May 08, 2020 - 3:15pm

DAEC COVID-19 Update May 8: Notes from Today's OSD Call


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

May 8th OSD A&S COVID Conference Call Notes:

  • OSD will play a significant role in “Operation Warp Speed,” which is the administration’s COVID-19 vaccine project.
    • Goal: 100 million doses of the vaccine available by November, 200 million vaccine dosages out by December, and 300 million available by January.  
    • HHS is leading the effort with DOD. 
    • Health and Human Services Secretary Alex Azar and Defense Secretary Mark Esper are taking the lead. DOD selected a a DASD to act as director of the project, this person will be the interagency lead for supply and distribution.
  • DOD Small businesses: Next Webinar is Wednesday, May 15 at 1pm.
    • This webinar will cover how to keep companies working, expanding telework for contractors, increasing liquidity and cashflow, as well as understanding section 3610 of the CARES Act.
    • More info can be found at business.defense.gov.
  • Three main concerns raised in OSD’s last survey:
    • Your defense business post COVID-19
    • Policy and regulatory updates
    • Access to capital

Services:

  • Navy: Revamping their website to make it more user-friendly.  They are open to feedback from industry. They will be sharing recorded webinars on their website and YouTube channel. Last webinar is 3-4PM today.
  • Airforce: Up 192 small business awards, with 300 contracting actions worth 26 million dollars.   They have made 6 small business innovator awards.

DCMA: 

  • Total number of DIB facility closures continue to decrease- 49 total closed, down from 87 a week ago and 106 two weeks ago.
  • 395 total contractors have been impacted, 195 total have reopened since march. 
  • Average number of days to re-open remains at 16.4.

DPC: 

  • Through Wednesday of this week, DOD had placed approximately 10,000 contract actions that are COVID-19 related and over 4000 have gone to small business. Out of 2.2 million of those 10k transactions made, 156 million has gone to small businesses.
  • DPC released a few new capabilities to allow for solicitation to be done in an automated way with everyone now teleworking, industry can respond.  If you’re interested, DPC released an administrative memo yesterday covering the details.
  • Congress wrote a paragraph in sec 3610, and DPC wrote 15 pages to explain it.  DPC wrote an additional 10 pages to go out to contracting officers. 
    • DPC received 40 pages of additional questions from the services on the 10 pages submitted, so eventually a book will be released responding to all for the benefit of industry.
    • They will not make the original Monday deadline, it will likely take another week to produce.
    • Weekly 3610 FAQ will be on hold but available in the new guidance on the subject so they will not publish anything today related to that.

DLA

  • Tracking 48% of their awarded contract actions going toward small businesses.
  • Monthly webinar on doing Business with DLA will be next Wednesday at 2pm.
  • Engaged with JATF team to handle non-traditional suppliers entering portal to make sure they’re registered and handled properly.

 

Associations: 

  • Small and big businesses are having discussions on when public events may happen, given the importance of trade shows and industry’s interaction with government officials. Associations are seeking advice on that front.
  • Associations are starting to hear concern on the ability to engage with program offices, active bases.  The focus on PPE is taking up all of the oxygen, but in the meantime everything else still needs to run.  Associations are asking DOD to continue engaging with DIB moving forward.
  • For small business, looking at logistics and transport, the largest impact is to the trucking industry.
    • This sector is unique because they operate on tender. Trucking industries are down 65% in overall business- and that includes business for government and the economy at large. It is difficult for them to lobby to be included in the CARES act. Their bottom-line feedback to associations: Get the country back to work.
  • Convulsions in supply chain because of dramatic decrease in sales volume is a strong complaint.
  • There is a large line of effort in ramping up production and retooling lines to produce PPE.
  • DPA Title 3 funding, how much is left? Industrial expansion effort with DHS and FEMA?
    • DPA- that amount of money is already allocated and will be for medical purposes.  There is still a sizable amount HHS has under the CARES act. That’s what they expect to go to the Industry expansion side of things- no shortage of that funding. It is a JATF discussion regarding prioritization and DLA determining where they will find the source of supply.  
  • Liability is a major concern for small businesses.  Potential for being sued even for following government regulations.  Big business may be able to handle it but small companies cannot sustain that, what is OSD’s position on this?
    • In DHS forums, there has not been any solution identified.  The need for legislations to protect critical infrastructure from liability and consequences has been identified. The group senses that internal production will catch up with the demand, but continuing concerns impact industry’s ability to reopen.
    • OSD is looking for guidance and feedback to advise small business on how to face liability concerns.
    • PPE- not provided by the government so it is a huge cost.  Much of the workforce does not want to return. 
      • OSD understands and is looking for ways to approach this.
    • Small business subcontractors want the ability to engage in decision-making process.
    • PPE- what’s offshore vs. what’s domestic, the wakeup call is that we cant even support ourselves internally with something as small as masks. This is a topic that requires a deep dive at the highest levels of government.

Action:  What are industry’s major concerns regarding workforce and reopening? Please share feedback with us to provide to OSD.

 

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.