News

BY REBECCA KHEEL - 05/03/20 01:30 PM EDT Defense budget cuts are looming as the coronavirus pandemic places pressure on the federal budget across various agencies. The Pentagon had already been expecting relatively flat budgets for the next few years due to economic constraints caused by the widening deficits in the country. But with the pandemic, the deficit is projected to explode after Congress passed trillions of dollars in coronavirus relief packages, with more aid bills expected. Defense budget analysts are predicting that will mean cuts to defense spending down the line. Meanwhile, Democrats say the crisis should result in a rethinking of national security that gives less money to the Pentagon and more to areas like public health. The chairman of the House Armed Services Committee said this past week it's hard to predict where the defense budget will head after the crisis abates, but suggested the entire federal budget will need to be re-examined. “The economics of this get much more complicated than they were before this, and it's logical to assume that we are going to have to reevaluate our entire budget, both revenue and expenditures,” Chairman Adam Smith (D-Wash.) said on a teleconference in response to a question from The Hill. “Beyond that, it would be pure speculation as to what's gonna happen.” Smith, a long time opponent of the nuclear budget, specifically highlighted nuclear modernization as an area for potential cuts, but said defense portfolios are “all on the table to figure out how to spend the money more wisely.” In the meantime, defense hawks, progressives and deficit hawks alike are honing their arguments as they brace for defense cuts. The defense budget battles are already starting to play out as Congress debates further coronavirus relief bills. The Pentagon has said it expects to request “billions” of dollars in the next bill to help contractors hit by the virus. That funding would follow the $10.5 billion the Pentagon got in the third coronavirus stimulus package for the Defense Production Act, defense health programs, and military deployments related to the crisis and other areas. Smith, though, said this past week he would not support more Pentagon funding in further coronavirus bills, saying the department can find unused funding in its existing $738 billion-plus budget. Smith's comments came about a week after dozens of progressive organizations led by Win Without War argued in a letter to Congress that “any arguments that the Pentagon cannot use existing resources to respond to the crisis should be met with considerable skepticism.” But the Pentagon maintained after Smith's comments it cannot dip into its existing budget for coronavirus relief. Ellen Lord, the Pentagon's top weapons buyer, said the department may be able to use some operations and maintenance funds for coronavirus needs, but added money still has to be available for “pretty significant needs” in readiness and modernization. “I am not sure that we have the fiscal flexibility to encompass all of the new demands we have and the inefficiencies that we are seeing and perhaps may see in the future,” Lord said at a briefing. “But I respect what Chairman Smith is saying, and we will obviously do our best.” Looking further ahead, Pentagon officials have indicated they are preparing to tighten their belts at the other end of the crisis. In a webinar with the Brookings Institution this past week, Army Secretary Ryan McCarthy recalled “compressed budgets” in the wake of recovery bills for the 2008 financial crisis, culminating in the 2011 Budget Control Act that Pentagon officials now blame for readiness shortfalls. The law set budget caps that resulted in sequestration, continuing resolutions or government shutdowns in several years. “These are challenges we're thinking about now as we look at the [Future Years Defense Program] and whether or not this will pressurize Army budgets in the [fiscal year] 23, 24 timeframe, which are very critical to us and our modernization efforts and increasing our talent management within the force," he said. “We are watching that very closely, and we know that is a challenge that is out in front of us.” Late last month, the Congressional Budget Office projected that Congress' rescue and stimulus efforts will cause the federal deficit to quadruple to $3.7 trillion, the largest by far in U.S. history. Defense budget experts say the ballooning deficit likely spells defense cuts in the future, citing trends after previous rising deficits and economic downturns such after the 2008 financial crisis. “What has historically happened is, when Congress and fiscal conservatives come out and get serious about reducing the debt and reducing spending, defense is almost always part of what they come up with for a solution,” Todd Harrison, director of defense budget analysis at the Center for Strategic and International Studies, said in a webinar. “So, we could be looking at a deficit-driven defense drawdown coming in the next two or