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Lockheed Martin-BUILT WEATHER Satellite ENCAPSULATED For Upcoming Launch — Press Release

DMSP Satellite Will Improve Military, Civil Weather Warning

VANDENBERG AIR FORCE BASE, Calif., March 20, 2014 – A Defense Meteorological Satellite Program (DMSP) satellite built by Lockheed Martin [NYSE: LMT] has been encapsulated into its payload fairing in preparation for an April 3 liftoff. The launch will take place aboard an Atlas V rocket from Space Launch Complex 3 East at Vandenberg Air Force Base, Calif.

DMSP satellites collect data that enables military forecasters to find, track and forecast weather systems all over the globe, particularly in remote and hostile areas for deployed troops. Additionally, DMSP supports a broad range of civil users with sensing capabilities not provided by U.S. civil and international weather satellite systems.

“Weather guides some of the most important decisions in the armed forces, from flight patterns to troop movements. Through DMSP, we’re helping to provide safer, successful military missions,” said Sue Stretch, DMSP program director at Lockheed Martin. “Our satellite build and test process went flawlessly. As we approach launch, we are ready to continue serving this mission for the military and civil agencies that depend on it.”

DMSP satellites fulfill the country’s most critical requirements for global atmospheric, oceanic, terrestrial and space environment information. DMSP-19 is the fourth Block 5D-3 version to be launched, and Lockheed Martin has produced more than 40 satellites throughout the program’s 50-year history. Many of the satellites are performing beyond their design life, so refreshing on-orbit capability is important for reliable weather information.

DMSP-19 is equipped with a sophisticated sensor suite that can capture visible and infrared cloud cover; measure precipitation, surface temperature and soil moisture; and collect specialized global meteorological, oceanographic and solar-geophysical information in all weather conditions.

The approaching launch is the first in five years for DMSP. The previous one was October 18, 2009, when DMSP-18 joined the constellation. The DMSP program is led by the U.S. Air Force Space and Missile Systems Center at Los Angeles Air Force Base, Calif., and control is provided by a joint team of the U.S. Air Force and the National Oceanic and Atmospheric Administration in Suitland, Md. All DMSP satellites were integrated and tested at the Lockheed Martin Space Systems facility in Sunnyvale, Calif.

Headquartered in Bethesda, Md., Lockheed Martin is a global security and aerospace company that employs approximately 115,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation’s net sales for 2013 were $45.4 billion.

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Congressman Garamendi Helps Position Beale Air Force Base to Get KC-135 — Press Release

WASHINGTON, DC – Today, Congressman John Garamendi (D-Fairfield, CA), a Member of the House Armed Services Committee, is pleased to highlight that the Department of Defense’s FY 15 budget proposes that eight KC-135 air refueling tanker would be moved to Beale Air Force Base, which is located near Marysville, California. Congressman Garamendi’s office has vigorously supported Beale’s personnel and its military assets, which both play a key role in our national security and in supporting the local economy.

“In a period of budgetary uncertainty and change, the Airmen at Beale Air Force Base remain a rock of professionalism and focus as they carry out the vital mission of Intelligence, Surveillance, and Reconnaissance,” said Congressman Garamendi. “Bringing KC-135 tankers back to the base would help the Air Force utilize the remarkable talents of Beale’s personnel while expanding the core missions of the base. This would be especially important for reservists, whom I met recently and who have made a long term commitment to living in the area. During this period of transition, I will continue use my position on the Armed Services Committee to forcefully advocate for the Beale community.”

Locating the KC-135, an AF Reserve and Air Mobility Command asset, at Beale would strengthen its connection with Travis Air Force Base in Fairfield. Both bases are in the 3rd Congressional District, which Garamendi represents.

Congressman Garamendi:

·         Prevented the Air Force from mistakenly deactivating Beale’s 13th Reconnaissance Squadron;

·         Is leading the return the KC-135 mission back to Beale Reserve Units, as proposed in the President’s budget;

·         Wrote measures into law to prevent the Global Hawk from being mothballed;

·         Is supporting military commissaries by fighting against Department of Defense plans to shut them down or scale back subsidies for this essential benefit for military families.

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Congressman Garamendi Supports Travis Air Force Base in Bipartisan Letter on KC-10 Aircraft — Press Release

WASHINGTON, DC – With more sequestration budget cuts looming, the Air Force is considering elimination of the entire fleet of KC-10 aircraft, which is key to the military’s aerial refueling mission. Today, Congressman John Garamendi (D-03, CA) and Congressman Jon Runyan (R-03, NJ) sent a bipartisan letter urging the Department of Defense to “take off the table this option that would be so detrimental to the strategic capabilities of our military around the world.” A copy of their letter is included at bottom and linked here.

