Nouvelles

By: Jaroslaw Adamowski WARSAW, Poland — Estonia's Parliament has amended legislation to allow Estonian companies to make and handle military weapons and gear. The law paves the way for the development of the country's defense industry and the export of weapons and equipment by local players. Estonian Defence Minister Jüri Luik said in a statement that, to date, the Estonian military has acquired its gear almost exclusively abroad, but now the situation is expected to change, and export opportunities for the country's defense industry will also increase. “The absence of a right to handle weapons and ammunition has long been a serious concern for Estonia's defense industry, one that hinders the development of the defense sector,” Luik said. The legislation's summary states it “provides a legal framework for Estonian companies to begin to manufacture, maintain, import and export military weapons, ammunition, munitions and combat vehicles. The existing legislation does not allow this.” The ministry expects between five and six local companies to apply for the required licenses in the first year. The move comes as Estonia is planning a defense spending hike, with military expenditure to total €2.4 billion (U.S. $2.8 billion) in the next four years, according to Luik. Last April, the ministry unveiled the country's updated investment program for the years 2018-2022. Among others, Estonia aims to purchase munitions for about €100 million. Owing to the amended legislation, Estonian defense companies could also become suppliers to neighboring Lithuania and Latvia. Lithuania has allocated €873 million to its defense budget this year, up 20.6 percent compared with 2017. Latvia's military expenditure for 2018 is to reach €576.34 million, up €126.8 million compared with a year earlier. https://www.defensenews.com/industry/2018/06/14/estonias-new-law-opens-door-for-weapons-export-defense-industry-growth/

U.S. President Donald Trump's tirade against Canada and threats to punish the country could undermine efforts by American firms trying to sell fighter jets and other military equipment to the Canadian Forces, warn defence and industry analysts. One European firm, Airbus, has already been talking with Canadian officials to pitch its plan to build fighter jets in Quebec as it positions itself to win the $16-billion deal to replace CF-18 aircraft. An Italian aerospace firm, Leonardo, is looking at building helicopters in Nova Scotia as it moves towards negotiations for a search-and-rescue aircraft modernization project the Department of National Defence says will be worth between $1 billion and $5 billion. Trump has hit Canadian aluminum and steel with tariffs, claiming their import is a threat to national security. After the weekend G7 meeting and Prime Minister Justin Trudeau's reaffirming that Canada would reciprocate with tariffs on specific U.S. products, Trump vowed more economic grief that will “cost a lot of money for the people of Canada.” Trump's move comes at a time when European firms are courting the Canadian government, particularly on big-ticket defence items such as aircraft and warships. Billions of dollars in new purchases are potentially at stake and European firms had a strong presence at the recent CANSEC military equipment trade show in Ottawa. “Trump certainly isn't helping U.S. defence companies who want to sell to Canada,” said Martin Shadwick, a defence analyst in Toronto. “It would be very difficult at this point from a political optics point of view for the government to announce awarding contracts to any American firm.” Shadwick said whether that situation will continue for the next several years, when for instance the decision on new fighter jets is supposed to be made, would depend on any further actions by the president. Two U.S. aircraft, the Boeing Super Hornet and the Lockheed Martin F-35, are among the top contenders in that jet competition. The other three aircraft are from European companies. An earlier trade dispute with Canada has already backfired on Boeing and the Trump administration, costing the U.S. billions in fighter jet sales. Last year Boeing complained to the U.S. Commerce Department that Canadian subsidies for Quebec-based Bombardier allowed it to sell its civilian passenger aircraft in the U.S. at cut-rate prices. As a result, the Trump administration brought in a tariff of almost 300 per cent against Bombardier aircraft sold in the U.S. In retaliation, Canada decided against buying 18 new Super Hornet fighter jets from Boeing. That deal would have been worth more than US$5 billion. Christyn Cianfarani, president of the Canadian Association of Defence and Security Industries, said it is too early to determine the impact of the U.S. tariffs on the domestic defence industry. “Tariffs are never good for trade or business,” she added. “CADSI is monitoring the issue and consulting our members to better understand the potential impact to Canadian firms, both in terms of the direct impact of any tariffs and the more indirect, long term impact on supply chains and market access,” she said. There is growing concern that Canadian aviation firms could be hurt by Trump's aluminum tariffs. The Aerospace Industries Association of Canada did not respond to a request for comment. But its counterpart in the U.S. has voiced concern that American aerospace companies could feel pain. In March, the U.S. Aerospace Industries Association noted it was deeply concerned about Trump's tariffs on steel and aluminum as it “will raise costs and disrupt the supply chain, putting U.S. global competitiveness at risk.” “There is also a significant threat for retaliation from other countries towards American made products,” the association noted in a statement. Canada is the largest exporter of aluminum and steel to the U.S. http://nationalpost.com/news/politics/trade-dispute-could-leave-u-s-firms-out-of-the-running-to-sell-military-equipment-to-canada

