Strategic acquisition in the USA: Rheinmetall agrees takeover of vehicle specialist Loc Performance

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  September 14, 2018 | International, C4ISR

  U.S. Cyber Command looks to grow its acquisition capacity

  By Lauren C. Williams The Defense Department's newest combatant command is nearly a decade old but still doesn't steer its own acquisitions. That could change in fiscal 2019, however, as U.S. Cyber Command staffs up its contracting office and seeks a bigger acquisition budget. "Acquisition authority is limited at the moment. It's capped at $75 million and has a sunset date, currently, of 2021," said Stephen Schanberger, command acquisition executive for U.S. Cyber Command during a panel at the Billington Cybersecurity Summit Sept. 6. "So the command is actively pursuing getting that increased on the ceiling amount as well as the sunset date." Cyber Command has only had acquisition authority for two fiscal years, but Congress extended that authority through 2025 in the fiscal year 2019 National Defense Authorization Act. That advances the authority four years from the original sunset date of 2021. Cyber Command awarded only one contract in fiscal 2017, Schanberger said, partly because it lacked a contract writing system and technical personnel to get things done. Things improved this year with $40 million in contract awards and Schanberger expects to reach the $75 million cap sometime in 2019. "We are really hamstrung at the moment in relying on the current [contracting] vehicles out there from others," he said. "And in some cases we've had to adjust our scope to match up to the contract versus waiting for them to put another whole contract vehicle or task order onto a contract." Schanberger seeks to more than triple Cyber Command's acquisition to $250 million to allow for multi-year contracts. Congressional scrutiny has been the main impediment to securing additional acquisition funds because the command needs to prove its contracting abilities, but Schanberger said increasing staff and getting things right will help. "Congress would like us to show that we actually can use our authority the way it's supposed to be and start to stand on the backbone of what it takes to be a contracting organization," particularly regarding contract types, use other transaction authorities, competitive bids versus sole source, and partnering with small businesses, he said. Schanberger told FCW he wasn't concerned about additional congressional scrutiny surrounding the Defense Department's use of other transaction authorities because "our efforts are nowhere near the big efforts that they're looking for." But overall, Cyber Command's contracting office is growing. Schanberger now leads a team of about five people, including himself, consisting of a contracting officer, specialist, and supporting contractors. He hopes to double the team's capacity by year's end. "We are in our infancy from an acquisition perspective, we are putting down the foundation of the personnel and the skills," he said, with the goal "to be able to activate, put together solicitation packages, plan our contracting strategy for [multiple] years, and be able to effectively implement and put out RFPs on the street without making a mess out it." Schanberger said they are looking at capabilities that can benefit all of the service components, such as analytic development. Cyber Command released a request for proposals for an analytic support program dubbed Rainfire on Sept. 4. "Once we get the skills in place, I think we'll be able to demonstrate to everyone around us that we can execute the authorities we have and grow them responsibly," he said. https://fcw.com/articles/2018/09/13/cybercom-aquisition-williams.aspx

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  January 23, 2020 | International, Naval

