September 18, 2020 | Information, Aerospace, Naval, Land, C4ISR, Security, Other Defence
WASHINGTON ― As Congress readies a stopgap spending measure this week, the defense industry is girding for a long-term funding patch that could delay both new procurement programs and needed fiscal certainty into next year.
Democrats say they are considering whether to offer a continuing resolution that would stretch 2020 funding levels into next February or March, or whether to go along with a stopgap through mid December, as Senate Majority Leader Mitch McConnell, R-Ky., is seeking.
Trade groups said this week that passing a CR by the Sept. 30 deadline is better than a government shutdown, but they warned that because CR's ban most new start programs, that will add more turbulence for firms already suffering from pandemic-related economic shocks.
“As threats continue to multiply and the COVID-19 crisis continues, sustained and stable funding in national security takes on new meaning for the U.S. military and the defense industrial base that supports it,” Aerospace Industries Association President and CEO Eric Fanning, said in an email to Defense News. AIA represents roughly 340 manufacturers.
“Relying on continuing resolutions, for any length of time, removes that stability, undermining the shared supply chain and endangering the solid progress made in readiness and modernization over the last several years.”
Defense advocates say continuing resolutions of any length are inefficient for government and disruptive to the budget certainty that businesses need in order to make decisions, but the pandemic and sagging economy add new wrinkles.
Smaller defense firms, many hit by cash flow problems related to the pandemic, were of particular concern to shipbuilder Huntington Ingalls Industries, which was among large firms that accelerated millions of dollars in payments to help small suppliers over recent months.
“The effects of a long term continuing resolution can be harmful to the defense industrial base by delaying or prohibiting work,” HII spokesperson Beci Brenton said in an email. “Our greatest concern with a long term CR is the impact to our thousands of suppliers located in all 50 states who are already impacted by the COVID pandemic.”
Despite a longstanding deal on the budget top lines, only the House has passed full-year appropriations bills, which means Congress will need more time to pass an FY21 appropriations package.
Congress would likely need to draft a CR this week and pass it next week to avert a government shutdown. That's just what House Majority Leader Steny Hoyer, D-Md., told reporters this week that House leaders are planning.
Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi, D-Calif., say they have agreed to a “clean” CR, free of policy riders. It's not expected to include COVID relief funds, but further details have not been announced.
Beyond timing, the defense industry is also watching which anomalies Congress includes to permit select new start programs. The White House sent Congress a list that included the Columbia-class submarine and new W93 submarine-launched nuclear warhead, as well as funds to ramp up the new Space Force ― along with select federal programs across multiple agencies.
The National Defense Industrial Association's senior vice president, Wesley Hallman, said delaying new starts means delaying new revenue streams for companies and, for some, new hiring decisions.
“How many new starts are planned for 1 October, I can't tell you, but if we go to March or February there are more new starts over that entire period,” Hallman said. “If it's bad in October, it's really bad if it's going into March.”
Professional Services Council president and CEO David Berteau, whose group represents services contractors across government, said his member are worried about long delays for a budget deal.
“Our members are always concerned because it slows down new contract awards, and it adds uncertainty to every program manager ― not only in the Defense Department, but across the federal government ― because they don't know how much money they're going to get or when they're going to get it,” Berteau said.
The duration of the CR has special political dimensions this year. If the bill runs through December, President Donald Trump and a Republican-controlled Senate would negotiate over the final spending package. Depending on the outcome of the election, a CR that stretches into the next calendar year could be negotiated by a President Joe Biden or a Democratic-led Senate, which would give Democrats more leverage.
Berteau was concerned that Biden, like Trump in 2017, would not enter office Jan. 20 ready to immediately hammer out a budget deal. It took until that April for Trump to sign a deal, and it took President Bill Clinton ― who entered office under similar circumstances in 1993 ― until that June.
“If you don't get it now, history says you won't get it for six months,” said Berteau, “and that's debilitating for industry.”
“Our members are always concerned because it slows down new contract awards, and it adds uncertainty to every program manager ― not only in the Defense Department, but across the federal government ― because they don't know how much money they're going to get or when they're going to get it,” Berteau said.
The duration of the CR has special political dimensions this year. If the bill runs through December, President Donald Trump and a Republican-controlled Senate would negotiate over the final spending package. Depending on the outcome of the election, a CR that stretches into the next calendar year could be negotiated by a President Joe Biden or a Democratic-led Senate, which would give Democrats more leverage.
Berteau was concerned that Biden, like Trump in 2017, would not enter office Jan. 20 ready to immediately hammer out a budget deal. It took until that April for Trump to sign a deal, and it took President Bill Clinton ― who entered office under similar circumstances in 1993 ― until that June.
“If you don't get it now, history says you won't get it for six months,” said Berteau, “and that's debilitating for industry.”
