Long-Term Transformation. Lockheed Martin is undergoing a “multi-billion dollar, seven-year, company-wide” effort to transform its business to help fuel its 21st Century Warfighting concept, James Taiclet, the company’s chairman, president and CEO, said last week. The strategy, which Taiclet outlined shortly after becoming chief executive in June 2020, said the “One LM Transformation,” also called One LMX, is a “key driver” of the strategy and will change its “end-to-end business processes and systems,” he said during an Oct. 18 earnings call. “One LMX will create a model-based enterprise with a fully integrated digital thread throughout the design, build and sustain product lifecycle,” Taiclet said.
…More Lockheed News. Taiclet also said the company’s long-term growth and 21st Century Warfighting strategy will be aided by plans for strong spending on internal research and development, and capital expenditures, with nearly $4 billion expected to be invested in these areas in 2023. The security strategy seeks to leverage the latest digital and other technologies such as 5G and artificial intelligence, many of which are being advanced commercially, with current and future weapons platforms. Lockheed Martin is also reviewing “potential synergies between our four business areas, further cost reduction opportunities and a general portfolio review with the goal of increasing operational efficiency in anticipation of our future growth,” he said.
L3Harris Cash Deployment. L3Harris Technologies says its board has approved an additional $3 billion to its share repurchase authorization, bringing total buyback authority to about $4.5 billion. Jefferies aerospace and defense analyst Sheila Kahyaoglu says that that through June the company had repurchased $6.7 billion of its shares since 2020, lowering the average share count to 194 million from 216 million during that period.
High Praise. Rep. James Langevin (D-R.I.), possibly the leading cybersecurity expert within Congress, said he thinks the Biden administration has done more than any other administration, Democratic or Republican, to best protect the U.S. in terms of cybersecurity. “The Biden administration has done more than any other and we finally now have the right structure, policies and people in place to do the job of more effectively protecting the country in cyberspace,” he said last week during an event hosted by the Washington Post. Langevin, who is retiring at the beginning of January 2023 after serving 22 years in the House, said that there still needs to be a focus on growing the cyber workforce.
Top Contractors. At $39.2 billion, Lockheed Martin was the top dollar recipient nationwide of DoD contracts in fiscal 2021, followed by Boeing at $23.6 billion, Raytheon Technologies at $21.4 billion, General Dynamics at $16.9 billion, and Northrop Grumman at $15 billion, the Pentagon said. Fiscal 2021 registered first time appearances on the top DoD contractors list by Pfizer, Inc. and Moderna—the two leading makers of COVID-19 vaccines. Pfizer came in in sixth place at $13.3 billion ahead of L3Harris Technologies at $7.5 billion. Moderna rounded out the top 10 Pentagon contractors list at $6.9 billion, just behind Huntington Ingalls Industries at $7 billion. In fiscal 2020, Lockheed Martin headed the list at $72.9 billion, followed by General Dynamics at $22.8 billion, Boeing at $22.4 billion, Raytheon at $20.2 billion, and Northrop Grumman at $14.1 billion.
…State Rankings. Virginia, California, Texas, New York, Florida, Maryland, Massachusetts, Connecticut, Washington, and Pennsylvania were the top 10 states for defense spending in fiscal 2021. While Texas ranked first in fiscal 2020 at $83 billion, Virginia was first at $62.7 billion in 2021, followed by California at $57.4 billion and Texas at $47.3 billion, and Pennsylvania was 10th at $16.5 billion. In fiscal 2021, DoD contract obligations and payroll spending in the 50 states and the District of Columbia totaled $559 billion–2.3 percent of U.S. gross domestic product. Defense contract spending rose steadily from $268 billion in fiscal 2016 to $422.6 billion in fiscal 2020 before falling to $398.7 billion in fiscal 2021, per a Pentagon report. The top 10 locations for defense contract spending in fiscal 2021 were Fairfax, Va., at $17.5 billion, New York City at $13.8 billion, Middlesex, Mass., at $13.5 billion, Tarrant, Texas at $12 billion, San Diego at $10.5 billion, Los Angeles and Madison, Ala. at $10 billion each, New London, Conn., at $8.9 billion, St. Louis, Mo., at $8.8 billion, and King, Wash., at $8.5 billion. In fiscal 2020, Tarrant, Texas headed the list at $42.1 billion, followed by Fairfax, Va., at $17.7 billion.
F-35 Parts. In 2018, the not mission capable for supply (NMC-S) rate for the Lockheed Martin F-35 fighter was 28.6 percent before dropping to 20.1 percent in 2019 and 15.8 percent in 2020. But the rate increased to 18.6 percent last year and has increased to 23.6 percent this year, the F-35 Joint Program Office (JPO) said last month. NMC-S measures the percentage of aircraft unable to fly due to parts shortages. The program has cited operational security reasons for declining to comment on whether there are major systems responsible for the five percent NMC-S increase this year and what those systems are, however.
