House panel would block Pentagon from extra sway over nuclear weapons budget

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  January 29, 2021 | International, Land

  Northrop Grumman Says It Will Walk Away From Cluster Bomb Contract

  The company's CEO says the decision is part of a move to "be thoughtful about potential human rights implications" of its products. Northrop Grumman said Thursday that it would walk away from a U.S. government cluster bomb contract as the company moves to distance itself from the deadly weapons commonly associated with civilian casualties. The contract involves the “testing of cluster munition components” and is “structured to help remove cluster munitions safely,” Northrop CEO Kathy Warden said on her company's quarterly earnings call on Thursday. The company does not make cluster munitions, which are air or ground-launched bombs that contain submunitions that spread indiscriminately over a wide area. Unexploded weapons from wars decades ago are still killing civilians. “We recognize that even supporting an area like cluster munitions for investors is of concern, because safe removal implies that at one point there was an embracing of the use of these products,” she said. “When we look at our portfolio, we are going to continue to recognize, we support our government and our allies in the important work of enabling our troops to do their work, but at the same time, be thoughtful about potential human rights implications, and how these technologies may be used in the future and provides equal consideration to safeguards associated with them.” With Democrats now controlling the White House and Congress, Warden used the earnings call to tout the company's environment, sustainability, and workforce-diversification efforts. “When we look through the lens of sustainability at our portfolio, we look at not only what capability we're providing, but how it's being used, or how we expect the customer to use that capability going forward,” she said. Still, Warden said, she expects no “significant changes” to the company's portfolio. Her comments come as the Biden administration has reportedly frozen several controversial weapons sales to Saudi Arabia and the United Arab Emirates. The Trump administration cleared multibillion-deals to sell F-35 stealth fighters and armed drones to UAE. It also reportedly approved a $500 million deal that would have allowed Raytheon to sell smart bombs to Saudi Arabia. Earlier this week, Raytheon CEO Greg Hayes said he expects the Biden administration to block that deal. “Generally speaking, when it comes to arms sales, it is typical at the start of an administration to review any pending sales to make sure that what is being considered is something that advances our strategic objectives and advances our foreign policy,” Secretary of State Anthony Blinken said Wednesday. “So that's what we're doing at this moment.” Saudi and UAE airstrikes have killed thousands of civilians in Yemen's civil war, according to UN reports.“We already have a portfolio where we have looked through that lens in making decisions about where we invest and what work we undertake,” she said. “This was just one small contract that came to us through the acquisition, and we've made a decision to stop performing in that area.” Northrop's decision to abandon the contract represents “a symbol of the stigma attached to these weapons,” said Jeff Abramson, coordinator of the U.S. Campaign to Ban Landmines and Cluster Munition Coalition. “Investors have gotten a lot of pressure not to invest in companies touching cluster munitions,” he said. Warden said Northrop would walk away from the cluster munition “surveillance” contract by the end of the year. “A stockpile surveillance program is a continuing process of testing of a stockpile to track its reliability as it sits in storage for the balance of its shelf life,” said Mark Hiznay, associate director of the Arms Division of Human Rights Watch. Textron, the last U.S. company to make cluster bombs, announced in 2016 that it would quit producing them, after the Obama administration banned sales to Saidi Arabia. ATK was a supplier to the CBU-87 and Sensor Fuzed Weapon cluster munitions. Warden, who became CEO of Northrop in January 2019, touted Northrop's recently being named in the top 25 of gender-balanced S&P 500 firms as well as being named to DiversityInc's list of Top 50 Companies for Diversity for more than a decade. The Biden administration has assembled what is believed to be the most diverse Cabinet in U.S. history. “In our endeavor to enable global security and human advancement, we recognize the importance of our environmental, social and governance responsibilities, and we expect to continue leading our industry forward,” Warden said. https://www.defenseone.com/business/2021/01/northrop-grumman-says-it-will-walk-away-cluster-bomb-contract/171713/