By EMILY HAWS Department of National Defence deputy minister Jody Thomas says she'll work through the summer to review how the Canadian government buys defence equipment, with a view to paring down the procurement process to get projects out the door quicker. That could even mean more use of sole-source contracts, when it doesn't make sense to hold a competition. She says the department wants to ensure the money outlined in Strong, Secure, Engaged—the government's 20-year defence policy unveiled last year—is spent. The department took flak earlier earlier this year for not having the capacity to push procurement projects outlined in the plan through the system at the expected pace. Speaking at a June 7 conference organized by the Canadian Global Affairs Institute think-tank in Ottawa on the first anniversary of the defence policy, Ms. Thomas suggested switching up the rules around sole-source contracting. She discussed the idea on a panel with other top DND executives Gordon Venner and Bill Matthews, moderated by CGAI defence procurement expert David Perry. “I think what we want to do and what is expected of us is to have an honest conversation,” Ms. Thomas told the audience. “Where we know there's one supplier in the world that is compliant, Five Eyes-compliant, NORAD-compliant, whatever compliancy we need—to run a competition [in that case] where there is no hope of multiple bidders wastes [everyone's] time; it's kind of disingenuous and dishonest,” she said, referring to security alliances of which Canada is a member. “We have to talk to ministers about that, and ministers are open to that conversation.” Mr. Perry said in a separate interview that the change in process would be a big deal, but it would only happen if the government decides its priority is to spend money. The department is trying to determine a better balance between spending and oversight, he said, but it needs to keep in mind that the “objective is to spend money, not follow a thousand steps and do multiple dozens of reviews.” Sometimes government officials try overly hard to make the bid process competitive, said Mr. Perry, so they end up sending to Treasury Board for review some bids that clearly don't meet requirements. This leaves Treasury Board officials with only one compliant bidder, which in turn leads these keepers of the public purse to ask more questions and perhaps conduct reviews. For example, the government is looking at buying one or more tanker aircraft, and is narrowing down the list of eligible companies, said Mr. Perry. There are basically only two companies that sell tankers, Airbus and Boeing, he said. “You set it up so that everyone has a chance, but that doesn't actually mean that you can actually have a really competitive environment that have at least two bids that actually meet all of the mandatory things you need to meet to submit a bid,” he said. Depending on the extent the rules shift, they may require approval from not just Defence Minister Harjit Sajjan (Vancouver South, B.C.), but Treasury Board and the larger cabinet, he added. Conservative MP James Bezan (Selkirk-Interlake-Eastman, Man.) and NDP MP Randall Garrison (Esquimalt-Saanich-Sooke, B.C.), defence critics for their respective parties, said they support streamlining the procurement process, but Mr. Bezan said the Liberals just need to be more decisive. Industry representatives are also supportive, with the Canadian Association of Defence and Security Industries (CADSI) calling the move “refreshing” in an emailed statement. DND is trying to increase its procurement workforce, said Ms. Thomas, adding that the procurement process is the same regardless of whether the contract is worth $1-million or $1-billion. Ms. Thomas, who has been in her role since October, said the rules were put in place after the department received criticism from the auditor general. “We've been risk-averse and we've been criticized, so a deputy's normal reaction to criticism or recommendations from the auditor general is to put process in place,” she said. “I absolutely understand that; we need to make sure it's appropriate to the complexity of the project.” She said she's going to work through the summer to analyze the number of steps in the procurement process to determine the value they serve and where they can be reduced. Ms. Thomas said she will create “sort of a lean methodology of the number of hands something has to touch, how long do we spend in project definition, [and] how long we spend in options analysis.” Byrne Furlong, a spokesperson for the defence minister, said in an emailed statement the review will accelerate approvals and delivery. “Ensuring our Canadian Armed Forces [are] well-equipped to deliver on what Canada requires of them is a significant undertaking,” she said, adding the government is committed to doing so. New defence policy ups procurement spending Earlier this year, Mr. Perry authored a report suggesting the procurement plans laid out in Strong, Secure, Engaged could be threatened by long-standing process problems. The new policy would see procurement ramp up from about $3.5-billion to $4-billion annually, in 2018-19 dollars, to $12-billion. Defence procurement budgets were cut from about 1990 until the mid-2000s, he said. Now Prime Minister Justin Trudeau (Papineau, Que.) is trying to play catch-up, but there's a bottlenecking of purchases. The government both doesn't have enough people to approve the projects, nor the quality of experience to work the larger, more technical jobs, Mr. Perry said in a previous interview. There are five critical steps to procuring defence equipment which spans from identification to close-out. Most work is done by DND to determine what it needs, said Mr. Perry, but the actual competition is run by Public Services and Procurement Canada (PSPC). The change in rules Ms. Thomas is contemplating would only apply to DND, she said, as that's her jurisdiction. CADSI president Christyn Cianfarani said, to her knowledge, a review in such a systematic way hasn't been done for some time. She said she sees the move as positive, allowing the government to properly balance risk and acquisition. “With the launch of SSE and the Investment Plan, the deputy minister's call to review the system is timely,” she said. “In this critical period of recapitalization, we simply cannot expect to move four times the volume of procurement through the same old procurement system.” When asked about the sole-sourcing of contracts, Ms. Cianfarani said competition is just one tool to meet policy objectives. She wants more sole-sourcing to Canadian firms and more Canadian-only competitions between companies with similar capabilities, price, and proven roots in Canada. Liberals just need to decide, says Conservative critic Mr. Bezan said sole-source contracting is almost impossible to do when the country isn't at war because one must argue it's in the best interest of national security and the taxpayer. The Liberals need to be more decisive on what equipment they want to buy, he added, saying they are risk-averse. “Fighter jets is a good example. They have punted the close of the competition—making the decision—until 2021,” he said. “Most countries run these competitions in around a year, and this was launched three to four months ago ... they should be able to close this off and make a decision within six to nine months.” The Conservative government before it tried and failed to procure fighter jets for several years too, incurring political controversy along the way, with accusations of conducting a flawed process of the purchase of billions of dollars. Mr. Garrison said the NDP welcomes efficiencies in the procurement process that benefit the armed forces and support Canadian industry, as well as meet DND targets. https://www.hilltimes.com/2018/06/13/defence-deputy-minister-begin-reviewing-procurement-rules-summer/147489

