British military feels out industry for helicopter buy worth over $1 billion

On the same subject

• 

  April 18, 2024 | International, Land

  True Velocity sues Sig Sauer, alleging stolen trade secrets

  True Velocity is suing Sig Sauer, alleging it stole trade secrets used in the weapon design the Army chose for its Next-Generation Squad weapon.

• 

  June 14, 2019 | International, Aerospace

  There are Turkish jets in the Pentagon’s latest F-35 deal. Here’s why that’s not a big problem.

  By: Valerie Insinna WASHINGTON — The Pentagon's latest deal with Lockheed Martin for new F-35 jets includes some for Turkey, raising the question of what will happen if the country is pushed out of the program. The handshake agreement announced Monday totals about $34 billion for 478 new F-35s over lots 12 through 14, including about five to 10 jets for Turkey per lot, one source told Defense News. But that might not complicate the process of finalizing the contract agreement, aerospace analysts and other sources close to the program said — even as the Defense Department begins “unwinding” Turkey's participation in the program. At issue is Turkey's purchase of the S-400, a Russian air defense system that U.S. and NATO officials say is at odds with the alliance's plan to field the F-35. Despite months of discussions between Ankara and Washington, Turkish leaders have emphatically maintained that it will not cancel the S-400 order. In response, acting U.S. Defense Secretary Patrick Shanahan on June 6 approved a plan to strip Turkey from the F-35 program. Turkish pilots and maintainers undergoing training at U.S. bases are required to leave the United States by July 31, and contracts with Turkish defense companies could end in 2020. Ankara has since doubled down on its intent to buy the S-400. Turkish President Recep Tayyip Erdogan said Wednesday that the purchase is already “a done deal” and that the Russian air defense system will be delivered in July, according to Reuters. “We will call to account in every platform Turkey being excluded from the F-35 program for reasons without rationale or legitimacy,” Erdogan said. So what if Turkey leaves? Sources told Defense News that Turkey's potential exit from the program isn't expected to have much of an impact on the deal for lots 12 through 14. The Pentagon hasn't provided exact costs per unit for the new F-35s, but it has acknowledged that unit flyaway costs will decrease by about 8.8 percent in Lot 12, made up of 157 jets. The department also estimates unit prices will drop by about 15 percent from Lot 11 to Lot 14 across all variants. By that framework, F-35 customers will be able to buy an F-35A conventional-takeoff-and-landing model for less than $80 million by Lot 13 — one year earlier than expected. That isn't expected to change, even if Turkey is knocked from the program, a department source said. Rebecca Grant of IRIS Independent Research said it's likely the number of jets and the negotiated prices in the handshake agreement will stand, adding that the Defense Department still has options on the table. “They can let Turkey go ahead and have those jets [and] park them in the desert [until this issue is resolved]. They can switch to a customer that wants earlier deliveries — also an option,” she said. Dealing with these types of problems isn't new for the United States, added Grant, who pointed to the U.S. arms embargo on Pakistan in 1990, which resulted in the country's F-16s being placed into storage. Richard Aboulafia, an aerospace analyst at the Teal Group, said there are multiple ways for the Pentagon to deal with the fallout of a Turkish exit from the program. Countries like Singapore and Poland, which have expressed interest in buying F-35s, could join the program and pick up the slack. If Congress adds F-35s to upcoming budget cycles — which has been typical in recent years — the U.S. armed services could buy Turkey's jets. “I really don't see it as a challenge,” Aboulafia said. “This is not the same as building white tails in the commercial aviation business.” Another option was outlined by Marillyn Hewson, the head of F-35 manufacturer Lockheed Martin, in May: Sell Turkey's jets to existing international customers. “It's not a significant number of aircraft that if there was a sanction that they couldn't receive those aircraft now or in the future; it will be backfilled,” she said at Bernstein's Strategic Decisions Conference, according to Defense One. “In fact, a lot of countries say: ‘We'll take their [production line] slots.' They [other countries] really want the aircraft. I don't envision that being an impact on us from a Turkey standpoint.” U.S. officials remain hopeful that Turkey will cancel its S-400 order, and they have made it clear that Turkey's participation in the F-35 program will continue if that happens. “Turkey still has the option to change course. If Turkey does not accept delivery of the S-400, we will enable Turkey to return to normal F-35 program activities,” Ellen Lord, the Pentagon's acquisition chief, said June 7. The U.S. government is no rush to expel Turkey from the program, Grant said. Including Turkey in the current contract negotiations helps send that message. “We need Turkey in NATO, and we'd like to see a Turkish Air Force with F-35s,” she said. “This is going to take some diplomacy.” Aboulafia noted that Turkey benefits from its involvement in the F-35 program, with its companies manufacturing parts for the jet's F135 engine and a second supplier providing the center fuselage. The country has made the development of its defense industry a priority, and risks becoming a cottage industry if it alienates its NATO allies, he said. “This does not do it any favors. They are going to have to line up partners and programs very fast," he added. But the prospect of a happy resolution is looking increasing grim, he said. “There is no room for compromise [on the U.S. side], and on the other side you have a populist, who is making this a test of his leadership. There is a lot of ego here.” https://www.defensenews.com/air/2019/06/13/there-are-turkish-jets-in-the-pentagons-latest-f-35-deal-heres-why-thats-not-a-big-problem/

