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DoD Details $11B for COVID Costs, Warns ‘At Least One’ Shipyard May Close
A new Pentagon memo estimates that between March 15 and June 15, defense contractors are expected to experience $11 billion in cost increases due to supply chain issues, with the Navy taking the brunt of it. The document, which asks Congress to fund the services for unforeseen expenses, lists $4.7 billion for the Navy, $4.3 billion for the Air Force; $1.1 billion for the Army; $594 million for the Missile Defense Agency; and $190 million for the Special Operations Command.
Hondo Geurts, the Navy’s acquisition executive, said this week that the service is not “out of the woods” in terms of a shipyard being shut down as a result of the coronavirus.
"COVID is not a place where I think anybody is out of the woods yet in terms of how it might impact us in the future," said Hondo Geurts when asked about a Pentagon white paper assessing the consequences of the pandemic.
One projection the document makes is that "at least one of the big seven shipyards may shut down" in the near future. Geurts today sought to clarify that concern, saying the document's phrasing could be taken out of context. "The impact would be if we happen to have…transmission within the shipyard, that we might have to temporarily close down the shipyard for a period of time until they got it under control," he told reporters. The concern is "not that we would have to shut down a shipyard permanently and lose them out of the industrial base," he continued.
Geurts added that in discussions with company presidents he has been told most coronavirus cases affecting workers were transmitted outside the facility, which is why no yards have closed yet. The Pentagon white paper also projected additional costs incurred by each service from March to June, estimating the Navy would require $4.7 billion in relief. Geurts said today he remains confident in that estimate but warned future modernization would be at risk if the Pentagon did not receive the funding.
Ellen Lord Looking to Settle COVID-19 Claims at Corporate Level; 3610 Guidance Forthcoming
Pentagon acquisition chief Ellen Lord said this week the Defense Department is working on a plan that could allow it to reimburse contractors experiencing pandemic-related hardships and inefficiencies with lump sums, rather than negotiate many smaller settlements. Lord, speaking during a virtual event hosted by the Professional Services Council, said DOD has developed "a path to settle globally -- at a company or division level -- that will eliminate the need to have proposals and negotiations on a contract-by-contract basis."
Lord said DOD has also developed a "streamlined path for low-dollar-value reimbursements under $2 million." She also said that DOD is in the process of developing final guidance on submitting 3610 reimbursement requests and plans to publish it “shortly.” The final guidance, Lord added, is awaiting approval from the White Office of Management and Budget for clearance under the Paperwork Reduction Act. "As soon as we secure OMB clearance, we will issue the policy," she said.
Administration Solicits Floating Border Wall to Seal off Waterways Along Mexico Border
The Trump administration wants to install floating border barriers that could be used to wall off river crossings and reservoirs along the international boundary with Mexico or extend U.S. fencing deeper into the sea, according to a new market solicitation posted by the U.S. Army Corps of Engineers. The “Buoy Barrier System” described in a new federal contracting bulletin seeks information from private companies capable of installing a system that could meet U.S. Customs and Border Protection requirements. Such a barrier would need to prevent swimmers from climbing onto it, “and must include a component (such as an anti-dive mesh) that would impede incursions and/or breaching via underwater diving while minimizing debris buildup,” the solicitation states.
MARAD Picks Crowley Government Services to Manage Sealift Recap Procurements
This week, the Maritime Administration awarded Crowley Government Services a $56 million indefinite-delivery, indefinite-quantity contract to manage procuring the dozens of used sealift vessels required to recapitalize the sealift fleet.
"The overall objective of the [vessel acquisition manager] contract is for the government acquisition of used ships to fulfill [Defense Department] sealift requirements," the public notice states. "MARAD will acquire ships, including used U.S. or foreign-built ships as part of the Department of the Navy's plan to recapitalize the organic, government-owned sealift fleet in accordance with the Sealift That the Nation Needs report to Congress," the notice continues.
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