1 00:00:00,370 --> 00:00:01,863 - Good morning, Barbara. 2 00:00:09,450 --> 00:00:13,050 - Okay, good morning ladies and gentlemen, 3 00:00:13,050 --> 00:00:14,990 both those joining us here in the Pentagon 4 00:00:14,990 --> 00:00:18,310 and most of you joining us virtually and on the phone. 5 00:00:18,310 --> 00:00:20,790 This morning, under Secretary of Defense, Ellen Lord, 6 00:00:20,790 --> 00:00:22,830 Deputy Assistant Secretary of Defense 7 00:00:22,830 --> 00:00:25,950 for Industrial Policy Miss Jennifer Santos, 8 00:00:25,950 --> 00:00:28,980 and Director of Defense Pricing and Contracting, 9 00:00:28,980 --> 00:00:31,730 Mr. Kim Harrington, are here to provide an update 10 00:00:31,730 --> 00:00:35,140 on how the Department is supporting the interagency effort 11 00:00:35,140 --> 00:00:37,554 to partner with the defense industry 12 00:00:37,554 --> 00:00:39,460 to mitigate impacts from COVID-19. 13 00:00:39,460 --> 00:00:41,410 They will each provide an opening statement 14 00:00:41,410 --> 00:00:45,080 and then we will go into Q&A using the list of reporters 15 00:00:45,080 --> 00:00:46,960 that have dialed in and those in the room. 16 00:00:46,960 --> 00:00:47,897 Ma'am over to you. 17 00:00:47,897 --> 00:00:51,050 - Thank you Mike and good morning ladies and gentlemen. 18 00:00:51,050 --> 00:00:53,960 We really appreciate you being here today. 19 00:00:53,960 --> 00:00:55,830 I'm going to provide an update 20 00:00:55,830 --> 00:00:58,120 on the Department's continued efforts 21 00:00:58,120 --> 00:01:01,600 to aggressively partner with the Defense Industrial Base 22 00:01:01,600 --> 00:01:04,890 to mitigate impacts from COVID-19. 23 00:01:04,890 --> 00:01:08,720 As Mike said, I'm joined today by my DASD 24 00:01:08,720 --> 00:01:11,140 for Industrial Policy, Jen Santos, 25 00:01:11,140 --> 00:01:13,180 and the Director for Defense Pricing 26 00:01:13,180 --> 00:01:15,459 and Contracting, Kim Harrington. 27 00:01:15,459 --> 00:01:18,424 They have both played key roles 28 00:01:18,424 --> 00:01:23,130 in really productive daily engagements with industry. 29 00:01:23,130 --> 00:01:25,950 I want to start by offering my condolences 30 00:01:25,950 --> 00:01:29,175 to the family of the Crystal City-based defense 31 00:01:29,175 --> 00:01:32,332 security cooperation agency contractor 32 00:01:32,332 --> 00:01:34,963 who passed away on March 21st. 33 00:01:36,200 --> 00:01:40,400 This is an example of why Secretary Esper has stated 34 00:01:40,400 --> 00:01:42,520 that the Department continues to focus 35 00:01:42,520 --> 00:01:44,030 on our three priorities: 36 00:01:44,030 --> 00:01:47,754 one, protecting our service members, their families, 37 00:01:47,754 --> 00:01:52,754 and our civilian coworkers to include DOD contractors. 38 00:01:53,490 --> 00:01:57,000 Two, safeguarding our national security missions 39 00:01:57,000 --> 00:01:59,910 and three, supporting the administration's whole 40 00:01:59,910 --> 00:02:02,050 of government approach in addressing 41 00:02:02,050 --> 00:02:04,203 this national health emergency. 42 00:02:05,110 --> 00:02:08,067 There are three key take aways I want to leave everyone 43 00:02:08,067 --> 00:02:10,340 here with today. 44 00:02:10,340 --> 00:02:14,277 First, I want to reassure the American people 45 00:02:14,277 --> 00:02:18,462 that the United States military remains steady, 46 00:02:18,462 --> 00:02:23,260 remains ready and capable of meeting all 47 00:02:23,260 --> 00:02:26,046 of our national security requirements. 48 00:02:26,046 --> 00:02:30,570 Second, although our acquisition and sustainment leaders 49 00:02:30,570 --> 00:02:33,995 in industrial policy, defense pricing and contracting, 50 00:02:33,995 --> 00:02:37,190 the Defense Logistics Agency, DLA, 51 00:02:37,190 --> 00:02:41,580 and the Defense Contracting Management Agency, DCMA, 52 00:02:41,580 --> 00:02:44,530 has made significant progress this week 53 00:02:44,530 --> 00:02:47,485 in addressing specific concerns outlined 54 00:02:47,485 --> 00:02:50,865 by defense industry leaders, there is more to do 55 00:02:50,865 --> 00:02:54,540 and we will not stop until the job is done. 56 00:02:54,540 --> 00:02:57,543 If you are open in industry, we are open. 57 00:02:58,530 --> 00:03:02,480 Third, I cannot express how thankful I am 58 00:03:02,480 --> 00:03:06,540 for the incredibly selfless efforts of Department leaders 59 00:03:06,540 --> 00:03:10,530 and contracting officers across the nation. 60 00:03:10,530 --> 00:03:14,372 They're helping to ensure a secure, reliable, 61 00:03:14,372 --> 00:03:17,513 and resilient Defense Industrial Base. 62 00:03:18,640 --> 00:03:21,587 Before Jen and Kim provide their opening statements, 63 00:03:21,587 --> 00:03:26,587 I want to say that I remain committed to daily communication 64 00:03:26,783 --> 00:03:30,376 and collaboration with the defense industry, 65 00:03:30,376 --> 00:03:33,300 state governors, and the Hill. 66 00:03:33,300 --> 00:03:36,180 I first emphasize that we continue to work 67 00:03:36,180 --> 00:03:39,120 through the Department's COVID-19 task force 68 00:03:39,120 --> 00:03:42,617 and the interagency on everything we do. 69 00:03:42,617 --> 00:03:45,720 So some insight into our daily rhythm. 70 00:03:45,720 --> 00:03:50,720 At 7:45 A.M. I have a call with key OSD acquisition 71 00:03:51,420 --> 00:03:55,229 and sustainment, service representatives and commanders, 72 00:03:55,229 --> 00:04:00,229 directors and stakeholders from DLA, DCMA, 73 00:04:00,720 --> 00:04:03,970 and the Defense Threat Reduction Agency, DTRA, 74 00:04:03,970 --> 00:04:06,747 as well as the Office of Economic Adjustment 75 00:04:06,747 --> 00:04:08,550 as well as others. 76 00:04:08,550 --> 00:04:11,568 We go over active tasks, new requirements, 77 00:04:11,568 --> 00:04:15,600 and new data received over the last 24 hours. 78 00:04:15,600 --> 00:04:18,560 Almost as important, this daily call ensures 79 00:04:18,560 --> 00:04:22,560 that everyone knows who is the lead for different activities 80 00:04:22,560 --> 00:04:24,550 and who is on the call. 81 00:04:24,550 --> 00:04:27,661 We maintain strict discipline. 82 00:04:27,661 --> 00:04:30,861 This is in order to ensure updates are provided 83 00:04:30,861 --> 00:04:34,510 and received on key tasks. 84 00:04:34,510 --> 00:04:38,460 My deputy Al Shaffer then takes that information 85 00:04:38,460 --> 00:04:41,630 to the COVID DOD task force meetings 86 00:04:41,630 --> 00:04:44,050 so that we can keep everyone in the Department 87 00:04:44,050 --> 00:04:46,730 and interagency informed. 88 00:04:46,730 --> 00:04:48,653 Likewise, General Steve Whitney, 89 00:04:48,653 --> 00:04:52,120 who is performing the duties of Deputy Assistant Secretary 90 00:04:52,120 --> 00:04:54,910 for Sustainment, represents ANS 91 00:04:54,910 --> 00:04:58,322 at the Joint Staff COVID-19 working group. 92 00:04:58,322 --> 00:05:03,120 At the same time, industrial policy hosts what began 93 00:05:03,120 --> 00:05:04,860 as a daily sync call 94 00:05:04,860 --> 00:05:07,427 with numerous defense trade associations 95 00:05:07,427 --> 00:05:11,180 and has evolved into an every other day call. 96 00:05:11,180 --> 00:05:14,048 This is to communicate what we're doing to hear, 97 00:05:14,048 --> 00:05:19,048 to listen to what the Defense Industrial Base issues are 98 00:05:19,764 --> 00:05:22,369 and to exchange data. 99 00:05:22,369 --> 00:05:27,010 The Department is receiving demand signals 100 00:05:27,010 --> 00:05:30,950 from the Federal Emergency Management Agency, FEMA, 101 00:05:30,950 --> 00:05:34,060 Health and Human Services, HHS, 102 00:05:34,060 --> 00:05:37,050 Department of Homeland Security, DHS, 103 00:05:37,050 --> 00:05:42,020 and other federal agencies for medical resources. 104 00:05:42,020 --> 00:05:44,908 When I say medical resources, this is our lexicon 105 00:05:44,908 --> 00:05:48,130 for both medical equipment as well 106 00:05:48,130 --> 00:05:51,130 as personal protective equipment. 107 00:05:51,130 --> 00:05:53,812 In response, I have established 108 00:05:53,812 --> 00:05:57,020 a joint acquisition task force. 109 00:05:57,020 --> 00:06:00,188 We call it the JATF, another DOD acronym. 110 00:06:00,188 --> 00:06:05,188 It is led by Ms. Stacy Cummings who is our Principle Deputy 111 00:06:05,190 --> 00:06:09,400 Assistant Secretary of Defense Acquisition Enablers. 112 00:06:09,400 --> 00:06:14,400 The task force will synchronize the DOD acquisition response 113 00:06:14,660 --> 00:06:18,960 to this crisis, working closely with all the services 114 00:06:18,960 --> 00:06:21,020 and defense agencies. 115 00:06:21,020 --> 00:06:24,142 The task force will leverage DOD authorities 116 00:06:24,142 --> 00:06:27,860 for maximum acquisition flexibility, 117 00:06:27,860 --> 00:06:30,050 I emphasize flexibility, 118 00:06:30,050 --> 00:06:32,520 to provide resilient capability 119 00:06:32,520 --> 00:06:34,810 in the current health crisis. 120 00:06:34,810 --> 00:06:38,480 Ms. Cummings as the JATF lead, has the authority 121 00:06:38,480 --> 00:06:42,300 to leverage the services and agency's acquisition resources 122 00:06:42,300 --> 00:06:45,410 to support the acquisition execution 123 00:06:45,410 --> 00:06:48,560 of our DOD COVID response. 124 00:06:48,560 --> 00:06:50,746 The Defense Production Act authorities 125 00:06:50,746 --> 00:06:54,128 and funding in response to this immediate crisis 126 00:06:54,128 --> 00:06:58,303 shall be prioritized and directed by the JATF. 127 00:07:01,240 --> 00:07:05,640 The JATF's scope includes building capacity 128 00:07:05,640 --> 00:07:08,080 in identified areas of fragility 129 00:07:08,080 --> 00:07:10,270 in the Defense Industrial Base, 130 00:07:10,270 --> 00:07:13,770 both the industrial capability and workforce 131 00:07:13,770 --> 00:07:18,710 with a focus on reducing reliance on foreign supply sources. 