By Michael D. White, author and freelance writer
On December 20, 2019, with a stroke of his pen, President Donald Trump signed a $738 billion 2020 National Defense Authorization Act (NDAA) into law setting the record as one of the biggest investments in military power by any nation in history.
The Act includes $635 billion for the base Pentagon budget, $23.1 billion for U.S. Energy Department nuclear weapons programs, $71.5 billion for war operations, and $5.3 billion in emergency disaster recovery for military bases.
The highlight of the bill, though, was not so much the scale of the funding earmarked for sea, land or air defense and ancillary activities as it was the official unveiling of the U.S. Space Force—the sixth branch of the U.S. military and the first created in more than 70 years.
The last independent branch of the U.S. Armed Forces—the U.S. Air Force—was established in 1947, which was separated from the U.S. Army.
Although traditional land, maritime and air-based threats continue to emerge, motivated by the ongoing, decades-long militarization of space and the advances made by potential adversaries, President Donald Trump directed the Pentagon to begin planning for a Space Force in June 2018 with a mission, according to the official directive, “to undertake missions and operations in the rapidly evolving space domain.”
That “rapidly evolving space domain” has become an increasingly important component of the nation’s overall defense industry sector as escalating global tensions have the potential to pose a significant threat to, for example, the extensive array of satellites that are key components of both military and non-military communications systems.
The cost of setting up the pending U.S. Space Force as a new military branch would likely top out at $2.7 billion at most over the next five years, a leading defense analyst has said, well below the U.S. Air Force’s $13 billion prediction.
In the days leading up to the signing of the NDAA, two aerospace giants inked space defense-related contracts with the Department of Defense.
Northrop Grumman Corporation secured a $450 million deal to provide “warfare simulation and advanced battlespace environment” training to the new U.S. Space Force, while Lockheed Martin Corp.’s Moorestown, New Jersey, unit was awarded a $585 million, five-year contract to manufacture a Hawaii-based missile defense radar in an effort “to counter evolving space-sourced threats.”
Earlier, Orbital ATK Inc. and Space Vector Corp. scored a $424 million contract to provide launch support services for the U.S. Department of Defense’s (DOD) sounding rocket program, which is mainly used to conduct scientific research on the upper atmosphere, while United Launch Alliance won an $867 million deal from the U.S. Air Force to keep supplying its Delta and Atlas rockets to the military in the meantime.
Colorado-based SEAKR Engineering Inc. nabbed a contract to develop and test processing system prototypes that have the ability to shield sensitive satellite communications from interference for the U.S. and, more recently, was selected by Northrop Grumman to provide an advanced space signal processor on two new GEOStar satellites to launch in 2022.
Last September, Lockheed Martin Corp. won a $7.2 billion contract to supply more next-generation Global Positioning System satellites to the military, and, by last fall, the U.S. Air Force said that it had awarded more than $2.2 billion in development deals for new space launch vehicles to a trio of established aerospace interests—Blue Origin, Northrop Grumman, and the United Launch Alliance.
According to Ireland-based industry analyst ResearchandMarkets, “Shifting from Post-9/11 asymmetric warfare to complete readiness for potential conflicts with peer- or near peer-competitors is a Copernican revolution for the Pentagon at every level: diplomatic, military, and doctrinal, and also in terms of procurement and training.”
Preserving the status quo, the analyst says, “Necessitates more expenditure in existing platform upgrades and new technology integration, evidenced by the current trend of budget allocation. This year’s DoD budget will increase by three percent from FY 2018, which was already one of the highest recorded in history (although smaller than FY 2017). Expenditures on actual acquisitions is in contrast to this trend. The procurement budget will hit $143 billion for FY 2020, after two consecutive years of $150 billion. More money is actually going into personnel, infrastructure, and O&M [Operations and Maintenance] expenditure.”
In addition, technological advancements and digitization have also led to cyber-related threats. To be prepared for the future, the nation’s military strategy is evolving, aiming at integrating digital tools and technologies to manage both traditional and digital-age threats.
The DOD issued a new cyber strategy last fall that allows for the increased use of offensive cyberattacks, as its focus turns towards cyber competition with China and Russia.
This strategic shift, says ResearchandMarkets, “has resulted in a bigger focus on many cyber security programs, which are expected to play a vital role in the near term.”
Boeing, Bae, Lockheed Martin, And Northrup Grumman
The past year has been a rollercoaster of highs and lows for Boeing, the Chicago-based multinational aerospace giant that ranks as one of the world’s largest manufacturers of commercial aircraft, rockets, satellites, missiles and telecommunications equipment.
