COVID-19 Impacts Air Force One Replacement Bottom Line

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  April 27, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  COVID cash crunch still hurting small defense firms

  By: Joe Gould WASHINGTON ― Cash flow for small defense contractors is continuing to suffer under the coronavirus pandemic, according to a survey by the National Defense Industrial Association. The survey echoes warnings from the Pentagon that these firms, part of a vast network of suppliers that makes up the defense-industrial base, are especially vulnerable. The Pentagon this week announced it will make $3 billion in new “progress payments" to increase cash flow to prime contractors, expecting the money would then trickle down. Of the NDIA survey respondents: 67 percent of companies with less than $1 million in annual revenue have seen a cash-flow disruption. 60 percent said the crisis has interfered with their cash flow. 60 percent expect to have long-term financial and cash-flow issues stemming from the crisis. 66 percent said accelerated payments from the Defense Department or prime contractors would be the most helpful step toward business recovery. L3Harris Technologies said this week it will issue more than $100 million in payments to its small suppliers. Lockheed Martin announced Friday it executed $256 million in accelerated payment toward its $450 million goal. Both of these promised followed the Pentagon's announcement this month that it will boost progress payment rates from 80 percent to 90 percent for large companies, and to 95 percent for small businesses. The payments are made to contractors, usually on a monthly basis, for costs incurred and work performed under a contract; a 90 percent rate means that if $1 million in expenses are submitted on the program, the Defense Department will reimburse $900,000. Sixty-six percent of the respondents also said it would help them to receive flexibility on the performance of their contracts. Seventy-two percent expected to avoid overruns on their firm fixed-price contracts as a result of disruptions caused by COVID-19. On Thursday, acquisitions officials with the Army said they expect costs to rise, and in response will guard against program slips and closely watch vulnerable lower-tier companies with less slack in their workforces. Pentagon officials anticipate workforce and supply chain issues will yield a three-month delay across the majority of its Major Defense Acquisition Program portfolio. “The supply chain does have some challenges, and that's probably where the vast majority of any slips would occur that are tied to individual companies,” said Bruce Jette, the Army's acquisition chief. “These companies are small, and if one person gets COVID in the company, the next thing you know you've lost 14 days with the company because everybody that didn't get it is in quarantine.” As of April 10, 769 small businesses responded to the NDIA survey. The number of companies expecting cash-flow disruptions was slightly lower last month, when 458 small businesses responded. Factoring into cash-flow problems, according to the NDIA, are cuts to billable hours, delayed payments from prime contractors and government customers, a lack of telework options or schedule flexibility in contracts, and shelter-in-place orders that prevent employees from working. Beyond revenue expectations, meeting contract obligations and access to capital are where small businesses are taking the biggest hits during the pandemic. Other areas of difficulty were workforce availability, access to secure facilities, contracting officers accessibility, clear information from the Defense Department, confidence in the supply chain, and stock and cost of materials. The technology and services sectors reported more disturbances from the crisis than the manufacturing sector, NDIA noted. And businesses with fewer than 50 employees are feeling the brunt harder than businesses with more than 500 employees. Defense Contract Management Agency data this week showed that 106 out of 10,509 primary Pentagon contractors are closed, and 68 companies closed and then reopened. Of 11,413 subcontractors, 427 were closed, with 147 having closed and reopened. https://www.defensenews.com/2020/04/24/covid-cash-crunch-still-hurting-small-defense-firms/

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  August 17, 2020 | International, Aerospace, Land, C4ISR

