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July 2, 2019 | International, Security, Other Defence

Here are the biggest weaknesses in America’s defense sector

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WASHINGTON — Production of a component vital to protecting American troops from chemical attacks that can't keep up with need. Key suppliers of aircraft parts that could go bankrupt at any time. A key producer of missile components that closed for two years before the Pentagon found out.

These are just some of the key findings of an annual report from the Pentagon judging the greatest risks to the defense industrial sector, underlining that while the overall defense industry continues to bring in massive profits, not all is well among the suppliers of key components that, while small pieces of larger systems, could impact America's ability to wage war.

The annual “Industrial Capabilities” report, quietly released May 13 by the Defense Department's Office of Manufacturing and Industrial Base Policy, found that despite total dollars spent by the department on weapons and ammunition increasing year over year since 2016, the number of vendors supplying them has decreased.

In addition, while the report found generally positive trends for the U.S. defense sector, it did warn that in certain areas, foreign weapon sales are decreasing.

For instance, the U.S. saw its market share of global naval weapon exports go from 63 percent in 2007 to just 17 percent in 2017. And from 2008-2017, two reliable buyers of U.S. defense goods — Pakistan and South Korea — saw their U.S. procurement percentages drop. Pakistan went from 31 percent to 12 percent, while South Korea went from 78 percent to 53 percent.

This is the first Industrial Capabilities report to be published since the October release of a White House-mandated study on the defense-industrial base. That study concluded, in part, that the government needs to increase use of its Defense Production Act Title III authorities, which allows the government to expend funds to support key production lines that might now otherwise survive.

The latest report says that through March 2019, seven presidential determinations were issued to address “key industrial base shortfalls in lithium sea-water batteries, alane fuel cell technology, sonobuoys production, and critical chemicals production for missiles and munitions.” However, details of those agreements, such as how much funding might go toward fixing the issues, were pushed into a nonpublic appendix.

Here are the biggest concerns, broken down by sector:

Aircraft: The report cites long product and system development timelines, high costs for development and qualification, and limits on production as broad issues in the aircraft sector. Those issues are inherent in major defense programs, but the report also calls out the aging workforce and consolidation among the industrial base, which “has expanded into the sub-tiers of the supply chain, creating additional risks for single or sole source vendors.”

As an example, the report notes there are only four suppliers with the ability to manufacture “large, complex, single-pour aluminum and magnesium sand castings” needed to make key parts of military aircraft. These four suppliers face “perpetual financial risk and experience bankruptcy threats” due to the insecure nature of Pentagon funding.

“The single qualified source for the upper, intermediate, and sump housing for a heavy-lift platform for the Marines has experienced quality issues and recently went through bankruptcy proceedings,” the report adds. “Without a qualified or alternate qualified source for these castings, the program will face delays, impeding the U.S. ability to field heavy-lift support to Marine Corps expeditionary forces.”

Finding qualified software engineers is another issue identified, with the report warning it is “increasingly difficult to hire skilled, cleared, and capable software engineers. As aircraft continue to increase in software complexity, it will become even more important for the sector to hire skilled software engineers.”

Ground systems: The report says the Pentagon's plan of incremental updates to existing systems rather than wholesale new designs has created “a generation of engineers and scientists that lack experience in conceiving, designing, and constructing new, technologically advanced combat vehicles.” But the same issues of consolidation and lack of budget stability that showed up in the aircraft sector impact the ground vehicle sector.

“Legislation and DoD industrial policy requires DoD to manufacture all large-caliber gun barrels, howitzer barrels, and mortar tubes at one organic DoD arsenal,” the report cites as an example. “There is only one production line at the arsenal for all of these items, and policy modifications to meet demand and surge from overseas have led to a lack of capacity to meet current production requirements.”

Shipbuilding sector: When it comes to maritime vessels, the “most significant risks found were a dependence on single and sole source suppliers, capacity shortfalls, a lack of competition, a lack of workforce skills, and unstable demand,” the report found.

