Here are the new areas of interest for the Army Rapid Capabilities Office

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  September 30, 2020 | International, Aerospace

  Here’s what Lockheed will have to do to make up for F-35 spare parts problems

  Valerie Insinna WASHINGTON — The Defense Department and Lockheed Martin reached a handshake agreement that will require the defense giant to invest about $70.6 million to fix an ongoing problem with F-35 spare parts, one that resulted in increased government labor costs, the department announced Sept. 29. For the past few months, Lockheed and the Defense Contracts Management Agency have been locked in a dispute over more than 15,000 F-35 spare parts sent to the U.S. military with incorrect or incomplete “electronic equipment logs” or EELs, which allow the parts to be absorbed into the F-35′s logistics system and installed on the jet. Lockheed and the Defense Contracts Management Agency expect a final agreement to be formalized sometime within the next two weeks or so, said DCMA spokesman Matthew Montgomery, who confirmed the $70.588 million deal to Defense News. The use of EELs — which allow the government to track the usage and lifespan of major F-35 parts — is unique to the joint strike fighter program and is meant to help inform smarter, more cost-effective maintenance and buying practices. But when parts are delivered with inaccurate EEL information, it can take hours for military maintainers and Lockheed support personnel to track down the correct data that will allow a part to be uploaded into the system and installed in the aircraft. Instead of paying back the government directly for the added costs associated with the EELs, Lockheed will “compensate the government with Lockheed Martin investments” that will ultimately ensure spare parts are delivered with accurate electronic logs, said Lockheed spokesman Brett Ashworth. “We appreciate the partnership with the Defense Contract Management Agency and the F-35 Joint Program Office, and we remain focused on ensuring the warfighter has the support they need to employ the F-35′s game changing capabilities,” he said. The final sum of the agreement is less than half of the $183 million sum that DCMA initially projected that the government had spent to correct wrong or incorrect EELs since 2015. It was not immediately clear why DCMA had agreed to a compensation deal worth so much less than the department's estimated costs. During a July hearing, lawmakers from the House Oversight and Reform Committee chastised Lockheed for its failure to deliver parts ready to fly. “That's $183 million that the American taxpayers were forced to pay because Lockheed Martin failed to meet the requirements of its contract,” said Rep. Carolyn Maloney, the committee's chairwoman. But Greg Ulmer, Lockheed's vice president for the F-35 program, said then that the company should not take all of the blame for the spare parts problems. “It's not all associated with Lockheed Martin performance. There are many aspects associated with [parts that are] not ready for issue,” he said. https://www.defensenews.com/air/2020/09/29/heres-what-lockheed-will-have-to-do-to-make-up-for-f-35-spare-parts-problems/

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  May 31, 2023 | International, Other Defence

  Czech Senate backs setting NATO spending target of 2% of GDP as law

  The Czech parliament's upper house approved a bill on Wednesday that will set the state's minimum defence spending at 2% of gross domestic product (GDP) from next year, matching its commitment to the NATO military alliance.

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  January 31, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  As tech startups catch DoD’s eye, big investors are watching

