COVID-19 NEWS: Air Force Wants More Money to Bolster Space Industry
Air Force illustrationThe Air Force and other defense agencies need more funding to prop up the space industrial base during the COVID-19 crisis, the service’s acquisition chief said April 16.
The spread of the virus has forced the closure of some businesses in the supply chain, created inefficiencies in production lines and introduced market uncertainty, Assistant Secretary of the Air Force for Acquisition, Technology and Logistics Will Roper noted during a teleconference with reporters.
“We’re all worried about the space industrial base during COVID-19, especially the small suppliers who are at risk and especially vendors who are reliant on commercial capital,” he said. “We do see a hesitancy and conservatism start to enter the market with all the uncertainty with COVID-19. Now is the time for the government to take a bold move and stabilize those markets.”
Interagency leaders from the Air Force, Space Force, National Reconnaissance Office, Space Development Agency, Missile Defense Agency and the office of the undersecretary of defense for acquisition and sustainment are expected to hold an emergency meeting next week or the following week to identify all the areas of the space industrial base that need support during the crisis, Roper said
The aerospace industry has been hit particularly hard by the pandemic. More than half of the defense-related companies that have had to shut down operations because of COVID-19 are part of that sector, he noted.
Commercial companies that focus on low-Earth orbit payloads and small satellite launch are part of an emerging market that is vulnerable to disruptions.
“Right now we see investors moving in more of a conservative posture waiting to see what is the government going to do,” Roper said. “We’ve got to send a message loud and clear that innovation is not a COVID-19 victim; that we will keep it immunized from this disease and we will keep it moving so that warfighters now and in the future have the systems that they need.”
Officials are worried that some companies might go out of business. Roper is pushing for more stimulus money from Congress and more funding for Defense Production Act investments to bolster supply chains.
“A lot of our stimulus ideas center around space and ways that we can make sure that that burgeoning ecosystem that was there before COVID-19 is sustained and then reemerges on the other side,” he said.
The Coronavirus Aid, Relief and Economic Security, or CARES, Act provided $2.2 trillion to stimulate the economy and help businesses impacted by the pandemic. That included billions of dollars to help bolster national security-related supply chains. Roper declined to disclose how much additional money he is seeking from Congress for these efforts.
More broadly, the Air Force expects program hiccups stemming from requirements for social distancing, sanitizing and other virus mitigation efforts. Companies affected can receive allowable adjustments to existing contracts so they aren’t penalized, he noted.
“We will have slips across the board,” he said. “What I’m proud of is that nothing has come off the rails.” However, more funding is needed urgently to mitigate the disruptions and help industry.
“Congress has to act now because we can’t wait for these smaller suppliers” to fold, Roper said. “If Congress does [act] and we get funding, we will be able to stabilize our defense industrial base and keep program slippages to the minimum [and] come out the other side of this crisis as an Air Force and Space Force … that are much better postured to complete against China and Russia long term.”