US Army General Officer Announcement
US Army General Officer AnnouncementMarch 4, 2010
Secretary of Defense Robert M. Gates announced today that the President has made the following nomination:
Army Lt. Gen. David M. Rodriguez has been nominated for re-appointment to the rank of lieutenant general and assignment as commander, International Security Assistance Force Joint Command/deputy commander, U.S. Forces Afghanistan. Rodriguez is currently serving as the commander, International Security Assistance Force Joint Command.
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Appointments, US Army
General Officer Announcement: US Army
General Officer AnnouncementMarch 1, 2010
Secretary of Defense Robert M. Gates announced today that the President has made the following nomination:
Army Maj. Gen. John W. Morgan III has been nominated for appointment to the rank of lieutenant general and assignment as commander, Force Command, Heidelberg. Morgan is currently serving as the chief of staff, U.S. European Command, Germany.
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Fixed Price for DDG-1000
Filed under: Business Line, Companies, Congress, Contract Awards, Department of Defense, Events, General Dynamics, Maine, Northrop Grumman Corp., Restructuring, Services, States, U.S. Navy, production program
As part of the reforms announced by Secretary Gates’ a few weeks ago one was to end the DDG-1000 program at three ships and restart the DDG-51 production line. General Dynamics will build the last two as the first is under construction by Northrop Grumman. Northrop will get the DDG-51 work to make up for the cancellation. The New York Times is reporting that GD agreed to a fixed price contract for hulls numbers two and three.
Normally fixed price contracts are used for when full rate production gets underway. The first few batches of a product are made as part of the cost plus development contract. This spreads the risk to the Government. Obama has said he wants more fixed price contracts to save money on defense programs that tend to go over schedule and cost. Of course a lot of that is due to issues with requirements or testing or just making the thing that add time and money.
DoD uses two ways to look at unit cost when it comes to managing a program. One is the total of all procurement and R&D funding spread over the quantity of the items being bought. Another just takes the total procurement cost and divides that by the quantity. As you build more of an item the R&D is spread over more units slowly lowering that cost. If things begin to require more procurement then that cost goes up. Slowing down a program and buying the same quantity over a longer time effectively increases total program costs greatly. There is always some fixed cost applied each year if you build one, ten or a hundred of an item. The more years it takes the more those fixed costs add up.
With this program it may be OK to use a FFP contract as the costs are more known and fixed. If there are issues GD will be taking a risk as they might not get back all the money it takes them to build the ships. This is why Cost Plus contracts are used for development and ironing out production. In this case it will be an interesting experiment to see if it works out for the Government and the contractor.
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.
Despite Gates’ Proposed Reforms New Satellites to go Forward
Filed under: Business Line, Congress, Department of Defense, Events, Federal Budget Process, NGIA, Proposal, Satellites, Services, U.S. Air Force, development program, space
As Federal Computer Week writes the Obama administration has decided to go ahead and begin development of a new spy satellite. In the past these black space programs have been heavily criticized for not only cost and schedule growth but the fact that due to their secret nature that there is no public oversight. Part of the impetus for this system is the recent North Korean missile launch. For monitoring programs like this and the Iranian nuclear one satellites are the most efficient way of doing so. This system will also utilize commercial imagery systems that are available. Of interest an earlier attempt at upgrading the U.S. capability, the Future Imagery Architecture project, was not successful. Perhaps this program will be able to demonstrate that Secretary Gates has been able to reform some aspects of acquisition at the Pentagon.
Good and Bad News for Boeing in Gates’ Proposals
Filed under: Boeing, Business Line, Companies, Congress, Department of Defense, Events, Federal Budget Process, Industry Analysis, Military Aviation, Proposal, Restructuring, Services, commercial aviation, development program, logistics, missile defense, production program
Today Secretary Gates announced the broad themes of Obama’s next year’s defense budget. Several major Boeing programs were cut. The KC-X tanker though keeps going so there is still hope that the company will win that contract. The Seattle Times has a writeup here of the challenges the company faces. Unfortunately for the company the F-22 and C-17 programs will finish after completing whatever aircraft are on order. The Airbone Laser will remain as an R&D program and the second aircraft won’t be built. The CSAR-X helicopter program will be canceled as well. Boeing won this originally but the award was overturned on protest and a new competition was being held. Boeing will also significant cuts to the Ground Based Mid-course ballistic missile defense system which it was the System Integrator on. The Army’s Future Combat System (FCS) will also be restructured with all ground vehicles cut out of it. Boeing was the leader on this program as well. Overall the proposed budget contains some major hits to the company. There is no guarantee that the budget will make its way through Congress with all these proposals in it, but if some stand then the company will see a loss of business. These could be made up from other contracts or new work as the DoD remakes itself.
England Bets on Gates
Filed under: BAE Systems, Business Line, Department of Defense, England, Federal Budget Process, IT, Military Aviation, commercial aviation, development program, logistics, production program
Many of the major English defense contractors rely on a great deal of American business. The biggest is BAE but there are many other companies selling goods and services to the Pentagon. Several have purchased US companies to expand their reach. There was concern with the Obama administration cutting back heavily on defense spending, but as The Times reports with the retention of Secretary Gates that concern has been alleviated somewhat. The major outstanding contract that is important to the UK and Europe is the KC-X contract. Taken away from EADS due to protest the hope is that the company will win it on the recompete. Many jobs in UK rely on building the wings for the tanker aircraft and it was a blow when the protest was upheld.
KC-X Advertisement Makes DoD Unhappy
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, logistics, production program
Northrop Grumman took out an ad this week in the Washington Post supporting its proposal for the KC-X mission. The Wall Street Journal reports that the content of the advertisement made folks over at DoD most unhappy. That is because it quotes an unidentified official as saying the A-330 was $3 Billion cheaper then the B-767 overall. Read more
Tanker decision fallout
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Military Aviation, Proposal, Protest, U.S. Air Force, commercial aviation, development program, logistics, production program
A fallout from Secretary Gates’ decision to postpone the KC-45 RFP is that EADS now is discussing whether they will bid on the contract next year. Boeing had threatened to not compete, feeling the terms where not in their favor and now EADS is upset that the recompete cannot go forward. Without two competitors it will be hard to have a competition. Unfortunately unless you want a Russian aircraft proposed their are only two companies capable of bidding – Boeing and EADS. McDonnel Douglas, who actually won the last tanker contract with the KC-10, is now part of Boeing.
See the press release at TheEarthTimes.
Gates gives up
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, development program, logistics, production program
The Secretary of Defense today canceled the KC-45 re-proposal. He decided that there was not enough time to do this before the end of President Bush’s second term. The announcement was made via a press release this afternoon. Secretary Gates stated that ““It has now become clear that the solicitation and award process cannot be accomplished by January,” he said. “Thus, I believe that rather than hand the next administration an incomplete and possibly contested process, we should cleanly defer this procurement to the next team.”
This decision ends temporarily a seven year saga that started with Boeing being given a lease for 767 tankers, through a proper competition that was thrown out by the GAO, and what was expected to be a quick recompete starting this month.
See the actual release at DefenseLink.mil.
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