WASHINGTON — As priorities in Europe evolve, particularly with the threat of Russia growing more profound, industry partners are left to adapt. Defense News spoke to Kim Ernzen, vice president of land warfare systems in Raytheon Missile Systems, to find out the company's approach to meeting customer expectations. EU and NATO cooperation on defense is evolving. As they work out roles, is it challenging for industry? From an international or global footprint, we are looking to continue to expand in international marketspaces. As we look particularly to EU and NATO starting to cooperate more, the EU brings some capabilities to the table. Obviously NATO is typically backed more from the U.S. [But] it's how we merge the capabilities together so the fighting forces have what they need when they go into harm's way. From a U.S. defense industry perspective, we like to make sure we protect the latest and greatest. When we look to international, we work through the normal releasability channels to make sure we can release our products. I think there is going to be increased opportunity, because the threats are continuing to evolve. From a pure RMS perspective, we're well positioned to support [combatting] those threats. We continue to work closely not only with the U.S.-based customer, but through them, the international partners to look at the capabilities they may need. Missile defense remains a huge priority in Europe, but how have hybrid warfare tactics, particularly from Russia, influences defense strategies and as a result the investments? As we as a nation look at how to pivot from urban warfare of the last two decades to what many would consider more traditional warfare, but with added complexities of things like cyberattacks, EW. So now you go into overmatch capability, a long-range standoff capability. Army is focused on how to get long-range precision fires that supports the [combatant commands] in the international footprints, being able to protect the European front against advancing Russia threats. And it's got to have that standup capability, they also have to be able to see further. From a company perspective, we're involved in the PRSM [program] — the new Long Range Precision Fire competition between us and Lockheed Martin. And we're also working to enhance the sighting capability on the vehicle, so they can see farther and identity threats sooner. We see a lot of exercises in Europe. Does industry have enough of a seat at the table? We don't necessarily engage one-on-one with the exercising activities that go on; we'll get feedback through customer communities. This is something we talk with our customers about continually: the more we can be engaged, the more we can bring to bear, whether company investments, a spin on the product; the more we can partner with the customer community, sooner, the better it is for them and us as well. We just haven't necessarily always done that. We've seen a great deal of emphasis on increased defense spending of our European allies. Have you seen a bump up? Or if not, where do you see them focusing in on in terms of spending? We have seen a modest increase, particularly across the munitions fronts. Everyone [is looking] in the cupboard drawer, wanting to make sure they have the right stockpiles should they need to go into any engagement with the enemy. We're also continuing to see internationally more system integrated solutions. Not just coming forward with a product, but how a system would work and operate so they can be more nimble in the battlefield. That's a transition we're seeing. The FMS system can be painful to work through. Have their been improvements? We need to look at [whether we] can start converting more programs to direct commercial sales, depending on where we're at in a lifecycle of a product, and what it is we're trying to protect or throttle. FMS is a slow an laborious process. It hinders industry from capitalizing on market opportunities. The more we can change the paradigm and partner with the government side to do more [direct sales], the more they will benefit long term because they get the volume to drive down prices, and allow us to recoup funds to invests in future technology. But there are challenges, because each branches has organizations that support foreign military sales. There's a balance. As more and more countries seek indigenous capacities as well as a return on defense investments domestically, has the nature of partnership changed? Part of partnering with some of these countries involves offset requirements. Often as we start to partner with indigenous capable industries, it used to be ok to [offer up] basic machining. But there is more pull for being able to put high levels of noble work into these countries. Some are more advanced in capabilities, and as we look to partner, how to do we strike that balance, leveraging some technology they may bring to bear, with what we're trying to keep domestically and protected? It's an interesting paradigm. And a tipping point with how U.S. industry deals with going international. https://www.defensenews.com/digital-show-dailies/eurosatory/2018/06/12/as-european-defense-evolves-heres-how-industry-is-responding/

