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  • The US Navy, seeking savings, shakes up its plans for more lethal attack submarines

    April 23, 2019 | International, Naval

    The US Navy, seeking savings, shakes up its plans for more lethal attack submarines

    By: David B. Larter WASHINGTON — The U.S. Navy is shaking up its plan for acquiring a new, much larger and more deadly version of its Virginia-class attack submarine it aims to start buying this year. The plan heading into this year was to start a contract on the 5th block of Virginias in October, beginning with an upgraded version of the block-four Virginia (a “straight-stick” Virginia), then the second boat in 2019 would be the first boat with the added with 84-foot section known as the Virginia Payload Module, designed to expand the Virginia's Tomahawk strike missile load-out from 12 to 40. The rest of the 10-ship buy was suppose to have the VPM, a move designed to offset the retirement of the four 154-Tomahawk-packing guided missile submarines in the mid-2020s. But the Navy is looking for savings and things have changed heading into the 2020 budget cycle. Instead of nine of 10 block-five Virginias being VPM boats, the Navy is proposing to Congress that they add a third Virginia in 2020, but the first boat will be another “straight-stick.” Then in 2021, the Navy will return to buying two Virginias, but the first boat again will be a straight-stick and the second will have VPM. All the block five boats, VPM and otherwise, will have acoustic upgrades. The net effect will be one fewer Virginia Payload Module in the block-five buy. Instead of nine of 10 boats in the buy having VPM, the Navy is proposing that eight of 11 boats have the VPM, deferring the VPM presumably to Virginia Block Six, which is slated to begin in 2024. The last-minute shuffling of the deck on Virginia, which includes pushing out VPM boats for which Congress had already appropriated advanced procurement money, shifts what was originally supposed to be the end of the straight-stick Virginias this year to buying one new straight stick a year for the next three years. This has raised concerns among those in the submarine building industry because of the potential for disruptions in the workflow at the yards, which is carefully planned out years in advance, and could even bleed over into the new, strategically vital Columbia-class ballistic missile submarine program. “Just like there is one rule in real estate (‘location, location, location'), there is one rule in building ships: Predictability, predictability, predictability,” said Dan Gouré, a former Bush Administration defense official and military analyst with the Arlington-based Lexington Institute. “And they are messing with that now, for the first time in quite a while. And that makes no sense.” The late changes have also affected the timeline for contract negotiations, and a source with knowledge of the details said a planned April contract date for block five is now unlikely. The date had already slipped from the beginning of the fiscal year in October, according to 2018 budget documents. The Virginia-class program has begun seeing creeping delays which the Navy acknowledged this year will likely be between four and seven months on each boat for the foreseeable future. The service says it has struggled to meet more aggressive construction timelines because of issues within the supplier base, which are causing delays. A spokesman for the Navy's research, development and acquisition office said he wouldn't comment on precisely what savings would be achieved with the strategy, citing ongoing negotiations, but said the move of a matter of competing priorities within the budget. He also said the changes in the VPM schedule were not part of ongoing supplier challenges. “To support the Navy's PB-20 request the decision to delay VPMs in FY-20 and 21 was based on competing requirements,” said Capt. Danny Hernandez, RD&A spokesman. “This was not based on any issues with shipbuilding or supply chain.” Added Wrinkle The third boat in 2020 also adds a wrinkle to the schedule. According to the Navy's justification books, the third boat will not start construction until 2023, which is the year before the service plans to buy a second Columbia-class boomer. That means the shipyards will be building three Virginias in 2023. The Virginia Payload Module strategy of continuing to buy straight-stick Virginias into 2021, ensures that General Dynamics Electric Boat and Huntington Ingalls Newport News will be building both straight sticks and Virginia Payload Module Virginia-class boats and the Columbia class simultaneously through 2026 and beyond, according to Navy budget documents. That will stress the yards and the supplier base, raising the risk that Columbia could run late, according to an industry source who spoke on background. “The juxtaposition of Virginia VPM and Columbia will be an added challenge for the shipyards,” the source said. “VPM and Columbia will have no learning curves when both projects are started. As we saw with Seawolf and Virginia (and every other first of a class ship the Navy has ever built) first ships are late and over cost. “Unfortunately, with the delay to the original program, Congress and the Navy have run the clock down, so there is no margin for Columbia to be late.” The mounting challenges within the submarine building enterprise prompted RD&A chief James Geurts to stand up a new program office specifically for the Columbia class, which was previously organized under Program Executive Office Submarines. Rear Adm. Scott Pappano is heading the new enterprise. “My concern was with Columbia being our No. 1 acquisition priority and all the other submarine activities we have going on, do we have enough leadership bandwidth available to oversee and run all those programs simultaneously?” Geurts said in an early March roundtable with reporters. “As I understand the challenges going forward, [I wanted to] get PEO-level support to that program as it starts ramping up. And I didn't want to wait for a crisis for that to occur; I wanted to make sure we are proactively working the program.” https://www.defensenews.com/naval/2019/04/04/the-us-navy-seeking-savings-shakes-up-its-plans-for-more-lethal-attack-submarines/

