Reports That Northrop Won’t Bid

It is being reported that Northrop Grumman (NOC) will not submit a proposal in response to the new KC-X RFP released at the end of last month. Supposedly the announcement will be made after the markets close. Northrop had written to the DoD in December saying they most likely would not without changes in the RFP to make it fairer to the Airbus 330 based aircraft.

There is no word on whether EADS will find another partner or bid by themselves for the $35 billion contract.

Boeing Will Submit Proposal Based on K-767

As it did in the last contest two years ago Boeing (BA) plans to submit a 767 based tanker. This is similar to the ones they are already building for Japan. To differentiate it from previous versions they are calling it a “NewGen” aircraft. Boeing will upgrade the basic 767 design with a new fueling boom and parts of the 787 cockpit technology.

There is still no formal word from Northrop Grumman (NOC) or EADS (EADS:P) if they plan to submit a proposal this time around.

KC-X Tanker Proposal News

To our loyal readers we are not ignoring the KC-X tanker RFP on Defense Procurement News but we have established a separate site, KC-X Tanker News, to cover that issue.

Boeing Looks To Get Into Vehicle Maintenance

Using their vast amount of experience supporting aircraft — both military and civilian — Boeing (BA) submitted a proposal to the U.S. Army to provide maintenance management and support at two depots primarily concerned with vehicle and weapon maintenance. The Industrial-Product Support Vendor (IPV) contract is worth over $190 million. The work at Anniston Army Depot in Alabama and Red River Depot in Texas is to repair, reset and recapitalize vehicles like the M1 tank, the M2 IFV and the Stryker ICV.

Boeing does not make many of these types of vehicles but at the depots the contract will provide support, forecasting and inventory management. This is all work that Boeing is experienced in with aircraft and they work with the Army already on helicopters such as the CH-47. The bid was submitted to the Defense Logistics Agency (DLA).

India Relooking New Tanker Aircraft

India currently operates a version of the Ilyushin-76 transport aircraft as an aerial tanker. The Il-78 “Midas” has been in service with Russia and India for several years and is a rugged, fairly cheap solution. Recently the Indian government had proposed new tankers based on the Airbus A330 aircraft. The same tanker is being purchased by England and would be considered again by the U.S. Air Force for its KC-X competition.

Now it is reported that the Finance Ministry has raised some concerns over the cost of the A330 compared to the Il-78. Both aircraft were proposed for the contract and the Il-78 was the cheaper bid. The Ministry feels that the contract should be reconsidered on cost grounds and also due to the fact that India already operates the Il-78 making it easier to integrate the new tankers. It is assumed though that the A330 platform offers benefits in capability and technology level over the older Russian aircraft.

India has been planning on new investment in their Armed Forces utilizing the purchase of foriegn, Western equipment to quickly upgrade their technological level. At the same time new rules on offsets and foriegn investment means that their economy will gain through these deals. The most important contract that is out there is for a new fighter which is currently undergoing the early stages of competition. Several U.S. and European companies as well as MiG have submitted bids.

It might be that the Indian Government decides that the higher cost of the A330 is worth it if the capability purchased is significantly enhanced.

SMALL BUSINESSES DEMAND ENFORCEMENT OF PENALTIES AND ACCURATE ACCOUNTING OF THEIR CONTRACTS — Press Release

SMALL BUSINESSES DEMAND ENFORCEMENT OF PENALTIES AND ACCURATE ACCOUNTING OF THEIR CONTRACTS

Size Protest Victories without anything to Show for them and Agencies Unfair Reporting of Small Biz Contracts prompts Demand for Congressional Hearings

Size Protest Process must be Strengthen1 and Data Quality Act 2 Implemented

JACKSONVILLE, FL., November 2nd, 2009. – “My second Size Protest victory within two months against a large business which had misrepresented its size to win small business contracts3 will help demonstrate that the size protest process does not work as Congress had intended and the process needs a major overhaul,” said Raul Espinosa, President of FitNet, a government purchasing group in Northern Florida.

