Long Term Aircraft Plan Includes 109 KC-X Tankers
Filed under: Congress, KC-X, KC-X Tanker News, Syndicated Industry News, U.S. Navy
The Air Force, Navy and Marine Corps released to Congress their “Aircraft Investment Plan”. This lays out how many fixed wing aircraft they intend to buy and maintain through 2020. The U.S.A.F. intends to buy 109 tankers by that year at an estimated cost of over $30 billion.
The Air Force also plans to maintain a force of 223 C-17 and 91 C-5 heavy lift aircraft. The core of the services aircraft though will be the F-35 JSF with about 600 planned for purchase at the current schedule.
Congress Earmarks Defense Budget for Padding
Congress has the final word on budgets. They add funds for projects they like or want despite the wishes of the Defense Department and the...New RFP Released Today
Filed under: Boeing, Congress, Department of Defense, EADS, KC-X, KC-X Tanker News, Northrop Grumman Corp., Protest, Syndicated Industry News
The Air Force and Department of Defense acquisition officials briefed Congress and the press today on the new RFP for the KC-X. It had some slight changes from the draft release a few months ago. The key question is will Northrop bid this time around?
They won the last contract to have that thrown out on Boeing’s protest. Much more to come on this in the days ahead.
Congress Piling On The Defense Budget
Congress passed over the weekend an omnibus spending bill of over one trillion dollars. This week they hope to pass the last spending bill --...Stimulus Funds Spur Investment In Alaska’s Internet Connectivity
There has been a great deal of criticism of the waste or weird projects involved with the “Stimulus” bill passed in March by Congress....Good News For Boeing In 2010 As More C-17 Transports Will Be Ordered
In a piece of good news for Boeing it looks like Congress will continue to buy C-17 transport aircraft in the 2010 budget despite requests from the...Russian Rather Than U.S. Helicopters For Iraq and Afghanistan Raising Eyebrows
A contract by Iraq to buy Russian Mil Mi-7 transport helicopters has raised concerns in Congress that it did not go to an American supplier.Logistical Costs Burden Operations In Afghanistan
Filed under: Business Line, Congress, Countries, DLA, Department of Defense, Events, Federal Budget Process, Services, U.S. Air Force, U.S. Army, logistics
Wars are expensive there is no doubt. As part of the planning for adding troops to Afghanistan the U.S. Department of Defense was asked why it costs about a $1 billion a year for a 1,000 soldiers to operate there. One of the main expenses it turns out is fuel. To get one gallon of JP8 to a soldier or airman who needs it costs about $400 if all related costs are taken into account. This figure alone is giving Congress second thoughts.
That is because the gas is shipped to Pakistan and then trucked to Afghanistan. To get it to the various outposts and bases sometimes requires aircraft and helicopters. For a helicopter to carry a gallon of gas probably takes a few gallons of gas and at a high maintenance rate. There is also the cost of all the personnel and contractors to handle the gas and supplies.
This should not really surprise anyone. In John Ellis’ book about World War II soldiers, On The Front Lines, he estimated it took about eleven personnel to support one front line soldier in the Pacific and almost ten in the European. That counted everyone who touched a ton of supplies as it moved from the U.S. to the actual soldier. That cost alone was fairly high. Take into account the gas used to move it and the maintenance of the ships, trucks and aircraft and the costs go up even more. Afghanistan is remote and costs even more.
Continuing Resolution Coming?
