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COVID-19 and DOD impact

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posted on Apr, 21 2020 @ 02:25 AM
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We continue to carefully and methodically track the state of the defense industrial base through DCMA for prime companies, top 10 defense contractors, and DLA for vendors. Out of 10,509 major prime companies, 106 are closed, with 68 companies having closed and reopened. Out of 11,413 vendor-based companies, 427 are closed, with 147 having closed and reopened.

Domestically, we are seeing the greatest impacts in the aviation supply chain, ship-building, and small space launch. We are seeing impacts on the industrial base by several pockets of closure internationally. Particularly of note is Mexico, where we have a group of companies that are impacting many of our major primes.
So, right now there isn't any specific COVID penalty that we see for a specific program, however, we do anticipate about a three-month slowdown at slower rates in terms of execution than we saw before. And we are just now looking at key milestones that might be impacted.
Question: "Hi, ma'am. Thank you.

In terms of the Section 3610 authorities that were put out, that would reimburse contractors for COVID-related delays or facility closures, do you need new money from Congress to pay for that? And how much do you think something like that's going to cost the department ultimately, if you're looking at three-month delays on things? "

Lord: "We believe it will cost us something and that what's part of our ask for this new package that we're talking about, the CARES Act 2. So we're talking billions and billions on that one."

Undersecretary of Defense Ellen Lord had a powwow wirh reporters to discuss where things are at post-pandemic, and what the DOD is facing and doing.
Basically they've pumped money to primes to hope that smaller subs and vendors continue to get paid without delay or penalty even though production on various projects has halted (or halted and resumed). Keeping subs alive is probably cheaper (and certainly much faster) than finding and establishing new supply chains.
Generically anticipating three-month delays across the board. They need "billions and billions" more of stimulus money in a new bill to keep everyone afloat. How much of that gets through OMB and Congress, who knows.

This year's regular budget has already been allocated. Next year's budget should be interesting... Everyone and their brothers is going to want hand outs from Uncle Sam. Hard to see how we can save everybody in need of saving (in all industries, not just defense).
edit on 21-4-2020 by RadioRobert because: (no reason given)


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