August 5, 2020 | International, Land

To keep weapon sales in place, US offers new options for payment

WASHINGTON — The United States is developing new options for arms customers as a way to ensure allies and partners don't drop planned procurements as the world economy remains in shock from the impacts of COVID 19.

Among the options, according to outgoing Defense Security Cooperation Agency head Lt. Gen. Charles Hooper, are allowing foreign countries to finance arms procurement through U.S. bank loans and altering existing payment schedules to stretch the costs over time.

“The bottom line here is, we are willing to work with our allies and partners, when they raise the challenges that they have, to find ways for them to continue to buy American and to ensure that they can pay for the equipment along a payment schedule that reflects their own economic conditions,” Hooper said.

During an exclusive exit interview with Defense News, Hooper declined to say which countries have already approached his agency about economic impact from the disease, but said that there are “certainly” customer nations that have reached out.

“There are partners that, we're already seeing that they are having challenges. So we're standing ready to work with them. As soon as we can gain an appreciation and the understanding of the challenges, we can find ways to help them,” Hooper said.

Hooper talked with Defense News two weeks before his Aug. 3 retirement. He is succeeded by Heidi Grant, the head of the Defense Security Technology Administration, a move that marks the first time a civilian has led the office since a previous agency was recognized into the current DSCA structure in 1998. The general expressed no concerns over that move, in large part, he said, because of Grant, a fixture in the international security cooperation world.

Grant will have to hit the ground running, given the potential impact from COVID on the world economies. The good news, Hooper said, is that by March, DSCA had concluded that the global economy would be hurt by the disease and set up an interagency working group, called the Operations Planning Group, to study program-level impacts from global trends and develop solutions.

The first step Hooper's team took was to revise the collection process of foreign payment in order to make them “a bit more flexible, to accommodate those partners that may be having some economic difficulties or may have reprioritized their budgets towards for example, economic recovery and away from defense.”

Those options include delaying payments on planned procurements to future years, creating new payment plans for ongoing procurement efforts, and returning funds currently on deposit with the United States to the customer nations as well as new financing strategies.

“One of the things we did is we are allowing our partners to draw on standby letters of credit from foreign banks operating in the United States, according to U.S. banking rules,” Hooper explained. “That offers a nation an opportunity to draw, for example, in that case, a standby letter of credit on one of their banks that operates in the United States, under United States banking rules, which ensures that there's no fiduciary risk to the United States.”

DSCA officials had been considering adding such an option for some time, but the economic downturn pushed the agency to start offering it for customer nations, Hooper added. Lucie Béraud-Sudreau, director of the Arms and Military Expenditure Programme at the Stockholm International Peace Research Institute, said that option sounds different from funding plans that have existed for some time in Europe, where specific entities in countries are responsible for guaranteeing arms-recipient states' loans thanks to the state treasury.

“There are a number of economic factors globally, that we anticipate will likely have an impact on country's abilities to move forward,” Hooper said. “Obviously, energy prices are lower, and those countries all over the world that specialize in energy are going to see a fall in revenue. We see countries that, as a result of the pandemic, are having to shift funds from their defense budgets to more domestic missions like economic recovery and other things.”

In addition to oil-reliant nations in the Middle East, Béraud-Sudreau said to watch the Pacific region, where “many countries have already decided to cut their military spending for this year, and planning decreases for 2021.” Indonesia, Thailand, South Korea, and the Philippines are among the nations that have already announced plans to cut defense spending, while Singapore is seeing delays in weapon deliveries due to supply chain issues.

“If there are limited orders in 2020-2021, there will be repercussions later on, as these companies work on long-term projects. Hence the pressure, on both sides of the Atlantic, for the defense sector to be part of economic recovery packages and high levels of military expenditure,” she said.

Over the course of his time at DSCA, Hooper oversaw almost 18,300 Foreign Military Sales actions, including 5,800 new agreements and various amendments and modifications to existing agreements, according to agency figures. He reduced three different surcharges on customers, saving customers millions of dollars as well. Also, timelines shrunk, with DSCA offering 50 percent of all new FMS cases that flow through the process to partner nations in 49 days or less by Hooper's exit.

And while Hooper did not want to preview what weapon sales totals for fiscal 2020 will be, he did say that the United States remains “on a very positive trajectory... We remain the global partner of choice. And I'm very optimistic that we're going to continue to see positive trends in our foreign military sales this year and in the years to come.”

https://www.defensenews.com/pentagon/2020/08/04/to-keep-weapon-sales-in-place-us-offers-new-options-for-payment/

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February 5, 2021 | International, Aerospace

