A Bailout for Defense Contractors

A Bailout for Defense Contractors

REUTERS/Matt Sullivan

The Pentagon has announced that it is providing financial assistance to defense contractors who have been hurt by the coronavirus pandemic, Defense One reports.

The Defense Department said this week that it has paid $135 million to five “mid-tier defense companies” as part of an effort to “sustain defense-critical workforce capabilities in body armor, aircraft manufacturing, and shipbuilding.” The money reportedly will be used to retain skilled workers and in some cases to rehire those who have been laid off due to the slowdown in business.

The Pentagon also said that it plans to ask Congress for funds to defray costs for contractors as they address the crisis, including reimbursements for the costs of protective gear and the redesign of factories. The CARES Act allows defense contractors to be reimbursed for coronavirus-related expenses, but Congress has not provided any funds to make those payments.