Rolls-Royce To Build New Engine Controls For OH-58D
Filed under: Business Line, Companies, Contract Awards, Events, Military Aviation, Rolls-Royce, Services, U.S. Army, development program, logistics, production program
The OH-58D Kiowa Warrior is the standard reconnaissance helicopter in use by the U.S. Army. As all Army Aviation it has seen a great deal of use in Iraq. Ultimately it will be replaced by the result of the current Armed Aerial Scout program. This replaced the failed Armed Reconnaissance Helicopter (ARH) program which was canceled in 2008. Due to this failure the Army must continue to invest money into the OH-58 to keep it fighting.
Rolls-Royce was awarded a contract to develop a new Full Authority Digital Engine Control (FADEC) for the aircraft. This system is one of the key components of the upgrades to the aircraft. No value for the contract was provided. FADEC systems are becoming common on helicopters and fixed wing aircraft and aid in managing fuel consumption and performance. Rolls-Royce manufactures the M250 engines for the Kiowa Warrior at their plant in Indianapolis.
Defense is Missing in Action in U.S. Stimulus
The U.S. passed last year a "Stimulus" bill that has seemed to have little effect on the unemployment rate. Little of this money went to the...In-sourcing v. Outsourcing: A Tale of Two Countries
Great Britain and the United States have chosen two different paths to try and save money in their defense spending. Britain is privatizing more…
Swine Flu Vaccine Makers Find Governments Can Be Fickle Customers
Novartis like many of the large drug companies made a great deal of money on producing the H1N1 vaccine. Now due to a glut of the product and less...Morocco Completes F-16 Order
Filed under: Business Line, Companies, Contract Awards, Countries, Events, Lockheed Martin, Military Aviation, production program
Two years ago the North African nation of Morocco selected the F-16 Fighting Falcon to be the basis of their new fighter force. They awarded an initial contract in 2008 for the twenty-four aircraft to Lockheed Martin. Now they announced the rest of the money will be paid. The total contract is worth over a billion dollars with the bulk, $840 million, executed this week.
The F-16 serves with many NATO and other U.S. allies as well as Egypt and Israel. Lockheed Martin continues to sell and build the aircraft for overseas sales despite the plans of the U.S. and many other countries to replace or at least supplement it with the F-35 JSF.
Pomerleau To Build New Facility For C-130 Training
Filed under: Business Line, Canada, Companies, Contract Awards, Countries, Events, Lockheed Martin, Military Aviation, logistics, production program, training
The Canadian government has invested in several C-130J transports from Lockheed Martin. These are to improve their tactical and operational mobility. The aircraft are to be built in the United States but the contract has significant offset requirements so that Lockheed will have to spend money in Canada. As part of their plans to stimulate the economy due to the global recession Canada also planned to invest in defense infrastructure and this kind of project is the kind of thing that they proposed doing.
The Ontario based company Pomerleau, Inc received a contract worth about $40 million Canadian to build the facilities to support C-130J aircrew and maintenance training at the Trenton. The hanger based facility will be completed in 2012.
The U.S. military has been able to utilize some of the stimulus bill money from Congress to build or rehabilitate facilities. These seem to be the kind of project that will generate jobs and investment in the local economy. At the same time like Canada they are getting an enhanced capability.
Electronic Health Record Companies Stimied By Law’s Language
The “Stimulus” bill contains money for lots of discrete different things. Such as the including the $4 billion as reported on yesterday...The Future Industrial Base With Declining Defense Budgets
There is concern from both sides that with less money and M&A activity the U.S. defense industrial base is at risk.Government Failing Small Business?
The U.S. Government awards a great deal of contracts each year worth a lot of money. One of its goals is to award twenty-five percent of these...Highway Spending Is Criticized
August 14, 2009 -- The U.S. Government collects money from gas taxes to put in the Highway Trust Fund. This money is to fund road construction and repair. Even...Highway Spending Is Criticized
August 14, 2009 -- The U.S. Government collects money from gas taxes to put in the Highway Trust Fund. This money is to fund road construction and repair. Even...British sign long-term torpedo deal
LONDON, Aug. 10 (UPI) -- The British Ministry of Defense has awarded BAE Systems a long-term torpedo contract designed to improve efficiencies and save money.
