In July 2013, the Royal Australian Air Force inked a long-term contract with BAE Systems to maintain and upgrade its 33 Hawk Mk.127 jet trainers based at RAAFB Williamtown and RAAFB Pearce. The new deal is for 5 years and up to $435 million, with potential extensions out to 2026. It covers depth maintenance, engineering support, and full logistics/ spares and training systems support. They’re following a similar path to Britain’s “Contracting for Availability“, building on a previous 2-year, A$ 150 million, performance-based deal that reportedly saved the RAAF 10% on Hawk support costs.
Al Qaeda’s resurgence in Iraq has contributed to a serious increase in casualties, with more than 1,000 deaths – most of them civilian – last month alone.
“In May Mr Obama spoke of the ‘war on terror’ coming to an end. It is true that al-Qaeda’s focus is now mostly on local struggles rather than the ‘far’ enemy in the West. But, compared with 12 years ago, it has many more fighters and holds much more territory [emphasis DID]. Its priorities could easily and at any moment shift once more. If a conversation between Mr Zawahiri and Mr Wuhayshi can be the cause of so much bother and trouble, Mr Obama may have to think again.”
US Defense Acquisition Undersecretary Frank Kendall issued a memo [PDF] on should cost management giving some flexibility to the services to provide them an incentive to pursue savings:
“Components will continue to baseline acquisition budgets using will cost estimates and CAPE Independent Cost Estimates when available […] However, successful should cost initiatives should drive down future program budgets once the savings have been demonstrated and realized. Components have the latitude to apply savings to their most pressing unfunded requirements, or may reinvest this funding within the same programs to accelerate the acquisition, fund cost-reduction initiatives, or cover critical unfunded requirements.”
In late November 2008, Canada’s Department of National Defence (DND) announced its intention to combine 3 programs into one general set of upgrades to its armored vehicle fleets. The C$ 5 billion meta-program would include:
(1) “Close Combat Vehicles” that perform as tracked Infantry Fighting Vehicles or Armored Personnel Carriers, alongside Canada’s new Leopard 2A6 tanks. Canada’s wheeled LAV-IIIs showed limitations in Afghanistan. Canada’s old M113 tracked APCs were a successful supplement, but the Canadians appear to be leaning toward a heavier vehicle for their future CCV. (2) A new “Tactical Armored Patrol Vehicle” that’s similar to the blast-resistant vehicle buys in other NATO countries. (3) LAV-UP upgrades to the existing LAV-III 8×8 wheeled APC fleet completed the set. July 2009 saw the roster expand to add (4) “FME”: dedicated Armored Engineering Vehicles based on the Leopard 2 tank, and engineering-related attachments for Canada’s new Leopard 2 tanks.
The “Close Combat Vehicle” appeared to be the most urgent purchase, but Canada’s procurement approach wasn’t structured to deliver urgency, and CCV has suffered the most from that failure. CCV is now the last unresolved contract, but all 4 sub-programs failed to deliver vehicles in time to help Canada in Afghanistan. Even so, all 4 programs continue to move forward.
Furloughs for civilian employees at the Pentagon have been further reduced to 6 days for the fiscal year ending on September 30, down from 11. On the one hand, that’s good news for these employees. On the other hand, these several downward revisions from an initial 22 days contribute to the narrative that sequestration has a much milder impact than decried so loudly for so long by the government and prime contractors.
In February 2007 the UAE announced its selection of the EADS A330 MRTT as its next-generation aerial tanker, with secondary transport capabilities. In this industry, however, contracts can take a while to materialize. It took another year for EADS to announce a signed contract for their initial 3 aircraft. The UAE’s tankers will be fitted with under-wing “hose and drogue” pods to refuel boom-equipped aircraft like the UAE’s Mirage 2000-9s, and an EADS ARBS boom system to refuel aircraft with dorsal inlets like their F-16 E/F Desert Falcons.
As is usually the case for contracts involving the UAE, price is not revealed. In this case, however, the quantity is known.
The Children’s Investment Fund (TCI), an hedge fund known for its “shareholder activism”, wants EADS to sell its 46% stake of Dassault Aviation. They’ll need the French government to agree.
The French government presented [in French] its 2014-19 Loi de Programmation Militaire (LPM, a 6-year defense budget law), to be discussed in parliament in the fall. They are confirming President Hollande’s earlier commitment to a flat (in nominal terms) EUR 31.4B/year ($41.4B) for the first 3 years of the period. However reaching that number will depend on EUR 6.1B worth of “exceptional income” from the sale of government-owned buildings and possibly shares in defense companies.
To drill down into France’s planned acquisitions, see their LPM briefing document [PDF, in French]. Among them, France hopes that exports will help sustain Dassault’s required 11 Rafale deliveries per year. Between ignoring inflation, relying on big ticket item sales whose value and timing remain to be seen, and hoping for tentative exports, these are three significant caveats to the “flat spending” pledge.
