WASHINGTON — The U.S. Defense Department expects to see a three-month delay across the majority of its Major Defense Acquisition Program portfolio as the result of workforce and supply chain issues caused by the coronavirus pandemic.
“We believe there will be a three-month impact that we can see right now. So we’re looking at schedule delays and inefficiencies and so forth. That isn’t a particular program, that’s MDAPs in general,” Ellen Lord, the Pentagon’s top acquisition official, told reporters Monday. “And we are just now looking at key milestones that might be impacted.”
Lord declined to identify specific programs that are starting to struggle, but said: “Particularly, we see a slowdown in the shipyards, to an extent. Aviation is actually the most highly impacted sector we have right now.”
In addition to shipbuilding and aviation, Lord expressed concern over the small space launch sector.
Delays are largely the result of closures, temporary or otherwise, up and down the supply chain, from small firms to defense giants. For example, Boeing recently shut down production lines for weeks at a time, while 106 prime contractors have closed since the start of the COVID-19 outbreak, with 68 having reopened.
For vendor-based companies, 427 have closed, with 147 having closed and then reopened, Lord said.
The international supply chain is experiencing negative effects of the pandemic, particularly in Mexico where a number of U.S. aerospace companies have outsourced work in recent years, as well as India.
Lord said she is writing to Mexican Foreign Secretary Marcelo Ebrard to look for help in reopening local factories.
Under the Coronavirus Aid, Relief and Economic Security Act, the Pentagon received $1 billion. Of that, $750 million is earmarked for procuring medical supplies, while $250 million is earmarked for the department to use to help keep critical suppliers in business.
Lord said that latter funding will go toward a number of priorities, including “machine tools and industrial controls, aircraft supply chain illumination, chem-bio, directed energy, radar, munitions and missiles, space, shipbuilding, soldier systems, and ground systems.”
Under Section 3610 of the coronavirus relief act, the Pentagon has the ability to reimburse industry for payments to employees, should they be prevented from working due to facility closures or other restrictions related to the COVID-19 pandemic. Lord said funding for that requirement will likely be in the second version of the act, currently being hashed out between the White House and Congress.
Lord described those potential reimbursements as “billions” of dollars, but declined to put a more specific price tag on it.