Mar 06, 2008 20:08 UTC
Red flag to a
bull defense market
As was the case in the communist Soviet Union, China’s official military budget and real military budget are not the same thing. Many items are hidden under other ministries, or simply not reported truthfully in the absence of accountable government. Official figures are given, however, and for the last 2 decades those figures have shown uninterrupted double-digit increases. Hot on the heels of the Pentagon’s release of its Congressionally-mandated “Military Power of the People’s Republic of China 2008” [PDF] report, Chinese “People’s Congress” spokesman Mr. Jiang Enzhu announced an 17.6% increase in China’s 2008 military budget, to 417.77 billion yuan ($58.81 billion). The increase follows a 17.8% increase in 2007, and a 14.7% increase in 2006.
The real math, of course, lies in compound interest; over 20 years, an increase averaging 10% per year would grow a budget to 6.7 times its original size; at 12.5% per year, the figure is 10.5 times, and at 14% per year the budget would be 16.4 times its original size. Military modernization programs appear to be accelerating in step, including reports that China’s navy has already announced plans to build its first aircraft carrier by 2010. While estimates regarding the true size of China’s military budget vary…
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Mar 06, 2008 18:13 UTC
As the $35 billion KC-45 tanker purchase flies into the teeth of Washington’s political battles, the Lexington Institute think-tank discusses the relative ratings of each contestant in the USAF’s aerial tanker competition. This is a bit unusual, as even Boeing has yet to hear the official debrief – a fact that has them somewhat upset. DID would not normally consider a report of this nature credible, but the think-tank has a wide range of contacts in Washington, and has been focusing on this deal for some time. Their broad assessment also mirrors commenets made by Sen Richard Shelby [R-AL], so it is possible – but not certain – that their report is correct.
Lexington defense analyst Loren Thompson contends that the Airbus/Northrop Grumman proposal would be able to deliver 49 operational tankers by 2013, whereas Boeing would have been able to deliver just 19 aircraft within that timeframe. That’s an interesting calculation whose basis DID would be interested in viewing, but public access may be an issue as it was attributed to USAF reviewers. Beyond that, Thompson concludes that Boeing lost out on 4 of 5 key measures, and tied on the 5th. Of course, sharp-eyed DID readers will recall that they were 9 Key Performance Parameters listed in the RFP…
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Mar 06, 2008 14:06 UTC
Watts Constructors, LLC in Honolulu, Hawaii won a $46.9 million firm-fixed-price contract to build a Communications Center at Naval Computer and Telecommunications Area Master Station Pacific, for Naval Station Pearl Harbor. Work will be performed in Wahiawa, Hawaii, and is expected to be complete by March 2010. Contract funds will not expire at the end of the current fiscal year. This contract was competitively procured, with 57 offers solicited and 5 proposals received by the Naval Facilities Engineering Command, Pacific in Pearl Harbor, Hawaii (N62742-08-C-1300).