Patriot PAC-2
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A 2007 US National Intelligence Assessment [redacted NIE summary] believes Iran’s nuclear program has stopped, but others, including the United Nations and Israel are more skeptical. Intelligence is always a very uncertain and ambiguous exercise, and occasionally features assessments like the infamous NIE (National Intelligence Estimate) whose 1962 judgment was that there were no Soviet missiles in Cuba [1]. Uncertainty creates perceptions of risk, and perceptions of risk lead to behaviors aimed at reducing that risk. Iraq is no longer a missile/WMD threat, Iran’s regular and Revolutionary Guards air forces remain relatively weak, and Iran’s ballistic missiles based on North Korean designs lack accuracy. Still, even a lucky conventional missile could create havoc in some Gulf states if it hit important oil-related infrastructure, or hit the larger and more nebulous target of business confidence.

Arms spending is an incomplete but very concrete way of tracking a state’s real assessment of threats and priorities. It’s becoming clear that Gulf states, including Saudi Arabia, have stepped up their defense spending in recent years. Those expenditures cover a range of equipment, but anti-ballistic missile capabilities appear to be rising to the top of the priority list.

In June 2008, over $10 billion worth of December 2007 Patriot missile upgrade requests in the UAE and Kuwait shone a spotlight on the region’s new defense priorities. In December 2008, a multi-billion dollar Patriot missile contract from the UAE seemed to lock in that shift, and Kuwait is proceeding with upgrades to its own Patriot systems. Upgrades that have led to recent contracts, and sales requests…

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AIA’s eBiz “Radar”
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The American Aerospace Industries Association and UK’s A|D|S recently announced new global standards for trading partner and electronic collaboration agreements between prime contractors and suppliers. It’s a small step toward a broader AIA vision, which includes a full portfolio of eBusiness related initiatives ranging from recommended standards and frameworks, to candidates, to initiatives being monitored by AIA.

The goal of having all key participants and trading partners “able to exchange information relative to product design, business relationships, transactions, and product support across an information backbone which is open and accessible to all.” is not unique to the aerospace industry. As the Internet boom and bubble accelerated, one of its main hopes was pinned on the emergence of industry trading portals that would create one set of connection standards/APIs, instead of high-cost, high-maintenance individual EDI links between firms. These portals failed for a variety of reasons, leaving much looser sets of industry initiatives and vendor-specific solutions to pick up the slack.

Globalization hit the defense and aerospace sectors later than others, given the national strategic importance of armaments industries. It’s definitely making itself felt on an array of fronts, however, which raises the importance of corresponding eBusiness frameworks. The F-35 program’s “digital thread” is a harbinger of wider things to come. In the case of the recent GTPA and GECA agreements…

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[by John MacNeill]
Goo goo g’joob!

In April 2005, “USN, DARPA See Blimps & HULAs Rising”, looked at a range of projects on the drawing board, including the Walrus heavy-transport blimp (that’s “heavy” as in “1-2 million pounds”) which offered the potential for a faster and more versatile sealift substitute.

In this article DID explains the Walrus concept, details the contractors and contracts involved in this initial award (including a few updates), and lays out the program’s structure… or at least, what used to be its structure. The Defense Advanced Research Projects Agency (DARPA) funded phase 1 contracts, but things seemed to end in 2006. Yet the imperatives driving the need for Walrus, or even for a much smaller version of it, remain. Is the Walrus dead? What about Paul? And could it, or a HULA like like it, rise again?

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As part of Britain’s Defence Industrial Strategy, the Labour Party government and Ministry of Defence actively sought to reduce the number of companies involved in naval surface ship building and maintenance. In fact, they wanted just one company to deal with. Monopolies tend to drive prices up and effectiveness down, but the Ministry of Defense believed that a long-term partnering arrangement with performance guarantees could counteract that natural tendency. They also believed that the expected volume of warship construction and maintenance could no longer support more than one sizeable firm. Rather than force the merger, they dangled a sizeable carrot: they would not issue contracts for the planned CVF aircraft carrier program until they had a single entity to deal with.

