Mattis Moves to Protect Defense Supply Chain From Rivals' Theft

(Bloomberg) -- Defense Secretary Jim Mattis has named a task force to recommend ways to protect critical technologies from theft by China, Russia or other adversaries.

“Working with our partners in the defense industry and research enterprise, we must ensure the integrity of our classified information, controlled unclassified information and key data,” Mattis said in the memo dated Oct. 24.

“Each year, it is estimated that American industry loses more than $600 billion dollars to theft and expropriation,” Mattis wrote. “Far worse, the loss of classified and controlled information is putting the Department's investments risk and eroding the lethality and survivability of our forces,” Mattis said.

Read More: Supply Chain Risks Could Force Big Changes on Defense Industry

Without mentioning any particular adversaries, Mattis said “solving this problem will require an integrated effort” that needs a specialized “Protecting Critical Technology Task Force” that will “draw a small, dedicated staff” from the offices of acquisition, research, cost analysis, Defense Intelligence Agency and Army, Navy and Air Force criminal investigations services.

The memo was written a week before a Chinese state-owned company was charged with conspiring to steal trade secrets of U.S. chipmaker Micron Technology Inc. Fujian Jinhua Integrated Circuit Co. and Taiwan's United Microelectronics Corp. were indicted in California on Thursday along with three individuals, according to court papers unsealed Thursday in federal court.

Read More: U.S. Says China State-Owned Company Stole Micron Secrets

Mattis directed the task force to organize the next four months into 30-day and 90-day efforts, or “sprints,” to “address a number of basic problems” as it also grapples with “broader systemic issues.” The memo doesn't define those issues.

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