The US Naval Sea Systems Command (NAVSEA) awarded Lockheed Martin a five-year follow-on contract option on 12 June worth about USD65 million to support the Navy's intermediate-level maintenance activities for MK48 torpedoes at the Pearl Harbor Heavyweight Torpedo Intermediate Maintenance Activity (IMA). The initial contract was awarded in March 2018. The Lockheed Martin MK48 Torpedo IMA Program focuses on ensuring availability and reliability of the torpedoes, Richard Dunn, programme manager for Lockheed Martin Rotary and Mission Systems, said in a statement, while reducing total programme life cycle costs for the US Navy's torpedo programme. Lockheed Martin has provided specialised maintenance for the MK48 torpedoes since 2007. http://www.janes.com/article/80934/us-navy-awards-lockheed-martin-mk48-maintenance-contract

The U.S. Navy has awarded Boeing (NYSE: BA) a two-year, $862.2 million contract modification to fund the full rate production of lot 42 Super Hornet multirole aircraft. Boeing will produce 15 units of the F/A-18E variant and and 3 of the F/A-18F variant for the service branch under the modified contract, the Defense Department said Friday. The company also received a $73.2 million indefinite-delivery/indefinite-quantity contract in late February to update four F/A-18E/Fs in an effort to extend the aircraft's operational service life. Super Hornet's E and F versions are designed to operate in various tactical missions such as strike, fighter escort, close air support, reconnaissance, forward air control, tanker and suppression of enemy air defenses. https://www.govconwire.com/2018/06/boeing-gets-862m-super-hornet-full-rate-production-contract-modification/

The littoral combat ship program continues to push ships to the fleet as the program begins to wind down ahead of the Navy's planned transition to a future frigate. In Marinette, Wisconsin, Lockheed and Fincantieri's latest mono-hull LCS, the Sioux City, completed acceptance trials in Lake Michigan, according to May 31 announcement. That ship is preparing to commission in Annapolis, Maryland, in the Fall after some weather and mechanical delays pushed back trials. The Sioux City is the sixth mono-hull LCS. Austal USA in Mobile, Alabama, in May delivered its eighth trimaran LCS, the Tulsa, and the second LCS delivered by the yard this year. The first one, the Manchester, was commissioned May 26. Both yards are still churning on a backlog of LCS. The ships will be coming fast and furious over the next couple of years as Austal, Lockheed and Fincantieri all pursue strategies to secure the contract to build the Navy's future frigate, known as FFG(X). At Marinette, the yard has seven other ships in production as well as one in long-lead procurement. Austal is working on five other LCS and the last three expeditionary fast transport ships of the 12 ordered. Between the two shipyards, there are no fewer than three proposals for the FFG(X). Fincantieri is pushing hard to make FREMM the Navy's next frigate, which would likely be built at Marinette. You can read all about the FREMM below: Lockheed is also likely eyeing Marinette for its proposal for FFG(X), a variant of the Freedom mono-hull LCS, for which it is the prime contractor. Austal is likewise proposing a variant of its trimaran LCS and the stakes for that shipyard are especially high since it is coming to the end of both its programs. Lockheed and Fincantieri are anticipating an order of a Freedom LCS variant multi-mission surface combatant for Saudi Arabia's naval recapitalization. All three of the contractors are among five competing for the FFG(X) contract. Navantia and Huntington Ingalls are the other two. https://www.defensenews.com/naval/2018/06/11/lockheed-austal-usa-serve-up-new-batch-of-lcs-amid-frigate-competition/

