Client Spotlight

SMI Client Florida Atlantic University Works with OceanBased Perpetual Energy to use Gulf Stream to Produce Electricity

by: Richa Patel

Florida Atlantic University’s Southeast National Marine Renewable Energy Center (SNMREC) has spent over a decade researching ocean energy and its related issues, such as what turbines work best in different conditions.

In a partnership, Florida Atlantic University’s SNMREC and OceanBased Perpetual Energy begin working together to develop a way to generate electricity using the Gulf Stream. Last month, they tested five types of turbines to determine which would work best while placed 80 feet under the ocean’s surface, leaving the turbines in the Gulf Stream for 24 hours to find out which produces the most power with the least problems.

On June 1st, the test was declared a success. All turbines worked well, and the one selected was designed in such a way to eliminate torque caused by rotating propellers. This success has “game-changing implications for the future of perpetual clean energy.” The goal for this project is that, in 5 years, turbines in the Gulf Stream would produce 5 gigawatts of electricity to be sent to a power distribution station in the West Palm Beach area.

Updates from SMI

Gerry Lamb Joins SMI as Senior Advisor

by: Richa Patel

At the end of May, SMI announced that Gerry Lamb has joined SMI aa Senior Advisor. Mr. Lamb is widely recognized as one of the leading shipbuilding advocates on Capitol Hill.

“Gerry has broad and respected experience in defense and shipbuilding government relations,” said SMI Chief Operating Officer Bill McCann. “His experience in legislative affairs and his strong partnerships will be a great resource for SMI’s practice. There’s no one in Washington who understands the importance of government shipbuilding better than Gerry.”

Prior to joining SMI, Mr. Lamb served aa Director of Government Relations for General Dynamics Corporation for more than three decades. He was the lead Congressional relations advocate for two of three shipbuilding yards and two of ten business units (Bath Iron Works ME and NASSCO CA). Between 2018 and 2019, Mr. Lamb helped account for over $6 billion in new Navy shipbuilding contracts. During his time at General Dynamics, he had lead responsibility for improving tax treatment of Navy shipbuilding contracts, congressional approval of multiyear procurement in Navy shipbuilding, and Congressionally accelerated funding for NASSCO Expeditionary Sea Base ships, among others. Prior to this, Mr. Lamb did Washington operations for Bath Iron Works and Todd Shipyards Corporation and worked for former US Congressman Brian Donnelly (MA).

Mr. Lamb holds an MBA from George Mason University and a BA from Suffolk University.

SMI Hosts First Ever Webinar on the Defense Production Act Title III

by: Aarzu Maknojia

On May 20th, SMI Senior Vice Presidents Ken Wetzel and Mark Gillman hosted SMI’s first ever webinar on the Defense Production Act Title III. They brought a combined 26 years of experience to the detailed and informative webinar.

They discussed the background of the DPA, its various authorities, statutory requirements and leadership structure. They also highlighted SMI client successes engaging the DPA Title III Program and gave their perspective and guidance on engaging with the program. Most notably, Wetzel and Gillman explained how the project intake process has changed since Congress appropriated additional funds due to COVID-19 and how that has impacted the overall process and strategy for industry.

SMI has a team of qualified experts that are looking forward to continuing to share their expertise via this newsletter and future webinars.

Updates from Washington

Senate Armed Services Committee Advances the FY21 National Defense Authorization Act

by: Aarzu Maknojia

On June 11th, the Senate Armed Services Committee (SASC) advanced the National Defense Authorization Act for Fiscal Year 2021 (NDAA) on an overwhelmingly bipartisan vote of 25-2. While the specific language of the NDAA is not yet available to the public, the Committee did release a report noting the key points.

It supports a total of $740.5 billion which is consistent with the 2019 Bipartisan Budget Agreement. Within this topline, it authorizes a base defense budget of $636.4 billion for the Department of Defense (DOD) and $25.9 billion for national security programs within the Department of Energy (DOE). It also authorizes $69 billion for Overseas Contingency Operations (OCO).

Broad goals include achieving irreversible momentum in implementing the national defense strategy, maintaining our technological advantage, protecting our military advantage, strengthening alliances and partnership, supporting the individuals in the military, improving the Pentagon’s business operations, and sustaining previously established detention policies.

It is important to note that while this authorizes funding, it does not appropriate funding. The House still needs to mark up its version of the NDAA which it is expected to take on in the middle of July. After which the House and Senate Appropriations committees will need to pass their versions of the spending bill.

