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A Capitol View: April 2020

Aarzu Maknojia and Richa Patel, Thursday, April 9, 2020

Client Spotlight

U.S. Footwear Manufacturing Association Companies Helping Make Masks Amid COVID-19

by: Richa Patel

The U.S. Footwear Manufacturing Association (USFMA) has companies dedicated to helping make masks during this global pandemic. SMI COO Bill McCann is the Executive Director of USFMA.
 
New Balance, a USFMA member, is transitioning domestic footwear manufacturing factories to make personal masks. Consulting with local medical and research & development institutions, the Lawrence, Massachusetts’s factory started its transition from the MADE 990 footwear model to personal facemasks on March 30th. It is now producing 8,000 masks daily. Their Norridgewock, Maine factory started production on April 2nd with the goal to scale-up to 10,000 masks daily by April 10. USFMA member Dela Inc. is helping supply materials.
 
In A Message to Our Community, New Balance says, “The global COVID-19 health crisis has called on individuals and organizations to bring their expertise and resources to solve new and extraordinary challenges. New Balance has engaged a portion of its skilled and innovative U.S. manufacturing workforce to develop face masks to address the significant demand for these supplies.”
 
Says McCann, "I am proud to support these companies in their incredible effort and look forward to continuing to support companies looking to aid in the COVID-19 crisis."
 

Updates from SMI

U.S. Advanced Ceramics Association Hosts 44th Annual Conference on Composites, Materials, and Structures in January

by: Richa Patel

The U.S. Advanced Ceramics Association (USACA) hosted its 44th Annual Conference on Composites, Materials, and Structures from January 27 to January 30, 2020. The conference provided a forum for information relating to advanced materials including ceramic, metal, and carbon matrix composites.
 
SMI CEO Glen Mandigo is the Executive Director of USACA, which is made up of over 40 members. This year’s conference, hosted in Cocoa Beach, Florida, was its largest yet.
 
Days were split into morning and afternoon sessions and included topics such as “Extreme Environment Materials,” “Hypersonic Vehicle Materials/Structures Evaluation,” and “Manufacturing of High-Temperature Composites and Ceramics.”
 
USACA was formed in 1985 to facilitate the commercialization of the United States’ advanced ceramics industry and quickly became the leading voice of the advanced ceramics industry before the U.S. Congress and federal agencies.
 
The 45th Annual Conference on Composites, Materials and Structures will be hosted January 25 - 28, 2021.
 

SMI Life Sciences Team Offers Summary of R&D Funding Opportunities in COVID-19 Response

by: Richa Patel

The recently passed $2 trillion CARES Act includes medical research and development funding opportunities of interest to the SMI community. SMI Life Sciences team members Dr. David Visi and Dr. Travis Taylor put together a memo providing a summary of these funding opportunities.
 
Included in the CARES Act is $10.5 billion in the Public Health and Social Services Emergency Fund for Vaccine, Therapeutics, Diagnostics, and other Preparedness Needs including a specific set-aside to advance construction, manufacturing, and purchase of vaccines and therapeutic delivery; $415 million for Defense Health Programs – Diagnostics for the development of vaccines, antivirals, 24/7 lab operations and the procurement of diagnostic tests; and $10 million for the Network for Manufacturing Innovation (Manufacturing USA) to prevent, prepare for, and respond to coronavirus, including to support development and manufacturing of medical countermeasures and biomedical equipment and supplies.
 
If interested in the full memo, please reach out. The SMI Life Sciences team is also available to discuss any potential research and development activities related to COVID-19 for your company.
 

Jeff Leahey Joins SMI as a Vice President

by: Aarzu Maknojia

At the beginning of 2020, Jeff Leahey joined SMI as a Vice President. Mr. Leahey previously served as the Executive Vice President for Government Affairs of the National Hydropower Association (NHA).
 
“Jeff is one of the nation’s leading advocates on hydropower and marine energy,” said SMI Chief Operating Officer Bill McCann. “He understands the issues from the legislative, regulatory and industry perspectives. Jeff will be an incredible resource for SMI’s growing marine and clean energy practice.”
 
In his 17 years of service at NHA, Mr. Leahey led the organization’s legislative, regulatory and legal policy work to advance the hydropower, pumped storage and marine energy industries. He represented NHA before Congress, the Administration, Federal Energy Regulatory Commission and federal resource agencies on matters including climate and clean energy policy, renewable energy tax incentives, hydropower licensing reform, R&D funding for waterpower technologies and many others. He has experience testifying before Congress, drafting legislative policy and developing comments on regulatory and administrative proposals.
 
Says Leahey, "I am excited to have joined the outstanding team at SMI with its proven track record of performance with clients. I am looking forward to utilizing my experience and expertise to help our clients be successful and reach their goals and objectives."
 
