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August 18, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

Number of Foreign Companies Within Defense Supply Chain Grew Over Past Decade, Report Says

Reliance on foreign suppliers in the defense industrial base rose—notably in packaged software and IT services—even as calls for reshoring increase, according to a new report.

Reshoring the defense supply chain may reduce national security risks, but a new report detailing a heavy dependency on goods and services from foreign countries like China shows reshoring may be easier said than done.

Researchers at Govini, a decision science company supporting the defense industry, analyzed data from over 1,000 Defense Department vendors across 100 industries to show how supply chain reliance on products from foreign countries has increased over the past decade. According to the survey, the number of Chinese suppliers in DOD's base increased by a total of 420% since 2010.

For cyber and information technology, two statistics stick out. The share of companies based in foreign nations in the supply chain grew the most in the packaged software and IT services between 2010 and 2019. Companies based in foreign countries made up 3% of the packaged software supplier base in 2010. That number rose to 7% in 2019. The numbers are similar for IT services: Companies based in foreign countries made up 3% of the IT services supplier base in 2010 and 7% in 2019.

Tara Murphy Dougherty, CEO of Govini, told Nextgov increasing adoption of IT infrastructure is critical for the Defense Department, particularly as COVID-19 forced the agency's workforce into mass telework. But that means it is imperative DOD addresses supply chain concerns for information and communications technology.

Murphy Dougherty said these two investment areas are only going to continue to grow, which means the department needs to act to clearly define its stance on IT supply chain security.

“What are you doing, other than responding to some of the legislation that we've seen come out of the Hill mandating investigation of this?” she said. “It would be great to see more options.”

A key mandate from Congress related to supply chain was supposed to take effect on an interim basis Thursday. Section 889 (a)(1)(b) of the 2019 National Defense Authorization Act bans agencies from contracting with companies that do business with five Chinese firms, including Huawei and ZTE. But according to a Defense News report, the Pentagon received a temporary waiver from the Director of National Intelligence pushing back the compliance date until September 30.

Defense Undersecretary for Acquisitions and Sustainment Ellen Lord said at a Professional Services Council webinar Thursday she needs feedback from industry on what's working and what's not when it comes to implementing the rule.

“I know we're all aligned in that we do not want adversaries in our supply chain. We don't want further theft of intellectual property. We don't want these nefarious actions going on,” Lord said. “But how do we get the language into the contracts, how do we practice the behaviors of ensuring we understand what we have in our supply chains for telecommunications equipment? What we need to do is continue to hear from you.”

It's not yet clear how the brief deadline extension will affect the implementation process. Regardless, visibility down the supply chain remains a key concern. Murphy Dougherty said there needs to be more transparency in supply chains if the industry is going to address security risks.

The Govini report focuses on firms in the mid-tier of the supply chain, with less visibility than a large company like Boeing. For companies further down the supply chain, U.S.-based companies make up less than half of the supplier base, according to the report. Chinese companies make up anywhere from 5% to 9% of the supplier base in the middle to lower ranges of the supply chain.

Murphy Dougherty said it's going to take time to see changes in the data. How to address the industrial base at a structural level remains an unanswered question, she said, and collaboration between DOD and industry will be critical in coming up with a new system to ensure supply chain security.

“It begs the question of do we have the right models in place today and the right framework for the department to get all of the goodness and partnership it possibly can out of the American commercial economy,” Murphy Dougherty said.

https://www.defenseone.com/threats/2020/08/number-foreign-companies-within-defense-supply-chain-grew-over-past-decade-report-says/167767/

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    January 14, 2020 | International, Aerospace