  Army buys $189M counter drone system but already has plans to replace it

  Nathan Strout WASHINGTON - The U.S. Army has invested another $190 million into a counter-small unmanned aircraft system (C-sUAS), but it's determined that the system will need to be replaced by a U.S. Marine Corps alternative. On July 20, the Army announced it was awarding DRS Sustainment Systems $190 million to develop, produce and deploy the Mobile-Low, Slow, Small Unmanned Aircraft System Integrated Defeat System (M-LIDS). While the system will be deployed, it doesn't have a long-term future with the military. Despite the Army investing in the program for years, M-LIDS is a casualty of redundancy. As the Department of Defense has become more concerned by the threat posed by small drones in recent years, the services have each developed their own C-sUAS responses — mobile, stationary and dismounted. Recognizing the redundancy in that approach, the defense secretary delegated the Army to lead the effort to narrow the number of C-sUAS solutions for use by the joint forces. On June 25, the Army's Joint C-sUAS announced it had selected eight C-sUAS for future investment and deployment by the joint forces. M-LIDS didn't make the cut. But then, about a month later, the $190 million M-LIDS contract was announced, “Mobile-LIDS (M-LIDS) was not selected and will be replaced by the next generation mobile system,” said Jason Waggoner, an Army spokesman. In the meantime, “M-LIDS will be deployed with Army units to the CENTCOM area of operations.” M-LIDS would likely be replaced by the Light-Mobile Air Defense Integrated System (L-MADIS), a C-sUAS developed by the U.S. Marine Corps and the only mobile solution approved by the Joint C-sUAS Office. L-MADIS has already been deployed for testing and was reportedly used to down a drone off the coast of Iran last year. The Joint C-sUAS office told reporters in June that the services were conducting an analysis of how many systems would need to be replaced under the new arrangement. However, leaders were not able to provide a timeline for how quickly they expected to replace those systems. The series of announcements in this market came quickly this summer. Two days after the M-LIDS award, the Army announced a contract for one of the C-sUAS solutions that was included on the list for future investment: the Expeditionary-Low, Slow, Small Unmanned Aircraft System Integrated Defeat System (now known as FS-LIDS). The $426 million contract with SRC Inc. provides for the development, production, deployment and support of FS-LIDS, one of three fixed-site solution approved for the joint forces by the Joint C-sUAS Office. “Development of FS-LIDS is complete and systems are being deployed to U.S. forces globally, with a focus in the CENTCOM area of operations,” Waggoner said. “FS-LIDS will remain in use until replaced with newer technologies.” C-sUAS spending hasn't been limited to the Army in recent weeks. On Aug. 10, the U.S. Air Force issued Black River Systems Co. an $89 million contract for an operational C-sUAS open systems architecture. CORRECTION: This story has been updated to show that the Joint C-sUAS Office selected three fixed-site C-sUAS solutions. https://www.c4isrnet.com/unmanned/2020/08/13/army-buys-189m-counter-drone-system-but-already-has-plans-to-replace-it/

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  June 29, 2018 | International, C4ISR

  A Senate panel wants to spend an extra $400 million on microelectronics

  By: Daniel Cebul When the Senate Appropriations subcommittee on defense released a summary of their spending priorities June 26, the bill included a significant increase for one emerging technology. The panel recommended setting aside an additional $447 million for microelectronics. Specifically, the committee wanted to ensure the Department of Defense has access to trusted microelectronics and can develop manufacturing processes for next-generation microprocessor chips. To do so, the bill raised the fiscal year 2019 research, development, testing and evaluation budget for microelectronic technology from $169 million in the president's fiscal year 2019 budget request to $616 million. Already, concern about the domestic production of microelectronics is expected to be part of a large defense industrial base review now underway. But what exactly are microelectronics, and why is their development worth so much to DoD? Microelectronic chips are essentially integrated electric circuits that regulate energy consumption, and perform complex computations that enable capabilities like global positioning systems, radar and command and control. Imagine all of the components that go into your computer ― memory, graphics processors, wifi modules, etc ― all on a single silicon chip, called a wafer. eading-edge wafers typically are 300 mm in diameter and loaded with transistors, resistors, insulators and conductors that control the flow of electrons (read electrical energy) across the chip. The smaller and smaller these components are, specifically transistors, the more can be fit on a chip, enabling faster and more efficient processing. Transistors themselves are measured in nanometers (nm), and are unfathomably small to most non-scientists and engineers. One nanometer equates to a billionth of meter! To put that into perspective, the average diameter of a human hair is 75,000 nm. The most cutting-edge transistors used in microelectronics measure between 10 and 7 nm, and are expected to get smaller in coming years. Smaller and smaller transistors will contribute to breakthroughs in “machine learning, data sorting for recognition of events, and countering electromagnetic threats,” according to a Defense Advance Research Project Agency backgrounder. Because Pentagon leaders believe this technology is vital for current and future capabilities, technology officials say it is important DoD can trust microelectronics are reliable and secure from adversary attacks and sabotage. For this reason, DARPA launched the five-year, up to $200 million Electronics Resurgence Initiative in September 2017 “to nurture research in advanced new materials, circuit design tools, and system architectures.” A key thrust of this initiative is partnership with top universities through the Joint University Microelectronics Program, or JUMP. The program enlists top researchers to work on proejcts like cognitive computing, secure cellular infrastructure to support autonomous vehicles and intelligent highways and other technologies enabled by microelectronics. Under the Senate defense subcommittee's markup, ERI received an additional $30 million to help “reestablish U.S. primacy in assured microelectronics technology.” https://www.c4isrnet.com/it-networks/2018/06/28/a-senate-panel-wants-to-spend-an-extra-400-million-on-microelectronics/