US Navy Takes Proactive Measures To Address Productivity, Cash Flow, and Worker Safety

THE PENTAGON, WASHINGTON D.C. – In an announcement this week, Under Secretary of Defense for Acquisition and Sustainment Ellen Lord made clear that employees working to construct and repair ships for the US Navy are considered part of the nation’s critical infrastructure employees. As such, and consistent with the President’s guidelines, they are excluded from State and local government “Stay at Home” orders and are allowed to-and-from work.

Reaching out to the major shipyards in a letter this week, Assistant Secretary of the Navy for Research, Development and Acquisition James Geurts asked for a balance between keeping ship construction on schedule and keeping workers safe during the COVID-19 outbreak. “During this time of national response to the COVID-19 pandemic, I would like to emphasize the importance of employee health and safety as well as reemphasize the importance of the ship construction and repair efforts you and your suppliers perform to the national defense. Delivering or redelivering our ships to the fleet is a national need that is unwavering and crucial to our national security,” Geurts wrote.

In an announcement Sunday, March 22nd, the Defense Department stated they would be increasing payment amounts to shipyards concerned about cash flow. Director of Defense Pricing and Contracting, Mr. Kim Herrington issued a memo which stated “the progress payment rate that contracts can get paid for will increase from 80% of cost to 90% for large businesses and from 90% to 95% for small businesses.” The Department is also accelerating payments to prime contracts while directing expedited payments to subcontractors.

Assistant Secretary Geurts has held daily communication with shipyard CEOs since the beginning of the outbreak. These calls have been focused on making the Navy’s objectives clear while emphasizing a concern for the health and well-being of shipyard employees. The leadership of many of the nation’s shipyards have released statements addressing their intention to remain open and working at the fullest capacity possible. These same shipyards are taking steps to improve sanitation throughout the work-site including setting up new hand-washing stations and having additional cleaning crews sanitize surfaces. Some are also adding additional shifts to decrease employee density in specific buildings and aboard vessels.

On Monday, Ameri-Force sent an “essential workers” letter to all employees, asking them to carry a copy with them as they commute in the event they are stopped by local law enforcement for violating any potential stay-home orders or other temporary restrictions.

As the situation changes day-to-day, continued communication among our employees and customers is imperative. We will continue to post updates to our website and social media profiles. Ameri-Force’s top concern is for the health and safety of our team members. We understand that the work we do is critical to national security and are committed to keeping our team working in a safe and effective manner.

John Glover is the President of Ameri-Force and serves on its Board of Directors. John holds an MBA from Harvard Business School and a BSE in Mechanical Engineering from Duke University.

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