Oct 07, 2020 - 3:00pm

October 7 OUSD Conference Call Notes


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

OSD A&S: 

  • Last week, Hon. Lord testified before the SASC Subcommittee on Readiness and Management Supply Chain to discuss supply chain integrity.  OSD will pass a long a link to this testimony shortly, which we will share with you all.  
  • Kevin Fahey, Assistant SecDef for Acquisition will be the next speaker for Oct 21st call on how industries can get involved in the IDC (Industrial Base Council).
  • These calls will continue first and third Wednesdays of every month. Please let us know if there are any special topics you would like covered.
  • No update on Warp Speed yet, OSD is working on that and will get it out soon.

CMMC:

  • DFAR rule was posted on September 29th.  It is an interim rule. The fact that it came out as an interim rule instead of a proposed rule was a decision made at much higher levels.
  • CCMC has definitively have seen their adversarial impact with cyber over the course of COVID.
  • They’ve seen a great deal of evidence to support that and the OMB and the dark council and the other federal agencies saw the need of getting the CMMC in line and getting that interim rule functional as a matter of national security, which is the rationale behind the rule going from a proposed rule to interim.  
  • November 30, 2020 the interim rule is slated to become a final rule.
  • The link on the DEFAR rule for comment- CCMC is strongly urging industry and the public to make comment. There's a 60 day time frame once that's completed.
  • The rollout of CCMC has not changed at all- a crawl walk run on implementation.
  • Some clarification points: in the interim role it states the Department audits; what they're referring to in that segment of the internal is DIB tack. The DOD CMA has a DIB Tack (defense industrial base cyber).
  • DIB tack audits will continue.
  • There are three levels of the rule:
    • The CMMC will take five years to roll out throughout the acquisition. Hon. Lord is the coordinator for the pilot programs that will required CMMC.  The fact that OSD would bring 15 large contracts on line in 2021 will require the CMC. Those contracts are sprinkled across the services and defense agency partners. The rule change still is not final so they can't release it into RSPs or RFIs at this point so they are waiting for that to happen.  
    • On average they expect to have 100 new suppliers, vendor partners, subcontractors each on each of those so they’re estimating about 1500.
    • DIB Tack audits are going to continue; they have scheduled 90 in year 21.  They will have an additional 90 DIP Tack assessments.
    • In the interim, the self-attestation will continue so if it's not a CMMC in the acquisition that you're bidding on, the DEFAR rule states that the company must assess and evaluate themselves just like they are required today.
    • The vendor partner who has a DIB Tack audit that has been assessed high in that methodology- the partner will then reach out to the CMMCAB accreditation body to request information of the certified assessors that are available. The vendor partner negotiates with whomever of those certified assessors they want to engage with. Once you walk through that with your assessor, they will be given to DIB Tack audit,  you will be given reciprocity for all the controls that have been met in the CMMC Level 3 or level 1 model and the 20 control Delta that currently exists on the CMMC3- the vendor will need to have the auditor validate compliance on those before they can issue the CMMC certification.
    • You will not be double-charged, you will get credit for that work.
    • Public comment period ends November 30th, they are looking for comments in the meantime.
    • The interim rule posted out the cost of the CMMC. Vendor partners will need to incorporate it into their indirect rates.
    • The CMC and the DEFAR rule are not retro grade, they don't go back in time, so if you have a firm fixed price contract today when you go to recompete than that's when you will need to get the CMMC and you will build new rates based on the CMC.
    • Regardless of contract, companies need to be recertified every 3 years.

DLA: 

  • DLA is working on their supplier survey. Reporting model using best practices from consultants, industry and academia. It is repeatable across the federal government.
  • Last survey was conducted in September- November 2018 measuring DLA communications, supplier relationships, and growth and profit potential, and DLA effectiveness. The received a 38% response rate with, level of 98% confidence, margin error of 1.6. They produced an action place that addresses the survey’s entire score. Next step is the next survey this November using the same model to compare to the 2018 baseline; results will be available in 2021.
  • Fiscal year 2020 came to a close and they obligated 14.63 billion of their 36.9 eligible dollars to contracts to small businesses which equates to 40.08%- Compared to initial Goal of just over 32% DLA is proud.
  • DLA obligated $10.91 billion to contracts for small businesses and performance 5.43% higher over that period.

 

OSD Small Business: 

  • Army: Preliminary FY19 prime contacting achievements were nearly 24.5 billion dollars, equates to 30.84%. Met goals in every socioeconomic category. AUSA now has two small business seminars- there will be match making going on during the event. 
  • Air Force: Historic record for air force small businesses: $14 billion and out of 22.3 percent of eligible dollars for small businesses on the COVID 19 site: 679 awardees.
  • Navy: Week 2 had a record setting fiscal year regarding small business participation and dollars received as primes. $16.8 Billion went to small businesses as primes, which exceeded their goal. All great across the board in socioeconomic categories as well.

 

DCMA: 

  • Tracked 493 operational impacts to the DIB, to include direct impacts from temporary facility shut downs to scaled down production to illness and travel concerns in response to Covid-19.  The number of impacts has increased significantly to DIB facilities.
  • Industry has really adapted to operating in the COVID environment- DCMA is currently tracking one closure, this is the first closure in over a month and that's the result from an implant closed.
  • They’re also tracking the current conditions for hurricane Delta-currently based on the current track they don't see any impacts to the DIB but they will continue to monitor that- CMO's closely watching.

 

DPC: 

  • As of right now FY20 obligations across the Department: 418 billion, that's well above last year which was the prior record of 383 billion. About 80 billion of that was small business- close to 25%. They do think that that total number will grow as final reporting takes place in the day to get certified.
  • Relative to COVID there are over 35,000 actions AND just shy of 17.7 billion dollars in total- 8.6B of that are contract, 7.7B ROTs (that's where all of the operation warp speed vaccine development is primarily taking place) and over a billion in other financial assistance to include all of the DPA items.
  • So billions of dollars in PPE, vaccine Pharmaceuticals, and in the hundreds of millions in mass generalization products, testing supplies and ventilators.
  • Pretty significant spend on the DoD side in support of the national effort.
  • DPC will have updated guidance relative to the extension of 3610 that was in the CR language; the only reason why they haven't published it yet is the official record and wording is not yet published on the congressional website and they were waiting for that to take place.
  • The Department continues to advocate for an appropriation for 3610 as well as other COVID related costs.

 

Associations/Chamber: 

  • OSD is looking for an industry contact list, if anyone has an update resource please share with OSD, or us to pass on to OSD.
  • Exec Order 13950 Combating Race and Sex Stereotyping: hotline for contracting employees to report and complain of violations.  Hotline has been set up, although there is no contract compliance language. How is DOD tracking this? DOD is waiting for information from department of labor before addressing.
  • Has DOD publicly extended the ODNI waiver? Yes, just an extension no change to content.
  • Question regarding CCMC’s Accreditation Board: Any update on the governance or the resourcing for the accreditation board? Yes- DOD has been working on getting the ISO certifications that will be required for the different component parts through the accreditation body. Within 2 years, AB must obtain ISO certification 17011. That oversight and rules of engagement was paramount. Then the AB body will engage with a training entity- a nonprofit type- who has to have the training ISO to avoid conflicts of interest. Testing facilities, same thing- they have ISO standards they need to meet as well.

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.