19 mai 2020 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

A $17 Billion Pot of National-Security Stimulus Aid Goes Begging

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There's a $17 billion pot of money in the pandemic aid package for companies vital to national security -- and no one seems to want it.

The $2 trillion rescue package Congress adopted in late March includes loans and loan guarantees specifically for companies “critical to maintaining national security.” The funds at first were seen as largely directed at Boeing Co., which at the time had been pleading for a government bailout. But after selling $25 billion in bonds to investors, the aircraft maker turned down the aid, which would have come with strings attached that it didn't like.

With the $17 billion up for grabs, the U.S. defense industry is asking the Trump administration to change the criteria for getting some of it, arguing that the terms are too strict.

The Treasury Department, which has sole authority over the $17 billion, has limited the companies that qualify to those whose work is designated DX, which means it ranks highest on the military's list of national priorities, or to companies that have facilities with top-secret security clearances.

Only about 20 companies applied by the May 1 deadline, according to the Defense Department. There are about 300,000 companies in the Pentagon's contractor supply chain.

Earlier: Defense Firms to Vie for Virus Aid With Boeing Weighing Options

“What we're hearing across the board is that the restrictions and requirements on the money are pretty onerous, and a majority of companies just can't apply for the money,” said Hawk Carlisle, president of the National Defense Industrial Association, which represents defense contractors.

It's another example of the Trump administration's struggle to help businesses that have been decimated by the pandemic. The initial round of $349 billion aimed at small businesses sparked outrage after large restaurant chains, a professional basketball franchise and numerous publicly traded companies were able to get money while mom-and-pop businesses were shut out.

Treasury has approved about $25 billion out of the $35 billion that Congress allocated for payroll assistance to airlines and cargo carriers.

Earlier: American Gets Most as Biggest Airlines Win Bulk of U.S. Aid

On Tuesday, Democratic Senator Maria Cantwell of Washington asked Treasury Secretary Steven Mnuchin to broaden the criteria for qualifying for loans and reopen the application process.

“Treasury's implementation of the loan program has not adequately addressed the needs of the aerospace supply chain and its workforce, which is fundamental to America's industrial base,” she wrote.

It's not just the defense industry raising concerns. Ellen Lord, the Defense Department's top acquisition official, told reporters last month that Treasury's criteria may have prevented companies with the greatest need from qualifying.

“We have talked with them several times; they have reached out to us,” Lord said. “I am not sure companies with DX-rated contracts are perhaps the ones that have the most critical needs.” She said suppliers already have been giving DX programs priority, which they are required to do under Pentagon rules.

The Treasury Department didn't respond to requests for comment.

Congress stipulated that companies receiving the national-security loans must provide the government with warrants, equity or senior debt securities and agree to limits on dividends, stock buybacks and executive pay.

But it's Treasury's additional criteria that defense firms say are too narrow. It restricted loans to two groups: those with a contract with the DX rating or those with facilities that have top-secret security clearances.

Eric Fanning, president of the Aerospace Industries Association, whose members include Lockheed Martin Corp. and BAE Systems Plc, said the criteria should be broadened to cover more companies.

A Pentagon spokesman, Air Force Lieutenant Colonel Mike Andrews, said in an email that the Defense Department has determined that only a few programs required a DX rating, but opted to stop releasing their names as of December 2018.

Before that, the Pentagon had said there are about a dozen DX programs, including those for the Minuteman III ICBM program, the B-2 bomber, presidential aircraft, missile warning satellites and nuclear-missile submarines. Some of the major companies involved are Boeing, Lockheed Martin, Northrop Grumman Corp. and General Dynamics Corp.

The Pentagon doesn't track the number of companies that possess top-secret clearances, but only the number of facilities cleared at that level, spokeswoman Cynthia McGovern said in an email.

Like Boeing, the large companies that might qualify for the Treasury loans are able to tap the capital markets to meet their financing needs, especially now that the Federal Reserve is pumping hundreds of billions of dollars into debt markets by buying corporate bonds and bond funds.

Earlier: Here's Where $881 Billion in U.S. Aid Went in Month of Spending

The Pentagon is helping by increasing progress payments by $3 billion and speeding up those payments to contractors, which range from the biggest makers of weapons systems to the more numerous, lower-tier suppliers of everything from software to uniforms.

But many contractors also rely on commercial deals to supplement their government work. With the airline industry facing a sharp and lengthy contraction, aviation suppliers could see a greater need for rescue financing in the near future, said Fanning of the aerospace industry group.