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  July 20, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  DoD Needs Supply Chain Strategy To Survive Future Crises: Roper

  "We were in a very frenzied state," Air Force acquisition head Will Roper says of DoD efforts to stave off the collapse of key suppliers during the early weeks of the coronavirus crisis. By THERESA HITCHENSon July 17, 2020 at 4:38 PM WASHINGTON: Air Force acquisition head Will Roper says DoD needs to develop a new supply chain strategy that incentivizes industry to build a more diverse, responsive and resilient supply chain. “What I hope sticks on the other side of COVID-19 is a strategic focus on the supply chain,” he told a webinar co-sponsored by Government Matters and the Farnborough International Association today, on the even of the virtual air show. “Government has to have a strategy. We have to explain to industry what we consider good supply chain management practices to be, and not to be. And we need to write that in plain English, which the government has a tough time doing frequently.” That strategy also has to be followed up with incentives for industry to do the right thing, he said. “We have to put our money where our mouth is,” Roper said. For example, he said, it should include incentivizing contractors, big and small, to use digital manufacturing technologies that allow companies to quickly pivot to different missions in times of need. “That's a strategic capability for the nation. We need to encourage that,” he said. Roper noted that the Air Force is attempting to do just that with its centerpiece Advanced Battle Management Program (ABMS), being designed as a technology foundation for running future all-domain wars via the Joint All-Domain Command and Control System (JADC2). “We've got a pretty cool program called the Advanced Battle Management System. It's not a cool name — it's kind of like Castle Anthrax in Monty Python: ‘it's not a good name but it's the one we've got',” he joked. “That's a program where adaptability is king.” He explained that the service is working with industry to both explain, and reward, technology initiatives that will give operators the ability to rapidly upgrade or switch out old capabilities for new ones. As Breaking D readers knows, ABMS is attempting to iterate technologies developed under the program on a four-month cycle. Roper said the first three weeks of the COVID-19 crisis threw DoD into a maelstrom as acquisition authorities tried to cope with the potential of supplier collapse. “We were in a very frenzied state,” he said. The Air Force is the executive agent for all DoD use of Defense Production Act Title III contracts to support industry suffering from the coronavirus pandemic. However, the Defense Industrial Base Sector Coordinating Council under the Office of the Secretary of Defense (OSD) actually chooses which companies to support based on service requests — including for the Air Force. While Roper sees ongoing problems from COVID-19 impacts on suppliers, especially small firms for whom cash-flow is highly important, he said that the Air Force and DoD are in a much better place now to handle them as they arise. “I don't think we'll see something as frenzied as what we went through during the first three weeks of COVID,” he said. “I think if this continues in future, we will have to take aggressive actions when there are hotspots that fire up in the country. Smaller companies are always going to be at risk by a few number of COVID-19 cases — they're going to have to shut down their facilities, they're going to have to clean, they're gonna have to be work force quarantining — and for companies of that size, having cash on hand to make payroll, to make invoicing, is critically important. Cash flow and liquidity is everything during a crisis. But we're more ready for that.” This is in part because leaders have a better grasp on what companies are likely to be at risk, Roper explained. “Now, we know who those critical suppliers are we have insight into our supply chain that we have ever had,” he said. For example, the small launch industry is one sector that Roper continues to keep a close eye on. “Small launch is still a big need for our industrial base for the Space Force and we want to try to try to do whatever we can to keep that market healthy,” he told reporters on July 14. Roper expressed some disappointment about OSD's July 1 decision to rescind a June-announced award of $116 million for six small launch companies: Aevum, Astra, X-Bow, Rocket Lab, Space Vector and VOX Space. He explained that OSD determined there “were some additional small business needs” that came up, because the small launch package was one of the last DPA approved actions, it was “the first to be put back in the batter's box.” “My hope is that whenever there's new Title III funding, or when resources free up due to other efforts not executing as planned, that those are the first to go back into the hopper. If I were asked today to put in one new Title III initiative, it's small launch,” he added. As Paul reported, Pentagon acquisition chief Ellen Lord on June 22 said she is seeking approval for a funding package request in the “lower double digit billions” from the White House to cover COVID-19 related costs, including paying for industry claims of supply chain and workforce reductions. And a group of CEOs from major defense primes, in a letter obtained by Breaking D, are asking for DoD help in seeking yet more COVID-19 stimulus funds from Congress. https://breakingdefense.com/2020/07/dod-needs-supply-chain-strategy-to-survive-future-crises-roper

