Where Industry and Security Intersect
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This chapter examines the contribution of the U.S. textile and apparel industries to the U.S. Armed Forces. There are two sections to this chapter. The first considers the contribution of the textile and apparel industries in meeting the regular needs of the DoD. The second section considers the contribution of these industries in meeting DoD’s surge requirements. Surge demand by DoD is triggered by escalated efforts, such as the recent operations in Afghanistan and Iraq. This chapter analysis relies on information provided by DoD’s Defense Logistics Agency (DLA), as well as data collected in the BIS survey.
In Fiscal Year 2001, the total amount of textile and apparel products directly consumed by DoD amounted to almost $1.3 billion. This represents one percent of the $132 billion of U.S. textile and apparel shipments for that year and includes only products classified under Federal Supply Classification Codes (FSC) 83 (Textiles, Leather, Furs, Apparel & Shoe Findings; Tents) and 84 (Clothing, Individual Equipment & Insignia). DoD expenditures on textile and apparel products as a percent of total U.S. shipments since 1997 are shown in Table III-1.
Table III-1. DoD Expenditures as a Percentage of Total U.S. Shipments
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| Year | U.S. Shipments | DoD Expenditures on Textiles, Textile Products and Apparel |
DoD Expenditures as % of Total U.S. Shipments |
|||
|---|---|---|---|---|---|---|
| Textiles | Textile Products |
Apparel | Total | |||
| 1997 | $58,707,401 | $31,051,835 | $68,018,116 | $157,777,352 | $991,044 | 0.6% |
| 1998 | $57,415,758 | $31,136,672 | $64,931,989 | $153,484,419 | $883,519 | 0.6% |
| 1999 | $54,306,467 | $32,689,157 | $62,305,193 | $149,300,817 | $921,191 | 0.6% |
| 2000 | $52,112,118 | $33,654,181 | $60,338,991 | $146,105,290 | $1,089,056 | 0.7% |
| 2001 | $45,680,697 | $31,970,642 | $54,598,294 | $132,249,633 | $1,278,166 | 1.0% |
| 2002 | N/A | N/A | N/A | N/A | $1,816,237 | N/A |
| Source: U.S. Department of Commerce, Census Bureau | ||||||
Figure III-1 shows the share of total DoD expenditures accounted for by textile and apparel items since 1994. In Fiscal Year 2002, expenditures by DoD on textiles and apparel increased to $1.8 billion from $1.3 billion in the previous fiscal year, a 38 percent increase. However, total DoD expenditures also increased significantly from Fiscal Year 2001 to 2002, primarily because of preparations and support for Operations Enduring Freedom and Iraqi Freedom. As illustrated in Figure III-1, expenditures on textiles and apparel by DoD as a percent of total DoD expenditures were 2.3 percent for fiscal year 2002, up from 1.9 percent in the previous fiscal year.
Figure III-1. Textile and Apparel Share of DoD Expenditures
Source: U.S. Department of Defense, Werner International
The top three apparel products consumed by DoD, which account for over two-thirds of all DoD consumption, are special purpose clothing, personal armor, and men’s outerwear, each contributing 46 percent, 11 percent, and 11 percent respectively, of total DoD direct expenditures on textiles and apparel. Figure III-2 shows consumption of all categories of textile and apparel items by the armed forces.
Section A.1 above considered only direct DoD expenditures on textile and apparel categories (FSC codes 83 and 84). DoD also makes direct purchases of products in other product categories (other FSC codes) that include significant quantities of textile and apparel items as inputs but also include significant components that are not textile and apparel items and were therefore excluded from the discussion in Section A.1. For example, the “Floor Coverings” category includes not only carpets but also hard floorcoverings. Table III-2 shows these additional product categories. If these additional categories were considered in their entirety, “textile and apparel items” would account for 2.55 percent of the total DoD procurement budget.
Figure III-2. Consumption by the U.S. Armed Forces of Textiles and Apparel
Source: U.S. Department of Defense
Table III-2. DoD Direct Spending in All Textile and Apparel Products
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| FSC Codes | Product Category | DoD Spending |
|---|---|---|
| 83 | Textiles | $138,932,182 |
| 84 | Clothing | $1,688,195,902 |
| 1540* | Gliders | $3,195,958 |
| 1670* | Parachutes etc. | $125,873,975 |
| 4020* | Fiber Rope, Cordage, Twine | $4,610,096 |
| 6510* | Surgical Dressing Material | $4,149,694 |
| 6532* | Hospital and Surgical Clothing | $425,149 |
| 7210* | Household Funishings | $63,820,421 |
| 7220* | Floor Coverings | $18,015,117 |
| 7230* | Draperies, Awnings, and Shades | $3,658,254 |
| Total Above | $2,050,876,748 | |
| % of total expenditure | 2.6% | |
| Source: U.S. Department
of Defense * The portion of textile content in each item cannot be discretely ascertained from available data. |
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In addition, textile and apparel products are incorporated into many other products used by DoD. This includes, for example, items such as: (1) fibers used in aircraft; (2) textiles used in tire cord, tubes, and hosing; (3) textiles used in motor vehicles and boats, such as seats, safety belts, and airbags; (4) textiles used in machinery and equipment such as conveyor belts and filters; (5) textiles used in construction; (6) textiles used in furniture, such as seat covers and seat backing; (7) textiles used in books; and (8) textiles used in cleaning equipment such as mops and sponges. Textiles and apparel constitute only a very small percentage of the overall value of these products, are often incorporated in the lower tiers of the production process, and are not specifically captured by publicly available information or BIS survey data. As such, gauging the value of textiles and apparel indirectly consumed by DoD through procurement of these goods is very difficult.
