trickle-down effect of things like cybersecurity that we’ve been talking about for several years That will affect you but what concerns the Department of Defense these days is that the defense industrial base is shrinking in numbers the numbers of businesses involved in it. 

1:54 

There are fewer of them and We are going to talk today about reasons why that might be and what some outlooks could be mark Yeah, hey good afternoon mark and Start of number 63 of this podcast. 

2:11 

But   the   DIB it’s kind of a fickle idea, I think and The   DIB includes both the large businesses and the small businesses certainly at World War two we had a demand signal that was Incredible and then that kind of continued maybe at a lesser pace to Through the Cold War and the Cold War had an ongoing demand signal and there are lots of primes. 

3:12 

There were roughly 52, 54 primes. 

3:16 

Now you take a look at it and the number of primes is,  depending on how you count,  five. 

3:24 

So part of that is consolidation purchasing. 

3:28 

We went through a period in probably the 70s, early 80s, the leverage buyouts, all this stuff about corporation or corporate formation and how corporate the grow and and drive Dividends and all that other stuff well that had an effect to some extent on the   DIB as well as you start to have these Consolidations within the   DIB and purchasing What yours talked about mark was the trickle-down effect of the of the supply chain is also one of the the key elements is that number one is the the number of Primes goes down and then naturally then they’re going to be select smaller businesses but one of the things that that concerns Congress and DOD is the visibility into the supply chain and  , certainly,   who the primes are and you may know the first of the second tier but at some point in time The supply chain becomes fainter and fainter and fainter and Part of that supply chain may or may not be within the US and so that becomes   a another issue as to our critical components being sourced from potentially adversary nations The other piece is that as you start getting downstream The size of of Suppliers starts going down and the size of suppliers That means that they’re more reliant and they don’t have the flexibility and they can’t hold their breath as long as some of the larger ones They just don’t have the resources But as you also said the impact of that Comes to something like cybersecurity because they may be dealing with a piece of sensitive information And so they’re going to have to have a full cybersecurity Program that that’s going to come up and that can cost tens of thousands of dollars. 

5:29 

  so all these things and then the last piece as we start that be more at this point in time and with this administration there’s kind of a shift. 

5:40 

We’ve been since the Cold War to now I think one could argue in a maintenance type of posture to where it’s more of a MRO maintenance repair operations type of supply. 

5:54 

And what that means is that you don’t have these huge investments, you don’t have these huge demand signals, but their sporadic and the cadence of them is somewhat irregular, which means, like as you talk about the   DIBs portal, there’s a lot of opportunities, but they’re very small and they’re very infrequent, which going back to your original start, It’s a heck of a way to run a railroad Company just can’t depend on those things those so   of what are the demand signals? 

6:34 

And how are we going to kind of coalesce around all these ideas? 

6:38 

  our critical things that I think that not only do D but the country and the funding and and one of the other pieces I pass it back to you here is The last couple of years we we’ve had budgets which have been And we’ve been more on a continuing resolution than we’ve had a firm budget by the end of the fiscal year. 

7:00 

So in other words,  , September 30th,  , one of the big things everybody’s looking for or hoping for is to have DOD’s budget approved by Congress so that all the defense agencies know what they can do and plan for instead of working off a continuing resolution of we think this might be and so all those things are impacting not only the primes but all the numbers of the supply chain and perhaps some other factors that affect primes particularly is that when a prime contractor is all about defense and nothing else that that means that their entire budget or their entire economic health will depend on, is the military currently procuring a sustainable amount of their products. 

7:59 

In the case of, let’s take a few cases that we know pretty well, Oshkosh Defense is now a group of companies and not only builds defense trucks, but also fire trucks, they took over Pierce, they took over JLG, which makes high lift forklifts, and they’re becoming more of a generic construction company. 

8:29 

I wouldn’t say more of one, but they have those extra branches. 

8:33 

And sometimes when the defense business goes down, The commercial business can be there to shore up and to keep your employees going There was more of this perhaps around World War two You had some incre  DIBle stories like the GM Chrysler plant shifting to build tanks But doing so on an assembly line those assembly line workers knew how to build things on assembly lines So they shifted from Chrysler cars to tanks and then back to cars Maybe more of that is a good idea. 

