14 décembre 2017 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité
WASHINGTON — A large number of American companies supplying the U.S. military may have left the defense market, according to a study announced Thursday, raising alarm over the health and future of the defense industrial base.
The Center for Strategic and International Studies study said the number of first-tier prime vendors declined by roughly 17,000 companies, or roughly 20 percent, between 2011 and 2015.
The full study, due to be released in January, was authored by CSIS Defense-Industrial Initiatives Group Director Andrew Hunter, Deputy Director Gregory Sanders and Research Associate Rhys McCormick. It was sponsored by the Naval Postgraduate School and co-produced by the Aerospace Industries Association, which released an executive summary on Dec. 14, the day of its annual aerospace and defense luncheon in Washington.
The authors, who used publicly available contract data, write that it's unclear — due to the limitations in the subcontract database —whether the companies have exited the industrial base entirely or still perform work at the lower tiers.
“There is no doubt that a huge portion of the recent turbulence in the defense industrial base has taken place among subcontractors, who are less equipped to tolerate the defense marketplace's funding uncertainly and often onerous regulatory regime — yet it remains extremely difficult to determine the real impact of these conditions on subcontractors,” the authors conclude.
Further details may yet be revealed by the Trump administration's ongoing review of the resiliency of the defense-industrial base. Defense Secretary Jim Mattis' assessment is due to President Donald Trump by mid-April 2018.
The CSIS summary links 2011 Budget Control Act caps, subsequent short-term budget agreements, and Congress' “unpredictable and inconsistent” appropriations process to the “lost suppliers, changes in competition and market structure, and other turmoil” it found. The years 2011-2015 are considered a period of defense drawdown and decline.
The authors, rather than focus strictly on the total decline of defense contract obligations over the entire period, chose to chart the “whipsaw” effect that struck certain sectors of the industrial base amid the imposition of sequestration in 2013 and subsequent budget caps.
Though the defense budget had been declining in the years leading up to the Budget Control Act, the implementation of an across-the-board sequestration budget cut in 2013 “marked a severe market shock that had a considerable impact on the defense industry,” the authors say.
Compared to the pre-drawdown fiscal 2009-2010 period, the start of the drawdown in fiscal 2011-2012, average annual defense contract obligations dropped 5 percent. When sequestration was triggered in fiscal 2013, defense contract obligations dropped 15 percent from the previous year. Average annual defense contract obligations fell 23 percent during the so-called BCA decline period, fiscal 2013-2015.
The Army, which has a checkered modernization history, bore the brunt of the decline. Average annual defense contracts dropped 18 percent at the start of the drawdown, then 35 percent during the BCA decline period.
Missile defense contract obligations actually gained 7 percent at the start of the drawdown and then dropped only 3 percent under budget caps. During his presidency, Barack Obama reversed course from early cuts to missile defense to spur the development and deployment of missile defense systems in Europe, Asia and the Middle East.
Lockheed Martin CEO Marillyn Hewson reacted to the internally circulated findings earlier this month, saying budget cuts are responsible for the industry being “more fragile and less flexible than I've seen it, and I've been in the industry many, many years.”
“What we've seen in the industry, I'll give you an example at Lockheed Martin: At the outset of budget cuts we were about 126,000 employees; today we are at 97,000 employees,” Hewson said at the Reagan National Defense Forum in California. “Our footprint has shrunk dramatically. We see some of our small and medium-sized business, some of the components that we need, there's one, maybe two suppliers in that field where there were many, many more before.”
Budget cuts have squeezed the Defense Department to unduly prioritize low-cost contracts over innovation and investment. Cost “shootouts,” she said, are endangering the military's plans to grow in size and lethality.
AIA Vice President for National Security Policy John Luddy said companies have coped through a variety of “healthy efficiencies,” such as mergers and acquisitions, consolidating facilities, exploring shared services, and offloading certain contracting activities.
“Our companies have done an amazing job of managing the downturn, they've pulled all kinds of levels to make it work, they've shown the ingenuity of the American free market system,” Luddy said. “Nonetheless, the uncertainty of the budgeting process has become a huge challenge for us.”
Army Secretary Mark Esper, formerly of Raytheon, warned lawmakers at a Senate hearing Dec. 7 that uneven funding is driving small suppliers — “an engine of innovation” — out of the defense sector.
“If you're a small mom and pop shop out there, and I'm referring to my industry experience, it's hard for them to survive in the uncertain budgetary environment,” Esper said. “And we risk losing those folks who may over time decide that they're going to get out of the defense business and go elsewhere. So that's a big threat to our supply chains.”
But the CSIS study found that small vendors either increased their share of platform portfolio contract obligations or held steady, while large and medium vendors were most harmed by the market shock from sequestration and the defense drawdown.
14 mai 2021 | International, Naval
The government cautions that the ship will traverse “one of the roughest seas in the world,” where waves regularly exceed 33 feet and some are more than 66 feet high.
