Pentagon’s COVID-19 security contract funds begin to flow to industries

Pentagon’s COVID-19 security contract funds begin to flow to industries

Undersecretary of Defense for Acquisition and Sustainment Ellen Lord briefs Pentagon reporters on Monday (DD photo)

WASHINGTON — The Pentagon is giving out multi-million dollar contracts to entities under COVID-19 funding to support long term business viability and protect domestic supply sources.

Among the deals: a $6 million contract with SolAero Technologies for satellite solar array panels; a $12.45 million contract with 5N Plus Semiconductor to improve semiconductor production processes to support semiconductor technologies for space programs; a $15 million agreement with Bethel Industries, Inc. to increase critical industrial capacity for specialized laser cutting of laminated nylon fabrics for soldier protective systems; a $20 million contract with GE Aviation for highly specialized engineering resources, most likely large combat, advanced combat engines; $80M to Spirit AeroSystems, Inc. for advanced tooling, composite fabrication and metallic machining; a $19.5M agreement with Steel America for U.S. Navy shaft repair and manufacturing; and $500,000 to Allied Systems for manufacturing and service provisioning for cranes and davits for the U.S. Navy and Coast Guard.

“The Department remains closely partnered with FEMA and HHS, providing almost $2.5 billion in lifesaving supplies and equipment to service members and federal agencies in the nation’s whole-of-government approach to the coronavirus pandemic,” Lt. Col. Mike Andrews, a Department of Defense spokesperson, said in a statement.

The Pentagon has the money after Congress gave it $10.5 billion as part of the $2.1 trillion CARES Act package. Helping the defense industrial base is one of the uses permitted, with roughly $66 million available to help companies.

The Defense Department also has money available from the $1 billion under the Defense Production Act, a Korean War-era law that President Trump invoked, to have industry produce key COVID-19 first-line items such as N95 respirator masks and ventilators.

The Pentagon is part of a government-wide initiative to determine vulnerabilities in the supply chain for U.S. companies and individuals.

On Monday, Undersecretary of Defense for Acquisition and Sustainment Ellen Lord told Pentagon reporters that billions in additional funding are still needed to reimburse contractor costs related to the COVID-19 pandemic. If the extra funds are not received, the Pentagon would have to use its fiscal 2021 appropriations to pay them, she said.

The funding will be needed to meet anticipated defense contractor claims under Section 3610 of the CARES Act, which permits the Pentagon and other agencies to adjust contract terms to allow contractors to keep their employees who are not working on-site and cannot work from home in a “ready state,” she said.

It gives those agencies money to reimburse up to 40 hours of paid leave per employee. It also allows agencies the discretion to reimburse contractors at the minimum applicable contract billing rates, she said.

“That’s why we put out over 30 memos to simplify and speed up contracting and increase the percentage in progress payment,” Lord said. “So sooner is better is, I think, the best way to put it,”

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