Bill aims to strengthen contested logistics strategy in Pacific

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  26 janvier 2023 | International, Aérospatial

  Northrop eyes low-rate production contract for B-21 this year

  Northrop is wary of inflation and said more companies are pushing back on fixed-price contracts.

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  15 juillet 2020 | International, Aérospatial

  Funding for small launch providers still in question after withdrawal of $116M in contracts

  Valerie Insinna WASHINGTON — The U.S. Air Force's top acquisition official hopes money will materialize for small launch providers whose Defense Production Act contracts were withdrawn earlier this month due to a lack of funding. In mid-June, the Space and Missile Systems Center announced that it would award ride-share contracts to six firms by using funding meant to bolster companies made financially vulnerable by the coronavirus pandemic. However, the government in early July reversed course, recalling the $116 million designated for small launch providers because of “additional small business needs that were generated,” such as other government loan programs, said Will Roper, the Air Force's assistant secretary for acquisition, technology and logistics “My hope is that whenever there's new [Defense Production Act] Title 3 funding or when resource frees up due to other efforts not executing as planned, that those [contracts] are the first to go back into the hopper,” Roper told reporters Tuesday. “If I were asked today to put in one new Title 3 initiative, it's small launch because I think it's going to be an amazing industry base for this country, and if properly influenced, my military mission can be highly disruptive in future war fighting, especially if satellites can be put up in a very responsive way that changes the calculus for holding space assets at risk.” In the June announcement, SMC stated that Aevum, Astra, X-BOW, Rocket Lab USA, Space Vector and VOX Space would each receive sole-source contracts for two ride-share missions to be conducted over the next 24 months. But it may no longer be possible for the companies to get all $116 million originally set aside for those contracts, Roper acknowledged. “I don't know if that much will free up,” he said. “We have had quite a few come in lower than initially estimated. So it's possible that a resource will be freed, and whatever it is, we can scale some effort in small launch.” With venture capital drying up due to worldwide economic instability caused by the COVID-19 pandemic, Pentagon leaders have been vocal about the impact on the emerging small launch industry, which they see as a critical capability that could allow the Space Force to launch small satellites more cheaply and rapidly. In April, Undersecretary of Defense for Acquisition and Sustainment Ellen Lord labeled it — along with shipbuilding and aviation — as one of the three sectors the Defense Department was most concerned could be permanently impacted. “Much of the industry have limited flight capability or are in the critical transition from development to flight, and this funding restriction may prevent or delay these systems,” Col. Rob Bongiovi, director of SMC Launch Enterprise Systems Directorate, told C4ISRNET in April. “The Space and Missile Systems Center is evaluating the impacts to the small launch industrial base to consider actions to enable a robust U.S. launch industrial base.” https://www.c4isrnet.com/battlefield-tech/space/2020/07/14/funding-for-small-launch-providers-still-in-question-after-withdrawal-of-116m-in-contracts/

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  17 août 2020 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité

  Budget and pandemic present challenges to Russia’s defense industrial base

  By: Fenella McGerty The two Russian defense companies in this year's Top 100 list — air defense missile systems manufacturer Almaz-Antey and weapons developer Tactical Missiles Corporation JSC — have again fallen in rank. Almaz-Antey has fallen to 17th place from 8th and 15th in 2018 and 2019 respectively. Similarly, Tactical Missiles Corporation JSC has fallen to 35th place from 25th and 32nd in 2018 and 2019 respectively. The falling revenues of the companies this year reflect the difficult market conditions these enterprises are operating in as a result of the impact of COVID-19 on government budgets. Even before the pandemic and the consequent contraction in economic output emerged, the outlook for Russian defense spending was already subdued in light of persistently low oil prices in 2019. Domestic spending was further constrained this year as the oil price fell below $20 per barrel in April, with the projected average price for the year reaching just $40 per barrel. The International Monetary Fund forecasts a 6.6 percent contraction in Russia's real gross domestic product this year as lockdown measures to prevent the spread of COVID-19 subdued domestic and international economic activity, the latter further weakening global energy demand. The 4.1 percent growth projected for 2021 means the Russian economy will only return to pre-pandemic output in 2022. Last month, as part of wider measures to offset the bleaker fiscal setting, the Russian Ministry of Finance proposed a 5 percent reduction in financing for the state armament program over the next three years. Under the new plans, the 20 trillion rouble (U.S. $271 billion), 10-year military appropriations program (known as GPV 2027) that runs to 2027 covering defense procurement, repairs, research and development, and infrastructure investment will be reduced by a total of 225 billion roubles between 2021 and 2023. Wider defense funding could be reduced by as much 323 billion roubles. The previous state armament program (GPV 2020) saw significant increases enacted to defense investment between 2011 and 2016 as the country pursued ambitious modernization targets. As a proportion of GDP, the official Russian defense budget peaked in 2015 at 3.8 percent. If one includes wider defense spending items such as military pensions, social support and housing, total Russia expenditure accounted for as much at 4.8 percent of GDP that year. This period of significant defense investment helped to recover some lost ground from the previous two decades. Progress was remarkable but by no means comprehensive, with strategic nuclear forces and defense aerospace surpassing modernization targets, while maritime and land forces fared less well. Pockets of advanced capability — e.g., air defense, weapons, combat aircraft — evolved alongside less efficient entities that failed to deliver against the ambitions of GPV 2020. Nonetheless, as Russia approached the overarching target of 70 percent “modern” equipment within the armed forces inventory, defense spending increases slowed and the country moved from a period of dramatic capability buildup toward a sustainment phase — a move further presaged by wider economic constraints at the time As such, GPV 2027 is less ambitious than GPV 2020, and annual defense budget allocations have reflected this. Russian defense spending has been stagnant in real terms since 2017, as sanctions impacted government finances, energy revenues remained subdued and modernization ambitions were deemed close to fulfillment. Official projections of the budget for national defense saw slightly stronger growth in 2021 and 2022, although this was proposed in the months before the full economic ramifications of the pandemic were realized. Russian companies therefore face a tighter domestic market — as indeed will most countries in the wake of the pandemic — while the burden of debt has stifled investment in new technologies and R&D. This lack of funds to invest in research has created a further challenge for companies facing increasing political pressure domestically to diversify production efforts toward the civil market. The reported moves to restructure defense industry debt will ease some of the stress on companies and provide some temporary bandwidth with which to focus on investment. However, such moves will further constrain domestic defense spending, as funds to absolve debt will inevitably squeeze investment elsewhere in the budget. Perhaps on the positive side, the further weakening of the rouble against the dollar in 2020 has the potential to provide Russian defense equipment with an added price advantage in global defense markets and to facilitate exports. The comparatively cheaper kit will appeal to countries that find they have less investment funds at their disposal than a year ago. As competition in export markets intensifies and funding tightens, buyers may find they can demand greater industrial participation, partnership and technology transfer in moves to bolster self-sufficiency and resilience. Markets which have previously shown preference for Western equipment may find such capabilities are no longer affordable with Russia's relative willingness to offer favorable exchange rate agreements and flexible financing terms, offering a further advantage in constrained export markets. Fenella McGerty is a senior fellow for defense economics at the International Institute for Strategic Studies. https://www.defensenews.com/opinion/commentary/2020/08/17/budget-and-pandemic-present-challenges-to-russias-defense-industrial-base