The Navy’s acquisition community is trying to “leverage the condition we’re in, not be a victim of it,” with the service’s top buyer saying he’s confident his workforce can take unexpected lessons learned adjusting to the COVID-19 pandemic and actually be more efficient in the long term.
Assistant Secretary of the Navy for Research, Development and Acquisition James Geurts said the Navy this fiscal year has already awarded $88.52 billion in acquisition contracts, compared to $66.3 billion at the same time last year – a 32-percent acceleration in awarding work, and with 5 percent fewer contracting actions. He said this is also happening while more than 95 percent of his staff is teleworking. On the research side of the portfolio, the Office of Naval Research (ONR) has obligated $1.5 billion in work compared to the planned $1.029 billion at this point in the year.
The reason for rushing to get so much work on contract is to get as big a backlog as possible in place for not just prime contractors but for suppliers of all sizes around the country – so that as the coronavirus hits different geographies at different times, any companies affected by the disease will have plenty of work to come back to when the workforce is able to continue working. Geurts first told reporters about this effort last month, saying the last thing he wanted was a company with healthy workers and no work on contract to perform.
Though the reason for speeding up contract awards is for the defense industrial base, Geurts told reporters today that “we’ve got to manage our way through delay and disruption, but really focus on steepening the recovery and reinvention phase to get us to the place we need to be. … I think there are ways we can come out of this in a much more resilient, much higher efficiency manner than where we were. We were doing some great things previously, but it’s hard to change bureaucracy and institutional ways of doing business. The team has really adapted quickly, we need to capture that and make sure this disruption doesn’t go to waste.”
Getting “back to normal” isn’t his goal anymore, he said; rather, he believes the workforce can “get us to a future end state where we are in a better position than we were pre-crisis.”
For example, Geurts said, the Navy may have lost out on accessing a lot of talented workers in the past because those people were not willing to move for a new job to work out of the Pentagon, Washington Navy Yard, or other locations. The Navy did not trust the available teleworking options, and so those potential employees went unhired. Now, with teleworking proving to be as efficient or even more so, Geurts suggested that the service could tap into even larger talent pools going forward if it were willing to continue telework practices even once the pandemic passes.
Additionally, he said, the Navy is being forced to rely on remote training, remote technology assistance and remove installation assistance options right now, where typically the service would choose to fly a team of experts from a center of excellence to the location of need in the fleet. Travel restrictions “caused us to reinvent to a large degree how we do some of that and recreate resiliency and self-sufficiency at the ship level and at the individual base level and at, quite frankly, the individual level, the person level.”
The Navy has already begun researching and testing tele-maintenance options and other related efforts, but the pandemic and the related work and travel restrictions may be a forcing function to embrace those technologies faster and more wide-spread than a big institution may have been inclined to do.
Though the next crisis might look different than today’s novel virus, Geurts said there will always be a next crisis ahead.
“Our sight picture cannot be the way we used to operate, which had a lot of fragility and brittleness to it, as we’re seeing right now. It’s got to drive to the way we need to operate in the future, which has to have resiliency for whatever disruption might come up,” he said.
Another key area where the Navy is trying to take advantage of the current situation is on aviation parts and maintenance. Commercial aviation is in sharp decline, and Geurts said it’s to the Navy’s and industry’s benefit to find a way to accelerate some work.
“Working, for instance, with Boeing: are there 737 parts available now, or repair capacity available now, that could help us in P-8s? Are there things in General Electric in the engine or Pratt & Whitney in the engine world where, since their commercial demand is way down, can we absorb some of that capacity, give them steady work, and then allow them to be in a better spot as commercial aviation comes back while also getting us in a better spot from a readiness perspective?”
Geurts said the Navy is early in the process of identifying some opportunities with industry and that all programs – both in aviation and in ship parts and repair – were eyeing their portfolios for opportunities to take advantage of.
“Everything I’m trying to do here in accelerating work, coming up with new business approaches is to create stability, a stable demand signal. I think one of our keys to steepen that recovery and reinvention ramp is going to be having steady work there as fast as we can. This is not about just putting money in people’s hands faster. This is about getting the worked queued up and available so that as the base can do more work; we need to make sure we have steady work lined up,” he said.
Where money has already been appropriated for programs in the current Fiscal Year 2020 budget, Geurts said the program offices are just awarding contracts early where possible. In other cases where money isn’t programmed but opportunities exist to get ahead and keep industry stable, the Navy is either seeking creative business models or procurement methods or will be in talks with the administration as future stimulus packages are put together, pitching these ideas as ways to keep workers working while also increasing military readiness.
On the research side of the portfolio, Geurts acknowledged that some work – particularly that done in academia, where universities are closed and student and faculty researchers dispersed – will fall behind schedule. The Navy has about 2,000 performers of basic and early research, and ONR is reaching out to each individually and “understanding their ability to get the work done, any modifications they have to make, anything we need to do on our end to try to accommodate that. We’re about 50 percent through that, we hope to finish that here in the next week or so. And so what I would say is, the performance on the grants and contracts are proceeding reasonably well; generally, those who don’t have access to labs or facilities are working on analyzing data, writing reports, doing test planning and whatnot. There are some that do have to modify their work plan, and for those we’re working with them to give them no-cost extensions so that they’re not penalized due to this disruption.”
“On the flip side, we’re also understanding where there’s opportunity to accelerate work. And maybe if there’s a performer doing [Small Business Innovation Research] work and they’re ready to move and we can double down on that work, we’ll look to accelerate things. So I think we’re looking for opportunities wherever they are – not necessarily just managing downside risk, we’re also taking advantage of upside opportunity.”