He added, “Violators are not concerned with the penalties Congress had imposed for fraud because there is no enforcement and the protest winners cannot get back the contract they fought for nor collect any fees nor expenses for their efforts.”

In 2005, Espinosa founded The Fairness in Procurement Alliance (FPA), following his Size Protest victory against a front for a large business to help demonstrate that the Size Protest process did not deliver justice4. FPA has since become a major national coalition to advance ‘partnership concepts’ and encourage bureaucrats to pay attention to out-of-the-box solutions. The flagship of this effort is The Umbrella Initiative5,
whose goal is to level the playing field in government contracting not only at the Federal level, but at the State and local level as well. Among its published Reports, is a White Paper on Why Size Protests Need Strengthening6, which cites numerous mishandled size protest cases and recommends specific solutions for the process to deliver justice.

FPA is now relying on its successes7 to help secure funding for seven pilot projects in Florida8 that do not only encourage small business participation in government contracting, but their projected results can be replicated in other States. Espinosa said, “The Umbrella Initiative pilot programs intend to make better use of existing networks of service providers such as the Small Business Development Centers (SBDC) and the Women’s Business Centers (WBC).”

Through an appeal before the Office of Hearings and Appeals (OHA) for yet another alleged mishandled size protest9, Espinosa is also attempting to demonstrate how Agencies are not only overlooking size standards violations, but allowing the abusive procurement practice referred to as unfair justification10 to abuse small businesses. “FPA has demonstrated that the Size Protest process is ineffective at delivering justice and
deterring fraud and abuse,” said, Borden Hallowes, Esq., Acting Director of the FPA Legal Center. He added, “There are entrepreneurial ways with which to fix the protest process and protect the statutory small business reservation with the Data Quality Act. FPA intends to bring attention to the ways it can be done.”

Anthony Robinson, President of MBELDEF said, “Espinosa’s determination since winning his 2005 key court victory to deter fraud and abuse in government contracting and help bureaucrats meet the objective of P.L. 95-50711 deserves the attention of Congress and the consideration of bureaucrats.”

Dr. Henry Thomas, Director of the FPA Think Tank at UNF said, “Our efforts are aimed at bringing attention to what we call “entrepreneurial solutions” that can level the playing field in government contracting. He added, “Our government is blinded by pro big business — Too big to fail thinking.”

Espinosa added, “FPA has corroborated what the SBA OIG has already claimed is the SBA biggest challenge:12 Stopping large businesses from taking small business contracts and preventing Agencies from taking credit for small business contracts awarded to large businesses.”
“For small and disadvantaged businesses to receive maximum practicable utilization in government contracting, as required by P.L. 95-507, all contracting abusive practices must be eliminated,” said Roger Campos, President of the Minority Business Round Table (MBRT) and a Member of the National SBA Advisory Committee.

Paul Murphy, President of Eagle Eye, a strategic partner of FPA said, “Transparency has allowed us to show that Federal Agencies had taken credit for $4.01B in small business contracts awarded to 48 multi-billion dollar businesses in FY 2008 which the Agencies did not account for to SBA.”13

Bob Coakley, a former staff director to former Florida Governor and Senator Lawton Chiles who is a FPA advisor noted, “Congress ought to inquire into the accuracy of the underlying data of the SBA Report Card. He added, “The Data Quality Act was intended to extend the requirements of the Chiles authored Paperwork Reduction Act. OMB has an affirmative responsibility to ensure that information disseminated by the federal government is reliable. Moreover, the Obama Administration is insisting upon transparency of government operations. They should determine and act upon the concern that small and disadvantaged businesses were shortchanged $4.01B in contracts they did not receive.”

For the current government outreach initiative to succeed at encouraging more small and disadvantaged businesses to contract with the government, SBA, MBDA and DoJ have to cooperate and support entrepreneurial efforts at eliminating ‘fraud and abuse,’ and at opening more contract opportunities at all levels.