  • Contract Awards by US Department of Defense - February 18, 2020

    February 19, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

    Contract Awards by US Department of Defense - February 18, 2020

    NAVY East Coast Repair & Fabrication LLC,* Norfolk, Virginia (N00024-20-D-4411; Lot 1) (N00024-20-D-4413; Lot 2); and Colonna's Shipyard Inc.,* Norfolk, Virginia (N00024-20-D-4412; Lot 1) (N00024-20-D-4414; Lot 2), are awarded firm-fixed-price, indefinite-delivery/indefinite-quantity (IDIQ) contracts for ship repair, maintenance and modernization of non-nuclear surface ships assigned to or visiting Norfolk, Virginia, via the rolling admissions solicitation process. Awards reflecting the final option period under Lot 1 have a maximum ceiling value of $250,000,000; awards reflecting the final option period under Lot 2 have a maximum ceiling value of $100,000,000. At the time of the IDIQ awards, each awardee under both Lot 1 and Lot 2 will receive the $10,000 minimum guarantee via delivery order. These multiple award IDIQ contracts are for repair, maintenance and modernization of non-nuclear Navy surface ships undergoing Chief of Naval Operations-scheduled maintenance availabilities in Norfolk, Virginia. These availabilities can be docking or non-docking availabilities and will be procured via competitive delivery order solicitations amongst the IDIQ contract holder. Each awardee of a delivery order for an availability will provide the facilities and human resources capable of completing, coordinating and integrating multiple areas of ship maintenance, repair and modernization. Work will be performed in Norfolk, Virginia, and is expected to be completed by February 2021. Fiscal 2020 operations and maintenance (Navy) funding in the amount of $10,000 per delivery order (four delivery orders total; $40,000 total) will be obligated at time of each IDIQ award and will expire at the end of the current fiscal year. These contracts were competitively procured via the Federal Business Opportunities website, with two offers received in response to solicitation N00024-19-R-4412. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. Rolls-Royce Corp., Indianapolis, Indiana, is awarded a $62,400,402 modification (P00016) to a previously awarded firm-fixed-price contract (N00019-17-C-0081). This modification exercises an option to procure 29 AE1107C engines for Navy V-22 aircraft. Work will be performed in Indianapolis, Indiana, and is expected to be completed December 2021. Fiscal 2019 aircraft procurement (Navy) funds in the amount of $21,517,380; and fiscal 2020 aircraft procurement (Navy) funds in the amount of $40,883,022 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. General Atomics, San Diego, California, is awarded a $25,200,747 cost-plus-fixed-fee delivery order (N00019-20-F-0521) against a previously issued basic ordering agreement (N00019-16-G-0006). This delivery order procures Electromagnetic Aircraft Launch System (EMALS) Depot Planning Phase II efforts, including depot level logistics support analysis, engineering support for logistics, supportability analysis, maintenance planning, reliability maintenance, technical manual development and engineering support as it directly correlates to depot planning for the USS Gerald Ford (CVN 78) and USS John F. Kennedy (CVN 79). Additional efforts include those required to complete the Depot Planning EMALS logistics products necessary in support of an in-service EMALS. Work will be performed in San Diego, California (99.9%); and Tupelo, Mississippi (0.1%), and is expected to be completed February 2022. Fiscal 2020 research, development, test and evaluation (Navy) funds in the amount of $4,787,000 will be obligated at time of award, none of which will expire at the end of the fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Boston Ship Repair LLC, Boston, Massachusetts, is awarded a $14,358,866 firm-fixed-price contract (N32205-20-C-4006) for a 90-calendar day shipyard availability for the overhaul dry-docking availability of USNS John Lenthall (T-AO 189). The $14,358,866 consists of the amounts listed in the following areas: category "A" work item cost, additional government requirement, other direct costs and the general and administrative costs. Work will include furnish general services, hull steel replacement, tank painting, stability testing, degaussing conduit removal from tanks and inserting bulkheads, diesel engine repair, structural steel gauging surveys, flight deck non-skid, flight deck safety net inspection and weight testing, steel replacement and underway replenishment systems repairs. The contract includes options, which, if exercised, would bring the total contract value to $16,867,699. Funds will be obligated Feb. 18, 2020. Work will be performed in Philadelphia, Pennsylvania, and is expected to begin on March 9, 2020, and is expected to be completed by June 6, 2020. Fiscal 2020 Navy working capital funds in the amount of $14,358,866 excluding options, are obligated at the time of the award and will expire at the end of the current fiscal year. This contract was competitively procured, with proposals solicited via the Federal Business Opportunities website and two offers were received. The Navy Military Sealift Command, Norfolk, Virginia, is the contracting activity. General Atomics, Electromagnetics Systems Group, San Diego, California, is awarded a $10,364,470 modification (P00047) to a previously awarded firm-fixed-price contract (N00019-14-C-0037). This modification procures hardware and