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April 29, 2020 | International, Naval

Navy Acquisition Boosts Ship Contract Awards Under COVID-19

“I think there are ways we can come out of this much more resilient, but you know it's hard to change bureaucracy and institutional ways of doing business [to] make sure that this disruption doesn't go to waste,” says Navy acquisition chief James Geurts.

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WASHINGTON: Navy leaders and defense industry execs are worried about the effect the COVID-19 pandemic is having on their supply chains, potentially interrupting critical repair and refit availabilities that could have knock-on effects on deployment schedules.

The Navy's acquisition chief James Geurts told reporters recently that so far, industry is “holding pretty good on near-term milestones,” but he's worried about long-term effects on ship repair and the industry's ability to keep pace.

However, the pandemic seems to be having some beneficial effects.

“Part of my goal for our team is not to recover necessarily to where we were,” before COVID-19, but to change some fundamentals of how the Navy's business gets done, he said. With most of the Navy acquisition force teleworking, “we're basically 32 percent ahead on contract awards,” of where they planned to be at this point in the year. “And so, that means there are processes that are working much more efficiently now than they were before, so I want to capture those,” he said.

The Navy and shipbuilders are trying to do the same thing in the shipyards where “maybe different techniques will allow us to gain some efficiency while also creating some resiliency,” that will help weather any future disruptions and setbacks.

The big shipbuilders like Huntington Ingalls and Bath Iron Works are staggering shifts and allowing liberal leave and teleworking without suffering much disruption so far, company officials have said.

Geurts said the lessons they're learning could lead to the conclusion that, “we cannot operate the way we used to operate, which had a lot of fragility and brittleness as we're seeing right now. It's got to drive to the way we need to operate in the future, which has to have resiliency for whatever disruption that might come up. That's what we're really trying to watch closely and think two or three phases ahead, and not just get caught up in managing today's crisis.”

Even before COVID-19 tore through the global economy, the Navy was looking at ways to save money on repairing ships. Last month the service backtracked on plans for a classwide service-life extension project for its Arleigh Burke-class destroyers that would have added a decade to their 35-year service lives.

Not keeping the Burkes longer, and saving on their life-extension upgrades, would free up money for the Navy to buy more unmanned systems and other smaller ships to fit into plans Defense Secretary Mark Esper is making with Navy leadership for a smaller, faster, more stealthy fleet.

To that end, the service has been working on changing how it awards ship maintenance contracts, and is working to “bundle” multiple ship repair contracts together to give industry a more predictable work schedule, allowing them to plan long-term. “Ultimately, getting them bundles is the key to us being successful delivering these [ships] on time,” the commander of Naval Sea Systems Vice Adm. Thomas Moore said last month at the annual McAleese and Associates Defense Programs Conference.

Awarding several ship contracts at once will allow the shipbuilder to stockpile parts and arrange work schedules in a more efficient and rational manner, as opposed to the one-off, last-minute contracts the Navy has traditionally awarded for ship repair.

“Industry is rational. That's what I tell everybody — you may not like every decision they make, but the decisions most always are very, very rational,” Moore said.

In the end, “we've got to manage our way through delay and disruption, but really focus on steepening the recovery and reinvention phase to get into the place we need to be,” Geurts said. “I think there are ways we can come out of this much more resilient, but you know it's hard to change bureaucracy and institutional ways of doing business [to] make sure that this disruption doesn't go to waste.”

https://breakingdefense.com/2020/04/navy-acquisition-boosts-ship-contract-awards-under-covid-19

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  • The European Union’s defense ambitions are still showing signs of life

    June 1, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    The European Union’s defense ambitions are still showing signs of life

    By: Sebastian Sprenger COLOGNE, Germany — A new budget proposal for the European Union shows that the bloc's defense plans are back on the table as the continent pushes to revive its economy following the coronavirus crisis. Two flagship programs to that end — the European Defence Fund and the Military Mobility initiative — are set to receive €8 billion (U.S. $9 billion) and €1.5 billion (U.S. $1.7 billion), respectively, in the seven-year plan beginning in 2021, according to a proposal unveiled this week by European Commission President Ursula von der Leyen. Those figures are lower than the initial proposal of €13 billion and €6.5 billion for the two budget lines. But they represent an uptick compared with recent negotiation positions that envisioned defense-related spending slashed even more. Defense spending remains an unbeloved subject in many European countries, and it is notable that there is no dedicated political narrative around building military prowess in the context of the bloc's recovery plan, dubbed Next Generation EU during a May 27 speech by von der Leyen. Still, the fact that the European Defence Fund — designed to foster intra-continental defense cooperation — remains in the mix is in itself a statement, according to analysts. Defense-spending advocates in Europe believe a robust military can strengthen the EU's hand in trying to assert its role on the world stage with other players like China and Russia. The new proposal of €8 billion for the European Defence Fund may not seem like much, given the high, upfront costs for multinational military equipment projects, said Sophia Besch, a senior research fellow at the Center for European Reform. “But it's a win for the [European] Commission in the current political context,” she added. “COVID-19 has shifted the priorities, and even before the crisis there were signs that defense was losing ground in the traditional budget battles,” Besch said. Given that, the new proposal is “better than nothing,” she argued. At the same time, the de facto reduction would make it harder to prove for the commission that the intended effects can be achieved with the amount envisioned, Besch predicted. Funding through the European Defence Fund and its associated channels ensures that certain projects in many member states can happen at all, said Yvonni-Stefania Efstathiou, an Athens, Greece-based defense analyst specializing in the emerging European defense-cooperation framework PESCO, or Permanent Structured Cooperation. “Allocations to the EDF have the potential of triggering more defense cooperation, as those funds will be used to finance collaborative research and common capability development projects,” she said. What is still missing, however, is an overarching context of where the EU wants to go with its defense ambitions, she argued. “The impact of these funds will be limited unless there is also progress on the common definition of strategic priorities and military requirements.” The cut to the budget line for military mobility means member states stand to pay more of their own money for updating bridges, roads and rail networks to ensure military equipment can quickly move along the continent in the event of a standoff with Russia. The work is seen as a critical interface between the EU and NATO, and alliance officials previously expressed hope for a funding injection that could speed projects along, especially in Eastern Europe. “Unless we have the full costings of how much bridges and roads will cost, it is hard to evaluate whether the funds are sufficient,” Efstathiou said. “What is easy to predict, however, is the dissatisfaction of the Eastern European states.” https://www.defensenews.com/global/europe/2020/05/29/the-european-unions-defense-ambitions-are-still-showing-signs-of-life/

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