Boeing, for example, in late April said it's shrinking its workforce by about 10%, or about 16,000 jobs, to conserve cash. General Electric Co. is cutting about 13,000 jobs in its jet-engine operation. Spirit AeroSystems Holdings Inc., a supplier to Airbus and Boeing, is also cutting jobs.

“We don't have a sense yet of where the stress points are in the industrial base,” Fanning said. “The health of supply chains can take a while to sort out and show where there are problems.”

https://www.bloomberg.com/news/articles/2020-05-14/a-17-billion-pot-of-national-security-stimulus-aid-goes-begging

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  • US Air Force orders freeze on public outreach

    13 mars 2018 | International, Aérospatial

    US Air Force orders freeze on public outreach

    By: Valerie Insinna , David B. Larter , and Aaron Mehta WASHINGTON — The Air Force is slashing access to media embeds, base visits and interviews as it seeks to put the entire public affairs apparatus through retraining — a move it says is necessary for operational security, but one which could lead to a broader freeze in how the service interacts with the public. According to March 1 guidance obtained by Defense News, public affairs officials and commanders down to the wing level must go through new training on how to avoid divulging sensitive information before being allowed to interact with the press. The effort, which represents the third major Defense Department entity to push out guidance restricting public communication over the past 18 months, creates a massive information bureaucracy in which even the most benign human-interest stories must be cleared at the four-star command level. Before settling on retraining its public affairs corps and commanders, the service considered an even more drastic step: shutting down all engagement with the press for a 120-day period, a source with knowledge of the discussions said. Instead, the service settled on the retraining plan, a temporary move which Brig. Gen. Ed Thomas, director of public affairs, said could be completed “in the coming weeks.” “In today's challenging information environment marked by great power competition, we will continue to be as transparent with the American public as possible while protecting sensitive information on our operations and capabilities,” Thomas told Defense News. “We owe both to the public, and it is vitally important for the public to understand what we are doing on their behalf and with their tax dollars.” But two former Air Force secretaries and an influential congressman all raise the same concern: that intentionally or not, this will send a message that engaging with the public simply isn't worth the risk. Rep. Mike Gallagher, R-Wis., told Defense News the memo fits into a trend of recent moves inside the Defense Department towards less transparency, which could ultimately undermine DoD's efforts to address long-standing problems. Gallagher serves on the Seapower and Projection Forces Subcommittee, which oversees several key Air Force programs like the B-21 bomber. “I fully support the National Defense Strategy's focus on great power competition,” Gallagher told Defense News, “but I think the department has it backwards; It is precisely because of the scale of the challenges before us that transparency is more important than ever. I worry that by failing to discuss problems, we will only ensure there is no public pressure to fix them.” Shrinking Air Force access The renewed focus on operational security stems from the Trump administration's recently released national defense strategy, according to the Air Force guidance. That document, which was marked as “for official use only,” was distributed to public affairs officials following a February 2018 memo on operational security signed by Air Force Secretary Heather Wilson and Chief of Staff Gen. Dave Goldfein. “As we engage the public, we must avoid giving insights to our adversaries which could erode military advantage,” the March 2018 guidance read. “We must now adapt to the reemergence of great power competition and the reality that our adversaries are learning from what we say in public.” Until wing-level spokesmen have been certified by their corresponding major command, responses to reporter queries that potentially could include details about “operations, training or exercises, readiness or other issues which may reveal operational information to potential adversaries” are subject to approval by the Air Force's public affairs headquarters at the Pentagon, known as Secretary of the Air Force Public Affairs or SAF/PA. Exceptions can be made for human interest stories, community engagement pieces or other lighter, fluffier news, which can be approved by major command public officials. What this means is that if public affairs officials at Lackland Air Force Base in Texas haven't received their training, a local story about military working dogs would need the approval of Air Education and Training Command before being allowed to proceed with an interview or any engagement. Beyond limiting the Air Force's interactions with journalists, the new guidelines pose new restrictions on public appearances such as air show demonstrations, trade shows, industry conferences and think tank events, which can move forward if authorized by SAF/PA's engagement division. And although Air Force band performances will be permitted to continue, all band members who interact with the media must receive training from public affairs. Exactly what constitutes sensitive information is unclear. The Air Force's guidance lays out “potential engagement areas” alongside topics that could possibly pose “operational security risks.” Classified information and vulnerabilities are included in the latter area, but so are details about flag exercises, the number and location of operational