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November 30, 2020 | International, Aerospace

Aircraft makers sweeten their offers in high-stakes Swiss warplane race

By: and

COLOGNE, Germany, and WASHINGTON — Four aircraft makers have submitted final offers for Switzerland's $6.5 billion aircraft program, with Airbus and Lockheed Martin touting different approaches to assembling their planes locally.

Nov. 18 was the deadline for the quartet of hopeful vendors, which also includes Boeing and Dassault, to deliver their vision — and price — for one of the largest procurement programs in Europe.

Switzerland is looking for somewhere between 36 and 40 new aircraft to police the country's airspace. The degree of local industry participation is shaping up to be a major factor for the famously independence-minded Swiss.

Airbus got an assist from four Eurofighter operators — Germany, Spain, Italy and the U.K. — who sent their ambassadors in Switzerland to a Nov. 19 news conference to talk up the prospect of a grander industrial and political partnership that would follow a Eurofighter pick.

The Swiss are expected to make a decision in early summer 2021, following a referendum vote this September that narrowly greenlighted the budget.

The Airbus offer includes final assembly of all aircraft by way of a partner company in Switzerland, the details of which the company plans to announce in December.

Michael Flügger, Germany's ambassador in Switzerland, touted the possibility of Eurofighter-based airspace-patrol cooperation along the Italy-Switzerland-Germany axis. In addition, he said, Switzerland joining the airplane's user club would mean the country can “export” training flight noise to remote areas in the other partner countries.

Franz Posch, who heads the Airbus campaign in Switzerland, told reporters that the company's plan to locally assemble all 40 of the notional aircraft would “more than fulfill” the offset requirements established by the Swiss government.

Lockheed Martin, with its F-35, also has high hopes for the Swiss competition, hoping to broaden the plane's user base in Europe. The company's offer includes a basic program of 36 jets, with options for an additional four aircraft, Mike Kelley, who leads the company's F-35 efforts in Switzerland, said during a Nov. 19 roundtable with reporters.

While Switzerland would be able to purchase parts through the spares pool shared by all F-35 operators, the offer also contains a six-month deployed spares package — a separate pot of parts that would be managed by the Swiss government, which was necessary to meet Swiss autonomy requirements.

To meet requirements for industrial participation, Switzerland would have the opportunity to domestically produce about 400 canopies and transparencies for F-35 aircraft, and Lockheed would establish a European hub for the maintenance, repair and overhaul of F 35 canopies and transparencies in Switzerland. In addition, the country would take on certain F-35 engine and airframe sustainment projects focused on maintaining the Swiss Air Force's operational autonomy, Kelley said.

Lockheed also plans to partner with Swiss industry to create a cyber center of excellence, which would prototype a unique data network for Switzerland and build a test bed that would allow Swiss companies to test cyber capabilities in a secure environment.

On top of those efforts, Lockheed is offering one last industrial participation opportunity to Switzerland. For an additional cost, Switzerland will be able to conduct the final assembly of four F-35 aircraft at existing RUAG facilities in Emmen, allowing the Swiss technicians that currently work on the country's aging Hornet fleet to build a deeper knowledge of the aircraft's design.

That option would add a “significant cost” to the total program, Kelley said, but could allow for overall savings throughout the life cycle of the program.

Boeing, meanwhile, has positioned its offer of an F-18 Super Hornet fleet as a logical extension of Switzerland's existing F-18 infrastructure. “As an F/A-18 operator, Switzerland will have the option to reuse up to 60 percent of existing physical and intellectual infrastructure, making the transition to a Super Hornet easier and more cost effective over the life of the aircraft,” the company said in a statement.

The aircraft offer, the statement added, would “easily fit” within Switzerland's current F-18 operating budget.

The reference to cost comes after Swiss officials stressed that the fighter portion of the Air 2030 air defense modernization program includes a cost ceiling of 6 billion Swiss francs (U.S. $6.6 billion), with with an eye on potential price reductions along the way.

“Currently, Boeing is working with more than 100 current and new partners across Switzerland to identify the right opportunities for its New Fighter Aircraft industry plan,” the company said.