10 décembre 2020 | International, Aérospatial
By: Vivienne Machi   STUTTGART, Germany — After the decade that has been the year 2020, it may seem like 2040 is centuries away. But for Airbus, the scheduled in-service date for Europe's next-generation combat aircraft and weapon system feels just around the corner. The Future Combat Air System (FCAS) industry partners have made significant progress on the pan-European, multi-system effort despite the hurdles of the COVID-19 pandemic. However, Airbus, along with its co-contractors Dassault Aviation and Indra, face a “very tough roadmap” to finalize system designs, begin preliminary development, launch production, and get the systems into service, said Bruno Fichefeux, FCAS leader for Airbus, during the company's annual trade media briefing Dec. 9. The 18-month Joint Concept Study and Phase 1A of the demonstrator portion are progressing well, but the companies need to move quickly to reach key technology maturation phases, he said. “This is a major de-risking and speeding approach towards the future development program, to ensure that we are on time on expectation.” France, Germany and Spain have teamed up on the FCAS program, which includes seven next-generation technology pillars: a sixth-generation fighter jet, multiple “remote carrier” drones, a next-generation weapon system, a brand new jet engine, advanced sensors and stealth technologies, and an “air combat cloud.” In September, the nations' three air forces worked together to down-select the five preferred architectures that will help inform the program's follow-on phases, Fichefeux said at the virtual briefing. The goal for 2021 is for FCAS to enter the preliminary demonstrator development phase for the next-generation fighter and the remote carrier aircraft. Those contracts are currently in negotiations, he noted. Starting in 2021, the FCAS will go from spending a “few million” euros to “billions,” he added. “It's a massive step forward [that] we want to initiate next year.” Observers can expect to see some major design choices after those negotiations are complete; for example, whether the next-generation fighter will have one or two seats, Fichefeux said. Airbus' unmanned aerial systems team has moved forward with efforts related to the remote carrier and manned-unmanned teaming technologies. Jana Rosenmann, the company's UAS leader, said at the briefing that her team had submitted their proposal for Phase 1B of the FCAS demonstrator portion that is scheduled to begin next year. The team is studying two remote carrier designs. “We are looking at both a smaller, expendable remote carrier, as well as a larger, conventional-sized remote carrier, looking in the direction of a loyal wingman to fly together with the combat aircraft,” Rosenmann said. Airbus is the lead contractor for the remote carrier pillar. The program has some new partners on board, Fichefeux shared Wednesday. In April, Airbus teamed up with the German Ministry of Defence for an eight-month pilot program bringing non-traditional startups and research institutes into the FCAS fold. Eighteen organizations worked on 14 separate program elements, spanning the entire range of technology pillars. Those efforts have led to concrete results, to include a first flight-test-approved launcher of an unmanned aerial system from a transport aircraft; a secure combat cloud demonstrator; and a demonstrator of applied artificial intelligence on radio frequency analysis. These 18 partners could be picked up for subcontracts later on in the program, Fichefeux noted. The plan is to “mature these pilots step by step, and then it could develop into real contracting participation within the FCAS development,” he said. “There is a perspective to bring them on board at a later stage.” Meanwhile, Airbus also announced Wednesday that its Spanish subsidiary was selected as lead contractor for the low-observability pillar of the program. Airbus Spain will also lead Madrid's contribution to the next-generation fighter pillar. Indra serves as national lead for the entire program since Spain joined FCAS in early 2020, and also heads the sensor pillar while contributing to the combat cloud and simulations efforts. The finalization of the low-observability contract “completes Spain's onboarding as an equal nation across all FCAS activities,” Airbus said in a release. “The signature closes a ten-month process of onboarding Spain as the third nation.” The program will begin testing low-observability technologies early in the demonstrator phase, Fichefeux confirmed. Both the fighter aircraft demonstrator and the remote carrier will have stealth capabilities when they begin flight tests, which are expected as early as 2026. Then the team will need to work on issues such as how to factor in the future engine's heat signature, and how to integrate sensors and antennae, Fichefeux said. Low-observability “is part of almost all pillars, and the aim of this maturation is to prove” what works and what won't work, he noted. Along with a personal deadline, the FCAS program may also face schedule pressure from Europe's second sixth-generation fighter program. The United Kingdom, Italy and Sweden have teamed up on the Tempest program, with a current goal of delivering new fighter aircraft to the nations' militaries by 2035. When asked whether the two fighter programs may converge at some point, Fichefeux noted that that would ultimately be a government decision. “That is our responsibility, on the industry side, is just not to lose time waiting,” he said. “If the governments want to define a path of convergence, we will support it in due time.” https://www.defensenews.com/global/europe/2020/12/09/despite-progress-industry-faces-very-tough-roadmap-to-field-fcas-by-2040/
6 juin 2023 | International, Aérospatial
The Air Force is considering skipping a competition for its interim tanker and instead buying more modified KC-46s for Boeing.