Garamendi, whose district is home to Travis Air Force Base in Fairfield, and Runyan, whose district is home to Joint Base McGuire-Dix-Lakehurst, are both Members of the House Armed Services Committee and the Congressional Mobility Air Forces Caucus.

The KC-10, which entered service in 1981, is the largest refueling aircraft currently in the military’s inventory and has made a significant impact to combat operations and overall mission effectiveness. With almost twice the capacity of the much older KC-135, this airframe is key because it combines the operations of aerial refueling, long range cargo transport, and aerial medical transport in a single aircraft. It can also be refueled itself in flight increasing its delivery range.

Congressman Garamendi said, “The ability to rapidly transport goods and people around the world is essential for our national defense. The KC-10 air refueling fleet serves as the lynchpin for this capability. As there is currently no adequate substitute, this multi-role aircraft must continue to be operated at Travis Air Force Base.”

In an Armed Services Committee hearing and in private conversations with the Air Force last month, Garamendi spoke with Air Force leaders about the importance of the KC-10. Congressman Runyan has also addressed this issue on several occasions with Air Force leadership in recent House Armed Services Committee hearings and conference calls, expressing his strong concerns that the KC-10 not be retired prematurely.

Congressman Runyan said, “The fact that the Air Force is considering eliminating its entire KC-10 fleet is an unnecessary and drastic move that would decrease our military readiness and lead to unacceptable mission risk. The KC-10 is a vital bridge as the new KC-46 tanker comes online. Although I understand the current fiscal constraints, it is especially critical that in this tight budget environment, common sense decisions are made, rather than the drastic “vertical cuts” the Air Force is proposing.”

Text of the bipartisan letter is included here:

October 29, 2013

The Honorable Chuck Hagel
Secretary of Defense
1000 Defense Pentagon
Washington, DC 20301

Dear Secretary Hagel:

We are troubled by recent news that the Air Force is weighing whether to eliminate its entire KC-10 fleet. We urge you to take off the table this option that would be so detrimental to the strategic capabilities of our military around the world.

We respect that difficult decisions must be made to maintain mission capability within the current fiscal constraints. However, we strongly oppose the divestiture of the KC-10 to meet budget targets. Our nation’s aerial refueling capability is too strategically important to risk.

If the KC-10 were to be retired, the Air Force would be left with only the aging KC-135 to conduct refueling missions until the delivery of the KC-46. Under that scenario, any structural or mechanical problem discovered on a KC-135 could ground the entire refueling fleet leaving our military and the nation quite vulnerable.

The KC-10 is an aircraft with decades of service life remaining and an ongoing integral role to play in our national defense interests. We look forward to productive conversations with you and your staff as you complete budget process and plans for FY 2015 and beyond.

Sincerely,

JOHN GARAMENDI
Member of Congress

JON RUNYAN

Member of Congress

MIKE THOMPSON
Member of Congress

ROBERT E. ANDREWS

Member of Congress

MARK TAKANO
Member of Congress

CHRISTOPHER H. SMITH

Member of Congress

FRANK LOBIONDO
Member of Congress

LEONARD LANCE

Member of Congress

GEORGE MILLER

Member of Congress

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F-35 Joint Strike Fighter (JSF) Foreign Intrigues Continue

The F-35 “Lightning II” Joint Strike Fighter (JSF) will be used not only by the U.S. military to replace its aging F-16, A/V-8, F/A-18 and A-10 aircraft but also by many other NATO countries and allies. It is being purchased as a F-16 replacement by many of these and like the successful F-16 program will have manufacturing and parts co-share agreements with different international partners.

The delays and cost increases to the program have been well documented and these have caused some early planned users to question the financial sense of continuing the program. Many of these countries, though, have already contributed through development funds as well as already had their aerospace contractors sign contracts and agreements with Lockheed Martin (LMT) to produce parts for the aircraft which continues in its Low Rate Initial Production (LRIP).

Canada, the Netherlands and Australia have had and continue to have debates about their purchase of the advanced aircraft rather then existing systems like the F/A-18, Eurofighter, Rafael, SAAB Gripens and Russian alternatives. In Canada they are reviewing the whole cost analysis that had led to the decision to continue the purchase which could technically end it and look at other aircraft. That leads to editorials and articles like this one, “The Case for the Super Hornet As The RCAF’s New Fighter” from Canada or analysis in Australia such as this: “Politics first as white paper fails on big issues”.

At the same time the U.S. has been successful in adding Foreign Military Sales (FMS) of the aircraft most notably to Israel and Japan. There has also been interested expressed by other U.S. allies like the U.A.E.

The commitment of the foreign partners is somewhat critical to the whole program as a reduction in buy quantity will have a ripple effect on the whole program. Less purchased in total and annually will cause a cost increase for each aircraft and the whole program. The F-35 PEO, Lt Gen Bogdan, identified this risk in Congressional testimony in April. If somebody drops out the price the others pay will go up putting more pressure on their budgets and perhaps cause them to drop out too. This would then become a spiral causing issues for the U.S. and all of the other nations involved in the program.

