DON’T BET ON MORE DOD STIMULUS MONEY
Pentagon leaders have told Congress that they would like $10 billion in additional stimulus money to ensure that the industrial base stays strong while dealing with the impact of COVID-19. Congress, however, may not be in a giving mood after already approving $10.5 billion in additional aid this year, increasing DOD budgets over the past three years, and being poised to deliver approximately $741 billion in spending for 2021. “We don’t need to give them any more money,” said HASC Chair Adam Smith (D-WA) during a recent teleconference and quoted in an article by Federal News Network. Smith went on to note that DOD had yet to distribute half of the COVID-related money it had previously received. A lack of additional supplemental funding may limit DOD’s ability to compensate contractors for workforce disruptions related to COVID-19. While the agency has the ability to do so, the real key is the availability of money. Pentagon leaders have previously said that they could need billions more in aid to meet such needs. Contractors should plan accordingly. A strong fiscal year-end may offset some of the negative impact, but some may still face challenges depending on the level of initial business disruption. Still, contractors may be fairing better than their commercial counterparts. Deputy Defense Undersecretary for Acquisition and Sustainment Alan Shaffer said on Government Matters recently, “We are somewhere under 40 companies in the defense industrial base that have had layoffs. I compare that to the rest of the nation and I think the actions the department took to accelerate payment to our supplier sub tier actually allowed them to stay in business.”