Florida Worries About the Defense Budget
Filed under: Department of Defense, Federal Budget Process, Florida, Lockheed Martin, Military Aviation, Restructuring, production program
This article in the OrlandoSentinal.com describes concerns that with the continued payout of money to save finance and other companies the US government may be forced to cut the defense budget. Concern surrounds the two big ticket fighter aircraft currently in production for the US military. The F-22 program is winding down unless Congress decides to extend the production beyond current planned numbers. There are also worries that the F-35 JSF program will be cut back or canceled. These programs provide a lot of work to Lockheed in the Orlando area. Read more
KC-X Advertisement Makes DoD Unhappy
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, logistics, production program
Northrop Grumman took out an ad this week in the Washington Post supporting its proposal for the KC-X mission. The Wall Street Journal reports that the content of the advertisement made folks over at DoD most unhappy. That is because it quotes an unidentified official as saying the A-330 was $3 Billion cheaper then the B-767 overall. 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.
Maryland is Tenth in Defense Spending
Filed under: BRAC, Congress, Department of Defense, Federal Budget Process, IT, Industry Analysis, Maryland, Military Aviation, SETA, U.S. Air Force, U.S. Army, U.S. Navy, development program, logistics, training
The State of Maryland put out is report showing that the state is tenth in receiving Federal defense funds. WTOP.com writes about it here. Maryland is of course helped by the large number of facilities in the state as the Army has Fort Meade, Fort Detrick and Aberdeen Proving Ground. The Navy obviously has the Naval Academy as well as Patuxent River Naval Air Station. The Air Force operates Andrews Air Force Base home of Air Force One for Presidential Transport. Read more
BAE Subs Out Weapon Part Production
Filed under: Contract Awards, Federal Budget Process, TTM Technologies, production program
As with any large contract the prime contractor, here BAE Systems, has to find companies to make the piece parts and award sub-contracts. In this press release at MarketWatch.com; TTM Technologies announces that they have won a contract from BAE to provide circuit boards and assemblies for use in thermal sights. The contract is wroth $65 M over the next few years. All across the US are many small companies making individual parts and sub-assemblies that are fit together by larger companies to make the actual delivery hardware for the customer. Read more
The New Administration and the Defense Budget
Filed under: Congress, Department of Defense, Federal Budget Process
I posted an article at BNET Industries/Government on the challenges the Defense Department will face with a new President.
Companies to develop contract management software
Filed under: CACI, Department of Defense, Federal Budget Process, IT, Oracle, development program
CACI and Oracle announced today that they would work together to build a software solution to manage government contracts. The software would be for the total life cycle of the contract through development, award and execution. The program will utilize an existing Oracle product with CACI providing the expertise on understanding Federal rules and regulations and the actual conduct of contracting. Contract management within the Department of Defense is a laborious process requiring a great deal of manpower. This software will help agencies carry out this function in a more accurate, timely fashion.
See the press release at MarketWatch.com.
Cross posted at BNET.
President signs defense budget
The last step for any of the appropriation bills passed by Congress is the approval of the President. This year after going through the House and Senate, and then Conference; before finally being rolled into a large omnibus spending bill the defense bill was signed by President Bush in early October. Last week he signed the companion Authorization Bill. The Authorization Bill comes out of the House and Senate Armed Services committees and specifies what the money given in the Appropriation Bill can buy. This is the largest Defense budget in US history, and based on comments by Congressional Democrats looking forward to a Democratic President may be the peak. Read more
Local paper touts defense industry as a way to cushion downturn in US economy
Filed under: BAE Systems, Congress, Federal Budget Process, logistics, production program
The Scranton Times-Tribune has an article discussing how the recent issues with the US economy will have less effect in their area due to the many defense contractors. They mostly support Tobyhanna Army Depot and provide services and products to the Army. The article discusses in detail the BAE expansion in the area where they make armor and gear for soldiers. BAE acquired the US company Armor Holdings last year and the plant is part of that acquisition. While the majority of these contracts are for things the US military needs, it is another example of the Defense budget being used by Congress as job programs. Members of Congress brag about how many dollars they bring back to their districts; and how their re-election is critical to maintain this type of work.
See the article for more.
