Back to news

August 14, 2018 | International, Naval

US Navy’s focus on rapid acquisition is opening up opportunities for Europe


WASHINGTON — The U.S. Navy intends to get much bigger, and that has meant new openings for European companies in the U.S. defense market.

The Navy's new over-the-horizon missile destined for the littoral combat ship and the future frigate was recently awarded to the Norwegian firm Kongsberg, in partnership with U.S. company Raytheon, for its Naval Strike Missile.

The future frigate program itself has awarded contracts to Spain's Navantia and Italy's Fincantieri for design work before the Navy selects a design later this year, meaning the service's next surface combatant may be a European design. And for the Navy's future training helicopter, both Franco-Dutch company Airbus and Italian firm Leonardo are top competitors for that program.

Analysts say the Navy's recent surge in interest has been spurred by a confluence of circumstances that could mean even more opportunities for foreign companies looking to break into the U.S. market.

Increased defense budgets are one reason the European companies have been seeing more business from the Navy and other American military branches. But a shift in the way the Defense Department tries to fill capabilities gaps has made the space more competitive for overseas firms, said Dan Gouré, a defense analyst with the Lexington Institute think tank.

As the Navy and other services have shifted toward great power competition, it has found a number of capabilities that were not hugely important in a unipolar world have again become requirements with the reemergence of Russia and the rise of China as security threats. One such area is the small surface combatant, or FFG(X) program, which would be needed to escort supply convoys and work as a survivable sensor node in a larger surface combatant network.

“With the frigate, for example, we hadn't built one of those in 40 years, but the Europeans have been building them for decades,” Gouré noted. “And if we needed a diesel-electric sub, they'd of course be the first in line.”

This emphasis on speed of acquisition has also helped because the Navy and the rest of the Department of Defense are reluctant to get tied down by a yearslong, inevitably over-budget development process unless necessary, Gouré said.

“The trend has been toward [other transaction authority] contracts, and that has made the European companies credible competitors,” he said.

Another factor is that the Navy has been more willing to make trades on capabilities, said Bryan Clark, an analyst with the Center for Strategic and Budgetary Assessments.

“I think what's new is that the Navy is openly seeking foreign proposals for some of these major new programs,” Clark said. “Foreign companies have always been able to submit proposals in response to RFPs, but usually they don't offer the high-end capability the U.S. is usually seeking.

“The big change is that the Navy is willing to get a less-sophisticated capability in to get a design that is more mature.”

In the case of the Navy's trainer helicopter competition, past success with European companies inside the DoD could be a driving factor in Airbus' and Leonardo's competitive bids.

Airbus' North American division has been successful with the U.S. Army's Lakota program, built by Airbus Helicopters in Columbus, Mississippi, which is where the company would build its H135 helicopter if selected for the program. The Army has been happy with Lakota, so much so that it has been pushing to buy more of the airframes despite legal battles over the contracts.

But the success of Airbus Helicopters with the Army is possible for much the same reason that, for example, Australian-owned Austal USA has been successful building both the trimaran version of the littoral combat ship and the expeditionary fast transport: a major manufacturing infrastructure investment in the United States.

And that kind of cash outlay for a program can scare away European competitors. Getting around “Buy American” provisions would literally take an act of Congress. Despite having already developed, tested and fielded the capability the Navy wants, Kongsberg had to team with American defense giant Raytheon to sell its missile to the DoD.

The “Buy American” provisions laid down and regularly upheld by Congress for defense procurement does have protectionist overtones, but there is a national security argument as well. In the event of a major, protracted conflict with Russia or China, it wouldn't be advantageous to have major suppliers located an ocean away or in occupied territory.

And maintaining the industrial base has long been a concern of the U.S. Navy because of the limited the number of trained workers with experience who are building ships and nuclear reactors.

Navy officials have testified that the shrinking industrial base, including the shipbuilders and the litany of subcontractors and vendors, is a significant concern. In 2015, then-head of the Navy's research, development and acquisition office Sean Stackley testified before Congress that some of the shipyards were just a contract away from going under.

“We have eight shipyards currently building U.S. Navy ships. And of those eight shipyards, about half of them are a single contract away from being what I would call ‘not viable,' ” Stackley told the Senate Armed Services Committee. “In other words, the workload drops below the point at which the shipyard can sustain the investment that it needs to be competitive and the loss of skilled labor that comes with the breakage of a contract.”

On the same subject

  • Can Army Futures Command Overcome Decades Of Dysfunction?

    August 28, 2018 | International, Aerospace, Land

    Can Army Futures Command Overcome Decades Of Dysfunction?

    By SYDNEY J. FREEDBERG JR. ARMY S&T CONFERENCE: How broken is the procurement system the new Army Futures Command was created to fix? It's not just the billions wasted on cancelled weapons programs. It's also the months wasted because, until now, there has not been one commander who can crack feuding bureaucrats' heads together and make them stop bickering over, literally, inches. “I have not always been an Army Futures Command fan,” retired Lt. Gen. Tom Spoehr told the National Defense Industrial Association conference here. But as he thought about his own decades in Army acquisition, he's come around. How bad could things get? When he was working in the Army resourcing office (staff section G-8), Spoehr recalled, the Army signals school at Fort Gordon wanted a new radio test kit that could fit in a six-inch cargo pocket. The radio procurement programmanager, part of an entirely separate organization, reported back there was nothing on the market under eight inches. The requirements office insisted on sixinches, the acquisition office insisted they had no money to develop something smaller than the existing eight-inchers, and memos shot back and forth for months. At last, Spoehr warned both sides that if they didn't come to some agreement, he'd kill the funding. Suddenly Fort Gordon rewrote the requirement from “fit in a cargo pocket” to “cargo pouch” and the procurement people could go buy an eight-inch kit. That kind of disconnected dithering is what Army Futures Command is intended to prevent. “I had the money, but nobody really had control of all of this,” Spoehr said. As a result, he said, “we probably spent six months trading memos back and forth on the size of the radio frequency test kit.” Multiplying that by thousands of requirements over hundreds of systems, and the wasted time and money gets pretty bad. But what's often worse is when the requirements are unrealistic and no one pushes back. Most notoriously ,Chief of Staff Eric Shinseki demanded easily airlifted Future Combat Systems vehicles that weighed less than 20 tons but had the combat power of a 60-ton M1 Abrams tank. The designs eventually grew to 26 tons, and the performance requirements came down, but by then FCS had lost the confidence of both Congress and Defense Secretary Bob Gates, who canceled it in 2009. It was another casualty of overly ambitious requirements drawn up by staff officers in isolation from the people who'd actually have to build them. Army Futures Command is structured to force those two groups to talk to each other from the start. Full article:

  • UAE's Edge Group to release tube-launched Hunter 10 drone in 2023

    February 18, 2022 | International, Aerospace

    UAE's Edge Group to release tube-launched Hunter 10 drone in 2023

    The first prototype of the Hunter 10 was unveiled during the 2021 Dubai Airshow near its 58-kilogram tube launcher.

  • US Navy shipbuilders’ union approves labor pact at Bath Iron Works

    August 21, 2023 | International, Naval

    US Navy shipbuilders’ union approves labor pact at Bath Iron Works

    Workers are receiving an increase in contributions to their national pension plan while health insurance costs will grow.

All news