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On the same subject

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  May 19, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  Our nation’s defense supply chain imperative

  By: Bill Brown, L3Harris Technologies The Department of Defense and defense industry have a long history of responding quickly and forcefully to crisis, and the COVID-19 pandemic is no exception. Today, hundreds of thousands of dedicated defense workers remain at their posts – delivering mission-critical products and services to support our troops around the world, while also providing personal protective equipment and other supplies to first responders and health care workers here at home. However, this most recent crisis has re-exposed weaknesses in our defense industrial base – highlighting the need to significantly bolster the nation's vital supply chain. This serves as a call to action to develop a strategic, long-term approach across government and industry. We witnessed the fallout from the 2008-09 financial crisis. Thousands of suppliers shuttered or permanently shifted precious capacity to other verticals when defense budgets were indiscriminately cut following the Budget Control Act of 2011 and sequester of 2013. When budgets began to recover several years later, the damage was clear – longer lead times that in some cases doubled or more, and increased reliance on single-source and international suppliers for critical components, such as microelectronics. In 2017, President Trump signed an executive order and established a multi-agency task force to study supply chain resiliency. The task force identified five macro forces that create risk to the supply chain and national security preparedness including sequestration and the uncertainty of government spending, the overall decline of U.S. manufacturing capabilities and capacity, harmful government business and procurement practices, industrial policies of competitor nations, and diminishing U.S. STEM and trade skills. Task force members proposed a comprehensive set of risk-reduction actions – ranging from establishing sustained and predictable multi-year budgets and developing an adaptive acquisition framework, to directing investment to small businesses and diversifying the supplier base. Over the past two years, the government has made initial strides on a number of these fronts, including working to reduce U.S. reliance on foreign sources for critical rare earth minerals and decreasing the country's dependence on China and other international suppliers for semiconductors and related components. Unfortunately, the COVID-19 pandemic emerged before these and other task force initiatives gained serious traction and forced the DoD to refocus its near-term priorities. And the urgency escalated when we began to see the brutal impact the pandemic was causing in the commercial aerospace sector, an important vertical market for many defense suppliers. The department quickly designated defense suppliers as essential and increased progress payments, spurring larger defense contractors to accelerate payments to thousands of small business suppliers. These actions helped companies to continue operating, maintain their employment and hiring goals, and sustain critical spending on internal research and development (IRAD) to keep the innovation engine humming. At L3Harris, for example, we recommitted to investing nearly 4 percent of revenues in IRAD, hiring 6,000 new employees and maintaining our apprenticeship and internship programs to provide opportunities for the workforce of the future. The combined DoD and industry efforts demonstrate the power of a focused, collaborative approach to mitigate and address the damaging effects of the pandemic and to support the broader defense industrial base. Today, we are at a critical juncture. We have an opportunity to make the necessary strategic investments that could significantly strengthen our supply base for generations to come, including: · Ensure sustained/predictable budgets – stable, long-term funding helps companies better plan and encourages them to invest in staffing, technology and facilities needed for the country to maintain its technical superiority. Now is not the time to pull back the reins on defense spending. · Accelerate contract awards – shorter decision and acquisition cycles enable suppliers to invest in and deliver technologies faster than with traditional methods, and in the near term could help offset the impact of the commercial aerospace downturn. · Expand domestic supplier base – increasing domestic capabilities reduces vulnerabilities and increases access to critical components, such as rare earths and microelectronics, and over time can help reduce the proportion of sole/single-source supply. · Increase workforce investment – providing advanced STEM education opportunities drives innovation and productivity by enhancing critical skillsets for existing employees, while attracting, training and growing the workforce of the future. · Institutionalize process improvements – the COVID-19 pandemic forced government and industry to find new and more efficient ways to work. The challenge now – to make these advances permanent. These are not quick fixes. However, they provide a strong platform for a more resilient national defense supplier base, which is vital at a time when near-peer adversaries continue to invest heavily in new technologies that threaten our nation's security. The imperative is clear – and the opportunity is now. Bill Brown is chairman and CEO at L3Harris Technologies. https://www.defensenews.com/opinion/commentary/2020/05/18/our-nations-defense-supply-chain-imperative/

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  June 4, 2024 | International, Aerospace

  Proposed House spending bill would add more F-35s

  The defense appropriations bill would take a different approach than the proposed NDAA, which would cut F-35 purchases.