“Eliminating the alleged illegal ‘exemptions’ on the Federal Acquisition Regulations (FAR) will allow $64B in federal contracts to become eligible for the statutory small business reservation,” said Al Piña, Chairman of the Florida Small Business Reinvestment Coalition. (FSBRC) He added, “Accurately accounting for all Florida minority businesses and for the municipal and State contracts disadvantaged businesses are receiving. The
projects of The Umbrella Initiative must be made a priority for the outreach efforts to succeed.”

Murphy, said, “The Umbrella Initiative and their projects will permit an accurate accounting for all disadvantaged businesses at the State level and for the contracts they are receiving from the State and municipal government.” He added, “The Umbrella Initiative intends to match state and municipal data to the Federal statistics and thus help State and municipal officials maximize all efforts at leveling the playing field.”14

Scott Amey, General Counsel for the Project on Government Oversight (POGO) said, “If the Administration is serious about acquisition reform, this is one of the first places it should look to enhance competition and improve federal contract spending.”

Congresswoman Corrine Brown along with other elected officials in Florida are supporting The Umbrella Initiative and its goal to establish a Minority Procurement Center at UNF 15 which would work on projects that would double the number of small businesses contracting with the government by the year 2020.

# # #

1 SBA IG Petition. – http://www.docstoc.com/docs/13394703/Congress-Asked-to-Enforce-Penalties-and–Revamp-Size-Protests
2 The Data Quality Act. – http://en.wikipedia.org/wiki/Data_Quality_Act
3 Size Protests Decisions against Unisen, Inc. – http://www.docstoc.com/docs/13810534/Consecutive-Size-Protest-Decisions-Against-Unisen-Inc
4 The OHA and SBA Decisions. – http://www.prweb.com/releases/2005/10/prweb302024.htm
5 The Umbrella Initiative. – http://www.docstoc.com/docs/3683947/The-FPA-UNF-Umbrella-Initiative
6 White Paper on Size Protests.- http://www.docstoc.com/docs/3651041/Reasons-why-the-SBA-Size-Protest-System-does-not-Work
7 FPA Successes . – http://www.docstoc.com/docs/11209387/FPA-Success-and-Track-Record
8 Proposed Florida Pilot Projects. – http://www.docstoc.com/docs/4458661/?key=N2QyYzg3N2Qt&pass=NjA2ZC00ZThh
9 OHA Appeal for Mishandled Protest. – http://www.docstoc.com/docs/13806343/OHA-Filing-for-Mishandled-Size-Protest
10 The Unfair Justification Procurement Advisory. – http://www.prweb.com/prfiles/2008/08/31/162468/FPAAdvisoryUnfairJustifications.pdf
11 P.L. 95-507. – http://www.docstoc.com/docs/3626707/The-public-law-that-defines-procurement-set-asides
12 The SBA OIG Report 5-15. -http://www.sba.gov/idc/groups/public/documents/sba/oig_gcbd_05-15.pdf
13 48 Ineligible Firms – http://www.docstoc.com/docs/13948639/FPA-List-of–48-Inelegible-Suppliers-Awarded-Small-Biz-Contracts-in-FY08
14 The State and Municipal Efforts. – http://www.docstoc.com/docs/13393316/Florida-Minority-Participation-in-Federal-Highway-Contracts
15 The Minority Procurement Center at UNF. – http://www.docstoc.com/docs/6048073/Cong-Corrine-Brown-Supports-FPA-UNF-Initiative

Northrop Threatening No Participation Over Cost Data

Yesterday Northrop announced that it is considering not participating in thew new KC-X competition. They are concerned that the the way the price requirement is structured may not be fair to them. They are also pursuing the complaint that their cost data was provided to Boeing during the protest of the last award and want access to the same information.

If Northrop and EADS don’t submit a bid it will be hard to get actual competition on the contract. That would leave just one submission, Boeing, or perhaps two from them if they go the route of having a 777 as well as a 767 proposal. This situation would make it hard for the Air Force to proceed.

