DOD Focuses on Sustaining Industrial Base Through Pandemic

May 5, 2020 | BY C. Todd Lopez , DOD News

The Defense Department is using an array of tools to ensure the defense industrial base stays afloat so it can provide critical materiel now and remain robust after COVID-19 has passed.

Ellen M. Lord, the undersecretary of defense for acquisition and sustainment, said last week that DOD is "carefully and methodically" tracking the state of the defense industrial base, which includes businesses large and small that have direct business with DOD or provide important components or support to companies with defense contracts.

"Our acquisition and sustainment team remains focused on partnering with industry to maintain readiness and drive modernization," Lord said. "Our industrial policy team continues to lead multiple industry calls every week with 18 Industrial associations. I am proud of the department's responsiveness in addressing defense industry concerns that are outlined during these calls."

One agency heavily involved in ensuring that the defense industrial base remains strong and capable throughout the COVID-19 pandemic is the Defense Contract Management Agency, which manages some of the largest contracts for the department, including that of the F-35 joint strike fighter aircraft.

Navy Vice Adm. David Lewis, agency director, said when the first of the COVID-19 closures started happening, he told the defense industrial base businesses the agency works with that if they stayed open, DCMA would be there to support them.

"If you're open, we're open," he said. "I said that, like, Day One or Day Two when this started happening. My point in that is we need the industrial base to stay open. We're still building airplanes. We're still building tanks. There are still soldiers, sailors, airmen and Marines in harm's way around the world. They still need their parts, they still need their equipment. We're still deploying. People are still shooting at us. We're still shooting back."

While DCMA works with nearly 10,500 businesses, the actual defense industrial base is much larger, Lewis said. A sister agency, the Defense Logistics Agency, also works with many companies, though there may be great overlap between the companies DLA and DCMA work with. Globally, the number of domestic and foreign companies in the defense industrial base could exceed 160,000.

One tool the department is using to ensure the companies remain viable is a memorandum published in March and signed by Lord. That memorandum defines the defense industrial base as the industrial complex that enables research and development as well as design, production, delivery and maintenance of military weapons systems/software systems, subsystems and components or parts, as well as purchased services to meet U.S. military requirements.

In the memorandum, Lord identifies the defense industrial base as a critical infrastructure sector as defined by the Department of Homeland Security. This allows companies to stay open even when other businesses have been directed to close.

"I've given the memorandum to every single DCMA employee, and we have given those to every company that wanted one and told them to give them to their employees," Lewis said. "That has been hugely helpful."

Another tool the department is using to help are changes made to increase the "progress payment" rate on some defense contracts. Those payments are made to  improve cash flow for industry involved in the ongoing production of large defense items.

"There are about 1,500 contracts that [DCMA] pays every couple of weeks based on the progress that they've done," Lewis said. "They don't have to deliver a product. It's such an expensive thing that we pay them incrementally as they build it."

The progress payment rate increase  from 80% to 90% for large businesses and from 85% to 95% for small businesses, Lewis said. "That has the effect of pushing $3.3 billion into the defense industrial base," he added. Last week, Lord said about $1.2 billion in invoices were processed at the higher progress payment rate.

"We have spoken with each of our major prime companies, and they have each confirmed their detailed plans to work with their supply chains to accelerate payments, and to identify distressed companies and small businesses," she said. "I want to particularly commend Lockheed Martin, who publicly committed to accelerating $450 million dollars to their supply chain, again, focusing on distressed and small businesses who need it most."

It's important that extra funding from the government gets pushed down from large "prime" contractors — such as Lockheed Martin or Boeing — to their smaller suppliers, Lewis said, because those small businesses are also a critical part of the defense industrial base and are more vulnerable to the effects of the COVID-19 pandemic.

"If you are a big company, you've got cash in the bank, you've got money on hand, you can probably work through things financially — it may not be pleasant, but you're OK," Lewis said. "If you're a small wiring harness maker, you might be living paycheck to paycheck, as a company."

Lewis also said that DCMA is working with companies to continue to provide payments even if those businesses are unable to keep the original agreed-upon schedule for product delivery.

