31 mars 2020 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

Small defense businesses see cash issues during coronavirus outbreak

By: Aaron Mehta

WASHINGTON — More than 60 percent of small companies in the defense supply chain are seeing disrupted cash flow, according to a new survey put forth from the National Defense Industrial Association.

“This survey shows how the defense lifeline runs through small business,” Hawk Carlisle, NDIA's president and CEO, said in a statement. “These companies must survive if the defense industrial base is to remain the best in the world on other side of COVID-19.”

COVID-19 is a newly discovered coronavirus — a family of viruses, some of which cause disease in people and animals, named for crownlike spikes on their surfaces.

As of Friday, 458 small businesses had responded to the survey, which will remain open through April 10. Fifty-five percent of respondents have less than $5 million in annual revenue, and 70 percent have less than 50 employees.

Sixty-two percent of the respondents have seen disrupted cash flow as a result of the economic downturn. Primarily, those have come as cuts to billable hours or delayed payments from prime contractors because of shutdowns or telework. A lack of telework options is also an issue for contractors.

Notably, 54 percent of respondents say they cannot work on a contract because they are currently under a shelter-in-place order.

And optimistically, 69 percent do not expect cost overruns on fixed-price contracts as a result of the coronavirus-related disruptions. Those that do expect such overruns predict them to be in the 10-20 percent range.

The results of the survey were delivered Friday to Ellen Lord, the undersecretary of defense for acquisition and sustainment. Speaking to reporters on Wednesday, Lord said she is closely watching the lower tier of the supply chain for weak spots that may appear.

Last week, the Defense Department announced new measures to increase progress payments out to both small and large companies to ensure they are able to keep work moving on schedule.

https://www.defensenews.com/industry/2020/03/27/small-defense-businesses-seeing-cash-issues-during-coronavirus-outbreak-survey/

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    ARMY Caddell Construction Co. (DE) LLC., Montgomery, Alabama, was awarded a $143,514,000 firm-fixed-price contract for the construction of an airmen training complex dormitory, a dining and classroom facility, supporting facilities, a free standing equipment building, a weapons cleaning pavilion, running track, exercise pads and parking lots. Bids were solicited via the internet with two received. Work will be performed in San Antonio, Texas, with an estimated completion date of June 8, 2021. Fiscal 2019 military construction funds in the amount of $143,514,000 were obligated at the time of the award. U.S. Army Corps of Engineers, Fort Worth, Texas, is the contracting activity (W9126G-19-C-0001). IICON Construction Group LLC,* Colorado Springs, Colorado, was awarded a $15,179,720 firm-fixed-price contract for construction of a National Guard readiness center. Bids were solicited via the internet with five received. Work will be performed in Fort Carson, Colorado, with an estimated completion date of Aug. 31, 2020. Fiscal 2017 military construction funds in the amount of $15,179,720 were obligated at the time of the award. National Guard Bureau, Arlington, Virginia, is the contracting activity (W912LC-19-C-0001). CORRECTION: The contract announced on Jan. 15, 2019, for $474,084,062 to BAE Systems Land & Armaments LP, York, Pennsylvania, has not been awarded. No award date has been determined at this time. DEFENSE LOGISTICS AGENCY Puerto Rico Apparel Manufacturing (PRAMA) Corp.,** Mayaguez, Puerto Rico, has been awarded a maximum $11,648,229 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for various types of coats and trousers. This was a competitive acquisition with seven responses received. This is a one-year base contract with four one-year option periods. Location of performance is Puerto Rico, with a Jan. 10, 2024, estimated performance completion date. Using military services are Army and Air Force. Type of appropriation is fiscal 2019 through 2024 defense working capital funds. The contracting activity is Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE1C1-19-D-1127). Alamo Strategic Manufacturing,*** San Antonio, Texas, has been awarded a maximum $8,550,000 firm-fixed-price, indefinite-quantity contract for knee and elbow pads. This was a competitive acquisition with two responses received. This is a one-year base contract with two one-year option periods. Locations of performance are Texas and Puerto Rico, with a Jan. 30, 2020, performance completion date. Using military services are Army, Air Force, and Marine Corps. Type of appropriation is fiscal 2019 through 2020 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania. (SPE1C1-19-D-1122). NAVY Gilbane Federal, Concord, California, is awarded a $10,966,383 firm-fixed-price modification to previously awarded contract (N39430-15-D-1634) to decrease the value of the contract for the cleaning, inspection and repair of Fuel Storage Tanks 305, 307, and 308 at Defense Fuel Support Point (DFSP) Tsurumi, Japan. Work on Tanks 305, 307, and 308 is being removed from the contract due to contractor performance problems. After award of this modification, the total cumulative contract value will be $6,426,985. Work will be performed in Tsurumi, Japan, and is expected to be completed by March 2019. Fiscal 2016 defense working capital (Defense Logistics Agency) contract funds in the amount of $10,966,383 are de-obligated on this award and will not expire at the end of the current fiscal year. The Naval Facilities Engineering and Expeditionary Warfare Center, Port Hueneme, California, is the contracting activity. Sikorsky, a Lockheed Martin Co., Stratford, Connecticut, is awarded $7,026,164 for cost-plus-fixed-fee modification P00017 to a previously awarded fixed-price-incentive-firm/cost-plus-fixed-fee contract (N00019-16-C-0048). This modification provides for Automated Logistics Environment software maintenance operating systems and obsolescence avoidance in support of the low rate initial production CH-53K aircraft. The work will be performed in Stratford, Connecticut, and is expected to be completed in October 2021. Fiscal 2018 aircraft procurement (Navy) funds in the amount of $7,026,164 will be obligated at time of award; none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. *Small Business **Economically disadvantaged women-owned small business in historically underutilized business zones ***Small disadvantaged business https://dod.defense.gov/News/Contracts/Contract-View/Article/1733689/source/GovDelivery/

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