Senate Appropriations Markups Delayed Over Disputes on Police Reform, Pandemic Aid

by: Richa Patel

Senate Republicans originally planned to begin markups next week, already delayed by the pandemic. However, markups are back on hold due to partisan disputes on what should be allowed to hitch a ride on the funding measures.

In the wake of George Floyd’s death, Democrats want to fund programs on police reform. They also want to include funding to continue tackling the coronavirus pandemic. They are looking to offer amendments on the issues, which Republicans refer to as ‘poison pills’ intended to make the bill unpassable. Democrats believe money needs to be appropriated to address these issues whereas Republicans believe the issues should be addressed outside the regular appropriations process.

In the meantime, the House plans to markup and pass all of its appropriations bills by the end of July.

The 12 appropriations bills funding the government or a stopgap measure must be passed by the start of the FY2021 on October 1st for the government not to shut down.

Under Secretary for Acquisition and Sustainment Ellen Lord’s Briefing to the House Armed Services Committee

by: Aarzu Maknojia

The Under Secretary for Acquisition and Sustainment, Ms. Ellen Lord appeared before the House Armed Services Committee (HASC) on June 10th. She spoke about the Department of Defense’s (DOD) response efforts during COVID-19. Her hearing focused on the DOD’s efforts regarding the Defense Industrial Base (DIB) challenges, contribution to interagency efforts and use of existing acquisition authorities including the Defense Production Act (DPA), to response to challenges presented by COVID-19 and meet the DOD’s readiness needs.

The CARES Act appropriated aadditional $1 billion for the DPA Title III program for COVID response. Ms. Lord explained that $312 million will be going towards a medical response and $688 million will be used to address the impact to the DIB including for the following industries: shipbuilding, aircraft propulsion, space launch, microelectronics, batteries, advanced fibers, soldier survivability and hypersonics.

She also discussed section 3610 of the CARES Act which authorizes reimbursements for contractors that are unable to work because of sickness, closures, restrictions, delays or other things caused by COVID-19. While the CARES Act authorized the use of funds for this, it didn’t appropriate additional funds for it. Ms. Lord says that the DoD does not have the funds to make these reimbursements without cutting into its modernization and readiness efforts. She requested that Congress appropriate additional funding.

A recording of the hearing is available here and Ms. Lord’s remarks are available here.

Congress Critical of DoD Not Spending Emergency Funds Quickly Enough – Pentagon Releases its Spend Plan

by: Aarzu Maknojia

As of the end of May, the Pentagon had spent less than a quarter of the $10.6 billion Congress appropriated in March in order to protect military personnel and to incentivize American industry to procure face masks, ventilators and other products hospitals needed. A short back and forth between congressional Democrats and the Pentagon highlights that the Pentagon has only put 15% of its additional funds under contract.

Since then, the Department of Defense (DOD) has submitted a spending plan to Congress for the funding it received through the CARES Act as it was required to do within 90 days. In its spend plan, the DOD notes that they received $10.5 billion for:
-$7.959 billion to “prevent, prepare for, and respond to coronavirus, domestically or internationally”
-$1.450 billion for the Defense Working Capital funds “to prevent, position, prepare for, and respond to coronavirus, domestically or internationally”; and
-$1.095 billion for the Defense Health Program to fund existing shortfalls in the TRICARE managed care support contracts

The spend plan has three priorities: (1) Protect the military and civilian personnel and their families, (2) Safeguard national security capabilities, and (3) Support the President’s whole-of-nation response to the pandemic.
Specific details are outlined by project and service here.

Federal Reserve Talks First Monetary Report Since Pandemic Started

by: Richa Patel

Federal Reserve Chairman Jerome Powell warned about “significant uncertainty” regarding how fast the U.S. economy will recover, saying that small businesses are particularly at risk. The Fed released its first semiannual monetary report since the pandemic begin, saying the data reveals “aalarming picture of small business health during the Covid-19 crisis.”

The U.S. entered a recession in February and as the nation shut down for the coronavirus pandemic, the Fed and Congress have provided unprecedented levels of monetary and fiscal support, including a potential for trillions of dollars in liquidity and lending programs.

On Monday, the Fed officially started its Main Street lending program, geared towards helping smaller businesses. It also said that it would start buying individual corporate bonds on top of the exchange-traded funds it has been purchasing. It indicated it would keep interest rates near zero through 2022 and pledged to use “its full range of tools to support the U.S. economy in this challenging time.”