DoD memo: Suppliers of critical products and services must stay on the job during pandemic

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Ellen Lord memo: “If you work in a critical infrastructure industry you have a special responsibility to maintain your normal work schedule."

WASHINGTON — Defense Department contractors in sectors such as aerospace, manufacturing and intelligence are part of the United States’ critical infrastructure and have to continue working during the coronavirus emergency, Undersecretary of Defense for Acquisition and Sustainment Ellen Lord said in a March 20 memo.

The “Defense Industrial Base” is one of the sectors identified in a Department of Homeland Security March 19 memo as critical infrastructure, Lord noted. The memo was distributed on Friday to defense industry associations, governors associations and to committees on Capitol Hill.

“If you work in a critical infrastructure industry you have a special responsibility to maintain your normal work schedule” during the COVID-19 emergency, she wrote. That applies to prime contractors and subcontractors that “support essential production sand services required to meet national security commitments to the federal government and the U.S. military.”

Companies and workers categorized as essential include those in aerospace, mechanical and software engineers, manufacturing and production, IT support, security, intelligence, aircraft and weapon systems maintenance, suppliers of medical supplies and pharmaceuticals, and critical transportation.

“If your contract or subcontract supports the development, production, testing, fielding or sustainment of our weapons systems and software,” those workers are considered essential, Lord said. “These companies have to maintain normal work schedules.”

During the COVID-19 pandemic, Lord wrote, companies should follow guidance from the Centers for Disease Control and Prevention, state and local governments regarding strategies to limit disease spread.

“We need your support and dedication in these trying times to ensure the security of this nation,” she added.

Pentagon spokesman Lt. Col. Mike Andrews said in a statement that Lord met on Friday with the chairman of the Senate Armed Services Committee Sen. James Inhofe (R-Okla.) to discuss this memo and other issues related to the coronavirus crisis. “In addition, she’ll be contacting several state governors to discuss state-specific critical infrastructure and essential workforce efforts,” Andrews said.

Requests from industry groups

Lord’s memo follows appeals by major industry groups for DoD and Congress to help ensure the continuation of critical national security work during the pandemic by designating national security programs and workforce as essential. Industry associations also have asked DoD to ensure contractors are paid on time to prevent the financial collapse of critical suppliers.

“Right now, extraordinary challenges to our workforce and our heavily integrated supply chain are reverberating across America’s industrial base, which in turn, is having a major and measurable impact on our economy,” Aerospace Industries Association President and CEO Eric Fanning said in a statement March 18.

Fanning called for a temporary injection of public and private investment into the system to help mitigate reduced cash flow and financial burdens stemming from the COVID-19 crisis. He also asked for “clear and consistent guidance for all federal contracts to help accelerate payments, obligations, and contract awards and facilitate the flow down of critical resources to the supply chain.”

National Defense Industrial Association President Hawk Carlisle in a March 19 letter to congressional leaders said the coronavirus crisis is a “threat the nation has not seen since World War II.”

He asked Congress to approve accelerated payments, tax breaks and credits, and zero-interest loans for small businesses and to exempt contractors, as appropriate, from state and local orders that restrict facility access for businesses.

Carlisle said the government must “pay contractors on time when vendors confront challenges caused by the pandemic.” In declaring a national emergency, the administration activated some protections to defense contractors as provided by the Federal Acquisition Regulations. “However, it does not provide them protections for loss of pay due to delays caused by an epidemic or quarantine,” Carlisle said, “nor does it protect them if the supply chain is impacted by a global crisis.”

The Commercial Spaceflight Federation, meanwhile, has called on Congress to take action to protect America’s commercial space industrial base during this crisis.

In a letter to congressional leaders, CSF President Eric Stallmer said the ongoing COVID-19 situation “threatens to inflict lasting harm” to the space industry.

“The United States partners with the domestic commercial space industry to conduct all of its missions to space, including those for the Department of Defense, the Intelligence Community, and NASA,” Stallmer wrote. “The sudden slowdown in programmatic work, combined with the possible shuttering of federal space launch ranges, poses significant challenges to operational continuity for assured access to space for critical missions, and substantial impacts to the commercial space supply chain.”

CSF asked Congress to establish a $5 billion grant or low-interest loan program “to ensure the continued availability of critical aerospace infrastructure, capability, personnel, and mission readiness to maintain assured access to space for national security, civil, and commercial space missions.”

Stallmer said space launch should be categorized as a “critical” industry that should have access to a $150 billion fund proposed by the White House. “If companies supporting national security or civil space activities are unable to conduct missions for the Government due to closures of federal facilities (including launch ranges), they will not be able to receive mission completion milestone payments, resulting in a significant shortfall of operating capital.”

The CSF letter noted that “widespread closures associated with COVID threaten to significantly postpone critical national security and civil space efforts. These closures could also halt cash flow to prime contractors and suppliers, potentially resulting in downstream closures that would harm the industrial base.”

To maintain operations of essential contractors while minimizing transmission of COVID-19, the federal government should make available funding for personal protective equipment, thermometers, and other support necessary for employees to safely continue operations, CSF proposed