Air Force says space industry needs stimulus as economy fails

For the past two years, the Air Force’s acquisition chief has been spending resources and trying new avenues to build up the service’s industrial base with innovative startups and nontraditional defense businesses, but the economic slump caused by coronavirus may unravel some of that hard work.

The aerospace and space industries are taking a hit from the coronavirus and the Air Force is scrambling to keep one of its most traditional industry sectors and one of its most important growing economies — aerospace and space, respectively — afloat, Will Roper, acquisition, technology and logistics undersecretary, said Thursday in a teleconference with reporters.

“Aerospace is certainly being hit disproportionately because many suppliers work for both defense as well as commercial and commercial cash streams have dried up nearly completely in some cases,” Roper said. “Space is also vulnerable right now because it’s an emerging market in terms of low earth orbit payloads, small launch. Right now we see investors moving in more of a conservative posture and waiting to see what the government is going to do.”

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Roper advocated for stimulus funding, especially for the space industry. He stated many of the Air Force’s ideas around stimulus funding were in the space sphere.

“We’ve got to send a message loud and clear that innovation is not a COVID-19 victim,” Roper said. “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 they need.”

Roper said he’s meeting with Congress as often a two times a week to discuss the state of the industrial base and is reiterating to them that small suppliers need assistance.

Congress already passed the CARES Act, which invests billions in propping up the defense industry; however, Roper said more needs to be done.

In a March 23 letter to President Donald Trump, International Association of Machinists and Aerospace Workers President Robert Martinez Jr. said 500,000 aerospace production jobs could be in jeopardy due to the coronavirus outbreak. At the time of the letter, the industry had already laid off 13,000 employees.

“This unprecedented number of layoffs continues to grow every day as companies shut down due to government restrictions and an inability for companies to ensure a safe work environment,” Martinez wrote.

The Defense Department already increased progress payments to give companies more liquidity.

Meanwhile, Roper is trying to help small and nontraditional businesses in less rigid markets thrive under the need for innovative answers to the coronavirus.

The Air Force is continuing with contracts to inject money into primes so that money will make it down to smaller subcontractors, Roper said.

The service is also engaging with smaller businesses directly.

At the beginning of the COVID-19 outbreak, the Air Force pushed forward with a virtual event that awarded nearly $1 billion to 599 small business contracts.

“What we will do is ensure those companies do not have a lapse in their progress payments if we need to extend their contract or award a follow-on contract,” Roper said.

Roper is also putting $350 million in its innovation hub, AFWERKS, to battle the virus.

“We led a commercial solutions offering,” Roper said. “It’s just an open door to anyone. You don’t have to be a small business, but you need to have something that is commercially available. We had over 1,000 submissions. Our strategy is we have to find ways to create new supply chains for things like protective gear and medical devices that are down at the small tier level.”

Roper said he wants to find companies that are not building masks or ventilators, but have the ability, in order to create new supply chains.