132 00:07:18,710 --> 00:07:20,070 We have embedded people 133 00:07:20,070 --> 00:07:22,830 at the National Response Coordination Center 134 00:07:22,830 --> 00:07:26,964 or NRCC working with Admiral Polovchak, 135 00:07:26,964 --> 00:07:30,374 especially advising FEMA and HHS 136 00:07:30,374 --> 00:07:35,083 on the Defense Production Act, Title I and Title III. 137 00:07:36,730 --> 00:07:39,296 I can't stress enough the importance 138 00:07:39,296 --> 00:07:43,990 of the data repositories and portals we have 139 00:07:43,990 --> 00:07:48,200 in DCMA, industrial policy, as well as those 140 00:07:48,200 --> 00:07:51,040 that we are establishing under the JATF. 141 00:07:51,040 --> 00:07:55,097 These repositories allow us to bring in critical feedback 142 00:07:55,097 --> 00:07:57,645 from the contracting officer level 143 00:07:57,645 --> 00:08:01,090 all the way up to the Pentagon. 144 00:08:01,090 --> 00:08:03,576 We additionally are providing portals 145 00:08:03,576 --> 00:08:08,576 for good ideas from industry so that there is one repository 146 00:08:09,690 --> 00:08:13,470 where we can go and see what is being offered 147 00:08:13,470 --> 00:08:15,092 in terms of technical assistance 148 00:08:15,092 --> 00:08:18,083 and manufacturing capability. 149 00:08:19,150 --> 00:08:23,388 One example of a data product that we are generating 150 00:08:23,388 --> 00:08:26,098 is what we call a heat map. 151 00:08:26,098 --> 00:08:31,098 We showed the number of DCD coronavirus positive tests 152 00:08:32,400 --> 00:08:35,940 as well as state and local shelter in place rules 153 00:08:35,940 --> 00:08:37,900 and guidelines. 154 00:08:37,900 --> 00:08:40,330 All of this information can help us 155 00:08:40,330 --> 00:08:43,320 with predictive solutions and planning 156 00:08:43,320 --> 00:08:47,902 when overlaid with the location of our industry partners. 157 00:08:47,902 --> 00:08:50,760 This battle rhythm and cadence 158 00:08:50,760 --> 00:08:54,730 of meetings everyday helps ensure we're focused 159 00:08:54,730 --> 00:08:58,660 on the problems at hand and that we utilize data 160 00:08:58,660 --> 00:09:01,497 and analytics to chart the most effective 161 00:09:01,497 --> 00:09:04,310 and efficient path forward. 162 00:09:04,310 --> 00:09:08,120 Last week, we had four productive daily sync calls 163 00:09:08,120 --> 00:09:10,950 with the Defense Industry Association leaders 164 00:09:10,950 --> 00:09:13,630 and other key trade associations 165 00:09:13,630 --> 00:09:16,791 who provided important feedback that allowed our leaders 166 00:09:16,791 --> 00:09:19,900 to make significant progress on matters 167 00:09:19,900 --> 00:09:24,490 such as the critical defense contractor workforce's ability 168 00:09:24,490 --> 00:09:27,680 to continue working, ensuring cashflow 169 00:09:27,680 --> 00:09:30,230 to the Defense Industrial Base 170 00:09:30,230 --> 00:09:33,973 and getting standardized guidance out to industry. 171 00:09:35,150 --> 00:09:38,350 After meeting with Senator Inhofe Friday morning 172 00:09:38,350 --> 00:09:40,510 and working closely with the Department 173 00:09:40,510 --> 00:09:43,530 of Homeland Security, I issued a memo 174 00:09:43,530 --> 00:09:45,089 that defined essentiality 175 00:09:45,089 --> 00:09:48,620 in the Defense Industrial Base workforce, 176 00:09:48,620 --> 00:09:53,620 ensuring the DIB's critical employees can continue working. 177 00:09:54,000 --> 00:09:57,422 This was very important because industrial leaders told us 178 00:09:57,422 --> 00:10:01,550 that state and local government had different shelter 179 00:10:01,550 --> 00:10:04,730 in place rules and guidelines with some 180 00:10:04,730 --> 00:10:08,710 even issuing misdemeanor citations to workers trying 181 00:10:08,710 --> 00:10:10,170 to get to work. 182 00:10:10,170 --> 00:10:13,930 This memo will help ensure continuity of mission 183 00:10:13,930 --> 00:10:17,750 with our full commitment to the safety of the workforce 184 00:10:17,750 --> 00:10:20,710 and state and local governments. 185 00:10:20,710 --> 00:10:22,940 Last Friday, Mr. Kim Harrington, 186 00:10:22,940 --> 00:10:25,630 Director of Defense Pricing and Contracting, 187 00:10:25,630 --> 00:10:29,540 issued a deviation on progress payments memo. 188 00:10:29,540 --> 00:10:31,117 Kim will go into more detail, 189 00:10:31,117 --> 00:10:33,730 but I'm proud of our efforts to address 190 00:10:33,730 --> 00:10:37,470 and standardize a key industry concern. 191 00:10:37,470 --> 00:10:39,537 I am firmly committed to ensuring 192 00:10:39,537 --> 00:10:42,450 that this is done in a fully transparent 193 00:10:42,450 --> 00:10:45,060 and accountable matter. 194 00:10:45,060 --> 00:10:48,340 Vice Admiral David Lewis, DCMA director, 195 00:10:48,340 --> 00:10:51,130 has worked closely with the contracting workforce 196 00:10:51,130 --> 00:10:54,060 and the Defense Finance and Accounting Services 197 00:10:54,060 --> 00:10:57,910 or DFAS to ensure that invoices are continuing 198 00:10:57,910 --> 00:11:00,570 to be paid in a timely manner. 199 00:11:00,570 --> 00:11:03,070 Our Office of Small Business programs 200 00:11:03,070 --> 00:11:05,650 within industrial policy reached out 201 00:11:05,650 --> 00:11:07,880 to defense industry small businesses 202 00:11:07,880 --> 00:11:10,940 and is working with the Small Business Administration 203 00:11:10,940 --> 00:11:13,654 and their Small Business Emergency Loan program 204 00:11:13,654 --> 00:11:16,500 to help protect these companies. 205 00:11:16,500 --> 00:11:21,500 We know innovation comes in large part from small businesses 206 00:11:21,540 --> 00:11:23,642 and we remain committed to supporting 207 00:11:23,642 --> 00:11:26,260 these small businesses. 208 00:11:26,260 --> 00:11:29,540 Moving forward, the Department remains fully engaged 209 00:11:29,540 --> 00:11:33,260 with the interagency to leverage the Defense Production Act 210 00:11:33,260 --> 00:11:36,670 to help reinforce critical elements of the DIB. 211 00:11:36,670 --> 00:11:40,570 Jen will provide more details on the DPA task force 212 00:11:40,570 --> 00:11:43,245 that Scott Baum will be leading for DOD 213 00:11:43,245 --> 00:11:46,570 to help prioritize requirements and funding 214 00:11:46,570 --> 00:11:49,107 through the interagency process. 215 00:11:49,107 --> 00:11:52,910 As we discussed with the Joint Acquisition Task Force, 216 00:11:52,910 --> 00:11:54,900 it's important that everything 217 00:11:54,900 --> 00:11:59,403 we do has joint representation, a joint mindset, 218 00:11:59,403 --> 00:12:02,240 and the joint war fighter in mind. 219 00:12:02,240 --> 00:12:05,130 It is critically important that we understand 220 00:12:05,130 --> 00:12:08,150 that during this crisis, the DIB is vulnerable 221 00:12:08,150 --> 00:12:12,370 to adversarial capital so we need to ensure companies 222 00:12:12,370 --> 00:12:16,308 can stay in business without losing their technology. 223 00:12:16,308 --> 00:12:21,308 In closing, I recognize that what we're doing is imperfect, 224 00:12:21,503 --> 00:12:26,010 but we are working as smartly and quickly as we can 225 00:12:26,010 --> 00:12:29,690 in close coordination with the Hill, state governors, 226 00:12:29,690 --> 00:12:31,830 and the Defense Industrial Base 227 00:12:31,830 --> 00:12:35,220 to everything we can to support our military members, 228 00:12:35,220 --> 00:12:38,910 their families, defense contractors, 229 00:12:38,910 --> 00:12:41,080 and our fellow citizens. 230 00:12:41,080 --> 00:12:43,259 We recognize how serious this pandemic 231 00:12:43,259 --> 00:12:47,290 and national emergency is and we will continue 232 00:12:47,290 --> 00:12:50,780 to remain fully transparent and provide oversight 233 00:12:50,780 --> 00:12:53,970 and accountability in all we do. 234 00:12:53,970 --> 00:12:57,398 I want to personally thank the industry association leaders, 235 00:12:57,398 --> 00:13:00,550 National Governors' Association, 236 00:13:00,550 --> 00:13:02,630 and our colleagues on the Hill. 237 00:13:02,630 --> 00:13:05,547 Each one has played a vital role 238 00:13:05,547 --> 00:13:10,350 in helping to ensure our force and contractors have 239 00:13:11,203 --> 00:13:12,407 what they need 240 00:13:12,407 --> 00:13:15,020 to continue mission-critical tasks and programs. 241 00:13:15,020 --> 00:13:18,860 We will continue to partner with you moving forward. 242 00:13:18,860 --> 00:13:21,632 Now Jen will offer her remarks followed by Kim 243 00:13:21,632 --> 00:13:24,636 and then we'll be very happy to answer your questions. 244 00:13:24,636 --> 00:13:25,760 Thank you. 245 00:13:25,760 --> 00:13:26,593 Jen? 246 00:13:35,540 --> 00:13:38,140 - Thank you for that introduction, Undersecretary Lord. 247 00:13:38,140 --> 00:13:40,390 I would also like to extend my sympathies 248 00:13:40,390 --> 00:13:42,940 to the family and friends of our colleague and DSCA 249 00:13:42,940 --> 00:13:45,010 who passed away this weekend. 250 00:13:45,010 --> 00:13:46,570 My team and the Office 251 00:13:46,570 --> 00:13:49,390 of Industrial Policy is working tirelessly 252 00:13:49,390 --> 00:13:52,090 to support the priorities of Secretary Esper 253 00:13:52,090 --> 00:13:54,480 as laid out by Undersecretary Lord. 254 00:13:54,480 --> 00:13:58,290 Within the past week, we have recalibrated aspects 255 00:13:58,290 --> 00:14:01,803 of our mission to identify ways to partner with industry 256 00:14:01,803 --> 00:14:04,720 as we jointly navigate the challenges brought 257 00:14:04,720 --> 00:14:06,520 by the COVID virus. 