9:07 

And looking forward and maybe upward, companies like SpaceX, they may be doing contracts for Department of Defense, but they certainly are doing a lot of civilian work as well, putting large chains of satellites into orbit and creating reusable launch vehicles and things that I’m sure the Air Force and Space Force will be taking advantage of, but they’re doing so both from a commercial and civilian point of view as well as a defense point of view. 

9:43 

And that might be a way,  , a kind of a path forward so that it isn’t always defense spending that,  , defense spending seems to come and go. 

9:55 

It swells and then there’s cutbacks and then it swells and there’s cutbacks, depending on how Congress is feeling that year sometimes. 

10:05 

So one thing I would say to make the entire defense supply chain more resilient is that we make those prime contractors more resilient, and they maybe can consider other things to do. 

10:19 

And I’m sure they’re doing just that in many cases. 

10:28 

Yeah, I think having companies that that have   good business planning They really have a good customer base. 

10:36 

They they know where they’re they’re heading But one of the so there’s kind of a in a sense of dichotomy. 

10:42 

I believe If you’re starting a new business and you’re saying well Where’s the opportunity? Where can I see opportunity? 

10:51 

Locate and say I can put my hands on a request for quotation or request for proposal   who is a customer   that’s a kind of a daunting question so we start a machine shop and now you’re standing outside   your door kind of looking scanning the street saying well where’s a customer who do I go approach and and it’s like is it that building over there or is it down the street   trying to find a customer that that’s the hard thing you to knock on the door and say, hey, I’m the machine shop. 

11:26 

I’m new. 

11:27 

I can do this. 

11:27 

I have all this great stuff. 

11:30 

Well, DoD becomes it. 

11:31 

It kind of has this big signal light over it. 

11:33 

It says, we’re open for business. 

11:35 

We’re looking for a small business. 

11:37 

But there’s a lot of pieces. 

11:38 

And that’s why the Apex Accelerators exist to a great degree of how do you get a company from that point, understand what’s required, how to put all the pieces in place, and then how to pursue. 

11:51 

But to do that, you have to be able to hold your breath a little bit. In other words,  , what is the customer base? 

11:57 

What is your revenue? What is your first contract? 

12:00 

And even though it’s not, even though the government’s a good, reliable payer, you deliver today, the government is only supposed to pay within 30 days, which is better than most commercial companies do. 

12:12 

But you still are going to fund whatever it is that you, you’re going to machine,  , for a period of time. 

12:20 

You’re going to have to buy the supplies, get it in-house, machine it, get it inspected, invoice it, but then you also gotta have another 30 days on the back end of that. 

12:29 

 , so you have to hold your breath. 

12:32 

And I think what you’re saying, Mark, is exactly right because like I was saying, if it’s sporadic and the cadence isn’t there and it’s small, is that enough to revenue for the shop to exist? 

12:44 

And so how do you go about finding those other customers? 

12:47 

Well part of that supply chain is that you can look to other members of the supply chain or to the primes So not only do you have the od but you have some of the primes? 

12:59 

They’re also visible, but they’re not as directly easy to get Involved with so in other words your machine shop you want to knock on? 

13:10 

Oshkosh’s door to say hey, I’m a machine shop.   we still have some of the issues of are you qualified? 

13:16 

Do you have the quality? 

13:17 

Do you have the cyber? 

13:18 

Do you have the resources? 

13:21 

Do they need a new vendor at this point in time? 

13:26 

So that becomes some of the big issues of, in a sense, the trepidation, so to speak, of the new members of the   DIB to entering into the   DIB. 

13:38 

It’s just not, I’m here, the door is open, welcome, go to the three pots you want to go to and scoop out your money. 

13:46 

and not it isn’t that way it’s much more difficult a lot more planning   a lot more focus and understanding who the   DIB is and   how   how are you going to interact with the   DIB i think are the the big thing but also understanding what the   DIB is going to do so coming back again to the demand signals of the budget and the agencies and understanding Who are your potential customers and how are you going to interact with the DOD as a whole, I think are key elements to existing and also new members of the DEV. 

14:32 

You bet. 

