Back to news

April 21, 2020 | International, Aerospace, Naval

DoD: Shipbuilding, Aviation Hardest-Hit Sectors in Defense Industrial Base by COVID Pandemic

By: Megan Eckstein

The shipbuilding, aviation and small space launch sectors are the three hardest-hit by the COVID-19 pandemic within the defense industrial base, according to the under secretary of defense for acquisition and sustainment, despite a slew of memos and authorities signed out by the Pentagon to relieve pressure from sick workers and facilities closures.

“We see a slowdown in the shipyards to an extent. Aviation is actually the most highly impacted sector we have right now. So the 20 different memos that Kim Herrington (director of defense pricing and contracting) put out are really to make sure our cash flows and we quickly get on contract so we can keep going,” Ellen Lord told reporters on a Monday morning news conference.

She said her team is still in the process of going program by program and understanding what production milestones may be at risk due to pandemic-related disruptions – everything from work slowing down on assembly lines to allow for social distancing, to coping with a smaller workforce as some employees are sick or taking leave to care for children at home, to breaks in the supply chain as component suppliers struggle to keep on schedule. For now, Lord said she could not point to any specific programs or any specific milestones most at risk, but she said major defense acquisition programs as a whole will face about a three-month slowdown due to COVID-19.

To try to stay ahead of the spreading disease, “we follow very carefully where the highest number of cases are throughout the country and we look at the defense industrial base, where they are located, so we try to anticipate the problems and work with the companies to keep going to the greatest degree possible” and work with companies in emerging hot spots to put mitigation measures in place before their workforces are hit.

Lord also said that, as the Pentagon takes a close look at its supply chain, “one of the key things we have found out are some international dependencies. Mexico right now is somewhat problematical for us, but we're working through our embassy. And then there are pockets in India as well.”

Specifically on Mexico, she said there is “a group of companies that are impacting many of our major primes” in the airframe production industry. She said she spoke to the U.S. ambassador to Mexico last week and would speak to Mexico's foreign minister today to ask for help reopening these major international suppliers.

Without naming companies or sectors, Lord said in her opening remarks that, of 10,509 major prime contractors, 106 are currently closed and 68 have closed and already reopened. On the vendor side, out of 11,413 companies, 427 are closed, with another 147 having closed and reopened.

Though the Pentagon can't help companies having to close because the workforce is sick, leaders can ensure that companies with healthy workers aren't left without work and waiting for contracts to be signed. The Navy and DoD have accelerated contract awards and urged prime contractors to quickly push work down to their suppliers of all sizes, so that as soon as a company is ready for new work, the work is awarded and money already paid.

“I remain proud of the department's responsiveness in addressing defense industry concerns outlined on [regular calls between the Pentagon and industry associations]. Mr. Kim Herrington, director of defense pricing and contracting, has issued 20 defense pricing and cost memos, aggressively responding to industry needs and impacts. Those memos include guidance for increased telecommuting, increased progress payment rates, acquisition timeline impacts, relief for those who cannot work, and more,” Lord said.
“Vice Adm. David Lewis, Defense Contracting Management Agency director, modified 1,500 contracts to help companies to file invoices at the higher progress payment rate, and he also worked with Defense Finance and Accounting Service for a seamless transition for invoices. Based on submitted invoices, we expect payments at the higher progress payment rate to start this week, helping provide $3 billion in increased cash flow to industry. I commend Lockheed Martin and Boeing for both publicly committing to ensure this cash flow goes quickly down the supply chain to small businesses who need it most. We are hoping for similar public announcement from other major primes.”

In addition to the actions the Pentagon can take on its own to help industry, Lord said the Defense Department is actively in talks with lawmakers and staffers to discuss a follow-on economic stimulus bill in the works. Though she couldn't get into specifics, she said it would cost DoD “billions and billions” to implement a section of the Coronavirus Aid, Relief, and Economic Security (CARES) Act “which allows agencies to reimburse contractors for payment to workers who are prevented from working due to COVID-19 facility closures or other restrictions.” She said the Pentagon hoped to see some funding in the next stimulus bill to help with that bill, as well as to pay for medical supplies and cover costs of delays in major defense acquisition programs.