Following two fatal crashes of the Boeing 737MAX narrow-body passenger airplanes in 2018 and 2019 in which 346 people died, aviation regulators and airlines around the world grounded 390 B737MAX airliners, while a scandal involving a series of internal memos regarding the airworthiness or lack thereof of the aircraft melded with the subsequent firing in December of Chief Executive Officer Dennis Muilenburg to deliver a devastating blow to the mega-giant’s bottom line, financial rating, and reputation.
In January, the company posted its first annual loss since 1997, due in no small part to the 737MAX scenario. Boeing’s core operating loss was $2.53 billion, compared with a profit of $3.87 billion a year earlier.
According to aircraft industry sources, costs related to the 737 MAX grounding reached $14.6 billion in 2019 and the company warned of another $4 billion in charges in 2020 due to the expense of slowly re-starting production of the aircraft. Sources say that those costs could reach as high as $18 billion before the aircraft returns to operational status sometime later this year.
The same week that Muilenberg was sacked, though, Boeing Co. secured a $1.5 billion contract to provide support services for Apache helicopters through the Foreign Military Sales program, according to the Pentagon. The contract funds services for AH-464 D/E Apache helicopters for Israel, Saudi Arabia, South Korea, United Arab Emirates, Indonesia, Netherlands and Taiwan.
In July, Boeing was awarded $96.9 million to provide support for Apache helicopters and Longbow crew trainers for the United Arab Emirates.
According to the company, more than 2,200 Boeing-built Apaches have been delivered to customers around the world since the first of the twin-turbo shaft, multi-use attack helicopters was delivered to the U.S. Army in 1984.
At the same time, Boeing was awarded a $265 million contract modification to continue its work on the Department of Defense’s land-based missile defense system.
The modification calls for the Chicago-based company to support and upgrade communications networks for the Ground-based Midcourse Defense (GMD) system, which is designed to detect and destroy long-range ballistic missiles targeting sites in the United States.
The award follows a January 2018 modification worth $6.56 billion that called on Boeing to build 22 new missile silos for Ground Based Interceptors (GBIs) in addition maintaining and upgrading various components of the GMD system.
The new modification brings the contract’s total potential value to $11.2 billion—up from $10.79 billion following an April 2018 adjustment that finalized some terms and conditions of the contract—and will support various upgrades tied to the GMD Communications Network Modernization.
Earlier in the year, Boeing was awarded a $14 billion contract for modernization and sustainment work on both the B-1 and B-52 over the next decade, upgrades which are meant to increase lethality, enhance survivability, improve supportability and increase responsiveness the company noted. The two aircraft, with the B-2 Spirit, often referred to as the ‘Stealth’ bomber, form the U.S. Air Force’s trio of long-range strategic bombing aircraft.
In September, the U.S. Air Force awarded Boeing a pair of contracts totaling more than $5 billion―a modification of an existing contract to produce 18 KC-46 Pegasus aircraft, with the order bringing the total number of aircraft ordered under the contract to 52; and a deal to provide a replacement helicopter for its iconic UH-1N Huey, picking Boeing’s MH-139 model over alternatives offered by rivals Sikorsky and Sierra Nevada.
On Christmas Eve, Boeing announced that it had been awarded a $400 million contract for engineering work on two of the United States’ three strategic bomber aircraft.
The deal covers recurring and non-recurring engineering services on the B-1 Lancer and B-52 Stratofortress long-range bombers. Work under the new deal will be performed at Tinker Air Force Base in Oklahoma; Edwards Air Force Base in California; Barksdale Air Force Base in Louisiana; and at other locations in Oklahoma City, Oklahoma. The new contract runs through December 31, 2020.
Most recently, on January 25, 2020, Boeing’s new wide-bodied 777X completed its maiden flight from Everett, Washington and landed about four hours later at Seattle’s Boeing Field. The short hop was the first flight in a series of airworthiness tests that will be conducted through the end of this year as the company works toward winning regulatory approval.
The plane is the largest twin-engine jet ever built and has a wingspan so wide—more than 235 feet—it features folding wingtips that reduce that width by more than 20 feet so the plane can fit into various airport taxiways and gates. The 777X-9 is slightly longer than Boeing’s most iconic plane: the hump-backed 747, which is fading away as airlines opt for twin-engine aircraft that require less fuel.
