The Pentagon’s Defense Business Bureau, an advisory group designed to give private sector expertise to senior leaders, announced its global analysis of DoD practices found potential savings of about $25 billion per year, to be squeezed mostly out of logistics, procurement, property management, HR, and healthcare, in that order.
The savings presume a capacity for the military to create ongoing and cumulative productivity increases – as does the private sector, generally. While the rather top-down analysis is likely to seem far fetched to military professionals, it does starkly compare behaviors in the private sector that differ, and that have resulted in vast, cumulative efficiencies.
When it comes to specifics, speaks generally about four areas of recommendations: renegotiating contracts; cutting the workforce; IT modernization and the catch-all business process re-engineering.
DoD contractors will be interested to see the nature of the target painted on their piece of budget pie. The DDB hopes to realize $9 to $18 billion in savings per year by saving 10-25 percent of contract spending. How they hope to do that? “More rigorous” negotiations; contract aggregation for economies of scale; a push for greater productivity in labor contracts; and the elimination of gold plating requirements.
Deputy Defense Secretary Bob Work charged the DDB with producing the report back in October in an effort to gauge the scope of changes that would help modernize the whole of the defense enterprise.
The report doesn’t break too much ground in terms of tactics recommended, as previous reports have largely enumerated the various savings the DDB hopes the military will recognize.
At the end of August 2011, Brazil’s Ministerio da Defesa announced the beginning of a BRL 1.09 billion (about $685 million) project to update Avibras’ ASTROS (Artillery SaTuration ROcket System) multiple rocket launcher system to the ASTROS 2020 configuration. It will also develop a GPS-guided short-range rocket, and an AV-TM300 missile option that gives the new system a 300 km strike range. That level of reach would stand out in the global market, as it would rival the USA’s MLRS(Multiple Launch Rocket System)/ATACMS(Army Tactical Missile System) combination.
The initial funding amounts belie the importance of this program, on 2 levels. One source of importance is industrial. The other is ASTROS 2020’s status as an indicator, pointing the way toward the future spread of advanced precision strike technologies.
Implementation of Britain’s “future contracting for availability” approach of paying for machines in service, rather than parts and hours, generally involves a phased set of contracts and agreements. As each party’s understanding the risks and demands grow, the contract’s complexity and comprehensiveness grow as well, and the framework moves closer and closer to the desired goal of a full availability contract. “Britain Hammers Out Through-Life Support Framework for Tornado Fleet” described how this approach works on the ground, and talked about some of the keys to success. “UK’s “Contracting for Availability” Adds Hawks, Looks Ahead” mentioned the MoD’s March 2007 Long Term Partnering Agreement Foundation Contract with BAE Systems, which aims to place all British military aircraft under this kind of framework.
In late 2007, the UK’s Eurofighter Typhoon fleet entered Quick Reaction Alert service with the RAF, and began flying with new ground-attack capabilities. In step with its growing operational responsibilities, the UK MoD began moving toward an availability contracting maintenance model. A 5-year contract signed in March 2009 accelerated that shift, and the Typhoon Availability Service has begun operations. Recent reports have raised the question: how successful has it been?
It’s becoming clear that Gulf states, including Saudi Arabia, have stepped up their defense spending in recent years. Uncertainty creates perceptions of risk, and perceptions of risk lead to responses aimed at reducing that risk. That’s why arms spending is an incomplete but very concrete way of tracking a state’s real assessment of threats and priorities. Iraq is no longer a missile/WMD threat, but Iran’s ballistic missiles are another matter. They may be based on North Korean designs that lack accuracy, but the prospect of nuclear payloads is producing reactions.
Gulf states recognize that even a lucky conventional missile could wreak havoc if it hit key oil-related infrastructure, or damaged the larger and more nebulous target of business confidence. The spread of nuclear weapons would change the calculus completely. A 2007 US National Intelligence Assessment [redacted NIE summary, PDF] believed that Iran’s nuclear program had stopped, but others, including the United Nations and Israel, were more skeptical. By 2010, that skepticism had spread to US intelligence, which repudiated an assessment that seems set to join the infamous 1962 NIE of no Soviet missiles in Cuba [1].
The Gulf states’ response to these developments covers a range of equipment, but anti-ballistic missile capabilities appear to be rising to the top of the priority list.
