July 26, 2019 | International, Aerospace
By: Valerie Insinna
WASHINGTON — Boeing has announced its withdrawal from the $85 billion Ground Based Strategic Deterrent competition, potentially leaving Northrop Grumman as the only contender vying to replace the Air Force's Minuteman III intercontinental ballistic missiles.
“After numerous attempts to resolve concerns within the procurement process, Boeing has informed the Air Force that it will not bid Ground Based Strategic Deterrent (GBSD) Engineering and Manufacturing Development (EMD) under the current acquisition approach,” reads a Boeing statement. “We've evaluated these issues extensively, and determined that the current acquisition approach does not provide a level playing field for fair competition.”
Boeing Defense CEO Leanne Caret detailed the company's issues in a July 23 letter to Air Force acquisition executive Will Roper, which was obtained by Defense News and other outlets.
“Throughout the procurement process, Boeing has been transparent with the Air Force about its concerns with the competition,” she wrote. “The final RFP released on July 16 made only modest changes to the draft RFPs that had been previously released. As relevant to the concerns Boeing had raised, the final RFP extended the proposal submission deadline by 60 days, from 90 days after the RFP's issuance to 150 days, and allowed offerors to submit ‘an alternative proposal in addition to their principal proposal,' that could include ‘a single, combined proposal' from both competitors."
But Caret said that those changes did not address Boeing's primary concern: that Northrop Grumman would have an unfair advantage in the competition due to its recent acquisition of solid rocket motor manufacturer Orbital ATK, now known as Northrop Grumman Innovation Systems.
NGIS is one of two U.S. manufacturers of solid rocket motors, alongside Aerojet Rocketdyne, but both Boeing and Northrop had chosen Orbital as its supplier for GBSD prior to the merger.
According to Caret, Northrop only recently — as of July 3 — signed off on an agreement that would firewall Boeing's proprietary information from Northrop's own GBSD team as Boeing negotiates with NGIS for solid rocket motors. Even though an agreement has now been reached, Caret contends that Boeing does not have enough time to negotiate a competitive price for the motors.
Caret said the current acquisition approach gives Northrop “inherently unfair cost, resource and integration advantages related to SRMs,” adding: “As I said in my July 8 letter, we lack confidence in the fairness of any procurement that does not correct this basic imbalance between competitors.”
Even the Air Force's accommodation that would allow Northrop and Boeing to submit a joint bid “is not a workable solution to these issues,” she said.
“Because the final RFP does not address Northrop's inherent advantage as a result of its control of SRMs, Northrop retains the ability to compete on unequal terms against either a Boeing or a joint ‘alternative' proposal — and as a result, would not be incentivized to devote the significant resources required to develop such a proposal,” Caret said.
Additionally, Caret said it is “not realistic” to expect that Boeing and Northrop could develop a competitive joint bid in the five months before proposals are due, given that both companies have been working on their separate proposals for more than two years.
An Air Force spokeswoman declined to comment on the news, as the competition is currently in source selection.
Inside Defense broke the news of Boeing's departure from the competition.
Boeing's decision comes a week after the Air Force released its final request for proposals on July 16. A contract for the engineering, manufacturing and development phase is expected to be awarded by the end of 2020.
Lockheed Martin had previously competed for the contract, but was ousted in August 2017, when the service awarded technology maturation and risk reduction contacts to Boeing and Northrop.
It's unclear how Boeing's departure will affect the ultimate price of the GBSD program.
In April, Gen. Timothy Ray, head of Air Force Global Strike Command, said he was counting on competition between Northrop and Boeing to help offset a near-term bump in cost expected as the Air Force makes investments in current infrastructure that will be reused for the GBSD system. Ultimately, that competition would help drive “billions” of dollars in savings over the lifespan of he weapon, he said.
“Between the acquisition and the deal that we have from a competitive environment, from our ability to drive sustainment, the value proposition that I'm looking at is a two-thirds reduction in the number of times we have to go and open the site. There's a two-thirds reduction in the number of times we have to go and put convoys on the road.”
It would be unusual for the Air Force to move forward with this program with only one competitor, Byron Callan, an analyst with Capital Alpha Partners, noted in an email.
“One option would be for the Air Force to re-write the RFP to address some of Boeing's concerns, which could delay the program,” he wrote. “The RFP had been seen by some analysts as favoring Northrop Grumman because the initial portion was cost-plus, but Boeing's concerns suggest it's worried about a strategic bid by Northrop Grumman.”
During an earnings call on Wednesday, Boeing CEO Dennis Muilenburg referred to the GBSD program a single time — to say that the company would leverage its development work on GBSD for future programs such as NASA Commercial Crew effort and next-generation space launch.
https://www.defensenews.com/space/2019/07/25/boeing-drops-from-next-generation-icbm-competition/
January 20, 2022 | International, Naval
The Navy and Lockheed Martin are still negotiating the cost breakdown for a fix to the Freedom variant Littoral Combat Ship that has restricted the operations of most ships in the class, a service official said last week. Capt. Andy Gold, the program manager for the Navy’s Littoral Combat Ship, told reporters at the annual …
July 26, 2023 | International, Aerospace, C4ISR, Other Defence
Lockheed is designing a spacecraft that can carry an experimental nuclear reactor engine and fuel developed by Virginia-based BWXT.