three years. At least history would suggest that that is a real possibility.” In the same webinar, American Enterprise Institute resident fellow Mackenzie Eaglen predicted the “budget comes down sooner rather than later.” “There probably will be a total relook even at the [National Defense Strategy] fundamentals and what mission is going to have to go in response to this,” she added. But defense hawks are arguing the Pentagon should not be used to pay other bills,, saying the country still faces threats from Russia and China. Fred Bartels, a senior policy analyst for defense budgeting at the conservative Heritage Foundation, said the defense budget needs to match the National Defense Strategy, which has not changed despite the pandemic. The strategy calls for the military to be ready for so-called great power competition with China and Russia. “What you're going to have is likely empty promises, and that's the worst possible outcome for the military,” Bartels said of a budget cut without a strategy change. “If your national strategy tells the world that you're going to do that but you don't follow through, it's going to be harder and harder to operate.” But the pandemic has intensified calls from progressive lawmakers to rethink what constitutes national security. Rep. Ro Khanna (D-Calif.) told The Hill the crisis shows the definition of national security needs be expanded. “Lawmakers must view issues like climate change, biosecurity, cybersecurity and this pandemic as serious and real national security threats facing our nation,” Khanna said in a statement to The Hill. “For too long, we were myopically focused and spending trillions on traditional national security issues like terrorism and ‘great power' politics. These new threats impact our health, safety, and economy, requiring new funds to address them.” https://thehill.com/policy/defense/495762-defense-budget-brawl-looms-after-pandemic

Pat Host, Washington, DC - Jane's Defence Industry 02 May 2020 For the first time since the coronavirus (Covid-19) reached the United States, more defence contractors re-opened than closed over the past week, according to the Pentagon's top weapons buyer. Ellen Lord, under-secretary of defence for acquisition and sustainment (A&S), told reporters on 30 April that out of the 10,509 companies tracked by the Defense Contract Management Agency (DCMA), 93 are closed, which is 13 fewer than last week. Of these, 141 had re-opened, 73 more than last week's tally of 68. Additionally, out of the 11,413 companies tracked by the Defense Logistics Agency (DLA), 438 are closed while 237 that were closed have re-opened. https://www.janes.com/article/95908/covid-19-more-us-defence-contractors-re-open-than-close-for-first-time-since-virus-struck

Nathan Strout SEAKR Engineering will continue developing the Defense Advanced Research Projects Agency's Pit Boss as the sole prime contractor, the company announced April 28. Pit Boss is the autonomous mission management system that will be used for DARPA's Project Blackjack, an initiative to demonstrate the value of a proliferated low earth orbit constellation that takes advantage of off-the-shelf commercial satellite technologies for military uses. According to DARPA, Pit Boss will be able to take data collected by the satellites, process it on orbit and then disseminate that information to users or platforms on Earth without human input. Pit Boss will be able to facilitate a number of functions, including augmenting position, navigation and timing capabilities, space-to-surface communications, and deliver persistent targeting and tracking data. DARPA selected three teams, led by BAE Systems, SEAKR and Scientific Systems Company, to develop Pit Boss solutions. SEAKR's team included Microsoft, Applied Technology Associates, Advanced Solutions Inc, Kythera Space Solutions and NKryptPhase. SEAKR said ithas received a Phase I Option II contract to continue its work on Pit Boss as the sole prime. “The award validates SEAKR's current program success in seeking on-orbit demonstration of state of the art processing capability incorporating autonomous operations, artificial intelligence, machine learning techniques, and bridged terrestrial and on-orbit technologies,” the company said in a statement. https://www.c4isrnet.com/battlefield-tech/space/2020/05/03/seakr-moving-forward-with-darpas-pit-boss-project

