July 22 OUSD A&S COVID Conference Call Notes

OSD A&S:

• Secretary of Defense Esper video released praising the workforce supporting DoD during this pandemic; business.defense.gov to see link for video.
• Later today is the small business webinar re Fed Mall buying and selling non-medical PPE to support this new DLA program.
• New DASD Industrial Base Policy reports on Monday: Jeb Nadaner. $14.9M award for military grade fuel bladders.
• $22M award to Rolls Royce for production and supply of USN propellers; both awards designed to address COVID impact to both industries and ensure critical supply; $3.5M Cross Tech International award to increase production of surgical masks, award increases machining at Cross Tech to ramp up significantly their production capability.

OSD Policy:

• Soon tohost roundtable with Allies to focus on interoperability especially in the Indo Pacific AOR.
• The National Security Strategy highlights need to have outside U.S. critical supply options, which has been further reinforced thru COVID pandemic and growing anxiety with China in the region.
• DoD working with Australia to leverage their maintenance and repair of aircraft to advance this strategic supply chain diversity initiative.
• Asking for industry input on capability and their programs in Australia; for those industries interested in working with Policy and A&S on this supply chain effort specific to Australia, please contact OSD A&S and offer support—U.S. Chamber DAEC can assist.

DLA:

• Gown solicitation—part of strategic national stockpile effort—isolation and surgical reusable and disposable—industry days last week on this requirement as well as other needs for PPE—three different solicitations released 20 July open till 2 August for gowns, with first award planned by 1 September which is ambitious with phased delivery thru 2020.
• DLA cancelation of stock buy solicitations, will reassess stock levels, and then where needed will reissue solicitations—these are for class 9 consumables. This is to reassess DLA inventory levels and adjust according to the findings.
• DLA supplier survey—developed a few years ago, first survey in 2018, 7800 suppliers invited to complete, done on line, focused on DLA communications effectiveness, supplier relationships, growth and DLA effectiveness.
• 38% response to that survey in 2018. Results showed the industry viewed DLA as trustworthy but needed to innovate.
• DLA developed an action plan back then responding to survey results.
• A new survey this Fall using same model and want a larger number of contractors to participate this Fal--so heads up! Fed Mall webinar today; 14 suppliers now in the program, 218 items offered, 5 buyers registered to date and would like to see more buyers registered under this historic program.

DPC:

• Across DoD up to $8.4B COVID related actions and obligations to date--$4.5B in contracts of the $8.4B; of the $4.5B close to $2B to small businesses.
• Balance above $4.5B covered various transactions and financial assistance for DPA allowed adjustments.
• Section 3610 guidance with a detailed check list and ability to do global reimbursements in final staffing, getting closer to publishing, hope to wrap up the formal coordination by COB Monday, then OMB for clearance, then sign it out.
• Maybe late next week for release on this final Sec 3610 guidance. DoD still needs supplemental funds to fully implement Sec 3610.
• Appreciate support from industry and associations. Senior level calls at Under level over the past few days with members of congress on the matter of supplemental funding.

DCMA:

• Tracking 4 closed facilities, single closures only for past month, see impacts in supply chain due to labor shortages and financial issues, highest was 147 companies closed on 12 April, now down to 4.
• Companies learning and smarter as to how they react to facility infections and thus average time for closure is 19 days.
• 6.6 days to process progress payments. Commercial invoices taking 14.5 days on average to process as of last week.

Associations/Chamber:

• I asked about effort to extend Sec 889 go live date of 13 August and I noted Foxx amendment to extend go live until January 2022 has failed to be picked up in the NDAA. OSD confirmed they have worked an extension hard with little success, OSD remains hopeful but time is passing and not looking favorable.
• Discussion on USAF BIS survey which remains a time crunch challenge and industry seeking extended response time/due date. OSD took action again to discuss with USAF.
• Asked about CMMC update at our next meeting—OSD response, went thru interagency review, responded to various comments, one last follow on request being worked now, so close to publication on CMMC, stand by for further updates.
• 4003 treasury loan program — Treasury swamped, applications at least two months behind, and Treasury now advising industries to seek loan options other than 4003.
• DPA Title 3—is the department still looking to use this authority to expand PPE production or shifting over to the non DPA activity? OSD stopped at about $300M medical section use of DPA Title 3. Now using industry expansion with HHS funding to identify expansion needs and to fund those needs via recent contract awards. Several recent non DPA awards to increase medical capacity. OSD did submit to Hill with OMB approval their Sec 3610 funding supplemental need as well as defense industrial base expansion funding needs for non-PPE defense requirements.
• AUSA noted that their October annual event will be virtual and will start on Tuesday vice Monday, Columbus Day.

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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