The lack of competition goes from the highest levels, where four companies control the seven shipyards building military vessels, to the lowest components, such as “high-voltage cable, propulsor raw material, valves, and fittings.”

Workforce concerns also dominate the shipbuilding sector. The report cites statistics from the Department of Labor predicting that between 2018 and 2026, there will be a 6–17 percent decrease in U.S. jobs in occupations critical to Navy shipbuilding projects, “such as metal layout (ship-fitting), welding, and casting.” If that is not addressed, a lack of skilled workers “will significantly impact the shipbuilding industry's ability to meet the Navy's long-term demand.”

Munitions sector: A major concern in last year's annual report was the future of the U.S. munitions sector, and many of those issues remain in the 2019 version. The report identified “multiple risks and issues, including material obsolescence and lack of redundant capability, lack of visibility into sub-tier suppliers causing delays in the notification of issues, loss of design and production skill, production gaps and lack of surge capacity planning, and aging infrastructure to manufacture and test the products.”

As an example, the report points to a voltage control switch, used in ignition devices and flight termination systems for Department of Defense missiles. Several years ago, the foundry that made a key component for the switch was purchased by another foundry, which then decided to close the factory. The Pentagon was not informed until two years after the foundry was closed, at which point “it became evident that the end-of-life buy, which was designed to last from three to five years, would only last six months.”

In another case, two key chemicals in solid-fuel rocket motors became obsolete, requiring the DoD to scramble for potential replacements.

Chemical, biological and radiological sector: The chemical, biological, radiological and nuclear defense sector provides protection for war fighters through items like respirators, masks and vaccines. But the report found serious issues regarding the industrial base's ability to provide that capabilities, indicating that Title III authorities might be needed in the near future to maintain production.

As an example, the report points to production of ASZM‑TEDA1 impregnated carbon, a defense-unique material with only a single qualified source that, as a result, “precludes assurances for best quality and price.” The carbon is used in 72 chemical, biological and nuclear filtration systems, and the report notes that current sourcing arrangements “cannot keep pace with demand.” The DoD is already using Title III to modernize the production line and try to establish a second source for the material.

Soldier systems: The collapse of the American textile market over the last three decades has left the department depending on single sources or foreign suppliers for soldier systems. Additionally, battery production is identified as a potential future issue.

“Lack of stable production orders has resulted in lost capability and capacity, increased surge lead times, workforce erosion, and inhibited investments by remaining suppliers. Surge-capacity-limiting constraints occur at several points along the value chain, from raw material to final battery assembly,” the report says.

Space systems: Aside from major issues around future threats to space assets from near-peer competitors, the report identifies major industrial base concerns for space as including “aerospace structures and fibers, radiation-hardened microelectronics, radiation test and qualification facilities, and satellite components and assemblies.”

Other areas include solar panel development — “There is not enough space business for companies to justify R&D to improve cells without [government] help,” the report says — the erosion of the traveling-wave tube industry, and a lack of suppliers for key parts needed to produce precision gyroscopes needed for spacefaring systems.

Electronics: The Pentagon has been sounding the alarm about China's growing power in the printed circuit board market, and this report continues that trend. The United States now accounts for only 5 percent of global production, representing a 70 percent decrease from $10 billion in 2000 to $3 billion in 2015, per the report. Meanwhile, almost half of global production comes from China.

https://www.defensenews.com/pentagon/2019/06/27/here-are-the-biggest-weaknesses-in-americas-defense-sector/

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  • Contract Awards by US Department of Defense - June 11, 2020

