28 août 2023 | International, Aérospatial, C4ISR
Pentagon unveils ‘Replicator’ drone program to compete with China
The program will seek to scale unmanned, attritable systems to offset China's bulk capacity, Hicks said.
7 août 2020 | International, Aérospatial, Naval, Terrestre, C4ISR, Sécurité
With billions of dollars at stake, let’s responsibly and deliberately spend America’s funds
By: Sen. Dick Durbin and Rep. Adam Smith
This week we broke a record: In the second quarter of 2020, the U.S. economy fell at an annual rate of 33 percent. As the largest annualized drop in our history, this staggering statistic underscores the breadth and depth of the coronavirus' effect across all industries, including the defense industrial base.
As Congress considers competing proposals for COVID-19 relief, we must ensure that any additional funds provided to the Department of Defense are targeted to protecting jobs and strengthening our industrial base. But we owe it to taxpayers to apply oversight and negotiate on their behalf. We cannot panic and hand out blank checks to defense contractors. To do so would set an irresponsible precedent for years to come.
Congress has acknowledged that our industrial base needs help during this pandemic. In March, the Coronavirus Aid, Relief, and Economic Security Act included a provision, Section 3610, to allow employees of federal contractors with critical skills to remain paid if the federal facilities where they work closed due to the pandemic. This additional flexibility would keep workers ready to return as soon as conditions allowed.
Since then, Section 3610 has taken on a life of its own, with senior administration officials estimating that agencies across the federal government could be on the hook for billions of dollars to carry out this law. With debate on the next coronavirus supplemental bill upon us, the calls for new funding are growing louder. We must explain to American taxpayers and workers what is, and is not, at stake.
The confusion stems from two separate issues: whether to use the generous funding already provided to the Department of Defense to pay contractors for the time they were locked out of their workplaces; and to what extent the pandemic and economic shock will make it more expensive to build weapons and perform research now and in the coming years.
The Department of Defense has unofficially asked Congress for nearly $11 billion in emergency funds to cover these costs for this year alone, split between these two purposes. The lack of detail in this request raises serious questions. For example, why are other federal agencies finding money in their regular budget to pay for their 3610 contractor pay claims, but the Pentagon cannot?
Americans should know that the CARES Act appropriated $10.5 billion for defense needs, with nearly unlimited flexibility for the Department of Defense to reprogram these funds to address urgent priorities. In addition to that infusion of money, the department has numerous other ways to support defense contractors. At the outset of the coronavirus, the department worked with states and localities to deem defense contractors as essential and therefore able to continue working. In April, the department issued a regulatory change on progress payments for existing contracts, increasing the cash flow to the defense industrial base and encouraging major contractors to advance cash to the supply chain, infusing billions of dollars in cash to companies that needed near-term cash flow.
And this brings us to our real problem with the $11 billion set aside for contractor reimbursements in this latest emergency appropriations bill: We do not know what it is for, what problems it will and will not fix, and why other funding and tools are not working. We also suspect that the Pentagon has not done its homework on behalf of American taxpayers before asking for this money. The proposal appears to be based on contractor requests, in the midst of a rapidly changing situation, without asking tough questions about how the funds would be used to prevent American job loss and what the long-term budgeting and recovery strategy may be.
Before Congress provides many billions of dollars to make up for the work that has been lost due to coronavirus closures, we should know which programs have been impacted, how much each program may need to recover and whether taxpayers will be on the hook for more money if the disruptions continue. The Department of Defense, in particular, has a weapons budget that exceeds the highest levels of the Reagan-era defense buildup — even when adjusted for inflation. Given the amount of base and supplemental funds already at the department's disposal, Congress needs more thorough justification for additional spending, both for Section 3610 and for other needs.
Generally speaking, it might make sense to appropriate additional funds to make sure that a shipbuilding program or airplane is completed on time. In other cases, however, taxpayers may reasonably question whether it is worth paying more money in light of other priorities. We have before us a unique opportunity to think strategically about future readiness risks and make the defense industrial base more resilient. Hastily throwing money at the problem is simply not the solution to a complex problem.
We appreciate the hard work of the hundreds of thousands of companies, of all sizes, that make up the defense industrial base. When the Pentagon spends CARES Act dollars, or any appropriations, we depend on senior leaders to negotiate hard with defense companies to get the best deal for the taxpayers. There is nothing wrong with tough negotiating when billions of dollars are at stake; as public servants, it is our duty.
Sen. Dick Durbin, D-Ill., is the Democratic whip and the ranking member on the Senate Appropriations Committee's Defense Subcommittee. Rep. Adam Smith, D-Wash., is the chairman of the House Armed Services Committee.