A400M Contract To Be Restructured
Filed under: Business Line, Companies, Contract Additions, Countries, EADS, England, Events, Military Aviation, Restructuring, development program, logistics, production program
The A400M transport program is the premier new aerospace defense effort in Europe. Seven separate countries had teamed together to develop and buy the aircraft from EADS. The program has had major delays due to engine and software issues and the customers have been delaying action for most of this year. Under the original contract EADS would have had to pay back money due to schedule targets not being met. This deadline has been pushed back until 30 July.
Now the customers have announced that a new contract will be negotiated by December of this year. Under the current schedule the first flight of the aircraft should occur by the end of the year with production deliveries in 2012. Britain had been pushing back on the contract due to their budget problems and the need for support for operations in Afghanistan.
The new contract is not technically a done deal as there could still be issues with some of the countries involved. The terms are obviously not clear now but will clearly revolve around the schedule and payments. EADS will probably see some relief from the schedule penalties. Military development programs are not new to such schedule issues and often if the program is important enough these kind of concessions will be made by the customers. The program is looking at a minimum three year delay and this will be reflected in the new contract.
The big thing this decision does delay further the penalty deadline that EADS has been facing all year and has made it hesitant to use their cash reserves for any other action.
GE Bets On House To Keep F-35 Second Engine Alive
Filed under: Business Line, Companies, Congress, Department of Defense, Events, Federal Budget Process, GE, Lockheed Martin, Military Aviation, Pratt & Whitney, Rolls-Royce, Services, U.S. Air Force, U.S. Marine Corps, U.S. Navy, development program, production program
Following up on its decision to strip the F-22 funding from the 2010 budget as requested by the Obama Administration the Senate also de-funded the second source for the F-35 JSF engine. This program too had its funding removed in the President’s budget submission but the House and the Senate Committees had restored some money to continue the program.
GE and Rolls-Royce are making this engine, the F136 with Pratt & Whitney responsible for the main F135 engine. The idea of having a second engine was due to the large amount of F-35 aircraft required and the three different versions there might be a need for such capability. GE is claiming that the competition that their engine provides will help control costs and schedule. The company feels that the funding will remain in the final bill as the House will support it in Conference. There is still a chance that the conference bill will also retain some money for the F-22 if the House is hard over on it.
It is interesting that Secretary of Defense Gates‘ wants to end this competitive program to save money when one of the new changes to defense acquisition that he has pushed this year is increased competition in the early stages of a program. Historically when there have been multiple sources trying to win a program there have been cost savings to the Government. In this case the feeling must be that the program is too mature to justify the two sources for the engines.
With the support of the Senate for Obama it may be a contentious conference, or the House may end up ending the programs. It will be an interesting August from the defense budget point of view.
MRAP-ATV Contract Continues On Track
Filed under: BAE Systems, Business Line, Companies, Congress, Contract Awards, Department of Defense, Events, Federal Budget Process, Force Protection, Oshkosh Truck Corp, Proposal, Services, U.S. Army, U.S. Marine Corps, logistics, production program
The MRAP-ATV is a program to develop a lighter, more maneuverable Mine Resistant Ambush Protected vehicle for use in Afghanistan. The Army has been working on awarding a production contract by the end of this quarter. Reports indicated that that will happen and one or more companies who are participating in the current testing will receive an order.
The Army and other Services have invested a great deal of money in the last five years into these systems to counter the IED and mine threat in Iraq and Afghanistan. The vehicles due to their size and weight primarily are road bound and provide point-to-point transport. The rougher terrain in Afghanistan and lack of roads has led to the MRAP-ATV requirement. The program has moved fast as basically all of the vehicles proposed are existing systems.
The winner(s) will see a great deal of work quickly as the military hopes to ramp up production and quantities very quickly. The use of MRAP and their force mix are all undergoing study as the U.S. tries to fit them into its regular tactical organizations and doctrine.
HASC Wants To Continue VH-71
Filed under: Business Line, Companies, Congress, Countries, Department of Defense, Events, Federal Budget Process, Finemeccanica, Italy, Lockheed Martin, Military Aviation, Services, U.S. Navy, development program
In their markup of the 2010 Defense Appropriations Bill the House Armed Services Committee added money for continued production of the F-22. It also recommended that the Navy and Defense Department continue production of the Increment One of the VH-71 New Presidential Helicopter.