The chances of Northrop doing this is low and the Department of Defense realizes it. This is the largest procurement coming down the road and both EADS and Boeing need the work. Of course if there is really a belief that their bid cannot win no matter what then Northrop should just save the money and not prepare one. This is only the draft RFP so the next year or so should be interesting.

Special Defense Procurement News Page On The KC-X Tanker Contest

As part of Defense Procurement News we have set up a special site to gather information and discussions about the new U.S. Air Force KC-X aerial tanker contest. KC-X Tanker News may be found here. We will try to have all that we can find on EADS, Boeing and Northrop Grumman’s efforts to win this major contract.

Boeing Responds To KC-X Draft RFP Release

Yesterday after the Air Force put out the draft RFP for the new tanker program. The third try at this acquisition Boeing responded with the following statement:

“Our next step is to conduct a detailed review of the document. We want to understand how requirements will be defined and prioritized and how the proposals will be evaluated. That information will help us decide which plane to offer or whether to offer both planes. We appreciate that there will be frequent, open discussion with the U.S. Air Force as we go forward. Both the Air Force and the American taxpayer will benefit from the tanker options we can offer. Boeing has a KC-7A7 ‘family of tankers’ available to meet the warfighter’s requirements. Whether it’s the agile, flexible 767-based tanker or the large 777-based tanker, Boeing will deliver a combat-ready tanker with maximum capability at the lowest cost.”

More details on Boeing’s plans may be found at the KC-7A7 United States Tanker website.

U.S. And India’s Weapon Buying Relationship Moves Forward

As part of her diplomatic mission to India Secretary of State Hillary Clinton discussed a new agreement between the countries that will facilitate sales of U.S. weapons. This “end user monitoring” will make it possible for the U.S. to make sure that the Indian government does not sell its technology to a third party or misuse it for their economic gain. This type of agreement is fairly common among countries and allows sales to be made with some confidence.

India has embarked on a major upgrade to its military through acquisition of foriegn sourced weapons. This is a change from the past when the South Asian country tried to develop its own advanced weapons and relied on the U.K. and Russia. The decision to buy American, European and advanced Israeli technology allows India to leap forward in capability. As part of these contracts significant offsets are required of the selling companies through investment in the Indian economy.

Australia Reportedly To Buy F-35

Two days after the roll out of their first F/A-18 aircraft necessary to provide an interim air capability until the nation moves out on its fifth generation buy of either the F-35 JSF or the F-22 Raptor the Government announced that they would invest in the F-35. While the F-22 was attractive due to its longer range and greater payload up to seventy F-35 aircraft will be purchased.

Australia plans to now review their defense procurement plans every four years and readjust as necessary. Australia has been a partner in the F-35 development effort but recently had looked at buying the F-22. This would require an act of Congress as current law bans the sale of the modern aircraft. Japan and Israel have also inquired about the availability of the F-22. With the Obama Administration planning on ending procurement of the F-22 foriegn sales are now attractive to Congress as a way to keep production going.

MRAP-ATV Contract Continues On Track

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.

India Releases Helicopter Requests For Proposals

India has released this week two separate Requests for Proposals (RFP) for new helicopters. The first one is to purchase twenty-two advanced attack helicopters. The second for fifteen heavy lift aircraft. India faces many of the same problems that the Allied forces in Afghanistan do because of the high, hot environments that aircraft must fly in.

The country had released a RFP last year for attack helicopters but withdrew after receiving non-responsive bids. India has looked at major upgrades to its armed forces by broadening the base of whom they buy from. Rather then relying primarily on Russian or British equipment Israel and the United States have begun to make inroads into the market. India also had invested heavily in domestic development and production but to get more technology faster has started buying overseas in greater amounts.

With the new proposals Boeing is considering a bid for each. They make the AH-64 Apache and CH-47 Chinook both heavily used in Afghanistan by the U.S. and Allies. Boeing is also looking at taking major hits in the Obama budget and will try to counter that with sales overseas.

Budget Woes Affecting Key Canadian Modernization 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.