France's Dassault, with its offer of the Rafale, is the only vendor keeping its cards close to its chest. Citing a commitment to confidentiality, a spokeswoman told Defense News the company had no plans to characterize its offer nor the “nature of the relationship” between the Swiss and French governments to that end.

https://www.defensenews.com/global/europe/2020/11/29/aircraft-makers-sweeten-their-offers-in-high-stakes-swiss-warplane-race/

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  • For IT companies, the secret to success in defense is all about big growth

    August 14, 2018 | International, Aerospace, Naval, Land, C4ISR

    For IT companies, the secret to success in defense is all about big growth

    By: Jill Aitoro WASHINGTON — The secret to tackling the defense information technology market may be scale. Looking specifically at the pure-play IT companies that landed on the 2018 Defense News Top 100 list, many of those that have doubled down in some capacity saw defense revenue increase during fiscal 2017. That came on the tail end of another trend among the largest defense primes, to get out of the IT business. “The evolution started a couple years ago, where the large defense primes who had boned up on IT service work during the war [on terror] started to realize that for a variety of reasons they might not be able to compete as effectively, or extract the returns they want out of a business like that,” said Jon Raviv, senior analyst and vice president for aerospace and defense at Citi Research. Divestitures followed, and pure-play IT companies were able to quickly scale up not just in size and their ability to support massive contracts, but also in capability set. The acquisition of Lockheed Martin's IT business transformed Leidos from a $5 billion company to a $10 billion company. That deal closed in late 2016, explaining how the company saw double-digit growth in defense revenue in both 2016 and 2017 — despite the buy actually making the company less defense heavy overall. Similarly, CACI closed on the acquisition of L3 Technology's National Security Solutions for $550 million in February 2016 — three months before the end of its fiscal year. The associated revenue contributed to the 16 percent increase in defense revenue during 2017. Leidos CEO Roger Krone, in an interview with Defense News in 2016 soon after the acquisition closed, pointed to “scale, but not scale for scale's sake” as a big factor in the buy — noting, too, the importance of balancing the portfolio and geographic distribution. He also pointed to sheer numbers — 15,000 employees specifically — many with security clearances. The trend does seem to be continuing. CSRA chose to not participate in the 2018 Top 100 because its $9.7 billion acquisition by General Dynamics closed by the time data collection for the list kicked off. While General Dynamics is a top defense prime, its IT business functions as a largely separate entity, similar to the pure-play IT companies. The acquisition of CSRA, which reported $2.25 billion in defense revenue for fiscal 2016 — will add significant scale to GDIT. It is also likely to influence the company's Top 100 rank next year. The future promises more cyber and IT-related merger and acquisition activity in the vein of that deal, according to Daniel Gouré, a vice president with the Lexington Institute think tank. “Raytheon is still in acquisition mode with cyber, so it's an area that's still kind of churning,” he said. “I wouldn't be surprised to see some of these big players acquire some of the more defense-oriented cyber players.” Unclear is what the sweet spot may be for those exclusively IT-focused firms. “Where we sit right now, it's not clear what the right size is,” Raviv said. “GDIT and Leidos are about $10 billion in sales; SAIC and CACI and ManTech are lower tier. All of those companies say they are happy with scale but could do a deal. Whether they call it scale, or marrying capability sets — it's all marketing, I suppose.” And there are other tactics that achieve scale without acquisition. Perspecta emerged on the 2018 Top 100, having launched June 1, 2018 through the combination of DXC Technology's U.S. public sector business, Vencore, and KeyPoint Government Solutions. As one entity, Perspecta reported $2.73 billion in defense revenue and ranked 37. To put that in perspective, Vencore ranked 67 in last year's list, with $886.59 million in defense revenue. And all of these pure-play companies are increasingly marketing themselves as conduits to the “nontraditional players” that the Pentagon is so keen to attract. Amazon Web Services, for example, will often partner with government IT companies on defense contracts to hand off some of the contracting morass. That said, for all the potential, the bulk of the defense IT market is notoriously fickle. Services often set aside IT projects in an effort to preserve platform buys, and margins can be low. Agencies also struggle to balance upkeep of existing systems versus modernization efforts versus research and development into the next great technological marvel. But as Raviv noted, it's all IT. “Yes, there are companies working on high-end cyber, the ability to launch attacks through cyberspace or to harden the communication node on a new missile so it can't be hacked by, say, China. And while the word cyber came up a lot three or four years ago, now you hear a lot about AI, autonomy and machine learning. But it's all technology. And it's a lot of smart people working on a lot of advanced things many of us don't understand.” https://www.defensenews.com/top-100/2018/08/09/for-it-companies-the-secret-to-success-in-defense-is-all-about-big-growth/