The Congress will not get the required funding bills passed by 1 October. This will require the use of a Continuing Resolution which has an effect...Congress Moves To Shore Up Social Security And Increase Deficit
Due to low inflation there are no COLA's planned for Social Security the next two years. Congress thinks this needs to be fixed with added...Old Habits Die Hard With Earmarks
Despite pressure from Obama's new administration Congress keeps funding programs with earmarks that are not necessarily wanted.IRS Loses Law Suit Over Phone Taxes Badly
August 10, 2009 -- In 1896 Congress passed an excise tax on long distance phone calls at a rate of 3% based on transmission time and the distance between the two...Government Burden To Run Program Increases Cash For Clunkers Cost
We wrote last week that the U.S. Government’s “Cash for Clunkers” was so popular that it burned through its initial one billion dollars in a few days. Congress allocated a further two billion by transferring some of the “Stimulus” funds to this program to keep it going. The program has led to anecdotal [...]IRS Loses Law Suit Over Phone Taxes Badly
In 1896 Congress passed an excise tax on long distance phone calls at a rate of 3% based on transmission time and the distance between the two connected points. In 2006 after five different U.S. Circuit Courts agreed that this tax was no longer applicable in response to a variety of different lawsuits the [...]IRS Loses Law Suit Over Phone Taxes Badly
August 10, 2009 -- In 1896 Congress passed an excise tax on long distance phone calls at a rate of 3% based on transmission time and the distance between the two...House Moves To Keep VH-71 Increment One Alive
Filed under: Agusta Westland, Business Line, Companies, Congress, Contract Awards, Department of Defense, Events, Federal Budget Process, Lockheed Martin, Military Aviation, Restructuring, Services, U.S. Navy, development program, production program
The various defense appropriations and authorization bills are working their way through the House and Senate. Many items have been included not requested by the Obama Administration or Secretary of Defense Robert Gates. This really is not surprising as Gates attempted to cut a lot very quickly. He spared no service cutting Air Force F-22 and C-17 aircraft, Navy VH-71 and destroyers, and Army vehicle and missile defense systems. Congress has pushed back on certain programs.
One that they are trying to keep alive is the VH-71 helicopter for use in transporting the President. This program has not only been unfunded in the President’s 2010 budget but Lockheed Martin has been told to stop work. The company and the Pentagon are negotiating termination costs.
The House Appropriation Defense sub-committee, though, included almost half a billion dollars to try and utilize the Increment One aircraft already procured. The program was structured with two increments of aircraft, the first being basic ones to be used to support testing and development. A larger buy in five or so years would have all the required equipment. To date the U.S. has invested about $3 billion in the program. The House wants to see if some use could be derived of the aircraft already delivered.
While the current fleet of VH-2 and VH-60 aircraft have served the President well they are somewhat dated. The VH-71 would have more modern survivability and communications equipment with greater range and lift. The strenuous requirements are what led to the programs cost and schedule growth. There will be more to come on this issue to say the least.
Australia Reportedly To Buy F-35
Filed under: Australia, Boeing, Business Line, Companies, Congress, Countries, Events, Lockheed Martin, Military Aviation, Proposal, Restructuring, development program, production program
Two days after the roll out of their first F/A-18 aircraft necessary to provide an interim air capability until the nation moves out on its fifth generation buy of either the F-35 JSF or the F-22 Raptor the Government announced that they would invest in the F-35. While the F-22 was attractive due to its longer range and greater payload up to seventy F-35 aircraft will be purchased.
Australia plans to now review their defense procurement plans every four years and readjust as necessary. Australia has been a partner in the F-35 development effort but recently had looked at buying the F-22. This would require an act of Congress as current law bans the sale of the modern aircraft. Japan and Israel have also inquired about the availability of the F-22. With the Obama Administration planning on ending procurement of the F-22 foriegn sales are now attractive to Congress as a way to keep production going.
Australia’s First F/A-18 Delivered
Filed under: Australia, Boeing, Business Line, Companies, Congress, Contract Awards, Countries, Department of Defense, Events, Federal Budget Process, Military Aviation, Missouri, Services, U.S. Navy, production program
Boeing delivered the first F/A-18 Super Hornet for Australia on July 8. This is the first of twenty-four. The aircraft will provide a stop gap until either the F-35 JSF or the F-22 aircraft Australia has expressed interest in buying. The total value of the contract to Boeing is about $3 billion.
The F-18 for the U.S. Navy and Marine Corps is facing the end of production as the Obama Administration has proposed accelerating deliveries of the F-35 for those services as well as the U.S. Air Force. This is tied in to the ending of F-22 production. Congress has not received these proposals well and have included continued F-22 deliveries in the appropriation and authorization bills working their way through both Houses. The House has also looked at increasing planned F-18 deliveries as well as exploring the award of another multi-year production contract. Multi-year contracts have to be specifically authorized and have been used for large aircraft contracts in a bid to keep overall costs down. If there is a consistent buy profile over several years it makes it easier for the contractors to manage supplies and material ideally reducing costs.