258 00:14:06,520 --> 00:14:09,100 Our three lines of efforts are in place: 259 00:14:09,100 --> 00:14:11,870 assess, protect, and promote. 260 00:14:11,870 --> 00:14:14,410 We are assessing the impacts of COVID-19 261 00:14:14,410 --> 00:14:16,670 on companies in the defense space. 262 00:14:16,670 --> 00:14:19,300 We are exercising hyper-vigilance to protect 263 00:14:19,300 --> 00:14:21,600 in a time of economic uncertainty, 264 00:14:21,600 --> 00:14:24,700 and promoting the Defense Industrial Base capabilities 265 00:14:24,700 --> 00:14:28,590 to aid in a government-wide response to the virus. 266 00:14:28,590 --> 00:14:30,430 First, I want to start with what we are doing 267 00:14:30,430 --> 00:14:33,760 in industrial policy to assess the situation. 268 00:14:33,760 --> 00:14:37,890 We are listening to our industry partners and taking action. 269 00:14:37,890 --> 00:14:40,080 We are the help desk to industry 270 00:14:40,080 --> 00:14:43,699 and directing industry to the right DOD organization. 271 00:14:43,699 --> 00:14:47,750 Teamed with Defense Contract Management Agency, 272 00:14:47,750 --> 00:14:49,470 we have established a portal 273 00:14:49,470 --> 00:14:52,440 for all Defense Industrial Base companies 274 00:14:52,440 --> 00:14:55,670 to provide information on their operating status. 275 00:14:55,670 --> 00:14:57,208 We will provide that portal information. 276 00:14:57,208 --> 00:15:01,650 We are also updating our industrial policy website 277 00:15:01,650 --> 00:15:04,170 with common frequently asked questions 278 00:15:04,170 --> 00:15:07,132 and created an industrial policy common mailbox 279 00:15:07,132 --> 00:15:10,810 that feeds into the DOD organizations. 280 00:15:10,810 --> 00:15:14,239 This mailbox is for other COVID-19 related inquiries 281 00:15:14,239 --> 00:15:17,510 as they are outside of the realm of the operating status 282 00:15:17,510 --> 00:15:20,470 the Defense Contract Management Agency will receive. 283 00:15:20,470 --> 00:15:23,206 We are very dynamic in also adding a portal 284 00:15:23,206 --> 00:15:26,420 that the in pull website will feed into. 285 00:15:26,420 --> 00:15:28,880 Last week, we started daily calls 286 00:15:28,880 --> 00:15:31,020 with our industrial association partners, 287 00:15:31,020 --> 00:15:33,600 reaching over three million companies. 288 00:15:33,600 --> 00:15:37,590 The industry associations consolidate the industry concerns 289 00:15:37,590 --> 00:15:39,600 and bring them to our attention. 290 00:15:39,600 --> 00:15:41,969 We have key personnel across the Department 291 00:15:41,969 --> 00:15:44,970 to directly answer their questions online. 292 00:15:44,970 --> 00:15:48,060 Kim, my colleague, will discuss DOD contracting actions 293 00:15:48,060 --> 00:15:49,320 we completed. 294 00:15:49,320 --> 00:15:51,870 This dialogue provides an important view 295 00:15:51,870 --> 00:15:54,710 into the impacts that COVID-19 is having, 296 00:15:54,710 --> 00:15:57,196 whether those are consequences for our workforce, 297 00:15:57,196 --> 00:15:59,134 including contractor supply chains, 298 00:15:59,134 --> 00:16:02,890 manufacturing capabilities, or critical infrastructure. 299 00:16:02,890 --> 00:16:06,470 This conversation has helped shaped solutions 300 00:16:06,470 --> 00:16:10,130 such as having a memo issued by Undersecretary Lord 301 00:16:10,130 --> 00:16:13,530 to define essentiality in the defense industrial workforce, 302 00:16:13,530 --> 00:16:16,068 enabling critical Defense Industrial Base employees 303 00:16:16,068 --> 00:16:18,920 continuing to work. 304 00:16:18,920 --> 00:16:21,185 We are understanding the supply chain vulnerabilities 305 00:16:21,185 --> 00:16:23,620 associated with the virus. 306 00:16:23,620 --> 00:16:27,250 We created, as Secretary Lord announced, the heat map. 307 00:16:27,250 --> 00:16:30,200 We're referring to it as the supply chain heat map 308 00:16:30,200 --> 00:16:32,570 for our leadership to understand the impacts 309 00:16:32,570 --> 00:16:36,300 of the supply chain overlaid with the CDC data. 310 00:16:36,300 --> 00:16:38,560 As a part of the promote of our mission, 311 00:16:38,560 --> 00:16:41,580 we have authorities that we can leverage 312 00:16:41,580 --> 00:16:43,200 to help our supply chain. 313 00:16:43,200 --> 00:16:45,710 Last week, the President invoked aspects 314 00:16:45,710 --> 00:16:49,020 of the Defense Production Act or the DPA. 315 00:16:49,020 --> 00:16:51,250 Two of those titles are within the purview 316 00:16:51,250 --> 00:16:53,500 of my office and come into play here 317 00:16:53,500 --> 00:16:55,850 and can be used to promote the strength 318 00:16:55,850 --> 00:16:57,750 of the Defense Industrial Base. 319 00:16:57,750 --> 00:17:01,470 One, DPA Title I which provides the authority 320 00:17:01,470 --> 00:17:03,532 to priority rate defense contracts 321 00:17:03,532 --> 00:17:05,930 and to allocate materials in a way 322 00:17:05,930 --> 00:17:08,630 that best meets our war fighter needs. 323 00:17:08,630 --> 00:17:12,730 Two, DPA Title III, which provides the DOD a means 324 00:17:12,730 --> 00:17:14,500 to partner with industry 325 00:17:14,500 --> 00:17:17,480 to strengthen commercial domestic industrial base 326 00:17:17,480 --> 00:17:20,275 capabilities essential to national defense. 327 00:17:20,275 --> 00:17:21,922 Under these authorities, 328 00:17:21,922 --> 00:17:25,310 the DOD may provide economic incentives 329 00:17:25,310 --> 00:17:27,966 to industry partners to aid in a timely delivery 330 00:17:27,966 --> 00:17:32,210 of essential domestic resources. 331 00:17:32,210 --> 00:17:35,990 In concert, as of Sunday, I had my deputy, 332 00:17:35,990 --> 00:17:40,061 Mr. Scott Baum leading the Defense Production Act task force 333 00:17:40,061 --> 00:17:41,753 over at FEMA. 334 00:17:42,740 --> 00:17:45,320 His work there will actively work with industry 335 00:17:45,320 --> 00:17:48,230 and our government partners to ensure Title I 336 00:17:48,230 --> 00:17:50,576 and Title III are utilized where needed 337 00:17:50,576 --> 00:17:53,170 in concert with the whole of government approach 338 00:17:53,170 --> 00:17:55,690 to combat coronavirus. 339 00:17:55,690 --> 00:17:57,690 To protect our industrial base, 340 00:17:57,690 --> 00:18:01,150 we have tools to combat adversarial capital 341 00:18:01,150 --> 00:18:02,066 like strengthening 342 00:18:02,066 --> 00:18:05,430 and expanding national security investment reviews 343 00:18:05,430 --> 00:18:07,620 under the Committee on Foreign Investment 344 00:18:07,620 --> 00:18:10,470 in the United States, referred to as CFIUS, 345 00:18:10,470 --> 00:18:12,290 are more important than ever. 346 00:18:12,290 --> 00:18:14,720 We simply cannot afford to let this period 347 00:18:14,720 --> 00:18:16,860 of uncertainty eat into reviews 348 00:18:16,860 --> 00:18:20,840 that foreign investments is shifting into hyper-vigilance. 349 00:18:20,840 --> 00:18:23,540 Further, over the past few weeks, 350 00:18:23,540 --> 00:18:26,410 we've been hosting trusted capital events. 351 00:18:26,410 --> 00:18:29,780 This program has continued to host these events virtually. 352 00:18:29,780 --> 00:18:32,450 This program has been launched to get to the left 353 00:18:32,450 --> 00:18:37,210 of CFIUS by ensuring that critical companies are able 354 00:18:37,210 --> 00:18:38,710 to access clean capital 355 00:18:38,710 --> 00:18:41,300 that assists their commercialization. 356 00:18:41,300 --> 00:18:44,440 In conclusion, our assess, protect, and promote lines 357 00:18:44,440 --> 00:18:46,990 of effort remain more vigilant as ever 358 00:18:46,990 --> 00:18:48,700 as we work to address the impacts 359 00:18:48,700 --> 00:18:50,850 of the coronavirus pandemic. 360 00:18:50,850 --> 00:18:53,670 I would like to echo the words of Undersecretary Lord 361 00:18:53,670 --> 00:18:55,210 and offer my sincere thank you 362 00:18:55,210 --> 00:18:58,122 to our industry stakeholders who have helped make 363 00:18:58,122 --> 00:19:00,140 these efforts possible 364 00:19:00,140 --> 00:19:02,870 and to my dedicated Industrial Policy team 365 00:19:02,870 --> 00:19:04,660 for their boundless energy. 366 00:19:04,660 --> 00:19:06,400 I will now turn over the floor to my friend 367 00:19:06,400 --> 00:19:08,030 and colleague Kim Harrington, 368 00:19:08,030 --> 00:19:10,303 Director of Defense Pricing and Contracting. 369 00:19:14,480 --> 00:19:16,760 - Thank you Jen and good morning. 370 00:19:16,760 --> 00:19:19,350 Defense Pricing and Contracting has issued a number 371 00:19:19,350 --> 00:19:23,250 of policy memos directed to the contracting workforce 372 00:19:23,250 --> 00:19:26,445 to quickly address issues and concerns related 373 00:19:26,445 --> 00:19:28,993 to the Defense Industrial Base, 374 00:19:28,993 --> 00:19:31,718 based on the DHS direction identifying 375 00:19:31,718 --> 00:19:35,681 the Defense Industrial Base as critical infrastructure 376 00:19:35,681 --> 00:19:38,998 and in conjunction with Ms. Lord's memo to industry, 377 00:19:38,998 --> 00:19:43,389 DPC issued a policy memo to their contracting workforce, 378 00:19:43,389 --> 00:19:45,866 instructing them to advise their contractors 379 00:19:45,866 --> 00:19:48,478 who qualify as critical infrastructure 380 00:19:48,478 --> 00:19:53,478 to continue to work and use the DHS and DOD documentation 381 00:19:53,789 --> 00:19:56,700 as the basis to do so. 382 00:19:56,700 --> 00:20:00,460 We also allowed the heads of contracting activities 383 00:20:00,460 --> 00:20:03,310 and program executive officers flexibility 384 00:20:03,310 --> 00:20:06,593 to identify specific companies and contracts 385 00:20:06,593 --> 00:20:09,317 that are deemed to be critical. 