DAEC COVID-19 Update April 20: Notes from Today's OSD Call

April 20^th OSD A&S COVID Conference Call Notes:

• Hon Lord gave a press brief at 10:00 am today and defense.gov will post the transcript.
• In her speech, Lord noted thanks to defense agencies for their COVID work, highlighted work with associations and Chamber on these weekly calls.
• $1B has been set aside for DPA Title 3 to build U.S. based capacity with US industries, in collaboration with HHS, DHS and FEMA interagency support to grow the domestic industrial base in support of COVID requirements.
• OSD’s industrial base council meets weekly every Friday to put some of the $1B to action.
• There are over 600 issues and proposals with the industrial base council and they are working through them to include proposals for military installations, aviation, textiles, etc.
• Lord discussed the $17B in loans that the Treasury is awarding, as well as CARES Act overall matters. She noted that the Government has fully committed the $349B in CARES Act Loan authority and more loan authority is being debated on the Hill with passage expected this week of a supplement to the CARES Act Loan program.
• There is an HON Lord letter due soon on liquidity and cash flow via progress payments and they need industry to support data requests as OSD is still seeking more payment flow down data. What they have in hand over the weekend is incomplete.
• We’ve made a lot of progress on various open actions from these calls; with all the information flow.
• Industry please advise OSD on what is too much and what more is needed.
• 11:00 am this Wednesday April 22^nd there will be a live webinar on Cyber.

JATF

• Adaptive additive manufacturing maturing during this time—as an example, 3D print exchange has ramped up significantly and is very helpful.
• About 2800 different unsolicited proposals with a fair amount proposed by brokers but OSD prefers to focus on those proposals provided directly from industries vice brokers; working though these 2800 currently.

DCMA

• Engaged with Mexico to open some of the aviation facilities.
• Hon Lord engaged directly with U.S. ambassador to Mexico and there is a U.S. high level interagency meeting tomorrow to discuss Mexico.
• Lord is publishing a letter to Mexico this week.
• 52% of U.S.-based industry closures are aviation industries—not surprising given commercial impact to the sector and so OSD needs to push money into those subs to help them get though the moment and hopefully remain open.
• DCMA is making progress payments and expects the money to deposit in accounts with businesses this week.
• They are doing more with virtual quality assurance inspections and the response has been favorable from industry overseas and expanding domestically—kudos for the practices innovation by all.
• As industries keep open, it would be good to publish in the local press how you stayed open, what did you do to stay open, as the DIB is leading the movement to reopen / staying open in a pandemic—so please be vocal here and help guide industries across the U.S.

DPC

• Published an updated Section 3610 FAQs last Friday afternoon.
• Supplier flow down payments—did reach out to 7 major primes who were being flooded by the Press and Hill staff with questions to ensure OSD and industry are connected and up to date with each other.
• Regarding the question what DoD could do to make PPE available to those industries in need? OSD is continuing to work this issue to include easing the ability of some to order PPE and get a quick turn (DLA comment on this below re Fed Mall).
• To the question of would the cost of PPE be an allowable cost? DPC said yes it is; then second question is what is the most efficient way to get PPE—DPC is thus looking at an option for single entry point to order and to simplify the process especially for smaller companies and this is the goal but not there yet (DLA is looking at the Fed Mall concept).
• HASC and SASC asked DPC for additional Sec 3610 line in and line out changes for stimulus 4.0 and it was implied by OSD that the issue of effective date was discussed with OSD providing a legislative line correction to clarify that 31 Jan is effective date of CARES Act Section 3610 vice OMB stating it is 27 March—date of the Bill being signed into effect. So more on this once stimulus 4 is published and passed.

DLA

• DLA continues to track status of businesses in their supply chain.
• They are working with DPC on PPE issues.
• Fed Mall may be an option to get at the PPE supply concerns to address industry challenges.
• It was reported that to date there are 4,109 requisitions in the DLA system totaling $73M in value that are coded COVID 19.

OUSDP:

• DHS released version 3.0 of CISA and included what DoD requested re nuclear and foreign military sales.

Associations:

• Discussions regarding PPE challenges; telework evolution, tools to do so and tools that are safe and appropriate for defense work.
• Section 4003 conflicts with banking rules, which is forcing some to avoid this relief under the CARES Act.
• This past Saturday the DoD Under Secretary for P&R conducted a phone call with reporters regarding stop work and waivers—what was missing in that call was the impact to contractor support personnel and thus we asked OSD to look into this matter and report back on Wednesday, which they agreed to do.
• There is much discussion about DLA’s working capital fund and DoD’s request for stimulus 4.0 relief; one association reported that they finished their small business analysis / survey and are sending results to OSD today.
• The liability of DIB and essential mission mandate was discussed.
• The SecDef letter to DIB workforce is imminent; Hon Lord letter to DIB leadership regarding the need for data on progress payments and associated flow down data to the supply base is needed and their support for this task is needed.

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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