Sequester Start. If so called sequestration budget cuts–of $500 billion to planned Pentagon spending over the next decade–kick in starting next January, existing contracts funded with obligated FY ’12 monies would not be impacted, Pentagon spokesman George Little says July 17. However, all funding for FY ’13, which starts in October of this year, would fall under the sequestration cuts even though they would not start until Jan. 2, 2013, he tells reporters at the Pentagon. “FY ’13 dollars would be affected by sequestration, period,” he says. That includes FY ’13 monies put on contract between Oct. 1 of this year and next Jan. 1, he says. Asked if the Pentagon is considering holding off on contracts from October to January, Little says: “We are, obviously, assessing the potential impacts of sequestration. We are not planning for sequestration…But, clearly, we do need to take a look at contracts and take that into account, should sequestration go into effect.”
Lieberman’s Take. Sen. Joseph Lieberman (I/D-Conn.) says he thinks the odds are “overwhelming” that Congress will prevent the politically unpopular sequestration cuts from being made, but adds it is “not impossible” that those reductions in both defense and non-defense spending of $1.2 trillion will go through. A senior SASC member, Lieberman predicts that Democrats and Republicans will either reach a deal to replace the sequestration cuts with other government budget reductions or at least agree to delay the decade-long cuts from starting next January. Speaking at a July 18 event sponsored by TechAmerica, a technology industry trade group in Washington, Lieberman laments that Congress is good at “inaction and disagreement;” he thus says he sees a chance that the sequestration cuts will go through. SASC member Sen. Kelly Ayotte (R-N.H.) has called for crafting a plan to replace the first year of sequestration cuts with other government savings. She appeared with Lieberman at the TechAmerica event dubbed “Defense Sequestration and U.S. National Security: A War Fighter’s Perspective.”
Lockheed Lowdown. Lockheed Martin officials send a July 18 letter to all U.S. employees saying a “substantial number” of them could receive “conditional” warnings of layoffs “later in the third quarter” of this year because of the potential sequestration cuts. Chairman and CEO Bob Stevens and President and Vice Chairman Chris Kubasik say they estimate roughly 10,000 Lockheed Martin jobs could be lost if Congress does not craft an alternate plan to sequestration. They note the federal Worker Adjustment and Retraining Notification (WARN) Act requires the company to provide 60 days’ notice of layoffs, and New York law requires 90 days’ warning. “As we continue our analysis, we see that these laws could result in the need to issue conditional WARN notices to a substantial number of our employees, starting late in the third quarter,” they write. Yet the executives caution that with “little guidance from the government on the specifics of sequestration, it is difficult to determine the impact of these cuts on our employees, programs and suppliers.”
Peoples’ Defense. Most people questioned in parts of the country dominated by both Democrats and Republicans support significant cuts to the Pentagon budget, according to a survey conducted by the Program for Public Consultation in collaboration with the Stimson Center public-policy institute and the Center for Public Integrity nonprofit journalism organization. For the survey, 665 Americans were told about the FY ’12 defense budget and then told arguments for and against reducing spending in FY ’13. Survey results show 74 percent of respondents in districts represented by Republicans and 80 percent in Democrats’ districts favor cuts to the FY ’13 budget. Further, most respondents in districts with high levels of defense spending do not object to defense cuts, the three organizations say. “Three quarters of respondents in the top 10 percent of beneficiary districts favored reductions, and their average (proposed) cut slightly exceeded that of the full sample,” they say in a July 16 press release. “Overall, there was no statistical correlation between the level of defense spending in a district and the level of support for defense cuts.”
Financial Advice. The investment banking firm Houlihan Lokey says it acted as the financial adviser to healthcare information technology company maxIT on its pending acquisition by SAIC that was announced last week. SAIC is paying $473 million for maxIT, which is a portfolio company of the private equity firm Riordan, Lewis & Haden Equity Partners. Houlihan Lokey says the pending deal is “indicative of the strong pace of M&A activity in the healthcare IT sector, with more than 70 transactions announced in the two quarters of 2012. In addition, this deal highlights the theme of diversification within the defense and government services market space.”
Open Source, Government Backing. The Department of Homeland Security last week announced the validation and availability of an open source cryptographic software tool for securing information shared across the Internet. The Department of Homeland Security and the Defense Advanced Research Projects Agency and the private sector contributed funds to the latest iteration the Open Secure Socket Layer, which is a free, publicly available security software that meets federal security guidelines. The National Institute of Standards and Technology validated the Open SSL version 2.0 using the Federal Information Processing Standards. In addition to having key government backing, the security software has been formally tested on a wide range of processors and operating systems.