Despite the issues with the aircraft over the last decade the U.S. remains committed to the program. Over 100 are on order and there is discussion to award a new 2 year production contract this summer for a further 60-70. Training is underway for both aircrew and maintainers of the U.S.A.F., Navy, Marines and allies. The big questions remain though about completing development, how many will be built, and who ultimately will operate the aircraft.

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Raytheon to Make More MALD

The U.S. Air Force executed a further production option with Raytheon (RTN) for their Miniature Air Launched Decoy (MALD). These will be a new version called the MALD-J that adds jamming capability to the decoy.

The contract has a value of just over $80 million and will provide for 202 of the systems including a warranty and shipping containers.

The MALD is carried by aircraft and then is deployed. It flies autonomously simulating the aircraft by flying similar profiles and speeds with a similar radar return. It has a range of about 500 miles and contributes to confusion of enemy aid defenses by increasing the number of targets being detected and tracked.

The MALD-J is the newest version of the system adding a jammer capability to it. This means it will provide even more confusion to enemy air defenses.

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JAGM to Follow JCM in Obama’s Latest Budget

The Joint Air-to-Ground Missile (JAGM) program is an Army run one to develop a replacement for the air launched Hellfire and Maverick missiles. The Hellfire is fired from helicopters and started life as a laser guided anti-tank missile. It now has a variety of warhead options and has seen heavy use in Iraq and Afghanistan from AH-64 and AH-1W attack helicopters. The Maverick is fired from fixed wing aircraft primarily by the U.S. Air Force and too was initially an anti-tank system.

Several years ago there was a similar program in development called the Joint Common Missile (JCM). This was cancelled around 2005. The JAGM program began a few years later. Originally it was planned to have two teams compete for designs and then take one into production. Raytheon (RTN) and Boeing (BA) formed a team and Lockheed Martin (LMT), who had been the prime contractor for the JCM, also competed. One of the requirements for JAGM is the use of a 3 mode seeker utilizing radar, infrared and laser guidance.

In 2012 the Army rather then continuing the contest decided to delay final development and production of the system. Rather the two teams would be given contracts to continue their work and this could then support a later production decision if it was decided to finish out the program. Both contenders were given about $60 million contracts for this work.

Now in the latest budget submitted by the Obama administration last week it looks like a final decision has been made to cancel JAGM. Only the costs of the current development plan are considered which would save a little over $200 million in the 5 years the budget plan covers. It is of course up to Congress to decide whether to remove the funding and end this program.

The Hellfire has a successful history but the JAGM, and JCM, would have offered improvements in size, range and guidance capability. If sequestration continues then the U.S. military will be faced with more choices of deferring new development, using existing equipment or investing in new capabilities for them. The current budget without considering those mandatory cuts already is starting to make those kind of decisions.

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LAS Controversies Continue

In this time of Continuing Resolution the U.S. Air Force’s Light Air Support (LAS) contract is one of the few major new programs to begin in FY13. The second attempt to conduct the contest led to same result as the first. Sierra Nevada (SNC) using a airframe from Brazil’s Embraer was selected and Beechcraft’s T-6 based proposal was rejected. As with the first attempt Beechcraft has filed a GAO protest.

The Air Force has announced that using available policy they will override the stop work that normally happens for 100 days while the GAO works out the protest. This has been done in the “best interests of the United States or unusual and compelling circumstances.” Due to the first protest and the do over on the contest it is already a year behind schedule. This new one could also cause several months delay.

The protest and the award remained tied up in politics and concerns about loss of work to a U.S. company. Sierra Nevada had originally planned to have a facility in Florida to do some of the work finishing the aircraft but they would be assembled in Brazil. The company is now looking at ways to increase the amount of jobs created by the contract through “in-sourcing” the work.

The loss of the contract to the U.S. company has been a further blow to the Kansas military aviation industry. Boeing (BA) has moved their work from the Wichita facility to Washington for the new KC-46A tanker. Beechcraft had planned to build their AT-6 in the state. As such it is attracting the interest of Kansas’ Congressional delegation.

With so few major programs and contracts predicted for the near future fights like this over awards will continue. Each company has a lot to gain by winning the work and as the defense budget declines there will be less contracts available.

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Beechcraft to Protest U.S. Air Force Decision — Press Release

WICHITA, Kan., March 8, 2013 /PRNewswire-USNewswire/ — Beechcraft Corporation today announced that it will formally protest to the U.S. Government Accountability Office (GAO) the U.S. Air Force’s (USAF) recent award of the Light Air Support contract to its Brazilian competitor, Embraer. An estimated 1400 jobs in Kansas and other states are in jeopardy as a result of the Air Force decision.

