April 27, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
By: Joe Gould
WASHINGTON ― Cash flow for small defense contractors is continuing to suffer under the coronavirus pandemic, according to a survey by the National Defense Industrial Association.
The survey echoes warnings from the Pentagon that these firms, part of a vast network of suppliers that makes up the defense-industrial base, are especially vulnerable. The Pentagon this week announced it will make $3 billion in new “progress payments" to increase cash flow to prime contractors, expecting the money would then trickle down.
Of the NDIA survey respondents:
L3Harris Technologies said this week it will issue more than $100 million in payments to its small suppliers. Lockheed Martin announced Friday it executed $256 million in accelerated payment toward its $450 million goal.
Both of these promised followed the Pentagon's announcement this month that it will boost progress payment rates from 80 percent to 90 percent for large companies, and to 95 percent for small businesses.
The payments are made to contractors, usually on a monthly basis, for costs incurred and work performed under a contract; a 90 percent rate means that if $1 million in expenses are submitted on the program, the Defense Department will reimburse $900,000.
Sixty-six percent of the respondents also said it would help them to receive flexibility on the performance of their contracts.
Seventy-two percent expected to avoid overruns on their firm fixed-price contracts as a result of disruptions caused by COVID-19.
On Thursday, acquisitions officials with the Army said they expect costs to rise, and in response will guard against program slips and closely watch vulnerable lower-tier companies with less slack in their workforces. Pentagon officials anticipate workforce and supply chain issues will yield a three-month delay across the majority of its Major Defense Acquisition Program portfolio.
“The supply chain does have some challenges, and that's probably where the vast majority of any slips would occur that are tied to individual companies,” said Bruce Jette, the Army's acquisition chief. “These companies are small, and if one person gets COVID in the company, the next thing you know you've lost 14 days with the company because everybody that didn't get it is in quarantine.”
As of April 10, 769 small businesses responded to the NDIA survey. The number of companies expecting cash-flow disruptions was slightly lower last month, when 458 small businesses responded.
Factoring into cash-flow problems, according to the NDIA, are cuts to billable hours, delayed payments from prime contractors and government customers, a lack of telework options or schedule flexibility in contracts, and shelter-in-place orders that prevent employees from working.
Beyond revenue expectations, meeting contract obligations and access to capital are where small businesses are taking the biggest hits during the pandemic. Other areas of difficulty were workforce availability, access to secure facilities, contracting officers accessibility, clear information from the Defense Department, confidence in the supply chain, and stock and cost of materials.
The technology and services sectors reported more disturbances from the crisis than the manufacturing sector, NDIA noted. And businesses with fewer than 50 employees are feeling the brunt harder than businesses with more than 500 employees.
Defense Contract Management Agency data this week showed that 106 out of 10,509 primary Pentagon contractors are closed, and 68 companies closed and then reopened. Of 11,413 subcontractors, 427 were closed, with 147 having closed and reopened.
https://www.defensenews.com/2020/04/24/covid-cash-crunch-still-hurting-small-defense-firms/
August 28, 2021 | International, Aerospace
NASA’s Space Launch System and Orion are big-government programs trying to keep pace in a marketplace increasingly dominated by commercial industry, meanwhile, the U.S. military is looking to build bridges to international partners, that same commercial industry and to the intelligence community.
January 30, 2019 | International, Land
By: Aaron Mehta WASHINGTON — The U.S. Defense Security Cooperation Agency announced Tuesday that Japan has been cleared to buy a pair of land-based Aegis ballistic missile defense systems, the first Foreign Military Sales announcement since the end of a government shutdown that stalled the FMS process. The sale, worth an estimated $2.15 billion, would bolster Japan's existing sea-based Aegis capabilities. The island nation is in the process of increasing its missile defense capabilities, both through additional Aegis buys and through the co-development of the SM-3 missile with the U.S. Although not specified in the DSCA announcement, a government official confirmed these two systems are for Japan's planned Aegis Ashore sites, which are expected to be operational by 2023. Included in the potential package: two Aegis weapon systems, two multimission signal processors, and two command-and-control processor refreshes, alongside radio navigation equipment, ordnance, identification friend or foe systems, and construction services for six vertical launch system launcher module enclosures. Tuesday's announcement is the first DSCA notification to be posted since Dec. 18, just days before the longest government shutdown in U.S. history began. Speaking to reporters last week, Andrea Thompson, the U.S. State Department official who oversees the FMS process, said the shutdown was slowing down the process of clearing sales requests from foreign customers — notable, as the Trump administration has made increasing weapon sales abroad a key part of both its foreign policy and economic growth strategy. “There will be a bit of a bump — a gap, if you will — just because we haven't had the engagement with [Capitol] Hill” normally seen in the process, Thompson said then. “We'll be able to make up some ground, but I am a realist. We have to work harder if we are going to have the numbers we had last year.” Japan has recently spent heavily on American defense items. In September, the nation was cleared to spend $3.14 billion on nine E2-D Advanced Hawkeye aircraft, and in October it agreed to pay more than half a billion dollars for SM-3 missiles. In the recently released Missile Defense Review, the U.S. Department of Defense identified that working with partners in the Pacific — notably Japan and South Korea — is the “cornerstone” of American security in the region. “Japan is one of our strongest missile defense partners, and works together with the United States to strengthen cooperative missile defenses against regional missile threats,” the review states. “Going forward, DoD will work with allies and partners to prioritize these types of missile defense integration opportunities that contribute to more effective protection of the United States, its allies and deployed forces.” DSCA announcements do not mean sales are final. The announcement serves as notification to Congress about the potential sale, which can be vetoed by the Senate; once cleared, negotiations between the customer and contractor can lead to changed quantities or dollar figures from the original announcement. https://www.defensenews.com/global/asia-pacific/2019/01/29/with-shutdown-over-japan-cleared-to-spend-215-billion-on-aegis-ashore
September 25, 2024 | International, C4ISR, Security
Unit 42 reveals the discovery of Splinter, a new Rust-based post-exploitation tool posing cybersecurity risks.