3 February 2021 OSD Call Notes

OSD Overview:

New SecDef and soon new Deputy confirmed soon. Effective Jan 20^th put in motion A&S succession plan—Stacey Cummings Acting Under and Greg Kausner Acting Deputy A&S. Kim Herrington Acting DASD MIBP—Jesse Salazar arriving later this month as DASD for Industrial Policy. It was noted that the MIBP position was fleeted up in the NDAA 2021 to ASD MIBP. The new Deputy (Kath Hicks) will come on board and work to establish the new position then nominate a candidate.

DLA:

Supplier service survey extended to the 12^th and to date significant input thus far. Survey link will be provided later today to ensure all get access to the survey. NAM discussion last week to better connect with their members and DLA. Clothing and textile supply chain office met with their suppliers to discuss the increase in the minimum wage on those suppliers. Troop support office and head of DLA met with PPE industry members from Pennsylvania to discuss their challenges and perspectives. Efforts underway now at DLA to reach out to small businesses in the supply chain—8A suppliers webinar next week and details for this event are on the DLA website. Discussion on recent contract for surgical gowns and compliance issues with DLA RFPs and awards with respect to certification of source and some confusion within the supply chain on criteria and sourcing. DLA committed to work with those industries who need additional guidance.

DCMA:

DIB is demonstrating an understanding of lessons learned and adjusting to ensure they remain open; tracking to date 542 impacts on the DIB including temp closures, scale downed production and employee impacts; DCMA is tracking how the DIB is adapting to the pandemic and implementing lessons learned to avoid complete shutdowns which seems to be working as disruptions are far less than a year ago. DCMA developing a handbook on CAR matters (Corrective Action Request) and compliance—currently getting prime feedback and will work to publish the handbook later this month. DCMA is hoping to collect numerous examples to include in the handbook to provide clarity and good practices to both industry and government staff. On the matter of CAR, an association chimed in that they and other associations have issues with CAR practices of late and will formally object to some of those practices next week.

DPC:

Class deviation update recently published specific to Sec 3610 reimbursement to add extension of this authority to 31 March 2021; have updated ROM Sec 3610 unfunded in DoD as OSD is working a supplemental request to seek full reimbursement which is a priority department matter. Memo issued yesterday updating previous guidance making FedMall available to small businesses—this is the new PPE corridor. To date the Fed Mall is not being fully used and the new instructions hopefully makes it easier for small businesses to actually use this supply option. DPC simplified the process of securing credentials and DODACs. Working thru any acquisition policy changes in response to various EOs recently issued by the President as well as changes due to FY21 NDAA. DPC was asked if the DIB will be part of developing some of these policies, like Buy America EO, and they said yes as appropriate. Some discussion about further extending Sec 3610 authority beyond 31 March 2021 and OSD seemed confident they would do so but no official position at the moment. Question regarding any knowledge of a wedge for defense in the $1.9 Trillion relief bill? No knowledge of such a wedge for defense in the bill.

CISO:

Trusted capital program has launched and please let OSD know of any financial groups that want to invest in the DIB; CMMC first certified auditors will be ready early March to coincide with release of first CMMC RFP; anyone working supply chain risk management within Associations and Chamber can contact OSD for further guidance. OSD needs to reach beyond Sec 885 NDAA 2020 supply chain assessment, hence the ask today. Much discussion on cyber supply chain and OSD seeking to support OSD DC3 on such an assessment—cyber supply chain.

Small business:

Army—pushing FedMall access for PPE, awarded over $6B to date which is 26.4% of year goal and $3B was specific to COVID requirements; Navy--$3.8B awarded to small businesses and of that $80M for COVID requirements; no Air Force input.

Questions:

I commented that the Chamber looks forward to working with OSD on implementing directions specific to the EO on Buy America;

OSD was asked to include next meeting a discussion on the micro-chip supply chain matter which is beginning to impact the DIB;

Question regarding vaccination effort—OSD responded that all hands on deck with supporting operation warp speed, distribution issues, HHS partnership and there is an interagency urgency to ensure better distribution;

DIB was reminded of the early January letter from Ellen Lord on priority with respect to DIB employees and vaccinations whether by DoD on DoD installations or outside DoD at the State and local level; DHS CISO website updated with new cover letter on vaccines and critical infrastructure priority—see page 2 of the memo as the DIB is part of the critical infrastructure—links coming later today;

The minimum wage increase matter was raised again and the impact upon businesses. Questions with respect to how will this increase be factored into the contracting, FAR and DFAR regulations and the timing of implementation for the increase—OSD stated that there is a pending EO on the minimum wage and OSD is in the early stages of figuring out how to implement if an EO is signed and will keep us informed and will partner with industry on regulatory and other guidance on this wage increase matter.

Next call on February 17^th.

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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