{"id":59883,"date":"2020-04-30T18:14:51","date_gmt":"2020-04-30T18:14:51","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2020\/04\/30\/defense-industry-shutdowns-trend-upward-but-lord-watching-cash-flow\/"},"modified":"2026-08-08T00:29:49","modified_gmt":"2026-08-08T00:29:49","slug":"defense-industry-shutdowns-trend-upward-but-lord-watching-cash-flow","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/industry\/2020\/04\/30\/defense-industry-shutdowns-trend-upward-but-lord-watching-cash-flow\/","title":{"rendered":"Defense industry shutdowns trend upward, but Lord is monitoring cash flow"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">WASHINGTON \u2014 The Pentagon\u2019s top acquisition official sees positive signs for the defense-industrial base, but remains concerned that enough cash may not be flowing to the smallest, <a href=\"https:\/\/www.defensenews.com\/coronavirus\/2020\/04\/08\/the-pentagons-supply-chain-faces-an-economy-under-siege\/\" target=_blank>most vulnerable companies<\/a> in order to keep them open in the wake of the coronavirus pandemic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Out of 10,509 <a href=\"https:\/\/www.defensenews.com\/pentagon\/2020\/03\/20\/pentagon-declares-defense-contractors-critical-infrastructure-must-continue-work\/\" target=_blank>defense-related companies<\/a> tracked by the Defense Contract Management Agency, 93 are currently closed \u2014 a number that has improved by 13 since April 20, according to Ellen Lord, <a href=\"https:\/\/www.defensenews.com\/2020\/04\/21\/covid-closed-mexican-factories-that-supply-us-defense-industry-the-pentagon-wants-them-opened\/\" target=_blank>undersecretary of defense for acquisition and sustainment<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Notably, the number of companies that have closed and reopened jumped by 73 since April 20 \u2014 \u201cthe first time we have seen reopening numbers larger than the number of closures\u201d since the crisis began, Lord told reporters Thursday.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Of the 11,413 companies tracked by the Defense Logistics Agency, 437 are closed, with 237 having closed and reopened. That\u2019s an improvement of almost 100 companies from the April 20 numbers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Lord credited a mix of factors for the improved numbers, including some states appearing to have reached their estimated peak in coronavirus cases and thus opening themselves up again; \u201creally good proactive actions\u201d by companies to create a hygienic space for work; and shared experiences from other companies who have found ways to keep working despite the pandemic.<\/p>\n\n\n\t<aside class=\"smg-interstitial-link wp-block-smg-interstitial-link\">\n\t\t<a href=\"https:\/\/one.sightlinemg.com\/defensenews\/pentagon\/2020\/04\/20\/pentagon-bracing-for-three-month-slowdown-on-major-defense-equipment\/\" class=\"smg-interstitial-link__inner\">\n\t\t\t\t\t\t\t<div class=\"smg-interstitial-link__media\">\n\t\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/one.sightlinemg.com\/wp-content\/uploads\/2026\/08\/ChinookKatterbach.jpg.jpg?w=300\" class=\"smg-interstitial-link__image wp-post-image\" alt=\"\" \/>\t\t\t\t<\/div>\n\t\t\t\t\t\t<div class=\"smg-interstitial-link__content\">\n\t\t\t\t<span class=\"smg-interstitial-link__kicker\">Related<\/span>\n\t\t\t\t<h3 class=\"smg-interstitial-link__title\">Pentagon bracing for three-month slowdown on major defense equipment<\/h3>\n\t\t\t\t\t\t\t\t\t<p class=\"smg-interstitial-link__excerpt\">The Pentagon also expects to spend &quot;billions&quot; of dollars in paying back industry for costs incurred by the COVID-19 outbreak.<\/p>\n\t\t\t\t\t\t\t<\/div>\n\t\t<\/a>\n\t<\/aside>\n\t\n\n\n<p class=\"wp-block-paragraph\">However, Lord still expects the pandemic to impact major defense programs. On April 20, she warned that top programs could face an approximate three-month impact. She reiterated that timetable Thursday but stressed she is largely looking at a \u201cslowdown\u201d rather than a \u201cdelay\u201d in major programs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWhat we are seeing as a result of illness or inability to travel: We see efficiency issues. So we are not physically able to get contractors sometimes overseas to conduct inspections,\u201d Lord explained. \u201cSo we have somewhat of a slowdown in our ability to accomplish tasks. We are finding workarounds for that, versus just saying we\u2019re delaying doing something. We do not look at delaying things; we are looking at working through the issues, which sometimes cannot be executed with the same efficiency we previously had.