The bulk of textile and apparel items acquired by DoD are acquired through DLA. DLA is a “combat support” agency, providing supplies and materials to the U.S. Military Departments as needed. DLA has five business units to provide services associated with the acquisition, distribution, maintenance, and disposal of parts and supplies. DSCP is the DLA business unit (or “inventory control point”) for four commodity groups: clothing and textile, food and related equipment, medical material, and general and industrial products and services. DSCP sells to the U.S. Military Services, as well as to some federal, state, and local entities.
In Fiscal Year 2002, DSCP had $7.8 billion in sales, $1.5 billion of which was clothing and textile related. The clothing and textile commodity group is managed by DSCP through its Clothing and Textile Directorate (C&T). C&T supplies more than 8,000 different items (30,000 line items after factoring in individual sizes).
In addition to the purchase of finished products, DoD also buys fabric directly from the textile industry. Contractors then utilize the fabric to manufacture end items. This procedure results in substantial savings due to discounts on large volume purchases and produces an end product of uniform quality.
Table III-3 shows the locations of suppliers that sold the most textiles and apparel items (by value) to DoD in Fiscal Year 2002. The state of Texas was the largest source, with 12 percent of the total.
Table III-3. DoD Textile and Apparel Procurement by State (FY 2002) |
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| State | Total ($ Millions) | Percent of Total |
|---|---|---|
| Texas | $224.7 | 12% |
| Tennessee | $157.0 | 9% |
| Kentucky | $124.2 | 7% |
| North Carolina | $111.6 | 6% |
| Alabama | $108.0 | 6% |
| All States | $1,681.3 | 92% |
| All other sources | $1,827.1 | N/A |
| Source: U.S. Department of Defense | ||
Table III-4 shows the largest suppliers to DoD, based on public data available from the DoD through its Directorate for Information Operations and Reports. The largest private military apparel supplier is Puerto Rico-based Propper International, with $67.4 million in contracts for Fiscal Year 2002. The largest textile fabric supplier is Burlington Performance Wear of Virginia, with $15.6 million in contracts in the same fiscal year.
Table III-4. Suppliers to the U.S. Armed Forces, Largest Suppliers,
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| Location | Dollar Value | |
|---|---|---|
| Textile Fabrics | ||
| Burlington Performance Wear | VA | 15,623,390 |
| Burlington Industries Inc | NC | 10,895,478 |
| Burlington Industries Inc | VA | 1,658,560 |
| Duracote Corp | OH | 746,862 |
| Drapery Corp. of America, Inc |
NJ |
413,835 |
| Narricot Industries Inc | VA | 267,528 |
| TOTAL | 36,587,993 | |
| Tents and Tarpaulins | ||
| Camel Manufacturing Co |
TN | 17,066,244 |
| AC Inc | AL | 15,568,822 |
| Alaska Industrial Resources | AK | 8,528,873 |
| B & B Manufacturing Inc | HI | 6,855,197 |
| Alaska Industrial Resources | AK | 1,911,814 |
| American Spacer Frame Fabricator | FL | 1,853,520 |
| TOTAL |
95,471,603 |
|
| Outerwear Men |
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| ORC Industries Inc | WI | 31,703,371 |
| American Apparel Inc | AL | 29,058,655 |
| Propper International Sales Inc | PR | 12,856,555 |
| Rutterrex Inc | LA | 9,714,894 |
| New Maryland Clothing Mfg Inc | MD | 6,137,672 |
| TOTAL |
199,471,603 |
|
| Outerwear Women |
||
| Derossi & Son Co Inc | NJ | 9,990,113 |
| Propper International Inc | PR | 2,861,439 |
| Federal Prison Industries Inc | SC | 2,120,389 |
| Sam Bonk Uniform Cap Inc | NY | 1,499,947 |
| VGS Inc | OH | 1,830,793 |
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TOTAL |
31,711,677 |
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Clothing, Special Purpose |
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Propper International Inc |
PR |
51,685,949 |
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DJ Manufacturing Co Inc |
PR |
42,116,949 |
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Golden Manufacturing Co Inc |
MS |
40,698,709 |
|
American Apparel Inc |
AL |
38,125,242 |
|
Creative Apparel Association |
ME |
26,776,181 |
|
TOTAL |
841,954,653 |
|
| Underwear & Nightwear , Men |
||
| Campbellsville Apparel Co | KY | 11,458,695 |
| Union Underwear Co Inc | KY | 5,939,313 |
| Jenson Promotional Items Inc | NC | 4,241,648 |
| National Industries for the Blind | MS | 3,672,000 |
| Jockey International Inc | KY | 1,820,000 |
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TOTAL |
33,860,734 | |
|
Footwear, Men |
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Belleville Shoe Mfg Co |
IL | 44,435,171 |
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Wolverine Worldwide Inc |
MI | 28,475,850 |
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Wellco Enterprises Inc |
NC | 19,885,764 |
|
Altama Delta Corp |
TN | 17,052,742 |
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Munro & Company Inc |
AR | 11,884,087 |
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TOTAL |