386 00:20:09,317 --> 00:20:13,060 As has been mentioned, we also issued a deviation 387 00:20:13,060 --> 00:20:14,592 to our contracting regulations 388 00:20:14,592 --> 00:20:17,970 that raises the progress payment rates 389 00:20:17,970 --> 00:20:21,611 for large business from 80% to 90% 390 00:20:21,611 --> 00:20:26,611 and for small businesses, from 90% to 95%. 391 00:20:26,640 --> 00:20:29,390 This will provide additional and immediate cashflow 392 00:20:29,390 --> 00:20:33,032 to industry once incorporated into the contract. 393 00:20:33,032 --> 00:20:36,040 We have coordinated with the comptroller's office 394 00:20:36,040 --> 00:20:39,270 to ensure the Defense Finance and Accounting Service 395 00:20:39,270 --> 00:20:41,498 is continuing to pay in a timely manner 396 00:20:41,498 --> 00:20:43,303 and with the services 397 00:20:43,303 --> 00:20:46,270 and the Defense Contract Management Agency 398 00:20:46,270 --> 00:20:49,320 to censure contracting officers and representatives 399 00:20:49,320 --> 00:20:52,361 will be available to receive and accept products, 400 00:20:52,361 --> 00:20:55,810 approve invoices, and also to work 401 00:20:55,810 --> 00:20:58,408 toward accelerating payments. 402 00:20:58,408 --> 00:21:01,680 We also issued direction to the contracting workforce 403 00:21:01,680 --> 00:21:04,865 to be as flexible as possible to allow contractors 404 00:21:04,865 --> 00:21:09,600 to also telework when it does not impact the mission. 405 00:21:09,600 --> 00:21:11,999 This will allow those companies to continue to work 406 00:21:11,999 --> 00:21:13,243 and get paid. 407 00:21:14,210 --> 00:21:17,130 Lastly, we are pushing through relevant regulation 408 00:21:17,130 --> 00:21:19,970 and deregulation in the FAR and DFARs 409 00:21:19,970 --> 00:21:23,397 that can assist industry's liquidity and efficiency. 410 00:21:23,397 --> 00:21:24,303 Thank you. 411 00:21:25,170 --> 00:21:26,410 - Okay, we're gonna start in the room. 412 00:21:26,410 --> 00:21:28,453 We're gonna start with Tom. 413 00:21:28,453 --> 00:21:31,090 - Ms. Lord, if you could answer this question. 414 00:21:31,090 --> 00:21:33,250 I mean, as we all know, the governors, 415 00:21:33,250 --> 00:21:36,650 the mayors desperately need PPE, the masks, 416 00:21:36,650 --> 00:21:39,247 the gloves, the ventilators, test kits. 417 00:21:39,247 --> 00:21:43,090 Ford and GE have apparently said 418 00:21:43,090 --> 00:21:46,469 that they can get ventilators up and running by June. 419 00:21:46,469 --> 00:21:50,210 So if you could talk about some of these products 420 00:21:50,210 --> 00:21:53,670 that are needed and can you move faster than June? 421 00:21:53,670 --> 00:21:56,550 Governor Cuomo says we need this stuff now. 422 00:21:56,550 --> 00:22:00,180 - So what we are doing is using 423 00:22:00,180 --> 00:22:03,088 this Joint Acquisition Task Force 424 00:22:03,088 --> 00:22:07,540 to be the group that takes in all the demand signals 425 00:22:07,540 --> 00:22:11,980 from HHS and FEMA and then goes and looks 426 00:22:11,980 --> 00:22:16,000 at the resources that we have to begin to manufacture. 427 00:22:16,000 --> 00:22:20,780 So as you said, we have some JV's that have been formed. 428 00:22:20,780 --> 00:22:22,910 We have some other business relationships 429 00:22:22,910 --> 00:22:24,220 that are being formed. 430 00:22:24,220 --> 00:22:26,920 We are working with those groups to see 431 00:22:26,920 --> 00:22:29,149 how quickly they can stand up and as soon 432 00:22:29,149 --> 00:22:33,850 as we have good data, we will get that through Mike 433 00:22:33,850 --> 00:22:35,010 back to you. 434 00:22:35,010 --> 00:22:38,590 Our objective is to move forward as quickly 435 00:22:38,590 --> 00:22:41,270 and responsibly as possible. 436 00:22:41,270 --> 00:22:45,250 We think setting up the organization embedded within FEMA 437 00:22:45,250 --> 00:22:48,238 and HHS will enhance communications. 438 00:22:48,238 --> 00:22:51,810 Also having a single point feeding into the rest 439 00:22:51,810 --> 00:22:54,850 of DOD acquisition will also be helpful. 440 00:22:54,850 --> 00:22:57,020 So we will strive to do everything we can 441 00:22:57,020 --> 00:22:59,898 before June, but I have no data to address that now. 442 00:22:59,898 --> 00:23:01,270 But we will get back. 443 00:23:01,270 --> 00:23:03,700 - Are you confident from talking to industry groups 444 00:23:03,700 --> 00:23:04,988 that you can move faster? 445 00:23:04,988 --> 00:23:06,158 - [Ellen] Yes. 446 00:23:06,158 --> 00:23:06,991 - With any of these products? 447 00:23:06,991 --> 00:23:08,150 - Yes, there are many products 448 00:23:08,150 --> 00:23:09,780 that we can move very quickly on. 449 00:23:09,780 --> 00:23:13,370 There are great ideas coming out from 3D printing 450 00:23:13,370 --> 00:23:16,950 to other things, looking at alternative materials 451 00:23:16,950 --> 00:23:20,521 for N95 masks versus what has traditionally been used. 452 00:23:20,521 --> 00:23:23,510 There are many many good ideas. 453 00:23:23,510 --> 00:23:27,673 Our job is to look at those that are most actionable, 454 00:23:27,673 --> 00:23:31,723 that will give us the highest volume and work through those. 455 00:23:31,723 --> 00:23:33,780 - Lastly, in the test kits, 456 00:23:33,780 --> 00:23:35,582 because those are desperately needed 457 00:23:35,582 --> 00:23:37,642 to get the universe of how many people are infected, 458 00:23:37,642 --> 00:23:40,980 any sense from industry how quickly they can move 459 00:23:40,980 --> 00:23:41,830 on the test kits? 460 00:23:42,920 --> 00:23:44,260 - We have one of those that is worked up 461 00:23:44,260 --> 00:23:48,690 through the White House using DPA from Secretary Azar. 462 00:23:48,690 --> 00:23:50,760 We'll get back to you on the timing on that, 463 00:23:50,760 --> 00:23:52,406 but we are moving very quickly on that, 464 00:23:52,406 --> 00:23:54,763 a lot of science being applied. 465 00:23:55,960 --> 00:23:58,020 - Okay we're gonna go to the phones. 466 00:23:58,020 --> 00:23:59,803 Mike Stone, are you there? 467 00:24:01,030 --> 00:24:05,460 - [Mike] Yup, right here, thank you, appreciate it. 468 00:24:05,460 --> 00:24:08,510 You just mentioned DPA, Secretary Lord. 469 00:24:08,510 --> 00:24:11,927 So is DPA actively being used to prioritize anything 470 00:24:11,927 --> 00:24:14,380 at the moment, thank you? 471 00:24:14,380 --> 00:24:19,210 - So DPA is being used both Title I and III 472 00:24:19,210 --> 00:24:21,270 within the Department of Defense. 473 00:24:21,270 --> 00:24:24,622 I think as you know, it gives us the ability 474 00:24:24,622 --> 00:24:29,622 to provide loans, grants, provide long leave funding. 475 00:24:31,150 --> 00:24:35,620 We are doing that for critical fragility as we call it 476 00:24:35,620 --> 00:24:37,690 within the Defense Industrial Base. 477 00:24:37,690 --> 00:24:42,690 Health and Human Services has Title I and I think soon 478 00:24:44,150 --> 00:24:48,520 to be Title III, although that has not yet been codified, 479 00:24:48,520 --> 00:24:53,170 authority for medical resources. 480 00:24:53,170 --> 00:24:58,170 So we have our people on site with HHS and FEMA, 481 00:24:59,140 --> 00:25:02,220 advising them how to use those authorities. 482 00:25:02,220 --> 00:25:06,365 We anticipate seeing more of those implemented very shortly. 483 00:25:06,365 --> 00:25:09,577 Once health and human service and FEMA does that, 484 00:25:09,577 --> 00:25:14,577 they will give our acquisition task force the demand signal 485 00:25:16,002 --> 00:25:18,553 and we will go out and help them place those orders. 486 00:25:22,400 --> 00:25:26,517 - Mike did you get that? 487 00:25:26,517 --> 00:25:28,580 - [Mike] Yes I sure did. 488 00:25:28,580 --> 00:25:30,280 Confused, sorry. 489 00:25:30,280 --> 00:25:31,113 I'm confused. 490 00:25:31,113 --> 00:25:33,450 The President said that he hasn't used DPA 491 00:25:33,450 --> 00:25:36,810 and you guys are, so you can just square that for me 492 00:25:36,810 --> 00:25:39,395 on where you guys are able to use it, 493 00:25:39,395 --> 00:25:41,880 but the President said that it hasn't been used? 494 00:25:41,880 --> 00:25:44,680 - Well, DPA is a broad authority 495 00:25:44,680 --> 00:25:49,680 and DOD has had DPA authority for the defense lines 496 00:25:52,260 --> 00:25:54,970 of effort if you will. 497 00:25:54,970 --> 00:25:57,800 What he, I don't want to speak for the President, 498 00:25:57,800 --> 00:26:02,377 but I think he is talking about broadly using DPA 499 00:26:02,377 --> 00:26:05,900 to in fact take over private industry. 500 00:26:05,900 --> 00:26:09,290 That's what he has clearly said he is not going to do. 501 00:26:09,290 --> 00:26:12,240 The White House is very judiciously looking 502 00:26:12,240 --> 00:26:16,480 through what sub-segments of DPA they will use. 503 00:26:16,480 --> 00:26:18,750 There are some authorities already out there. 504 00:26:18,750 --> 00:26:22,190 We can back to you, Mike, with a succinct statement on that 505 00:26:22,190 --> 00:26:24,100 so it's very clear to you. 506 00:26:24,100 --> 00:26:26,042 And we will continue to keep you apprised 507 00:26:26,042 --> 00:26:28,870 because I see this evolving over the week. 508 00:26:28,870 --> 00:26:30,660 But I think this is the difference 509 00:26:30,660 --> 00:26:35,660 between surgical application versus broad-based enactment. 510 00:26:38,730 --> 00:26:40,312 - We're gonna go to Tony Capacio. 511 00:26:40,312 --> 00:26:42,160 Tony are you on the line? 512 00:26:42,160 --> 00:26:43,518 - [Tony] I am, sir. 513 00:26:43,518 --> 00:26:44,351 Thanks for the opportunity. 