The Latest Word On Trends And Developments In Aerospace And Defense
Transition Testing. The Pentagon must do a better job during the current “inflection point” in defense spending than it did during the previous four periods of this type following World War II, Deputy Defense Secretary William Lynn tells the World Affairs Council of Northern Virginia on Oct. 6. The other four transitions occurred at the end of World War II, the Korean War, and Vietnam War, and then again in the late 1980s, he says. After each period the Pentagon “suffered a disproportionate loss of war-fighting capabilities,” he says, adding: “In different ways, the (Defense) Department managed each transition badly.” This current and fifth inflection point will be different, he argues, if the Pentagon heeds three lessons: making hard decisions early about budget cuts, eliminating “low-priority” activities and organizations (such as U.S. Joint Forces Command), and approaching “the defense enterprise in a balanced way” by avoiding major cuts to one area of the budget. Defense Secretary Robert Gates’ efficiency drive, to free up $100 billion in the defense budget over five years, will help manage the fiscal pressure the nation is under without disrupting the military’s capabilities, Lynn maintains.
Defending Defense. Three conservative think tanks are pushing back at efforts in Congress, by Democrats and Republicans alike, to trim defense spending. “A weaker, cheaper military will not solve our financial woes. It will, however, make the world a more dangerous place, and it will impoverish our future,” states an op-ed in the Oct. 4 Wall Street Journal by Arthur Brooks, president of the American Enterprise Institute, Edwin Feulner, president of the Heritage Foundation, and William Kristol, director of the Foreign Policy Initiative. Standing ready to fight this argument is the Sustainable Defense Task Force, which was created by Rep. Barney Frank (D-Mass.) and is calling for trimming the Pentagon’s budget by $960 billion over the next decade.
Intel Action. The Intelligence Authorization Act for Fiscal Year 2010 President Barack Obama signed into law on Oct. 7 is the first intelligence policy-setting act enacted in nearly six years. The new law is intended to allow more lawmakers to be briefed in a general sense on covert intelligence operations. The measure contains a series of acquisition reform measures, including: requiring the director of national intelligence (DNI) conduct vulnerability assessments of major systems and supply items in the National Intelligence Program; mandating the DNI cancel or recertify to Congress the need for keeping major systems that breach cost-growth thresholds, and then to rebaseline the costs of programs that are not terminated; and requiring major systems’ program managers to submit quarterly cost reports to the DNI during the acquisition process. The law also calls on the DNI to give Congress budget projections for the following 10 years, which would include near-term projections for major acquisition systems’ costs and milestones, as well as affordability reports for major systems.
Goodbye, Mr. Jones. Key lawmakers and administration officials are praising Jim Jones following the Oct. 8 announcement that he is retiring as President Obama’s national security adviser. “Jim has always been a steady voice in Situation Room sessions, daily briefings, and with meetings with foreign leaders, while also representing our country abroad with allies and partners in every region of the world,” Obama says about Jones, a former Marine Corps commandant and Supreme Allied Commander in Europe. “At the same time, he has led an unprecedented reform of our national security staff here at the White House. Reflecting the new challenges of our time, he put new emphasis on cyber security, development and climate change, and made sure that homeland security is fully integrated into our efforts.” SASC Chairman Carl Levin (D-Mich.) says as national security adviser Jones’ “demonstrated intelligence and willingness to say what he thinks have served the nation well.”
Lowered Margin Forecast. New Defense Department efficiency initiatives will ultimately lower the profit margins of defense contractors–particularly in the area of full- rate production contracts where firms traditionally have enjoyed strong margins as mature processes reduce risk–due to coming changes in the way contracts are structured, says J.P. Morgan defense analyst Joseph Nadol. He sees two implications for margins from the procurement reform initiatives. First is making use of fixed-price contracts earlier in production than currently, with Lockheed Martin’s new F-35 Joint Strike Fighter contract indicative of this change. “Second, and just as importantly, we believe DoD is becoming less willing to pay high margins for the low-risk, fixed price work on mature production programs that have long been the lucrative reward for defense companies after what is often a difficult technology invention period and industrial ramp-up,” he says in a note to clients.
…Unclear How Bad it Will Be. Nadol says that it’s still not clear how extensive the upcoming contract changes will be. “The Pentagon oversees thousands of programs, and if only the top 10 percent or 20 percent are impacted, the implications for industry would be far different than if this were successfully driven through the entire portfolio of programs,” he says. Moreover, he adds, given the size of the DoD bureaucracy and the relatively short stays of the civilian political leadership, “substantial change” is hard to make stick. He also notes that DoD officials are not targeting margins, just trying to make “procurement practices” more efficient. “We believe these practices will ultimately have the impact that we are now forecasting, but some senior officials disagree both publicly and privately.
Minuteman Upgrades. Lockheed Martin has received a $106 million engineering, manufacturing and development contract from Northrop Grumman to develop the next-generation Reentry Field Support Equipment (RFSE) for the Air Force’s Minuteman III ICBM system. Under the 58-month contract awarded over the summer, Lockheed Martin will design, develop, test and deliver two sets of RFSE. Production of an additional 10 RFSE sets for deployment to all operational Air Force Minuteman III wings will be performed under a follow-on contract. The RFSE will replace the aging Minuteman III Reentry System Test Set (RSTS). Lockheed Martin will continue to sustain the RSTS, for which it is the original equipment manufacturer, until deployment of the replacement RFSE. Lockheed Martin is a subcontractor to Northrop Grumman, the ICBM prime integration contractor. Lockheed Martin has been the principal designer, manufacturer and sustainer of the Minuteman reentry systems since the 1960s.
