Apr 17, 2020 - 4:15pm

DAEC COVID-19 Update April 17: Notes from Today's OSD Call


President, Defense and Aerospace Export Council (DAEC)
Vice President, U.S. Chamber of Commerce

April 17th OSD A&S COVID Conference Call Notes:

  • There are some major financially distressed companies and OSD is working to figure out how to help.
  • Some really big challenges out there; every day there is a +$1B growth in negative impacts and this is since tracking over the past 14 days so you can imagine the overall number and scope of the challenge.
  •  PPE—meeting with a bunch of companies and it’s a mix of those that need PPE and those who don’t; OSD needs associations and the Chamber to help identify those who need PPE, who they are and what those specific needs are. 
  • Big concern is medical grade PPE versus less than medical grade PPE; part of the issue is what an industry and or States really are demanding and can that be addressed—so the “what” is critical in addressing PPE for essential workers.  

OSD Small Business: 

  • Prioritization of testing and PPE for essential workers still top priority, there is no easy solution.
  • Four meeting in past 48 hours at highest levels, they are working on it. 
  • Small business loans and PPE have maxed out; still working applications, but relief ceiling has been hit so they are accepting no new applications. 
  • Still working banking engagements and identified three banks open to helping new businesses and industry should start application processes now in anticipation of additional loan authority.  See Business.defense.gov to see details. 
  • SBA debt relief and bridge loans still available and see OSD SBA website. 
  • They are planning two additional small business webinars—April 22nd at 11:00am Cyber Focus re protecting small business in a COVID 19 environment.  Wednesday April 29th focus on trusted capital for DIB small businesses.  Details on both events coming. 
  • They are seeking other topics for future webinars for small business. 
  • The small businesses package is available for download on business.defense.gov site and includes a host of samples and information OSD believes is helpful to include the safe passage sample letter for essential workers. 

JATF: 

  • They are continuing synchronization regarding portal within DoD and with FEMA and merging previous databases.
  • The FEMA site is still alive and working and continuing to ask industry to use both sites to send in proposals to the government.

Small Business Service leads: 

  • Army – nothing new to report just working through issues raised by their small business supply chains.
  • Navy – There is a SecNav teleconference this week with smaller shipyards and they are doing ok to date but absenteeism is running around 10% to date.
    • The Navy is spending $1.23B greater in contractor payments for their small businesses as compared to last year at this same time and to date.
    • For the year, Navy has processed in excess of $7B for their supply chain; website DON.OSDP has a list of small business resources. 
  • Air Force – keeping a small business utilization focus.
    • Their website is updated with all current links; breaking out direct small business utilization for COVID and to date working with 137 suppliers for COVID actions.

DCMA: 

  • They are monitoring progress payment and working with DPC on payment reporting process.
  • They are working non DCMA payments and how that data can be captured.

DPC: 

  • DCMA, DFAS, DPC and Services to capture non DCMA management contracts regarding turnaround times on payments and amount of money flowing.
  • Most larger invoices are in house with DoD now and they should see payments against these larger invoices within the next week or so to primes, small business primes and then those payments are expected to quickly flow down the supply chain.
  •  Still asking for payment flow down data and continue seeking prime contractor support to obtain that payment data.
  • OSD issued direction to contacting officers yesterday regarding at risk contractors in Afghanistan and the need to remove them.
  • Regarding UCAs, and 80% ceiling, DPC issued a memo correcting earlier guidance and have submitted a legislative fix to the Hill for stimulus package 4 that would allow DoD to pay greater than 80% of the value of a UCA to a prime—seeking up to a 100% pre definitization and full award.

DLA: 

  • 1600 companies with some negative COVID impact; over 600 closed--163 reopening this weekend; 464 remaining closed due to a host of COVID impact issues.
  • States with biggest DLA supply chain COVID impacts are CA, New York, New Jersey, Texas.
  • Supply categories most impacted are subsistence(food), clothing and textiles, aviation seals, ducts and bearings.

Associations: 

  • Congress is asking for greater data on actual industry impacts and closures and data supporting those numbers—SASC specifically; need to begin planning for return on contract personnel into the workforce—challenges and issues learned from the government shutdown of how not to do so, so need to begin a discussion on how best to plan a return to work.
  • Discussion of ratings given COVID performance impacts—DPC stated that there will be no negative ratings impact for those industries who experience COVID performance impacts.
  • Concerns with supply chain risks growing re foreign control, intellectual property theft, etc. especially with respect to Cyber vulnerability as well as other vulnerabilities.
  • OMB guidance on Sec 3610 just posted which states the effective date is March 27th vice DPC stated effective date of 31 January—DPC stated they made their position clear to OMB on this matter and DoD has not changed their position yet and suspect they will get challenged but DoD intends to hold firm.

 

 

About the Author

About the Author

Keith Webster headshot
President, Defense and Aerospace Export Council (DAEC)
Vice President, U.S. Chamber of Commerce

President, Defense and Aerospace Export Council (DAEC), and Vice President, U.S. Chamber of Commerce.