514 00:26:44,351 --> 00:26:45,710 Ms. Lord, two quick questions. 515 00:26:45,710 --> 00:26:47,490 Can you address some of the criticism 516 00:26:47,490 --> 00:26:51,000 of the increase fro 80% to 90% 517 00:26:51,000 --> 00:26:54,630 of large primed progress payments? 518 00:26:54,630 --> 00:26:56,459 What is the money gonna be used for? 519 00:26:56,459 --> 00:26:59,612 What do you want the money to be used for? 520 00:26:59,612 --> 00:27:02,601 And what mechanisms are in place to prevent abuse 521 00:27:02,601 --> 00:27:04,745 of those payments? 522 00:27:04,745 --> 00:27:06,653 And secondly, on the F-35 523 00:27:06,653 --> 00:27:07,530 - Hey, Tony, hold on. 524 00:27:07,530 --> 00:27:08,590 Tony, Tony, wait a second. 525 00:27:08,590 --> 00:27:10,840 Let's take one at a time here. 526 00:27:10,840 --> 00:27:13,860 Initially, I said that we are committed 527 00:27:13,860 --> 00:27:18,150 to keeping our Defense Industrial Base in place 528 00:27:18,150 --> 00:27:19,620 to support the war fighter. 529 00:27:19,620 --> 00:27:21,010 I'm gonna ask Kim Harrington 530 00:27:21,010 --> 00:27:22,750 to give you a few more specifics 531 00:27:22,750 --> 00:27:24,780 on what we actually did in terms 532 00:27:24,780 --> 00:27:27,225 of moving the progress payment amounts. 533 00:27:27,225 --> 00:27:28,175 - [Tony] Thank you. 534 00:27:29,210 --> 00:27:30,540 - Hi Tony. 535 00:27:30,540 --> 00:27:34,040 So progress payments are paid on contracts 536 00:27:34,040 --> 00:27:35,863 for work that's already been performed. 537 00:27:35,863 --> 00:27:38,450 So those costs have already been incurred 538 00:27:38,450 --> 00:27:40,972 and what we are doing is just increasing the cash 539 00:27:40,972 --> 00:27:44,300 back to the companies by raising the rate. 540 00:27:44,300 --> 00:27:47,370 So, it's not for anything new. 541 00:27:47,370 --> 00:27:49,410 It's for work that they're already performing 542 00:27:49,410 --> 00:27:50,330 on the contract. 543 00:27:50,330 --> 00:27:53,217 They've incurred those costs previously. 544 00:27:53,217 --> 00:27:57,150 For large business, we are reimbursing at a rate of 80%. 545 00:27:57,150 --> 00:28:01,525 Now we're reimbursing at a rate of 90% prior to delivery. 546 00:28:01,525 --> 00:28:04,580 So there's nothing new in the sense 547 00:28:04,580 --> 00:28:06,910 of different applications of the funds. 548 00:28:06,910 --> 00:28:09,480 It's to reimburse the contractors for the work 549 00:28:09,480 --> 00:28:10,853 that they've already done. 550 00:28:10,853 --> 00:28:14,930 As far as monitoring the same processes that are already 551 00:28:14,930 --> 00:28:19,930 in place to verify and validate the invoices are continuing 552 00:28:20,240 --> 00:28:21,570 to be done. 553 00:28:21,570 --> 00:28:22,560 - [Tony] Okay, fair enough. 554 00:28:22,560 --> 00:28:26,410 And on F-35, the (mumbles) this morning said 555 00:28:26,410 --> 00:28:28,648 that Edwards has suspended flight operations, 556 00:28:28,648 --> 00:28:31,460 test operations in general. 557 00:28:31,460 --> 00:28:34,300 Ms. Lord, can you give a little bit of clarity on that 558 00:28:34,300 --> 00:28:36,150 and what impact might that have 559 00:28:36,150 --> 00:28:37,640 on the full rate production decision 560 00:28:37,640 --> 00:28:41,470 that you've established as March 21 as a threshold date? 561 00:28:41,470 --> 00:28:46,470 - So Tony, as you know, the F-35 is a large program 562 00:28:46,908 --> 00:28:50,890 that is spread many places around the globe. 563 00:28:50,890 --> 00:28:54,730 I will say that today, F-35 joint strike fighter 564 00:28:54,730 --> 00:28:58,047 is performing very very well operationally. 565 00:28:58,047 --> 00:29:03,047 Marine Corps, Navy, Air Force are using the aircraft 566 00:29:03,160 --> 00:29:05,954 to great effect along with our partners 567 00:29:05,954 --> 00:29:08,490 and FMS customers. 568 00:29:08,490 --> 00:29:12,670 We have a number of areas where we have to pause 569 00:29:12,670 --> 00:29:15,760 across the Department in terms of what we're doing 570 00:29:15,760 --> 00:29:17,710 either in research and development 571 00:29:17,710 --> 00:29:21,510 or in testing or operations. 572 00:29:21,510 --> 00:29:25,401 What I am, I am in daily contact with General Fick 573 00:29:25,401 --> 00:29:27,135 at least once a day. 574 00:29:27,135 --> 00:29:30,410 The JPO is managing this well. 575 00:29:30,410 --> 00:29:32,950 What I would like to do is ask Mike 576 00:29:32,950 --> 00:29:37,950 to coordinate with PA at the joint program office 577 00:29:38,240 --> 00:29:40,189 and we will get back to you later today 578 00:29:40,189 --> 00:29:42,727 with areas where we are pausing. 579 00:29:42,727 --> 00:29:45,134 Right now, I can't comment 580 00:29:45,134 --> 00:29:48,090 on the full rate production decision. 581 00:29:48,090 --> 00:29:51,970 What I will tell you is we are moving forward. 582 00:29:51,970 --> 00:29:54,610 While we work on COVID-19, 583 00:29:54,610 --> 00:29:58,022 we still have normal operations going, executing 584 00:29:58,022 --> 00:30:01,620 on our programs because just like your question 585 00:30:01,620 --> 00:30:04,893 about progress payments, I want to emphasize 586 00:30:04,893 --> 00:30:09,070 that we are looking at the totality of what we do 587 00:30:09,070 --> 00:30:10,940 with the acquisition work force, 588 00:30:10,940 --> 00:30:14,440 supporting the war fighter, making sure that both readiness 589 00:30:14,440 --> 00:30:17,010 and modernization are underway, 590 00:30:17,010 --> 00:30:20,720 all the way back to making sure that we have a secure, 591 00:30:20,720 --> 00:30:24,490 safe, and resilient Defense Industrial Base. 592 00:30:24,490 --> 00:30:27,198 So close communication, keeping cash flowing, 593 00:30:27,198 --> 00:30:30,900 keeping operations going with minor pauses 594 00:30:30,900 --> 00:30:32,696 in a variety of places. 595 00:30:32,696 --> 00:30:33,912 - [Tony] Okay, thank you and stay safe. 596 00:30:33,912 --> 00:30:35,012 Wash your hands. 597 00:30:35,012 --> 00:30:36,154 Stay safe. 598 00:30:36,154 --> 00:30:37,720 - Thanks Tony, you too. 599 00:30:37,720 --> 00:30:38,870 We're gonna back into the room. 600 00:30:38,870 --> 00:30:40,250 Barbara Starr? 601 00:30:40,250 --> 00:30:44,650 - Ms. Lord, really looking for some specifics here 602 00:30:44,650 --> 00:30:46,280 if you can. 603 00:30:46,280 --> 00:30:49,230 What is your, the Department's estimate right now 604 00:30:49,230 --> 00:30:54,230 about how many workers in your Defense Industrial Base, 605 00:30:55,180 --> 00:30:57,366 in defense companies in this country, 606 00:30:57,366 --> 00:31:01,570 are currently not working because of this, 607 00:31:01,570 --> 00:31:02,793 who are out of work? 608 00:31:06,060 --> 00:31:07,980 I guess I don't understand how, 609 00:31:07,980 --> 00:31:11,760 I need to understand better how this is directly affecting 610 00:31:11,760 --> 00:31:12,980 the Defense Industrial Base. 611 00:31:12,980 --> 00:31:15,793 So how many are out of work? 612 00:31:17,090 --> 00:31:21,450 What is your concern in any programs 613 00:31:21,450 --> 00:31:24,820 that will be affected in terms of not being able 614 00:31:24,820 --> 00:31:28,980 to deliver spare parts on time, to keep operations going, 615 00:31:28,980 --> 00:31:33,290 where you see the biggest jeopardy to acquisition 616 00:31:36,840 --> 00:31:38,780 in ongoing programs? 617 00:31:38,780 --> 00:31:43,030 And you mentioned that you had some concern 618 00:31:43,030 --> 00:31:46,320 that the Defense Industrial Base not be vulnerable 619 00:31:46,320 --> 00:31:48,086 to adversarial capital. 620 00:31:48,086 --> 00:31:52,130 Do you have concerns that as these companies have 621 00:31:52,130 --> 00:31:57,130 these layoffs and they're perceived value drops, 622 00:31:57,260 --> 00:32:00,560 their stock prices drop, this could open the door 623 00:32:00,560 --> 00:32:04,560 to foreign investors trying to take them over? 624 00:32:04,560 --> 00:32:06,420 What are you doing to stop that? 625 00:32:06,420 --> 00:32:09,273 But most importantly, how many defense workers are 626 00:32:09,273 --> 00:32:11,330 out of work in this country? 627 00:32:11,330 --> 00:32:15,130 - I do not have an actual number for you here today. 628 00:32:15,130 --> 00:32:16,867 I can go back and work with DCMA 629 00:32:16,867 --> 00:32:20,150 and get you the best estimate in the next couple hours 630 00:32:20,150 --> 00:32:21,220 that we have. 631 00:32:21,220 --> 00:32:23,021 I will say that the concern 632 00:32:23,021 --> 00:32:26,480 - Thank you, I would greatly appreciate that. 633 00:32:26,480 --> 00:32:27,720 - [Ellen] I'd say the bulk. 634 00:32:27,720 --> 00:32:29,979 I will say that the bulk 635 00:32:29,979 --> 00:32:34,010 of defense industry is working today. 636 00:32:34,010 --> 00:32:37,070 We've had a few specific issues such as Boeing 637 00:32:37,070 --> 00:32:39,460 where they had to shut down an operation. 638 00:32:39,460 --> 00:32:43,084 We have a few military operations that you had cited 639 00:32:43,084 --> 00:32:46,490 where we're having to pause. 640 00:32:46,490 --> 00:32:49,760 But I will tell you the vast majority are working. 641 00:32:49,760 --> 00:32:51,320 They do want to work. 642 00:32:51,320 --> 00:32:54,840 CEO's are reaching out to us to ensure 643 00:32:54,840 --> 00:32:57,510 that they can continue operations. 644 00:32:57,510 --> 00:32:59,250 That's why I put out my memo 645 00:32:59,250 --> 00:33:02,700 so that we didn't have local law enforcement stopping people 646 00:33:02,700 --> 00:33:03,900 on the way to work. 647 00:33:03,900 --> 00:33:07,730 We have had incredible collaboration from governors. 