14:34 

And any business would rather go with tried and true suppliers than new suppliers or people who haven’t proven themselves in the market. 

14:42 

And often, through some work, well, there’s several things that roll into this, but we often see entrepreneurs who want to start with government business, and we usually quote them the maxim that the government will never be your first customer. 

14:59 

You need to get out in the market and get established and get a track record, so some sales, have some happy customers that you can get referrals from,  , and then they’ll take a look at you. 

15:11 

But then by that time, you will have solved. 

15:13 

Every company is going to go through growing pains. 

15:16 

Quality issues, supply chain issues, finance issues. 

15:20 

Do you have the, as Mark was saying, do you have the cash flow to be able to wait 30 days for a payment? 

15:25 

If you can’t wait 30 days and your financing isn’t solid, that’s something to think about. 

15:32 

It could be that your company is just in an earlier stage of growth. 

15:36 

The government is an advanced customer, or maybe the most advanced customer you could possibly have. 

15:43 

And they’re not really set up for entrepreneurs, quite frankly. 

15:51 

Another thing is, as Mark was alluding to, selling them things that they need, not things they can already get easily. 

16:00 

We’ve had a couple of clients come to us and say, well, I want to sell nuts and bolts. 

16:04 

I want to sell hardware to the government. 

16:08 

And I said, well,  , they they’ve been buying nuts and bolts since the Civil War. 

16:15 

I they probably have that covered and not probably either. 

16:20 

I was a mechanic in the Navy and with very few exceptions. 

16:23 

I always had nuts and bolts when I needed them and didn’t really care where they came from because I was the end user of that supply chain. 

16:33 

But I knew that somebody had looked at them, had done quality testing, hardness testing, the threads were going to be right, it was going to fit, and I was basically going to just pull these from supply and go install them and,  , not have the kind of failures that can really set a unit back. 

16:57 

So jumping into something that’s not a supply problem for the government, Mark said once and more than once on these podcasts, that companies are problem solvers. 

17:10 

And if you need to take any four words away from this entire set of podcasts, remember that companies are problem solvers. 

17:19 

You need to know your customer well enough to know what their problems are. 

17:23 

What can they not find? 

17:25 

What are they having trouble getting? 

17:28 

What need can you fill? 

17:30 

And you start from there, And then from there you can build a product list if for that customer and you should be doing that really with all your customers  , there’s nothing better than a supplier that calls you and says I got a problem and before you get   30 more seconds into the call. 

17:50 

They’ve already started telling you how they’re going to solve the problem that same thing between a contractor and the contracting office. 

18:00 

We had problems in 10 years of rebuilding machinery and but I remember I don’t know where I learned that or who told me that but I remember that was something we had to do. 

18:12 

First we discuss it and solve the problem then we call our customer and say we’ve got this problem going on and here’s what we’re going to do to resolve it and then if there’s anything, the only thing they’ll ask is, well, is there anything you need for me? 

18:28 

Maybe you need a little time, something else, maybe you’re going to need an extra quality visit from your QAR, could be,  , but you’ve reduced it down to something the government can actually do and participate and help with. 

18:46 

And that makes all the difference. 

18:48 

And they remember that about a supplier, that these are good guys to have in the supply chain, because they’re problem solvers. 

18:57 

And they don’t expect you to never have problems. 

19:00 

That’s not realistic. 

19:02 

But they do expect you to work on it and help with it. 

19:08 

When I say there’s nothing better than that, there’s nothing worse than having a supplier call you and say, well, I can’t get the parts, and I don’t know what to do. 

19:18 

So, you’ve just put yourself on the red list of the supply chain when you act like that. 

19:28 

Mark, I’d like to pick up on that idea there, because it dovetails nicely. 

19:35 

I was going to talk about the acquisition system as being one of the big hurdles a company has to get over. 

19:43 

And to that point, what you’re talking about, a company that calls up with an issue like that. 

19:51 

It’s like, hey, I can’t find this material. 

19:54 

Where do I find this? 

19:56 

 , there’s not a print for this. 

