Back to news

July 9, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

Top Defense Execs Ask For Help in Next COVID Stimulus Package

The biggest defense manufacturers in the world warned the Pentagon and OMB of "significant job losses in pivotal states" if Congress doesn't come up with stimulus money to cover unforeseen expenses.

By on July 08, 2020 at 4:16 PM

WASHINGTON: A group of CEOs leading the world's top defense firms sent letters to Pentagon acquisition chief Ellen Lord and and Office of Management and Budget director Russell Vought on Wednesday, citing “significant job losses in pivotal states” if the federal government doesn't step in to assist with COVID-related costs.

Electoral maps have traditionally acted as a tried and tested tool defense contractors use when making pitches to both the Pentagon and Congress, as a way of showing where the jobs sit in different congressional districts.

The letter to Lord was signed by the leaders of Lockheed Martin, General Dynamics, Boeing, Raytheon, and BAE Systems, which represent five of the top seven defense companies in the world. Huntington Ingalls, Textron Inc., and L3Harris Technologies also signed onto the letter, which was obtained by Breaking Defense, requesting the Pentagon's help in pressing for stimulus money in the Senate's next rescue package. The Senate is slated to debate in the coming days.

Lord has previously estimated the Pentagon would have to pay more than “lower double digit billions” to offset costs borne by defense manufacturers in lost work hours, buying PPE equipment and propping up smaller suppliers.

Speaking to reporters at the Pentagon last month, Lord said she's seeing a “three-month slowdown to all programs due to COVID-19,” after the virus shut down defense manufacturing facilities and production lines across the globe.

The vast majority of defense firms have operated at reduced capacity over the past several months, and Lord said the Pentagon continues to see the biggest impacts in the aviation and shipbuilding supply chains.

The CEOs write that US-based supply chains “are simply not able to absorb these significant costs. Without additional funding in the next stimulus package, the resolution of [reimbursement] claims will need to be funded from existing DoD budget topline resources for FY20-22.”

That would cause “significant reductions” in research and procurement budgets, they said, before pivoting to warning about Defense Secretary Mark Esper's top priority: modernizing weapons systems to keep abreast of China and Russia. Placing the burden on the companies to use their own case to meet unplanned emergency costs risks “thwarting the Department's ability to meet the challenges and threats associated with great power competition” they add.

In order to keep the smaller suppliers afloat, companies have pushed contracts forward to give the smaller supplier more work, and in turn, DoD has sped up planned payments to the defense industry, hitting the $2 billion mark in recent weeks.

Speaking at a Brookings Institution event this morning, Lord didn't mention the letter, but talked about moving more production of defense equipment to the United States from overseas. Part of that effort stems from President Trump's “American First” push to build up the domestic manufacturing sector, but Chinese influence in electronic supply chains is also a big concern.

During a visit to the Fincantieri Marinette Marine shipyard in Wisconsin late last month, Trump said “we'll always live by two simple rules: Buy American and hire American.”

Lord phrased the idea differently, saying she prefers to have two sources for equipment, and “we would like one of those, if possible, to be domestic.” That issue has been highlighted in the global pandemic shutdown which wreaked havoc on global supply chains. “We just found that particularly with microelectronics, we have gotten ourselves into a potentially compromised position,” Lord said. “Where we have US intellectual property going offshore for fabrication and packaging leaves us with some vulnerability there. That is unacceptable moving forward.”