installation support services for the System Functional Demonstrator and Shipset Control Lab sites for the Electromagnetic Aircraft Launch System. Work will be performed in San Diego, California (95%); and Tupelo, Mississippi (5%), and is expected to be completed December 2021. Fiscal 2018 shipbuilding and conversion (Navy) funds in the amount of $10,364,470 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. DEFENSE LOGISTICS AGENCY Coastal Pacific Food Distributors Inc., Stockton, California, has been awarded a maximum $246,750,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution. This was a competitive acquisition with two responses received. This is a five-year contract with no option periods. Locations of performance are California and Washington state, with a Feb. 15, 2025, performance completion date. Using military service is Navy. Type of appropriation is fiscal 2020 through 2025 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3259). Sysco Seattle Inc., Kent, Washington, has been awarded a maximum $176,250,000 fixed-price with economic-price-adjustment, indefinite-quantity contract for full-line food distribution. This was a competitive acquisition with two responses received. This is a five-year contract with no option periods. Location of performance is Washington state, with a Feb. 15, 2025, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriation is fiscal 2020 through 2025 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE300-20-D-3260). Science Applications International Corp., Fairfield, New Jersey, has been awarded a maximum $90,000,000 firm-fixed-price contract for facilities maintenance, repair and operations items. This was a sole-source acquisition using justification 10 U.S. Code 2304(c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is an 18-month bridge contract with no option periods. Location of performance is the Southwest Region Zone 2 of the U.S., with an Aug. 18, 2021, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriation is fiscal 2020 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E3-20-D-0007). SupplyCore Inc.,* Rockford, Illinois, has been awarded a maximum $90,000,000 firm-fixed-price contract for facilities maintenance, repair and operations items. This was a sole-source acquisition using justification 10 U.S. Code 2304(c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is an 18-month bridge contract with no option periods. Location of performance is the Southwest Region Zone 1 of the U.S., with an Aug. 18, 2021, performance completion date. Using military services are Army, Navy, Air Force, Marine Corps and Coast Guard. Type of appropriate is fiscal 2020 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE8E3-20-D-0006). ARMY 313 Industries Inc.,* Warren, Michigan (W56HZV-20-D-L001); Mettle Craft Manufacturing LLC,* Sterling Heights, Michigan (W56HZV-20-D-L002); Milton Manufacturing Inc.,* Detroit, Michigan (W56HZV-20-D-L003); and Rose-A-Lee Technologies Inc.,* Sterling Heights, Michigan (W56HZV-20-D-L004), will compete for each order of the $19,000,000 firm-fixed-price contract to provide surge support for build-to-print component requirements through fabrication and manufacturing for the Combat Capabilities Development Command Ground Vehicle System Center. Bids were solicited via the internet with four received. Work locations and funding will be determined with each order, with an estimated completion date of Feb. 15, 2025. U.S. Army Contracting Command, Detroit Arsenal, Michigan, is the contracting activity. Canco LLC,* Canton, Ohio, was awarded a $10,050,000 firm-fixed-price contract to replace an existing fire station. Bids were solicited via the internet with seven received. Work will be performed in Mansfield, Ohio, with an estimated completion date of Dec. 31, 2021. Fiscal 2019 -Air National Guard military construction funds in the amount of $10,050,000 were obligated at the time of the award. The United States Property and Fiscal Office, Columbus, Ohio, is the contracting activity (W50S8R-20-C-0003). U.S. TRANSPORTATION COMMAND Vane Line Bunkering Inc., Baltimore, Maryland, has been awarded contract modification P00040 on contract HTC711-13-C-W015 in the amount of $11,516,430. This modification provides continued transportation of bulk jet fuel and marine diesel fuel by barge for the Defense Logistics Agency-Energy in the Atlantic Region. Work will be performed in ports and points along the inland waterways and East Coast locations in the Atlantic Region. Period of performance is March 1, 2020, to Aug. 31, 2020. Fiscal 2020 defense working capital funds were obligated at award. This modification brings the total cumulative face value of the contract to $178,740,305 from $167,223,875. U.S. Transportation Command, Directorate of Acquisition, Scott Air Force Base, Illinois, is the contracting activity. DEFENSE ADVANCED RESEARCH PROJECTS AGENCY Two Six Labs LLC,* Arlington, Virginia, has been awarded a $7,970,711 modification (P00008) to previously awarded contract HR0011-18-C-0134 for additional in-scope work under a Defense Advanced Research Projects Agency research project. Work will be performed in Arlington, Virginia, with an expected completion date of September 2022. Fiscal 2020 research, development, test and evaluation funding in the amount of $850,108 is being obligated at time of award. The Defense Advanced Research Projects Agency, Arlington, Virginia, is the contracting activity. *Small business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2086591/source/GovDelivery/