By: Joe Gould WASHINGTON―As the Pentagon works to defray the coronavirus pandemic's impact on its network of suppliers, it's worked hand-in-glove with defense and aerospace trade associations to find and address problems in the supply chain. The National Defense Industrial Association, whose members stretch into the lower tiers of the defense industrial base, surveyed more than 700 small businesses to find that cash-flow disruptions remained a problem as the Pentagon and major defense firms increase payments to suppliers. Retired Air Force Col. Wesley Hallman is NDIA's senior vice president of policy, charged with monitoring Capitol Hill on matters of concern to defense, including annual budgets, acquisition and procurement reform. This week, he spoke with Defense News about NDIA's priorities as Congress mulls how to follow its third coronavirus response bill, worth $2.2 trillion and intended to speed relief across the American economy. With NDIA's finger on the pulse of the supply chain and recent survey, how do you interpret the Undersecretary of Defense for Acquisition and Sustainment Ellen Lord's numbers, demonstrating more defense firms that have closed now reopening? What are you seeing among your members? As you know, A&S has been holding a call on Mondays, Wednesdays and Fridays, and we've been participating in all of those. The Defense Contract Management Agency has really been the clearinghouse for all these companies' challenges, and in fact we've been pushing our member companies that are seeing challenges to go to the website and fill in information about what their challenges are what they're seeing. And DoD has been responsive when something has closed down for whatever reason. Undersecretary Lord herself has picked up the phone to make calls to state governors to explain that we work very hard to ensure that the defense industrial base is considered essential. That was a question when people were starting to call for shelters in place. The very issues these companies have been seeing are things you're expecting: the result of closures, and sometimes those closures aren't state and local but on installations. Many contractors have to go to work on installations, and installation commanders are the mayors of their bases; they're tasked with the safety and security of their installations, and sometimes they've made the call to close facilities that have an effect on those performing contracts. There's also a growing concern on liability. There's uncertainty surrounding contractors' liability during the crisis for heeding calls to keep everything turned on. They also have to make sure that they're keeping their workforce safe and secure, and sometimes that's an issue as you look at reopening everything. Our last NDIA survey was really about what kind of things do you need to reopen to get to a new normal, where we're producing on contracts. Access to personal protective equipment is a concern, safety is a concern and more. DCMA has been following up with those companies to see what those issues are and what would allow them to reopen. We all know the supply chain ― and I'm sure you remember our report on the health of the defense industrial base at the beginning of the year ― but one of the things we highlighted is we have a relatively fragile supply chain already. This is a concern of the associations, the Pentagon and particular House Armed Services Committee members. Cash flow was also identified as an issue in NDIA's survey, and it's been a feature of DoD's press conferences. Ellen Lord said she was relying on the trade associations to help DoD understand how its accelerated progress payments are trickling down the supply chain to smaller firms, from the primes. How detailed is the information the associations are providing, and are the primes doing what's expected of them? What I have is anecdotal. It's proprietary data, and our members don't necessarily share that with us. I did get calls from all of the majors asking about accelerating payments through the supply chain, and one company was very explicit that “we have access to capital to get through this, but our supply chain doesn't.” Lockheed Martin has been very public with their commitment, and I know they're worried, and they're incentivized to keep their supply chain healthy because they've got to produce. The companies know their supply chains better than anyone else, so they're incentivized to push those dollars. It's not the amount of money but the velocity, and they understand that. This is me talking, but what the Pentagon wants to show ― and you've seen multiple groups saying, “not a dime for defense” ― is that the money that's being accelerated to these companies is not going to line anybody's pocket. This is to allow folks to survive. And beyond the national security aspect of this, which we could talk about forever, these are real companies with real people, doing real jobs that are key to our economy. They're as valid as any of the other small businesses that apply for the Paycheck Protection Program. So, ‘not a dime for defense' is I think a very shortsighted bumper sticker, because these are real people developing real capabilities for the defense of our nation. There have been some progressive lawmakers, as well as the chairman of the House Armed Services Committee who have already pushed back on the Pentagon's upcoming request for funding. But more broadly, what would NDIA like to see legislatively in the next stimulus package, including policy―or are your priorities being addressed directly through the Pentagon? So there's only so much the Pentagon can do without appropriations. What we're