They feel that this would be the best use of the over $3 billion already spent on the program. There is obviously still a requirement for this aircraft and a new program is planned. The HASC wants the first group of VH-71 to be used as “the normal transport for the President…” with other systems looked at for the more stringent requirements. Right now the President uses VH-3 for short range, normal duties and then longer ranged CH-53 and UH-60 for other missions. One of the problems faced by the VH-71 was the attempt to buy one aircraft to do all missions.
Finemeccanica had offered to just deliver Increment One aircraft at reduced price for the total program. Of course these did not meet all of the requirements that the Navy had levied. This was a major reason the program’s cost and schedule increased so much.
So far the HASC markup does not necessarily agree with the Obama Administration’s proposals in the area of the F-22 or the VH-71. The bill still needs to go through the process of other committee markups, the full House and Senate and then the Conference. This means that this language may or not make it to the final version but it does show support for the VH-71 program.
JSF Second Engine Fighting For Its Life
Filed under: Business Line, Companies, Congress, Contract Awards, Department of Defense, Events, Federal Budget Process, GE, Military Aviation, Pratt & Whitney, Restructuring, Rolls-Royce, Services, U.S. Air Force, U.S. Marine Corps, U.S. Navy, UTC, development program
One of the programs cut by Secretary of Defense Gates’ in his proposed budget is the second source for the F-35 engine. This has been a controversial program since its inception. Now with the plan to end the program Rolls Royce and General Electric are arguing it is cheaper and more sensible to continue the program.
The Air Force and Navy have always been ambivalent about the program but Congress has kept it funded. The fact that Congress cuts aircraft production to find the funding has raised the hackles of some people. Now that the Defense Department has decided to end the program the contractors, and their allies in Congress, are arguing that most of the planned money has been spent and the program should at least complete development.
Of course if the engine did go into production and was used to power some of the JSF aircraft to be used by America and its allies the amount of revenue available to GE and Rolls Royce as well as Pratt & Whitney who make the primary engine would be quite substantial. The second source providers say that the bulk of the $3.5 billion allocated to the program has been spent so rather then terminating the program at some cost just complete it.
As with all of these programs recommended for termination it will be Congress who will have the last say in the budget. But since Gates moved quickly to halt the contracts for FCS and VH-71 it wouldn’t surprise me to see a stop work order on this one as well.
Budget Woes Affecting Key Canadian Modernization Program
Filed under: Boeing, Business Line, Canada, Companies, Contract Awards, Countries, Events, Military Aviation, Proposal, Restructuring, production program
Canada has suffered from a shortage of internal lift capability both strategic and tactical. The government had decided to purchase sixteen CH-47F Chinook helicopters to provide the tactical lift capability needed in Afghanistan. Operations there require substantial helicopter forces and the high and hot conditions need big, powerful aircraft.
Now there is a report that Canada may look at reducing the number of aircraft procured due to the budget problems facing all of the world’s governments. The contract with Boeing is still in negotiation so a change like this of cutting two aircraft bringing the total to fourteen is certainly easier then after the award. The total cost savings though may not be that much unless other customers can be found for the two aircraft. The more you buy of something the cheaper they are so reducing the buy to save money may cause a slight cost increase in the ones remaining.
Unfortunately Canada is now joining Britain with its Typhoon problems were the lack of money available is starting to affect military procurement programs. Discretionary spending in budgets is limited and weapons spending is one area that may be cut. If the world’s economy doesn’t turn around soon we will see more of these program changes. The start will be nibbling around the edges and then whole programs finally being ended.
Army To Upgrade And Refurbish M2 Bradleys
Filed under: BAE Systems, Business Line, Companies, Contract Awards, Events, Pennsylvia, Services, States, Texas, U.S. Army, logistics, production program
In the 1980’s the U.S. Army upgraded their heavy units with the M1 Abrams tank and M2/M3 Bradley Infantry Fighting Vehicles (IFV). These vehicles have been upgraded over the last twenty-five years and saw service in Desert Storm as well as the invasion and stabilization operations in Iraq. There has been no new production of them for several years and since 2001 the Army has spent a great deal of money to keep the vehicles up and running.
BAE Systems was awarded a contract to repair and upgrade another 600 M2 vehicles. This contract is worth about $600 million over its full life. This is enough to equip about twelve battalions. Normally when the vehicles go through this process they are completely rebuilt and also receive any current upgrades available. At the end of the process basically a brand new vehicle is delivered back to the Army.
Work on this contract will be done in Texas and Pennsylvania. BAE Systems has been doing the bulk of this kind of work on the M2 for the last several years. The vehicles were originally made by FMC a company that has long since been merged and bought out of existence.