African countries need counter-insurgency and surveillance aircraft, but they aren’t about to buy top-end gear like an AC-130. Embraer’s A-29 Super Tucano turboprop trainer and light attack aircraft is about the upper end – a few African countries have purchased them, and the USA’s LAS program offers them through an intermediary. Lower-end alternatives involve widely-used and easy to maintain light planes like the Textron Cessna C-208Bs fielded by Iraq and Lebanon, AirTractor’s AT-802Us, etc. A recent Pentagon contract shows that the low-end idea is catching on.
The USA’s Global Positioning System service remains free, but the European Union is spending billions to create an alternative under their own control. In addition to civilian GPS (the Open Service), services to be offered include a Safety of Life Service (SoL) for civil aviation and search and rescue, a paid Commercial Service with accuracy greater than 1 meter, plus a Public Regulated Service (PRS) for use by security authorities and governments. 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 2014/15. After a public-private partnership model failed, the EU gained initial-stage approval for its plan to finance the program with tax dollars instead of the expected private investments. Political issues were overcome in 2007 by raiding other EU accounts for the billions required, but by 2011, it became clear that requests for billions more in public funds were on the way. Meanwhile, doubts persist in several quarters about Galileo’s touted economic model. Security concerns regarding China’s early involvement, and its potential Beidou-2/Compass projects, have been equally persistent, and there is good reason to expect that the constellation has a military purpose. On a European political and contractual level, however, Galileo is now irreversible.
This article offers background, players, developments, contracts, and in-depth research links for Galileo, as well as linked EU programs like GIOVE and EGNOS.
The 22nd International Defence Industry Exhibition (MSPO 2014) was a good opportunity to take a closer look at the ambitious technical modernization program of the Polish Armed Forces. Poland is among the very few European countries that has been increasing its military spending, as part of a shift away from Soviet-era gear and toward modern Western systems. The Polish government’s legal commitment to allocate 1.95% of the previous year’s gross domestic product (GDP) to defence spending, and a growing threat perception from Russia, are strengthening Poland’s political commitment.
Even so, the forecast made by the Polish Ministry of National Defence (MoND) appears to be overly optimistic regarding the availability of funds…
The dilemma for airdropping supplies has always been a stark one. High-altitude airdrops often go badly astray and become useless or even counter-productive. Low-level paradrops face significant dangers from enemy fire, and reduce delivery range. Can this dilemma be broken?
The US military believed that modern technologies could allow them to break the dilemma. The idea? Use the same GPS-guidance that enables precision strikes from JDAM bombs, coupled with software that acts as a flight control system for parachutes. JPADS (the Joint Precision Air-Drop System) has been combat-tested successfully in Iraq and Afghanistan, after moving beyond the test stage in the USA… and elsewhere.
In July 2010, Vincent Pavlak, a partner in KPMG LLP’s Transactions & Restructuring service group, contributed an article to Defense Industry Daily, titled, “Lessons from the Automotive Supply Chain: Surviving a Downturn.” At the time, the automotive industry was enduring one of the worst economic periods in history, and there were concerns that the aerospace and defense industry could suffer a similar fate. Ultimately, the automotive suppliers that endured the downturn have emerged stronger, due in part to critical efforts undertaken during the crisis. Meanwhile, the aerospace and defense industry has experienced a post-crisis divergence of paths, with commercial aerospace companies enjoying a resurgence parallel to the automotive industry while the defense sector has suffered declining revenues and prospects. Despite differing outlooks now facing each industry, supply chain enhancement presents opportunities for increased competitive advantage for aerospace, defense and other industries across varying economic cycles.
Part 1 looked at supply chain issues and imperatives for aerospace & defense (A&D). Part 2 looks at some implications, trends, and opportunities.
In July 2010, Vincent Pavlak, a partner in KPMG LLP’s Transactions & Restructuring service group, contributed an article to Defense Industry Daily, titled, “Lessons from the Automotive Supply Chain: Surviving a Downturn.” At the time, the automotive industry was enduring one of the worst economic periods in history, and there were concerns that the aerospace and defense industry could suffer a similar fate. Ultimately, the automotive suppliers that endured the downturn have emerged stronger, due in part to critical efforts undertaken during the crisis. Meanwhile, the aerospace and defense industry has experienced a post-crisis divergence of paths, with commercial aerospace companies enjoying a resurgence parallel to the automotive industry while the defense sector has suffered declining revenues and prospects. Despite differing outlooks now facing each industry, supply chain enhancement presents opportunities for increased competitive advantage for aerospace, defense and other industries across varying economic cycles.
Part 1 deals with the key challenges facing these industries’ supply chains.