Lockheed Plans Further Job Cuts Due To VH-71 Ending
Filed under: Business Line, Companies, Congress, Countries, Department of Defense, Events, Federal Budget Process, Finemeccanica, Italy, Lockheed Martin, Military Aviation, New York, Restructuring, Services, States, Suspensions, U.S. Marine Corps, U.S. Navy, development program, production program
Lockheed Martin had already cut over one hundred jobs at their Upstate New York facility in Owego. This was mainly due to the decision by Obama and Secretary of Defense Gates to end the VH-71 New Presidential Transport helicopter program. Even though the aircraft was made in Italy Lockheed did all the modifications and integration in Owego.
Despite a great deal of argument and pressure to keep the program going in some form or another the contract was recently terminated. Lockheed is now saying that another seven hundred and fifty people may lose their jobs. Right now they are looking for people to voluntarily leave or retire with a promise of severance. The plan is to begin the layoffs in July based on how many people agree to leave voluntarily.
One of the arguments against ending this and other production programs is that they will just add to the joblessness during the current recession. Of course the defense budget is not really a jobs program and that is fairly poor reasoning to continue spending billions of dollars on a system that does not meet requirements. It is still possible that Congress will pass some form of spending that will keep pieces of the program alive in the 2010 defense budget but that will not be finished until the Fall.
SBIRS Continues
Filed under: Business Line, Companies, Congress, Contract Awards, Department of Defense, Events, Lockheed Martin, MDA, S&T, Satellites, Services, U.S. Air Force, development program, missile defense
The troubled Space Based Infra-Red System (SBIRS) satellite based detection system program has had its highs and lows over the last fifteen years or so. The constellation of satellites will be used to provide detection of missile launches across the globe and will replace the original DSP system. SBIRS is divided into high and low systems and has suffered from cost and schedule problems over its lifetime.
There is no denying that the aging DSP satellites need replacing and the Air Force and the Missile Defense Agency (MDA) have worked hard to keep the SBIRS program going over the years despite criticism from Congress, various Presidential Administrations and outside groups.
On the 2nd of June Lockheed Martin announced that they had received a contract for the third high satellite of that constellation. This $1.5 billion contract will be for the payload, satellite and ground control systems. The launch will be paid for out of a different contract. To date two payloads are in space and the first two satellites are in development with the first planned launch sometime in 2010.
Photo from Lockheed Martin.
Littoral Combat Ships (LCS) See Growth In Prices
Filed under: Austal, Australia, Business Line, Companies, Congress, Countries, Department of Defense, Events, General Dynamics, Lockheed Martin, Marinette Marine, Services, U.S. Navy, development program, production program
The Littoral Combat Ship (LCS) is a new class of light warships for the U.S. Navy designed to fight close inshore and have the ability to mix-and-match its systems to the mission requirements. The Navy currently has ordered four of the controversial ships two each from Northrop Grumman and General Dynamics. The plan is to buy three more in 2010 from one or both of the contractors.
Due to cost growth in the first two ships the Navy had at one point had canceled the contracts for ships 3 and 4. Congressional pressure made them order these next two ships. The initial estimate was that the ships would cost $220 million on average but the price tags have slowly escalated over time. Now LCS 1 is estimated to cost $637 million and hull 2 $704 million. Congress has placed a cap of only $460 million for the average cost. The Navy originally intended to build over fifty of the vessels.
With the continued cost growth of the existing program it is hard to see how the Navy can continue it. There will have to be a restructuring of the costs and number of ships planned. If not the program will like the bigger DDG-1000 class look like a good candidate to end with the Navy having to accept a new design or continue constructing existing ships.
Earmark Proposed For Elbit To Upgrade CH-53D Aircraft
Filed under: Business Line, Companies, Congress, Editorial, Elbit, Events, Federal Budget Process, Military Aviation, Services, States, Texas, U.S. Marine Corps, production program
The U.S. Marines like the Army have been heavily stressing their helicopter fleet in Iraq and Afghanistan. That service has begun to upgrade their lift capability with the procurement of CH-53K and V-22 aircraft. At the same time they have refurbished their older CH-53D aircraft to maximize their use.