    June 12, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - June 11, 2020

    DEFENSE MICROELECTRONICS ACTIVITY Lockheed Martin Corp., Owego, New York (HQ0727-16-D-0001); BAE Systems Information and Electronics, Nashua, New Hampshire (HQ0727-16-D-0002); General Dynamics Mission Systems, Bloomington, Minnesota (HQ0727-16-D-0003); Northrop Grumman Systems Corp., Linthicum Heights, Maryland (HQ0727-16-D-0004); Cobham Advanced Electronics Solutions Inc., Lansdale, Pennsylvania (HQ0727-16-D-0005); Raytheon Co., El Segundo, California (HQ0727-16-D-0006); The Boeing Co., Hazelwood, Missouri (HQ0727-16-D-0007); and Honeywell International Inc., Albuquerque, New Mexico (HQ0727-16-D-0008), are being awarded a maximum $10,271,000,000 modification on existing indefinite-delivery/indefinite-quantity, Advanced Technology Support Program IV (ATSP4) contracts. The modification raises the ceiling on the current ATSP4 contracts from $7,200,000,000 to $17,471,000,000. ATSP4 are multiple-award, indefinite delivery/indefinite quantity contracts for engineering services designed to resolve problems with obsolete, unreliable, unmaintainable, underperforming, or incapable electronics hardware and software through development of advanced technology insertions and applications to meet the requirements of the Department of Defense for a quick reaction capability. With all options exercised, the ordering period goes until March 31, 2026. The contracts were competitively procured via a February 2015 solicitation resulting in nine proposals and eight awards. No funds are being obligated on award. Funding will occur through individual task orders. The Defense Microelectronics Activity, McClellan, California, is the contracting activity. NAVY Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is awarded a $368,194,942 not-to-exceed, undefinitized contract modification (P00036) to previously awarded fixed-price-incentive-firm-target, firm-fixed-price, cost-plus-fixed-fee contract N00019-17-C-0001. This modification provides for the procurement of five F-35A Lightning II lot 14 aircraft, one F-35B lot 14 combat aircrafts and associated red gear for the government of Italy. It also authorizes the common capability scope of work at the Final Assembly and Checkout Facility in Cameri, Italy. Work will be performed in Fort Worth, Texas (35%); Cameri, Italy (28%); El Segundo, California (15%); Warton, United Kingdom (8%); Orlando, Florida (4%); Nashua, New Hampshire (3%); Baltimore, Maryland (3%); San Diego, California (2%); various locations within the continental U.S. (1.3%) and various locations outside the continental U.S. (0.7%). Work is expected to be complete by June 2023. Non-Department of Defense funds for $184,429,857 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. DRS Systems Inc., Melbourne, Florida, is awarded a $120,009,046 not-to-exceed, cost-plus-incentive-fee, firm-fixed-price, cost undefinitized contract to provide non-recurring engineering to design, develop, integrate and test engineering development models and production representative models of weapons replaceable assemblies for the AN/AAQ-45 Distributed Aperture Infrared Countermeasure system. Work will be performed in Dallas, Texas (61%); San Diego, California (31%); Fort Walton Beach, Florida (7%); and Melbourne, Florida (1%), and is expected to be complete by June 2024. Fiscal 2020 research, development, test and evaluation (Navy) funds in the amount of $23,497,884 will be obligated at time of award, none of which will expire at the end of the current fiscal year. This contract was not competitively procured pursuant to Federal Acquisition Regulation 6.302-1. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity (N00019-20-C-0041). Harper Construction Co. Inc., San Diego, California, is awarded a $65,165,290 firm-fixed-price contract for the design and construction of a high-bay maintenance hangar for the Bell Boeing V-22 aircraft at Naval Base Coronado. The contract also contains one unexercised option and two planned modifications, which will increase the cumulative contract value to $66,148,955, if exercised. Work will be performed in San Diego, California. The work to be performed provides for the design and construction of a steel-framed and high-bay maintenance hangar for aircraft, to include one and a half modules of hangar space and associated airfield pavement for aircraft ingress and egress to hangars. The new facility will contain high-bay space, shops and maintenance space, operation, training, administrative space and supporting site infrastructure improvements. The project also includes construction of a hangar access apron. The option, if exercised, provides for reconstruction of the existing north parking lot. The planned modifications, if issued, provide for furniture, fixtures and audiovisual equipment. Work is expected to be complete by January 2023. Fiscal 2019 military construction (Navy) contract funds in the amount of $644,756 and fiscal 2020 military construction (Navy) contract funds in the amount of $64,520,534 are obligated on this award and will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website and seven proposals were received. The Naval Facilities Engineering Command Southwest, San Diego, California, is the contracting activity (N62473-20-C-0553). Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is awarded $31,065,000 for a not-to-exceed, undefinitized contract modification (P00006) to previously issued order 0097 against basic ordering agreement N00019-14-G-0020. This modification provides supplier non-recurring engineering, development of design documentation and the creation of modification instructions for the developmental test fleet in support of the Joint Strike Fighter aircraft for the Navy, Air Force, Marine Corps and non-Department of Defense (DOD) participants. Work will be performed in El Segundo, California (85%); and Fort Worth, Texas (15%). These efforts will support service life extensions and enable the developmental test fleet to maintain currency with delivered technology. Work is expected to be complete by February 2022. Fiscal 2020 research, development, test and evaluation (Navy) funds in the amount of $3,698,820; fiscal 2020 research, development, test and evaluation (Air Force) funds in the amount of $3,698,820 and non-DOD participant funds in the amount of $1,602,360 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Fukunaga & Associates Inc.,* Honolulu, Hawaii, is awarded a $30,000,000 indefinite-delivery/indefinite-quantity, architect-engineering contract with a maximum amount of $30,000,000 for architect-engineer services for various utility projects and other projects primarily under the cognizance of Naval Facilities Engineering Command, Hawaii. The initial task order is being awarded at $929,417 for the replacement of a 24-inch waterline at Joint Base Pearl Harbor-Hickam, Hawaii. The work to be performed provides for architect-engineer services for utility projects with associated multi-discipline architect-engineer support services. The type of design and engineering services expected to be performed under this contract are primarily for request for proposal (RFP) documentation for the design-bid-build utility projects with associated multi-discipline architect-engineering support services for new construction, alteration, repair and installation of mechanical systems and associated facilities. Other design and engineering services may include, but are not limited to, design-build RFP documentation, engineering investigations/concept studies, functional analysis concept development/charrettes and post construction award services. Work for this task order is expected to be complete by March 2021. Fiscal 2020 operations and maintenance (Navy) (O&M,N) contract funds in the amount of $929,417 are obligated on this award and will expire at the end of the current fiscal year. The term of the contract is not to exceed 60 months with an expected completion date of June 2025. Future task orders will be primarily funded by O&M,N funds. This contract was competitively procured via the beta.SAM website and two proposals were received. The Naval Facilities Engineering Command, Hawaii, is the contracting activity (N62478-20-D-5037). Leidos Inc., Reston, Virginia, is awarded a $7,456,371 firm-fixed-price and cost reimbursement task order under the General Services Administration One Acquisition Solution for Integrated Services (GSA OASIS). This indefinite-delivery/indefinite-quantity contract is also for a wide range of operational, analytical and management support services in support of the U.S. Marine Corps Central Command. Work will be performed in Tampa, Florida (90%); and Bahrain (10%). Work is expected to be complete by June 2021. If all options are exercised, work will continue through December 2025. This task order includes a 12-month base period, four 12-month option periods and one six-month option period, which, will bring the cumulative value of this task order to $48,846,236 if exercised. Fiscal 2020 operations and maintenance (Marine Corps) funds in the amount of $7,456,371 will be obligated at the time of award and will expire at the end of the current fiscal year. This task order was competitively solicited via the GSA OASIS Pool 1 and four proposals were received. The Marine Corps Installations National Capital Region-Regional Contracting Office, Quantico, Virginia, is the contracting activity (M00264-20-F-0227). ARMY INTEC Group LLC,* Paducah, Kentucky (W912QR20D0021); Dawn Inc.,* Warren, Ohio (W912QR-20-D-0022); RJ Runge,* Port Clinton, Ohio (W912QR-20-D-0023); G.M. 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    February 22, 2021 | International, Aerospace

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