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12 juin 2020 | International, C4ISR
Year two post merger, L3Harris looks toward $1B more in divestitures
By: Jill Aitoro WASHINGTON — One year post merger, L3Harris is a third of the way to its goal of shedding roughly $1.5 billion of the company, with COVID-19 slowing progress, said its two top executives in an interview with Defense News. About $500 million in business has been divested since June 2019, when Harris and L3 Technologies combined into a single, $17 billion company. That total came by way of three deals that shed the EOTech business, the night vision business, and the security detection and automation businesses. “Out of the gates, we were really running at this,” said CEO Bill Brown, who noted in previous interviews the audacious goal for divestitures of 8-10 percent of total revenue. “We continue to make progress on others, but obviously with the COVID crisis and the financial impacts of that, it's moved some opportunities to the right.” The sale of the security detection and automation businesses to Leidos for about $1 billion will ultimately be one of if not the biggest divestiture for the company, said Brown, who declined to point to any specific portions of business as currently up for sale or likely to be shed. Thus far divestitures have been driven either by overlap created by the merger — which subsequently raised the alarm bells of regulators — or by a desire to focus the portfolio even more to become what Brown described as a “powerhouse C4ISR company.” Brown stopped short of stating any intention to exit the commercial or federal business altogether — even as the former took a significant hit from pandemic fallout: Commercial revenues are expected to be down around 35 percent organically for the year. Also likely to suffer from the COVID-19 pandemic is international business. Foreign sales, which account for 20 percent of total revenue, will likely remain flat, versus the increase in low to mid-single digits previously expected. “We identify that as an area where we think we can outperform,” Chris Kubasik, L3Harris chief operating officer, said during the interview. “Clearly the global pandemic applies some pressure, especially in the Middle East with the prices of oil and all the countries having their own bailouts or stimulus plans. Just like the U.S., I think the situation is going to call into question how those countries deal with defense going forward. It's going to be one of these areas that we need to monitor, and are probably going to have to take market share to grow.” An inability to travel has, however, opened doors to new ways of doing business around the world. Kubasik pointed to a particular deal with a customer in a Far East country that was negotiated via Skype. “Nobody's really closed for business,” he said. “We've just got to be creative and do it differently. You feel pretty good when you do a one- or two-hour Zoom [video conference], where in the old days it would have taken four days by the time you flew to the country, cleared customs, got a good night's rest, held a meeting, met again and flew back.” For L3Harris, year two post merger will focus on the remaining $1 billion in divestitures and see a continuation of company integration. In the longer term, those efforts will set the company up nicely for additional acquisitions, which Kubasik called “a clear expectation” for spurring growth. And C4ISR is the area that will likely be the focus of potential buys. “The value of those capabilities and technologies will be even greater in the future in a near-peer competition,” Brown said. “It's not the platforms, but what the platforms do and how they interoperate that requires networks and new ways of communicating, which is in the sweet spot of the company. So I would imagine that anything we would do through acquisition would happen in that broad C4ISR domain.” But for now, he added, the company is focusing on “the basic fundamentals." "And if we do that really well, then we build credibility to go and do another acquisition, another merger over time. The key is earning the right to do that — building the credibility and the muscle to go down that path, and that's what we're doing today.” https://www.defensenews.com/industry/2020/06/11/year-two-post-merger-l3harris-looks-toward-1b-more-in-divestitures/
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24 mars 2020 | International, Aérospatial
KC-46, P-8 production to stop as Boeing temporarily shuts down facilities
By: Valerie Insinna WASHINGTON — Production of the Air Force's KC-46 refueling tanker and the Navy's P-8 maritime surveillance plane will stop as Boeing shuts down all facilities in the Seattle area amid the coronavirus pandemic. “Boeing plans to begin reducing production activity today and projects the suspension of such operations to begin on Wednesday, March 25, at sites across the Puget Sound area,” the company said in a statement on Monday. A Boeing spokesman confirmed that the impacted area includes the facilities in Everett and Renton, where the KC-46 and P-8 are made, respectively. “We plan to temporarily suspend all production operations, including those relating to P-8 and KC-46A, in the Puget Sound region,” the spokesman said. “We're actively engaged with our defense customers to minimize any impacts on their missions. Certain non-production work for all commercial derivative aircraft programs, including for the KC-46 remote vision system enhancements, will continue being done by employees working remotely.” The company is urging employees to telework if they can, but work on classified projects cannot be done on laptops, which could impact more sensitive elements of defense programs. The production stoppage itself is perhaps an even more urgent challenge. Boeing's Puget Sound facilities are best known for commercial airliner production, but the commercial-derivative aircraft it makes for the military —like the KC-46 and P-8 — are built on the same lines. Any pause in commercial production could put Boeing behind in delivering aircraft to the Air Force and Navy. However, Boeing's defense business will likely be able to make a quick recovery as long as the pause in production is not protracted, said Richard Aboulafia, an aerospace analyst with the Teal Group. “P-8, KC-46 and other Boeing defense production in the Puget Sound area is mostly low-volume, like around 1-2 per month,” he said. “So they should be able to recover over the course of the year, assuming the factory deep clean is successful and the pandemic threat turns a corner.” Boeing CEO Dave Calhoun characterized the temporary plant closures as a “necessary step” to protect employees in the wake of a state of emergency in Washington state. "We continue to work closely with public health officials, and we're in contact with our customers, suppliers and other stakeholders who are affected by this temporary suspension,” he said. “We regret the difficulty this will cause them, as well as our employees, but it's vital to maintain health and safety for all those who support our products and services, and to assist in the national effort to combat the spread of COVID-19.” The company will also continue to monitor U.S. government guidance on COVID-19 and conduct a deep cleaning of impacted sites during the two-week pause, Boeing said. https://www.defensenews.com/coronavirus/2020/03/23/kc-46-p-8-production-to-stop-as-boeing-temporarily-shuts-down-production-in-puget-sound-area/