    Swiss issue second RFP for fighter/GBAD replacements

    Gareth Jennings, London Switzerland has issued a second request for proposal (RFP) for its Air2030 requirement to procure new combat aircraft and ground-based air defence (GBAD) systems. The supplementary solicitation, which came about 12 months after the first RFP, was issued by the country's Armasuisse defence procurement agency on 10 January. As noted by the Federal Department of Defence, Civil Protection, and Sport (VBS [previously DDPS]) that announced the new RFP, the second request builds on data already gathered from tests and evaluations of the five candidate fighter aircraft and two GBAD types. For the requirement to replace the Swiss Air Force's current Northrop F-5E/F Tiger II and Boeing F/A-18 Hornet fleets, Air2030 is considering the Eurofighter Typhoon, Dassault Rafale, Boeing F/A-18E/F Super Hornet, Saab Gripen E, and Lockheed Martin F-35A Lightning II Joint Strike Fighter (JSF). For the GBAD requirement, Air2030 is considering the Eurosam SAMP/T and Raytheon Patriot. For the fighter aircraft element, the companies contacted via the government authorities are requested to submit the most advantageous offer for Switzerland. The proposal should include prices for 36 and 40 aircraft (including logistics and weapons), as well as other defined industrial aspects of the bid including offsets. "The starting point for determining the number of fighter aircraft are the requirements to cope with a situation of increased tension. In such a situation, the Swiss Air Force must be able to permanently conduct air patrols with at least four aircraft for at least four weeks in order to preserve air sovereignty, prevent unauthorised use and violations of Swiss air space, and thus contribute to keep Switzerland out of armed conflict. In addition, the Swiss Air Force will use the new fighter aircraft for air policing around the clock, and, in case of armed attack, defend the air space for a limited period of time and support the ground forces," the RFP said. https://www.janes.com/article/93660/swiss-issue-second-rfp-for-fighter-gbad-replacements

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  • Contract Awards by US Department of Defense - November 25, 2019

    November 26, 2019 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - November 25, 2019

    ARMY General Electric Co. - GE Aviation, Lynn, Massachusetts, was awarded a $1,336,809,577 modification (P00021) to contract W58RGZ-15-D-0048 for T700 engine deliveries in support of the Army H-60 and AH-64 programs, Navy H-60 programs, Air Force programs, Foreign Military Sales and other government agencies. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of Dec. 31, 2024. U.S. Army Contracting Command, Redstone Arsenal, Alabama, is the contracting activity. 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Applied Physical Sciences Corp., Groton, Connecticut, is awarded a $23,225,953 cost-plus-fixed-fee contract for the multi-disciplinary tools, technologies and experimental methods in support of future Naval platform stealth and operations. Work will be performed in Groton, Connecticut (87%); and Cheswick, Pennsylvania (13%), with an expected completion date of October 2024. The total cumulative value of this contract including the base period is $23,225,953. This contract has no options. Fiscal 2019 research, development test and evaluation (Navy) funds in the amount of $146,749 are being obligated the time of award and will not expire at the end of the current fiscal year. This contract was competitively procured under N00014-19-S-B001, "Long Range Broad Agency Announcement (BAA) for Navy and Marine Corps Science and Technology." Proposals will be received throughout the year under the long range BAA and the number of proposals received in response to the solicitation is unknown. 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Fiscal 2020 operation and maintenance, Navy (O&M, N)) contract funds in the amount of $10,000 are obligated on this award and will expire at the end of the current fiscal year. Future task orders will be primarily funded by O&M, N funds. This contract was competitively procured via the Navy Electronic Commerce Online website and Federal Business Opportunities website with seven proposals received. The NAVFAC EXWC, Port Hueneme, California, is the contracting activity (N39430-20-D-2206). Advanced Alliant Solutions Team, Fairfax, Virginia, is awarded a $9,038,301 modification (P00021) to a previously awarded cost-plus-fixed-fee contract (N00421-16-C-0068) to exercise an option for information assurance services in support of the Naval Air Warfare Center Aircraft Division's Digital Networks Applications. Work will be performed in Patuxent River, Maryland, and is expected to be completed by November 2020. 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This modification increases the total cumulative contract value by $9,800,000 from $3,162,719,877 to $3,172,519,877. Under this modification, the contractor will perform engineering and design support services necessary for continuation of planning efforts executed under the Technical Assistance Case to support the Aegis Ashore Japan Foreign Military Sales Main Case. The work will be performed in Moorestown, New Jersey, with an expected completion date of July 31, 2020. Funds from the government of Japan in the amount of $9,800,000 are being obligated at the time of award. This contract modification is the result of a sole source acquisition. The Missile Defense Agency, Dahlgren, Virginia, is the contracting activity. U.S. TRANSPORTATION COMMAND Phoenix Air Group Inc., Cartersville, Georgia, has been awarded a task order (HTC711-20-F-R013) under contract HTC711-16-D-R001 in the amount of $8,832,188. The task order provides continued charter air transportation services to the Headquarters U.S. Africa Command. Work will be performed in Stuttgart Army Airfield, Germany, to various points throughout Africa and Europe. The period of performance is from Jan. 1, 2020, to Dec. 31, 2020. Fiscal 2020 Air Force operations and maintenance funds were obligated at award of the task order. This task order brings the total cumulative face value of the contract value to $56,982,110 from $48,149,922. U.S. Transportation Command, Directorate of Acquisition, Scott Air Force Base, Illinois, is the contracting activity. *Small Business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2026407/source/GovDelivery/

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