648 00:33:07,730 --> 00:33:11,856 I spoke with Governor Tom Wolf from Pennsylvania last Friday 649 00:33:11,856 --> 00:33:16,100 to ensure that some Boeing and BAE facilities could keep up 650 00:33:16,100 --> 00:33:18,210 and running in the state of Pennsylvania. 651 00:33:18,210 --> 00:33:20,020 We were having particular concerns 652 00:33:20,020 --> 00:33:21,490 in the state of California. 653 00:33:21,490 --> 00:33:24,595 Last Friday, I talked to the Chief of Staff 654 00:33:24,595 --> 00:33:28,240 of the Governor of California last Friday. 655 00:33:28,240 --> 00:33:30,530 - Where in California did you have concerns? 656 00:33:30,530 --> 00:33:33,850 - Sunnyvale, Carlsbad, those areas. 657 00:33:33,850 --> 00:33:38,298 So we continue to work there where there is sometimes 658 00:33:38,298 --> 00:33:43,298 a lack of clarity, reading Governor's orders 659 00:33:43,860 --> 00:33:48,010 and what is essential, what is not, what support there is. 660 00:33:48,010 --> 00:33:51,570 So we are using our Office of Economic Adjustment 661 00:33:51,570 --> 00:33:54,880 who has a very strong communication path 662 00:33:54,880 --> 00:33:58,920 with the Governors' Association to make sure they understand 663 00:33:58,920 --> 00:33:59,753 where we are. 664 00:33:59,753 --> 00:34:01,693 So the vast majority is working. 665 00:34:01,693 --> 00:34:04,920 We want industry to know 666 00:34:04,920 --> 00:34:07,430 that our demand signal is still there. 667 00:34:07,430 --> 00:34:11,060 We want them to adhere to all the CDC guidelines. 668 00:34:11,060 --> 00:34:13,990 We are not asking anyone to do anything differently 669 00:34:13,990 --> 00:34:16,250 than all of us are doing with social distancing, 670 00:34:16,250 --> 00:34:17,630 quarantining and so forth. 671 00:34:17,630 --> 00:34:19,270 - Two very quick follow-ups. 672 00:34:19,270 --> 00:34:21,219 The foreign investment question 673 00:34:21,219 --> 00:34:23,498 and are you convinced that it's safe 674 00:34:23,498 --> 00:34:25,070 for all these people to go to work? 675 00:34:25,070 --> 00:34:28,710 - The foreign investment issue is something 676 00:34:28,710 --> 00:34:32,080 that I have tracking for the last couple years. 677 00:34:32,080 --> 00:34:36,410 There is no question that we have adversarial capital coming 678 00:34:36,410 --> 00:34:39,340 into our markets through nefarious means. 679 00:34:39,340 --> 00:34:42,250 So what we are doing is on the defense side, 680 00:34:42,250 --> 00:34:43,690 looking at CFIUS. 681 00:34:43,690 --> 00:34:45,180 On the offensive side, 682 00:34:45,180 --> 00:34:47,317 we're using our trusted capital mechanisms. 683 00:34:47,317 --> 00:34:51,060 What I can say in terms of safety in the workplace is 684 00:34:51,060 --> 00:34:52,764 that we are working very very closely 685 00:34:52,764 --> 00:34:56,420 with our industry partners to make sure they have 686 00:34:56,420 --> 00:34:58,107 all the information available 687 00:34:58,107 --> 00:35:00,005 that the government is pushing out 688 00:35:00,005 --> 00:35:02,950 as to what safe operations are. 689 00:35:02,950 --> 00:35:04,530 - Coronavirus, I'll be very quick. 690 00:35:04,530 --> 00:35:07,920 My question actually is in the coronavirus situation, 691 00:35:07,920 --> 00:35:09,420 are there specific concerns 692 00:35:09,420 --> 00:35:12,200 that you see foreign capital making a move? 693 00:35:12,200 --> 00:35:16,589 - Well, I think it presents a greater attack surface 694 00:35:16,589 --> 00:35:19,092 if you will as there is uncertainty 695 00:35:19,092 --> 00:35:21,004 especially with small businesses 696 00:35:21,004 --> 00:35:24,141 as to whether their contracts will continue. 697 00:35:24,141 --> 00:35:29,141 So we want to basically mitigate that uncertainty. 698 00:35:29,210 --> 00:35:31,500 That's why we are being forward leaning 699 00:35:31,500 --> 00:35:35,330 and over communicating probably to say we are open. 700 00:35:35,330 --> 00:35:36,690 We want them to be open. 701 00:35:36,690 --> 00:35:39,640 We want the defense industrial base to be safe, 702 00:35:39,640 --> 00:35:42,710 but we want them to know that we are open 703 00:35:42,710 --> 00:35:44,670 and we're hoping they're making every effort 704 00:35:44,670 --> 00:35:46,410 to be open as well. 705 00:35:46,410 --> 00:35:49,417 - Okay, Doug Cameron, are you on the line? 706 00:35:53,657 --> 00:35:55,861 - [Doug] I am, I just need to get myself 707 00:35:55,861 --> 00:35:57,053 off speaker and everything. 708 00:35:57,053 --> 00:35:58,059 Can you hear me okay? 709 00:35:58,059 --> 00:35:58,892 - Yeah, Doug, you might want to speak up 710 00:35:58,892 --> 00:35:59,725 just a little bit more. 711 00:36:00,700 --> 00:36:02,047 - [Doug] Okay, hang on (mumbles). 712 00:36:04,727 --> 00:36:08,510 Secretary Lord, we're kinda you know 45 minutes 713 00:36:08,510 --> 00:36:13,500 into this call and we haven't heard a direct example 714 00:36:13,500 --> 00:36:16,144 of something that the Defense Manufacturing Base 715 00:36:16,144 --> 00:36:19,160 with its continued funding and the heat maps 716 00:36:19,160 --> 00:36:22,540 and the task forces is actually able to do 717 00:36:22,540 --> 00:36:27,380 or is doing rather in terms of working towards 718 00:36:27,380 --> 00:36:30,790 or even producing essential supplies. 719 00:36:30,790 --> 00:36:32,700 You talked before about joint ventures. 720 00:36:32,700 --> 00:36:35,490 Maybe you could expand a little bit 721 00:36:35,490 --> 00:36:37,370 with some concrete examples 722 00:36:37,370 --> 00:36:41,820 of what all these task forces have actually produced. 723 00:36:41,820 --> 00:36:44,890 - Okay, so just a point of clarification, Doug. 724 00:36:44,890 --> 00:36:47,745 We obviously have our own strategic reserves 725 00:36:47,745 --> 00:36:52,340 and after we at DOD make sure we have taken care 726 00:36:52,340 --> 00:36:57,300 of our service members, we have begun to ship N-95 masks 727 00:36:57,300 --> 00:37:02,300 for instance out to support the rest of the interagency 728 00:37:02,640 --> 00:37:04,397 and we will backfill with those. 729 00:37:04,397 --> 00:37:09,397 We are also making sure that ventilators, for instance, 730 00:37:09,429 --> 00:37:14,290 a member of our staff actually got together 731 00:37:14,290 --> 00:37:16,780 with one of the automotive companies 732 00:37:16,780 --> 00:37:19,260 and one of the ventilator manufacturers 733 00:37:19,260 --> 00:37:22,700 and helped them craft a business arrangement 734 00:37:22,700 --> 00:37:27,550 and basically facilitated the exchange 735 00:37:27,550 --> 00:37:31,082 of technical information to help them get up and going, 736 00:37:31,082 --> 00:37:33,780 thereby providing a template. 737 00:37:33,780 --> 00:37:37,960 I will tell you that this is all very very realtime. 738 00:37:37,960 --> 00:37:40,349 We wanted to come and give you information 739 00:37:40,349 --> 00:37:43,772 about what our daily cadence is and what we're doing. 740 00:37:43,772 --> 00:37:46,630 In the next two or three days, we will be able 741 00:37:46,630 --> 00:37:49,210 to give you examples, but I will tell you 742 00:37:49,210 --> 00:37:53,860 that I am fielding calls from CEOs, from other individuals. 743 00:37:53,860 --> 00:37:57,390 We, our first action was to make sure 744 00:37:57,390 --> 00:37:59,510 that we have a system in place. 745 00:37:59,510 --> 00:38:02,370 If we do not have a system with clear roles 746 00:38:02,370 --> 00:38:05,710 and responsibilities, how information flows, 747 00:38:05,710 --> 00:38:09,280 how money flows, how we are going to really leverage 748 00:38:09,280 --> 00:38:11,486 our adaptive acquisition framework, 749 00:38:11,486 --> 00:38:16,486 we will descend into a very uncoordinated state. 750 00:38:17,000 --> 00:38:20,553 So my first effort is to set up the structure 751 00:38:20,553 --> 00:38:24,797 and the governance to make sure OSD, the agencies, 752 00:38:24,797 --> 00:38:27,699 and the services are aligned. 753 00:38:27,699 --> 00:38:30,540 Then the deal flow can begin. 754 00:38:30,540 --> 00:38:32,128 There's an enormous amount of activity. 755 00:38:32,128 --> 00:38:36,930 I will commit within 48 hours, Mike Andrews will get back 756 00:38:36,930 --> 00:38:39,510 with specific examples, but I do not want 757 00:38:39,510 --> 00:38:41,690 to give out misinformation and I want 758 00:38:41,690 --> 00:38:44,640 to make sure we're totally coordinated in what we're doing. 759 00:38:46,200 --> 00:38:47,730 - [Doug] Okay, but with all respect, 760 00:38:47,730 --> 00:38:49,362 I mean you mentioned an auto maker 761 00:38:49,362 --> 00:38:53,225 and you helped facilitate the process and there, 762 00:38:53,225 --> 00:38:57,749 but again, you have this huge defense industrial base 763 00:38:57,749 --> 00:38:59,802 and frankly, our readers will wonder 764 00:38:59,802 --> 00:39:04,720 why can you mention an auto maker and not a single member 765 00:39:04,720 --> 00:39:06,840 of the defense industrial base? 766 00:39:06,840 --> 00:39:08,860 - We have two different things going on. 767 00:39:08,860 --> 00:39:11,940 We have our Defense Industrial Base 768 00:39:11,940 --> 00:39:15,190 who we are working through with DPA Title III 769 00:39:15,190 --> 00:39:16,710 and Jen can give us a couple examples 770 00:39:16,710 --> 00:39:19,270 on things we're doing with fragility. 771 00:39:19,270 --> 00:39:23,930 Then separate and distinct is our support 772 00:39:23,930 --> 00:39:27,750 to HHS and FEMA on COVID-19. 773 00:39:27,750 --> 00:39:29,610 That's where we're just getting 774 00:39:29,610 --> 00:39:32,470 these deals put together and advising. 