So far, the Defense Logistics Agency has provided more than 1.8 million N95 masks, 3.2 million non-medical and surgical masks, 8.4 million pairs of exam gloves, 275,000 surgical gowns and 8,000 ventilators to the military services, which are being used both to keep DoD personnel healthy as well as to support DoD's contribution to the multiagency efforts around the country.

The Pentagon has also provided 10 million N95 masks to the Department of Health and Human Services and the Federal Emergency Management Agency and is prepared to give another 10 million from DoD stockpiles.

Additionally, DoD will invest $133 million to increase domestic production of N95 masks to more than 39 million in the next 90 days, Lord announced. Contracts have been finalized with 3M for $76 million, O&M Halyward for $29 million and Honeywell for $27.4 million.

Beyond new mask production, DoD also spent $415 million to buy 60 Battelle Memorial Institute Critical Care Decontamination Systems that will be able to sterilize N95 masks to allow for reuse up to 20 times, and therefore reduce the demand for new masks.

“Six units were delivered last week, including two to New York and one each to Columbus, Ohio; Boston; Chicago; and Tacoma; providing the ability to sterilize 3.4 million masks a week, reducing the need for new masks by the same number,” Lord said.
“All 60 systems will be available by early May for prioritization and distribution by Health and Human Services and Federal Emergency Management Agency. Once all are delivered, these 60 units will allow 4.8 million masks to be sterilized per day, almost 34 million per week.”

https://news.usni.org/2020/04/20/dod-shipbuilding-aviation-hardest-hit-sectors-in-defense-industrial-base-by-covid-pandemic

On the same subject

  • From the lab to the battlefield: Soldiers put new network tools to the test

    July 31, 2020 | International, C4ISR

    From the lab to the battlefield: Soldiers put new network tools to the test

    Andrew Eversden The Army's new network tools, set to be deployed to units in 2021, were heavily influenced by a new factor: soldiers. Through exercises and training events, the Army's Network Cross-Functional Team received feedback on its design decisions for Capability Set '21, the set of new network tools set to be delivered to soldiers next year as part of the service's network modernization efforts. “This is the first time really in recent history that the network has really focused on soldier feedback. And it's important and it played a huge role in that,” said Col. Garth Winterle, project manager for tactical radios at the Army's Program Executive Office Command, Control, Communication-Tactical. The Army recently completed its critical design review of Capability Set '21 and is in the beginning stages of procuring network pieces for delivery. In the lead-up to making purchases, feedback from units helped show the differences between how the new network tools perform in the field versus in a lab. “Soldier ingenuity, leader know-how, the skill craft that our soldiers bring and the tradecraft they utilize in the field is a lot different than how we conceptualize it back here,” Col. Rob Ryan, deputy director of the Network CFT at Army Futures Command, said at a C4ISRNET event in June. Testing for the capability set has been ongoing in lab-run experiments and with limited field tests in the last few months. Through the field experiments, the Army modernization team received feedback from units on what volume of various capabilities the soldiers needed, what capabilities were usable and what “attributes” of each capability soldiers found to be more important than others, said Winterle. Disruptions caused by both the coronavirus pandemic and a deployment of the 82nd Airborne Division to the Middle East at the end of December forced the modernization team adjust its testing plans. Defender 2020, a massive exercise scheduled to take place in June with European allies, was altered. Army leaders had planned to use the event to test network equipment with allies. However, network tests are “back on the calendar” in the fourth quarter of fiscal 2020, Winterle said. “The design decisions that were made at critical design review are still up on the table for revision or reassessing after continual soldier feedback,” Winterle said. “This is a continual evaluation, continual process.” Maj. Gen. Peter Gallagher, director of the Network CFT, said in a June 9 webinar with industry that several testing events, like a Joint Warfighting Assessment and Defender 2020, were altered, as were combat training center rotations and other exercises. Those “are always great venues for us getting feedback from soldiers and leaders on improving the network design,” Gallagher said. Ryan said that the network team received feedback from soldiers during the development, build and delivery phases of network design. In forthcoming testing events, the Army wants to figure out how many radios are needed and where they need to be located, Winterle said. The service also plans to evaluate if it undervalued and overvalued certain capabilities. https://www.c4isrnet.com/yahoo-syndication/2020/07/30/from-the-lab-to-the-battlefield-soldiers-put-new-network-tools-to-the-test/

  • Raytheon to move global headquarters to Arlington, Virginia

    June 10, 2022 | International, Land

    Raytheon to move global headquarters to Arlington, Virginia

    This is the second major defense contractor in as many months to announce plans to move to Virginia.

