Map by Gene Thorp
The Washington Post

Pakistan will reopen its roads to NATO convoys, but at a price. They want to charge $5,000 per container, according to the Washington Post.

Other recent international defense developments include:

• US Secretary of Defense Leon Panetta is complaining that House Republicans want to fund stuff the military doesn’t need. In Australia, Shadow Minister for Defence David Johnston and Defence Minister Stephen Smith have similar disagreements on what the appropriate level of spending should be.

• Panetta and chairman of the Joint Chiefs of Staff Army Gen. Martin E. Dempsey argue in favor of the US signing the Law of the Sea Convention. It never obtained the Senate’s approval in the 30 years since the UN formalized the treaty.

• Workers at the Lockheed Martin plant in Forth Worth, TX, are heading into a 4th week of strike. AFL-CIO | Lockheed Martin.
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KC-390 refuels AMXs

Global competition in the 20-ton air transport segment continues to intensify, with Brazil’s launch of its KC-390 program. Embraer figures reportedly place the global C-130 replacement market at around 700 aircraft. In response, it will develop a jet-powered rival to compete with Lockheed Martin’s C-130J, the larger Airbus A400M, Russia’s AN-12 and its Chinese copy the Yun-8/9, and the bi-national Irkut/HAL MRTA project. Smaller aircraft like the EADS-CASA C-295M, and Alenia’s C-27J, may also represent indirect competition.

Embraer is extending its efforts and markets by crafting a jet-powered medium transport with a cargo capacity of around 23 tons, that can be refueled in the air, and can provide refueling services to other aircraft by adding dedicated pods. The KC-390 has now become a multinational effort, and may be shaping up as the C-130’s most formidable future competitor…

• The KC-390: Program [updated]
• The KC-390: Aircraft
• Contracts and Key Events [updated]
• Additional Readings: Competitors
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• Q1 results are in for L-3 Communications, Lockheed Martin and Raytheon. They are all showing more topline resilience than Northrop Grumman. Quick summary table of their sales and backlog at the bottom of this entry.

• Lockheed Martin’s CEO Bob Stevens will retire and be replaced by current President and COO Christopher Kubasik effective January 1, 2013. Kubasik is an alumnus from the Defense Acquisition University.

• US Secretary of Defense Leon Panetta leaned on Brazil in support of Boeing’s F/A-18s for the ongoing F-X2 competition. Panetta discussed technology transfers with his counterpart Celso Amorim. Dassault is working the local cooperation angle too [in French].
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Current: S30 Tupi
(click to view larger)

Brazil’s submarines are seen as a key part of the country’s new national armaments and defense strategy, which was released on Dec 18/08. It places a higher priority on protection of Brazil’s offshore energy reserves, and sees submarines as key players in that effort. The experience of the 1982 Falklands War, in which Argentina’s entire fleet was kept in port by Britain’s nuclear fast attack boat HMS Conqueror, is often cited as instructive.

In 2008, Brazil and France signed an agreement to build 4 diesel-electric submarines (SSK), and provide assistance in developing and fielding the non-nuclear parts of 1 nuclear fast attack submarine (SSN). Key specifics, such as the presence or absence of SSK Air Independent Propulsion technologies, have yet to be made public, but the terms of the agreement leave the possibility open. Reports regarding the submarine deal’s value have varied, but the budget is now set at almost EUR 7 billion. Financing now appears to be in place, and recent releases explain the budgets, the timing, and some of the key players in Brazil’s Prosub program:

• The Boats
• Contracts and Key Events [updated]
• Additional Readings
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• The Pentagon’s 2013-2042 annual aviation inventory and funding plan is available via Bloomberg, in a context of aging aircraft. It says 5th generation assets will go from 7% of the current force of manned fighter aircraft to about 25% by FY 2022 based on a F-35 production ramp up. Fighter spending is about equal between the Air Force and Navy in FY 2013 but the next years see a gap in favor of USAF. Total spending (i.e. RDT&E, procurement, MILCON, and O&M) is projected to $770B in then-years over the next 10 years. See data tables and charts of DoD’s projected aicraft inventory at the bottom of this entry.

