Photos show China has fielded another semi-submersible transport ship

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  April 21, 2020 | International, Aerospace, Naval

  DoD: Shipbuilding, Aviation Hardest-Hit Sectors in Defense Industrial Base by COVID Pandemic

  By: Megan Eckstein The shipbuilding, aviation and small space launch sectors are the three hardest-hit by the COVID-19 pandemic within the defense industrial base, according to the under secretary of defense for acquisition and sustainment, despite a slew of memos and authorities signed out by the Pentagon to relieve pressure from sick workers and facilities closures. “We see a slowdown in the shipyards to an extent. Aviation is actually the most highly impacted sector we have right now. So the 20 different memos that Kim Herrington (director of defense pricing and contracting) put out are really to make sure our cash flows and we quickly get on contract so we can keep going,” Ellen Lord told reporters on a Monday morning news conference. She said her team is still in the process of going program by program and understanding what production milestones may be at risk due to pandemic-related disruptions – everything from work slowing down on assembly lines to allow for social distancing, to coping with a smaller workforce as some employees are sick or taking leave to care for children at home, to breaks in the supply chain as component suppliers struggle to keep on schedule. For now, Lord said she could not point to any specific programs or any specific milestones most at risk, but she said major defense acquisition programs as a whole will face about a three-month slowdown due to COVID-19. To try to stay ahead of the spreading disease, “we follow very carefully where the highest number of cases are throughout the country and we look at the defense industrial base, where they are located, so we try to anticipate the problems and work with the companies to keep going to the greatest degree possible” and work with companies in emerging hot spots to put mitigation measures in place before their workforces are hit. Lord also said that, as the Pentagon takes a close look at its supply chain, “one of the key things we have found out are some international dependencies. Mexico right now is somewhat problematical for us, but we're working through our embassy. And then there are pockets in India as well.” Specifically on Mexico, she said there is “a group of companies that are impacting many of our major primes” in the airframe production industry. She said she spoke to the U.S. ambassador to Mexico last week and would speak to Mexico's foreign minister today to ask for help reopening these major international suppliers. Without naming companies or sectors, Lord said in her opening remarks that, of 10,509 major prime contractors, 106 are currently closed and 68 have closed and already reopened. On the vendor side, out of 11,413 companies, 427 are closed, with another 147 having closed and reopened. Though the Pentagon can't help companies having to close because the workforce is sick, leaders can ensure that companies with healthy workers aren't left without work and waiting for contracts to be signed. The Navy and DoD have accelerated contract awards and urged prime contractors to quickly push work down to their suppliers of all sizes, so that as soon as a company is ready for new work, the work is awarded and money already paid. “I remain proud of the department's responsiveness in addressing defense industry concerns outlined on [regular calls between the Pentagon and industry associations]. Mr. Kim Herrington, director of defense pricing and contracting, has issued 20 defense pricing and cost memos, aggressively responding to industry needs and impacts. Those memos include guidance for increased telecommuting, increased progress payment rates, acquisition timeline impacts, relief for those who cannot work, and more,” Lord said. “Vice Adm. David Lewis, Defense Contracting Management Agency director, modified 1,500 contracts to help companies to file invoices at the higher progress payment rate, and he also worked with Defense Finance and Accounting Service for a seamless transition for invoices. Based on submitted invoices, we expect payments at the higher progress payment rate to start this week, helping provide $3 billion in increased cash flow to industry. I commend Lockheed Martin and Boeing for both publicly committing to ensure this cash flow goes quickly down the supply chain to small businesses who need it most. We are hoping for similar public announcement from other major primes.” In addition to the actions the Pentagon can take on its own to help industry, Lord said the Defense Department is actively in talks with lawmakers and staffers to discuss a follow-on economic stimulus bill in the works. Though she couldn't get into specifics, she said it would cost DoD “billions and billions” to implement a section of the Coronavirus Aid, Relief, and Economic Security (CARES) Act “which allows agencies to reimburse contractors for payment to workers who are prevented from working due to COVID-19 facility closures or other restrictions.” She said the Pentagon hoped to see some funding in the next stimulus bill to help with that bill, as well as to pay for medical supplies and cover costs of delays in major defense acquisition programs. So far, the Defense Logistics Agency has provided more than 1.8 million N95 masks, 3.2 million non-medical and surgical masks, 8.4 million pairs of exam gloves, 275,000 surgical gowns and 8,000 ventilators to the military services, which are being used both to keep DoD personnel healthy as well as to support DoD's contribution to the multiagency efforts around the country. The Pentagon has also provided 10 million N95 masks to the Department of Health and Human Services and the Federal Emergency Management Agency and is prepared to give another 10 million from DoD stockpiles. Additionally, DoD will invest $133 million to increase domestic production of N95 masks to more than 39 million in the next 90 days, Lord announced. Contracts have been finalized with 3M for $76 million, O&M Halyward for $29 million and Honeywell for $27.4 million. Beyond new mask production, DoD also spent $415 million to buy 60 Battelle Memorial Institute Critical Care Decontamination Systems that will be able to sterilize N95 masks to allow for reuse up to 20 times, and therefore reduce the demand for new masks. “Six units were delivered last week, including two to New York and one each to Columbus, Ohio; Boston; Chicago; and Tacoma; providing the ability to sterilize 3.4 million masks a week, reducing the need for new masks by the same number,” Lord said. “All 60 systems will be available by early May for prioritization and distribution by Health and Human Services and Federal Emergency Management Agency. Once all are delivered, these 60 units will allow 4.8 million masks to be sterilized per day, almost 34 million per week.” https://news.usni.org/2020/04/20/dod-shipbuilding-aviation-hardest-hit-sectors-in-defense-industrial-base-by-covid-pandemic