Air Force study on future aerial refueling tanker could start in 2022
By: Valerie Insinna WASHINGTON — The Air Force could begin to lay out its vision for a future aerial refueling tanker, previously known as KC-Z, as early as next year, the head of Air Mobility Command said Monday. The service intends to conduct an analysis of alternatives for an advanced aerial refueling aircraft in fiscal year 2022, AMC commander Gen. Jacqueline Van Ovost said during a Defense Writers Group meeting with reporters. That study will help the Air Force determine precisely which capabilities a future tanker will need to to operate in more heavily contested battlefields against the threats posed by nations such as Russia and China. “We're thinking about the near peer [competition], and what we need for a near peer [competition],” she said. Key to that discussion is figuring out how much of the aerial refueling process can be performed without a human pilot or boom operator onboard the plane to fly it or give other aircraft gas. “Is going to be autonomous? Is it going to be pilot on the loop [or] pilot in the loop capability?” asked Van Ovost. “Is it going to be small? Is it going to be large? What kind of [self protection] is it going to have? What kind of electromagnetic spectrum capabilities is it going to have to both protect itself and enhance the lethality of the Joint Force while it's out there?” In April, Will Roper, then the Air Force's top acquisition official, told reporters that an agreement with Boeing for a new and improved KC-46 vision system could pave the way for autonomous aerial refueling. The addition of 4K high-definition cameras, modern processors and LiDAR (light detecting and ranging) sensors would help the new system accumulate much of the data necessary for a computer to correctly calculate all the variables that need to be solved for safe aerial refueling. “All you have to do is take that data that tells the world inside the jet the reality of geometries between the airplane and the boom outside the jet. Once you have that, you simply need to translate it into algorithms that allow the tanker to tank itself,” Roper said then. The Air Force is not the only service interested in automated aerial refueling. The Navy is flight testing the MQ-25 Stingray aerial refueling drone — which, like the Air Force's new KC-46 tanker, is built by Boeing. The Navy eventually hopes to operate the MQ-25 onboard aircraft carriers, where it will be used to extend the range of fighter jets like the F-35C and F/A-18EF Super Hornet. Van Ovost acknowledged the Air Force is still years away from being able to hold a competition for the platform formerly known as KC-Z. After the Air Force completes its procurement of 179 KC-46s — which, if its current buy rate holds, will occur around the 2027 timeframe — the service will buy a non-developmental “bridge tanker,” she said. That effort, which replaces the KC-Y program, will likely be a battle between Boeing and an Airbus-Lockheed Martin team, which joined forces in 2018 to market Airbus' A330 Multi-Role Tanker Transport to the U.S. Air Force. Both teams are expected to offer upgraded versions of their current aerial refueling aircraft. Van Ovost did not say when that competition will begin. Along with tackling questions about its future tanker, the Air Force is also set to begin a business case analysis whether to pursue contracted aerial refueling to support U.S. military training and test activities across the contiguous United States. After holding a December 2019 industry day with interested vendors, Air Mobility Command conducted a study into the feasibility and affordability of commercial air refueling services and submitted a proposal to Air Force leadership. However, Air Force leaders want more information before making a final decision, and have asked for a comprehensive business case analysis that would finalize a requirement for all of the services' needs, Van Ovost said. The study would come up with options for various contracting models — which could include tankers that are leased to the government or contractor-owned and operated — as well as hammer out details on Federal Aviation Administration certification requirements. “We're working with headquarters Air Force to finalize the parameters for the study, and then likely will be contracting out that study,” Van Ovost said. “And for expectation's sake, it does take a while. These kinds of business case analysis we have seen take 18 months, so we are going to put pen to paper and take a very close look at it.” https://www.defensenews.com/air/2021/02/02/air-force-study-on-future-aerial-refueling-tanker-could-start-in-2022
August 20, 2020 | International, Aerospace

Aviation firms Aero Precision, Kellstrom Defense merge
by Marc Selinger US-based Aero Precision and Kellstrom Defense have merged their operations to form a military aircraft sustainment firm named AllClear, according to a 17 August announcement. The combined entity, which is privately owned, supports “over 40 platforms” for the US military and allied forces. It is based in El Segundo, California, where Kellstrom was headquartered, and its CEO is Darryl Mayhorn, who previously led Aero Precision. AllClear said it has been integrating the two companies since March, when Aero Precision, which was a parts distribution firm, acquired Kellstrom, which specialised in maintenance, repairs, and overhauls. When the acquisition occurred, Aero Precision said the deal would streamline sustainment by creating a “new bundle of parts and services”. https://www.janes.com/defence-news/news-detail/aviation-firms-aero-precision-kellstrom-defense-merge
August 3, 2021 | International, Aerospace

Turkmenistan Emerges As Undisclosed M-346FA Customer | Aviation Week Network
Turkmenistan has emerged as the launch customer for the light attack version of Leonardo’s M-346 jet trainer after the country’s president took a flight in one of the aircraft shortly after delivery.

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To keep weapon sales in place, US offers new options for payment

On the same subject

Turkmenistan Emerges As Undisclosed M-346FA Customer | Aviation Week Network Turkmenistan has emerged as the launch customer for the light attack version of Leonardo’s M-346 jet trainer after the country’s president took a flight in one of the aircraft shortly after delivery.

Turkmenistan Emerges As Undisclosed M-346FA Customer | Aviation Week Network
Turkmenistan has emerged as the launch customer for the light attack version of Leonardo’s M-346 jet trainer after the country’s president took a flight in one of the aircraft shortly after delivery.