“Following our debrief with the Air Force earlier this week, we are very perplexed by this decision,” said Bill Boisture, CEO, Beechcraft. “Our belief that we have the best aircraft was confirmed by the Air Force rating our aircraft ‘exceptional’ and the fact that we are the lower cost solution was confirmed by the USAF’s public award announcement.”

Last year, an Air Force investigation found evidence of bias toward Brazil-based Embraer and its Nevada-based partner, Sierra Nevada (SNC), which led to the decision to restart the competition. Although SNC later sued the Air Force attempting to enforce the biased decision, U.S. Court of Federal Claims Judge Christine O.C. Miller wrote in her Nov. 1, 2012, opinion that based on the investigation’s evidence of bias “the Air Force’s decision to cancel the contract award to SNC and re-solicit proposals was reasonable and rational and should stand.”

“We simply don’t understand how the Air Force can justify spending over 40 percent more – over $125 million more – for what we consider to be less capable aircraft,” Boisture said. “Given our experience of last year and our continued strong concern that there are again significant errors in the process and evaluation in this competition, we are left with no recourse other than to file a protest with the GAO. The Air Force needs to make the right decision for the nation and our future allies.”

About Beechcraft Corporation

Beechcraft Corporation designs, builds and supports versatile and globally renowned aircraft, including the King Air turboprops, piston-engine Baron and Bonanza, and the T-6 trainer and AT-6 light attack military aircraft. Its 5,400 highly skilled employees are focused on continuously improving the company’s products and services which are sold to individuals, businesses and governments worldwide. In business since 1932, Beechcraft has built more than 54,000 aircraft and more than 36,000 continue flying today. It leads the industry with a global network of more than 90 factory-owned and authorized service centers. The company’s headquarters and major manufacturing facilities are located in Wichita, Kan. For more information, visit beechcraft.com or follow us on Twitter @Beechcraft.

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Air Force to Try Again with LAS Contract and Sierra Nevada

In a blow to the newly reorganized Hawker Beechcraft the U.S. Air Force after conducting a second source selection due to that company’s protest again selected Sierra Nevada for the Light Air Support (LAS) contract. That U.S. company will team with Brazil’s Embraer to provide the Afghan Air Force several modified turboprop aircraft. The initial contract is worth $950 million.

If all goes well there may be other customers for the system optimized for use in counter insurgency and non-conventional warfare. There were only two bidders with Hawker utilizing a version of their T-6 trainer already in use by the U.S. military.

An earlier attempt to award the contract late last year to Sierra Nevada was halted on Hawker’s protest which was upheld by the General Accountability Office (GAO). This led to a re-evaluation of the proposals submitted with Sierra Nevada being selected a second time.

As with the first attempt there is nothing to stop Hawker from protesting if they believe the source selection was conducted unfairly.

The selection of a non-U.S. aircraft has already received some criticism from Congress.

The Air Force has struggled the last decade to conduct these large aircraft source selections. The KC-X new aerial tanker program took 3 tries before Boeing (BA) won with a version of their 767 airliner. The CSAR-X combat rescue helicopter was ended after 2 rounds of bids and protests and the Air Force is yet to buy a replacement for their current fleet of MH-60 aircraft.

If Hawker does not protest this will actually be a victory for recent Air Force acquisitions as it only took 2 tries and was awarded fairly quickly. Deliver of the first aircraft, though, is reportedly delayed a full year.

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Lockheed Receives Contract to Continue F-22 Upgrades

Lockheed Martin (LMT) has completed deliveries of the F-22 Raptor to the U.S. Air Force. Based on past experience the aircraft may remain in service to well into this century. Due to this projected service life the Government just awarded a contract to continue upgrades to the aircraft.

Similar to one issued in 2003 this almost $7 billion Indefinite Delivery / Indefinite Quantity (ID/IQ) contract will allow the Air Force to buy the necessary technical services and work to integrate new electronics, weapons and sensors onto the aircraft. The contract is for 10 years.

Like all ID/IQ contracts there is no guarantee that any work will be awarded or the full value of the contract reached.

The previous contract too had a value of over $7 billion and supported integration of different Increments for the aircraft.

The F-22 was developed over two decades ago and was in production for over ten years. It is not surprising that there will be new weapons such as the Small Diameter Bomb (SDB) or missile systems that need to be added. There will also be new air-to-air systems as well as data links, sensors and more efficient electronics and engines that ultimately could be added to the aircraft.

It is also conceivable that some of the technology being developed for the F-35 could also be added to the F-22 like the new helmet.

As with many military systems the OEM will be making money off of them well after production ends.

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Air Force Awards GPS Contracts

Even as the nation heads towards sequestration and its dramatic effects on defense spending the Pentagon continues to execute programs and award necessary contracts. Recently the Air Force awarded 2 separate Global Positioning Satellite (GPS) contracts. GPS satellites provide signals that allow receivers to locate themselves. It is used heavily by both the military and in many civil applications.

