24 Jun 2020
Posted in Aerospace, Defense & Security
The Pentagon wants its share of federal aids to face COVID-19 disruptions
Following the press conference of Undersecretary of Defense for Acquisition and Sustainment Ellen Lord updating on COVID-19 measures;
Nicolas Jouan, Aerospace and Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the situation:
“Recent communications from Undersecretary Ellen Lord suggest that the Department of Defense (DoD) will push for more federal aids as some lawmakers, chiefly Rep. Adam Smith, chairman of the House Armed Services Committee, have been critical about extending help. Smith explained during a call with reporters in April that he was against an extension of stimulus funding allocation for the US defense industry beyond the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, estimating that the DoD was already well funded and that defense was not the most exposed industry. With a US$738bn budget allocated to national defense in 2020, The Pentagon is sometimes considered as an unfair beneficiary of federal aids to fight the COVID-19 crisis.
“The DoD is working on a funding request under Section 3610 of the CARES Act that could reach ‘lower-digit billions’ of dollars, according to Ellen Lord. The Pentagon has already processed US$2bn on the US$3bn of promised accelerated invoices and US$472 million in additional contracts have been signed. These measures are important to protect small and medium-sized enterprises (SME) from the impact of COVID-19 on supply chains and deliveries. However, if the bill reaches more than US$10bn, even The Pentagon can make a case for more federal aids in order to maintain SMEs in business.”