May 5 OSD Conference Call & DLA Industry Association Leaders Webinar (J7):

Overview:

• OSD is wrapping up input on their 100-day study on Executive Order 14107 regarding Critical Minerals and Materials; the results will likely be published in June.

DLA:

• DLA conducted their Industry Association Leaders Webinar this morning; notes on that discussion can be found below.
• India: DLA has delivered $100M worth of supplies to India to include COVID tests, Oxygen tanks, PPE, Vaccine manufacturing supplies, and etc. There is now discussion on support to Brazil. A domestic stockpile replenishment will be underway shortly leveraging existing contracts.

DCMA:

• There are 11 impacted industries as a result of mandatory quarantines from positive COVID tests but 0 closures within the DIB.

DPC:

• Vaccine update: On 29 April, the Secretary of Defense issued additional guidance for Commanders related to studying HP Cons (Health Protection Condition Levels). A link will be sent around shortly, which we will share with you all. This memo provides guidance on protective actions at each level, and how that transitions between levels and when to apply those HP Cons.
• DOD is working on a memo that will address civilians and contractors (under DOD contract) and their collective dependents overseas per DAEC and industry request, however policy logistics and medical challenges in play are slowing things down and require robust coordination. They are hoping to have this out as soon as possible.
• President Biden signed an Executive Order regarding Minimum wage on federal contracts; this EO builds on EO 13658 which formerly brought the minimum wage to $10.10; it has an annual mechanism which brought the federal rate to $10.95 and this latest EO takes us to $15.

Small Business:

• Army: Prime Contract achievements are currently below their goal achieving 27.5 % of all prime contracts to small business worth $12.75B. COVID spend is still increasing. To date, they have obligated $3.8B to COVID
• Airforce: Continue to participate in the internal joint task force tracking COVID 19 efforts; today they tracked $38B to small business. Airforce hosted a webinar yesterday on conducting business with the Airforce, the slide deck will be available on their website tomorrow. They have an expiring contracts list floating around that they’re working on updating.
• Navy: Not on the call.

Associations and Chamber:

• Any update on 30-DAY review on CMMC?
• What are the plans for contractors in Afghanistan? How is DOD approaching this?

DLA Industry Association Leaders Webinar (J7)

DLA’s recently released strategic plan for 2021 can be found here. Their 5-year plan is to transform global logistics over 5 lines of effort to improve how they support the war fighter (primary customer and 1st priority). DLA’s 5 lines of effort are: (1) Warfighter Always, (2) Support to the Nation, (3) Trusted Mission Partner, (4) Modernized Acquisition and Supply Chain Management, (5) Future of Work. Enterprise Key Performance Indicators (KPI) measure the success of this strategy: Service readiness, supply availability, acquisition timeliness, liquidity, business health, price competitiveness, customer satisfaction score, employee engagement.

During the call, DLA bid farewell to Major General Allan Day USAF, Director of Logistics Operations and Commander of Joint Regional Combat Support who is retiring after a 30+year career. He was replaced by Rear Adm Doug Noble, US Navy. Eric Smith is the new Chief of Staff for DLA.

DLA Obligations to Industry FY21 Projections (Non-Energy): $24,216B - $27,638B; these orders from DLA to industry are estimated to range between -8% to +5% compared to FY20. Through March of this year, DLA is tracking 6% lower on awards in comparison to this time last year. DLA is seeing an uptick in demands from the services as they look ahead to the rest of the fiscal year. Support to the troops: clothing, textiles, clothing, medical equipment etc. will fall into the higher range while hardware will fall to the lower end; purchases for energy will be somewhat lower than FY20.

Second DLA supplier Survey: 8,180 DLA supplier POCs were invited to complete the anonymous 30-question survey on 2 November 2020. This surveyed DLA effectiveness, communication, supplier readiness, as well as growth and profit potential. The results were promising; DLA saw a rise 3 of the 4 categories. The biggest improvement was seen in innovation followed by timeliness. The dip in growth and profit was attributed to some of the challenges faced in the past year with the funding environment and pandemic.

Concern was raised on the call that the CARES act is disincentivizing the workforce; DLA understands but claims to be looking at this problem from another perspective and sees value in it.

Upcoming DLA Industry Events:

• Industry Association Leadership Survey Results Webinar (5 May)
• Aviation: Supplier Industry Day (8-9 Jun); Senior Executive Partnership Roundtable (TBD)
• Distribution Industry Day (9 Jun)
• Land & Maritime Industry Roundtable (24 Aug)
• Demand Forecast Webinar to Industry Association Leadership (Oct 2021)
• Troop Support Clothing & Textile Joint Advanced Planning for Industry (Nov 2021)
• Research & Development Industry & Collider Day (Nov 2021)

About the authors

Keith Webster

Keith Webster, president of the U.S. Chamber of Commerce’s Defense and Aerospace Council, guides the focus of the council to strengthen the U.S. defense and aerospace industries by influencing domestic and international policy on behalf of its members.

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