CAGW Advises Congress Not to Ground Presidential Chopper — Press Release

CAGW Advises Congress Not to Ground Presidential Chopper

WASHINGTON–(BUSINESS WIRE)–Citizens Against Government Waste (CAGW), the nation’s premier taxpayer watchdog organization, today expressed support for the continuation of the VH-71 Presidential Helicopter Program. President Obama included the program on the list of program terminations and reductions to the fiscal year (FY) 2010 budget, which he released on May 7, 2009 in a bid to whittle $17 billion out of his overall $3.6 trillion budget. The President had stated in February, 2009 that the helicopter he currently uses “seems perfectly adequate” and added, “I think it is an example of the procurement process gone amok. And we’re going to have to fix it.”

But even in his recommendation to terminate the program, Defense Secretary Robert Gates acknowledged that a new fleet of presidential helicopters is necessary due to the advanced age and technological limitations of the current fleet. In a post-9/11 world, there is broad consensus that the President should not be flying Vietnam-era technology.

“CAGW applauds the President’s desire to cut wasteful spending, but taxpayers are between a rock and a hard place on the helicopter issue,” said CAGW President Tom Schatz. “One of the most common axioms of aviation is that every takeoff is optional, but every landing is mandatory. The same could be said now about the $13 billion program to fund the new fleet of presidential helicopters.”

It has become increasingly clear that it won’t be as cost effective as it may have appeared to terminate the VH-71 program. More than $3 billion has already been invested in the program to cover the R&D and production costs of the first phase. Navy officials estimate that program termination and liability costs will be $555 million. Factoring in costs already incurred and shut-down fees, terminating the program now would leave taxpayers with nothing to show for nearly $4 billion – even though nine new aircraft have been produced that meet performance requirements. “This program is also another example of the rampant lack of realistic budgeting and absence of fiscal discipline in the Pentagon’s procurement process,” said Schatz.

More alarming, according to a recent memo prepared by House Armed Services Committee staff, the Navy has told Congress it will require billions of dollars to extend the life of the current fleet of presidential helicopters, which are already 35 years old, in order to keep them in operation for another decade until a new program can be devised. “In light of these facts,” said Schatz, “starting a do-over program from scratch would be even more costly than completing the current program – leaving the taxpayer to foot the bill twice rather than maximizing the current investment. Given the urgent security needs of the President and the massive amount of money that would be wasted should the Pentagon and the White House terminate the program at this late stage, the prudent course would be to move forward, take possession of the helicopters we have paid for, and find a responsible solution both for the taxpayer and the Office of the President.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

MRAP-ATV Moves Forward

In early March the Defense Department awarded a group of companies contracts to begin concept designs for the Mine Resistant Ambush Protected-All Terrain Vehicle (MRAP-ATV). Now it is being reported that the first production buy contracts may be awarded by May 1st. Crain’s Detroit Business says that the contracts had been delayed due to the short lived protest by Navistar. The Army plans to buy a small quantity of vehicles to do tests with and then order larger buys. The Defense Department had discussed in the past buying several of the proposed vehicles rather then focusing on just one.

This would mirror the experience had with the large MRAP vehicles bought for use in Iraq and Afghanistan to defeat the IED threat. Then due to the large quantities needed quickly several companies were able to win contracts. Part of this was that the U.S. military moved slowly first equipping engineering units and then the bulk of their infantry and other troops. This meant that the U.S.M.C and the Army bought different types for the missions. The MRAP-ATV will be used in Afghanistan where a lighter, more mobile off road vehicle is needed due to the rough terrain. This has been a more deliberate process then that used for the MRAP. Multiple contracts would allow faster equipping of units, but will also require a larger, more diverse logistical and training tail.

India Rejects Rafale For New Fighter

Update — Flight International is reporting that India says it has not ruled out any competitor in the program.