  By: Jill Aitoro SIMI VALLEY, Calif. — Private investors are not yet lining up to back defense startups, but they are paying close attention. Two factors have created an opening that could lure venture capitalists to defense investments: first, a few select venture-backed technology startups are gaining traction; and second, there's been a strategic shift in approach to weapons development from the U.S. Department of Defense, focusing more on information warfare and, as such, software. In the words of Mike Madsen, director of strategic engagement at the Pentagon's commercial tech hub, Defense Innovation Unit: "We're at a significant inflection point right now that will be visible through the lens of history.” Nonetheless, for the tech startups, it's been slow going, as discussed during a Defense News roundtable in California. For the second year, leadership from DoD and the tech community came together to discuss the state of the Pentagon's efforts to attract commercial startups — this time digging into the challenges and opportunities that come with investment in defense development. “We went into this eyes wide open, knowing full well that to the venture community, the math doesn't make sense. Making the choice to contribute to the advancement of artificial intelligence for DoD represented for us more of a mission-driven objective,” said Ryan Tseng, founder of artificial intelligence startup Shield AI. But early on, “we were fortunate to get the backing of Andreessen Horowitz, a top-tier venture fund. They're certainly leaning in, in terms of their thinking about defense technology — believing that despite the history, there might be a way to find an opening to create companies that can become economically sustainable and make substantial mission impact.” Shield AI has raised $50 million in venture funding since 2015, with more rounds expected. Indeed, a few key Silicon Valley investors have emerged as the exceptions to the rule, putting dollars toward defense startups. In addition to Andreessen Horowitz, which counts both Shield AI and defense tech darling Anduril in its portfolio, there's General Catalyst, which also invested in Anduril, as well as AI startup Vannevar Labs. And then of course there's Founders Fund. Led by famed Silicon investors Peter Thiel, Ken Howery and Brian Singerman, among others, the venture firm was an early investor in Anduril, as well as mobile mesh networking platform goTenna. Founders Fund placed big bets on Palantir Technologies and SpaceX in the early days, which paid off in a big way. Some of the early successes of these startups have “done an excellent job of making investors greedy,” said Katherine Boyle, an investor with General Catalyst. “There's a growing group who are interested in this sector right now, and they've looked at the success of these companies and [are] saying: ‘OK, let's learn about it.' ” Take Anduril: The defense tech startup — co-founded by Oculus founder Palmer Luckey and Founders Fund partner Trae Stephens — has raised more than $200 million and hit so-called unicorn status in 2019, reaching a valuation of more than $1 billion. As the successes piled up, so did the venture capital funding. According to Fortune magazine, those investors included Founders Fund, 8VC, General Catalyst, XYZ Ventures, Spark Capital, Rise of the Rest, Andreessen Horowitz, and SV Angel. “I started my career at Allen & Company investment banking. Herbert Allen, who's in his 80s, always said: ‘Hey, you should run into an industry where people are running away,' ” said John Tenet, a partner with 8VC as well as a co-founder and vice chairman of defense startup Epirus. “There's so much innovation occurring, where the government can be the best and biggest customer. And there are people who really want to solve hard problems. It's just figuring out where the synergies lie, what the ‘one plus one equals three' scenario will be.” Also attracting the attention of Silicon Valley investors is the growing emphasis by the Pentagon not only on systems over platforms, but software over hardware. Boyle described the shift as the “macro tailwind” that often drives innovation in a sector. Similar revolutions happened in industrials and automotive markets — both of which are also massive, global and slow-moving. That emphasis on tech, combined with some recent hard lessons, also provides a glimmer of hope that the typical hurdles associated with defense investments — lengthy procurement cycles and dominance by traditional manufacturers, for example — could be overcome. Consider U.S. Code 2377, which requires that commercially available items be considered first in procurement efforts, said Anduril's Stephens. He also noted court decisions in lawsuits filed by SpaceX and Palantir, which ultimately validated claims that defense agencies had not properly ensured a level playing field for major competitions. “These types of things are now at least in recent memory for Congress, and so they have some awareness of the issues that are being faced,” Stephens said. “It's much easier now to walk into a congressional office and say, ‘Here's the problem that we're facing' or ‘Here's the policy changes that we would need.' There are also enough bodies like DIU, like In-Q-Tel, like AFWERX, like the Defense Innovation Board, like the [Defense Science Board] — places where you can go to express the need for change. And oftentimes you do see that language coming into the [National Defense Authorization Act]. It's part of a longer-term cultural battle for sure.” For now, all these factors contribute to the majority of skeptical investors' decisions to watch the investments with interest — even if they still take a wait-and-see approach. And that places a lot of pressure on the companies that are, in a sense, the proof of concept for a new portfolio segment. “My fear is that if this generation of companies doesn't figure [it] out, if they don't knock down the doors and if there aren't a few successes, we're going to have 20, 30 years of just no investor looking around the table and saying we need to work for the Department of Defense,” Boyle said. “If there aren't some success stories coming out of this generation of companies, it's going to be very hard to look our partners in the eye and say: ‘We should keep investing in defense because look at how well things have turned out.'” https://www.defensenews.com/smr/cultural-clash/2020/01/30/as-tech-startups-catch-dods-eye-big-investors-are-watching/