"We'll give them grace — if you're supposed to deliver 10 this week, but you completed eight — that's fine," he said. "We've allowed partial payments. We'll relax some of our normal contract provisions for penalties ... we'll relax our penalties if you're late on deliveries. So you're still producing, you're compliant with the [Centers for Disease Control and Prevention] guidelines for the health of your workforce ... but you're still producing product, which means you're still getting paid, which means you have an income stream and you can stay open."

DOD also has made changes in what's allowed within a "request for equitable adjustment." The changes were part of the recent Coronavirus Aid, Relief and Economic Security Act.

Lewis likened a request for equitable adjustment as something that might be used by a small business to recoup additional, unforeseen costs associated with a contract. A contractor, he said, might agree to replace a customer's roof for $15,000. If during the execution of that work the roofer discovers extensive termite damage to the customer's home, then this would increase the cost of the roofing work. The roofer would need to work with the customer to get additional funds beyond what was initially agreed upon.

Businesses doing work with the government who suffer similar unforeseen circumstances — such as costs associated with COVID-19 — would use the request for equitable adjustment to seek additional funding.

"The company could say, well, 'I was supposed to deliver ten, but because of the pandemic I could only deliver eight, ... [or] it took me longer to make up the difference and that cost me extra, I had to expedite things, I had to air-freight stuff, so I'm requesting a request for equitable adjustment,'" Lewis said.

Part of the DCMA mission involves having representatives embedded in businesses who would witness the kinds of problems that might give rise to a request for equitable adjustment, Lewis said.

"We're the ones that will say, 'This is what happened on April 29 at a facility with this delivery,' for instance," he said. "So we provide the facts to the contracting activity, the buying activity, the company provides a request for equitable adjustment, and then the buying activity and the company negotiate that."

A worker wears a welder’s hood flipped up on her head. She manipulates a roll of wire. A large vehicle sits to her left.

While businesses in the defense industrial base can submit a request for equitable adjustment at this point, Lewis said he's not aware that any company has done so.

Lord said that, as of last week, 93 of the companies that DCMA tracks are closed, and that's down 13 from the week before. As a result of COVID-19, she said, a total of 141 of those companies had closed and then reopened. She said the trend now is that DOD is seeing more companies reopening from a closure, than new companies closing. Of the companies tracked by DLA, she said, 437 were closed last week, with 237 having closed and reopened, up almost 100 companies from a week before.

While any company within the defense industrial base suffers when it's forced to close as a result of COVID-19, small companies are hit especially hard, Lewis said. But the worst case scenario, he said, is if a company is closed permanently as a result of COVID-19. It's a loss for that business, and for those employees who are out of a job. It's also, he said, a loss to DOD.

"A lot of our stuff is niche, specialty equipment," he said. "If a company packs up, shuts down, and sends their people away, the question is how many other companies do that work? There might only be one, there might be just a couple. It would be a challenge  if we couldn't get the material that we needed to support the warfighter."

DOD Remains Flexible, Agile in Face of Coronavirus

May 5, 2020 | BY JIM GARAMONE , DOD News

As the coronavirus situation evolves, the Defense Department must remain agile, flexible and responsive, Defense Secretary Dr. Mark T. Esper said.

DOD will continue its work with the Federal Emergency Management Agency and the governors across the country to try to stay ahead of the pandemic, the secretary said at a Pentagon news conference today.

Army Gen. Mark A, Milley, the chairman of the Joint Chiefs of Staff, speaking alongside Esper, said the military has been flexible in changing its responses to the needs of the various communities.

Some 62,000 service members are supporting the fight against COVID-19, with more than 3,500 DOD health care professionals working on the front lines of some of the hardest-hit areas, Esper said, adding that he will continue to assess the situation and tailor the DOD's capabilities to what civilian agencies might need.

The secretary said he is also assessing his directives to the force.

"This week, I will conduct the first 15-day review to determine if adjustments are warranted as we work to ease the burden on the force as much as possible," he said. "We've already expanded some of the exemptions to the stop-movement order, including allowing certain permanent-change-of-station moves to proceed."

Esper announced new safety measures for PCS moves to protect service members and their families. U.S. Transportation Command will oversee the changes, he said.