• 

  April 28, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  DoD Budget Cuts Likely As $4 Trillion Deficit Looms

  By THERESA HITCHENSon April 27, 2020 at 5:02 PM WASHINGTON: With the federal deficit expected to balloon to over $4 trillion in fiscal 2020 due to spending to pump the economy in the face of the COVID-19 coronavirus pandemic, downward pressure on the US defense budget is inevitable, several experts believe. “I think the budget comes down sooner rather than later,” Mackenzie Eaglen, resident fellow at the American Enterprise Institute, said bluntly in a webinar today. The best-case scenario is for flat defense budgets for the foreseeable future, but if history is a guide, the smart money is on defense budget cuts, explained Todd Harrison, DoD budget guru at the Center for Strategic and International Security (CSIS). “What has historically happened is, when Congress's fiscal conservatives come out and get serious about reducing the debt, reducing spending defense is almost always part of what they come up with for a solution,” he said. “So, we could be looking at a deficit-driven defense drawdown coming. ... At least history would suggest that that is a real possibility.” Indeed, even as Congress is pulling out all the stops trying to assist DoD and the defense industrial base to weather the COVID-19 coronavirus pandemic, DoD already is being eyed as the future deficit bill-payer, Eaglen told the webinar. “DoD is at the top of the list,” she said. Eaglen added that, at a more macro-level, the budget crunch could force DoD to re-look the goals of the 2018 National Defense Strategy (NDS) with an eye to downsizing. “There's going to be an impact across the board,” she said. “There probably will be a total relook — at even the NDS fundamentals, and what mission is going to have to go — in response to this.” Harrison noted that already DoD has been looking at flat budgets through 2021, which has caused it to have to take some risks as it tries to juggle divesting in high-maintenance legacy systems with investing in future programs while maintaining readiness to handle a possible peer conflict with Russia and/or China. “Just to divest legacy systems and invest in new ones and try to maintain, or slightly grow, force structure, DoD was already saying that it would need three to five percent real growth each year in the defense budget, going forward, just to fully execute that,” he said. This means that DoD leadership is going to face even more difficult decisions in the future, Harrison explained. “Now we're looking at an environment where the budget might be flat at the best case or trending down over time. Something's gonna have to give. And so, if DoD really wants to protect these key modernization programs, not only is it going to have to divest legacy systems, it's going to have to divest them faster, and it's going to have to make some reductions in force structure that's going to incur risk.” More immediately, Harrison said, as Congress moves over the next few months to pass a fourth, or even a fifth, economic stimulus package DoD already is signaling that it hopes to see a number of its “unfunded requirements” stuffed into those bills. “DoD is saying: ‘hey, if you want to fund more things for DoD to help stimulate the economy, and help the defense industry, well, here's a list you already have that you can pick from.” DoD's unfunded priorities list — the annual wish list of programs it would like to fund if only there was more money in the top-line — for 2021 includes a total of $35.9 billion for programs across the military services and the combatant commands. The Pentagon might also petition Congress for greater authority to use operations and maintenance funds appropriated but not spent due to work slowdowns to short up programs facing cost overruns because DoD paid contractors for work supposed to be done, but not actually done, while employees are home-bound due to the pandemic, Harrison said. “DoD has implemented the CARES Act implementation, saying that they would pay for paid leave for employees of defense industry firms that are unable to report to work. And so that cost is covered,” Andrew Hunter, who works on defense industrial base issues at CSIS, explained. “Those folks aren't necessarily going to be laid off; they will be kept on the payroll and paid. And again, that will create some costs down the road to then pay those folks to do the actual work that they're originally scheduled to do.” Most of the nearly $10.5 billion in the CARES Act, signed by President Donald Trump on March 27 to help DoD protect itself from the impacts of the pandemic goes into O&M accounts, according to CSIS. That said, some $1 billion goes to procurement funding, with an eye on health-related equipment. Further, it includes some $1.5 billion in the Defense Working Capital Fund, which allows DoD to make investments in things like depot maintenance, transportation and supply management in the near term and recoup the costs through future year pricing deals. However, the bill grants DoD a good deal of flexibility to move money around — with the exception of banning any funding for Trump's southern border wall construction. https://breakingdefense.com/2020/04/dod-budget-cuts-likely-as-4-trillion-deficit-looms/