Defense contract requirements to be loosened
Filed under: Commentary, Congress, Federal Budget Process, IT, Military Aviation, SETA, U.S. Army, development program, logistics, production program
One of the issues that faces any company trying to do business with the US DoD is that the personnel requirements are usually pretty stiff. This is especially true for SETA type work. The military is usually looking to hire experienced people with clearances. This is why you find so many retired military and federal workers as contractors. Getting a clearance has become an issue as the Federal government has been bogged down for years trying to clear people. The easiest way to get one is to join the military; or work for the government. These requirements also make it harder when you are trying to hire someone. Now, the Army in Huntsville has recognized these factors and is making efforts to change them. They are trying to relax the experience and degree requirements to allow newer hires out of college; they are also making it easier to hire interns to get them clearances and experience before they graduate.
See the Huntsville Times for the story.
ARH’s first try is cancelled
Filed under: Bell, Congress, Department of Defense, Federal Budget Process, Military Aviation, Restructuring, U.S. Army, commercial aviation, development program, production program
After the close of the stock market this evening the Department of Defense announced that they are canceling the Armed Reconnaissance Helicopter (ARH) contract with Bell. The ARH-70 was to be a replacement for the OH-58D Kiowa Warrior aircraft that has been in service for over twenty years. ARH was one of the programs created out of the end of the RAH-66 Comanche program. Bell had run into cost and schedule growth issues with the program, much of it probably due to an overly optimistic US Army estimate on the program. The program had suffered a Nunn-McCurdy cost breach and that required DoD to either certify to Congress on the necessity of the program, or cancel it. Now the Army will start over.
See The Wall Street Journal for more.
Good overview on Federal contracting to researchers
Filed under: Congress, Federal Budget Process, S&T, development program
While most people think of Defense when it comes to contracting as that dominates the headlines, the Federal government hands out money for many things. Research is one of the areas that they buy a lot off. It discusses the difference between grant and contract research. The biggest is that with a contract the government is buying research on a specific problem. A grant funds more basic research.
For more on this the Chronicle of Higher Education.
McCain’s contracting proposal makes no sense
Filed under: Congress, Contract Awards, Department of Defense, Federal Budget Process, S&T, development program, production program
In the first Presidential Debate on Friday, Senator McCain restated one of his favorite reforms of government spending - require Firm Fixed Price (FFP) contracts for all work. Currently FFP contracts are used to buy hardware and services when the price and schedule are known. The contractor agrees to this as they will make profit on each unit sold. Cost Plus contracts are used for development or for things where the cost is not known. During World War II Cost Plus contracts were used almost exclusively and some abuse did occur. For R&D contracts it is hard to do a FFP as the total time and cost required to develop a system or new capability has often proved to be beyond the estimation capability of the best government or contractors can do. Senator McCain’s proposal will not work, as you will have a situation where no one will bid on the work as they know they won’t make any money on it.
See FCW.com for the story.
House passes Defense Appropriation Bill
Filed under: Congress, Department of Defense, Editorial, Federal Budget Process, development program, production program
The House of Representatives approved the Defense Appropriations Bill as part of a larger spending law this afternoon. The bill fully funds all of the services as well as providing funding for a variety of other government actions, including a loan of $25 B for the US automakers. Now the Senate needs to approve the bill and a Conference one be worked out to be re-approved by the two parts of the legislature. Until the actual text of the report is read funding for specific programs cannot be identified.
For more on this story see CNNMoney.com.
Bush administration rushing to complete overseas sales
Filed under: Congress, Contract Awards, Department of Defense, FMS, Federal Budget Process, Military Aviation, Proposal, logistics
According to an article in the International Herald Tribune; the Bush administration is moving quickly to ok deals for foriegn partners on US weapon systems. The Pentagon plays a role in organizing and having Congress approve these deals. There has been a rash of equipment for Iraq and Afghanistan lately as well for former Soviet and Eastern Europe states. This is seen as building good will with them, as well as counteracting other nation’s attempts to sell weapons. The deals also help out US contractors.
See the article here.
Gates gives up
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, development program, logistics, production program
The Secretary of Defense today canceled the KC-45 re-proposal. He decided that there was not enough time to do this before the end of President Bush’s second term. The announcement was made via a press release this afternoon. Secretary Gates stated that ““It has now become clear that the solicitation and award process cannot be accomplished by January,” he said. “Thus, I believe that rather than hand the next administration an incomplete and possibly contested process, we should cleanly defer this procurement to the next team.”
This decision ends temporarily a seven year saga that started with Boeing being given a lease for 767 tankers, through a proper competition that was thrown out by the GAO, and what was expected to be a quick recompete starting this month.