161,514,965 | |
|
Footwear Women |
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Capps Shoe Co Inc |
VA | 3,314,550 |
|
New Balance Athletic Shoe Inc |
MA | 2,926,267 |
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TOTAL |
5,632,229 | |
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Hosiery, Handwear, Clothing Accy |
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Special T Hosiery Mills, Inc |
NC | 8,747,885 |
|
Singer Hosiery Mills, Inc |
NC | 4,651,899 |
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SAMCO |
NY | 3,265,208 |
|
Travis Assn for the Blind |
TX | 2,961,561 |
|
Mauney Hosiery Mills Inc |
NC | 1,892,985 |
|
TOTAL |
5,632,229 |
|
|
Armor Personal |
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Point Blank Body Armor Inc |
FL | 70,406,426 |
|
Armor Works LLC |
AZ | 23,570,707 |
|
Simula Safety Systems Inc |
AZ | 22,793,390 |
|
Ceradyne Inc |
CA | 20,224,566 |
|
Men-eng Systems Inc |
CA | 11,941,603 |
|
TOTAL |
200,489,461 |
|
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Special Flight Clothing & Acce. |
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Creative Apparel Assoc |
ME | 18,449,984 |
|
Gentex Corp |
PA | 11,643,341 |
|
Derm Buro Inc |
FL | 2,265,813 |
| TOTAL | 42,794,106 | |
| Source: U.S. Department Of Defense | ||
In addition to private U.S. firms, several other organizations are DoD-preferred suppliers. U.S. government agencies are required to consider the government supply sources listed in the Federal Acquisition Regulations (FAR) when acquiring supplies and services (FAR Part 8). Significant government supply sources are (in descending order of priority):
The basis for DoD’s implementation and supplementation of the FAR regarding “Required Sources of Supplies and Services” is available at Defense Federal Acquisition Regulation Supplement (DFARS) Part 208.
Federal Prison Industries is the largest military apparel supplier among the sources other than industry, with $44.7 million in contracts for 2003 to date. The National Center for Employment of the Disabled is second, with $44.5 million in contracts in the current fiscal year. Goodwill Industries and the National Industries for the Blind are also significant apparel producers.
DoD includes a “surge option clause” in a growing number of procurement contracts in order to ensure access to increased production in a short period of time when needed. Sharp increases in production may be required to support mobilization efforts by the U.S. armed forces. Specifically, under surge conditions, firms can be asked to increase their production within 90 days of notification by 50 percent above the maximum amount specified in their contract. According to information provided by the DLA for this study, DoD suppliers of textiles and apparel have a strong capability to meet surge requirements, as evidenced during Operation Enduring Freedom and Operation Iraqi Freedom.
Thirty-nine percent of firms that responded to the BIS survey supplied products to the defense sector during 2002. To assess their ability to surge productions, firms were also asked if they could double their monthly output of defense-related textile and apparel items within six months, 12 months, or some longer period. Of the 195 firms who replied to this question, 155 of them (or 80 percent) stated that they could double production within six months; 175 (or 90 percent) answered that they could double production within 12 months. Ten firms (or about five percent) reported that it would take them longer than 12 months to double capacity. The average time required for these ten firms was 26 months. The remaining ten firms stated that they could not double output in any amount of time. The results are summarized in Figure III-3.
Figure III-3. Surge Production Capabilities of Surveyed Firms Supplying DoD
Source: U.S. DOC/BIS Industry Survey Data
Firms were also asked about what barriers they would encounter in doubling their production. The results are presented in Table III-5.
Table III-5. Difficulties Firms Experience in Doubling
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| Percent of Respondents | Primary Delay Factors |
|---|---|
| 18.5% | Delays in Delivery of Domestic-Sourced Raw Materials |
| 16.1% | Labor Shortages |
| 14.9% | U.S.-Sourced Raw Material Shortages/Non-Availability |
| 13.4% | Plant Space/Capacity |
| 11.6% | New Machinery Delivery Lead-times |
| 11.3% | Access to Capital |
| 4.8% | Delays in Foreign-Sourced Raw Materials |
| 4.5% | Foreign-Sourced Raw Material Shortages/Non-Availability |
| 3.9% | Other Reasons |
| 1.2% | Labor Agreements |
| Source: U.S. DOC/BIS Industry Survey Data | |
The main barriers impeding production increases are limitations in domestic inputs, including domestic raw materials and additional labor. A smaller number of respondents (4.8 percent) indicated that they would encounter difficulties or delays in obtaining foreign-sourced materials. Respondents also indicated that plant space, new machinery lead times, and access to capital could constrain their ability to expand production.