The Air Force is in the process of upgrading the existing satellite systems to the new Block III status. Lockheed Martin (LMT) received a $62 million contact to buy long lead materials for GPS Block III satellites #5 & 6. These are the last two systems on a contract to procure the Block III satellites. Ultimately up to 32 will be built and placed into orbit. The first one is planned for launch next year.

At the same time Boeing (BA) received a contract that was worth $51 million to support launch of the Block IIF satellite. This has one base year and up to 4 option years. Up to 12 Block IIF satellites will be launched with 3 currently in orbit. This contract will prepare the systems for launch and support them once in orbit.

Maintaining a viable GPS constellation has become critical to the U.S. military as it allows precision guidance of everything from a patrol of Soldiers or Marines to ships and bombs and missiles. The military has worked hard to execute available options on contracts prior to the sequestration but have been hampered by the Continuing Resolution Authority (CRA) that still exists.

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P&W Receives JSF Engine Contract

The Joint Strike Fighter (JSF) is produced by Lockheed Martin (LMT) but the engine for the advanced tactical aircraft comes from United Technologies (UTX) Pratt & Whitney. As with many other aircraft programs the engine is procured under a separate contract and then provided to the aircraft manufacturer. This means as aircraft options are executed another contract action must take place for the engines.

P&W received their contract recently to support the most recent JSF order. This contract will be for 32 more F135 engines and is the 5th order so far to match the first 5 Low Rate buys of the F-35. No value was given but earlier estimates were of a cost that was close to $40 million per unit.

For several years Congress funded against DoD wishes another engine development program as risk reduction. This was with General Electric (GE) and Rolls-Royce (RR) and several hundred million dollars was given to them for the F136 engine. The idea was to have enough production capability or maintain schedule if there were issues with the primary F135 engine. In the first Obama administration this was a program that was terminated.

The JSF program continues to gain momentum as more are produced, more training conducted and development continues. It still is several years behind its original schedule and has had significant cost growth. This has led to some of the original international partners to re-consider how many aircraft they will buy and the terms of their contracts.

As the largest part of the Pentagon’s budget it would face cuts of several hundred million dollars if the required reductions are spread evenly. This would affect this years operations and perhaps cause further delays in the overall program.

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Raytheon Bids for New Air Force Communications Terminal

The Global Aircrew Strategic Network Terminal (Global ASNT) is a U.S. Air Force project that is part of the Minimum Essential Emergency Communications Network (MEECN)system. It’s role is to provide messaging and aircrew alert functions. It will be part of the Advanced Extremely High Frequency / Extremely High Frequency (AEHF/EHF) system utilizing new AEHF communication satellites now being built by Lockheed Martin (LMT) to improve U.S. communication capabilities.

The requirement has existed for several years but earlier this month the U.S. Air Force asked for final proposals by 18 January. The solicitation information may be found on FedBizOpps.Gov here.

It has been reported that Raytheon (RTN) did submit a proposal for this requirement. It believes that the contract will be awarded this summer. The company is already building AEHF ground terminals for use by the military.

The program is still R&D and this contract would develop the terminal. It would then move into production later. If any other company bid on the contract it has not been publicized.

Due to the budget uncertainty of the sequestration and continuing resolution it may be hard in FY13 to begin new programs like this. They might, as the Army has already announced with the Ground Combat Vehicle, delay them a few months to get to FY14 and a more stable fiscal environment.

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Despite Budget Worries Programs Continue

The U.S. Congress and the Obama Administration may have pushed off the decision on sequestration and dealing with the planned budget cuts for the Defense Department but that does not mean development and new programs don’t continue. Using available funding the work goes on to advance these efforts 2 recent press releases illustrate this activity.

General Dynamics and Alenia Aermacchi Join Forces for U.S. Air Force T-X Trainer Competition — “General Dynamics (NYSE: GD) and Alenia Aermacchi, a Finmeccanica company, announced today the signing of a Letter of Intent (LOI) to join forces and compete for the U.S. Air Force’s T-X trainer program, which will replace aging T-38 trainer jets and related training systems.” The American defense contractor will team up with Italy’s Alenia Aermacchi to propose a variant of the M-346 military aircraft trainer designated the T-100. The T-X program will replace the U.S. Air Force’s T-38 fleet. THe M-346 was recently selected by Israel to be their primary training aircraft.