England Looking At Harder Line On Typhoon Buy
Filed under: Business Line, Companies, Contract Additions, Countries, EADS, England, Events, Germany, Military Aviation, Restructuring, Saudi Arabia, Spain, production program
Update — It was reported on Monday that the expected penalties and cancellation fees related to the UK’s buy in this round for the advanced aircraft will be over two billion pounds ($3 billion or so). This amount of money may make it more feasible to purchase the aircraft. While penalties are capped at the two billion figure there would still be termination fees. The economic effect of ending the program would also be substantial as there are several thousand jobs in the UK that rely on the program. The decision on this effort will not be easy for the Brown Government already facing a dire financial situation.
As we wrote about previously England’s budget struggles are causing it to rethink the upcoming contract buy of Typhoon fighters. If England does not participate fully in the third option then either the other countries will have to renegotiate the prices most likely to a higher number. England does have the option of ending their participation in the multi-national contract but would have to pay substantial termination fees that might end up higher then the cost of buying the aircraft.
The interesting thing is that it was England worried that some of the other participants may have left the contract that worked to have the high fees put in the contract. England is trying a third option where most of there scheduled buy will go to Saudi Arabia rather then to them allowing some savings. The Brown government like Obama in the U.S. is facing trying to pay for a large economic stimulus package as well as increased social spending. This has put pressure on a military budget already suffering from the combined campaigns in Iraq and Afghanistan. Like Obama is doing one way to save money is to end large procurement programs to save defense spending. They can either be stopped in development or less units can be bought, like the F-22. Unfortunately the less you buy the more they cost so total savings may be limited.
If England does renege on this contract there will be significant future issues with their partners and for the Eurofighter consortium.
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.
Canada and Sikorsky Have Issues with New Helicopters
Filed under: Business Line, Canada, Contract Additions, Contract Awards, Military Aviation, Restructuring, Sikorsky, production program
In 2004 the Canadian government ordered 40 new helicopters from Sikorsky to replace aging Sea King search and rescue aircraft. The original contract was for about $5 billion Canadian and set an initial delivery date of 2008. Now The Globe and Mail reports that due to requirement changes requested by the government $117 million had to be paid to Sikorsky. The contract has also slipped deliveries to 2012. There are also indications that due to further changes planned by the government more money will have to be paid. At the same time Canada has refused to collect a penalty clause in the contract to punish the company for delayed deliveries.
ID Cards are Big Business
Filed under: Contract Awards, DLA, Department of Defense, IT, Telos Corporation, logistics
The US Department of Defense has over the last few years switched to a universal identification card, The Common Access Card (CAC) Card (sic). As its name implies it is common across DoD being used by the Services, for civilians and contractors. Most military bases require a CAC Card for access. MarketWatch.com reports that Telos Corporation has been awarded a $160 M contract to provide the consumables used to make the cards and track the government inventory of them. Read more
Does the Punishment Fit the Crime? Former DoD Worker Sentenced for Fraud
Filed under: Contract Awards, DLA, Editorial, Federal Budget Process, IT, Press Releases, crime, logistics
A Defense Logistics Agency (DLA) worker, Constance Walton, was sentenced to two years probation and a $10 K fine. Ms. Walton directed contracts be given to companies that she either had a financial role in or owned outright. She also failed to report income from these ventures. MarketWatch.com has the press release from the US Department of Justice on her case. To top it off the companies she directed work to never did any and were still paid. Read more
USAF Provides Long Lead Funding for More F-22
Filed under: Contract Additions, Contract Awards, Department of Defense, Federal Budget Process, Lockheed Martin, Military Aviation, U.S. Air Force, production program
The US Department of Defense awarded Lockheed-Martin a contract to begin buying long lead items for four more F-22 aircraft. The Associated Press reports. This funding will allow the production line to stay hot and will let the new, Obama administration decide whether to keep it going. The next step in the production of the aircraft would be to obligate another $140 M next year to continue construction of the aircraft. The current DoD leadership has been going back and forth on how many of the very expensive, but capable F-22’s to buy. Currently there are 183 under contract. Congress has the power to keep the line going through adding money to buy them even if an administration does not request them. Then it would be up to the President to veto the whole Defense Appropriations Bill; which rarely happens as there are items considered critical to running the DoD.
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- Contracts for March 19, 2010
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