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  November 13, 2019 | International, Aerospace, Naval, Land

  A new future in global arms sales?

  By: Jill Aitoro The last few years have seen a subtle transition in how the U.S., as the world's dominant arms exporter, markets to the world. Consider what we already know. In Europe, there's an expectation to filter more to local firms, whether through co-development or direct buys. There's also demand for greater access into U.S. programs, and for that access to be on a level playing field. And then there's South Korea, now calling for foreign contractors to engage with domestic small and medium-sized enterprises. Financial support for its companies is important, according to the Defense Acquisition Program Administration, but so is guidance that helps identify technologies that will make those domestic companies more marketable. Call it a mentorship of sorts. Look to Middle Eastern countries and we've historically seen more financial offsets: expectations to create jobs at home to improve the economy, grow skilled labor and expand infrastructure. That's the same in northern Africa. But with oil no longer a reliable source of revenue for the region, the expectations are shifting. The Middle East wants to build a new industry, and with billions of dollars in arms sales at stake for the U.S. and Western allies, the region also knows full well that it holds some powerful cards to play. It's that question that drove the shift in Europe: “We're buying from you, so why can't you buy more from us? And by the way, politically speaking, we're pretty important.” All this to say that the emerging visions in the United Arab Emirates and Saudi Arabia have some teeth. And it can, therefore, shape how the Pentagon, American defense giants and global allies for that matter handle arms sales. Consider a couple of the more recent developments. The UAE launched a government-owned company with a combined annual revenue of $5 billion known as Edge, established with a core mandate “to disrupt an antiquated military industry generally stifled by red tape,” according to its CEO. Falling under Edge are now 25 companies that before were quite small in revenue and global market share, but together hold significant buying power: NIMR, AMMROC and Abu Dhabi Ship Building to name a few. Not only do these companies become more formidable players on the global stage, but Edge suddenly carries with it significant negotiation power. Sales to the UAE could bring newfound expectations for partnerships, for stakes in programs. Then consider Saudi Arabia, which established the Saudi Arabian Military Industries, or SAMI, for essentially the same reason. It also modeled the structure off of other countries with established defense industries — Turkey, South Korea, South Africa and some Western countries, among others. SAMI's stated goal is to become one of the largest 25 defense companies in the world by 2030 and to have export account for 30 percent of its business. So what might this mean for how the U.S. works with the Middle East? Major primes have cheered the formation of these holding companies. But make no mistake: Those primes recognize that the holding companies also pose a threat to the status quo. A simple model of just selling systems into the region likely won't fly, nor will teaming on a particular competition necessarily be enough. Boeing formed a joint venture with SAMI, for example, recognizing the need to commit long term. Also consider what SAMI CEO Andreas Schwer stated to be his asks of the U.S. and allies when I interviewed him last year: “If there was a wish, we would love to get more access to top-class technologies from all the U.S. partners. There are obviously limitations, which we are suffering from. That's the one element. So be a little bit more open. And second, export in arms and weapons was driven by FMS [Foreign Military Sales] programs. In our new setup in Saudi Arabia, we will do more and more in direct commercial sales.” Let's be realistic — that could change things. https://www.defensenews.com/global/mideast-africa/2019/11/11/a-new-future-in-global-arms-sales/