Lockheed Martin JLTV Undergoes Successful Design Review — ” Lockheed Martin’s (NYSE: LMT) family of Joint Light Tactical Vehicles successfully completed a top-to-bottom government design review in late December, well ahead of the first Engineering and Manufacturing Development (EMD) JLTVs that will begin rolling off the assembly line this spring.” The JLTV is the planned replacement for the HUMVEE in use by the U.S. military and potentially its Allies. It will be a large program if fully executed as there will be a requirement for thousands of the vehicles. The U.S. is utilizing a process where multiple designs are being developed independently by contractors and then one or more may eventually be selected to go into Engineering, Manufacturing and Development (EMD) and then production.

The hard decisions facing U.S. defense budget decision makers is whether to cut back funding for these types of programs and make do with existing systems that may cost more in the long run to operate and maintain due to their age and capabilities. In the past it has been tempting to reduce investment in new systems beyond basic development to manage the size of the budget. If these types of programs continue it may mean cuts to current operations and force sizes to fee up the necessary investment requirements. The types of cuts required by sequestration will be hard to implement in the current budget but could be easier in future ones as more specific cuts may be made.

In the end if the cuts are carried out the U.S. will lose capability and may see new programs like these executed.

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Annual Production Options Continue to be Executed as V-22 Buy Goes Through

Despite the “Fiscal Cliff” and sequestration facing the U.S. Federal budget the U.S. military has continued to execute their FY13 buys for hardware. The vote last night in the house delayed sequestration issues and also extended some of the Bush tax cuts. The options on existing contracts are able to be awarded under Continuing Resolution Authority so they are not tied to any new budget or legislation.

One of the most recent was the production buy for the V-22 from Boeing-Bell (BA). The Marine Corps and Air Force will purchase a further 22 V-22 for just over $1.4 billion. These will be delivered in 2014-2015.

This follows the current production contract for 21 aircraft being delivered at this time.

This is the second multi-year production contract for the versatile tilt rotor aircraft that has seen use in Iraq and Afghanistan.

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Despite End of C-17 Production Boeing Still Generating Revenue

The C-17 has been the standard strategic transport for the U.S. Air Force for the last two days. Flying alongside the much smaller C-5 fleet it has flown thousands of missions carrying cargo and passengers in support of Iraq and Afghanistan. Congress and the Air Force decided to end production for the Air Force a few years ago although there are still some open Foreign Military Sales (FMS) cases and hopefully a few more remaining. Even so the C-17 will remain in U.S. service for several more years.

Despite the lack of production orders Boeing (BA) is still able to generate revenue from the platform through maintenance, retrofit and service contracts with the American defense department. They were just awarded a ten year contract for software, hardware and weapon system upgrades worth almost $900 million.

In most cases these days the military rarely buys full data rights to a weapon system due to the prohibitive costs involved. This means that many times the OEM receives the bulk of the support and sustainment contracts. In the end these can easily dwarf the value of the production contract.

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Air Force Cost Goals Restrict Competition for New Rescue Helicopter

The U.S. Air Force is once again trying to attempt to buy a new aircraft to replace their MH-60 rescue helicopter fleet from the Eighties. The original CSAR-X program faltered twice earlier this century due to protests. Boeing (BA) had one the last contest with a version of the CH-47 but after protests from the losing bidders it was decided to start over.

The current Combat Rescue Helicopter program had put out a RFP for new proposals due in January. The goal is to buy just over 100 aircraft at a cost of $6.4 billion.

Unfortunately it was announced this past week that the only company interested in bidding on the contract is Sikosrky, part of United Technologies (UTX), teamed with Lockheed Martin (LMT). Sikorsky made the current HH-60 fleet. Other potential bidders including Augusta Westland, Eurocopter, Bell and Boeing believe that the cost goals will be too hard to meet for their products. Some have basically said the contract requirements were written in such as way so only a version of the UH-60 Black Hawk could meet them.

The Pentagon is obviously trying to reduce cost but at also at the same time promoting competition. Sometimes, as here, the two things don’t always work together as to attract bidders there must be some profit in it for them.

The Air Force has struggled with large acquisitions for a few years now. The new aerial tanker, KC-X, took 3 tries before Boeing won. The CSAR-X has already been discussed. They are currently redoing the Light Air Support aircraft contest after Embraer and Sierra Nevada’s win of the original contract was overturned on protest.

Whether they want to continue the current contest with limited bidders or try to re-do the requirements to attract more will be the next decision. They could just wait and see if more then one bid in January as originally intended.

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HASC Members, Air Force Trying ‘End Run’ on Air Guard Budget Talks — Press Release

WASHINGTON, Dec. 13, 2012 /PRNewswire-USNewswire/ — The National Guard Association of the United States today released the following statement by retired Maj. Gen. Gus L. Hargett Jr., the NGAUS president:

“Fueled by misinformation from some Air Force officers, it appears a handful of House Armed Services Committee members are willing to circumvent the legislative process to force a budget on the Air National Guard that the governors, the adjutants general and most in Congress oppose.

