[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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Emerging clusters, 2005
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Russia’s aircraft industry remains one of the country’s defense export standbys, and Russian companies are beginning to partner with foreign firms in ways that could increase their reach. In December 2005, Moscow Defense Brief took a look at key trends, especially the consolidation trends as private maneuverings and state ‘encouragement’ to join a “Unified Aircraft-Building Corporation” (UABC) began to consolidate the various players.

At the time, names like Mikoyan, Sukhoi, Antonov, Ilyushin, Yakolev et. al. appeared to be coalescing around Irkut Corporation, with a second smaller pole around Sukhoi. Recent events are shifting away a French “sesquipolar” model, and toward a unipolar model. The question is whether this will result in success and profitability for a Russian defense industry that is struggling to regain its footing. Recent announcements at the MAKS 2009 indicate that more financial aid is on the way, but the powers that be are less than happy…

• Makienko’s 2005 Analysis
• Key Events & Developments
• Additional Readings
  
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Irkut concept
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In late December 2006, Hindustan Aeronautics (HAL) announced a $700-million joint venture (JV) agreement with Irkut Corporation of Russia for manufacturing 60-tonne multi-role transport aircraft (MRTA). Under this 50/50 arrangement with HAL, Ilyushin Design Bureau of Russia will design the MRTA and Irkut corporation of Russia will develop the aircraft, while series production would be taken up by the transport aircraft division of HAL at Kanpur. Irkut is a major investor (40% of project expenses), and will be the coordinator of the Russian side. For HAL, the move is part of an effort to forge new partnerships with global aviation majors for military and civil projects, with an eye on trebling their annual turnover to $3 billion by 2011.

YC-15 and F-4
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The MRTA has been described in news reports as a 60-ton, 100-seat aircraft aimed at the military freigter market, creating some confusion about its ultimate carrying capacity and competitive niche. Is it destined to replace the Ilyushin IL-76s India flies? Compete with the 120-troop capacity A400M? Further research with Irkut shows it to be a 60-ton total takeoff weight aircraft with a cargo capacity of around 18,500 kg/ 20 tons, giving it similar capacity and dimensions to the Russian An-12 or the USA’s C-130J Hercules. Illustrations show a jet aircraft whose requirements produce a design somewhat reminiscent of the canceled 1970s US AMST Program that eventually led to the much larger C-17.

Recent reports indicate that the formal contract is set for signing in September 2009 – but other competitors may have a jump of the critical time-window for introduction…

• MRTA and the Per-Ton Price Constant
• MRTA: Contracts and Key Events
• Additional Readings
  
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