FY 2014: US Department of Defense Budget Headed for Another Rocky Year

By releasing its budget proposal for fiscal year 2014 in mid-April, the Obama administration was two months over the legal deadline and later than at any time in the modern record. The Office of Management and Budget (OMB) reiterated the gambit that failed and arguably backfired in the previous fiscal year by ignoring the sequester. In place, President Obama put again on the table the broad terms he had offered earlier to House Republicans, with a mix of spending cuts (translation from Washington lingo: mostly a decrease in the rate of real growth) and tax increases. That was received by most observers as a lack of realism, making the budget request directly interesting in terms of relative priorities at best.

To add insult to the injury, the Overseas Contingency Operations (OCO) budget and Green Book were released only weeks later, giving the impression of an administration scrambling to apply the Budget Control Act, a law that had been on the books for more than a year.

A number of systems, especially among UAVs and ground vehicles, see a decline in the quantity of scheduled buys, but the list of programs that are explicitly terminated or restructured is rather slim, reflecting the Administration’s choice to use its previous budget request as its baseline rather than plan within sequestration constraints. This gives the initiative back to lawmakers. Will they seize it?

V-22 Osprey: The Multi-Year Buys, 2008-2017

In March 2008, the Bell Boeing Joint Project Office in Amarillo, TX received a $10.4 billion modification that converted the previous advance acquisition contract (N00019-07-C-0001) to a fixed-price-incentive-fee, multi-year contract. The new contract now sits at $10.92 billion, and will be used to buy 143 MV-22 (for USMC) and 31 CV-22 (Air Force Special Operations) Osprey aircraft, plus associated manufacturing tooling to move the aircraft into full production.

The V-22 tilt-rotor program has been beset by controversy throughout its 20-year development period. Despite these issues, and the emergence of competitive but more conventional compound helicopter technologies like Piasecki’s X-49 Speedhawk and Sikorsky’s X2, the V-22 program continues to move forward. This DID Spotlight article looks at the V-22′s multi-year purchase contract from 2008-12 and 2013-2017, plus associated contracts for key V-22 systems, program developments, and research sources.

Rolling Sales: Indonesia Becomes the Latest Buyer of German Tanks

Leopard 2A6

In August 2012, reports emerged that Indonesia had made a deal with Germany to buy heavy tanks and infantry carriers, after the Dutch had demurred. The Indonesian Army has a long record of human rights abuses, which sparked considerable opposition in the Netherlands. In contrast, Germany has been pushing hard for defense exports as a way to keep its defense industrial base busy, and of preserving jobs amidst Europe’s economic slowdown.

In May 2013, those reports were finally confirmed. What is the exact shape of the deal? How will the new vehicles fit with, and compare to, Indonesia’s existing equipment? And how did we get to this point?

Brazil’s F-X2 Fighter Competition

Upgraded F-5EM

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. The Navy and Army have already received funds to replace broken-down equipment, and new fighters will be a critical centerpiece of the Forca Aerea Brasileira’s efforts.

Boeing’s F/A-18 E/F Super Hornet, France’s Dassault’s Rafale, Saab’s JAS-39 Gripen NG were picked as finalists. But after repeated stalling, the question is whether Brazil will actually place an order, or fold up the competition like the ill-fated 2011 F-X process.

This free-to-view DID Spotlight article covers Brazil’s reborn F-X2 competition, adds its assessment of the competitors’ relative strengths and weaknesses, and covers ongoing events.

Australia’s Next-Generation Submarines

Bridge to the future?

In its 2009 White Paper, Australia’s Department of Defence and Labor Party government looked at the progress being made in ship killing surveillance-strike complexes, and at their need to defend large sea lanes, as key drivers shaping future navies. These premises are well accepted, but the White Paper’s conclusion was a surprise. It recommended a doubling of Australia’s submarine fleet to 12 boats by 2030-2040, all of which would be a new successor design that would replace the RAN’s Collins Class submarines.

The surprise, and controversy, stem from Australia’s recent experiences. The Collins Class was designed with the strong cooperation of ThyssenKrupp’s Swedish Kockums subsidiary, and built in Australia by state-owned ASC. The class has had a checkered career, including significant difficulties with its combat systems, issues with acoustic signature and propulsion, major cost growth to A$ 5+ billion, and schedule slippage. Worse still, reports indicated that the RAN can only staff 2 of its 6 submarines. High-level attention led to a report and recommendations to improve the force, but whether they will work remains to be seen. Meanwhile, the nature of Australia’s SEA 1000 future submarine project – and its eventual cost – remain unclear, with estimated costs in the A$ 36-44 billion range. This FOCUS article covers Australia’s options, decisions, and plans, as their future submarine program slowly gets underway.

ER/MP Gray Eagle: Enhanced MQ-1C Predators for the Army

ER/MP, armed

In August 2005, “Team Warrior” leader General Atomics Aeronautical Systems, Inc. in San Diego, CA won a $214.4 million cost-plus-incentive-fee contract for research, development, test and evaluation (RDT&E) of the Extended Range/ Multi Purpose Unmanned Aerial Vehicle System (ER/MP UAS). That was just the first step along the US Army’s $5 billion road to fielding a true Medium Altitude, Long Endurance, armed UAV, modified from the USAF’s famous MQ-1 Predator.