19:58 

There are times, and this is hard to believe, but there are companies that like will quote right off the request for quotation and don’t do a deep dive into the technical data or Seeing if the specification is still available seeing if the materials,   are still being Are available even if the mills are still making    that recipe is steel You have to remember again some of these some of these Items that that the government’s maintaining could be   to be 52 was Built in the late 50s,  , so some of the stuff,   are as ancient and, and the mills, you ask them for a certain mill spec or mill standard that it’s like, Hey, that went out,  , with the Eisenhower administration. 

20:55 

Exactly. 

20:56 

And so the problem is, is that the government to some extent is the last organization that you’re going to use a handshake, it’s a handshake contract. 

21:08 

And a lot of people look at me strange when I say that, but here’s what I mean. 

21:12 

The government puts out they post out their requirement a company responds to it They basically submit and they sign say I can do this the government is taking you at your word The government is not coming in and asking or checking each and every step prior to that. 

21:29 

They’re going to say hey the company looks responsible The price is fair and reasonable. 

21:33 

They have agreed to all the terms and conditions That’s what we have talked about in this podcast about being the contracting triangle And so they’re going to sit there and say sold and they’re going to,   award a contract to you now the expectation is that whatever it is and that that’s on that the Scopal work or specified is going to be delivered on the date that it’s supposed to be delivered by And it’s all going to be in the tidy package with the bow and everything else You have to back it up and get it inspected and all that other stuff But conceptually that’s what they’re looking for so that when you come in And a lot of times, some of these items will have 120 days, 200 days, maybe more on the delivery. 

22:21 

And so, one, you have to even think about that. 

22:23 

It’s like, if this is so simple apart, why am I delivering in 120 days or 240 days? 

22:32 

Is there something, if there’s something I’m missing here? 

22:35 

And now all of a sudden you say, well, it’s like being back in high school and you get the term paper due. 

22:41 

Oh, it’s not due for another week. 

22:42 

It’s not due for another week. 

22:43 

And the next thing  , you’re trying to pull an all nighter for it. 

22:47 

Well, now you call the contracting officer and say, hey, I need a modification. 

22:51 

It’s like, why do you need a modification? 

22:53 

Well, because I didn’t read anything and I can’t get this stuff. 

22:56 

I need your help. 

22:57 

And they’re saying,  , now it all goes south. 

23:01 

So to your point, Mark,  , and I think that’s where That’s where being the raw business, stepping into this very formal process, can be very dangerous. 

23:16 

As Mark was saying, this is not a simple everyday type of process at every business. 

23:25 

And it’s not,  , having the resources, the knowledge, the knowledge of not only the quality of the parts, but also the acquisition system of knowing how to maneuver in that, navigate the system, understanding what the terms and conditions all are, what the responsibilities,  , there are huge things that companies have to step up to, to really understand and be prepared to be into the, into the   DIB, be a member of the   DIB. 

23:55 

And then another issue that,  , beyond the material supplies and things like that, and the expertise perhaps, but also do you have the people and can you find the people to do the work? 

24:10 

This is the defense industrial base, and the industry part of the industrial base needs industrial workers. 

24:16 

This is something that has been on the decline just by the nature of the US becoming more of an information producing society and less of an industrial and building society. 

24:33 

And we’ve perhaps become reliant on being able to buy things overseas, have things built overseas. 

24:43 

As the decades change, sometimes the international relationships change, so countries where you used to be able to send a blueprint and say, make this for me and ship it back, sometimes those countries go on the adversary list and now you are not allowed, absolutely not allowed to get stuff made there. 

25:04 

And, but on the bright side of that, some of the great things I see is let’s say you are a manufacturer, you have a critical shortage of a certain type of employee. 

25:17 

Let’s say it’s a welder who welds specialized metals, something other than steel. 

25:24 

You just can’t find those welders. 

25:26 

So, maybe you go to visit a technical college here in Wisconsin who has a welding program and talk to them and say, do you have people that can do this,  , are you training, are you teaching this kind of welding? 

25:45 

And if not, how can we help? 

25:48 

And next thing  , you’ve got the ACME Incorporated School of Precision Welding at and such a university to,  , where that’s where a lot of these endowments come from. 

26:01 

There’s absolutely a great industrial and educational partnership going on, especially in the fabrication arts and the building arts. So that’s something to encourage. 