April 25, 2019 | Information, Aerospace, Naval, Land, C4ISR, Security
GUIDE À L'INTENTION DES ENTREPRISES QUI SOUHAITENT FAIRE DES AFFAIRES EN FRANCE https://www.desjardins.com/ressources/pdf/c00-entreprendre-le-marche-francais-f.pdf
June 11, 2018 | Information, Aerospace, Naval, Land, C4ISR, Security
The Defence Capabilities Blueprint (DCB), accessible through a new online tool, is now available, and offers access to information related to defence investment opportunities. Like the previous Defence Acquisition Guide, the DCB provides industry access to planning information such as funding ranges and project timelines. Information on approximately 250 projects funded under Strong, Secure, Engaged (SSE) including infrastructure projects, as well as significant in-service support contracts is available for industry to plan for and compete in defence procurement opportunities. With this information, industry will be able to make informed research and development (R&D) and strategic partnering decisions based on projected needs of the Canadian Armed Forces. Within the DCB the following are found: Projects: Capital equipment or infrastructure projects with a value of over $5 million that are planned and funded under SSE Support Contracts: In-service support contracts and professional services contracts with an expected value of greater than $20 million that will be awarded in the coming years to support the capabilities being delivered under SSE SSE projects which are noted and identified The DCB includes a key word search function and segments investment opportunities into searchable components by: Defence Capability Areas (DCAs) Defence Capability Investment Areas (DCIAs) Project sponsors Key Industrial Capabilities (KICs) Defence Capability Areas (DCAs) are 13 broad component categories, such as Land, Sea, Air, Space and Cyber. These categories are further comprised of smaller constituent components of more than 150 Defence Capability Investment Areas (DCIAs). Examples of DCIAs are Commercial Pattern Vehicles, Ship Parts and Components, or Avionics. Projects may include more than one DCA and several DCIAs. Project Sponsors are the service command level or civilian equivalent organizations within Department of National Defence (DND). Projects and investment opportunities are also searchable under Innovation, Science and Economic Development Canada's Key Industrial Capabilities (KICs). These capability areas inform industry about which key business activities are government priorities in defence procurement. Finally there is an Advanced Search capability that allows the user to filter their searches into specific parameters. http://dgpaapp.forces.gc.ca/en/defence-capabilities-blueprint/index.asp https://www.canada.ca/en/department-national-defence/corporate/reports-publications/defence-investment-plan-2018.html
September 17, 2020 | Information, Other Defence
Justin P. Oberman Despite being warned, with impressive precision, about the dangers of so-called black swan events, America tends to ignore or downplay them because they seem remote, or the perceived financial, societal and political costs are too great. In the aftermath of 9/11, of Hurricane Katrina and other major domestic tragedies, we too often learn that our relevant capabilities have atrophied. Now, following perhaps the most devastating such event — the COVID-19 pandemic — the defense industrial base is actively seeking billions of dollars to prop it up without necessarily committing to making step-function leaps forward in a highly complex threat environment. And while keeping the thousands of small companies that support the defense primes alive is important, the Pentagon — flush with cash and a mandate to act quickly to react to the pandemic — should use this opportunity to refine its technology acquisition approach, in part by doing more to engage nontraditional defense firms. The reasons for bringing in new ideas for defense are clear. Just last week, the Department of Defense released its annual report to Congress on China, which states that “China has already achieved parity with — or even exceeded — the United States in several military modernization areas.” Even more concerning, DoD analysts describe China's military-civil fusion development strategy as “a nationwide endeavor that seeks to ‘fuse' its economic and social development strategies with its security strategies to build an integrated national strategic system and capabilities in support of China's national rejuvenation goals.” The United States doesn't need and shouldn't pursue a “fusion” strategy; rather, we need a better approach to strengthening the defense industrial base and engaging with innovators. The United States is at risk of losing its ability to manufacture critical national security technology thanks to a combination of byzantine domestic procurement processes, offshoring and overseas competitors. To counter these and other negative trends, the DoD needs a sustainable, continuous innovation model. In Silicon Valley, everyone from the biggest players to the youngest startups view working against or around slow, tired establishment organizations as almost a prerequisite to success (Uber vs. taxis, Tesla vs. legacy automakers, Amazon vs. everybody). Despite the Pentagon's attractive budget and important missions, many innovators are repelled by restrictive requirements, lengthy sales cycles, high costs of bidding and a deck often stacked in favor of large prime contractors. The DoD must throw open its doors to innovators and free itself to make bets; if it does, it will get more world-class tools for its mission owners. The department should: Make requirements less prescriptive, easier to understand and run two ways. Develop an outreach program for innovators that uses channels they're already occupying, in language they understand, with requirements that are compelling. Encourage two-way communication that surfaces non-obvious solutions to critical defense missions. At the Transportation Security Administration, we worked with an In-Q-Tel-backed company that was founded in Las Vegas to catch casino cheats; the Pentagon should look for similar outside-the-box opportunities. Engage substantively with private sector innovation experts. The best investors and executives back successful entrepreneurs, mentor them as they refine their offerings and support world-changing scale. The DoD needs these skill sets and should set up (unpaid) innovation mentoring boards. Insert flexibility into contracting and financing. To remove barriers to entry without sacrificing quality, the DoD should: Create “off-campus” labs to mitigate procurement and security clearance delays. Build on the work of Dr. Will Roper, the assistant secretary of the Air Force for acquisition, technology and logistics. to ensure innovators don't run out of funding. In what would be a great advancement and threshold change, work with Congress to arrange for private sector investment in key technologies to bolster programs of record. Lift government price and margin controls. Cost, often controlled through the anti-innovation technique of lowest-price, technically acceptable contracts, is not the key metric, particularly in emerging, dynamic technologies. What matters are outcomes and value. Restricting profit to a bureaucrat-calculated rate of 15 percent will drive innovative and nimble companies away from the DoD. Cost does not effectively incorporate other important metrics, including risk, prior investment and return on investment. Order quantities and frequency are also critical in determining reasonable costs, as these factors underpin business cases. It's not a coincidence that the world's largest, most innovative economy belongs to the same country that has the world's largest, most lethal military and is the world's most attractive target for emerging threats. The threat environment (intensified by the pandemic) makes clear that we need to change our approach; the state of our economy means that we need to start now. https://www.defensenews.com/opinion/commentary/2020/09/16/coronavirus-has-kept-us-close-to-home-its-a-helpful-lesson-for-strengthening-national-defense/