The ER/MP program was part of the US Army’s reinvestment of dollars from the canceled RAH-66 Comanche helicopter program, and directly supports the Army’s Aviation Modernization Plan. Its position got a boost when a 2007 program restructuring cut the Future Combat Systems Class III UAV competition, in favor of ER/MP. Next, the US Air Force saw this Predator derivative as a threat and tried to destroy it, but the program survived the first big “Key West” battle of the 21st century. Now the MQ-1C “Gray Eagle” is moving into full production, as the US Army’s high-end UAV. This FOCUS article offers a program history, key statistics and budget figures, and ongoing coverage of the program’s contracts and milestones.

NH90: Europe’s Medium Helicopter Contender

NH90: TTH & NFH

The NH90 emerged from a requirement that created a NATO helicopter development and procurement agency in 1992 and, at almost the same time, established NHIndustries (62.5% EADS Eurocopter, 32.5% AgustaWestland, and 5% Stork Fokker) to build the hardware. The NATO Frigate Helicopter was originally developed to fit between light naval helicopters like AW’s Lynx or Eurocopter’s Panther, and medium-heavy naval helicopters like the European EH101. A quick look at the NFH design showed definite possibilities as a troop transport helicopter, however, and soon the NH90 project had branched into 2 versions, with more to follow.

The nearest equivalent would be Sikorsky’s popular H-60 Seahawk/ Black Hawk family, but the NH90 includes a set of innovative features that give it some distinguishing selling points. Its combination of corrosion-proofing, lower maintenance, greater troop or load capacity, and the flexibility offered by that rear ramp have made the NH90 a popular global competitor.

As many business people discover the hard way, however, success can be almost as dangerous as failure. NH Industries has had great difficulty ramping up production fast enough to meet promised deliveries, which has left several buyers upset. Certification and acceptance have also been slow, with very few NH90s in service over a decade after the first contracts were signed. Booked orders have actually been sliding backward over the last year, and currently stand at 474 machines, on behalf of 14 nations.

Super Hornet Fighter Family MYP-III: 2010-2014 Contracts

Breakthrough…

The US Navy flies the F/A-18 E/F Super Hornet fighters, and has begun operating the EA-18G Growler electronic warfare & strike aircraft. Many of these buys have been managed out of common multi-year procurement (MYP) contracts, which aim to reduce overall costs by offering longer-term production commitments, so contractors can negotiate better deals with their suppliers.

The MYP-II contract ran from 2005-2009, and was not renewed because the Pentagon intended to focus on the F-35 fighter program. When it became clear that the F-35 program was going to be late, and had serious program and budgetary issues, pressure built to abandon year-by-year contracting, and negotiate another multi-year deal for the current Super Hornet family. That deal is now final. This entry covers the program as a whole, with a focus on 2010-2015 Super Hornet family purchases. It has been updated to include all announced contracts and events connected with MYP-III, including engines and other separate “government-furnished equipment” that figures prominently in the final price.

Direct Sting: Thales’ Small LMM/FASGW-L Missiles

LMMs/FASGW-L on
AW159 SCMR & AH1 Apache

In early April 2011, Thales received an initial production contract for Lightweight Multi-role Missiles (LMM), to equip the UK’s next-generation AW159 Wildcat naval helicopters as their “Future Anti-Surface Guided Weapon – Light” (FASGW-L). The parties offer no details regarding contract costs, as they’re re-routing funding from an existing project, in order to finalize LMM development and produce the initial set of weapons. The casualty is believed to be Thales’ laser beam-riding, Mach 3.5 Starstreak portable anti-aircraft missile, which reportedly had some of its technology re-used in the less costly LMM.

The LMM will fill a niche on helicopters and UAVs that sits somewhere below the popular 100 pound plus Lockheed Martin AGM-114 Hellfire missile, or laser-guided 70mm rockets, and appears similar to emerging mini-weapons like Raytheon’s Griffin.

The USA’s M4 Carbine Controversy

An M4 – or is it?

The 5.56mm M-16 has been the USA’s primary battle rifle since the Vietnam war, undergoing changes into progressive versions like the M16A4 widely fielded by the US Marine Corps, “Commando” carbine versions, etc. The M4 Carbine is the latest member of the M16 family, offering a shorter weapon more suited to close-quarters battle, or to units who would find a full-length rifle too bulky.

In 2006 an Army solicitation for competitive procurement of 5.56mm carbine designs was withdrawn, once sole-source incumbent Colt dropped its prices. The DoD’s Inspector General weighed in with a critical report, but the Army dissented, defending its practices as a sound negotiating approach that saved the taxpayers money. As it turns out, there’s a sequel. A major sequel that has only grown bigger with time.

The M4/M16 family is both praised and criticized for its current performance in the field. In recent years, the M4 finished dead last in a sandstorm reliability test, against 3 competitors that include a convertible M4 variant. Worse, the 4th place M4 had over 3.5x more jams than the 3rd place finisher. Was that a blip in M4 buys, or a breaking point? DID explains the effort, the issues, and the options, as the Army moves forward with an “Individual Carbine” competition. But will it actually replace the M4?