looking at ― and we are a 501(c)3, non-lobbying organization, though we engage when asked what we think ― is we think, first off, there needs to be a plus-up in appropriations for FY20. We all know that there's a lot of challenges to performing on contracts right now that are going to extend the length of those contracts. There's been a slowdown in the ability to perform on contracts because of this, and in some cases it has made made delivery on contracts more expensive. We believe that should be reflected in appropriations, and that shouldn't steal from the future. You know, we have a National Defense Strategy, we have a future-years defense program, there's already president's budget in. We don't think that the FY21 should be paying the increased cost for FY20. So it would be a defense supplemental to cover the extra expense to produce on contract because of COVID-19. That's first and foremost. The other thing is ― and you may know the Defense Logistics Agency and others, they pay out of a working capital fund. Back in November, DLA stopped following the accelerated payment policy passed by Congress because their working capital fund didn't have the liquidity to make that happen. They backed off to a 30-day instead of a 15-day payout. Well, that was hard enough in November, December, January, February. But you start getting to March with COVID-19, and these folks that have already performed on contract and are waiting to get their money are waiting an extra 15 days because of the lack of liquidity in the working capital funds. That's not acceptable. So another thing we'd like to see is a bump up in the working capital fund so those accelerated payments can start happening the way that Congress intended. You referenced liability issues. There's been a movement afoot to shield companies from lawsuits as they seek to reopen that's been met with partisan pushback. Are liability protections something NDIA favors? You have to be very careful because you don't want companies to do something that is not smart or not safe, but you do have to look at it because there's a potential that this is a ripe avenue for liability suits. We would rather see that stemmed up front so we can focus on producing for the war fighter. On a positive note, are you seeing companies employing any novel solutions to problems stemming from the pandemic? The Defense Department has a Joint Acquisition Task Force where companies can go and say what they can produce. We have worked with a lot of companies who can do harnesses for parachutes or where they can shift production to make you masks or other PPE. So it's been kind of heartening to see. A lot of small businesses are saying, ‘Hey, we can do this.' And we direct them over to the Joint Acquisition Task Force, which can look at their capabilities and explore those. https://www.defensenews.com/congress/2020/05/02/interview-ndias-wesley-hallman-on-a-liability-shield-and-other-defense-priorities-for-the-next-stimulus

A report drawing on anonymized phone data, and other open-source information belies Vladimir Putin's everything's-under-control message. Many Russian arms factories are slowing their production amid the COVID-19 pandemic, according to a report from geospatial analytics company Orbital Insight, obtained exclusively by Defense One. The revelations further undermine Moscow's attempts to project an image of a government in control of the coronavirus outbreak in its country. Among the affected firms: Salyut, which makes parts for Russia's Su-27 and China's Chengdu J-10 fighter jets, has 2,000 fewer people in the factory, as indicated by cell phone pings. Uralvagonzavod, which makes parts for the T-90 and the T-14 Armata tanks, had 3,500 fewer people. Hydromash, which makes landing gear parts, hydraulics, and cylinders for the Su-30MK and Su-34 fighters, has more than 2,000 fewer people. Not every Russian firm has been visibly affected. The Orbital Insight report saw no evidence of a productivity dropoff at the Kazan Aircraft Plant, which makes parts for strategic bomber aircraft. The analysts applied machine learning and data science to anonymous phone data obtained from a variety of partners. Such data can allow researchers to track large-scale human movement trends in close to real-time, which can “inform policymakers as to the effect of a particular restriction — or the impact/consequence of a breach of the same,” said Robert Cardillo, an Orbital Insight advisor who once ran the National Geospatial-Intelligence Agency. Researchers use the data to establish a baseline of activity, then to look for aberrations and disruptions, Cardillo told Defense One in an email. “In the intelligence profession, job one is to understand normal so one can have any chance of detecting abnormal. [Orbital Insight] senses global activity — or lack thereof — in a way that enables an understanding of the baseline pattern of life. That foundational understanding enables not just the fact of a change in that pattern but to — more importantly — infer meaning,” he wrote. The report offers detail about slowdowns beyond what Russian media has already revealed, said Michael Kofman, a senior research scientist at CNA, a nonprofit research and analysis organization in Arlington, Virginia. Kofman said he was surprised at the company's ability to obtain Russian cell phone data, which is required by law to be stored on servers in Russia. “The fact that this company is able to aggregate anonymous cell use data is a real boon for those interested in the level of productivity and output in Russia's military-industrial complex,” he said. Overall, Kofman said, he expects “a significant drop off in production for at least two months in the Russia defense industry as a result of COVID-19 measures, but it will be highly uneven depending on the region and assembly plant/shipyard.” The Russian government has tried to project an image of a country little affected by the coronavirus. In March and the beginning of April, the government flew protective equipment and medical supplies to Italy and to the United States in what many call a propaganda ploy. But government officials now acknowledge that they are experiencing a shortage of protective equipment, The country has confirmed that it has more than 100,000 confirmed cases. Babel Street, a data analytics company that specializes in natural language and sentiment data, says the government's initial steps were popular with Russians. But analysis of Russian-language social media posts on platforms like VK and local blogs suggest that Russian President Vladimir Putin's image has been slipping. “There was a ton of positive sentiment early on. People were buying the government line that Russia was here to help the world. I think that things really began to sour when they saw friends and neighbors coming down with this disease,” said McDaniel Wicker, Babel Street's vice president of business development. Russians are growing increasingly anxious with lockdown conditions, Wicker said. An April 20 street protest in Vladikavkaz could be a sign of civil unrest to come. “We are able to get a lot of insights from some of our data sources showing social unrest popping up in some of those areas...before it began to pop up in the English language press,” he said. “There's a narrative in Western media that Putin is all-powerful,” he said. “This shows that to be a misconception. The state does not have infinite means, information, or even control over its population. Given the right circumstances, there could be significant change in Russia.” https://www.defenseone.com/technology/2020/05/russian-arms-production-slowed-coronavirus-analysts-find/165071

Airbus just bested Boeing, achieving a massive milestone in an area that's recently been haunting the American manufacturer: air-to-air refueling. In the latest match-up in the cross-ocean rivalry between the American and European manufacturers, an Airbus A310 MRTT tanker test aircraft successfully completed an automatic refueling operation with a Portuguese Air Force fighter jet. Boeing has not yet been able to achieve the feat, even with its newest aerial tanker. Airbus has been leading the charge in autonomous flight operations, with the newly-automated refueling process the latest step in reducing manual control in aerial procedures. In December, an Airbus A350 XWB successfully took off without pilot input, using software integrated to onboard cameras. The system has plans to be implemented on Airbus' newest tanker, the A330 MRTT, with the certification phase scheduled to begin next year. The Airbus A330 MRTT is the European competitor to Boeing's KC-46 Pegasus. Currently in use with the US Air Force, the KC-46 Pegasus is Boeing's newest jet but is also proving to be one of its most problematic. Boeing's Pegasus is nowhere near autonomous refueling, with the company needing to fix a key system before autonomy can be discussed, an Air Force official told DefenseNews. Take a look at how Airbus is making history with its flying gas station. https://www.businessinsider.com/airbus-a330-achieves-first-aerial-refueling-beats-boeing-2020-4

By: Valerie Insinna WASHINGTON — The U.S. Air Force is seeking information from industry about hypersonic cruise missile technology, with the hopes of starting up a new prototyping program in the near future. The service issued a sources sought notification on April 27 asking companies to submit information about air-breathing conventional hypersonic cruise missiles that could be launched from fighter jets and bombers. The responses will help the Air Force determine whether to begin funding a new program of record and figure out how quickly it will be able to field the new weapon, said Air Force acquisition executive Will Roper. “In the case of how fast we could go with the scramjet technology getting into cruise missile and missionizing it, I think we can go fast,” he told reporters April 30. “I don't know how fast — that's why we're reaching out to the street. But given how far scramjet technology