The Indian Air Force is looking to purchase an advanced fighter to add to their inventory. Six foreign companies had submitted bids for the 126 aircraft order. Now word comes that the French proposed Dassault Rafale was eliminated from the competition. The Indianexpress.com reports that publicly it was stated the aircraft did not meet certain “qualitative” requirements. It was also said that the proposal submitted showed the aircraft did not meet some of the technical requirements for the program. This means that the contest will continue with Boeing, Lockheed Martin, SAAB, MiG and Eurofighter participation for now.

The deal is one of several that India is proceeding with in an attempt to upgrade the technical capability of their armed forces. In the past the country had tended to buy from Russia or England. India has also spent the last several years developing an indigenous arms industry. Although lately they have turned to outside sources to include Israel and the U.S. for advanced weapons.

Currently there are several nations looking at buying advanced fighters. The Rafale has not been bid for many as most of the competition has been between the F/A-18G, SAAB Gripen, F-35 JSF and the Eurofighter Typhoon. The Indian contract is certainly one of the largest percolating.

Kansas Fights for the ABL

Boeing uses their Wichita, KS facility to modify aircraft for use by the military. Obviously the state has a vested interest in keeping this plant with work. The tankers if Boeing wins the KC-X contract as well as the second Airborne Laser (ABL) 747 would be built here. So it is not surprising that The Kansas City Star is reporting that the Kansas Congressional delegation is a tad upset with Gates’ proposal to cancel the second ABL aircraft.

With all of the various programs that Gates’ has recommended terminating or restructuring you can expect to see stories like these. One state will demand that a ship building program continue or a vehicle one. The F-22 supporters started making a case before the announcement of the ending of production. Contractors and Congressman have a vested interest in keeping programs going for revenue and economic impact reasons. The fighting over keeping programs is really just another aspect of the whole earmark process. As Gate’s budget makes it through Congress there will be whole sale changes to what he proposed with programs continuing.

Has Force Protection Turned the Corner?

It has been a good few weeks for Force Protection. First they set up the joint venture withe British company Morgan Crucible JV to produce new armored support vehicles for the British military. Then they won a contract from Hungary for three Cougar vehicles plus support. While this is not a large contract it may certainly lead to other contracts from the new Eastern European NATO countries. Now it is reported that they have won a contract from the U.S.M.C. for upgraded MRAP vehicles. The big prize that is still out there is the MRAP-ATV contract which will build a new, lighter and more maneuverable vehicle for use in Afghanistan. Force Protection had been losing work in 2007-2008 after a big boom in 2005 and out due to the rapid demand for MRAP driven by the reaction from Congress to the IED threat. The company’s stock declined rapidly and there was a shareholder suit filed. If the company can keep up this pace and win some of the MRAP-ATV work then it will have a solid future for the next few years. Depending on how the new budget integrates MRAP and the future replacement for the FCS requirement there might be more work there for a long time. More to come on this for sure.

Despite Gates’ Proposed Reforms New Satellites to go Forward

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.

Oklahoma Congressional Delegation Not Happy with FCS Decisions

In yet another story of Congressional reaction to the decisions by Secretary Gates in next year’s budget. The one recommending cancellation of the Army’s Future Combat Systems (FCS) manned vehicles had the Oklahoma Senators and Representatives expressing strong reservations. The Oklahoman writes that Senator Inhofe who has been a strong supporter of the Non-Line of Sight Cannon (NLOS) system blames President Obama for this plan. The system would be assembled at a BAE plant in Elgin, OK. This is yet another example of how even though the Pentagon may propose cuts or ending programs Congress will have the ability to keep them going through adding funding in the Appropriations bill. Inhofe has always supported the system which was planned to enter into limited production in the near future. The FCS vehicles are planned to be lighter, faster and more fuel efficient then the current suite of heavy, tracked vehicles used by the U.S. Army. They would make up for there lack of armor through speed and reaction time. The FCS envisioned a heavily networked system that would allow greater situational awareness that would help U.S. troops engage faster. This decision by Gates is just one of several that will end up being decided in Congress.

Good and Bad News for Boeing in Gates’ Proposals

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.