Truman. The USS Harry S Truman (CVN-75) completes a docking availability after first entering dry dock more than 15 months ago. The Nimitz-class (CVN-68) carrier underwent the maintenance as part of the ship’s design for a 50-year service life. The availability was completed July 15. The work at the Norfolk Naval Shipyard in Virginia included extensive overhaul of the hull, tanks, seawater systems, and propulsion shafting as well as complex replacements of reactor control systems and the main combat system mast, the Navy says. Following undocking in late January 2012, Truman spent six months pier side completing production work and an in-depth equipment testing and crew certification phase. “The entire shipyard family is proud to have returned such a vital asset to the fleet. Our goal, as always, is to deliver world-wide first-time quality material readiness to the ships of the United States Navy and to the men and women who serve on them,” says Capt. Mark Bridenstine, the shipyard commander. Once the availability is complete, Truman will begin preparations for its sixth full deployment since being commissioned in 1998, the Navy says.
Iraqi vessel. The Navy accepts delivery last week of an offshore support vessel, one of two the service is procuring on behalf of the Iraqis. The future al-Basrah (OSV-401) was handed over to the Navy by contractor RiverHawk Fast Sea Frames of Tampa, Fla., on July 16. The new vessel will conduct maritime security operations in the northern Persian Gulf alongside previously delivered Iraqi Navy patrol boats. “This delivery highlights the strong relationship between the U.S. and Iraqi navies,” says Frank McCarthey, program manager for Support Ships, Boats and Craft at Program Executive Office (PEO), Ships. “We look forward to officially transferring custody of OSV 401 to the Iraqi Navy to aid in its mission of providing maritime security later this year.” The multi-function vessel is designed to supply a wide range of missions, including support of oil production platforms and command and control requirements for securing the platforms.
Green fleet. The Naval Sea Systems Command continues testing and evaluation of five technologies meant to improve efficiency and reduce energy consumption of Navy ships during the two-day Great Green Fleet demonstration that ended Thursday. The goal is to further the Navy’s pursuit of a domestically produced alternative to foreign oil in increase energy security, a mission championed by Navy Secretary Ray Mabus. Parts of Mabus’ initiative, such as the promotion of bio-fuels, however, have been subjected to criticism from congressional lawmakers who charge the alternative fuel is too expensive and believe energy development should not be a priority for the Navy. Among the demonstrated technologies were Shipboard Energy Dashboard to provide real-time situational awareness of the energy demand and consumption, a tool for optimizing route planning to save fuel, an online water wash system to allow compressors to be washed while the engine remains running, energy efficient lighting, and a stern flap to reduce drag.
New Trade Assn. Leader. Sandy Wilson, president and managing director of General Dynamics UK, is the newly elected as chair of the Defense and Security Board of Intellect, a trade association representing companies in the U.K. technology sector. The Defense and Security Board is Intellect’s most-senior industry grouping in the defense and security sector. It comprises 15 senior representatives from companies active in the U.K.’s defense and national security markets, and oversees Intellect’s other Defense and Security councils and groups. “As off-the-shelf solutions become more important to our armed and security forces, the ability of companies of all sizes and from a diversity of sectors to integrate their solutions for nationally important projects is paramount,” Wilson says. “Intellect is in the unique position of being able to help this happen, and I look forward to leading that activity on behalf of the UK’s defense and security sectors.”
Gimme Shelter. General Dynamics’ Armament and Technical Products unit will produce more than 25 Army Standard Family (ASF) expandable mobile shelters under a $6.1 million delivery order. They are used as command centers, kitchens, maintenance shops and medical facilities. The shelters are constructed of aluminum-faced, nonmetallic honeycomb-sandwich panels and can include features for power and signal distribution, environmental control units and lighting. ASF shelters meet the International Organization for Standardization’s (ISO) cargo container specification and are easily transportable by truck, helicopter, cargo aircraft, sea and rail. The shelters will be delivered in 2013 as part of a multi-year contract awarded to General Dynamics in December 2010. This delivery order increases the total contract value to-date to $26 million. Production work will start immediately at the General Dynamics facility in Marion, Va.
Now 500 Black Hawks. Sikorsky and the Army celebrate the delivery of the 500th H-60M Black Hawk helicopter of a planned 1,375. The Army now has 400 UH-60M utility helicopters and 100 HH-60M medical evacuation helicopters. The Army sold 73 of the UH-60M utility helicopters to six foreign armies under FMS. Sikorsky delivered the first production UH-60M in December 2007. The first production medical evacuation helicopter came a year later. “I speak for more than 17,000 Sikorsky employees–many of us service veterans–when I say we are truly honored to build a modern combat-proven helicopter that men and women in uniform around the world can count on to perform their critical multi-role missions,” says Sikorsky President Mick Maurer. Col. Thomas Todd, Army’s Utility Helicopters project manager, says: “The UH-60M and HH-60M Black Hawk helicopters are performing extremely well in theater, and I receive positive comments from our combat commanders.”