December 18, 2018 | International, Aerospace, Naval, Land, C4ISR
By: Leo Shane III WASHINGTON — Analysts from the Congressional Budget Office say the government could trim hundreds of billions from the federal deficit by enacting a host of already discussed military and veterans program reforms. The problem is that those reforms include some of the most controversial and politically unpopular policies of the last few years, things like limiting military pay raises, ending a host of military equipment purchases, and cutting back on veterans benefits. The document released last week — CBO's annual “options for reducing the deficit” report — lists more than 120 ideas to reduce federal spending or boost federal revenues over the next 10 years. Authors said the goal is to “reflect a range of possibilities” of moves that lawmakers could make in dealing with government debt and escalating federal programming costs. Twenty of the proposals would affect the departments of Defense and Veterans Affairs, including a plan to cut the Pentagon budget by 10 percent ($591 billion in reduced budget authority over the next decade). That dramatic cut would “require DOD to decrease the size of its forces, slow the rate at which it modernizes weapon systems, or do both,” which in turn would prompt a host of complaints from military leaders and defense lawmakers. Still, the size of the savings involved show why the ideas continue to attract debate on Capitol Hill each year, even with the significant disruptions they may bring. Here is a look at some of the other potential VA and Pentagon moves: Limit pay raises for troops ($18 billion in savings over 10 years) The CBO idea would give troops an annual raise of 0.5 percent less than the expected growth in civilian salaries. Service members would still see annual raises, but opponents of the idea argue that those increases wouldn't keep up with the cost of living for military families. President Barack Obama's Pentagon capped the military raises at this level for three years during his presidency, leading to criticism from advocates that he had created a new gap in military and civilian wages. President Donald Trump suggested a 0.3 percent reduction in the expected raise formula in his first budget, but saw the proposal rejected by Congress. Narrow eligibility for VA disability benefits ($33 billion over 10 years) The CBO plan would drop a host of conditions not directly related to military service — illnesses like arteriosclerotic heart disease, hemorrhoids and multiple sclerosis — from the list of claims eligible for disability benefits. More than 750,000 veterans' checks would be affected by the move. Any such trims in benefits have prompted harsh attacks from veterans groups, who have accused supporters of breaking faith with men and women who were promised lifelong assistance for their military service. Cancel new F-35 purchases ($16 billion over 10 years), retire the F-22 fleet ($30 billion over 10 years) and delay development of the B-21 bomber until after 2028 ($45 billion over 10 years) All three ideas would require Air Force officials to continue using aging aircraft, a concern for Pentagon planners who have seen a spike in aviation accidents in recent years. The CBO report acknowledged that a disadvantage of the idea would be making the military “less flexible against advanced enemy air defense systems” but said the current mix of aircraft types already in use by the services would mitigate some of those concerns. Stop building Ford-class aircraft carriers ($18 billion over 10 years) Under this option, the Navy would stop building new aircraft carriers after the USS Enterprise, scheduled to be completed in 2027. A carrier set for the start of construction in 2023 would be scrapped. The CBO report argues that even with the move, the Navy would still have 11 active carriers until 2036 given its current fleet size. However, defense lawmakers have long argued against any delays in ship building schedules, given the long wait for construction and fielding of new vessels. End VA's Individual Unemployability program for retirement-age veterans ($48 billion over 10 years) Trump also suggested this idea in his first VA budget, only to have lawmakers and veterans groups soundly reject it. The IU program provides extra benefits to veterans unable to work because of disabilities, even if they don't have a 100 percent disabled rating. Supporters have argued that money should stop once Social Security payouts begin. Opponents of the idea could leave as many as 235,000 veterans in dire financial need. Reduce military housing allowances to 80 percent of rent costs ($15 billion over 10 years) Under this plan, BAH payments wouldn't change for troops until they move, but it would slowly increase their out-of-pocket costs for housing. The change would also create savings for the VA, since post-9/11 GI Bill housing stipends are tied to the military housing formula. Similar BAH reform proposals on Capitol Hill have met fierce opposition in recent years. Advocates argue that since military members have little say in their next duty assignment, they shouldn't have to shoulder the costs of unexpected moves and expensive housing costs. Replace thousands of troops with civilian workers ($17 billion over 10 years) The CBO idea calls for reducing military end strength by 80,000 over four years and replacing them with 64,000 civilian employees. The work would not be directly related to warfighting, and the health care and ancillary costs of non-military workers would create significant savings compared to service members' benefits. But Congress has worked to increase the military's end strength in recent years, saying it brings more readiness and flexibility to the overall force. An end-strength cut of that size would represent a major political backtrack for many elected officials. https://www.militarytimes.com/news/pentagon-congress/2018/12/17/analysts-find-hundreds-of-billions-in-military-savings-by-capping-military-pay-scrapping-aircraft-slashing-veterans-benefits