  • Stop China’s predatory investments before the US becomes its next victim

    April 20, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Stop China’s predatory investments before the US becomes its next victim

    By: Jeffery A. Green An ancient Chinese stratagem instructs military leaders: “Chen huo da jie,” or “loot a house when it's on fire.” The tactic is simple and self-explanatory — strike when your enemy is most vulnerable. As America's people and industries reel from the impact of a global pandemic, the United States must take immediate action to protect our economic interests from being looted by a uniquely opportunistic adversary. Many U.S. companies have been substantially weakened in both market cap and revenue by the COVID-19 pandemic. With countless companies struggling to survive this crisis, the U.S. should institute a temporary but immediate and total ban on the sale of any U.S. company deemed “critical infrastructure,” whose value has been materially impacted by the pandemic, to a Chinese-owned or controlled entity. Until the president certifies that the economy has fully recovered from the effects of COVID-19, this ban should remain in effect. This crisis necessitates action far beyond the existing review process of the Committee on Foreign Investment in the United States. China's aggressive weaponization of its economy is no secret. Whether through currency manipulation or the withholding of critical materials, such as rare earth minerals, from the global supply chain, China has a reputation for using its economy in a targeted manner to further its ambitious global plans. Be it overtly or obliquely, through direct ownership or by de facto monopoly, China has encroached on or outright assaulted nearly every meaningful sector of the U.S. economy. There is ample evidence of China's exploitation and deception related to COVID-19. Credible reports are emerging that Beijing has taken donations of personal protective equipment and sold them to Italy and possibly other foreign countries. Further, the dubiously low official infection and death figures released by China are being juxtaposed with higher U.S. infection and death rates to enhance the narrative that China is the more competent nation and should therefore be regarded as the preeminent global leader. But China's infiltration and manipulation of the American economy and psyche began well before the COVID-19 crisis. From a national security perspective, Chinese companies have taken ownership of U.S. companies critical to the strategic supply chain, such as cutting-edge battery technologies and microelectronics. The U.S. is entirely dependent on China for segments of the supply of rare earth minerals, which are necessary for everything from cellphones to critical weapon systems. In 2013, a Chinese company purchased Smithfield Foods, simultaneously making the company the owner of both the largest pork producer globally and more than $500 million of American farmland. Beyond industries like defense and agriculture that form America's economic and national security backbone, China has opened new fronts to project soft power as well. The Chinese conglomerate Tencent began a 2015 push, as Tencent Pictures, into Hollywood with significant investments in major U.S. films, including quintessentially American films, such as “Wonder Woman” and “Top Gun: Maverick.” The Cold War era was rife with films juxtaposing an American hero and a Soviet enemy. With Chinese investment in the U.S. film industry and the growing importance of the Chinese market for these films, it's no coincidence there is a dearth of communist Chinese government villains in today's entertainment market. In 2004, China launched the Confucius Institute program, with the stated goal of promoting Chinese culture and language overseas. With mounting concerns about the spread of Chinese Communist Party propaganda through these institutes, as well as fears of possible espionage originating from them, universities across the world began canceling their affiliations. To date, more than two dozen U.S. universities have cut ties with these programs. While America seeks to recover from the economic impacts of this pandemic, Congress and the administration must take swift action to ensure China is not afforded any opportunity to enhance its economic foothold in the U.S. As distressed companies desperately look for funding and investment, the U.S. needs to send a message that financial exploitation by China will not be tolerated, especially if it involves companies working in industries critical to national security and our broader industrial base. As part of this infiltration of our business community, defense enterprise and culture, China will likely hire an army of lobbyists and lawyers to oppose this proposal. This, too, should be prohibited for the length of the economic crisis in the U.S. For millennia, Chinese dynasties have employed the tactic of looting a burning house as they vanquished enemies all around them. America must act before we become China's latest victim. https://www.defensenews.com/opinion/commentary/2020/04/17/stop-chinas-predatory-investments-before-the-us-becomes-its-next-victim/

All news