During his Wisconsin visit, Trump suggested that one of the considerations for awarding a $795 million contract to the US home of the Italian shipbuilder was its location in a competitive state in the 2020 presidential election. “You notice that's not a supply chain going through China and going through other countries,” he said, adding, “I hear the maneuverability is one of the big factors that you were chosen for the contract. The other is your location in Wisconsin, if you want to know the truth.”

https://breakingdefense.com/2020/07/top-defense-execs-ask-for-help-in-next-covid-stimulus-package

On the same subject

  • Army drops request for proposals to build next-gen combat vehicle prototypes

    April 2, 2019 | International, Land

    Army drops request for proposals to build next-gen combat vehicle prototypes

    By: Jen Judson WASHINGTON — The U.S. Army on Friday issued a request for proposals to competitively build next-generation combat vehicle prototypes. The RFP opens up competition for industry to provide optionally manned fighting vehicle prototype designs. From that pool, the Army will choose — in the second quarter of fiscal 2020 — up to two teams to build 14 prototypes. The OMFV is intended to replace the Bradley Fighting Vehicle starting in 2026 and is designed to better operate in future environments that would allow soldiers to maneuver to a position of advantage and “to engage in close combat and deliver decisive lethality during the execution of combined arms maneuver,” an Army statement reads. Some of the threshold requirements for OMFV are a 30mm cannon and a second-generation forward-looking infrared system, or FLIR. Objective requirements are a 50mm cannon and a third-generation FLIR. “The OMFV must exceed current capabilities while overmatching similar threat class systems,” Brig. Gen. Ross Coffman, the director for the Next-Generation Combat Vehicle Cross-Functional Team, said in the statement. “It must be optimized for dense urban areas while also defeating pacing threats on rural terrain.” The NGCV CFT is part of a new four-star command, Army Futures Command, that is designed to modernize the force. NGCV is the second-highest modernization priority for the Army just behind long-range precision fires. After working with industry through a multitude of engagements and testing several draft RFPs with ambitious requirements, Coffman believes the Army has both the threshold requirements for the vehicle as well as the right objective requirements as the service heads toward the release of the final RFP. “We put out a very aggressive draft RFP,” Coffman told reporters March 27 at the Association of the U.S. Army's Global Force Symposium, because the CFT knew it was not obtainable in its entirety. The draft RFP was meant to stretch goals and objectives and to inspire feedback to ultimately write requirements that are attainable, Coffman explained. The Army's current approach to enter into a rapid prototyping effort truncates what could be a two- or three-year technology-maturation and risk-reduction phase, Maj. Gen. Brian Cummings, the program executive officer for Ground Combat Systems, noted in the statement. “It is about being able to prototype and field required capabilities on an accelerated schedule to get capability into soldiers' hands quickly,” he said. The Army's acquisition chief, Bruce Jette, approved a rapid prototyping approach for the OMFV in September 2018, which requires a prototype demonstration in an operational environment within five years, according to the statement. The prototypes will go through “rigorous” operational testing and soldier assessments. The Army plans to downselect to one vehicle for low-rate initial production following the assessments and testing. Several companies have come forward either with clear plans of what they would like to offer or declaring they will participate in the competition. German company Rheinmetall announced last fall that it would team up with Raytheon to provide its new Lynx combat vehicle. It's also possible its Puma vehicle, which is co-manufactured with German defense firm Krauss-Maffei Wegmann, could be submitted. BAE Systems showed what it could do with a CV90 vehicle at the Association of the U.S. Army's annual show in the fall, and General Dynamics European Land Systems turned heads at AUSA with a Griffin III technology demonstrator equipped with a 50mm cannon. https://www.defensenews.com/land/2019/03/29/armys-request-for-proposals-to-build-next-gen-combat-vehicle-prototypes-drops

  • USAF launches huge upgrade program for its F-16s - Skies Mag

    March 7, 2022 | International, Aerospace

    USAF launches huge upgrade program for its F-16s - Skies Mag

    Long-awaited modernization plans finally move ahead for the U.S. Air Force's newest F-16 "Vipers."

  • 3D Printing of Multilayered Materials for Smart Helmets | 3D Printing Progress

    August 3, 2021 | International, Land

    3D Printing of Multilayered Materials for Smart Helmets | 3D Printing Progress

    A mechanical and aerospace engineering professor is developing advanced helmets to ensure that members of the military are as protected as possible from blasts and other types of attacks.

All news