DoD wants to see fuller picture of COVID-19 impact on industry

It will take time to accurately quantify the economic and operational impacts of COVID-19 on the US defence industry, a senior DoD official noted on 9 September.

Ellen Lord, Under Secretary of Defense for Acquisition and Sustainment, said more information is needed as it is still too early to tell how well key defence companies are coping during the pandemic.

‘All the reports that have come out in large part don’t reflect the hits that were taken by business,’ she said on 9 September in a discussion during the 2020 Defense News Conference.

‘There have been mixed reports in terms of revenue and profitability. I would contend that most of the effects of COVID haven’t yet been seen, because most companies gave their employees time off — they stretched out production, paid a lot of people for working 100% when, perhaps, they were only getting 50% of the hours in, and so forth.’

Lord said that the Defense Contract Management Agency now tracks about 22,000 key companies. ‘Going back over the last six months, we did have hundreds of companies shut down, but now we’re down to only about 30. So, that’s very, very good news.’

The DoD now wants to ascertain more precisely how the defence industrial base was affected in the six months to 15 September.

‘What we are looking for is whether or not we’re maintaining warfighter readiness for our production programmes,’ Lord said. ‘And then relative to modernisation, whether we are hitting key milestones relative to development programmes.’

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