DoD Seeks Billions More For COVID-Related Delays

WASHINGTON: The Pentagon knows it needs “lower double digit billions” to cope with COVID-19 related costs, but remains vague about just how much money it is asking the White House to add to the $740 billion already requested for 2021.

Defense officials disclosed weeks ago that a request was on its way, and it is now with the White House Office of Management and Budget waiting for approval.

The money will be part of a large-scale effort to cover defense industry claims of supply chain and workforce reductions as a result of the COVID-19 crisis, and is covered explicitly by Section 3610 of the coronavirus relief package.

Under that rule, contractors can ask the Pentagon and other federal agencies to cover things mandated by new government rules like personal protective equipment, cleaning, and staggering work shifts.

Speaking with reporters at the Pentagon this morning, acquisition chief Ellen Lord said “sooner is better, I think, is the best way to put it,” when asked about when the funds will be available. 

Lord repeated the timeline she has been referring to for weeks, saying “we continue to assess a three-month slowdown to all programs due to COVID-19,” she said, “we have seen inefficiencies across most programs. COVID-19 is shutting down defense manufacturing facilities and production lines, disrupting supply chains and distressing the financial stability of the companies DoD relies on to protect the nation.”

The vast majority of defense firms have operated at at least some reduced capacity over the past several months, and Lord said the Pentagon continues to see the biggest impacts in the aviation and ship building supply chains” 

In order to spur the system, the DoD has sped up planned payments to the defense industry, hitting the $2 billion mark in recent days, and each of the large prime contractors have “confirmed their detailed plans to work with their supply chains to accelerate payments to identify distressed companies, and small businesses.”