Mr. Leahey currently serves on the Board of the National Energy Resources Organization (NERO) and is an Advisory Board member for NHA. He is a graduate of Northeastern University Law School and holds a Bachelor’s degree in Biology and Political Science from Washington University in St. Louis.
 

Updates from Washington

Opportunities for the Defense Production Act Title III for COVID-19 Response

by: Ken Wetzel

The Defense Production Act (DPA), a little known, but powerful presidential authority, has been the focus of a lot of media attention over the past few weeks. Some outlets have indicated that the DPA has not been used since its inception in 1950, while others have said its use brings the United States one step closer to martial law. As the leading consulting firm for DPA, SMI is certain that neither are factually accurate, and that the appropriation of $1 billion to the DPA Fund as part of the CARES Act provides a significant opportunity for government and industry to effectively partner on a response to the COVID-19 public health emergency, while also strengthening the defense industrial base over the long term. SMI released a memo discussing this opportunity which can be found here.
 
The COVID-19 crisis has unveiled the US’ lack of manufacturing capacity and reliance on foreign suppliers for critical personal protection equipment, ventilators, and tests. Over the coming weeks, a combination of the DPA’s Title I (Priorities and Allocations) along with its Title III (Expansion of Productive Capacity) authorities will be used to fulfill the demand for these items as quickly as possible. It is yet to be seen how much of the appropriated $1 billion will be spent on addressing these immediate shortages, but it would be prudent for the government to also consider the underlying supply chain issues and next generation capabilities that have resulted in significant shortages for these essential items.
 
Read more here.
 

Emergency Spending Bill Aims to Protect Small Businesses

by: Aarzu Maknojia

Small businesses have been impacted widely by the state-wide shelter in place orders that are being put into effect by governors. While many defense contractors are deemed essential and are being asked to still come into work, many others have had their doors shuttered and the lights turned off. 
 
On March 27th, President Trump signed into effect the Coronavirus Aid, Relief and Economic Security (CARES) Act, a $2 trillion emergency spending bill. This includes relief in the form of individual stimulus checks to American families as well as funding for various industries.
 
Specifically, the CARES Act appropriates $349 billion to the Small Business Administration for the Paycheck Protection Program. This is intended to assist businesses with fewer than 500 employees for payroll support, mortgage interest and rent payments, utility payments, interest on debt and overhead costs. The maximum loan size is either $10million or 2.5 times the average monthly payroll costs for the previous year and the value of any existing Economic Injury Disaster Loan Program (EIDL), whichever is lower.
 
It is important to note that a portion of these borrowed funds are forgivable over the February 15th to June 30th period. Please find more information about the criteria and requirements here.
 

President Trump Sends FY 2021 Budget Request to Congress

by: Aarzu Maknojia

On February 10, 2020, President Trump sent Congress his proposed FY 2021 Budget Request. It proposed increases of various levels to the Department of Defense, Department of Treasury, Department of Homeland Security, NASA, and the Department of Veterans Affairs. It proposed decreases in top level spending for all other departments.
 
The top-level numbers by department are as follows:
 
-Department of Agriculture: $21.8 billion (-$1.9 billion)
-Department of Commerce: $8.1 billion (-$4.8 billion)
-Department of Defense: $705.4 billion (+$0.8 billion)
-Department of Education: $66.6 billion (-$5.6 billion)
-Department of Energy: $35.4 billion (-$3.1 billion)
-Department of Health and Human Services: $96.4 billion (-$9.5 billion)
-Department of Homeland Security: $49.7 billion (+$1.6 billion)
-Department of Housing and Urban Development: $47.9 billion (-$8.6 billion)
-Department of the Interior: $12.7 billion (-$2 billion)
-Department of Justice $31.7 billion (-$0.7 billion)
-Department of Labor: $11 billion (-$1.3 billion)
-Department of State: $44.1 billion (-11.7 billion)
-Department of Transportation: $21.6 billion (-$3.2 billion)
-Department of Treasury: $15.7 billion (+$0.2 billion)
-Department of Veterans Affairs: $105 billion (+12.3 billion)
-Environment Protection Agency: $6.7 billion (-$2.4 billion)
-NASA: $25.2 billion (+$2.7 billion) 
 
This came after Congress and the President agreed in August 2019 to a two-year budget deal that would increase and fix top-line spending levels. This helped avoid the across-the-board funding cuts that were set to take place in October 2019.
 
The next steps will be for the House and Senate Armed Services Committees to release the FY21 National Defense Authorization Act after which the House and Senate Appropriations Committees will release the FY 21 Appropriation Bills. As the self-isolation mandates due to COVID-19 have kept many members of Congress away from Capitol Hill, it is likely that the anticipated dates for the markup will be pushed back.
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