27 Apr 2020
Posted in Aerospace, Defense & Security
US Army wants to mitigate COVID-19 disruptions for its main programs
Following the news that the US Army wants to mitigate delays of major programs amid the COVID-19 crisis;
Stelios Kanavakis, Aerospace & Defense Analyst at GlobalData, a leading data and analytics company, offers his view on the current challenges:
“A stop in production would immediately jeopardize the ability to deliver the end product and the combat capability of the US Army, especially at the moment when prime contractors are gradually resuming their production efforts. Programs that could potentially be concerned are the upgrading programs of the M109A7 Paladin and M2 Bradley or the long-standing Integrated Air and Missile Defense Battle Command System, which is still in test phase. The DoD is trying to resolve the issue on a case-by-case basis with each individual second or third-tier supplier.
“However, this news comes as no surprise as it has been three days since the Undersecretary of Defense Ellen Lord explained that three-month delays were to be expected across the board for the Department of Defense (DoD) programs. In order to mitigate issues, the DoD intends to request additional funding from Congress should they be necessary in order to cover cost increases. Companies could rely on scrapping summer vacation to make up for the lost time, as it has already been seen with BAE Systems. The flow of liquidity from the DoD to prime contractors, and through them to the lower-tier suppliers, should both help the entire supply chain to face economic hardship and the US Army to advance programs with minimal disruption.
“Lower-end suppliers have limited financial and manpower resources to address issues such as a potential two-week quarantine in case a staff-member was found COVID-19-positive. They are, by nature, more prone and vulnerable to interruption of activities in pandemics.”