Japan Hawkeye Radars. Lockheed Martin was recently awarded a $9.6 million commercial contract by Japanese trading company Mitsui Bussan Aerospace to provide AN/APS-145 Airborne Early Warning (AEW) Radar spares for Japan. The delivery of these radar spares allows the Japanese Air Self Defense Force to maintain its E-2C Hawkeye aircraft fleet in the highest state of operational readiness, according to Lockheed Martin. The APS-145 AEW radar is a high-power UHF Doppler radar that uses a rotating antenna within a circular radome to simultaneously detect and track multiple threats on the sea, in the air, over land and the land-sea interface. It can monitor and track more than 20,000 targets simultaneously and is in use by the U.S. Navy, U.S. Customs Service, Japan, Egypt, Taiwan, France and Singapore.
Smarter Bots. iRobot receives a $14 million order from the Army TACOM Contracting Center in Warren, Mich. The order calls for delivery of iRobot Aware(R) 2 robot intelligence software and spare parts for iRobot PackBot tactical mobile robots. This order will allow the Army to upgrade its existing iRobot 510 FasTac fleet to the iRobot 510 PackBot multi- mission robot. This is the 20th order under the $286 million Indefinite Delivery/Indefinite Quantity (IDIQ) xBot contract. The current total contract value now stands at approximately $143 million. The iRobot 510 PackBot multi-mission robot performs bomb disposal and other dangerous missions for warfighters and is being used in Iraq and Afghanistan. Powered by iRobot Aware(R) 2 robot intelligence software, 510 PackBot is a highly adaptable robot. The robot’s modular digital architecture accommodates a wide variety of interchangeable payloads that enable a wide variety of missions.
New HET. Oshkosh Defense receives its first production order for the newest configuration of the Heavy Equipment Transporter (HET) from the Army. This delivery order is for more than 1,000 vehicles and is valued at nearly $440 million. The Oshkoshr HET A1 features design improvements to provide a more powerful vehicle fleet. It is a part of the Army’s Family of Heavy Tactical Vehicles (FHTV) that Oshkosh produces. “The production of the HET A1 marks the completion of a series of enhancements made to the Army’s heavy fleet,” says Mike Ivy, vice president and general manager of Army Programs for Oshkosh Defense. “By listening to our customer’s needs, Oshkosh engineers integrated new technologies in the upgraded HEMTT A4, PLS A1 and now the HET A1 that improve their operational capabilities and survivability.” Production will take place in Oshkosh, and be completed in June 2012.
First Timer. The 63-year old family run U.K. firm Dytechna is exhibiting for the first time at the 2010 AUSA Annual Meeting Oct. 25-27, in Washington, D.C.’s Convention Center. The last five-years have seen Dytecna grow from a two-site 100 employee company, to 450 people over six locations. The company plans to expand its offerings in the United States. The question defense-oriented companies now face is what’s next. Dytechna Managing Director John Fulford says: “The answer is to provide engineering solutions in support of Land, Sea and Air and offering products including HUMS, Blast and Ballistic Protection, Aviation Ground Power, Platform Integration (ECM/Communications) and Vehicle Power Distribution, this is our core business.”
NATO Transforming. There are three main areas the new NATO Strategic Concept will address, the Secretary General says in a speech Friday. First, it must modernize defense and deterrence. The alliance must also transform crisis management. “No other organization can marshal, deploy and sustain NATO’s military power” in aid of 21st century crisis management, Anders Fogh Rasmussen says in a speech at the German Marshall Fun of the United States in Brussels. Finally, NATO must transform to engaging with the wider world to build cooperative security. “In a nutshell, the Alliance must develop deeper, wider political and practical partnerships with countries around the globe,” Rasmussen says.
Joint Exercise. Capital Shield 2011 will take place Oct 13-15 in the National Capital Region. The interagency emergency management exercise will be conducted at Ft. McNair, D.C., and Lorton, Va. It is an opportunity to show the Joint Force Headquarters-National Capital Region’s (JFHQ-NCR) unique capabilities and how it works jointly with its partners as a collaborative team in a contingency environment, across a full spectrum of assigned missions, the command says in a statement. The goal is to ensure the command is trained and prepared to provide Defense Support to Civil Authorities (DSCA) while maintaining the serenity and integrity of Military Reservations through the employment of Force Protection measures, the statement says.
Nobel Effort. The Office of Naval Research (ONR) says a grantee has been awarded the 2010 Nobel Prize in physics for research into the properties of a two-dimensional material that could one day replace computer chips. Professor Andre Geim, whose work is currently funded by ONR, and colleague, Professor Kostya Novoselov, both of the University of Manchester, England, were recognized Oct 5. for their contribution to graphene, the first truly two-dimensional material consisting of a single atomic, layer-thick carbon crystal. “It is an honor for Navy science and technology to be associated with Nobel-caliber scientists,” said Chief of Naval Research Rear Adm. Nevin Carr. “This underscores the quality of our scientists and also ONR’s deep commitment to encouraging innovation and accepting risks in basic and applied research that will one day pay off for Sailors and Marines.” ONR started supporting Geim’s work in 2007 under the Naval International Cooperative Program, which is jointly administered by ONR headquarters and the Navy’s international scientific brain trust, ONR Global, said Chagaan Baatar, ONR program officer for nanoelectronics.