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A Capitol View: September 2020

Aarzu Maknojia and Richa Patel, Wednesday, September 30, 2020

 

Client Spotlight

Florida Atlantic University Wins $11 Million Office of Naval Research Contract

by: Richa Patel

Florida Atlantic University (FAU) is working with the Office of Naval Research (ONR) and partners to develop a next generation sensor. Dr. Michael Twardowski, research professor and principal investigator, will be working to develop a sensor that is compact, versatile in deployment, and provides an exceptional tool in the continuation of research in oceanic bioluminescence and its role in ocean ecology.
 
FAU’s Harbor Branch Oceanographic Institute landed an $11 million four-year ONR contract, competitively procured under the “Long Range Broad Agency Announcement (BAA) for Navy and Marine Corps Science and Technology.” With the contract, researchers will develop a bathyphotometer sensor for natural oceanic bioluminescence assessments, which will take measurements that can be used to study light emissions from populations of luminescent marine organisms such as zooplankton. 
 
Project collaborators include the University of South Florida, University of Florida, Scripps Institute of Oceanography, University of California-San Diego, Texas Christian University, and Florida International University.
 

SMI Client Specialty Materials Named National Subcontractor of the Year

by: Richa Patel

The U.S. Small Business Association named Specialty Materials, Inc. the Region One Subcontractor and National Subcontractor of the Year. On September 17, the company was presented the Region One award by the SBA’s New England Regional Administrator Wendell Davis and its Massachusetts District Director Robert Nelson.
 
Specialty Materials’ development of boron fiber and silicon carbide is used in end products such as the F-15 Eagle and Predator drone– but it’s boron fiber is also used in items like fishing rods, bicycles, and hockey sticks. Its customers include Boeing, Northrop Grumman Innovation Systems, and Rolls Royce High Temperature Composites.
 

Updates from SMI

SMI Responds: Supplemental Funding for Defense Contractors During COVID-19 Highlights Fragility of Defense Industrial Base

by: Ken Wetzel

On September 22, the Washington Post published an article stating the Pentagon’s use of $1 billion appropriated to the Defense Production Act Title III program as part of the CARES Act was “redirected to firms that weren’t originally targeted for assistance.” The article implied that DoD mismanaged these funds by using them as “bailouts” for defense contractors rather than for Congress’ intended purpose of scaling up manufacturing for personal protective equipment (PPE). The DoD released a response last week.
 
Since the article was published, there has been heightened criticism and scrutiny of the DoD’s use of DPA Title III funds appropriated in the CARES Act. Some have called for the DoD Inspector General to investigate the use of the funds by the DoD.
 
Although it is certainly true that other industries require support during these unprecedented events, it is also of the utmost importance that the Department utilize its funding to protect the resiliency of its industrial base. Ensuring defense contractors are able to successfully navigate an unprecedented crisis such as COVID-19 is directly related to the United States’ national security. Many defense contractors that provide essential DoD materiel have faced significant business challenges due to economic decline. This is especially true for sub-tier suppliers. In many cases, revenue generated from DoD contracts is a small contributor to their overall financial health.
 
As the September 2018 report on the defense industrial base and its supply chain resiliency revealed, the defense industrial base is quite fragile. Due to a decrease in domestic manufacturing, increased reliance on foreign imports, movement towards sole source providers for critical materials, continuing resolutions from Congress, the government’s procurement practices, and more, the domestic industrial base is weak in a number of key areas. Ms. Ellen Lord, the Under Secretary of Defense for Acquisition and Sustainment, has made the relationship between economic stability and national security clear to the public on more than one occasion.
 
Our nation’s warfighters depend on highly specialized equipment that should be manufactured domestically when possible to ensure capability overmatch compared to near peer adversaries. Allowing the US industrial base to become more vulnerable due to a global pandemic could open up more opportunities for mergers and acquisition by foreign entities that are less interested in supplying the DoD or cause these companies to shutter. The manufacturing capacity and capability needed to make the DoD’s equipment cannot be easily or cheaply reconstituted. Perhaps more importantly, the work force’s skill and technical expertise could also atrophy, thus further steepening the lead time to effectively produce important defense items.
 