OTTAWA, Ontario, June 12, 2018 /PRNewswire/ -- Lockheed Martin Canada (NYSE: LMT) has been awarded a three-year extension to its In-Service Support contract for the Royal Canadian Navy's 12 Halifax Class Frigates. "We are pleased by the vote of confidence from our Royal Canadian Navy customer to continue this existing relationship," said Gary Fudge, vice president and general manager of Lockheed Martin Canada Rotary Mission Systems. As part of our Combat System Integrator portfolio, Lockheed Martin Canada has established a world class in-service support team which is also being recognized by our international customers." The Lockheed Martin Canada In-Service Support team has provided uninterrupted support to the Halifax Class Combat System, Command and Control System and Trainers for 25 years. The existing In-Service Support contract commenced in November 2008 with the award of the Halifax Class Modernization project. The In-Service support contract also included support of the legacy Halifax Class system prior to ships entering the shipyard for modernization. The Combat Management Systems (CMS) support entails hardware and software support for the CMS 330, and the CMS to combat subsystem interfaces, ancillary systems and tools, as well as the integration of new weapons, sensors and information sources. For additional information, visit our website: www.lockheedmartin.ca. https://news.lockheedmartin.com/2018-06-12-Lockheed-Martin-Canada-Awarded-Extension-to-its-Contract-for-In-Service-Support-for-Royal-Canadian-Navys-Halifax-Class-Frigates

Le Programme des capacités de la Défense (PCD) un nouvel outil maintenant en ligne permet d'accéder à des renseignements sur les occasions d'investissement en défense. À l'instar du Guide d'acquisition en défense, le PCD offre à l'industrie de l'information sur la planification comme les fourchettes de financement et les échéanciers des projets. L'industrie pourra y trouver environ 250 projets financés dans le cadre de la politique Protection, Sécurité, Engagement (PSE), dont des projets d'infrastructure ainsi que d'importants contrats de soutien en service afin de faire ses prévisions pour les occasions d'acquisition en défense et tenter d'obtenir des contrats. Gr'ce à ces renseignements, l'industrie sera en mesure de prendre des décisions éclairées en matière de recherche-développement (R-D) et de partenariats stratégiques fondés sur les besoins prévus des Forces armées canadiennes. On trouvera dans le PCD : des projets : des projets de biens d'équipement ou d'infrastructure d'une valeur de plus de 5 millions de dollars prévus et financés dans le cadre du la politique PSE des contrats de soutien : des contrats de soutien en service et des contrats de service professionnels d'une valeur escomptée supérieure à 20 millions de dollars qui seront octroyés dans les prochaines années pour soutenir les capacités livrées dans le cadre de la politique PSE des projets de PSE notés et inscrits Le PCD comprend une fonction de recherche par mot-clé et segmente les occasions d'investissement en composantes qui peuvent servir de critères de recherche : secteurs en matière de capacités de Défense (SCD) secteurs d'investissement en matière de capacités de défense (SICD) promoteurs du projet capacités industrielles clés (CIC) Les secteurs en matière de capacités de Défense (SCD) se divisent en treize grandes catégories, comme les le domaine terrestre, le domaine maritime, le domaine aérien, l'aérospatiale et le cyberespace. Ces catégories se subdivisent en éléments constituants plus de 150 secteurs d'investissement en matière de capacités de défense (SICD), comme les véhicules de modèle commercial, les pièces de navires et l'avionique. Les promoteurs du projet correspondent au commandement du service ou à l'organisation civile équivalente au sein du ministère de la Défense nationale (MDN). Il est aussi possible de rechercher les projets et les occasions d'investissement en fonction des capacités industrielles clés (CIC) d'Innovation, Sciences et Développement économiques Canada. Ces secteurs de capacité indiquent à l'industrie qu'elles sont les principales activités commerciales prioritaires pour le gouvernement en ce qui concerne l'approvisionnement en matière de défense. Enfin, il y a une fonction de recherche avancée qui permet à l'utilisateur de filtrer ses résultats selon des critères particuliers. http://dgpaapp.forces.gc.ca/fr/programme-capacites-defense/index.asp https://www.canada.ca/fr/ministere-defense-nationale/organisation/rapports-publications/plan-dinvestissement-de-la-defense-2018.html