June 30, 2024 | International, Security
April 6, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
Daily Memo: Emergency Funding For Suppliers, Aftermarket Providers
Sean Broderick
The Coronavirus Aid, Relief, and Economic Security (CARES) Act sets up several new programs and adjusts some existing ones—each aimed at pumping much-needed cash into specific sized organizations or industry sectors.
Large portions of the U.S. commercial aviation industry got specific carve-outs in the $2 trillion economic relief package enacted March 27. While these loans and grants will help air carriers and other key industry players offset some financial strife caused by the COVID-19 outbreak, most suppliers will be looking elsewhere for money.
Thankfully, CARES gives even the smallest companies options.
Topping the list is the Paycheck Protection Program (PPP), a $349 billion pot of money designed to enable the U.S. Small Business Administration (SBA) to provide “expeditious” relief to eligible businesses, an interim final rule published late April 2 said. PPP provides SBA-guaranteed loans equal to up to 2.5 times monthly payroll costs, with a $10 million cap, that businesses can use to keep the lights on for two months. Eligible expenses include payroll, health care benefits, rent and utility payments, as well as some interest expenses. The loans come with a 1% interest rate, maximum two-year terms, and require no collateral or personal guarantees. But they will be forgiven if 75% or more of the funds are used to cover payroll.
Among the PPP's wrinkles: only the first $100,000 in an employee's salary can be counted when calculating payroll expenses. Contractors are eligible to apply for their own relief, so their costs can't be counted at all. Also ineligible for counting in the payroll expenses: salaries of employees that live outside the U.S.
Businesses can only apply for one PPP loan, so the SBA advises applying for the maximum eligible amount.
Determining eligibility is straightforward: a business must find its North American Industry Classification System (NAICS) code, check the maximum employee size for its business category, and compare it to its staff size. While the general small-business benchmark is 500 or fewer employees, aerospace has many exceptions. The threshold for aircraft engine and engine parts manufacturing/maintenance (NAICS code 336412) is 1,500 employees. For aeronautical instruments manufacturing (334511), it's 1,250. If your business falls into multiple codes, the one that generates the most work determines your NAICS code. SBA has an online tool that walks through the process at www.sba.gov/size-standards.
The PPP application window opened on April 3. The program's sheer size—SBA's cornerstone 7(a) loan program issued about $20 billion in loans in all of 2019—and its first-come, first-served basis triggered a massive, front-loaded surge of applications. The interim final rule contained key guidance that banks needed to service the program, which meant not all lenders were ready to start processing applications right away. But the situation was improving hourly throughout the day April 3 as more lenders came onboard.
Another SBA program that CARES leans on is the Economic Injury Disaster Loan (EIDL). Capped at $2 million with a 3.75% interest rate, EIDLs can be used for a wider variety of expenses than the PPP. Unlike the PPP, however, they are not eligible for forgiveness.
CARES also gives the U.S. Treasury Department the authority to make special loan allowances for medium-sized businesses, generally those that are too large for an SBA program and have up to 10,000 employees. Among the caveats: maintaining or restoring 90% of its equivalent workforce as of Feb. 1, 2020 within four months of the official U.S. declaration that the COVID-19 public health emergency is over. Further guidance from Treasury, including basics such as how to apply, are in the works.
Some suppliers are eligible to apply for shares of the aviation-specific funds set aside in CARES. FAA-certificated repair stations are mentioned as being eligible for some of the $29 billion in CARES loans, specifically from the $25 billion pot allocated for passenger airlines. But the law says they should exhaust other available CARES funding options first.
There is another pot of $17 billion in loans set aside for companies critical to national security. Neither the law nor Treasury defines the term, however, so eligibility remains unclear. If Treasury looks to the U.S. Department of Homeland Security's Critical Infrastructure guidance, aircraft and engine supply-chains would qualify, as would repair stations.
Payroll grants for suppliers are murkier. CARES language has a $3 billion set-aside for contractors that both work for airlines and are on-airport. Many maintenance providers would seem to fit here, though Treasury will have the final say.