…Not a Requirement? In the past, a shortage of engine power modules has significantly contributed to the F-35’s NMC-S rate, but the stand-up of depot capacity has apparently abated that shortage. While the F-35 has a goal of no more than a 10 percent NMC-S rate, that percentage is not a requirement, the JPO said. “There is no program level NMC-S requirement,” the F-35 program said. “However, the F-35 Joint Program Office continuously monitors all factors impacting F-35 mission capable rates, including NMC-S drivers. When a particular F-35 system degrader is impacting the NMC-S rate, the JPO team works across the enterprise to include our industry team in order to determine the root cause, incorporate countermeasures and establish a recovery plan. Root cause examples could be: earlier than predicted failure of components, surge in operations causing higher usage rates, diminishing manufacturing sources, limitations in establishment of component repair sources, temporary reductions in repair capacity due to natural disasters, pandemics, etc. Additionally, the JPO coordinates with our U.S. services, partner nations and FMS customers to minimize impacts to operations.”
DDG-90 and 92. The Navy awarded Continental Maritime of San Diego LLC an $88 million contract to execute fiscal year 2023 depot modernization work on the Arleigh Burke-class destroyer USS Chafee (DDG-90) and FY ‘24 depot modernization work on the USS Momsen (DDG-92). These availabilities will cover maintenance, modernization, and repair for both ships. The contract includes options that, if exercised, would raise the total value to over $204 million. Work will occur in San Diego and is expected to be finished by June 2025. DoD said the contract was competitively procured with two competitors, but did not disclose the other offeror.
MACH-TB Details. Dynetics on Oct. 20 revealed more details about its contract win to operate a new hypersonics test bed, first announced on Oct. 6. A Dynetics spokesperson told Defense Daily the contract will start with a 9-month period of performance for $5.8 million, beginning with development of a test matrix for testing hypersonic technologies via multiple commercially-available launch vehicles. The effort is called the Multi-Service Advanced Capability Hypersonics Test Bed (MACH-TB) and was awarded by the Naval Surface Warfare Center, Crane Division on behalf of DoD. MACH-TB will also include a modular Experimental Glide Body in order to test technologies in hypertonic environments. Dynetics’ team will include the National Security Technology Accelerator (NSTXL), Peraton, Kratos Defense and Security Solutions, Stratolaunch, JRC Integrated Systems, NineTwelve Institute, Corvid, SpinLaunch, Varda, Kitty Hawk Technologies, Systima Division of Karman Space and Defense, Sandia National Laboratories, Oak Ridge National Laboratory, X-Bow Systems, RLNS and other experts. Work will occur in Crane, Ind., Huntsville, Ala. and the Washington, D.C., metropolitan area.
China Naval Pressure. Chief of Naval Operations Adm. Mike Gilday recently said the “analysis is still ongoing” of what Chinese President Xi Jinping said during the Communist Party Congress regarding options to reunify with Taiwan, but the Navy is looking at actions as much as words. “I will say this, it’s not just what President Xi says, but it’s how the Chinese behave and what they do. And what we’ve seen over the past 20 years is that they have delivered on every promise they’ve made earlier than they said they were going to deliver on it,” Gilday said during a virtual Atlantic Council event on Oct. 19. He said while the former head of U.S. Info-Pacific Command Adm. Phil Davidson said last year China could seek to take Taiwan by 2027, the CNO cannot rule out action sooner. “When we talk about the 2027 window, in my mind, that has to be a 2022 window or potentially a 2023 window. I can’t rule that out. I don’t mean at all to be alarmist by saying that, it’s just that we can’t wish that away.” Given that pressure, Gilday said he does not want to field ships that are not “lethal, capable and ready to win. And so again, it’s readiness over capacity. The ships that we put out there have to be ready to fight.”
…Unmanned Fleet. Gilday also said the investments the Navy is making currently is setting the path for a hybrid manned-unmanned fleet in the mid-to-late 2030s and into the 2040s. He boasted the MQ-25 Stingray carrier-based unmanned tanker aircraft “is really our trailblazer into that transition timeframe to inform our investments in the air wing of the future.” Gilday reiterated that the service thinks the air wing of the future will eventually become 60 percent unmanned and 40 percent manned. “And so MQ-25, is helping us conceptually understand that manned unmanned teaming is going to be essential to that mix in the future. And it will also inform what we buy.” He added the Extra Large Unmanned Undersea Vehicle (XLUUV) program is a similar platform that will inform the future fleet, with a prototype set to go in the water in 2023. “We’re going to test that prototype, we’re going to run it through the wringer. It’ll inform the manufacturing process for the vendor. And we think we’ll be in a better place to make a decision on when to scale and to what degree we scale those kinds of platforms in the unmanned space.”
Triton 7th Fleet. The commander of the U.S. 7th Fleet recently said the MQ-4C Triton unmanned aerial vehicle is useful to him to add to surveillance aircraft missions, thanks to its endurance. “We’re going to use Triton as a replacement for some of our surveillance aircraft. And so the biggest benefit it brings, clearly it’s got some tremendous endurance,” Vice Adm. Karl Thomas said during an event hosted by the U.S. Naval Institute and Center for Strategic and International Studies on Oct. 14. He reiterated the Navy has operated the Triton routinely out of Guam and various places in Japan. Thomas noted the Navy is getting closer to Initial Operational Capability (IOC) with the Triton and said they are working to build up an orbit for the MQ-4C to learn through the capabilities of the land-based Aries II Orion EP-3 electronic reconnaissance aircraft. “It’ll be a different way of processing the information than we do with our EP-3. And so we’re working as a Navy to figure out how we seamlessly make that transition. But you know, any sensor is goodness in my fleet. It’s a huge AOR and to have something that has that kind of legs and that persistence really helps,” he added.