has matured, I'd expect that we'll be able to go pretty quickly on this.” According to the solicitation, the service would aim to conduct a preliminary design review in the fourth quarter of fiscal 2021. The technologies offered should feature ramjet, scramjet or dual-mode propulsion — a major difference from the hypersonic weapons currently under development by the Defense Department, which are all boost glide missiles. There are multiple advantages to fielding air-breathing and boost glide hypersonic weapons, Roper said. Boost glide missiles fly just below space, above the “thick atmosphere” where scramjet missiles would fly. That allows scramjet missiles to take on certain missions and targets that boost-glide systems cannot engage. “In the world of competing technology, we can't afford to have any blind spots or cede any ground. So we're preparing to make sure we don't cede ground on scramjet technology and hypersonic cruise missiles as a whole,” Roper said. “We will have greater flexibility with this as a whole. That's one reason we're interested in accelerating the technology. It's mature, it's ready. It will give our operators greater flexibility.” It will also allow the Defense Department to diversify the number of companies that can produce hypersonic weapons, he said. “In the case of boost glide technology, a lot of our major programs in the department go to the same suppliers,” in part because those companies have pioneered materials and components that have not been replicated throughout industry, Roper said. “One of the reasons I'm excited about starting a hypersonic cruise missile program is that we will have different suppliers. It's a very different technology.” Roper said the hypersonic cruise missile effort would involve inputs from the Air Force Research Laboratory and the Defense Advanced Research Projects Agency. In particular, DARPA's Hypersonic Air-breathing Weapon Concept, or HAWC, effort could inform the new program. As part of the effort, a Raytheon-Northrop Grumman team and a Lockheed Martin-Aerojet Rocketdyne team are building scramjet-powered hypersonic vehicles. “Scramjet technology has come a long way. I have been exceptionally impressed by what new manufacturing techniques are enabling,” Roper said. “I entered this job thinking scramjet will probably be a step behind boost glide. I am delighted to say that I was wrong. Scramjet is much more mature and ready to go than I originally thought.” The Air Force may be embarking on a new hypersonic weapons program just months after canceling one of its two development efforts, the Hypersonic Conventional Strike Weapon, or HCSW. Although HCSW showed promise and was on track for flight tests, the service killed it the fiscal 2021 budget rollout this February in favor of the Air-Launched Rapid Response Weapon. Both ARRW and HCSW are boost-glide weapons made by Lockheed, but the Air Force decided to pursue ARRW because it was more affordable and could be carried in larger quantities by the B-52 and F-15 aircraft, Roper said. https://www.defensenews.com/industry/techwatch/2020/04/30/the-air-force-wants-to-develop-a-hypersonic-cruise-missile/

By: Joe Gould WASHINGTON ― Because fewer than 20 firms sought to apply for $17 billion in federal loans for Defense Department suppliers hurt by the coronavirus pandemic, the Trump administration is weighing how to broaden the eligibility requirements, a top Pentagon official said Thursday. “The challenge is that this $17 billion worth of loans comes with some fairly invasive kind of riders, and I think companies have to think very carefully about whether that makes good business sense for them,” Under Secretary of Defense for Acquisition and Sustainment Ellen Lord said at a Pentagon news conference. Treasury Secretary Steven Mnuchin, whose agency is implementing the loans, is requiring public companies seeking a share of $17 billion in coronavirus-related relief offer an equity stake to the government. “It may not be as interesting as for private companies, so that's one of the differentiators I see,” Lord said. The loans were intended for companies operating top secret facilities and with DX-rated contracts, which means the Pentagon deems them of highest national priority. “I am not sure that companies with DX-rated contracts are the ones that have the most critical needs. They have had a little less than 20 companies reach out to date,” Lord said. The Treasury Department has been in consultation with the Pentagon, and it's been open to ways the loan program could be expanded ― potentially to firms the Pentagon designates, Lord said. “So I'm hoping that early next week, between the Treasury Department and the Department of Defense, we can come back with a little bit more fidelity to the defense industrial base to better identify who might most benefit from this particular money,” Lord said. The agency had set a May 1 deadline for applications. The $17 billion tranche in the CARES Act for COVID-19 relief was widely assumed to be targeted