Navy Contract Spending: 30% Increase Despite COVID-19

For many across the country, across the world for that matter, the effects of COVID-19 have had a significant impact on everyday businesses. For most, this impact is negative, costing tens of millions of Americans their jobs and forcing small businesses to hang on for dear life. Within Federal contracting, contractors have had the fortunate of performing the needs required by the country maintain the status quo in the ability to perform daily task, showing improved results from previous years.

Even with trillions of dollars being allocated for stimulus and small business relief, the Navy reported a 30% increase in contract spending as compared to last years figures. As of Tuesday, April 28, 2020, the Department of the Navy obligated $96.9 billion towards contracts in April, compared to $74.7 billion in April of 2019, even though more than 95% of its contracting workforce is working remotely. During the same month, those acquisition professionals also increased their use of distance learning for ongoing workforce development by more than 65%.

This increase is undoubtedly a result of the Navy’s efforts to combat this virus, spending more dollars-on-contract to ensure our country’s safety and supply chain efficiency. The increase also shows that the Navy has seen research and development efforts, as well as acquisition efficiencies pay off. “I’m seeing some remarkable efficiencies,” said James Geurts, the assistant secretary of the Navy for research, development and acquisition, on a conference call Tuesday. “I think a lot of that is getting rid of layers of bureaucracy that weren’t needed. Some of it is also creating better partnerships with industry so that we can leverage cost and pricing data we already have, and we don’t have to send out an RFP and get a proposal back just to confirm that data. And some of it is just a continued sense of urgency and mission focus.”

The Navy’s efforts, along with the contractors who continue to fulfill critical contract obligations, are paying off in fighting this unprecedented virus. It is encouraging that we are seeing an increase in spending, especially since it illuminates improvements in reaction time and efficiency, areas that are integral in keeping our country safe.

Author: Paul McVeigh