See the actual release at DefenseLink.mil.
JLTV very important to Oshkosh
Filed under: Department of Defense, Federal Budget Process, Northrop Grumman Corp., Oshkosh Truck Corp, Proposal, logistics, production program
Oshkosh Industries has struggled over the last 18 months with the downturn in the economy. The stock is down almost 75% since last September. The slowdown in the world economy, especially the construction industry, has hit the company hard. It has received several US defense contracts for heavy vehicles and MRAPs. It also is teamed with Northrop Grumman on the Joint Light Tactical Vehicle (JLTV) proposal for a new tactical vehicle for the US military. If its team wins that will be a lot of work replacing the ubiquitous HUMVEE used by all four of the US services. That would offset the struggles it has been having with its conventional business lines.
See The Milwaukee Journal-Sentinal article for more.
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.
Small business prospers
Filed under: Akimeka Technologies, Congress, Contract Awards, Federal Budget Process, IT, SETA
This article from Hawaii describes how a small, minority owned business is prospering under DoD contracting rules. Most agencies and large contracts are required to share the work among small, disadvantaged business by Federal law and regulation. Here, Akimeka Technologies, a Hawaiian company, that provides IT services benefits from those rules. Larger companies will team with it to cross off that requirement, or they have a step-up in bidding on work due to their status. Of course they need to be able to do the work required, but many companies get a start like this due to the targeted efforts of the DoD.
For more see the article on Pacific Business News.
CROWS contract spreads to Maine
Filed under: Contract Awards, Federal Budget Process, Konsberg, Maine, Norway, production program
In another example of the international integration of the US Defense Budget a Maine company received a sub-contract from Kongsberg Defense of Norway to fabricate parts for the Crew Remote Operating Weapon System (CROWS). Kongsberg had recently won a contract in the Spring to build a part of the system. Now because of this contract the company in Maine is able to expand and hire a few more workers. The overall effect of the several hundred billion the US spends each year on defense is vast, affecting companies from Maine to Iraq and Afghanistan.
For more see the article on WCSH6’s website.
Preparing for the downturn
Filed under: Congress, Department of Defense, Federal Budget Process, IT, Massachusetts, Raytheon, S&T, development program, missile defense, production program
The Boston Herald writes today about how the various defense companies in Massachusetts are planning for the expected cuts in the defense budget with the end of the fighting in Iraq. While it is certainly expected that the US defense budget will decline beginning in FY09 with either a Republican or Democrat administration, it will probably be slow. The biggest shift will be away from Operations & Maintenance (O&M) funding to more new systems. It will also be interesting to see if the Army and Marines will get smaller after several years of growth. Obviously the biggest player in Massachusetts is Raytheon, they may be cushioned a bit, as they tend to make high-tech weapon and C4ISR systems.
For more see the article “Massachusetts companies brace for wind down in Iraq”.
Europeon view of KC-45
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, development program, logistics, production program
This article in the Deutsche Welle provides a good round up of the current on goings of the KC-45 recompete. It reiterates that despite rumors on not participating in this round Boeing went ahead and had their meeting with OSD and the Air Force to discuss the RFP. Obviously there is a great deal of interest in Germany, and Europe as a whole, for EADS to win the contract. It would be the largest to date for a primarily European based company.
Boeing moves forward with KC-45
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, logistics, production program
Despite reports earlier in the week, it seems that Boeing will pursue the KC-45 re-proposal. See a story here. The two possible contenders met with US Air Force and DoD representatives to talk through the new RFP. The goal of OSD is to award a contract by the end of the year. The tanker replacement process started 7 years ago with the new delays a KC-145 replacement may not be available until 2012-2014.
Boeing may refuse to bid on KC-45 recompete
Filed under: Boeing, Contract Awards, Department of Defense, EADS, Federal Budget Process, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, development program, logistics, production program
Rumors are swirling that Boeing may not bid on the new contract for the KC-45. See an article here. Supposedly Boeing is piqued that the new requirements supposedly favor Northrop Grumman and EADS and will not submit a bid. If there is only one bid it may require the whole process to start over again, of course if DoD and the Air Force change the requirements EADS could claim the same thing and the whole program will get stuck. Unfortunately DoD and the Air Force have to do the new process as GAO upheld the Boeing protest. More to come on this very complicated story.
