17 February 2021 OSD Call Notes

OSD Overview:

• Yesterday Mr. Jessie Salazar arrived at OSD as Deputy Secretary of Defense for Industrial Policy.
• President Biden and Vice President Harris visited the Pentagon to address senior leaders and workforce personnel; they announced a task force within the DOD that will review the China strategy. An element of that strategy will be the issues that pertain to supply chain and our reliance on component models, raw material levels, and other issues we have with China. One area includes microelectronics.
• On our last call, the formation of DOD’s Cross-Functional Team (CFT) that formed at the end of last year for microelectronics was discussed; as requested on the last call, the director of that team joined today’s call for an update on their progress and objectives for the coming months.
• Hon. Ellen Lord has been working with counterparts and making recommendations for a strategy to minimize vulnerabilities in our supply chain. A memo was signed recently on this topic and is being broken into actionable objectives within a 12-month plan.
• This CFT has been getting a lot of questions on their progress; their core team is meeting twice weekly to review milestones and augment their action plan accordingly.
• The CFT is coordinating with other agencies (DHS, Commerce, State, Intel Community, etc.) and has an upcoming meeting scheduled in the next few weeks.
• They have an office in Crystal City which will open March 1.
• CFT is putting together issue papers on what they hope to have done in 2023.
• Someone asked if the CFT is planning to provide 2021 NDAA provisions; while that is not currently on their agenda, they welcome input and recommendations from industry to help guide them doing so.

DLA:

• Small business: COVID obligations up to 3.2 billion 56% of that awarded to small business.
• DLA continues to host their monthly webinars to discuss opportunities and participation in their supply chain. Next is scheduled March 10th focused on Women owned small business programs; information on this webinar will be sent out later today.
• Received 600 responses from a survey they circulated recently to industry.
• There is a lot of uncertainty within the agency regarding the introduction of a new minim wage; they’re sensitive to struggling companies being unable to meet a new wage and remain profitable at this time.
• They are working with the DPC and general counsel to find solution for the industrial base. They’re also tracking extended family leave and emergency COVID-related leave.
• Nothing official has yet been provided that DLA can make formal comments on, right now they are responding to updates in the media.
• Update on DLA challenges with accelerated payments: the Comptroller did not push it forward but DLA will continue to advocate for this.

DCMA:

• COVID impacts to the DIB: no facilities or plant closures at this time.
• They are still seeing impacts here and there when there is a high positive rate at facilities but they’re not resulting in long-term impacts.
• They will be putting out a memo soon on the corrective action request policy; this is something they’re already working with industry on given their May 2020 guidebook policy changes.

DPC:

• $19.3 billion and 21,000 actions to report; $17.2 billion of those obligations going to small business.
• Made in America Executive Order: They met with the OMB team on this and are in the 180-day policy development period. They will be seeking industry feedback through public comment soon.

Small business:

• Army: To date, army has awarded $3.7 billion to small businesses for COVID-related actions; they have awarded $1.8 bill to small business at large within the army.
• No one from Airforce or Navy participated on today’s call.

Questions:

• Is Ellen Lord’s Feb 3 memo on vaccination guidance still valid? Yes, it is still active. DOD advises you use it in concert with the DIB memo she signed in March identifying DIB as critical infrastructure.
• How will Made in America apply to transportation and logistics? DPC is the department’s main POC on that EO. DPC is aware there will be exceptions to the “Buy American” policy, such as logistic support with Allies. They are encouraging DOD to consider where and when exceptions and waivers will be appropriate; specifically areas we just do not have a domestic capability.
• Politicians in MD, VA, and DC submitted a letter requesting vaccination support from the federal government; have actionable items been delegated within DOD yet to respond, if so how? No one on the call was aware of this specific letter but will look into it and respond on our next call.
• Is there a status on the 3610 extension? Not quite; they continue to express their support for its continuation but A&S does not have any official update to provide.

• Defense Trade Modernization will be a major topic on our next call.

About the authors

Keith Webster

Keith Webster, president of the U.S. Chamber of Commerce’s Defense and Aerospace Council, guides the focus of the council to strengthen the U.S. defense and aerospace industries by influencing domestic and international policy on behalf of its members.

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