assets, or information related to current readiness — some of which are routinely shared with the public. The guidance notes that “neither list is all inclusive,” and that public affairs professionals “use sound discretion and exercise discretion when evaluating all engagement opportunities.” Pausing a turnaround The guidance comes as the Air Force was finally repairing a damaged public affairs reputation. The service infamously clamped down on talking after the 2008 firing of both its chief of staff and service secretary, which had a chilling effect across the service. The situation culminated in a 2016 informal poll by Foreign Policy magazine, which found reporters ranking the Air Force as the worst service to deal with. That result resonated heavily within Air Force leadership, triggering promises of more open lines of communication. Deborah Lee James, Wilson's predecessor as Air Force secretary, told Defense News it was her belief the service needs to be more open, not less. “I have not seen the memo. However, I am sorry to hear about this development. If true, it certainly runs against the grain for what I tried to do as secretary of the Air Force,” James said. “Sometimes there's positive news to talk about, and our airmen can be the best communicators. Sometimes there's negative news to talk about. But much better that we be the ones to describe that news and frame it for the American people.” Whit Peters, who from 1997-2001 served as both Air Force secretary and undersecretary, acknowledged there are times when the military needs to keep information back for security reasons. He said the memo restrictions remind him of the way the service handled information during the conflict in Bosnia. But he also warned the memo may have a chilling effect far beyond its printed text. “The penumbra of this memo is worse than the memo itself. If you're already an Air Force officer, who is disinclined to talk to the press, this just gives you one more reason to think it is not career enhancing to talk to the press,” Peters said. “And that is unfortunate because the Air Force at all levels needs to be talking to the American public about what a valuable service it provides.” “I still think the Air Force does not do enough publicly to explain its mission and to explain why it needs to rejuvenate its whole fleet, both in air and space,” Peters continued. “So I would hope this doesn't get in the way of the Air Force telling its story on why it's important, and why it needs to be funded by the taxpayers.” The Navy: A Case Study A test case for the potential impact of the memo can be seen in the recent status of the Navy. In March 2017, Chief of Naval Operations Adm. John Richardson issued a memo that directed admirals to continue to engage with the media. But it also implored Navy officials not to give “too much” information — even unclassified information — in a public setting. “When it comes to specific operational capabilities however, very often less is more,” he said in the memo. “Sharing information about future operations and capabilities, even at the unclassified level, makes it easier for potential adversaries to gain an advantage.” The memo, which was broad and lacked specific guidance, created a persistent atmosphere of uncertainty throughout the Navy where leaders and program managers have been unsure about what they can talk about and what they can't. And last October, Secretary of Defense Jim Mattis released a memo calling for employees to be “vigilant” in preventing leaks. “It is a violation of our oath to divulge, in any fashion, non-public DoD information, classified or unclassified, to anyone without the required security clearance as well as a specific need to know in the performance of their duties,” he said. The information chill both inside the Navy and DoDwide has been noticed by lawmakers, who have called on the military to err on the side of transparency. Rep. Mike Gallagher, R-Wis., discusses the budget and transparency at the Surface Navy Association's annual symposium on Jan. 10, 2018. At a Navy conference in January, Gallagher dismissed Richardson's concerns about giving away secrets in the press, arguing that if the Navy doesn't talk about what it's doing, members of Congress can't convince their fellow members not on defense committees, let alone their constituents, that more resources are necessary. “Despite the old adage that ‘loose lips sink ships,' non-existent strategic communications can sink entire navies,” he continued. “If the bias is towards silence to prevent adversaries from finding out about unique capabilities or potential weaknesses: guess what, there will never be a public constituency for acquiring or mitigating them. “And, oh by the way, our adversaries probably have a decent idea of what we're up to anyways.” The powerful chairman of the House Armed Services Committee, Rep. Mac Thornberry (R-Texas), spoke out in January as well, saying that while secrecy is important, so is transparency, saying it makes a difference in DoD's bottom line. “As we've talked before, some of the folks in DoD are reluctant to talk too openly about our shortfalls because you're broadcasting that to your potential adversaries,” Thornberry said. “And I admit, it's a fine balance. But if we're going to convince my colleagues who are not on this committee, as well as the American people, to fix these things, I think we do have to at least talk somewhat openly about what our problems are.” https://www.defensenews.com/breaking-news/2018/03/13/air-force-orders-freeze-on-public-outreach/

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  • Navy Exercises $84.7 Million Option With Boeing For Three MQ-25A Stingrays

    3 avril 2020 | International, Naval

    Navy Exercises $84.7 Million Option With Boeing For Three MQ-25A Stingrays

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