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  May 19, 2021 | International, Naval

  BAE Systems Awarded $164 Million Navy Design contract for Vertical Launch System - Seapower

  MINNEAPOLIS, Minn. – BAE Systems, Inc. has won a U.S. Navy competition to serve as the design agent for the mechanical portion of the Mk41 Vertical Launch System (VLS), the company said in a May 18 release. With this $164...

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  August 28, 2018 | International, Aerospace, Naval, Land, C4ISR

  Head of Saudi Arabia’s defense industry umbrella org talks Vision 2030

  By: Jill Aitoro LONDON — In spring 2016, Crown Prince of Saudi Arabia Mohammed bin Salman unveiled a plan to reduce the country's dependence on oil and to diversify the economy. The goal of Saudi Vision 2030, as that plan is known, is to make Saudi Arabia “the heart of the Arab and Islamic worlds, the investment powerhouse, and the hub connecting three continents.” Among the sectors central to that vision is military. Taking cues from other countries in the region, Saudi Arabia stood up a single umbrella organization to lead its efforts in defense development and expertise: the Saudi Arabian Military Industries. Defense News spoke to CEO Andreas Schwer in an exclusive interview about the goals of SAMI, and what it could mean for global defense partnership and cooperation. You lead the Saudi Arabian Military Industries. I would love for you to talk a bit about how SAMI, as it's known, was stood up and the goals of that organization. When the Vision 2030 program was established and defined by his royal highness, it became apparent right from the beginning that the defense industry would play a major role to achieve these global targets. So the defense industry, set up, is one of the major tasks of the Vision 2030 program. They established a team to define how this kind of defense industry should be set up. They were looking to comparable countries who are undergoing this kind of process — countries like Turkey, South Korea, South Africa or some Western countries. They have tried to learn the lessons out of that process. It was obvious that there are two choices: either to go for a [new company], or to use existing assets and to build up on those assets. They decided to go [new] in order to enhance the opportunity to implement best Western practices from the beginning. That was the key decision to go ahead, and they decided to build a nucleus which is covering any kind of [military] activities, starting from space, ground or naval activities under one big umbrella company to set up a kind of sustainable business instead of having different companies of smaller size. Are they operating relatively independently, or is it really one management structure? SAMI itself is acting as a kind of active holding company. We will operate through four business divisions. Each of the business divisions will be composed of a set of business units. A business unit is a joint venture with a foreign partner, but it would also integrate the existing assets in the kingdom into this umbrella environment; assets which are already joint ventures today but also nationally owned assets, which will be allocated to the various business divisions. I know you have an extensive career with defense companies. You were with Rheinmetall, and you spent time at Airbus. What interested you about this opportunity? It's quite unique overall in the world that to set up a new company which covers, again, all the product portfolio you can imagine. Space, aviation, land systems, hydraulic simulation, ammunition, shipbuilding, everything. I don't think there's any job in the world which offers you this kind of broad portfolio of activities. So it's unique. It's a once-in-a-lifetime chance. And the second argument is it's fantastic to set up a company. You can apply all your ideas, all the activity to form and shape something which otherwise you will never be able to do, versus ending up in an organization where almost all elements are predefined and it's hard to implement any kind of significant change. You have said that the goal for SAMI is to become one of the largest 25 defense companies in the world by 2030. How do you intend to make that happen? Saudi Arabia has the third-biggest defense budget in the world. It's around $70 billion throughout the year. On top of that, we have to look to all the budgets for the other customers on the domestic scene. It's the National Guard, the Royal Guard, Ministry of Interior, homeland security. There are lots of national customers [for] security-related equipment. Most of that will end up at SAMI's desk. So just by the volume and the size of the procurement, it's achievable, [also with] export potential of 30 percent. With that, you can easily achieve the target to become among the top 25 companies in the world. The Pentagon started working with Saudi Arabia on some very sizable foreign military sales from the United States, with the Trump administration very vocal about supporting that. How does that fit into the picture? There are lots of partnership opportunities. Those [foreign military sales] will be subject to our new scenario. We will apply for each and any of those contracts with the 50 percent localization rule, to be in line with Vision 2030. And whether it's a foreign military sale or whether it's a direct commercial sale, those sorts of buys will offer in all the local industries great opportunities for growth. So it's a good opportunity? You would say it's a positive? It's possible. But we have to make the target. We have to grow the local content from the 2 percent to more than 50 percent of the total span, new procurement, and [maintenance, repair and overhaul]. That's the target: 50 percent localization. That brings up an interesting point. Saudi Arabia has long voiced, like many countries in the Middle East, a desire for more indigenous capabilities. You mentioned the 50 percent localization in terms of contract opportunities, but how else can SAMI promote those aspirations? In the past, we've had the classic vendor-buyer relationship. Saudi Arabia was the classic buyer with very, very little local content. There were offset obligations, but most of the times they were never