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cWe think we\u2019re learning how to work in this new environment and get back up to rate, if you will, in areas where we didn\u2019t, but right now that is our best estimate and we are working, obviously, to minimize impacts,\u201d she added.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Pentagon has pushed out $3 billion in increased cash flow under its coronavirus-related progress payment plan, which <a href=\"https:\/\/www.defensenews.com\/coronavirus\/2020\/03\/23\/pentagon-loosens-cash-flow-for-industry-more-measures-likely-coming\/\" target=_blank>increased upfront payment<\/a> to contractors from 80 percent of cost to 90 percent for large businesses, and from 90 percent to 95 percent for small businesses.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The goal for department officials: getting cash into the hands of prime contractors, who can then quickly provide funds to their subcontractors and other small businesses, who Lord has consistently identified as the most vulnerable parts of the defense-industrial base.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In both her April 20 press appearance and Thursday\u2019s event, Lord praised Lockheed Martin for publicly committing to give early payments to subcontractors in order to keep them open. On March 27, the <a href=\"https:\/\/www.defensenews.com\/news\/coronavirus\/2020\/03\/27\/lockheed-offers-cash-to-supply-chain-use-of-private-jets-for-covid-19-fight\/\">company announced<\/a> it would push $50 million down toward small companies most at risk; that has since increased to $450 million.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But, Lord acknowledged, other companies have not been as open with where those Pentagon relief funds are going.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That\u2019s something she\u2019d like to see change.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">\u201cI believe that the major primes are flowing down, they\u2019ve committed. But I always like to trust, yet verify,\u201d Lord said. \u201cSo I encourage all of those companies to be as transparent and forthcoming as they can be because we have a responsibility to the taxpayer, as well as the mid-tiers and the small companies, to make sure actions we take at the prime level do go down all the way through the chain.\u201d<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When asked if she believes the primes are being transparent with her office about where their cash is going, Lord said, \u201cI believe they are,\u201d but added: \u201cI need to rely on CEOs of major primes to come forth with that data.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Ellen Lord, undersecretary of defense for acquisition and sustainment, sees reasons for tentative optimism in the number of defense-industrial facilities that have reopened.<\/p>\n","protected":false},"author":7,"featured_media":61968,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_yoast_wpseo_meta-robots-noindex":"","_yoast_wpseo_meta-robots-nofollow":"","_yoast_wpseo_canonical":"","_acf":"","_yoast_wpseo_primary_category":12,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","_smg_distribution_targets":{"9":{"categories":["coronavirus","daily-brief","newsletters"],"primary_category":"coronavirus"}}},"categories":[9,160,12,36,19],"tags":[],"coauthors":[3378],"class_list":["post-59883","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-coronavirus","category-daily-news-roundup","category-industry","category-newsletters","category-pentagon"],"acf":{"subheadline":"","legacy_arc_id":"7GGRMD3CP5B67KPUXWPF5TE7MA","arc_canonical_url":"\/industry\/2020\/04\/30\/defense-industry-shutdowns-trend-upward-but-lord-watching-cash-flow\/","remove_feature_photo":false,"is_sponsored":false,"subtype":"","redirect_url":"","disable_inline_ads":false,"native_logo_pretext":"Presented By:"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Defense industry shutdowns trend upward, but Lord is monitoring cash flow - Defense News<\/title>\n<meta name=\"description\" content=\"Ellen Lord, undersecretary of defense for acquisition and sustainment, sees reasons for tentative optimism in the number of defense-industrial facilities that have reopened.\" \/>\n<meta name=\"robots\" content=\"noindex, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Defense industry shutdowns trend upward, but Lord is monitoring cash flow\" \/>\n<meta property=\"og:description\" content=\"Ellen Lord, undersecretary of defense for acquisition and sustainment, sees reasons for tentative optimism in the 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