775 00:39:32,470 --> 00:39:37,010 So they're two separate, but well-coordinated activities, 776 00:39:37,010 --> 00:39:41,410 leveraging the capacity and the capability of DOD. 777 00:39:41,410 --> 00:39:44,420 One is what I will call our standard work 778 00:39:44,420 --> 00:39:48,512 where we continue to work with the industrial base 779 00:39:48,512 --> 00:39:52,850 to allow them to move forward crisply. 780 00:39:52,850 --> 00:39:56,760 That's what a lot of the cashflow comments are about, 781 00:39:56,760 --> 00:39:59,530 but there is some DPA Title III activity 782 00:39:59,530 --> 00:40:03,210 that Jen can address separate and distinct, 783 00:40:03,210 --> 00:40:07,410 yet in coordination is the work we are doing 784 00:40:07,410 --> 00:40:11,480 to leverage what we have for acquisition capability 785 00:40:11,480 --> 00:40:14,640 to Health and Human Services and FEMA. 786 00:40:14,640 --> 00:40:17,560 They have to give us the demand signal. 787 00:40:17,560 --> 00:40:21,950 Once we get clarity on the demand signal, we will execute. 788 00:40:21,950 --> 00:40:26,950 If you recall, FEMA just got the lead role on Friday. 789 00:40:27,556 --> 00:40:32,480 This weekend, Admiral Polovchak from joint staff 790 00:40:32,480 --> 00:40:35,830 was detailed over to be part of them. 791 00:40:35,830 --> 00:40:38,147 Over the weekend, we stood up a team. 792 00:40:38,147 --> 00:40:40,270 So this is all very new. 793 00:40:40,270 --> 00:40:42,845 I know COVID has been here for several weeks, 794 00:40:42,845 --> 00:40:47,679 but this coordination at this level of detail 795 00:40:47,679 --> 00:40:49,830 just started on Friday. 796 00:40:49,830 --> 00:40:50,820 So Jen, do you want to talk 797 00:40:50,820 --> 00:40:52,310 about the Defense Industrial Base, 798 00:40:52,310 --> 00:40:53,695 our presidential determinations, 799 00:40:53,695 --> 00:40:56,876 and how we're putting DPA Title III money to work 800 00:40:56,876 --> 00:41:01,010 within the Defense Industrial Base for our defense needs? 801 00:41:01,010 --> 00:41:02,340 - Yes, Ma'am. 802 00:41:02,340 --> 00:41:04,560 So yes, so thank you. 803 00:41:04,560 --> 00:41:08,900 So the Defense Industrial Base leverages DPA Title III. 804 00:41:08,900 --> 00:41:10,880 DPA Title III, Defense Production Act, 805 00:41:10,880 --> 00:41:15,360 allows for infusion of funding into companies 806 00:41:15,360 --> 00:41:17,243 to make sure they can meet the demand signal. 807 00:41:17,243 --> 00:41:22,220 In the N-95 mask example, HHS issued a contract 808 00:41:22,220 --> 00:41:25,240 over the weekend to five companies. 809 00:41:25,240 --> 00:41:27,890 Those five companies now are working with us 810 00:41:27,890 --> 00:41:30,748 to ensure we can help them meet their demand signal. 811 00:41:30,748 --> 00:41:34,252 Specific examples over the past calendar year, 812 00:41:34,252 --> 00:41:36,390 so the President signed 813 00:41:36,390 --> 00:41:40,848 out 14 presidential determinations over 2019. 814 00:41:40,848 --> 00:41:43,410 One of them, I'll give you a specific example 815 00:41:43,410 --> 00:41:44,630 on is the small UAS. 816 00:41:44,630 --> 00:41:48,857 So in June of last year, small UAS identified a 817 00:41:48,857 --> 00:41:52,278 Defense Industrial Base and so we've used 818 00:41:52,278 --> 00:41:55,550 that authority to create a United States 819 00:41:55,550 --> 00:41:59,300 industrial base command signal to build up manufacturing 820 00:41:59,300 --> 00:42:00,433 in the United States. 821 00:42:02,899 --> 00:42:04,470 So that is how Defense Product Act Title III 822 00:42:04,470 --> 00:42:06,443 has been leveraged. 823 00:42:06,443 --> 00:42:09,610 In coordination with HHS, 824 00:42:09,610 --> 00:42:11,380 we have been working very closely with them. 825 00:42:11,380 --> 00:42:14,340 My deputy, Scott Baum, went over there on Sunday 826 00:42:14,340 --> 00:42:16,780 and started educating HHS on how 827 00:42:16,780 --> 00:42:21,000 to use the Defense Prioritization and Allocation System, 828 00:42:21,000 --> 00:42:23,618 which was the first Executive Order the President signed out 829 00:42:23,618 --> 00:42:25,260 and then also how 830 00:42:25,260 --> 00:42:29,380 to leverage the Defense Product Act Title III authorities 831 00:42:29,380 --> 00:42:33,430 to expand the industrial base to meet the demand signal 832 00:42:33,430 --> 00:42:35,143 the nation requires right now. 833 00:42:36,660 --> 00:42:37,493 - Okay, Doug. 834 00:42:37,493 --> 00:42:38,510 We're gonna move on here. 835 00:42:38,510 --> 00:42:39,810 We're going back into the room. 836 00:42:39,810 --> 00:42:40,883 Jennifer Fox. 837 00:42:42,030 --> 00:42:46,260 - Ms. Lord, you're in charge of acquisition and procurement. 838 00:42:46,260 --> 00:42:50,260 There was an execute order issued by the joint chiefs 839 00:42:50,260 --> 00:42:54,320 on February 1st suggesting that a pandemic was coming. 840 00:42:54,320 --> 00:42:58,384 What did you do to begin stockpiling masks, 841 00:42:58,384 --> 00:43:02,790 protective equipment, PPE, and ventilators at that time? 842 00:43:02,790 --> 00:43:05,070 Can you take us back to when you started 843 00:43:05,070 --> 00:43:07,280 and why there isn't a greater stockpile 844 00:43:07,280 --> 00:43:09,640 in the US military right now? 845 00:43:09,640 --> 00:43:12,790 - There is actually a very significant stockpile 846 00:43:12,790 --> 00:43:16,080 in the US military, which we can get back to you with. 847 00:43:16,080 --> 00:43:19,160 What we did was first assess the stockpile 848 00:43:19,160 --> 00:43:23,390 and then what we have done is distributed some of those 849 00:43:23,390 --> 00:43:24,720 for DOD use. 850 00:43:24,720 --> 00:43:29,720 We have also made both masks and ventilators available 851 00:43:29,894 --> 00:43:32,395 outside of DOD. 852 00:43:32,395 --> 00:43:35,210 There are I believe 200 ventilators. 853 00:43:35,210 --> 00:43:36,180 We can check on that. 854 00:43:36,180 --> 00:43:39,380 They're slightly different than the ventilators used 855 00:43:39,380 --> 00:43:41,340 in a typical civilian hospital, 856 00:43:41,340 --> 00:43:43,040 but with direction, they can be used. 857 00:43:43,040 --> 00:43:45,540 So DHA has worked on that. 858 00:43:45,540 --> 00:43:49,440 DLA has been in coordination with the interagency 859 00:43:49,440 --> 00:43:53,480 on what our stockpiles are and we have moved some 860 00:43:53,480 --> 00:43:56,410 of our materials and then we are back filling them. 861 00:43:56,410 --> 00:43:59,130 So we can get back to you with the exact numbers 862 00:43:59,130 --> 00:44:02,890 and examples, but things are moving forward. 863 00:44:02,890 --> 00:44:05,277 - So I believe it was 2,000 ventilators 864 00:44:05,277 --> 00:44:10,230 that you had and did you start buying more ventilators? 865 00:44:10,230 --> 00:44:12,570 2,000 is not going to solve the current crisis. 866 00:44:12,570 --> 00:44:14,231 - I understand. 867 00:44:14,231 --> 00:44:17,030 We are working on procuring more ventilators right now 868 00:44:17,030 --> 00:44:19,440 and I think one of things we might've talked 869 00:44:19,440 --> 00:44:22,040 about a little bit earlier is the fact 870 00:44:22,040 --> 00:44:26,170 we have multiple companies that are standing up capability 871 00:44:26,170 --> 00:44:27,970 to do that right now. 872 00:44:27,970 --> 00:44:30,680 And in fact, we can back with who those are. 873 00:44:30,680 --> 00:44:32,320 I don't particularly want to throw out a lot 874 00:44:32,320 --> 00:44:34,550 of company names when we have not told them 875 00:44:34,550 --> 00:44:37,920 that we are gonna release them to the general public. 876 00:44:37,920 --> 00:44:40,240 We are still working through business arrangements. 877 00:44:40,240 --> 00:44:42,110 Everyone's very very committed. 878 00:44:42,110 --> 00:44:45,680 So I would characterize this as all in. 879 00:44:45,680 --> 00:44:48,410 There's an enormous amount of work going on. 880 00:44:48,410 --> 00:44:51,890 We need to quantify that and get back to you with that. 881 00:44:51,890 --> 00:44:54,240 - But six weeks later, February 1st was 882 00:44:54,240 --> 00:44:56,580 when the Ex Ord went out. 883 00:44:56,580 --> 00:44:57,610 It's hard to understand 884 00:44:57,610 --> 00:44:59,489 why this is just beginning right now. 885 00:44:59,489 --> 00:45:03,930 - I think what you are seeing is it's just beginning 886 00:45:03,930 --> 00:45:06,070 in an aggregated form. 887 00:45:06,070 --> 00:45:09,280 There were a lot of different efforts going on 888 00:45:09,280 --> 00:45:11,863 throughout the services, throughout the agencies 889 00:45:11,863 --> 00:45:15,245 within DOD and the other agencies. 890 00:45:15,245 --> 00:45:17,870 What you are just hearing now is 891 00:45:17,870 --> 00:45:21,440 that it is an all of government effort being coordinated 892 00:45:21,440 --> 00:45:22,600 in one place. 893 00:45:22,600 --> 00:45:25,340 The reason we're doing that is to be able 894 00:45:25,340 --> 00:45:28,509 to give you the data, to be able to give you the specifics, 895 00:45:28,509 --> 00:45:31,210 which have been difficult to give you up 896 00:45:31,210 --> 00:45:32,610 to this point in time. 897 00:45:32,610 --> 00:45:36,007 We just started standing up capability on Friday. 898 00:45:36,007 --> 00:45:40,250 We real time are having meetings constantly. 899 00:45:40,250 --> 00:45:43,240 So I will commit to you within the next 48 hours we 900 00:45:43,240 --> 00:45:46,350 will get back with details on that. 901 00:45:46,350 --> 00:45:48,423 - Okay, we're gonna go to Katrina. 902 00:45:51,660 --> 00:45:52,890 - [Katrina] Yes, thanks so much. 903 00:45:52,890 --> 00:45:54,620 Just to specify, can you let us know 904 00:45:54,620 --> 00:45:58,510 if you've signed no deals yet in response 905 00:45:58,510 --> 00:46:03,510 to the coronavirus pandemic since Friday? 