being fulfilled for different reasons. In the new scheme, we change from this kind of supplier-vendor relationship to a partnership model, a partnership model to the extent that we expect the foreign partner — under the terms of their exclusivity access to Saudi Arabia — to bring all their technologies, all the skills and knowledge into the kingdom. That typically is established through a joint venture so we can build up local competence not only by getting licenses for production, but in the engineering and R&D field to be able to develop the next generation of weapons systems, within the joint venture, within the kingdom. And you established a joint venture with Boeing. Can use that as an example? Saudi Arabia has a very long-lasting, strategic relationship with Boeing. It started many years ago, and we already have an established joint venture in the kingdom, where we conduct substantial aircraft MRO activities. Our future collaboration is obviously centered around this activity and will be expanded along the portfolio of Boeing products. Boeing is a showcase. Boeing is one of our most important partners. What does Saudi Arabia bring to the table both in terms of location, and technological capabilities? What is ripe for expansion within the country to support the military industry? As I mentioned before, we're the third-largest defense budget in the world. If you compare this budget with smaller budgets in other countries and if you compare what they have achieved in terms of localization — we have all the ingredients which we need to have in order to make this a success story. We will invest not only in the defense industry, but we also do a big push in the education system in universities, in any kind of area which needs support in order to get this industry up and running, to support the creation of jobs, to fulfill the Vision 2030. SAMI's obligation is to create more than 40,000 direct jobs, more than 100,000 indirect jobs, to achieve the target as defined. Are there things that the United States and other allies can do to better support Saudi Arabia with this military expansion? 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 programs. In our new set up in Saudi Arabia, we will do more and more in direct commercial sales. Why? Because this office has more flexibility, more opportunity for follow-up in the organization in a more time-effective manner. And yes, companies have to be trained, in that they have to change the mindsets and mentality in order to do this kind of normal type of commercial sales activity and to become a commercial partner on an industrial level rather than on a political or governmental level. They'll need to convince the Pentagon to allow them, too, because there's a lot of cases where the Pentagon tends to put in restrictions and wants to be in control of that relationship. You are absolutely right. This is a burden on the U.S. companies, and I wish them all the best in order to overcome the hurdle [so we] will be equally treated as many other companies who are not restricted by their governments. Some western European countries, for example, are offering much more support in that respect. Offering more opportunities for the companies to transfer their ideas, their technologies into the kingdom. Saudi Arabia had a bit of a shakeup in terms of its own military leadership. Where does that stand, if you don't mind my asking, and how does that influence the formation and growth of SAMI? The Vision 2030 program has many elements. So it's a transformation program, not only for society but also for the governmental administration. And as [the armed forces] are part of this administration body, they also have to undergo this transformation process. This is an ongoing process. The first steps have been done. One of the outcomes is the creation and foundation of the new regulatory body, which is the twin to SAMI, to host a centralized procurement agency, which they regulate and control and manage any kind of military and defense-related or security-related procurement action. This will ensure critical mass, synergy effects, volume effects, and allow us to build up a kind of sustainable business. With this kind of transformation, obviously, the roles and the responsibilities of administrative bodies, as well as leaders in the forces, have to change. And in line with that, some people have to be replaced, to be in full support with this new vision and to be completely in line with our targets, and I can tell you we have relationships with all the national stakeholders, and we consider ourselves with them as partners. They are no longer a client, we are no longer vendor to them; we are partners. You mentioned R&D. What areas do you see the greatest potential in terms of investment for development and product development? We will put our focus on software technologies, electronics, microwave, space-based technologies, robotics, laser weapons systems on the midterm and long term, but in in the short term we have to give the short-term needs, which are conventional in nature. So, in the beginning, as all the other companies are doing, are on the classical systems. How do you meld what Saudi Arabia as a nation needs for its own military with the potential for global export? Upmost importance and top priority is the security of the country. That means, yes, our top priority is to serve the needs of our armed forces, and we try in parallel to satisfy also the needs of our strategic partners. In most of the cases those are quite complementary. You see a lot of efforts in the United Arab Emirates to bolster defense. Is there a collaboration between the military organizations that are stood up in a country like UAE and what you're trying to establish in Saudi Arabia? Top leadership of UAE and Saudi Arabia have recently agreed on a strong collaboration on defense, and defense industries, so we are highly encouraged to align our thoughts and to align our strategies with our counterparts in the UAE. This process is ongoing, but we've had very fruitful collaborative talks, and soon we'll hopefully be in a position to announce some great, common achievements. https://www.defensenews.com/interviews/2018/08/27/head-of-saudi-arabias-defense-industry-umbrella-org-talks-vision-2030