Impeva Demonstrates “Smarter” Supply Chain Management Solutions to Help Ensure Safe, Timely Delivery of Critical Supplies for Global Communities – Press Release

Impeva Demonstrates “Smarter” Supply Chain Management Solutions to Help
Ensure Safe, Timely Delivery of Critical Supplies for Global Communities

Company Participates at DIHAD Event in Dubai, April 7-9

MOUNTAIN VIEW, CA — April 6, 2009 — Impeva Labs, Inc., the leading supplier
of global supply chain management solutions, is participating in the Dubai
International Humanitarian Aid and Development Conference & Exhibition
(DIHAD) 2009 in Dubai April 7-9, 2009. DIHAD is the largest humanitarian
event in the Middle East, attended by leading international companies from
Europe, the Middle East, Asia and Africa as well as procurement and
logistics officials from regional and local NGOs (non-government
organizations), United Nations agencies, governmental departments and
international associations.

“It is an honor for us to join a prestigious group of participants in a
common cause to support critical humanitarian missions around the world,”
stated Randall Shepard, COO of Impeva Labs. “We are very confident that
Impeva Labs’ ‘smarter’ tracking, monitoring and security solutions can
significantly improve the dependability, speed and efficiency of delivering
critical goods to global communities.”

In compliance with the objectives of humanitarian organizations worldwide,
Impeva Labs’ “smarter” technology and cost-effective solutions enhance the
security, reliability and effectiveness of the supply chains for providers
of healthcare, medical, emergency, and pharmaceutical supplies and temporary
housing to global communities. The ability to immediately deploy and
continuously monitor supply chains spanning all regions of the world make
Impeva services uniquely suited for emergency and ongoing humanitarian
missions.

Impeva Labs has a long history of supporting critical government and
commercial supply chain operations in the Middle East and Africa. These
countries include United Arab Emirates, Pakistan, Afghanistan, Iraq, Jordan,
Kuwait, Kingdom of Saudi Arabia, Egypt and Sudan.

About Impeva Labs

Impeva Labs, headquartered in California’s Silicon Valley, provides an
industry-leading solution for global asset tracking, monitoring and security
for commercial shippers and government agencies. Impeva’s “smarter” devices
minimize unproductive reporting to provide the lowest possible life-cycle
cost. Impeva Labs is currently deploying systems globally in a variety of
markets including dry and refrigerated containers, fleet management, and
high-value assets. For more information, visit the Impeva Labs web site at
www.impeva.com or email Info@Impeva.com.

The Impeva Labs logo is a registered trademark of Impeva Labs, Inc.

###

U.S. Department of Defense Still Not Sold on Split Tanker Buy

Responding to growing pressure from Congress and some in industry to the idea of splitting the KC-X tanker procurement between Boeing and EADS Secretary of Defense Gates said that the idea would be bad policy. The Hill reports that any cost savings from more rapid production would be offset by the increased logistical tail of having two separate systems. In this day and age when the quantities of equipment purchased is minimal the U.S. cannot afford a dual source for one mission. While some have said that this proposal would more rapidly field capability a split fleet would require two supply chains, training networks and support networks. More will be found out when the Obama administration releases its FY10 budget proposal in the near future.

VH-71 Suffers Cost Breach and Connecticut is Lobbying

The Connecticut Post reports that the VH-71 new Presidential helicopter program suffered a “Nunn-McCurdy” cost breach. There are two levels of this breach and the higher one, a 25% increase, requires the Secretary of Defense to certify the program is still required for the U.S. national defense. The fine Senators and Congressmen from Connecticut have pricked up their ears at this development and want to meet with DoD to discuss canceling the program and giving it to Sikorsky. The contract with Lockheed Martin has seen considerable cost growth due to requirements creep since the contract was awarded. This has required wholesale changes to the EH-101 platform selected. Hence the great increase in cost and schedule for the program. Of course the DoD will have to weigh the savings if another vendor proposes something cheaper with the time required to restart the program. With a new administration it is conceivable that the contract could be canceled and started over, like ARH, but it probably won’t happen.

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