26:15 

And then,  , if you can’t do it on your own, we have all these wonderful venture capitalists that have cropped up in the last several years, who are looking for a good bet financially, the next shark tank success story,  . 

26:30 

And even the current secretary of the army is a recent venture capitalist himself and has been pushing those kinds of programs. 

26:42 

So,  , be aware of that, find out what these folks are doing and what they could be doing. 

26:47 

And,  , if you can’t find the people, then teach the people. 

26:52 

If you can’t do all the training in-house,  , identify where the gaps are, and then see if you can partner with, and Wisconsin, by the way, has such a fantastic secondary education. 

27:05 

They’ve got the UW system. 

27:07 

A lot of other states don’t even have all their state universities organized under one umbrella, but Wisconsin does. 

27:14 

And every technical college I visit just blows me away. 

27:20 

And the programs are offering and the quality of the students that they’re turning out. 

27:28 

And to that point, it’s not just a company issue, it’s a national issue. 

27:34 

And it’s a national issue to the point that Department of Defense has what’s called the IBAS office or program, the Industrial Base Analysis and Sustainment. 

27:45 

And they’re the ones who are looking out over to saying electrician welders,  , what is our crop? What is our core? 

27:52 

What is our capability? 

27:54 

You may have seen on some TV commercials of Bill submarine comm That’s coming out of the IBAS office and most recently within the literally the last last month Was it called Mark manufacture forward? 

28:08 

It’s a program of advertising to individuals that are looking to build skills, or see skills, and there’s a lot of transparency, a lot of knowledge, and there is a path forward because you can’t be building the the next generation of ships, and you can’t be building the next generation of submarines, and you can’t be building what the military needs without individuals who are well qualified and have all these skills. 

28:38 

And so, together, I think,  , kind of quickly summarizing, I think capital, knowledge of the process, the acquisition, I think having the skills,  , having the company ready and understanding what the expectations are. 

28:54 

But then on the government side, there need to be demand signals. 

28:58 

There needs to be stability there, there needs to be that working relationship that they’re doing to help bring companies along. 

29:06 

They also have to be clear and some of the things like we talked about cyber security, but one of the big issues that impact companies is the lack of of of inconsistent marking of some of the information that needs to be controlled or secured So the government has  , the government has their to-do list as well and and watching both these things I think those are the two ends of the div and they need to come together for the div to grow and to be successful. 

29:41 

And I’d like to think that one of the legs of that is the Apex Accelerator that we kind of monitor these issues and we can help discuss these with companies and help guide them forward as a way to look at it. 

29:57 

One of the great aspects of Wisconsin Procurement Institute as an apex accelerator is that they facilitate a lot of industry days, places where business and government contracting offices can get together, meet face-to-face, discuss their issues, also maybe do a little marketing there, a little one-on-one face-to-face meetings,  , present your company to them, give them your five-minute spiel. 

30:26 

And so keep an eye on our website. 

30:29 

The very first page of our website is our events calendar. 

30:33 

And on that events calendar, you’ll see events like we’re talking about. 

30:37 

And by all means, if you’re a business, sign up for those, attend those. 

30:41 

If you’re in the entrepreneurial stage or you’re in the very early days of your business, but you’re still interested in this, attend those anyway, because you’ll learn a lot by osmosis, just by listening to people talking to people and that will kind of guide you into whether okay this is for us or maybe this is not but you’ll know and you’ll have some facts instead of theory and but there’s nothing better than a good good industry day a good face-to-face meeting so that’s what that’s what we do when we’re out there in the in the public eye it’s because we’re together or being part of these large meetings and conferences throughout the state of Wisconsin. 

31:28 

So again, check our calendar out, go two or three months ahead, see what’s coming up, and take the short trip to wherever it is to attend those events. 

And to all of our audience, we hope that you’ll join us again, not only for these sessions, but again, check our website. 

33:00 

Our website is wispro.org. And if you’d like to talk with one of our counselors, called Wisconsin Procurement Institute. 

33:08 

That number is 414-270-3600. 

33:17 

414-270-3600. 

33:20 

And whoever answers the phone, just let them know what you’re calling about, what you’d like to discuss. 

33:24 

And we’ll assign one of our fine counselors to work with you. 

33:31