at Boeing, which is a prime defense contractor and had indicated that it might seek assistance. However, U.S. lawmakers have said the loans are intended to span the defense supply chain, said Andrew Hunter, director of the Center for Strategic and International Studies's Defense-Industrial Initiatives Group. “I would just say the requirements under that program are pretty strict that," he said. "You have to be really in desperate need for financing and have no access to other forms of financing, you have to accept a lot of limits on how the business operates: [on] share buybacks, dividends, executive compensation. And so it's really been designed and set up as a lender of last resort to firms that really need that assistance.” https://www.defensenews.com/congress/2020/04/30/only-20-defense-firms-sought-17-billion-in-covid-loans-now-the-trump-administration-is-weighing-a-fix/

By: Aaron Mehta WASHINGTON — The Pentagon's top acquisition official sees positive signs for the defense-industrial base, but remains concerned that enough cash may not be flowing to the smallest, most vulnerable companies in order to keep them open in the wake of the coronavirus pandemic. Out of 10,509 defense-related companies tracked by the Defense Contract Management Agency, 93 are currently closed — a number that has improved by 13 since April 20, according to Ellen Lord, undersecretary of defense for acquisition and sustainment. Notably, the number of companies that have closed and reopened jumped by 73 since April 20 — “the first time we have seen reopening numbers larger than the number of closures” since the crisis began, Lord told reporters Thursday. Of the 11,413 companies tracked by the Defense Logistics Agency, 437 are closed, with 237 having closed and reopened. That's an improvement of almost 100 companies from the April 20 numbers. Lord credited a mix of factors for the improved numbers, including some states appearing to have reached their estimated peak in coronavirus cases and thus opening themselves up again; “really good proactive actions” by companies to create a hygienic space for work; and shared experiences from other companies who have found ways to keep working despite the pandemic However, Lord still expects the pandemic to impact major defense programs. On April 20, she warned that top programs could face an approximate three-month impact. She reiterated that timetable Thursday but stressed she is largely looking at a “slowdown” rather than a “delay” in major programs. “What we are seeing as a result of illness or inability to travel: We see efficiency issues. So we are not physically able to get contractors sometimes overseas to conduct inspections,” Lord explained. “So we have somewhat of a slowdown in our ability to accomplish tasks. We are finding workarounds for that, versus just saying we're delaying doing something. We do not look at delaying things; we are looking at working through the issues, which sometimes cannot be executed with the same efficiency we previously had.” “We think we're learning how to work in this new environment and get back up to rate, if you will, in areas where we didn't, but right now that is our best estimate and we are working, obviously, to minimize impacts,” she added. The Pentagon has pushed out $3 billion in increased cash flow under its coronavirus-related progress payment plan, which increased upfront payment to contractors from 80 percent of cost to 90 percent for large businesses, and from 90 percent to 95 percent for small businesses. The goal for department officials: getting cash into the hands of prime contractors, who can then quickly provide funds to their subcontractors and other small businesses, who Lord has consistently identified as the most vulnerable parts of the defense-industrial base. In both her April 20 press appearance and Thursday's event, Lord praised Lockheed Martin for publicly committing to give early payments to subcontractors in order to keep them open. On March 27, the company announced it would push $50 million down toward small companies most at risk; that has since increased to $450 million. But, Lord acknowledged, other companies have not been as open with where those Pentagon relief funds are going. That's something she'd like to see change. “I believe that the major primes are flowing down, they've committed. But I always like to trust, yet verify,” Lord said. “So I encourage all of those companies to be as transparent and forthcoming as they can be because we have a responsibility to the taxpayer, as well as the mid-tiers and the small companies, to make sure actions we take at the prime level do go down all the way through the chain.” When asked if she believes the primes are being transparent with her office about where their cash is going, Lord said, “I believe they are,” but added: “I need to rely on CEOs of major primes to come forth with that data.” https://www.defensenews.com/industry/2020/04/30/defense-industry-shutdowns-trend-upward-but-lord-watching-cash-flow/