“This is the kind of mischief that can occur during conference, when a handful from the House and Senate can go behind closed doors and literally change legislation in the name of forging compromise between the two chambers.

“The House and Senate both rejected the Air Force’s fiscal 2013 budget request, which would take disproportionate cuts from the Air National Guard. Both chambers told Air Force officials to go back and work with the governors and the adjutants general on a new proposal that addressed state concerns.

“Unfortunately, Air Force officials have since ignored the governors and the adjutants general. Neither group has been able to provide meaningful input to a new budget plan. Nevertheless, Air Force officers have told members of Congress that they have a compromise plan in hand.

“For the record, the nation’s governors and adjutants general favor a freeze on Air Guard manpower and force structure and the establishment of a National Commission on the Structure of the Air Force. Neither organization has agreed to any Air Force proposal. Both remain concerned that the cuts to the Air Guard would adversely affect domestic response.

“In addition, to our knowledge, the chief of the National Guard Bureau has not endorsed any compromise plan for the Air National Guard in the fiscal 2013 Air Force budget.

“Commissions are certainly not the ideal way to craft budget decisions. They are a last resort. But at this point, a commission independent from the Air Force is our only remaining hope for a transparent process that includes real input from the governors and Guard leaders.”

About NGAUS: The association includes nearly 45,000 current or former Guard officers. It was created in 1878 to provide unified National Guard representation in Washington. In their first productive meeting after Reconstruction, militia officers from the North and South formed the association with the goal of obtaining better equipment and training by petitioning Congress for more resources. Today, 134 years later, NGAUS has the same mission.

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5th LRIP Batch of F-35 JSF to be Awarded

Lockheed Martin (LMT), the prime contractor on the Joint Strike Fighter (JSF), and the U.S. Department of Defense have pretty much wrapped up negotiations for the latest batch of F-35 Joint Strike Fighter (JSF) production. This goal was to complete and award this by the end of 2012 and it looks like that will be met.

The FY13 order will be for 32 more of the advanced aircraft split between the 3 variants. The bulk, 22, are the Air Force’s Conventional / Take Off and Landing (CTOL) version. These are intended to replace the F-16 and A-10 platforms currently in use. Then there are 3 F-35B Short/Vertical (S/VTOL) for Marine Corps to meet the AV-8A mission and finally 7 F-35C carrier based aircraft for the Navy. Estimates for the cost of the aircraft along with engineering services and other money is in the $3.8 – 4 billion range.

The F-35 program remains several years behind original schedules and cost have increased greatly but much progress has been recently made. There are now over 150 aircraft delivered or in production with this order. They are supporting test and development along with training for pilots and ground crew.

Due to the high concurrency remaining with the program Lockheed will have to go back and modify many of the current production aircraft to the final standard after they are delivered. This is due to the much more T&E remaining for things like the advanced helmet, software and other parts of the aircraft. The F-35 continues to remain on track to be the most expensive defense acquisition program in history.

Photo from U.S. Navy Imagery’s flickr photostream.

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Boeing to Modernize U.S. Nuclear Bombs

In another demonstration about how the world of nuclear weapons and classification of information has changed it was announced that Boeing (BA) has received a contract from the U.S. Air Force to design a new tail kit for the standard B61 aerial nuclear weapon.

The contract is worth a little over $175 million and is part of a program to improve the weapon’s reliability and upgrade the design.

The B61 has been in existence for almost fifty years in various versions. Boeing will work with the Mod 12 of the bomb. The B61 is a key component of the current U.S. stockpile of weapons.

In the past even confirmation of the existence of this weapon would have been impossible and now contract awards are treated routinely.

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Joint Strike Fighter Update – Training and FMS

As the Pentagon and Lockheed Martin (LMT) continue to negotiate the latest production buy for the F-35 Joint Strike Fighter (JSF) the program continues its path towards completing development, testing and begin fielding. With the recent, unexpected change in leadership for Lockheed one of the issues that has come up is the focus on the JSF program. On Tuesday the Assistant Secretary of Defense for Acquisition, Technology and Logistics (OSD(AT&L)), Mr. Frank Kendall, made clear that the company needs to concentrate on continued delivery of the aircraft and not worry about its short term business goals.

The program overall continues to make progress in different areas including completion of the Operational Utility Evaluation of pilot training Thursday. This means that the data collected through the process of teaching 4 pilots over the last six weeks will be reviewed by the Air Force Training Command (AFTC) eventually leading to approval of the program allowing formal training to begin.

In related matters a group of Royal Air Force and Royal Navy maintainers continue their training at Eglin AFB now supported by 2 British owned aircraft. The U.K. is one of the major overseas partners in the F-35 program and will also begin instructor pilot training this month.

