Defense Procurement News

The UK Ministry of Defence signed an approximately $4 B contract with BAE systems to buy ammunition, explosives and also to rebuild the former Royal Ordnance factories. BAE had bought the formally Government owned ammunition production sites in 1987 and have slowly closed down capacity. BAE had been looking at selling off this part of the company, but this long term contract with the UK military should stop that in the near term. As part of the contract BAE will invest in modernizing and upgrading the factories.

The story is in the Times.

L3 was awarded a contract by the UK’s Ministry of Defence to perform replacement of the outer wings of three C-130 aircraft. The contract is worth over $18 M. The actual work will be done in Canada. Like many European companies expanding in the US market; it also behooves US ones to work there. Especially with so much originally American equipment being used by the UK, Germany and other NATO countries.

For the actual press release see MarketWatch at the Wall Street Journal Digital Network.

BAE Systems received a contract for M777 howitzers. See a story here. The M777 is a light weight towed piece that is used by the US, England and Canada. These countries have ordered 700 of the weapon. The contract is worth over $80 M.

The UK government is currently planning on buying Eurofighters and F-35 JSF aircraft to modernize their fixed wing aviation force. There are rumors that the Eurofighter buy may be canceled as a cost savings. See an article here. Eurofighter is built by a multi-nation consortium in Europe with BAE being the most important UK participant. If the contract is canceled, with the Government paying termination fees, that means no major aircraft will be built by BAE. They build parts of the JSF but do not assemble the final aircraft. This would be the end of fighter production in England if it happens until a more advanced aircraft then the F-22 or F-35 comes along.

The UK government, fresh off of awarding the construction contract for the two new aircraft carriers, has now awarded a second major one related to the effort. BAE has been awarded a contract to develop the IT backbone for the ships. See this article for more. This over $500 M contract will develop the system that integrates everything on the ship. Sure to be key as one of the goals of the new design must be to minimize crew size.

The British Ministry of Defense signed the contract with the VT Group to build the two new aircraft carriers for the Royal Navy. See an article here. Previous reports had the Scottish government worried that Britain might renege on the deal due to differences with the emerging nationalistic mood in Scotland. See a post here. The total contract value is about $7.5 B with as always with these kind of programs the chance to go higher.

This blog post describes the recent launch of the Skynet-5C communications satellite on an Ariane Space Launch Vehicle. Paradigm is the company that manages the Skynet system for the British Ministry of Defense. In the movie The Terminator, of course, the super C3I system that decides to wipe out the humans was called Skynet. There has been a running joke that someday a system like Skynet will be built and take appropriate action on the people it serves.

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.

Bump - Further details on the contract the UK signed with Ascent, the joint venture of Lockheed and VT, to conduct aviation training have come out. See this article for some of the new details. It is a 25 year contract with the contractor that will be implemented incrementally as the current training program completes.

According to this short report, the UK is ready to transition all of its pilot training to a private contractor. This is for the Royal Navy, Royal Air Force and Army rotary wing pilots. If this is true it represents a major change in how training has been done in the past. One would have to assume that there are major cost savings in this transition away from maintaining their own aircraft and training staff. Beyond saying that Lockheed Martina and VT will carry out the contract no details were given as to how it would be done.

The US DoD has had a habit over the last five years to raid the investment accounts to fund current operations. This means they take RDT&E and procurement funding and convert it to Operations & Maintenance for war efforts. This is not always a good practice as it can play havoc with development and production programs. Part of the problem is that the Congress does not always budget well funding these types of programs and not putting enough into O&M. Now it seems the UK has the same problem according to this article. The UK MOD has proposed taking funding from programs to meet the demands of current operations and fund the two new carriers the British are about to start building. In the long run this is not a good practice as you create bills that have to be met in the out years, or end up canceling programs.

Lockheed Martin was awarded a $197 M contract for long lead items for 10 JSF aircraft. See the story here. These will be procured for the US Navy and the UK. These are the version capable of Vertical Take Off and Landing (VTOL) operations. Ultimately they will replace the Harrier in service. Like many programs there are certain items that need to be purchased far in advance of delivery and these long lead items are usually funded incrementally from year to year. Aviation programs will receive Advanced Procurement in the budget to support these activities.

As part of the Future Rapid Effect System (FRES), General Dynamics was selected to provide the wheeled utility vehicle. See an article here. The FRES is a long term program to modernize and upgrade the British Army. It is similar in concept to the US Army’s Future Combat System (FCS) in that it is a system-of-systems. The utility vehicle is the first part to be awarded. According to this article the order to GD could be worth up to $12 B, with the next two parts to be awarded also worth this much.

Boeing was awarded a $3.8 M contract by DARPA to begin development of a ultra-high endurance unmanned aircraft. Boeing teamed with a British company, QinetiQ Ltd., for the program. The Vulture will be an aircraft that can loiter for years and carry a payload. It would then be activated when necessary. QinetiQ had been working on solar powered aircraft under other contracts that might have applications to this mission.

Force Protection announced that they had been awarded a contract to deliver 157 MRAP to the UK armed forces. See the press release here. Force Protection had been struggling as they won very little of the last US contract for MRAP vehicles. This contract will certainly tide them over for several months as it is worth an estimated $125 M. See a post here on Force Protection’s situation.

In kind of a switch from the US the UK decided to lease their new tankers from EADS. It also looks like full Contractor Logistics Support (CLS) will be utilized. This means that the contractor will be paid to do all of the maintenance on the aircraft. This has become more common in the US as well as it minimizes the up front costs to the government as they do not have to stock parts or train mechanics.   Read the rest of this entry »

The Royal Navy let a contract to buy the elevators, or “lifts” in England, as part of the overall construction program for the two new large deck aircraft carriers it intends to build. See a story here. The contract was awarded to the engineering firm McTaggert Scott. The elevators will be used to move aircraft, ordnance and equipment from the hanger deck to the flight deck. While there have been stories of slow down in the work on the two ships this contract indicates that the Navy is starting to move forward.

The British government gave Lockheed Martin a contract worth $200 M for a system similar to Blue Force Tracker. See the article here. The Land Environment Air Picture Provision (LEAPP) provides situational awareness for troops so that they may minimize friendly fire incidents. Blue Force Tracker (BFT) is the equivalent type of system for the US military.   Read the rest of this entry »

As predicted EADS along with a group of English and French companies won a contract to build 14 tankers for the Royal Air Force. See a story here. The contract is worth $26 Billion. Boeing had been eliminated from the competition a few years earlier.

This short note at Forbes.com indicates that the UK government will buy KC-30 aircraft manufactured by EADS and with Rolls-Royce engines. This is a much smaller contract then the US Air Force one, but it builds on that success. I don’t know who else bid on this contract, but one would assume it had to be Boeing as there is nobody else. The contract will be worth $26 B dollars.

Force Protection won two contracts worth about $120 M to build vehicles for Britain and Italy. See an article here about this. Force Protection had been struggling a little lately due to some US cancellations or contracts going to other companies, but these contracts should help.

Rosyth Dockyard will received a 50 M pound investment from the British government to facilitate the construction of their two new carriers. See NEWS.Scotsman.com for more. The total value of the construction and fitting out of the ships is almost 4.0 billion Pounds. For more on the new ships see this.

This analysis in The Guardian says that BAE and the VT Group will lose billions in orders from the British government if planned cuts to the defence budget go through. Because some of the contracts for hardware have cancellation clauses the government may be force to buy the systems and then sell them to other nations. This is all part of an attempt to reduce public spending.