US DoD to partner with defence supply chain to combat COVID-19

The US Department of Defence (US DoD) has released a statement outlining its plans to work with the defence industry supply chain to combat the impact of the coronavirus pandemic.

The statement from Department of Defense spokesman, Lt. Col. Mike Andrews, said the US DoD continues to ‘aggressively’ partner with the defence industry to mitigate impacts from COVID-19, with ‘significant’ progress had been made through the Defense Logistics Agency (DLA), and the Defense Contracting Management Agency (DCMA) to tackle specific concerns outlined by defence industry leaders.

Lt. Col. Andrews said that following dialogue with the defence industry, a number of key concerns were identified. These included: critical defence contractor workforce ability to continue working; ensuring cash flow to the defence industrial base; and getting standardised guidance out to industry.

On Friday, the US DoD issued two memos to address these three concerns. This led to the release of a Defense Industrial Base Essential Critical Infrastructure Workforce memo that defined essentiality in the Defense Industrial Base (DIB) workforce, ensuring the defense industrial base’s critical employees can continue working. The memo also reiterated the commitment to the safety of the workforce and support of the national security mission.

Deviation on Progress Payments memo was also released, stating that once in contracts, the progress payment rate that contracts can get paid for will increase from 80% of cost to 90% for large businesses and from 90% to 95% for small businesses.

It is envisaged that this measure will improve industry cash flow.

THE DCMA will work on mass modifications to contracts where applicable (vs one by one) using DCMA authorities. In addition, the Department is accelerating payments through several means to prime contracts and directing prime contracts to expedite payments to subcontractors.

The Acquisition and Sustainment Small Business Office has been in contact with small  defence businesses and is working with the Small Business Administration and their small business emergency loan program to help protect these companies.

Closing the statement, Lt. Col. Andrews said: “The Department is fully engaged with the interagency to leverage the Defense Production Act to help reinforce critical elements of the DIB. It is especially important to understand that during this crisis the DIB is vulnerable to adversarial capital, we need to ensure companies stay in business without losing their technology.

“Under Secretary Lord remains grateful for the productive discussions with the defense industry associations, US Chamber of Commerce, Hill and State leaders. She’s especially proud of the incredible efforts of Department leaders and contracting officers across the nation who are helping ensure a secure, reliable and resilient Defense Industrial Base.”

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