The Latest Word On Trends And Developments In Aerospace And Defense


Lynn On F-35.
Deputy Defense Secretary William Lynn tells the heads of the SASC that the Pentagon is working to control costs with the F-35 Joint Strike Fighter program. He notes while Lockheed Martins’ Low Rate Initial Production (LRIP) 1-3 contracts–which are over-budget by hundreds of millions of dollars–are cost-plus-incentive-fee deals, LRIP 4 has a fixed-price-incentive-firm setup. “The (Defense) Department is currently examining every element of cost in developing the government’s position for our negotiations of a fixed price contract for LRIP 5,” Lynn writes. “In both the LRIP 4 contract and in the LRIP 5 contract now being negotiated, the government is protected against these kinds of open ended overruns. In each case, the contract does/will include equitable sharing arrangements for underruns/overruns as well as a ceiling price so as to cap the government’s liability.”

Monitoring. Levin and McCain are troubled by the LRIP 1-3 overruns and have not approved a Pentagon request to reprogram funds to cover the cost growth. Lynn says cancelling the contracts with Lockheed Martin and Pratt & Whitney–something the SASC heads asked about–would subject the Pentagon to unspecified costs and legal hurdles. He tells the senators that “the Department is closely monitoring and concerned about cost growth in the JSF program. The cost estimates for future production and sustainment of the JSF are unacceptable and unaffordable. Aggressive management by the Department and the contractors involved will be needed to ensure that those costs are reduced.”

Port Request. Sen. Jim Webb (D-Va.) lays out questions regarding the Navy’s decision to move a nuclear aircraft carrier from Norfolk, Va. to Mayport, Fla. that he wants the Government Accountability Office to answer. The SASC’s FY ’12 defense authorization bill requires the GAO to report on the carrier move by February 2012. In an Aug. 11 letter to the GAO, Webb asks the following questions: Did the Navy follow best-business practices to prepare a comprehensive analysis of alternatives for East Coast CVN homeporting? Do other more cost-effective alternatives exist to sustain Naval Station Mayport’s mission in the future? Is there a compelling risk-based justification for the Navy to build redundant infrastructure on the East Coast? Does the number of ships in the Navy’s force structure justify the addition of yet another nuclear-support facility?

Defending Energy. The new congressional Defense Energy Security Caucus urges Defense Secretary Leon Panetta to spare Pentagon renewable-energy projects from pending budget cuts. Caucus Chair Rep. Maurice Hinchey (D-N.Y.) argues in an Aug. 10 letter to Panetta: “Recognizing the critical importance of mission energy requirements, we urge you to prioritize the Department’s energy policies and budgets. Investments in smart energy plans will not only show returns in security and mission success but they will contribute to future cost savings and have a unique opportunity to help foster innovative and diverse energy and clean technologies to strengthen our economy.” Reps. Roscoe Bartlett (R-Md.) and Jack Kingston (R-Ga.) and the office of Rep. Gabrielle Giffords (D-Ariz.) serve as co-chairs of the caucus.

Defense cuts could hurt economy. Loren Thompson of the Lexington Institute warned in his blog that cutting defense spending by $1 trillion dollars in the next 10 years will harm an already fragile economy and add to the possibility of it slipping into a recession next year. Thompson writes that big cuts in the Pentagon budget along with reductions in domestic spending, a weak housing market and a cautious financial sector could spell gloomy days ahead for the economy. "Money spent in the Pentagon’s base budget tends to stay in the United States and create jobs there — jobs that produce useful goods and services."

Coast Guard Cutter ready for duty. The next Coast Guard National Security Cutter, the Stratton (WMSL 752), has successfully completed its sea trials and its set for delivery on September 2, Huntington Ingalls Industries  said. The third in its class, the Stratton underwent two days of trials in the Gulf of Mexico effectively testing all of its systems for the Board of Inspection and Survey. Stratton was christened by First Lady Michelle Obama at Ingalls Shipbuilding in July 2010.

Basing a carrier. Virginia Senator Jim Webb is once again questioning the Navy’s January 2009 decision to base an aircraft carrier at Naval Station Mayport, Fla. He has urged the Government Accountablity Office (GAO) to address the "numerous questions" that remain regarding the strategic neccessity and fiscal viablity of basing a carrier at Mayport. Webb’s homestate lost its bid to host the carrier. The Navy has repeatedly stood by its decision to base the carrier in Mayport.

Take on HII’s second quarter. Credit Suisse said it expected Huntington Ingalls Industries  stock value to remain rangebound following its quarterly report last week, although the "modest" improvement it showed in the second quarter of 2011 was a "positive signal." Huntington Ingalls, the largest builder of Navy surface ships, reported earnings of $40 million for the second quarter after suffering losses in the same period last year.

Defending The Canal. Armed forces from 17 nations are taking part in the annual U.S. Southern Command and U.S. Army South sponsored “Fuerzas Aliadas PANAMAX 2011” exercise that is conducted simultaneously at Fort Sam Houston, Texas and in Panama Aug. 15-26. Known as PANAMAX, the exercise brings together sea, air and land forces in a joint and combined operation focused on defending the Panama Canal from attacks by an organized terrorist group as well as responding to natural disasters and pandemic outbreaks in various locations. More than 50 Colombian military officers will travel to Texas to lead the land component portion of the exercise for the first time in PANAMAX history. Army South led the land component portion during previous exercises. This year, in addition to the United States and Colombia, participants from Argentina, Belize, Brazil, Canada, Chile, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay and Peru will take part in the exercise.

Director Wanted. The Library of Congress is looking for a Director of the Congressional Research Service, the principal research arm of Congress. Posted on USAJobs.gov Aug. 8, the $165,000 position is open until Sept. 8. The director reports to the Librarian of Congress, and leads CRS in the research and analysis that supports congressional deliberations, the posting said. The successful candidate “should have a strong desire to work exclusively for Congress,” the posting said.

All Composite Armor. The Netherlands Ten Cate says it will introduce in mid-September  its 3D molding for its patented TenCate Liba armor systems, which allows replacement of existing key components of armor vehicles such as hatches and doors, with all-composite solutions. Engineers at TenCate Advanced Armor recently completed the design and testing phases, with a complete solution now being field tested. The system will be on display during DSEi in London, Sept. 13-16.

Used Vehicles For Disposal. Australia’s Minister for Defence Materiel says it’s released the Request for Proposals for disposing of as many as 12,000 surplus Army vehicles and trailers over the period 2011-2020. “By disposing of this equipment in bulk, it will increase the amount of revenue Defence can raise and reinvest in new equipment,” Jason Clare says. “The money raised from the sale of these vehicles will be invested in Force 2030, with one option to fund simulators used for training that will reduce the wear and tear on Army vehicles.” Army vehicles under the hammer are non-combat types such as Land Rovers, trailers, Unimogs, trucks, and truck-mounted cranes. The vehicles will be progressively replaced by new vehicles under Defence Project LAND 121.