Almost a year after the original July 25/07 Heads of Terms signed by BAE systems, VT Group, and the UK MoD, BAE Systems plc finalized a legally binding Framework Agreement with VT Group plc (‘VT’) to establish the BVT Surface Fleet Ltd. joint venture as the UK’s premier provider of surface warships and through-life support. The firm would become the UK Government’s strategic partner for the design, build and support of future warships, and will also pursue export opportunities. The joint venture targets total net savings to the government in excess of GBP 700 million (currently about $1.4 billion) to be shared 70/30 between the MoD and the BVT. These net savings, and the extent to which the parties will actually benefit, remain to be seen in practice.

The joint venture is now a single venture again, as BAE Systems buys out its partner…

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Galileo concept
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The European Union is cooperating with a number of outside investors to replace the USA’s free Global Positioning System service with an alternative under their own control. In addition to civilian GPS (the Open Service), services to be offered include a paid Commercial Service (with accuracy greater than 1 meter), and a Public Regulated Service (PRS)/ Safety of Life Service (SoL) for use by security authorities (police, military, etc.) and safety-critical transport applications (air-traffic control, automated aircraft landing, etc.). PRS/SoL aims to offer Open Service quality, with added robustness against jamming and the reliable detection of problems within 10 seconds.

Organizational issues and shortfalls in expected progress pushed the “Galileo” project back from its originally intended operational date of 2007 to 2013-14 – and doubts persist in several quarters about its economic model, even as security issues arise regarding China’s COMPASS project. After a public-private partnership model failed to agree among themselves or with the EU’s desired terms, the organization gained initial-stage approval for its plan to finance the program with tax dollars instead of the expected private investments. Political issues were overcome, albeit with some protest, by raiding other EU accounts for over EUR 3 billion (about $5.35 billion) in funds, rather than asking for more money from member states.

The latest set of updates cover developments in Galileo, and in related programs like GIOVE and EGNOS. While the project’s base funding is now more secure, its ability to remain within budget faces issues, as does the expected launch timetable. Recent events may even lead to a smaller Galileo constellation…

• Galileo: Goals, Structure & Costs
• “Eppur, Si Bloccare”: Trials & Tribulations [updated]
• Contracts and Key Events [updated]
• Appendix A: The EU Proposal – Going Forward (2007)
• Appendix B: Additional Readings [updated]
• Appendix C: Additional Readings – The Security Dimension
  
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Guam
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DID has covered a number of base improvement efforts and other contracts related to the USA’s pacific territory of Guam, including construction of an RQ-4 Global Hawk UAV complex for the Pacific Rim, and extensive base improvements/ expansion for Guam’s airfield, harbor, et. al. DID will use this post to shine a spotlight on contracts related to that territory from the beginning of FY 2007 onward. Military.com offers a broader article detailing the build up; it’s useful as a frame for activities to date, and also a a context reference for our ongoing coverage (hyperlink below added to enhance context):

“The 2006 agreement between the United States and Japan to shift 8,000 U.S. Marines from bases in Japan to the island of Guam by 2014 is likely to have more far-reaching implications than just a change of address for some units of the Marine Corps’ III Marine Expeditionary Force (III MEF). The move is accelerating the return to prominence of Guam in the U.S. defense posture and fostering a higher level of cooperation among the U.S. armed forces in the Pacific region….

Congress authorized $193 million in military construction funds for Guam in the fiscal year 2007 National Defense Authorization Act, a $31 million increase over 2006 funding. “Guam is likely to see between $400 million and $1 billion in military construction in military construction each year for a period of six to 10 years,” [Guam’s representative in Congress, Madeleine Z. Bordallo] said.”

Our latest update involves a raft of infrastructure projects dating back to May 2009 – and a GAO report covering the local labor requirements associated with the build-up…

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Water tower etc.,
Times Beach
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Most people never see services like wastewater management and water distribution, maintenance of the electric grid, et. al. The cost is built into their taxes and utility bills, or into initial subdivision fees. Military bases have to deal with these sorts of issues, just as homeowners and developer do – but on a much larger scale. The preference in the US military seems to be shifting toward very long term (about 50 year) term fixed-price or regulated tariff contracts, which are often coupled with partial privatization or conveyance of assets to make the contractor 100% responsible for the utility.