  • Could Textron Become Purer A&D Company, Or Be Sold?

    August 13, 2019 | International, Aerospace

    Could Textron Become Purer A&D Company, Or Be Sold?

    By Michael Bruno As a multi-industrial manufacturer, Textron sells many transportation vehicles, from military helicopters to UAVs and even snowmobiles and recreational four-wheelers. But a new corporate review may indicate the conglomerate could be looking to become an aerospace and defense (A&D)-focused company similar to other large rivals, according to analysts. Earlier this month, Textron announced it is reviewing strategic alternatives such as a sale or spin-off of its German Kautex business unit, which produces fuel systems and other functional components. Kautex operates more than 30 plants in 14 countries and generated more than $2.3 billion in revenue in 2018. “Kautex strategic review suggests Textron wants to become an A&D ‘pure-play,'” Cowen analysts Cai von Rumohr and his team said Aug. 9. “The thesis is that ‘new Textron' could command a higher [valuation] multiple closer to A&D pure-plays; and it would have optionality for merger and acquisition (M&A) or stock repurchasing to leverage its new product-driven growth.” The Cowen analysts said they think that if Kautex is disposed of, so could golf cart maker Textron Specialized Vehicles or other units in Textron's Industrial division. In turn, the company could use proceeds and money saved to bolt on smaller A&D businesses, or it could continue active share repurchases to lever benefits of expected growth from new products such as Longitude, Sky Courier, Denali and V-280. “A third possibility is that free of Industrial, Textron could be of interest to larger primes, who would bring more lobbying clout to V-280,” the analysts said. Buying candidates could be Boeing or General Dynamics, they added. Separately, a well-known adviser to the A&D industry recently told Aerospace DAILY that Textron would make a good acquisition target for other A&D players. “Over the years I've had my clients take a hard look at that one,” the consultant said. This person listed Boeing and Lockheed for possible top-level consolidation, although getting Pentagon and Trump administration approval could be more of a challenge than for other recent M&A deals. To be sure, Textron is already an aerospace-focused multi-industrial. According to Cowen, it is the leader in Class 1-5 business jets (which make up 24% of annual total revenue), with positions in helicopters via Bell (26%), defense systems (12%), and then industrial products (25%). Defense as an end-market accounts for 29%. But conglomerates are increasingly breaking up and those with A&D elements continue to focus on those businesses. United Technologies is working to spin off its elevators and air conditioning businesses while adding Raytheon. General Electric is divesting major units but favoring aviation. Honeywell International in recent years has spun off units to focus more on A&D and related businesses. One reason for the portfolio shaping is because of pressure from major investors who want companies to be more focused, in part so they can balance their own investment portfolios rather than relying on a company to try to play in various industries. Goldman Sachs is advising Textron on its review. Textron reiterated that no decision has been made and there are no assurances that the process will result in any transaction being announced or completed. The company has not set a definitive timetable for completion of its review of strategic alternatives and does not intend to make any further announcements related to its review unless and until its board of directors has approved a specific transaction or Textron otherwise determines that further disclosure is appropriate. https://aviationweek.com/business-aviation/could-textron-become-purer-ad-company-or-be-sold

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