  • Here’s who will build the US Army’s new missile defense radar

    October 17, 2019 | International, Land

    Here’s who will build the US Army’s new missile defense radar

    By: Jen Judson WASHINGTON — Incumbent Raytheon will build the U.S. Army's new missile defense radar to replace the Patriot air and missile defense system's current radar as part of the service's future Integrated Air and Missile Defense System. The company has taken its years of experience refining gallium nitride, or GaN, technology at its Massachusetts-based foundry to help design a new radar system that will provide the Army 360-degree threat detection capability in a configuration that includes one large array in the front and two smaller arrays in the back. The contract is worth roughly $384 million to deliver six production-representative units of the Lower Tier Air and Missile Defense Sensor, or LTAMDS. “Our clean-sheet approach to LTAMDS reinforces Raytheon's position as the world's premier air and missile defense radar capability provider,” Ralph Acaba, president of Raytheon Integrated Defense Systems, said in a statement. The service earlier this year held a “sense-off” at White Sands Missile Range, New Mexico, between three working radars from Raytheon, a Lockheed Martin and Elta Systems team,and Northrop Grumman. The service analyzed the results and was in contract negotiations with the winner as the Association of the U.S. Army's annual conference, which kicked off Oct. 14. Brig. Gen. Brian Gibson, who is in charge of the service's air and missile defense modernization effort, told Defense News in an interview ahead of the show that negotiations were ongoing and that the award would happen soon. Without public knowledge of the win, Raytheon brought its offering for the LTAMDS competition to the show and passed out red lanyards advertising LTAMDS that said: “No time for a blind spot,” referring to the 360-degree coverage capability. Replacing the Patriot radar has been a long time coming. The radar was first fielded in the 1980s, and the Army previously attempted to replace the system with Lockheed Martin's Medium Extended Air Defense System through an international co-development effort with Germany and Italy. But that program was canceled in the U.S. after closing out a proof-of-concept phase roughly six years ago. Since then, the Army studied and debated how to replace the Patriot radar, while Raytheon continued to upgrade its radar to keep pace with current threats. The service has acknowledged there will come a point where radar upgrades will be unable to keep up with future threats. Taking years to decide, the service moved forward on a competition to replace the radar in 2017 and chose four companies to come up with design concepts for the capability — Raytheon, Lockheed Martin, Northrop Grumman and Technovative Applications. Toward the end of 2018, Raytheon and Lockheed were chosen to continue technology development under that program. But then the Army redirected its plans into a sense-off competition last fall. Raytheon is expected to build six prototypes by the end of fiscal 2022. The radar that Raytheon specifically designed for the Army uses next-generation GaN and is 7 feet longer but 11 inches more narrow than the current radar unit. But it no longer requires outrigger stabilizing legs. Rather, the system is held stable by jacks underneath, which means it takes up less space on the sides, according to Bob Kelley, Raytheon's director of domestic integrated air and missile defense programs for business development and strategy. The radar meets all of the Army's mobility and transport requirements, Kelley said, including fitting in a C-17 aircraft. The smaller arrays are about 50 percent of the size of the legacy Patriot system's array, but are twice as capable due to the advancements with GaN technology, he added. Though the Army backed off its 360-degree detection capability requirement for the competition, Raytheon has been steadfast about keeping that capability in its offering. In addition to being able to constantly cover 360 degrees, the radar can see farther than the currently fielded Patriot radar. That radar is unable to fully support the maximum kinematic range of the Patriot Advanced Capability-3 Missile Segment Enhancement that it fires. The Army claims that its effort to tie the Terminal High Altitude Area Defense System with Patriot would help the MSE missile reach its full potential. The LTAMDS will be able to fully support current missile systems including PAC-3 MSE range capability and future missiles ranges, Kelley said. https://www.defensenews.com/breaking-news/2019/10/17/heres-who-will-build-the-armys-new-missile-defense-radar

  • U.S. Small Businesses May Get More COVID-19 Emergency Funding

    April 8, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    U.S. Small Businesses May Get More COVID-19 Emergency Funding

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