This Spotlight article covers recent contracts that fall under this format, totaling over $5 billion. In the latest offering, Entergy Arkansas won a contract worth a maximum of $25.3 million to own, operate and maintain the electric distribution system at Little Rock Air Force Base…

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T-50 Golden Eagle
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Korea’s defense industry is advancing on all fronts these days. On the armored vehicle front, vehicles like the XK2 tank and K9/K10 self propelled howitzer are beginning to win export orders, and its XK-21/KNIFV amphibious infantry fighting vehicle may not be too far behind. All fill key market niches, promising performance at a comparatively inexpensive price. Its shipbuilding industry, one of the world’s busiest, is beginning to turn out LHDs, and December 2008 saw its first-of-class KDX-III AEGIS destroyer accepted into service on time and on budget. Now its aerospace industry is in flight abroad with the already-exported KT-1 trainer. Not to mention a clever entry into an incipient market.

Enter the T-50 Golden Eagle family, which offers a supersonic high-end trainer and light fighter aircraft at an attractive price. The aircraft is hitting the international market just as many of the world’s jet training fleets are reaching ages of 30 years or more, and high-end fighters are pricing themselves out of reach for many countries. The TA-50 LIFT variant and F/A-50 lightweight fighter are especially attractive as lightweight export fighters, and the ROKAF’s own F-5E/F Tiger II and F-4 Phantom fighters are more than due for replacement.

Weapons export and corporate issues have now been resolved, and a contract to produce the F/A-50 is underway. So, too, is a major new radar contract to equip them…

• T/F/A-50: The Program, The Planes
• Contracts & Key Events [updated]
• Additional Readings
  
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French Cougar SAR/SOF
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In November 2007, “Brazil Embarking Upon F-X2 Fighter Program?” discussed both the revived fighter competition, and Brazil’s surprising 50% boost to its defense budget. Other programs mentioned in that article included Brazil’s selection of a medium transport helicopter and of an attack helicopter, with other programs to follow. After decades of neglect, Brazil is reconstituting both its armed forces, and a defense industry that once offered an array of competitive products on the global stage.

The medium transport helicopter competition featured 3 established players: AgustaWestland’s EH101 has found success in Britain, Europe, and Japan, and was chosen as the base for the USA’s VH-71 Presidential helicopter before that program was canceled. Eurocopter’s EC725 Cougar is an updated version of the popular AS332/532 Super Puma, and has been ordered in limited quantities by the French and Mexican governments. An up-to-date version of Russia’s widely used Mi-17 was the 3rd contender; like the Super Puma, Mi-8 and Mi-17 helicopters are already in wide use within Latin America.

In truth, however, Eurocopter always had an edge. The Brazilian Amy’s Aviacao do Exercito already uses the AS532/”HM-3” Super Puma, basing them in the Amazon at Manaus. Its Navy also uses Super Puma variants: AS332s and AS532s both serve in the Navy as the UH-14, flying from Brazil’s NAe Sao Paulo aircraft carrier and from the southeastern base of Sao Pedro da Aldeia in support of Brazil’s Marines. Now, Eurocopter’s offering will become Brazil’s medium-lift helicopter across all services… thanks to a new contract.

• The Cougar and the Opportunity
• Contracts & Key Events [updated]
  
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All together now…
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Over the past 18 months, DID has spent a fair bit of time covering Britain’s defense procurement reforms, in particular its practice of “contracting for availability” rather than spare parts or maintenance hours on a number of its key platforms. In Britain, the approach of starting at a smaller level, then expanding the scope once performance is proven and trust built, has become standard procedure in this field.

Across the pond, the USA is significantly behind Britain in this area. Fortunately, they have not ignored the model entirely. Recent changes to the contracts covering their B-2 Spirit stealth bomber fleet demonstrate that some progress is being made, even as these efforts receive $3+ billion more between now and 2014…

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