To develop hypersonic missile launcher, Pentagon seeks funding transfer

On the same subject

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  April 25, 2024 | International, Land

  GA-ASI invests in upgrading EagleEye radar with AESA antenna

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  January 28, 2021 | International, Aerospace, Naval, Land, C4ISR, Security

  Opinion: Are Flat Pentagon Budgets The New Up Or The New Down?

  Byron Callan January 26, 2021 The Biden administration probably will not unveil an outyear spending plan for the Defense Department until the late spring of 2021 at the earliest, and more likely it will come out with the fiscal 2023 budget submission in February 2022. The administration should, however, be commenting on some of the bigger changes as different reviews and assessments are completed before that budget plan is released. Consensus now is that Pentagon spending will be flat at least in the first term of the Biden administration, though analysts are not clear on what this means. Will the Pentagon's budget be unchanged from the level that was appropriated for fiscal 2021? Will it be flat in inflation-adjusted terms, which means it would rise at 2% annually in current dollars? Or will the budget be flat in current dollars, which would entail a roughly 2% annual decline in Pentagon purchasing power, assuming inflation is 2%? Each would have different outcomes for the spending that would flow to contractors. Defense optimists could argue that flat budgets historically have not lasted too long. There were periods in which budgets were flat over 2-4 years annually in the late 1950s, early 1960s and mid-1990s. Flat periods, however, were succeeded by growth—usually because of a crisis or a new military contingency. No one has a working crystal ball that will show what is ahead for the 2020s. There are reasons to believe, however, that the 2020s are different. Although interest rates are at historic lows, the ratio of U.S. debt to GDP is at levels seen during World War II. There is pent-up demand for non-defense discretionary spending—notably for infrastructure, and an aging U.S. population will likely demand more health care and other “social” spending. “Endless wars” in the Middle East may temper Americans' willingness to engage in new overseas missions, unless a major provocation occurs that is akin to the 9/11 attacks. The flat budget period could last longer than the post-World War II era suggests. Is “flat” good for contractors? That depends. Markets started to digest that U.S. defense spending was flattening in 2020. The largest U.S. defense contractors underperformed the S&P 500 in 2020 and are doing so again in the first days of 2021. The initial market verdict is that flat is not good. The assessment might be true, but it is going to depend on two factors: how the Pentagon reallocates resources in a flat budget environment and how contractors change their strategies and portfolios. A flat top-line defense budget could be positive if the Pentagon can successfully cut military personnel and operations and maintenance (O&M) spending. Both are tall tasks. Winding down operations in Afghanistan and the Middle East is not going to free up significant troop numbers, and in any event, both are apt to exert gravitational pulls from which the U.S. cannot easily break free. Global security risks are not going to allow the sort of force structure cuts that occurred at the end of the Cold War and the Korean and Vietnam wars. Readiness and training also will remain a priority in this environment. Spending on military personnel and O&M that keeps pace with inflation may place even more pressure on investment. If those accounts grow at 1-2% annually, in a flat top-line period, that will put even more pressure on investment. Still, while there has been no indication so far, it is conceivable that the Biden administration will propose reductions in force structure and will attack O&M costs with more vigor. It will take 1-2 years at least to realize those savings, but they could be applied to modernize a smaller military. For a number of years, the Pentagon attempted to retire older “legacy” weapon systems in order to fund new investment, but Congress has stymied efforts to muster out older Navy cruisers, aircraft carrier refueling systems and aircraft such as the A-10. The Defense Department could renew this line of attack, but it may be reminded of the old adage that repeating the same thing over and over and expecting a different outcome is the definition of insanity. The Pentagon will have to change its approach here by offering more incentives to states and districts that could be affected by the elimination of squadrons or units, and it has to be more forceful in confronting contractors whose net interests are harmed by such moves. A final thought is how contractors' strategies might change. In 2020 and so far in 2021, outperformance was evidenced by small-to-midsize contractors that appeared better aligned with Pentagon investment priorities in artificial intelligence, autonomy, supply chain resilience and low-cost weapons. The largest contractors may be able to unlock value in a flat top-line environment if they can spin off segments that are stagnant or declining. Sprawling program portfolios are apt to perform more in line with market growth rates, and that is not a recipe for superior performance. https://aviationweek.com/defense-space/budget-policy-operations/opinion-are-flat-pentagon-budgets-new-or-new-down

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  October 1, 2018 | International, Aerospace

  Critics point out holes in Swiss government’s $8.2 billion ‘Air 2030’ plan

  By: Sebastian Sprenger COLOGNE, Germany — The Swiss are choosing sides over how to shepherd an $8.2 billion package of new combat aircraft and air-defense equipment through the country's unique political process. Defence Minister Guy Parmelin favors subjecting the “Air 2030” program to a public referendum, eyed for 2020. If approved, that step could secure the population's thumbs-up for a blank check covering the cost of the entire project while leaving the administration to sort out the details of which planes to buy and how to split the aerial and ground components. This course of action is still preferred, a defense department spokesman told Defense News on Thursday, even though opposition to the plan became increasingly evident as the public feedback period ended Sept. 22. For now, there appears to be support across the major political parties for the main objectives of Air 2030, which aims to replace the country's aging fleet of F-18 and F-5 combat aircraft and install new ground-based weapons against aerial threats. But critics in parliament contend that the risk of a referendum defeat is too high, arguing nothing less than that the very future of the Swiss military is at stake. Depending on which political party is asked, some prefer putting the project out for separate votes for the larger aircraft portion, estimated at roughly $6 billion, and the ground segment. But others want the government to proceed without any referendum at all, arguing that the program — despite its hefty price tag — should be treated like other critical government purchases. The government's strategy of seeking popular approval only for the broad contours of Air 2030 follows the still-fresh memories of a failed attempt to replace the Swiss air-policing fleet. The population in 2014 voted against a measure to buy 22 Saab Gripen planes in a referendum that some analysts said was muddied by questions over the aircraft's specific capabilities and drawbacks. Swiss defense procurement agency Armasuisse on Monday invited bids for the ground-based program segment from the military sales offices of the United States, France and Israel. Those countries' anti-missile systems — Raytheon's Patriot, Eurosam's SAMP/T and Rafael's David's Sling — are expected to go toe-to-toe in a competition. For the aircraft portion, the Swiss in July invited bids from the Airbus Eurofighter, the Dassault Rafale, the Saab Gripen E, the Boeing F/A-18 Super Hornet and the Lockheed Martin F-35A. Armasuisse requested pricing proposals for a fleet of 30 or 40 planes. Meanwhile, government officials will sift through the fresh feedback from Swiss stakeholders — including political parties, regions and trade unions — in the coming months and formulate a measure for parliamentary debate by year's end, defense department spokesman Renato Kalbermatten told Defense News. And while the course of putting the entire investment plan out for a referendum remains the goal, there appears to be a willingness to adjust in case the risk of rejection is deemed to high. “We will put forward the best solution,” Kalbermatten said. https://www.defensenews.com/global/europe/2018/09/28/critics-see-big-holes-in-swiss-governments-82-billion-air-2030-plan