WASHINGTON — As large chunks of the country begin to scale back restrictions caused by COVID-19, the companies of the defense industrial base have largely reopened for business, the Pentagon’s top acquisition official said Monday.
Speaking to reporters, Ellen Lord, the undersecretary of defense for acquisition and sustainment, said that only 33 total companies in the industrial base, largely smaller services providers tracked by the Defense Logistics Agency, remain closed for business.
“Out of 10,509 companies [the Defense Contract Management Agency] tracks: we are down to two closed, and 267 companies having closed and reopened,” Lord said in her remarks. “Out of 11,413 companies DLA tracks: 31 are closed with 661 having closed and reopened.”
That is an improvement from April 30, when Lord said there were 93 defense-related companies tracked by DCMA closed, with 437 of the DLA tracked companies shut down at that time.
“We see an enormous amount of recovery in the defense industrial base. It depends on location and what type of work is being performed, but there is enormous progress coming back,” she said. “Obviously, for manufacturing, we need people on the line. So, we’re doing things differently in terms of following CDC guidelines and so forth.
“We don’t know what that new normal will be on speed, but we see an enormous amount of recovery.”
Lord acknowledged that the efforts to stabilize the defense industrial base would be ongoing, noting officials “continue to see the greatest impacts both domestically and internationally in the aviation and shipbuilding supply chains.” She added that advanced progress payments to companies has hit over $2 billion, and that all of the prime contractors have “confirmed their detailed plans to work with their supply chains to accelerate payments to identify distressed companies, and small businesses.”
The department is still tracking a roughly three-month period of delays that could have repercussions on major defense programs, Lord said, although she declined to give any specific examples.
“We have seen inefficiencies across most programs,” Lord said. “DoD continues to partner with our industry partners to do everything possible to keep programs on schedule and to minimize the cost and schedule impacts. This is obviously a dynamic situation, and the overall impacts will not be completely known for a while as we work through how we operate over the next few months.”
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.