  India makes initial bid selections for $7 billion submarine project

  By: Vivek Raghuvanshi NEW DELHI — India on Tuesday announced the selection of domestic and foreign defense companies for the construction of six diesel-electric submarines with air-independent propulsion technology as part of an effort worth more than $7 billion. The submarines will be manufactured in India under the Navy's P75I program and guided by the Ministry of Defence's Strategic Partnership model, which aims to build indigenous capabilities, a senior ministry official told Defense News. Two domestic shipyards companies — state-owned Mazagon Dock Shipbuilders Limited and private sector firm Larsen & Toubro — were shortlisted to collaborate with five overseas original equipment manufacturers — Rubin Design Bureau of Russia, Naval Group of France, Navantia of Spain, ThyssenKrupp Marine Systems of Germany, and Daewoo Shipbuilding & Marine Engineering of South Korea. “The defence acquisition council approved the shortlisting of Indian strategic partners and potential original equipment manufacturers (OEMs) who would collaborate to construct six conventional submarines in India,” the MoD said in a statement. An expression of interest was issued in June 2019 to four domestic companies: Mazagon; Larsen & Toubro; Reliance Naval and Engineering Limited; and a consortium of Hindustan Shipyard Limited and Adani Defence. An internal MoD committee rejected the Hindustan-Adani Defence bid because it did not meet eligibility requirements, and the ministry noted that Reliance Naval and Engineering did not meet financial requirements. A separate, restricted expression of interest was issued in July 2019 to the five foreign OEMs as well as Saab of Sweden. Saab chose not to participate in the program, citing lack of clarity. For the P75I program, the Rubin Design Bureau is offering the Amur 1650 submarine; France is offering the Scorpene 2000; Navantia has offered the S-80-class sub; TKMS offered its HDW class 214; and Daewoo is offering its KSS-III. The MoD official said submissions were accepted in September and selection done early this month. A senior Indian Navy official said the OEMs must provide full technology transfer of critical systems of the submarines such as air-independent propulsion technology, sensors, and communication and electronic warfare suites. They must also help establish a domestic supply chain for spare parts and material as well as assist in training the local labor force, the official added. The OEMs are free to set up joint ventures or equity partnerships, or make royalty arrangements with Indian prime partners and other domestic suppliers. Another MoD official said a request for proposals will be issued to two shortlisted Indian companies who will set up a technical partnership with one of the five shortlisted OEMs and submit both financial and technical bids by the end of 2020. Thereafter, the technical and financial bids will be evaluated, with final selection expected in mid-2022. The selection will be made based on the lowest price offered, he added. Under the P75I program, the submarines must be made up of 65 percent indigenous material. The MoD said any contract between an Indian strategic partner and a foreign OEM must include provisions for the protection of classified information. In addition, the shortlisted OEMs must confirm their willingness to cooperate with the selected Indian company, including life-cycle support and transfer of technology. https://www.defensenews.com/industry/2020/01/22/india-makes-initial-bid-selections-for-7-billion-submarine-project/

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  December 10, 2019 | International, Aerospace

  Lockheed Looks To More F-35 Development Work

  Michael Bruno Lockheed Martin is looking to new government interest in follow-on modernization (FOM) upgrades of the F-35 Joint Strike Fighter to drive future business returns on top of what could be ballooning sustainment revenue, according to the company's chief financial officer (CFO). CFO Ken Possenriede told a Credit Suisse investor conference this month that FOM and sustainment will drive business growth out of the F-35 for Lockheed and its shareholders as production returns shrink with unit price reductions and maturing production. “We ended the SDD [system design and development] program, but the customer still is looking at capability that they want,” he told financial analysts and investors. “So you'll see growth there and in sustainment.” Lockheed Martin expects to deliver 131 F-35 Joint Strike Fighters this year, compared with 91 in 2018, and should deliver 140 in 2020. Over the next few years, Lockheed expects total international demand for the F-35 to drive production to about 175 a year, most of which will be built in Fort Worth, but with some finished in Japan or Italy. But because the price per aircraft has been reduced 13% over low-rate production lots 11-14, to below $80 million per jet for the A variant, that part of the program–“the lion's share” now–is increasingly becoming minimized as a moneymaker. “The reduction in price has been faster than the ramp-up in quantity,” Possenriede said. “So it's going to be, at least in the short term, [that] you'll probably see modest growth in production revenue.” Lockheed won the original $19 billion SDD contract in 2001, but spending on the FOM, also called Block 4 improvements, could reach an additional $16 billion under Pentagon plans discussed last year. At the same time, the F-35 fleet is expected to more than double from about 400 aircraft to 1,000 in the next couple of years. “You'll have more sparing, some more repairing,” he said. “But then you'll see a larger influx of the modification work that will get done, and you'll see sustainment over the next couple of years double. So that will be a faster piece of the revenue.” The company is about one-third complete in standing up repair base facilities now. Lockheed also continues to promote a performance-based logistics contract for the F-35, the CFO noted. “We provided a white paper, call it an unsolicited proposal, that basically commits to the 80% availability and it commits to the $25,000 per flight hour, which we think is the right number to get to,” he said Dec. 5. The F-35 currently costs $35,000 a flight hour. https://aviationweek.com/defense/lockheed-looks-more-f-35-development-work