In other Foreign Military Sales (FMS) related F-35 news both Japan and Denmark agreed to have companies there begin making components for the aircraft. As part of the overall program many of the other nations buying the fighter will contribute components from their domestic suppliers. In Japan up to 40% of their version of the aircraft will be produced domestically. Northrop Grumman (NOC), who produces fuselage and other assemblies for Lockheed, signed an agreement with a Danish composite manufacturer to provide items like doors, panels and skin assemblies. This is a follow on agreement to one signed in 2007.

The F-35 remains the most expensive acquisition program in history and a key part of U.S. modernization plans. Despite its struggles with schedule, testing and cost it continues to see investment in it by the U.S. and its partners. While there may be near term haggling about the price it is expected that the next production batch will be on order by the end of the year. As more aircraft are delivered training will continue to increase in amount and complexity.

Photo from MultiplyLeadership’s flickr photostream.

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Lockheed Receives Order for 2 More SBIRS Satellites

The Space Based Infrared System (SBIRS) is the new missile warning satellite constellation being placed into orbit by the U.S. Air Force. It will consist of 2 different systems. One of these will be in high orbits and the others in geosynchronous orbits. Lockheed Martin (LMT) is a major contractor with the program.

The Air Force recently awarded a contract to Lockheed for the next 2 geosynchronous satellites – GEO 5 and 6. The initial value of the contract is a little over $80 million. This will fund further non-recurring effort on the 2 satellites as well as begin some long lead procurement.

GEO-1 satellite was launched last spring and is in orbit conducting tests. GEO-2, 3 & 4 are in production with the launch date of GEO-2 set for March of next year.

Over the next several years the rest of the systems will be built and placed into orbit replacing older Cold War era systems.

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Trying Again for the U.S. Air Force as Request for Proposals Released for New Rescue Helicopter

The U.S. Air Force has had its struggles over the last decades conducting competitions for new aircraft. The KC-X tanker program took 3 tries before Boeing (BA) ended up the winner with their modified 767 aircraft. Another program was a new Combat Search & Rescue (CSAR) helicopter to replacing aging MH-60 helicopters originally built by Sikorsky, part of United Technologies (UTX).

That program saw two attempts which ended up going nowhere due to protests and reviews. The last one in 2008 did see Boeing win the contest with a version of the CH-47 Chinook heavy lift helicopter but after the GAO upheld protests by the losers, Sikorsky and Augusta Westland, the Air Force decided not to pursue a 3rd attempt at that time.

Now reportedly a Request for Proposals for a new program, Combat Rescue Helicopter (CRH), was put out recently. This gives vendors 90 days to submit their proposals with source selection planned for most of next year and a contract award in late Fiscal Year 2013.

The program is for 112 aircraft and has a cost goal of under $6.8 billion.

Potential bidders will include Boeing, Sikorsky, Augusta Westland, and presumably EADS North America could participate with a Eurocopter aircraft.

Based on past history with recent Air Force acquisitions the service will have to do a very thorough and documented source selection process as a protest is very likely due to the upcoming budgetary situations and lack of new helicopter programs.

The FedBizOpps page for this procurement may be found here.

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Pentagon Plan JSF Upgrade Contract

The U.S. Air Force and Navy Joint Project Office for the Joint Strike Fighter (JSF) announced recently that they plan to tender a contract to upgrade the first 93 F-35 aircraft to be consistent with a later production version. This covers 4 years of Low Rate Initial Production (LRIP) aircraft that are currently being delivered.

No value for the contract was estimated but it should be several hundred million dollars to modify that number of aircraft.

It would be expected that Lockheed Martin (LMT), the prime contractor on the current JSF development and production effort, would be awarded the contract. The announcement though did leave an opening for others to submit proposals to do the work. This would be extremely hard for another contractor to do depending on how much technical data the Government owns and is available. Just estimating the cost of the work without that information would be difficult.

The JPO is expecting this contract to take some time to develop, negotiate and award as the LRIP 5 production contract remains in negotiation with Lockheed and probably won’t be awarded until the end of this year. Those aircraft would be coming off of the production line in several months. This will allow the program to continue production, testing and training while then beginning to retrofit the existing aircraft.

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ULA Wins Contract for Further Launch Services

As the fiscal year came to an end this weekend the Pentagon closed it out by awarding several FY12 contacts. One of the biggest was to United Launch Alliance (ULA) for launch services in FY 2013.

ULA is a joint venture between Boeing (BA) and Lockheed Martin (LMT) and builds Atlas and Delta rockets used to launch military payloads. The overall program is the Evolved Expendable Launch Vehicle (EELV). Under the contract ULA provides both the launchers as well as engineering, management and launch activity support.

This part of the contract option for FY13 is worth a little over $1 billion and the number of launches planned for this year was not specified.

The original plan for EELV a decade a go was to support both Boeing and Lockheed as separate launch vehicle providers but eventually the decision was made to establish a joint venture between the two companies as a way to reduce costs.

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