Industry trade associations and legal experts working the issue are learning more by the hour. Their one common piece of advice for businesses: consult with an attorney or tax expert, determine what your business qualifies for, and weigh your options. Many businesses will qualify for multiple programs that cannot be mixed, creating an either/or choice that comes down to the various strings attached to each.
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March 15, 2023 | International, Naval
How the US plans to expand its submarine industrial base for AUKUS
The Defense Department and Congress will need to pour billions of dollars into the submarine industrial base to prepare to sell Australia AUKUS submarines.
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October 15, 2019 | International, Aerospace
The US Army is building a ‘cloud in the sky’ for its aviation fleet
By: Jen Judson WASHINGTON — The Army is building what is essentially a “cloud in the sky” for its current aviation fleet as it prepares the aircraft to fight alongside a future fleet under development, according to Brig. Gen. Thomas Todd, the program executive officer for Army aviation. The general spoke to Defense News in an interview ahead of the Association of the U.S. Army's annual conference. The current fleet won't dissolve into thin air when future helicopters are fielded, and they will be expected to fly together in operational environments across multiple domains. The Army is aiming to field a future attack reconnaissance aircraft and a future long-range assault aircraft by 2030. “We have to figure out a way to host a common server so that we can store data, process data and transport data quicker,” Todd said. “So while they work on the future vertical lift architecture, we still have to make the enduring fleet, that will fly alongside it, work and be capable.” So the Army is building an Aviation Mission Common Server, or AMCS, that is a stack of storage, data processing and transport capability “that's very much a flying cloud, if you will,” Todd said. The AMCS “will reside inside every aircraft. It has to reside in every aircraft because there has to be onboard processing and storage power,” Todd said, adding that it will be the engine that drives the associated user interface and apps as well as provide connectivity to the network overall. The user interface will be built upon the technology developed by Northrop Grumman for the Victor-model Black Hawk. The "V" model is an L-model UH-60 with a digital, modern cockpit like the "M" model, the latest Black Hawk variant, but not with an M-model price tag. Additionally, the interface in a V model can take on new capability through apps like a smartphone. The V model wrapped up its initial operational test and evaluation in September at Joint Base Lewis-McChord in Washington state, Brig. Gen. MacMcCurry, who is the Army G-3/5/7 aviation director inside the Pentagon, told Defense News in a separate interview. He reported the tests went well and the service looks forward to building out the fleet. The Army is currently assessing integrating the same user interface into Mike-model Black Hawks, according to Todd. The effort to build the server is part of a larger effort to ensure the current fleet is ready to fight in multidomain operations. The Army wants to obtain multidomain dominance by 2035. “We took a look at Army Futures Command's guidance on exactly what those combat aviation brigades would have in them and what would be enduring. For example, the Apache would be there indefinitely,” Todd said. “We also found that the requirements for data, the transport of and use of was exponential. So ultimately it's a problem that exists for the entire fleet, so we need to get after, at a minimum, making the enduring fleet compatible with future vertical lift, if not more capable.” There are several cross-cutting initiatives for the current fleet to make the aircraft more agile, interoperable, survivable and integrated in multidomain operations, Todd said, and the network will play an integral role. For example, the Army is working with the network community to replace its AN/ARC-201 radios with radios with the TSM waveform, which will improve and comply with future air-to-ground radio communications, according to Todd. There is also work being done within the position, navigation and timing community and with the Air Force to develop antennas, processors and software that hep the current fleet to survive battle, Todd added. And the service is working to improve power sources onboard aircraft. “There is a huge demand requirement coming, a demand signal for onboard systems and the power requirements of those is exponential. So given that it's not linear and it's going to grow exponentially, we have to get after alternative means,” Todd said. The same team that is in charge of the Improved Turbine Engine Program — which will replace engines in Apaches and Black Hawks and be the engine for the future attack reconnaissance aircraft — is looking at supplemental power units, upgrades to generators and upgrades to batteries to better power onboard systems that may not require the main power system anymore, Todd said. https://www.c4isrnet.com/2019/10/15/the-us-army-is-building-a-cloud-in-the-sky-for-its-aviation-fleet