Pentagon to Modify Hundreds of Contracts for COVID-19 Response

USNS Mercy enters the Port of Los Angeles on March 27.

USNS Mercy enters the Port of Los Angeles on March 27. Mark J. Terrill/AP

The Defense Department is ramping up the purchase of certain items, including ventilators, in response to the COVID-19 outbreak.

The Defense Department modified an existing government contract to purchase 8,000 ventilators from four vendors worth as much $84 million, with an initial shipment of 1,400 of the increasingly important ventilators due for delivery by early May.

The announcement to purchase ventilators—already in need in COVID-19 hot spots like New York and Louisiana— for the Federal Emergency Management Agency to distribute was one of several major partnership efforts with the defense industrial base the Pentagon touted over the weekend. In total, the Defense Department “has processed several hundred contracts and orders related to COVID activities, including everything ranging from transportation, communication to medical supplies,” according to Department of Defense spokesperson Lt Col Mike Andrews.

"The Department continues to aggressively partner with the defense industry to mitigate impacts from the COVID-19 national emergency,” Andrews added.

In addition, the Defense Logistics Agency has purchased $2 million worth of pharmaceuticals and medical supplies, nearly 1 million gallons of fuel and food and repair components for the USNS Comfort and USNS Mercy hospital ships that will assist New York City and Los Angeles.

Andrews said the Defense Threat Reduction Agency helped deliver 3 million COVID-19 test kit swabs nationwide and will continue working with U.S. Transportation Command to support future deliveries.

On the procurement front, the Defense Contracting Management Agency announced plans to implement a mass modification on 1,500 contracts to raise limits on progress payments to 90% for large businesses and to 95% to small businesses.

“This will provide immediate cash flow to industry, especially small businesses in the supply chain, once incorporated into the contract,” Andrews said. “The department has a high expectation level that prime companies are also ensuring cash flow is moving to small businesses in their respective supply chains.”

During the COVID-19 outbreak, the Defense Department’s Joint Acquisition Task Force will partner with FEMA’s National Coordination Center to develop capacity, address areas of fragility within the defense industrial base and communicate demand for medical products to industry. Thus far, Andrews said the Defense Department “has not executed” any efforts under the Defense Production Act executive order President Trump issued March 18.

“Two weeks of discussion set in motion all these actions, all this cooperation,” said Hawk Carlisle, president of the National Defense Industrial Association, in a statement. “This steadies our defense industrial base in this difficult time and gives these companies the resources and ability to keep going, as well as answer needs for this emergency. It’s inspiring.”

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