The Latest Word On Trends And Developments In Aerospace And Defense
Appropriation Action. The SAC’s Defense subcommittee is scheduled to mark up the fiscal year 2012 defense appropriations bill tomorrow at 10:30 a.m. The full committee set the amount of the defense budget, including military construction, at $526 billion on Sept. 7. That’s $27 billion less than the White House’s request. Some advocates of defense cuts have argued the SAC’s proposal is not a major blow to the Pentagon’s budget, because the $526 billion figure is just $3 billion less than the final FY ’11 budget of $529 billion. Sen. Daniel Inouye (D-Hawaii), chairman of the SAC and its defense subcommittee, is expected to unveil his plans today for the F-35 Joint Strike Fighter’s alternate engine, developed by General Electric and Rolls-Royce. Inouye, a second-engine supporter, has cast doubt on the prospect of reviving funding for the program Congress de-funded earlier this year. Yet he has weighed efforts to allow the contractor to work on the engine with its own money.
Homeland Monies. The full SAC approves the FY ‘12 Department of Homeland Security appropriations bill Sept. 7, giving it $2.6 billion less than the White House requested but $408 million more than the House wants. That increased funding over the House-passed DHS bill includes $271 million more for the Coast Guard. Those monies would grant monies, cut by House appropriators, for six Fast Response Cutters (FRC) as well as long-lead material for the sixth National Security Cutter and 40 Response Boat Mediums. Sen. Mary Landrieu (D-La.), chairwoman of the SAC’s Homeland Security subcommittee, fought for the six FRCs, which would be built at Bollinger Shipyard in Lockport, La. The SAC also wants to give more funding than the House would for Federal Emergency Management Agency grants and Transportation Security Administration Advanced Imaging Technology machines.
Industry Impact. The defense industry would be greatly harmed if the Department of Defense’s budget faces more cuts than the $350 billion in defense-related reductions over the next decade already approved in the new deficit-control act, a top Pentagon official says. The Pentagon could be cut by up to $600 billion more, depending on the work of a 12-member congressional committee this fall. “The only certainty of that uncertainty (regarding an additional potential cut) is that it would be devastating to the department and to the industry if implemented as currently envisioned,” Brett Lambert, deputy assistant secretary of defense, manufacturing and industrial base policy, says at the Reuters Aerospace and Defense Summit in Washington on Sept. 6, according to a Reuters report. “What has made (the defense industry) less attractive in the last few years is the uncertainty, not the fundamentals.” He adds his office expects more mergers and acquisitions in the coming years.
Straight Talk. Defense industry executives will talk to reporters Wednesday about “devastating job losses, national security threats, and infrastructure implications that would result from budget cuts put in motion by this summer’s debt-ceiling deal,” according to the Aerospace Industries Association, which is organizing the event. The officials “will address the long-term costs that another round of major cuts would have on the defense capabilities, industrial workforce, and America’s legacy of innovation in space and civil aviation leadership,” it adds. Speakers will include: James Albaugh, president and chief executive officer for commercial airplanes at Boeing, David Hess, president of Pratt & Whitney; and Charles Gray, vice president and chief operating officer of Frontier Electronic Systems.
NASA Nudge. NASA supporters Sens. Bill Nelson (D-Fla.) and Kay Bailey Hutchison (R-Texas) allege President Barack Obama’s administration has inflated the cost of a future heavy-lift rocket. They say the administration is using a “wildly inflated set of NASA cost numbers” based on an “imaginary ‘acceleration’” of development. Under these numbers, leaked to the press, development costs were pegged to increase to $57 billion, or nearly twice the amount cited in an independent cost assessment by Booz Allen Hamilton. “No one has proposed to accelerate development,” Nelson and Hutchison say. “We and others have–repeatedly–demanded that the administration’s budget office simply follow the development plan that the president signed into law last year.” They argue “accelerated development is a convenient myth” and the White House should proceed with the timetable in the NASA authorization law Obama signed last year.
Silver lining for GD? A Morgan Stanley analysis produced last week said General Dynamics should be able to weather possible cuts in defense spending. The Morgan Stanley review came after General Dynamics held an investor conference on Thursday. It concluded the company’s management “built a credible case why its defense portfolio can remain resilient.” The case centered around execution, cost, control, international and proactive strategy. “This coupled with the high growth Gulfstream makes GD attractively positioned ahead of potential budget cuts,” the analysis says.
First Thoughts. The Army has proven itself “in arguably the most difficult environment we have ever faced,” Army Chief of Staff Gen. Raymond Odierno says in his initial thoughts as chief of staff after being sworn in Sept. 7. “Trust is the bedrock of our honored Profession–trust between each other, trust between soldiers and leaders, trust between soldiers and their families and the Army and trust with the American people,” he says. The land force faces the future from a position of great strength, in a period of uncertainty, historic change, security challenges and fiscal constraints. With the Army Secretary, Odierno says he will share his thoughts on the way forward in the weeks to come. That path includes sustaining the all-volunteer Army, providing depth and versatility to the joint force and ensuing flexibility for the defense of U.S. interests at home and abroad.
Alone No More. Army program managers are “no longer alone” in executing their programs, says Lt. Gen. William Phillips, principal military deputy to the Army acquisition chief. Programs don’t stand alone, but must be synchronized with other programs and are “all part of a system of systems,” Phillips says at an AUSA ILW breakfast last week. PMs must be connected to other PMs, to the Pentagon, the Army, and they must also ratchet up their situational awareness of what’s going on in Congress, and elsewhere around them that could affect their program. Phillips says PMs should allocate their time–25 percent to requirements, 25 percent to resources, 40 percent to acquisition and sustainment and 10 percent to knowing what’s going on around them that could affect their program.
…Facing the Challenge. Phillips says with budget restraints, the service is moving “from capability at any cost to what capability, at what cost and what schedule.” The service is now much more willing than in the past to “trade performance to sustain cost and sustain schedule.” In the past PMs executed requirements, the change is that now the requirements can be challenged, he says.
New Mission Computers. BAE Systems will design and test mission computers for 37 C-130 aircraft under an Air Force contract worth about $23 million. The company says it will develop, qualify and test the new computers, integrate existing software, and manufacture the kits the Air Force uses for final installation. This award builds on BAE’s strong history of performance in support of C-130s. The company has designed, supported and completed more than 200 modifications to C-130 variants since the late 1990s. Earlier this year, BAE won an $8 million contract to develop, test and install more than 85 crashworthy seat systems to enhance the survivability of C-130s. The new mission computers will replace the current versions on about 20 MC-130H variants and 17 AC-130U variants used by Special Operations Forces. BAE will also conduct ground and flight testing for the computers.
Converting Landfill Gas. DoD continues its green and clean energy efforts ordering the FlexEnergy Inc., Flex Powerstation FP250. This equipment, emplaced at Ft. Benning, Ga., will convert landfill gas into enough renewable electricity to power the equivalent of 250 homes, reducing the Army’s carbon footprint and bottom line, the company says. Southern Research Institute chose the Powerstation under a demonstration program funded by the DoD Environmental Security Technology Certification Program, which seeks innovative and cost-effective technologies to address its high-priority environmental and energy requirements. The Flex Powerstation finished the initial operations tests on Aug. 19, producing up to 230 kW net of renewable energy. In just weeks, the system will be generating renewable electricity continuously for Ft. Benning.