Sep 02, 2020 - 2:45pm

September 2 OUSD Conference Call Notes


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

OSD A&S: 

  • Transitioning calls to 1st and 3rd Wednesday of every month (we will adjust our membership invites accordingly).
  • DTA Title 3 SY21 Title 1 Department Funding request and likely range of funding: Total request was $181, 931,000 to address Domestic Industrial Base critical shortfalls, as identified in the interagency report the response to Executive Order 13086 and ensured the industrial base can support the Department’s Strategic Modernization Initiative.
  • The request would fund Industrial Base efforts to include rare earth, critical chemicals, small unmanned aerial systems, hypersonic applications, and electronics.
  • Specified numbers for each effort are subject to change based on ongoing market research and acquisition process.
  • The House Appropriates Committee approved the FY2020 Defense Funding Bill back in July. The committee recommended an increase of $10 Million for a total appropriation of $191, 931,000 for DPA to support activities to expand production capacity and supply and to incentivize the domestic industrial base to grow the production supply of critical materials and goods. Any increase will allow the department to make further investments in these critical areas for other industrial base shortfalls as they are identified.
  • The Senate Appropriations Committee has not marked up any of its bills, and it appears unlikely that they will do so before the November elections.
  • With regard to the NIA (National Interest Action Value) extension, the expiration date is extended to March 31, 2021.

DLA: 

  • Last Thursday, there was an award for 150 million test kits purchased from Abbott. These are being delivered to the States on behalf of HHS.  
  • It was a sole-source award based on Emergency use authorization that was issued by FDA last Wednesday.

OSD Small Business

  • Air Force: In 2020 to date, they have obligated to small business $11.2 billion (20.3%). COVID related Air force awards roll up to approximately 600. Total Airforce contract actions, as well as civil actions roll up to 1200 total actions worth $600 million.

DCMA: 

  • Tracking 489 impacts since the start of COVID. 
  • Currently there are no DIB facilities closed, no plants are closed either.
  • Working on closing out aging impacts; there are 122 total. 
  • Communications between industry and DCMA is good.  They are receiving good notifications and see a good road ahead.
  • This was DCMA’s last report on payments.
  • As of last week, DCMA had 184 progress payments. These numbers are hovering around pre-COVID activity worth $1.1 billion. Normal rhythm. No more progress payment reports to come.
  • If the DIB continues to stay stable, they may not be reporting on any more closures either.

DPC: 

  • Relative to COVID spending, DPC dipped down a bit.  They are just shy of $16 billion total in COVID spending.
  • DPC made a request for supplemental DPA funding.

Associations/Chamber: 

  • Question regarding 3610: There was a class deviation for reimbursement request that was recently issued, does that supersede any previous class deviations or guidance relevant to potential reimbursements for PPE within DIB facilities?
    • Those documents are for 3610 only, they wouldn’t cover any other costs due to COVID, PPE, etc.
    • July 1, a letter was issued that spoke about non-3610 & non-regulatory REAs. For categories other than those 2, OSD’s memo said they believe OSD should cover those costs if they get an appropriation from Congress.
  • Are DOD requests in subsequent funding focused on DIB itself rather than all PPE?
    • OSD does not have enough information to answer that exactly, however supplemental funding is focused on the DIB. Regardless, OSD did use a chunk of money out of the CARES ACT’s $1 billion that was for DPA for medical purposes (north of $200 million). Request in supplemental was for DIB related impacts.
  • Is there any additional HHS funding for PPE?
    • OSD cannot answer, they advise you go to HHS for those details.
  • FDS extension of COVID-related categorizations up through the end of March next year- is there anticipation that those will at some point begin to capture the large number of COVID-related OTAs that have been reported in prior weeks?
    • Yes, those are already captured, that is how they are being reported (with that code).
  • Is the extra DPA request included in the $10.8 billion previously discussed, or in the other part of the DOD supplemental exercise?
    • It is not in the $10.8 billion, it would have been included in that $20 billion of DOD funding discussed by the Senate.
  • Will there be an Oct 1st start date for the DFARS clause from CCMC?
    • Folks are concerned the period to submit comments is getting tight if that is the case. OSD could not answer exactly but ensured all that there will be a period that they are accepting comments, likely to come next week.

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.