Apr 29, 2020 - 3:30pm

DAEC COVID-19 Update April 29: Notes from Today's OSD Cal


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

April 29th OSD A&S COVID Conference Call Notes:

  • There is a one hour call with OMB today on stimulus 4.0 and DoD input.
  • Sec Def distributed guidance through June 30th on expansion of exemptions and waivers allowing for some essential recruiting and training for the military to include travel; see press release for details.
  • Treasury Department implementation of Section 4003 regarding loans in original CARES Act, specifically $17B for those industries critical to the national security of the US, and a web based form went live on Monday.
  • Treasury defines a company that is eligible for the $17B as one who at the time of the application is performing under a DX rating, operating under a TS security clearance, and/or by recommendation of the SecDef.
  • There is a lot of activity at Treasury on this loan program this week and the OSD Industrial Base Council, which will review those loan requests from the DIB for this loan program to try to manage the situation and ensure a proper DoD review.
  • So far less than 20 companies seeking a Sec 4003 loan. 
  • SecDef letter to the essential workforce is very close to signature by the SecDef.

Small Business: 

  • There was a small business webinar today at 3pm.
  • The call Friday will be dedicated to small business issues.

JATF: 

  • Several working group meetings this week focused on pandemic plans and industrial base capacity, and the look of a future stock pile for the next wave of the pandemic.

IC: 

  • They aren’t tracking any specific DIB closures in Canada, which was a question raised as there may be a supply chain issue soon with Canada.
  • With regard to Mexico, the department and interagency are heavily engaged and have had some success in reopening some suppliers and there is inconsistency and although they are making gains, each day seems to bring another closure.
  • DCMA jumped in to say that actually it appears industry is on message with the US Country team and that most success is being accomplished via prime leadership vice government leadership.

DCMA:

  • Various stats on progress payment activity.
  • A little over $4B processed in April compared to last year at this time, which clocked in at $700M.  So huge payment volume in response to pandemic needs and doing so a few days less in average processing time as compared to one year ago. 
  • May will see as much, if not more, financial activity pushing payments out to industry and the supply chain.

DPC: 

  • Review of non MOCAS payments, to date over $11B processed, 90% paid on time and time is a watch item averaging 7 days for non-DLA invoices.
  • DLA invoices are averaging about 15 days and in general seeing quick turns on payments and beating targets and infused significant amount of cash into the DIB.
  • $650M in progress payments was received over the past week or so and so payment this week for those invoices will post later this week early next week for about another +$3B pushed out to the DIB. 
  • Section 3610—OSD taking a rather narrow scope for reimbursement under Sec 3610 and thus will not include other costs like cleaning facilities, PPE, etc., which will be claimed via standing FAR/DFAR rules. 
  • Looking at a coordinated approach for resolving COVID 19 claims other than Sec 3610 so as to avoid mod after mod to the various contracts.
  • They are working a proposal and paper for Service review next week, and week after have a final consolidated recommendation that will then be passed to industry for comment, and then in about another week issuing final guidance reflecting industry input. 
  • Therefore, by mid to late May this guidance document will be published and will serve as a solid working document. 
  • They will also develop additional guidance regarding the definition of what is allowable as an equitable adjustment under the pandemic as the original guidance published a few weeks ago was not sufficient.

Associations:

  • An assessment is being conducted on meat packing impacts and ability to implement DPA from this week.
  • Good survey from American trucking association which should give further insights into small business segment.
  • Expanded work with HHS on DPA Title 3 funding under 3.5 stimulus—what might industry see?
    • Industrial expansion language was included in stimulus 3.5, to support HHS mission specific to stockpiling and moving critical pandemic production to the US thus reducing or eliminating foreign dependencies.
    • Department language is being worked and DoD reached an agreement with HHS to develop a plan to begin to implement a program to build a strategic stockpile and determine what production must be sufficient within the US and not off shore—for industry, DoD will see increased workload to support HHS mission to do industrial expansion that is DPA like and industry should see some additional direction soon. 

 

 

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.