• DoD’s long term aicraft plan include a T-X trainer replacement “envisioned to begin production around FY18 with a planned IOC in FY20”, and replacements for T-45Cs and T-44s to be identified next decade. They expect the V-XX new presidential helicopter to begin operating in 2023. Further out, the 30-year plan mentions in passing F-X and FA-XX replacements to the F-22 and F/A-18, respectively.

• The Chinese Navy has begun using UAVs, deploying them on exercises around the South China Sea. Perhaps this will prod the US Navy, which has been the slowest adopter of the 3 services.
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• Daniel Goure at the Lexington Institute challenges the value of the “should cost” procurement methodology pushed by Undersecretary of Defense Ashton Carter. He calls it “new” but finds it “rather traditional in nature”. Well, “should cost” looks traditional indeed because it is not new. That methodology first came up decades ago as shows this Air University Review article from 1972. The Defense Acquisition University has an analysis of the relevant literature from the 70s and 80s.

• The Heritage Foundation makes a good point on Nunn-McCurdy cost breaches: “The services should do everything possible to avoid the stigma of breach – no easy task today when breaches can be the result of dramatically cutting purchases (driving up per unit cost) as budgets are slashed rather than mismanagement of the program.” [Emphasis ours]. Case in point: the E-2D Hawkeye.
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• The Australian DoD announced the allocation of construction work for the third ship of the $8 billion Air Warfare Destroyer (AWD).

• Earlier this week India debarred 4 foreign companies – Israel Military Industries (IMI), Singapore Technologies Kinetics Ltd, Rheinmetall’s Air Defence Swiss subsidiary, and Russia’s Corporation Defence (aka Corporation Zashchita) – and 2 local ones – RK Machine Tools Ltd and TS Kisan and Co Private Ltd – from doing business with its Ministry of Defence for 10 years. Apparently this will affect the whole ministry in practice though not in the legal fineprint.
  
  ST Kinetics first complained that allegations to that effect were made since 2009 despite a lack of any formal charges until now. The company then confirmed it received official notification from the Ordnance Factory Board (OFB) which only affects an NDA signed a few years ago, as the firm has not won any defense contract in India. Meanwhile Israel’s defense ministry expressed its surprise and is reviewing how to proceed with IMI.
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Upgraded F-5BR

Could the words “Brazilian fighter” begin evoking images unrelated to the Gracies? Recent boosts to Brazil’s defense budget could be on its way to accomplishing that, and more. While the Navy and Army are also in line for funds to replace broken-down equipment, the fighters will be a critical centerpiece of the Forca Aerea Brasileira’s efforts. The 36+ aircraft buys under consideration are mostly the same set of 4+ generation fighters that were considered last time: Boeing’s F/A-18 E/F Super Hornet, Dassault’s Rafale, EADS’ Eurofighter, Lockheed Martin’s F-16 Block 60, Saab’s JAS-39 Gripen NG, and Sukhoi’s SU-35. The Gripen, Rafale, and Super Hornet were picked as finalists, and along the way, the Brazilian competition became much more important to at least one of that trio.

This free-to-view DID Spotlight article covers Brazil’s reborn F-X competition, adds its assessment of their offers’ relative strengths and weaknesses, and covers ongoing events:

• A Stirring Giant?
• F-X2: The Competition
• Analysis: F-X2, The Competitors
• Contracts and Key Events [updated]
• Additional Readings
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• China is officially announcing that its 2012 budget is increasing by 11.2% to about $106B. It is broadly agreed that this significantly understates total military spending. After about 25 years of double-digit growth China is now clearly the second biggest defense spender behind the US, with a budget that more than doubled in the last 5 years alone. There is more to it than just new kit though: some of that money is spent on improving quality of life for sailors to ease recruitment and retention, as China is facing serious demographic constraints and deep socioeconomic shifts. Associated Press | Bloomberg.

• The US DoD Inspector General is reviewing the F-35’s quality assurance system, while the Air Force is looking at where to locate its training site. Meanwhile the UK is reportedly researching whether they should stick to F-35Cs or switch to F-35Bs.

• Deputy Secretary of State William Burns told Brazilians last week, about the LAS travails:
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