June 8, 2021 | International, Aerospace, Naval, Land, C4ISR, Security
Contracts for June 7, 2021
Today
November 6, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
The COVID-19 pandemic has exacerbated some of the risks that have always existed in the defense industrial base. Although government assistance and a robust Pentagon budget have helped offset initial trials, more challenges are looming.
One of the biggest risks to the defense industrial base is that some companies serving the military are too heavily leveraged toward the commercial sector or too reliant on international companies, financial analysts told Aviation Week's DefenseChain Conference.
“Some of these places are two weeks from bankruptcy,” says Chris Celtruda, managing principal at Destiny Equity Partners, says. Suppliers are beginning to falter because of a combination of factors, including the need to comply with cybersecurity standards, the pressure that prime contractors such as Boeing and Lockheed Martin have applied to them and their reliance on commercial business. A prime example is the recent bankruptcy of Impresa Aerospace, a Wichita-based company that made parts using computer numerical control machines as well as sheet metal parts and assemblies for Boeing and Lockheed military aircraft but was highly dependent on its work for the commercial Boeing 737 MAX.
The U.S. federal Paycheck Protection Program helped delay some business failures, but others are inevitable, says Rick Nagel, managing partner of Acorn Growth. “The Impresa bankruptcy is an example of a lot more insolvencies we may see,” he adds.
Weakness among niche companies could pose a problem for the Defense Department in the future. “I'm always amazed at how many critical systems have multiple single points of failure on major programs,” he says.
At the Pentagon, officials have been working to keep essential suppliers afloat and to keep production moving through its sprawling international industrial base.
For the U.S. Army, that has meant initial disruptions to Apache fuselage production in India and to the flow of generators from Mexico. The Pentagon and the State Department helped ease the stoppage, but the incident has caused them to review the full range of risks to its international supply chain.
“I think that we can navigate through this, though it's certainly always going to be complex in today's global economy,” says Patrick Mason, deputy program executive officer for U.S. Army Aviation, adding that he is in the position of putting pressure on vendors to reduce cost, particularly to provide savings on multiyear aircraft contracts.
One trend emerging along with the pandemic is a movement toward onshoring or reshoring overseas business for reasons of cybersecurity and the protection of the U.S. industrial base.
As that happens, and as the commercial aviation market sags, Raanan Horowitz, president and CEO of Elbit Systems of America sees opportunity. “We are trying to position ourselves around some of those discontinuities,” Horowitz says, adding that the company likes going after opportunities that are not necessarily glitzy but hold value. “We are intensifying efforts toward looking at licensing, taking over orphan product lines and positioning ourselves to be part of the long-term solution.”
Horowitz says Elbit is investing in U.S. infrastructure to capture new business. Industry officials see broad support for bringing more of the defense supply chain back to the U.S. The shift stems in part from the COVID-19-related economic downturn but also from longstanding concerns about China. In the fiscal 2020 National Defense Authorization Act, Congress passed restrictions on contracting with companies that use Chinese telecommunications equipment.
Though companies first look for the best value, the threat posed by Chinese parts that either do not work or could transmit classified information back to China is an ongoing concern, says John Luddy, vice president for national security policy at the Aerospace Industries Association. “The concept of reshoring of supplies to better connect our allies and friends, both from a production standpoint and from an operational functionality and alliance standpoint, I think the volume is getting turned up on that a little bit,” he says. “There's also a strong impetus in Congress to look at exactly how vulnerable we are. That's going to be a more intense discussion in the year to come than it has been.”
And that trend toward reshoring could have unintended consequences, warns Steve Grundman, founder and principal of Grundman Advisory.
“I'm genuinely concerned that benign moves to secure our supply chain to prevent nefarious supplies and code [coming] into particularly our defense supply chain or commercial aerospace supply chain could slip very easily into protectionism,” Grundman says. “If you want to really put pressure on the defense budget, ask the defense industry to reshore the supply chain.
https://aviationweek.com/defense-space/supply-chain/how-covid-19-affecting-defense-industrial-base
June 8, 2021 | International, Aerospace, Naval, Land, C4ISR, Security
Today
May 28, 2024 | International, Aerospace
The multi-billion dollar contract for Joint Direct Attack Munitions comes at a time when the military is trying to boost production of multiple weapons.
November 3, 2020 | International, Naval
11/2/2020 By Connie Lee The Defense Advanced Research Projects Agency has awarded contracts for its Sea Train program, which seeks to enable autonomous vessels to perform long-range transit operations. In September, Applied Physical Sciences Corp., Gibbs & Cox Maritime Solutions and Mar Technologies were chosen for the program, which will include two 18-month phases. The contract awards' total potential values were $31.2 million, $30.4 million and $28.5 million, respectively. Through the effort, DARPA wants “to provide some operational flexibility for medium-sized unmanned surface vessels,” said Andrew Nuss, a program manager within the agency's tactical technology office. Each company is “developing a unique approach to be able to address the goals of the Sea Train program.” Unmanned surface vessels are generally limited in operational range, typically 3,500 to 4,000 nautical miles, he said in an interview. However, DARPA hopes to extend that to about 14,000 nautical miles under the Sea Train program. Usually unmanned surface vessels must undergo multiple refuelings to go farther distances, he noted. “It's sort of a vicious cycle at that point, where you're constantly chasing efficiencies and whatnot,” he said. However, a Sea Train platform — which is expected to be 40 meters long and carry a 35-ton payload — could give an operational commander “the flexibility to deploy these highly capable medium-sized unmanned surface vessels from many different locations without having to rely on ... refueling operations.” DARPA plans to extend the range of USVs more efficiently by creating a “train” in which four autonomous vessels are physically connected until they reach their destination. The platforms would then detach, conduct their individual operations and then reconnect before returning to their starting point, Nuss said. Unmanned boats must overcome resistance and friction from waves as they move, but attaching the platforms may help increase their efficiency and allow them to travel longer distances, he said. “By physically connecting multiple vessels together, and extending the length of that interconnected system, we could move — in our case — four vessels with ... approximately the same efficiency of a single vessel,” Nuss said. The medium-sized platforms were picked for proof of concept, but the idea could be applied to smaller vessels or manned systems as well, he noted. https://www.nationaldefensemagazine.org/articles/2020/11/2/darpa-awards-contracts-for-autonomous-sea-train