The U.S. government declared defense companies and their suppliers part of the country’s “critical infrastructure sector,” a designation that will allow employees to continue reporting to work even if local and state governments order citizens to stay home amid the COVID-19 outbreak.
The decision, which defense executives and trade association officials have argued for over the past week, allows assembly line workers, engineers, mechanics, security personnel and others to maintain normal work schedules.
“We need your support and dedication in these trying times to ensure the security of this nation,” Ellen Lord, the defense undersecretary of acquisition and sustainment, wrote in a Friday memo. “I understand that this national emergency presents a challenge and we are dedicated to working closely with you to ensure the safety of the workforce and accomplishments of the national security mission.”
Contractors who provide the military with office supplies, recreational support, or lawn care are not included in the exemption.
The order is critical for the defense sector, which has large clusters on both coasts of the United States. Companies in California have been struggling to navigate statewide orders to stay at home.
Still unclear is whether the Pentagon will give defense companies a reprieve from weapon delivery schedules as there will inevitably be slowdowns as workers contract COVID-19.
With health experts predicting the spread of the coronavirus will only get worse in the coming weeks and months, some executives fear they will be forced with this choice: Send people to work or go bankrupt.
Boeing is considering temporarily closing its Everett, Washington, widebody aircraft production facility for a deep cleaning. The facility north of Seattle — a region heavily hit by COVID-19 — builds Air Force KC-46 tankers and 747, 767, 777 and 787 airliners. Nearly a dozen employees there have tested positive for the virus; hundreds of others are quarantined.
The Aerospace Industries Association had argued for “clear and consistent guidance for all federal contracts to help accelerate payments, obligations, and contract awards and facilitate the flow down of critical resources to the supply chain and stabilize procurements, while ensuring minimal disruption to the delivery of goods and services.” the organization said in a statement earlier this week.
“We urge American leaders at every level—local, state, and federal—to seize this opportunity to work together to help support our industry, which is essential to our country’s economic and national security,” AIA CEO Eric Fanning said in the statement.
Trade associations have pushed for an emphasis on contract guidance, so that hundreds of billions of dollars — already appropriated by Congress — continue flowing to companies amid the coronavirus crisis. That’s important to keep workforces busy not just at big companies, but their suppliers. For example, about 70 percent of what the Pentagon pays Boeing ends up flowing to thousands of its suppliers.
To date, the Pentagon weapon buying community has had a fragmented response in how it’s handling coronavirus, executives say. One example: There is not one single person in charge so the heads of acquisition for each military service are holding individual meetings with company executives, executives say.
Lord, the Defense Department’s top weapons buyer, met with Sen. James Inhofe, R-Okla, chairman of the Senate Armed Services Committee, Friday about declaring defense companies exempt, Lt. Col. Mike Andrews, a Pentagon spokesman, said in an emailed statement.
“She remains committed to daily communication and collaboration with the defense industrial base, especially the defense industry trade associations,” Andrews said. “In addition, she’ll be contacting several state governors to discuss state-specific critical infrastructure and essential workforce efforts.”