US Air Force looks to replace C-130E aircraft
Filed under: Federal Budget Process, Lockheed Martin, Military Aviation, Proposal, U.S. Air Force, U.S. Marine Corps, production program
The US Air Force has begun talks with Lockheed Martin on executing a multi-year procurement contract for C-130J aircraft. These would replace the Air Forces and other Service’s current inventory of C-130E Hercules. The contract could be for up to 110 aircraft and have a value over time of $6 B. Multi-year procurements must be authorized by Congress and they are typically done for aircraft and other large systems in order to save money over time.
For more see The Guardian’s Business Feed.
Boeing pays premium for unmanned aircraft partner
Filed under: Acquisitions, Insitu, Military Aviation, development program
Boeing had been working with Insitu, a Washington state company, on unmanned aircraft. Now it just bought the company. See an article here. Based on reports, Boeing payed quite a premium for the company. Insitu had an estimated earnings last year of $80 M and Boeing reportedly payed five times that for the company. Of course all this is based on anonymous reports as the details have not been made public yet. So if you were able to invest money in Insitu you made it back.
Navy needs sailors
Filed under: Bearing Point, Contract Awards, IT, U.S. Navy, training
Bearingpoint was awarded a contract by the US Navy to provide management tools for the Recruiting Command. See a press release here. The contract is worth over $12 M and is a continuation of Bearingpoint’s work over the last few years. As with many other types of corporations the military spends a great deal of money on custom software and database applications. This is actually a large business and is often subsumed within the SETA support contracts.
Europeon nations developing common UAV
Filed under: EADS, France, Military Aviation, S, development program
This article describes how EADS is moving forward on a development contract for UAV for Germany, Spain, and France. They have finished the study phase and are now working on risk reduction. Ultimately, if all things go well they will move into production of a UAV for all three nations. There is no discussion as to how they will integrate the requirements of the different countries, or perhaps they will all accept the same solution. As in most programs EADS will have to produce a certain number of aircraft to make back some of the money sunk into the development.
Poorly written contract grounds UK CH-47
Filed under: Boeing, Contract Awards, England, Military Aviation, production program
In 2001 the British military purchased 8 CH-47 Chinooks to support special operations. Unfortunately the contract did not buy access to the aircraft source code for the software. This meant that the UK military could not certify the aircraft for any but day operations. See a story here. This has meant that the aircraft have sat for seven years not being used. At one point the UK government planned to convert them to regular cargo CH-47 aircraft but used the money for other things in the end. Obviously a clause to allow access to the technical data would have driven up the price a bit, but it would have allowed the military to certify the aircraft for night and bad weather operations. As it is there has been little gained by buying these aircraft, at really no fault of Boeing.
Lockheed EVMS not up to snuff
Filed under: Contract Awards, Department of Defense, Lockheed Martin, Military Aviation, development program
This article in the UK’s Gaurdian newspaper says that DoD is unhappy with the accuracy of Lockheed Martin’s Earned Value Management System (EVMS). This may lead to reduced award fee to the contractor. Earned value is defined in this paper, here, as “It is an objective measurement of how much work has been ccomplished on a project. It compares the value of the work done with what was budgeted to do that work and what was actually spent to do it.” It is very important to managing Cost Plus contracts as the money paid to the contractor is based on their performance. Read more
US defense budget spreads the wealth
Filed under: DRS Technologies, Federal Budget Process, IT, SETA, development program, logistics, production program
These three articles illustrate how the US defense budget as it has grown over the last several years effects localities economically. This one and this one discuss how Western Pennsylvania relies on the budget to support local industry. This article about Hawaii shows the effect of the Pacific Missile Range Facility on the island of Kaua’i. Although tourism is the major economy on that island the conduct of AEGIS missile defense tests certainly adds money to the local economy. Read more
AP on protests
Filed under: Congress, Contract Awards, Department of Defense, GAO, Protest
This article nicely summarizes the situation with protests. In a follow-up to the earlier discussion by Secretary of Defense Gates this makes it seem that DoD is getting tired of companies protesting losses. Unfortunately as we have discussed previously there is nothing to lose for these companies. Business opportunities are limited and the only way to get around a loss is to protest. Of course it creates issues for the winner and DoD in executing what could be very critical programs for the US military. There will be more to come on this.
DoD buys some vegetables
Filed under: Adams Brothers, Contract Awards, Department of Defense, logistics
In a contact that is an example of several things, Adams Brothers Produce of Montgomery, AL won a contract worth $7 M or so to provide fruits and vegetables. See the story here. This shows that DoD buys small things, big things, cheap and expensive things. It didn’t say if these were for the Defense Commissary Service, or to be served to troops. The other thing about this contract is that it is a small business set aside. That means only certain companies can bid on it. So in the name of social engineering, DoD may not always get the best value for its money.
Perseverance Pays
Filed under: Cleveland BioLabs, Contract Awards, Department of Defense, development program
Cleveland Biolabs who at the beginning of the year failed to win a large contract from DoD for a drug to treat radiation poisoning was rewarded yesterday with another contract. See the article here. A previous post on the matter can be found here. This contract worth about $9 M pales compared to the one awarded previously at $225 M but will help the company move forward with its research. Read more
US weapon system acquisition policy
When the US government orders a new development program for a weapon system there are a variety of steps that must be done to get to the point of awarding the contract. Congress through law and regulation strictly dictates how a system may be acquired. The process is supposed to be driven by requirements. The users specify the requirements and then the material developer gets a system that meets the requirements at a good price for the government. Read more
Australia cuts bait
Filed under: Australia, Boeing, Contract Awards, McDonnell Douglas, Military Aviation, production program
The Australian government decided after all to go ahead with the purchase of the F/A-18 to gap fill until the JSF is available. An article is here. The new more liberal government had discussed canceling the contract to save money. Now they claim they have been able to reduce the total cost, so it is worthwhile. See a previous article here. Read more
After debriefs protest to come
Filed under: Boeing, Contract Awards, EADS, GAO, Northrop Grumman Corp., Protest, U.S. Air Force, commercial aviation, logistics, production program
According to press reports Boeing will protest the KC-45 award to Northrop-Grumman and EADS. They are supposedly going to the General Accounting Office (GAO), which is the middle level. The lowest is the agency making the decision, here probably Air Force Material Command, and the highest is straight to Federal Court. They can still go to court if they disagree with the GAO decision. If you go to court you will most likely just get some money, not the contract. The GAO if it upholds the protest will most likely direct recompetition. See the CSAR-X for an example of that, which funnily Boeing won but Sikorsky and Augusta Westland won on protests. Northrop Grumman on the other hand put out a press release on why they won.
Air Force awards KC-X to team of Northrop Grumman and EADS
Filed under: Boeing, Contract Awards, EADS, Military Aviation, Northrop Grumman Corp., U.S. Air Force, commercial aviation, logistics, production program
The Air Force announced today that the Northrop Grumman and EADS team won the KC-X contract. News story is here. This is a huge decision and marks a major change in US defense policy. Read more
Services ask Congress for things not in the budget
Filed under: Congress, Department of Defense, Federal Budget Process
In early February the President submits his budget to Congress. The three Services submitted theirs in October - November. The President, really the Office of Management and Budget (OMB), and DoD can, and will, change the Services’ request. Congress then allows the Navy, Army and Air Force to submit lists of things that they want funded, but weren’t in the President’s Budget. Looking at this article on Wired.com, they did that. Read more
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