NDIA Conducts Survey to Assess Impact of COVID-19 Crisis on Small Businesses

A survey by the National Defense Industrial Association says small businesses in the defense sector expect the coronavirus pandemic to have the biggest impact on their revenue expectations, access to capital and ability to meet contract obligations.

NDIA said Thursday it surveyed approximately 770 small businesses between late March and April 10 in response to the request of the Department of Defense’s office of acquisition and sustainment and found that companies in the technology and services industries and those with fewer than 50 employees experienced more disruption from the COVID-19 pandemic than firms in the manufacturing sector and those operating with more than 500 personnel.

The NDIA report also showed that 60 percent of respondents have reported a cash-flow disruption as a result of the health crisis and that 67 percent of firms with annual revenue less than $999,999 have seen their cash flow interrupted due to the pandemic.

Companies surveyed have mentioned several reasons behind the cash-flow disruption, including delayed payments from government clients and prime contractors due to telework or shutdown, cuts to billable hours and lack of schedule flexibility or telework options in the contracts.

The trade group also found that 60 percent of respondents said they expect the crisis to experience long-term issues with regard to their cash flow and financial performance.

According to the report, 51 percent of small businesses said a shelter-in-place orders linked to the pandemic has interfered with their ability to perform on a contract.

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