The NATO Support and Procurement Agency (NSPA) on March 31 said that it has awarded $17.2 million contracts each under the Alliance Future Surveillance and Control (AFSC) initiative to consortia led by Boeing [BA] and  Airbus/Northrop Grumman [NOC] and to General Atomics for risk reduction and feasibility studies for the replacement of the Boeing E-3 Airborne Warning and Control System (AWACS).

NATO’s fleet of 14 AWACS planes based in Geilenkirchen, Germany is to retire by 2035. U.S. Air Force (USAF) leaders have said that the Boeing E-7 Wedgetail is the leading contender for the follow-on Air Force airborne early warning aircraft, and the service plans to award an AWACS replacement contract in fiscal 2023 (Defense Daily, Feb. 9). Australia, the Republic of Korea, and Turkey use the E-7, Boeing said.

NATO launched AFSC at the Warsaw summit in 2016 to study a follow-on to AWACS, which has served NATO since 1985. NSPA said on March 30 that it “is evaluating new technologies and exploring a system of systems approach, including potential combinations of air, ground, maritime, and space systems working together to collect and share information.”

“All 30 NATO Allies currently cooperate in the planning and resourcing of this program,” the agency said on March 30.

NSPA and Boeing did not answer why the new risk reduction and feasibility study awards do not represent potential conflicts of interest, given that the three companies are likely bidders for the AWACS replacement.

But Brian Humphreys, a Northrop Grumman spokesman, responded “not at all” when asked whether the risk reduction and feasibility study contracts are conflicts of interest.

“It is our understanding that the NATO AFSC studies, and their resulting findings, need to be based on a thorough understanding of all elements of airborne surveillance and C2,” he wrote in a March 31 email.  “As such, current aircraft and C4ISR system providers are well placed to offer experience-based information, options and guidance. NATO would then review this study, and the other studies in this program, before making their final determinations of requirements.”

One defense analyst said that the study contracts are “problematic.”

“There is nothing new about contractors being asked to provide studies about the replacement for an existing capability,” Dan Grazier, the Jack Shanahan military fellow at POGO’s Center for Defense Information and a retired U.S. Marine captain, wrote in a March 31 email. “It is problematic, as it gives the participants a significant leg up once the requirements are finalized and a request for proposal is sent out. There is an obvious conflict of interest in the practice because there is a large incentive for these companies to generate a report saying that the capability gap can only be filled by their system.”

Grazier wrote that “the better way to go about this process is for the government to have its own experts draw up a list of requirements for identified capability gap and then send that list out to industry in the form of a request for proposal.”

“None of the companies should be allowed to gain an advantage by getting a glimpse of the requirements in advance, and ideally the government would not already have a preferred design identified,” per Grazier. “That way, the government might actually be surprised by the innovation from industry. There are two solid examples of that. In both the Lightweight Fighter and A-X programs that produced the F-16 and A-10 respectively, the government representatives were surprised by the designs that made it to the prototype phase. In both cases, the evaluators thought they knew which delivered design was better, but they ended up changing their minds as the two designs were put through their paces.”

NSPA said that it launched the competition for the AWACS replacement’s risk reduction and feasibility studies last July “to develop and analyze the feasibility of three promising concepts identified during the initial high-level concept studies.” NSPA said that 65 companies were nominated to bid and that the agency received seven bids.

NSPA said that the two consortia and General Dynamics will “develop and detail a realistic technical concept and analyse its feasibility and risks for implementation.”

“A wide team of NATO and national experts will further assess these three technical concepts to support the selection of a final technical concept,” per NSPA. “This will guide collective, multinational and national capability development efforts by the Allies, based on potential capability gaps to be identified after the completion of the studies.”

The studies are to include technical architectures, system specifications, life cost estimates, and intellectual property rights analysis.

Cagatay Soyer, the program manager of NSPA’s AFSC effort, said in a statement that the teams are to analyze “a wide range of requirements and propose innovative solutions.”

Boeing’s ABILITI consortium includes Thales, Leonardo, Inmarsat, Lufthansa Technik, Germany’s ESG, Spain’s Indra, and the United Kingdom’s Mott MacDonald.

The Airbus and Northrop Grumman ASPAARO Consortium includes Lockheed Martin [LMT], BAE Systems, IBM [IBM], Kongsberg Defence and Aerospace, Canada’s MDA Systems, Spain’s GMV Aerospace, and Poland’s Exence S.A.
General Atomics’ subcontractors include Raytheon Technologies [RTX], Leidos [LDOS], Viasat Inc. [VSAT], Leonardo, Germany’s Rohde & Schwarz, Saab Sensis, and Spain’s Sener Aerospatiale.
“I expect the studies will revolve around customization and updating of the E-7 to meet USAF requirements, and what’s needed for NATO allies too,” Richard Aboulafia, the managing director of Michigan-based AeroDynamic Advisory, wrote in a March 31 email.
The NATO approach for an AWACS replacement may be akin to that of the U.S. Navy for the P-3C Orion. The Navy is buying the Northrop Grumman MQ-4C Triton drone to complement the Boeing P-8A Poseidon, which is to conduct long-range anti-submarine warfare; anti-surface warfare; and intelligence, surveillance and reconnaissance (ISR) missions.
While Navy plans called for a buy of 67 Tritons a decade ago, the Navy has fielded just two (Defense Daily, Feb. 2). The latter are in the Pacific with the 7th Fleet.