Defense Procurement News

The House Appropriations Committee marked the FY09 budget before taking their August recess.  See a story here. The Army’s struggling Armed Reconnaissance Helicopter (ARH) program was marked to delete 13 aircraft, and the Navy’s Presidential Helo was also decremented. The House also ordered that consideration of jobs would be a criteria for the source selection of the KC-45 tanker. Boeing won its protest of the award to Northrop-Grumman and EADS and forced DoD to reconsider the contract. The Senate needs to also mark the bill and then there will be a Conference mark up as well.

The soaring costs of the ARH program have caused a Nunn-McCurdy Cost Breach. See a story here. The 40% increase in unit cost has caused the Army and DoD to rethink, again, proceeding with the contract. Nunn-McCurdy cost breaches were established in the 80’s as part of the overall reform of Congressional monitoring of programs.   Read the rest of this entry »

The Navy ordered from the Boeing-Bell team manufacturing the V-22 Osprey training devices and related equipment today. The contract is worth about $78 M. See a story here. The Osprey has just finished a successful deployment in Iraq where it carried out heavy lift missions, usually for logistics purposes. The contract will pay for the development and production of training equipment.

The House Armed Services Committee marked up the FY09 Defense Authorization Bill to their own priorities. See an article here. Big cuts were made to the Army’s Advanced Reconnaissance Helicopter (ARH) and Future Combat System (FCS). ARH, a new Bell helicopter to replace the OH-58D Kiowa Warrior, has had its struggles. FCS is a vast system of systems that will still get over $2 B of funding with the House cut. Of course the Senate has fully funded both programs so that will have to be worked out in Conference. Some programs did gain such as the C-17 and the House continued the second engine for the F-35 JSF despite Pentagon protests that it is not necessary. There will be many more changes by October.

As part of the recent procurement of 167 V-22 Osprey’s by the USAF and USMC the Boeing led team will buy parts from Eaton. The expected revenue for this company from the contract could be over $300 M. See a story here. Eaton makes parts for the tilt rotor aircraft. This again illustrates the spillover effect from these large procurement contracts. Companies all over the world participate in the production of parts and services for the total systems. Gone are the days where one company does all of the work.

After canceling an earlier contract for Army helicopters, India is trying it again. This time though they are buying 259 for their Army and another 125 for the Air Force. See an article here. For information on the previous contract action see this. It is expected that Bell, Eurocopter, Augusta and Kamov will bid on the contract. The Indian government had for years relied on Russian and British equipment, but is now turning to America and other nations for their procurements. Based on past other procurements we will see similar aircraft to those that were proposed for the US Army’s Light Utility Helicopter (LUH) program which was won by the Eurocopter EC-145 aircraft.

Bell was building a tilt-rotor Unmanned Aeriel System (UAS) for the USCG as part of the Deep Water modernization and upgrade program. The whole Deep Water program has been hit with problems and criticism from Congress to the point where the USCG is restructuring. As part of this they canceled the tilt-rotor UAS that Bell Helicopter was building for them based on V-22 technology. See a story here.   Read the rest of this entry »

This article at Rotorhub.com highlights the performance of the V-22 Osprey in Western Iraq. Of note they replaced a CH-53 squadron and are maintaining an availability of 68%. This seems low compared to the Army helicopter systems I am familiar with, but maybe it is good compared to the 53. The squadron has flown 2000 hours or so since deployed in October.

With an increase in the 2008 defense budget, the Taiwanese military plans to buy AH-64 Apaches and Patriot PAC-3 missile systems. See DefenseNews.com here for more. The military also plans to invest in new cruise missiles and a study for an advanced submarine. Taiwan will also upgrade its Anti-submarine warfare aircraft by purchasing P-3 Orion aircraft.

On Friday, Bell Boeing was awarded a contract to provide Interim Contractor Support (ICS) for the US Air Forces V-22 aircraft. The contract is worth almost $48 million and will support aircraft in Florida and New Mexico. The company is also required to support any operationally deployed aircraft. Details about the award are here. Since the program is managed by the Navy for all the Services they awarded the contract, although this is for the US Air Force aircraft.

One of the issues with Contractor Logistics Support (CLS), although ICS is not traditional CLS it just provides a bridge until the service stands up their organic support, is that if you are using it you will need to make provisions to deploy your maintenance contractor. That means in Iraq and Afghanistan there are a large number of contractors providing logistic services for aircraft, vehicles and in general.

The author in Government Computer News is talking about software, but it applies to DOD buying any type of commercial product. Of course, since this is Defense procurement there are three categories: Commercial-Off-The-Shelf (COTS), Commercial Item, and Non-Developmental Item. The key sentence in the article is that the government is buying trust from the provider, trust that their product will work and meet their requirements. The key concept of commercial acquisition is that the product already meets your needs, so there is no need to develop anything. For an example of a program where this is how it was supposed to be, and did not end up see the RH-70. The article is here. Read about the RH-70 here.