Under the changes, movers will be required to adhere to COVID-19 health protection protocols, which include wearing face coverings, cleaning surfaces and practicing social distancing. "Furthermore, DOD is requiring moving companies to provide certification to service members that their personnel have been screened for illness in line with [Centers for Disease Control and Protection] guidelines," Esper said.

DOD is increasing investments in short and long term medical solutions, the secretary told reporters. "As we work toward a vaccine and long term, we're interested in advancing immediate therapeutic solutions that can protect our service members across the globe," he said.

All this happens against the backdrop of an agency with responsibilities around the globe, Esper noted. "We remain focused on our national security missions around the world," he said. "Many countries have turned inward to recover from the pandemic, and in the meantime, our strategic competitors are attempting to exploit this crisis to their benefit at the expense of others."

He noted that the Chinese Communist Party has ramped up its information campaign to try to shift blame for its response to the coronavirus and burnish its image and has continued aggressive behavior in the South China Sea. The Chinese navy threatened a Philippine navy ship, sank a Vietnamese fishing boat and is trying to intimidate other nations from engaging in offshore oil and gas development.

The U.S. Navy replied, conducting freedom-of-navigation operations in the South China Sea "to send a clear message to Beijing that we will continue to protect freedom of navigation and commerce for all nations, large and small," Esper said.

Lack of Chinese transparency is troubling and has given rise to many theories. Reporters asked Milley if the coronavirus was man-made. Milley would not discuss intelligence matters, but he did address the Wuhan origin case of the virus. While nothing is conclusive "the weight of evidence … is that it was natural and not man-made," he said.

A question that would flow from that is whether the virus was accidentally or intentionally released. "We don't have conclusive evidence in any of that, but the weight of evidence is that it was probably not intentional," the chairman said.

He called on China to "open up and allow inspectors and investigators to go there in full transparency so that the world can know the actual original source of this so that we can apply the lessons learned to prevent outbreaks in the future."

Both men noted that tomorrow begins National Nurses Week. "We salute all nurses, both military and civilian, who have served and are currently serving our nation and our people," Esper said. "Thanks to many of their efforts, we're encouraged to see the situation improving in several of the most impacted areas of the country."

Military Hospital Lends Research Expertise to Global Pandemic Effort

May 5, 2020 | BY Elaine Sanchez , Brooke Army Medical Center

Within weeks of the COVID-19 pandemic's spread, Brooke Army Medical Center, Joint Base San Antonio-Fort Sam Houston, Texas, drew on its deep bench of research expertise to join the global race to find a treatment for the coronavirus disease.

"We knew early on that with BAMC's strong research and academic foundation, our clinicians would want to quickly launch or join studies to help find answers," said Dr. Christopher A. Rábago, the chief of the Human Research Protection Office. "We took immediate action by reducing all non-essential research to enable us to focus our efforts on the pandemic."

BAMC explored every opportunity to participate in local, national and global studies and research efforts in a concerted effort to save lives and ensure the health and welfare of the force, said Air Force Col. Heather Yun, the chief of the Department of Medicine and professor of medicine with the Uniformed Services University of the Health Sciences, Infectious Diseases.

"Research is truly a mission-essential activity, particularly in times like these where there is so much still to be learned about a novel and emerging infectious disease," Yun said.

Alongside military and civilian organizations, BAMC soon joined the nation's first clinical trial to evaluate an experimental treatment for the virus. The Adaptive COVID-19 Treatment Trial, or ACTT, centered on an antiviral drug called remdesivir, formerly touted as a potential Ebola treatment.

The National Institute of Allergy and Infectious Diseases, NIAID, sponsored study enrolled more than 1,000 people across the nation to determine if the antiviral drug was effective against COVID-19.

According to a, April 29 news, NIAID released promising preliminary results indicating that hospitalized patients with advanced COVID-19 and lung involvement who received remdesivir recovered faster than similar patients who received a placebo.

"As of yesterday, we didn't have a proven treatment for COVID for hospitalized inpatients and now we do," said Air Force Maj. (Dr.) David Lindholm, infectious disease doctor and BAMC's principal investigator on the remdesivir trial, who also serves as an assistant professor of medicine at Uniformed Services University of the Health Sciences. "The trial started in late February, and we went from having limited information to promising results. To see the rapidity at which this has happened is unprecedented.