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  October 1, 2018 | International, Aerospace

  Boeing’s big month capped off with hat trick of new contracts

  By: Valerie Insinna WASHINGTON — Boeing is the biggest aircraft manufacturer in the world, but the losses of the joint strike fighter program and Air Force's long range strike bomber still weigh heavily on the company's defense unit, and had prompted some in industry to wonder if the company's days of making cutting edge combat aircraft were numbered. Conventional wisdom held that Boeing needed to win either the Navy's unmanned tanker drone or the Air Force's next-generation trainer aircraft contract to keep its St. Louis, Mo.-based facility building tactical aircraft into the 2030s. a contract for the Air Force's Huey replacement helicopter was seen as out of reach as the service had formerly expressed a preference for sole-sourcing Black Hawks. But in a matter of weeks, Boeing racked up all three contracts, shocking the defense establishment. First came the MQ-25 Stingray award for the Navy's unmanned tanker drone on Aug. 30. An initial $805 million contract covers the design, development, fabrication, test and delivery of four Stingray drones, but Navy acquisition boss James Geurts said the entire program could be worth up to $13 billion for 72 aircraft. “It is a big win on a high-visibility competition/program and gives Boeing a franchise unmanned program,” wrote Roman Schweizer of Cowen Washington Research Group on Sept. 4. Boeing defeated Lockheed Martin and General Atomics to win the program — and that victory allows Boeing to cement its own status as the Navy's premier manufacturer of fixed-wing aircraft. “A Lockheed Martin win would have cemented its position as the builder of ‘next-gen' naval aviation platforms while Boeing would have been relegated to manufacturing fleet workhorses,” Schweizer said in his assessment of the award. “General Atomics would have a been a one-off, but we thought they would been a favorite for a low-cost, low-risk design.” Then on Monday, Boeing won another big competition — this time worth up to $2.38 billion — for the Air Force's UH-1N replacement helicopter. Boeing and Leonardo were immediately obligated $375 million for the initial four MH-139 helicopters, which will be built at Leonardo's commercial AW-139 production plant in Philadelphia. It was huge news for Leonardo, a large Italian defense contractor that had been attempting to break into the U.S. market with a major program for about a decade. But for Boeing, it was still a relatively small aircraft procurement program, with Byron Callan, an analyst with Capital Alpha Partners, writing that there were probably few opportunities for Boeing-Leonardo to sell the MH-139 to other users in the U.S. military. However, Boeing on Thursday won the major opportunity it had been seeking: the Air Force's T-X program. Boeing's clean sheet design beat out Lockheed and Leonardo to win a contract worth up to $9.2 billion. It's likely the actual program will be worth considerably less — Boeing would be obligated a total of $9.2 billion over time if the Air Force decides to execute all options on the contract for 475 training jets, and the services' program of record sits at 350 jets. But its importance to Boeing extends past the award's total contract value. Winning T-X was “possibly critical” for Boeing's St. Louis plant and for its defense business to remain a competitive player in tactical aircraft design, said Callan. “The MQ-25 win helps sustain production at that facility, which now builds F/A-18s and F-15s,” he wrote after the Sept. 27 announcement. “However, the F/A-18 and F-15 lines may end by the mid-2020s. T-X enables Boeing to keep that facility humming and therefore in the hunt for Penetrating Counter Air and other new military aircraft programs.” Analysts like Callan and Schweizer had speculated that Boeing would bid very aggressively to try to win the contract, but the question was whether the company could possibly offer a new purpose-built design at a significantly lower price point than competitors Lockheed Martin and Leonardo, which both proposed aircraft designs already in production and use by foreign militaries. It appears Boeing may have been able to do just that. Richard Aboulafia told Defense News in 2017 that the Lockheed and Leonardo trainers came with a price tag of about $25 million, although both companies were expected to bid lower than that to be competitive. Meanwhile, Jim McAleese of McAleese & Associates pegged the unit cost of Boeing's T-X at an “eye-watering” $19 million, far below the Air Force's $45 million per plane expectation. That low price “establishes an extremely high burden for disappointed offerors of Lockheed or Leonardo” to launch a successful protest with the Government Accountability Office, he stated in a Sept. 28 email, although Lockheed and Leonardo could potentially argue that the Air Force's cost and schedule risk assessments are too optimistic, given that Boeing offered a new airframe. Callan also pointed out that the MQ-25 and T-X wins could be advantageous to Boeing's commercial business. In the past, the defense sector has developed new materials that have later been adapted for use by the airline industry. With Boeing acquiring autonomy-focused businesses like Liquid Robotics and Aurora while investing in startups through its HorizonX organization, it is possible advances in military unmanned tech could give way to autonomous commercial cargo planes or other future concepts. https://www.defensenews.com/industry/2018/09/28/boeings-big-month-capped-off-with-hat-trick-of-new-contracts