If the United States government did not make investments into defense manufacturers, it risked losing access to domestically produced military critical equipment. For example, while it may be unlikely that the United States would lose the capability to assemble fighter aircraft, it may be the case that it loses the capability to produce important components and subsystems within that system, leaving the government less desirable options such as securing these items from overseas suppliers or investing to reconstitute the manufacturing capability and capacity at another entity. Both of these are potentially higher risk and more expensive than proactively strengthening the industrial base.
 
While individual contract actions made with DPA Title III funding may be open to criticism, utilizing these funds to invest in the domestic industrial base was a necessary action. Without it, the United States’ national security could have been compromised and the nation may have had to spend more money redeveloping its domestic capability for certain products. Going forward, it would be prudent for the DoD and Congress to preempt these industrial base shortfalls that occur during market disruptions by increasing its investments in industrial base and manufacturing technology programs to develop a truly robust and resilient defense industrial base before a crisis deems it necessary.
 

Interviews with Virologist Dr. Travis Taylor and Contracts Specialist Dennis Padilla

Have you read our interviews with Virologist Dr. Travis Taylor and Contracts Specialist Dennis Padilla?
 
SMI has a team of highly qualified specialists that clients are able to take advantage of at any time. These interviews are a reflection of only some of the talent and expertise that SMI is able to utilize to help our clients succeed.
 
Read the interview with Dr. Taylor here and the interview with Mr. Padilla here.
 

Updates from Washington

Congress to Pass Stopgap Measure to Extend Federal Funding Past End of Fiscal Year

by: Richa Patel

On September 22, the House passed a stopgap measure to extend federal funding through December 11 of this year. The bill is now with the Senate, where it will likely easily pass before the September 30 fiscal year deadline, and then to be signed by President Donald Trump. 
 
The vote came after a deal between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin to include more in nutrition assistance and trade relief payments for farmers.
 
Congress has not yet passed any of the 12 regular appropriations bills for the upcoming fiscal year. The continuing resolution (CR) would continue the current funding levels for federal agencies – with anomalies for special circumstances – through December 11.
 
The CR would postpone making deals on the $1.4 trillion in FY2021 appropriations spending to the lame-duck session after the elections.
 

House Democrats Vie for Retiring Appropriations Committee Chair’s Seat

by: Aarzu Maknojia

Last October, House Appropriations Chairperson Nita Lowey announced that she is not running for reelection. The first woman leader of this committee will be retiring after this November’s elections. Multiple members have made bids to take over this powerful role. 
 
Rep. Debbie Wasserman Schultz, currently the chair of the Subcommittee on Military Construction and Veterans Affairs, announced her intent to take over the role shortly after Lowey’s announcement. She is expected to draw support from freshman members who are eager to see more diversity in leadership. 
 
Rep. Marcy Kaptur, currently is the chair of the Subcommittee on Energy and Water Development, is also the most senior Democrat on the House Appropriations committee and the longest serving woman in Congress. She argued that in addition to seniority, she feels an obligation to run before she represents the Midwest which is largely left out of leadership.  
 
Rep. Rosa DeLauro, currently the chair of the Subcommittee on Labor, Health and Human Services, and Education, is one of the longest-serving appropriators. She has a long history of working across the aisle and is an ally of both the outgoing Lowey and Speaker Nancy Pelosi.  
 
When the current Congress comes to an end, House Democrats seeking the position will vie for the backing of the Steering and Policy panel that influences leadership selections. In a closed-door vote, they will choose who to recommend. However, lawmakers who aren’t chosen by the panel can still request a vote from the full caucus.
 
This will depend on the Democrats keeping a majority in the House during the November elections. 
 

Supreme Court Justice Confirmation Process to Slow Down Other Congressional Business  

by: Aarzu Maknojia

On September 27, President Trump nominated Judge Amy Coney Barrett to serve on the Supreme Court. This comes after Justice Ruth Bader Ginsburg’s death earlier this month. 
 
As the Senate Judiciary Committee works through the confirmation process including hearing testimony, it is likely that other congressional business, including another COVID-19 relief bill will be delayed. 
 
There has been some controversy surrounding President Trump’s decision to nominate someone this close to the election and it is likely that both Democrats and Republicans as well as their staff, will be occupied with the process until a decision is made on the confirmation. 
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