Back to news

April 29, 2020 | International, Naval

U.S. Navy pays contractors $600 million held back to ensure performance

WASHINGTON (Reuters) - The U.S. Navy has paid defense contractors $600 million it had withheld to ensure contract performance, hoping the funds would shore up finances for suppliers ravaged by the coronavirus-driven economic downturn, a Navy official said on Tuesday.

The move, which follows a similar action taken by the Air Force that released billions of dollars in payments, is aimed at replacing revenue vital Pentagon suppliers have lost in their non-military businesses as the spreading coronavirus has halted business activity nationwide.

“We were immediately able to infuse about $600 million of funds that we had on withholds,” James Geurts, the assistant secretary of the Navy for research, development and acquisition, told reporters on a conference call.

A Navy spokesperson said “for example, with the ship repair industry, withholds were reduced to one percent.” The Navy was unable to say whether a portion of the $600 million was withheld due to poor contractor performance.

The Department of Defense has also accelerated contract awards as it leverages its portion of the more than $700 billion annual defense budget to help keep suppliers afloat.

Geurts wrote a memo on March 24 to his staff directing them to release or reduce the withholds. It did not discuss rectifying the root causes.

Government waste watch-dogs criticized the move.

“This current emergency shouldn't be an excuse to avoid accountability for poor performance that predated this outbreak,” said Mandy Smithberger, of the Project On Government Oversight in Washington.

Earlier this month, Geurts said he had authorized “hundreds of millions” of dollars to be paid out to top suppliers like General Dynamics (GD.N) and Huntington Ingalls Industries (HII.N) which could flow to the supply chain.

Representatives from Huntington Ingalls and General Dynamics said the Navy was not withholding money from them for poor performance.

While the Navy did not name any companies that received payments, industry sources have said the biggest contractors have been filtering coronavirus-related funds to their suppliers and subcontractors who, because of their smaller size, are on much shakier financial footing.

The Navy's multi-layered supply chain is comprised of companies building out President Donald Trump's vision for a 350 ship here Navy. The funding will help pay salaries and ensure hard-to-replace workers are not lost to other industries or early retirement.

Geurts has said the Navy is pushing money into the defense industrial base by speeding up contract payments, hastening contract awards and releasing funds withheld for poor past performance.

The U.S. Air Force said it would release $882 million in payments to Boeing (BA.N) that were held back due to flaws in the KC-46 air refueling tanker.

https://www.reuters.com/article/us-usa-navy-procurement/u-s-navy-pays-contractors-600-million-held-back-to-ensure-performance-idUSKCN22A33L

On the same subject

  • Squad X Improves Situational Awareness, Coordination for Dismounted Units

    November 30, 2018 | International, C4ISR

    Squad X Improves Situational Awareness, Coordination for Dismounted Units

    The first test of DARPA's Squad X Experimentation program successfully demonstrated the ability to extend and enhance the situational awareness of small, dismounted units. In a weeklong test series at Twentynine Palms, California, U.S. Marine squads improved their ability to synchronize maneuvers, employing autonomous air and ground vehicles to detect threats from multiple domains – physical, electromagnetic, and cyber – providing critical intelligence as the squad moved through scenarios. Squad X provides Army and Marine dismounted units with autonomous systems equipped with off-the-shelf technologies and novel sensing tools developed via DARPA's Squad X Core Technologies program. The technologies aim to increase squads' situational awareness and lethality, allowing enemy engagement with greater tempo and from longer ranges. The Squad X program manager in DARPA's Tactical Technology Office, Lt. Col. Phil Root (U.S. Army), said Experiment 1 demonstrated the ability for the squad to communicate and collaborate, even while “dancing on the edge of connectivity.” The squad members involved in the test runs praised the streamlined tools, which allowed them to take advantage of capabilities that previously had been too heavy or cumbersome for individual Soldiers and Marines to use in demanding field conditions. “Each run, they learned a bit more on the systems and how they could support the operation,” said Root, who is also program manager for Squad X Core Technologies. “By the end, they were using the unmanned ground and aerial systems to maximize the squad's combat power and allow a squad to complete a mission that normally would take a platoon to execute.” Two performers, Lockheed Martin Missiles and Fire Control and CACI's BIT Systems, each are working on different approaches to provide unique capabilities to enhance ground infantries. Manned-unmanned teaming is critical to both companies' solutions. Marines testing Lockheed Martin's Augmented Spectral Situational Awareness, and Unaided Localization for Transformative Squads (ASSAULTS) system used autonomous robots with sensor systems to detect enemy locations, allowing the Marines to engage and target the enemy with a precision 40mm grenade before the enemy could detect their movement. Small units using CACI's BITS Electronic Attack Module (BEAM) were able to detect, locate, and attack specific threats in the radio frequency and cyber domains. Experiment 2 is currently targeted for early 2019. https://www.darpa.mil/news-events/2018-11-30a

  • Italy unveils weapons wish list, forecasts defense spending

    October 18, 2023 | International, Land

    Italy unveils weapons wish list, forecasts defense spending

    Now on the list are 21 High Mobility Artillery Rocket Systems — U.S.-made rocket launchers that have seen success on the battlefield in Ukraine.

  • Air Force begins to roll out special cyber defense teams

    December 31, 2018 | International, C4ISR

    Air Force begins to roll out special cyber defense teams

    By: Mark Pomerleau The Air Force is beginning to build specialized cyber teams across the service whose primary mission is to defend local installations and critical mission tasks from cyberattacks. These teams will ensure that a particular wing or smaller organization can complete their mission from a cyber perspective, Maj. Gen. Robert Skinner, commander of 24th Air Force/Air Forces Cyber, told Fifth Domain in a November interview. For example, Skinner said if a wing has an F-16 unit that's responsible for offensive counter air or defensive counter air support, mission defense teams will understand those weapon system and everything that goes into making those air sorties successful as a way to defend that mission from a cyber standpoint. As an example, an eight-man team at the 2nd Weather Group within the 557th Weather Wing monitors the network and recently discovered several “bogus” account requests. The commander, Col. Patrick Williams, said the team was able to figure out that many of the requests were either bots or foreign requests that “had no business being on that network.” By working with the Network Operations and Security Center to eliminate that activity, the number of requests dropped by 80 percent, a huge win, Williams said. He added this was done with just a nascent mission defense team given that the teams are just being filled out across the major commands now. Skinner said each major command is at a different point in activating the teams. In addition, Air Force leaders said the service hopes to achieve efficiencies within its entire IT and cyber defense enterprise. The officials pointed to the Air Force's “enterprise IT as a service” pilot, which examines what efficiencies can be gained by having commercial companies conduct the IT services as opposed to having airmen maintain the IT infrastructure. One benefit of such a move could be that it frees up personnel to spend more time on cyber defense. “Our core strategic theme is moving from IT focused delivery into mission defense teams,” Bill Marion, deputy CIO of the Air Force, said during a keynote presentation in early December. Skinner said the service will likely be able to “re-mission” workers from their IT positions and assign them to these more active defensive roles such as mission defense teams. These mission defense teams are different from cyber protection teams that the Air Force, and other services, provide to U.S. Cyber Command. “In my eyes the [mission defense team] is a [cyber protection team] lite,” Skinner said. "We're very proud of our cyber protection team training and I think that the more of that I can get with our mission defense teams, the more successful they'll be and then our cyber protection teams can be really focused on the high end, the big threats that we'll run into in a peer competition and peer adversaries.” https://www.fifthdomain.com/dod/air-force/2018/12/27/air-force-begins-to-roll-out-special-cyber-defense-teams

All news