Elbit makes a display that has been fitted into many Army and Marine helicopters already called the ANVIS-HUD. The Marine Corps did not have the money available in their budget to add this to the CH-53D as part of their refurbishment. Now the local Congressional Representative, Kay Granger (R-TX), has proposed a $22 million earmark to do this.
This illustrates one of the issues with earmarks. Sometimes they can be used for good things that the services may not have available funds for. Not all earmarks are for blatant waste or fraud like those that make the headlines. There are also cases where the company or the Service have lobbied Congress to include these kind of marks.
Ideally the budget would be planned by the Services, OSD and the President and Congress would do little to change it. That is not possible as the Constitution gives the House the authority to start all funding bills. What is in the bill is what is given to the Executive Branch at the end. Earmarks are a part of this process. As this example shows though not all earmarks are bad and they can buy useful capability for the military that might not be able to fit in the regular budget.
CH-53 photo by Flickr user Obskurantist.
AugustaWestland Work Force Worried About VH-71 Contract
Filed under: Agusta Westland, Business Line, Companies, Congress, Contract Awards, Countries, Department of Defense, England, Events, Federal Budget Process, Italy, Lockheed Martin, Military Aviation, Restructuring, Services, U.S. Navy, development program, production program
While Finmeccanica has stated that they are not worried about the pending cancellation of the VH-71 new Presidential helicopter as proposed by Secretary Gates, there is concern at AugustaWestland’s facility in Yeovil, England. The local paper reports that if the program is ended there would be major cuts to the work force at that facility. AugustaWestland is not coming out and stating anything in this regard, but much of the work going on there supports the two phases of the program. As Finmeccanica has said Phase II has not yet started and that is why their earnings would not be effected in the next few years — no money has been spent on that part of the program. AugustaWestland makes the base helicopter which is then modified by Lockheed Martin in New York. The company would also provide support to the delivered aircraft. The contract while it is only for 23 aircraft is very large due to the cost of the individual platforms and the necessary modifications. The support contract would also be significant. The cancellation is just a recommendation right now and ultimately Congress will decide whether to end the program, restructure it, or just continue the current path.
U.S. Department of Defense Still Not Sold on Split Tanker Buy
Filed under: Boeing, Business Line, Companies, Congress, Contract Awards, Department of Defense, EADS, Events, Federal Budget Process, GAO, Proposal, Protest, Services, U.S. Air Force, development program, logistics, production program
Responding to growing pressure from Congress and some in industry to the idea of splitting the KC-X tanker procurement between Boeing and EADS Secretary of Defense Gates said that the idea would be bad policy. The Hill reports that any cost savings from more rapid production would be offset by the increased logistical tail of having two separate systems. In this day and age when the quantities of equipment purchased is minimal the U.S. cannot afford a dual source for one mission. While some have said that this proposal would more rapidly field capability a split fleet would require two supply chains, training networks and support networks. More will be found out when the Obama administration releases its FY10 budget proposal in the near future.
Army Pushes Back on FCS
Filed under: Boeing, Business Line, Companies, Congress, Events, Federal Budget Process, GAO, SAIC, Services, U.S. Army, development program, production program
Due to its complexity, cost and risk the Future Combat System (FCS) program is required to have an annual report to Congress submitted by the GAO. This was done recently. The FCS is the largest and probably most complex program under development right now by the U.S. military. It is being managed and integrated by Boeing and SAIC. The GAO continues its negative view of FCS and the Temple Daily Telegram reports that the Army acquisition folks countered that with calls to reporters. FCS is a system of systems which will used wheeled armored vehicles, unmanned ground and aerial vehicles all linked by a variety of data links and systems. Its goal is to increase the speed, accuracy and response of the Army. Parts of it have been developed and deployed where they can in Afghanistan and Iraq. The current Stryker vehicle units are the interim step from the M1/M2 based units to the FCS. As it is the largest program in the Army consuming a few billion dollars a year and has risk it is obviously the place that Congress and the Obama administration is looking for cuts. Until the FY10 budget is released there will be this back-and-forth between the Army and other parts of the government as that service tries to preserve as much of the program as they can.
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