"This was an incredible opportunity to collaborate with national and international clinical research experts, while exploring potentially lifesaving treatments," he continued. "BAMC will also have a role in NIAID's ACTT 2 trial, which is currently being designed."

Based on preliminary research on the drug, BAMC has joined an Army-sponsored force health protection clinical protocol that will enable providers to use remdesivir on a case-by-case, emergency basis to treat military personnel and protect deployed or remote service members as needed, explained Army Col. (Dr.) J. Shen-Gunther, the chief of the Department of Clinical Investigation.

"Doctors will be able to prescribe and use remdesivir under this expanded-access treatment protocol," Shen-Gunther noted.

The military is also looking into additional treatment options to include the use of convalescent plasma, which is blood donated by people who have recovered from the virus. Researchers are hoping this antibody-containing blood will boost COVID-19 patients' ability to fight the virus.

While many of these research efforts are highlighted in the news, Rábago cautioned people to keep experimental drugs and treatment trials in perspective; only a small, severely-ill population will ever need them.

"Our doctors are doing a normal, everyday standard of care, and patients are getting better," Rábago said. "Not everyone needs an extraordinary intervention, but we are prepared to do that because BAMC is laying the groundwork to be ready."

National-level studies are important; however, much of the work happens quietly and on a smaller scale behind the scenes, Rábago noted. "From documenting cases to process improvement efforts, our clinicians are doing their part every day," he added. "And their efforts are just as vital and important"

Shen-Gunther praised BAMC's participation in national and global registries, which are repositories of patient data that researchers and healthcare professionals can use to increase understanding of medical conditions, track trends and more.

"Registries enable us to step back and look for trends that may offer a roadmap for a cure or different course of treatment," she said. "For example, we can look at certain populations based on demographics or conditions, and make discoveries or change our technique."

Looking to the future, BAMC has joined a study launched by the Uniformed Services University's Infectious Disease Clinical Research Program called Epidemiology, Immunology and Clinical Characteristics of Emerging Infectious Diseases with Pandemic Potential, or EpICC-EID. This multicenter study follows patients with suspected or a confirmed case of COVID-19 for six months to better understand the varying characteristics of the virus, Lindholm explained.

Spurred by this national emergency, research and subsequent approvals have been expedited through the system. Fortunately, BAMC, with the second-largest research portfolio in the Defense Department, has some experience in swiftly and safely navigating the process.

"Being a Level I trauma center, we are well-versed in working with the [Food and Drug Administration] and dealing with emergency-use treatments," Rábago said. "We are able to apply this knowledge locally while also providing guidance and insight to other military treatment facilities. Research is in our wheelhouse."

Along with COVID-19 trials, over 300 studies and 150 clinical trials, which can't be halted due to patient safety or continuity, are ongoing at BAMC. In the weeks ahead, Rábago expects there will be a host of new study and process improvement proposals from across the organization aimed at better understanding the pandemic and outlining best practices for the future.

"One example is a multidisciplinary new project, led by Dr. Lindholm, which looks at our drive-thru COVID screening operations and how to best refine testing criteria for optimal capture of COVID cases," he said. "That will be highly important not just for current operations, but also for future training and implementation."

While the pandemic is unprecedented, the collaboration taking place at BAMC is not, Shen-Gunther said.

"The collaboration between specialties and departments — infectious disease, public health, pharmacy, lab, emergency medicine, to name just a few — has been incredible, but we collaborate every day of every year," she added.

"I can't speak highly enough about the researchers and clinicians working so diligently behind the scenes to aid our community and our nation," Rábago agreed. "I'm very proud to be a part of this incredible team of professionals who are making their mark on science and in history."

BAMC's focus on research is vitally important on multiple levels, Yun said.

"If we are in a war against the virus, medical research is the intelligence operation that enables us to stay agile and one step ahead of the enemy," she said. "These are the studies that will drive innovation, change practice, and ensure that we have all the tools available to provide the best care for our patients, now and in the future."