906 00:46:03,810 --> 00:46:05,270 Or if you have got any deals, 907 00:46:05,270 --> 00:46:06,680 could you give us a number? 908 00:46:06,680 --> 00:46:09,230 Could you give us a value of economic incentives 909 00:46:09,230 --> 00:46:13,270 that you are hoping to deploy under Title 33? 910 00:46:13,270 --> 00:46:14,920 And I've got a follow up. 911 00:46:14,920 --> 00:46:18,630 - So I can't give you a specific number of deals, 912 00:46:18,630 --> 00:46:21,530 but I will tell you there have been deals done 913 00:46:21,530 --> 00:46:24,940 so we will take that and get back to you with specifics. 914 00:46:24,940 --> 00:46:27,282 Again, I want to be respectful of the companies 915 00:46:27,282 --> 00:46:29,956 that we are doing those with and make sure 916 00:46:29,956 --> 00:46:33,728 that everyone is ready for us to go public with that 917 00:46:33,728 --> 00:46:36,090 for a number of reasons. 918 00:46:36,090 --> 00:46:38,140 And the second part of your question was 919 00:46:38,140 --> 00:46:39,180 that you already said? 920 00:46:39,180 --> 00:46:40,013 I can't recall. 921 00:46:40,013 --> 00:46:41,150 - [Mike] Economic incentives. 922 00:46:41,150 --> 00:46:42,730 - Oh, economic incentives. 923 00:46:42,730 --> 00:46:47,250 I will tell you that I was on the phone, 924 00:46:47,250 --> 00:46:50,180 I was on the Hill on Friday morning 925 00:46:50,180 --> 00:46:55,180 and on the phone all weekend and yesterday 926 00:46:55,290 --> 00:46:59,180 with both members as well as staffers 927 00:46:59,180 --> 00:47:02,810 as was the comptroller here, the Secretary of Defense, 928 00:47:02,810 --> 00:47:05,210 the Deputy Secretary of Defense working 929 00:47:05,210 --> 00:47:07,350 through the White House and OMB, 930 00:47:07,350 --> 00:47:10,869 working on exactly what those economic incentives are. 931 00:47:10,869 --> 00:47:12,800 There are a lot of moving parts. 932 00:47:12,800 --> 00:47:15,550 There's this very large bill that's about to be voted on. 933 00:47:15,550 --> 00:47:18,010 Then there will be a follow on appropriation. 934 00:47:18,010 --> 00:47:20,880 We are not sure exactly what the numbers are 935 00:47:20,880 --> 00:47:22,631 that are going to go into the final bill, 936 00:47:22,631 --> 00:47:25,853 but they will be significant. 937 00:47:27,650 --> 00:47:29,290 - [Katrina] Thank you and my follow up is 938 00:47:29,290 --> 00:47:31,890 would you in any way consider using the Defense Product Act 939 00:47:31,890 --> 00:47:34,740 to start building medicine, manufacturing plants 940 00:47:34,740 --> 00:47:38,272 for the long term to wean the US off Chinese supplies? 941 00:47:38,272 --> 00:47:39,400 - Absolutely. 942 00:47:39,400 --> 00:47:41,110 Everything is on the table. 943 00:47:41,110 --> 00:47:46,110 We are looking at short-term using immediate capacity 944 00:47:47,070 --> 00:47:49,700 and capability that exists 945 00:47:49,700 --> 00:47:52,709 and then augmenting manufacturing sites, 946 00:47:52,709 --> 00:47:55,183 research sites that exist right now, 947 00:47:55,183 --> 00:47:58,020 but this is give us the opportunity 948 00:47:58,020 --> 00:48:01,680 to really focus strategically on this critical segment. 949 00:48:01,680 --> 00:48:03,670 So yes, we are working short-term 950 00:48:03,670 --> 00:48:05,180 and we are working long-term 951 00:48:05,180 --> 00:48:07,600 and that's in conjunction with the services, 952 00:48:07,600 --> 00:48:11,580 especially the Army has a enormous capability relative 953 00:48:11,580 --> 00:48:13,119 to medical research. 954 00:48:13,119 --> 00:48:15,570 - Okay, we're gonna have to close out. 955 00:48:15,570 --> 00:48:17,520 I'm gonna give Tom one last question. 956 00:48:17,520 --> 00:48:18,750 - [Tom] A couple quick ones. 957 00:48:18,750 --> 00:48:21,720 You said you want to reduce reliance on foreign sources. 958 00:48:21,720 --> 00:48:23,220 I mean, in the short-term, 959 00:48:23,220 --> 00:48:25,110 wouldn't you want to be desperately reaching out 960 00:48:25,110 --> 00:48:28,640 to any source you can for PPE, number one, and also. 961 00:48:28,640 --> 00:48:30,930 - Let me, I would like to answer. 962 00:48:30,930 --> 00:48:32,825 Absolutely, we are looking everywhere. 963 00:48:32,825 --> 00:48:37,293 However, we know that there's more fragility associated 964 00:48:37,293 --> 00:48:39,160 with foreign resources. 965 00:48:39,160 --> 00:48:42,814 So when we find ourselves dependent on a foreign resource 966 00:48:42,814 --> 00:48:46,050 that we cannot reach for a specific amount of time, 967 00:48:46,050 --> 00:48:47,860 we want to have the resiliency to be able 968 00:48:47,860 --> 00:48:49,400 to deal with that here domestically. 969 00:48:49,400 --> 00:48:51,570 - Also, I think this is what Jen said. 970 00:48:51,570 --> 00:48:55,746 HHS and FEMA have to give you folks demand signals 971 00:48:55,746 --> 00:48:57,278 and exactly what they need? 972 00:48:57,278 --> 00:48:58,530 I mean, don't we know that already 973 00:48:58,530 --> 00:48:59,843 or is that still uncertain? 974 00:48:59,843 --> 00:49:03,471 - They have an enormous number of demand signals. 975 00:49:03,471 --> 00:49:06,106 What they have to do is prioritize 976 00:49:06,106 --> 00:49:08,980 and then allocate and distribute. 977 00:49:08,980 --> 00:49:11,120 - [Tom] Do we have any sense of their priority now? 978 00:49:11,120 --> 00:49:13,450 - Right now, we have been primarily focused 979 00:49:13,450 --> 00:49:18,000 on ventilators and respirators, 980 00:49:18,000 --> 00:49:20,360 but there's also test kits that have been looked at, 981 00:49:20,360 --> 00:49:21,740 swabs, and other things. 982 00:49:21,740 --> 00:49:24,570 So I want to be careful that I'm not on the ground there 983 00:49:24,570 --> 00:49:27,070 and this is changing hour by hour. 984 00:49:27,070 --> 00:49:28,390 We have that information. 985 00:49:28,390 --> 00:49:29,740 I just don't have it right here. 986 00:49:29,740 --> 00:49:31,000 - [Barbara] Can I just ask a clarification 987 00:49:31,000 --> 00:49:32,903 of Jennifer's question really quick? 988 00:49:32,903 --> 00:49:37,820 Since all of this begin with the Ex, the planning order 989 00:49:37,820 --> 00:49:41,260 and all of that, has the Department of Defense put 990 00:49:41,260 --> 00:49:46,260 out a single contract for additional ventilators? 991 00:49:49,120 --> 00:49:49,953 - I will check. 992 00:49:49,953 --> 00:49:51,020 I believe we have. 993 00:49:51,020 --> 00:49:52,120 I will have to check on that. 994 00:49:52,120 --> 00:49:53,506 We have a lot 995 00:49:53,506 --> 00:49:54,779 - [Man] I'll take that. 996 00:49:54,779 --> 00:49:56,783 - We have a lot of contracts going out, I know, for masks. 997 00:49:58,961 --> 00:49:59,794 We have worked on a variety of different ventilators. 998 00:49:59,794 --> 00:50:02,350 We actually have contracts in place. 999 00:50:02,350 --> 00:50:06,276 It's a question of whether or not the supplier 1000 00:50:06,276 --> 00:50:09,020 can deliver against them. 1001 00:50:09,020 --> 00:50:10,440 So I want to be careful here. 1002 00:50:10,440 --> 00:50:12,290 We have a lot of long-term contracts. 1003 00:50:12,290 --> 00:50:15,970 - You have standing contracts for ventilators? 1004 00:50:15,970 --> 00:50:18,720 - We have standing contracts for most of our equipment 1005 00:50:18,720 --> 00:50:20,360 that we release against. 1006 00:50:20,360 --> 00:50:22,545 So it's a question of what the ability is 1007 00:50:22,545 --> 00:50:24,780 to fill those contracts. 1008 00:50:24,780 --> 00:50:27,716 So I just want to be careful and precise when I ask, 1009 00:50:27,716 --> 00:50:29,420 when I answer your questions. 1010 00:50:29,420 --> 00:50:31,534 We have many long-term contracts 1011 00:50:31,534 --> 00:50:35,301 that we release task orders or new quantities. 1012 00:50:35,301 --> 00:50:36,134 - If you would take the question, 1013 00:50:36,134 --> 00:50:40,110 have you put out any contracts or are you about to 1014 00:50:41,174 --> 00:50:42,300 or standing contracts, 1015 00:50:42,300 --> 00:50:45,967 take it every which way for ventilators? 1016 00:50:45,967 --> 00:50:47,400 DHA is working on that. 1017 00:50:47,400 --> 00:50:50,220 I don't have the data here, but I can get back 1018 00:50:50,220 --> 00:50:51,790 to you today on that, absolutely. 1019 00:50:51,790 --> 00:50:53,477 - I'm sorry, I'm sorry. 1020 00:50:53,477 --> 00:50:56,930 No Ma'am, I've got to get her to a 10 o'clock. 1021 00:50:56,930 --> 00:50:57,763 I'm very sorry. 1022 00:50:57,763 --> 00:50:59,540 Do you have any closing remarks, Ma'am? 1023 00:50:59,540 --> 00:51:02,680 - I just want to say that we are working very hard 1024 00:51:02,680 --> 00:51:05,210 to make sure that we have a system 1025 00:51:05,210 --> 00:51:06,780 to process all of this. 1026 00:51:06,780 --> 00:51:10,790 I understand the concern with not having many numbers here. 1027 00:51:10,790 --> 00:51:13,890 We didn't come this morning planning on giving numbers. 1028 00:51:13,890 --> 00:51:17,140 I commit to you we will follow up on that 1029 00:51:17,140 --> 00:51:18,988 because we have an enormous amount 1030 00:51:18,988 --> 00:51:23,330 of disaggregated activity, great activity going on. 1031 00:51:23,330 --> 00:51:24,870 We now have the need 1032 00:51:24,870 --> 00:51:27,522 because this is growing so exponentially 1033 00:51:27,522 --> 00:51:31,200 to make sure we have a system for aggregating that 1034 00:51:31,200 --> 00:51:34,000 and when we give you a number, it is a good number 1035 00:51:34,000 --> 00:51:36,030 and we have all the data behind it 1036 00:51:36,030 --> 00:51:38,600 for what will be the logical follow on questions. 1037 00:51:38,600 --> 00:51:39,700 Thank you. 1038 00:51:39,700 --> 00:51:40,533 - Thank you.