The 777X, which lists for $422.2 million although airlines usually receive discounts, can fit up to 426 passengers in a two-class configuration. Boeing had 344 firm orders for the 777X at the end of the third quarter, according to a company filing, and Emirates is its biggest single customer.
The maiden flight of the 777X was a much-needed boost for a company desperate to revive its reputation with both investors and the public following the disclosure of internal emails that revealed employees boasting about convincing regulators and airlines to approve the 737Max without costly simulator training, while other documents expressed safety concerns about the aircraft.
BAE Systems Inc., the Virginia-based subsidiary of UK-headquartered multinational BAE Systems plc, snagged several big ticket Defense Department contracts in 2019.
The first, a $148.3 million contract with the U.S. Army, calls for BAE to upgrade M88A1 heavy-lift vehicles. Under the terms of the deal, a total of 43 vehicles will be rebuilt with increased power, maneuverability and survivability features to increase their configuration to M88A2 Heavy Equipment Recovery Combat Utility Lift System, or HERCULES, status.
Twenty-eight feet long and carrying a crew of three, the M88A2’s specialty is the recovery of tanks mired to different depths, removing and installing tank turrets and power packs, and its ability to upright overturned heavy combat vehicles. The Army intends to eventually acquire 933 such vehicles.
The company also inked a $119.9 million deal for BAE to build 30 amphibious combat vehicles for the U.S. Marine Corps. The deal is BAE’s third order for low-rate initial production of variants of the vehicle and has been called a milestone by the company on the path to full production.
The contract is a modification of a prior contract and calls for work to be concluded by January 2022. The eight-wheeled ACV personnel carrier variant, or ACV-P, is an amphibious assault vehicle capable of transporting Marines from open-ocean ship to shore, as well as conducting land operations. It can carry 13 personnel and a crew of three. The ACV-P features a 325-mile range before refueling and can travel on land at speeds up to 65 mph.
Production of the vehicles will largely be conducted at BAE’s manufacturing facility in York, Pennsylvania, as well as at four other facilities in the United States.
In July, BAE Systems was awarded an $88 million contract for long lead material for the Army’s new M109A7 Self-Propelled Howitzer and M992A3 Tracked Ammunition Carrier Vehicle programs. The new equipment is a modernization effort, improving size, weight, power, cooling and combat survivability the company noted.
Each vehicle carries a crew of four, and is equipped with a 155 mm gun, among other weapons, as well as the Blue Force Tracker “to aid in situational awareness,” according to the company. The project has an estimated completion date of Jan. 31, 2023. The Defense Department contracted BAE Systems to deliver 18 155mm howitzer artillery guns to the U.S. Army in October 2018.
BAE had already received a $45 million contract in July to improve the firing capabilities of the self-propelled howitzers.
The company also scored big offshore with the award of a contract from the U.S. Navy to modernize the guided-missile cruiser U.S.S. Vicksburg.
The Vicksburg will undergo approximately 18 months of work at the company’s shipyard in Norfolk, Virginia, the ship’s homeport. The Modernization Period (MODPRD) contract includes options that, if exercised, would bring the cumulative value of the contract to just over $175 million.
The company initiated the first phase of Vicksburg’s modernization program in May 2017. Under the new contract, the shipyard’s employees and sub-contractors will work on the ship’s weapons and engineering equipment, including its gas turbine propulsion system; restore crew habitability spaces, and support the installation of a new Aegis combat system, communication suite and CANES (Consolidated Afloat Network Enterprise System).
The Vicksburg’s MODPRD is scheduled to be complete in July 2021, allowing the ship to rejoin the fleet immediately afterward.
BAE Systems’ Norfolk shipyard is also performing similar work on the guided-missile cruiser U.S.S. Gettysburg. The Gettysburg’s MODPRD work began in January 2019 and is expected to be complete in fall of 2020. The Gettysburg and Vicksburg were both commissioned in the early 1990s.
In late November, the company landed a $104.7 million contract with the U.S. Navy to provide engineering and technical services aboard Navy and Coast Guard vessels, the Pentagon announced Monday.
Under the contract, BAE will provide engineering and technical services to support production, lifetime support engineering and in-service engineering for the radio communication, command and control, internal communications, computer, combat information, intelligence, surveillance, and reconnaissance systems aboard Navy surface combatants, several Coast Guard cutters, and at a number of undisclosed shore sites.
According to the Department of Defense, the contract will be applied to all Navy ships but will be focused primarily on Coast Guard ‘47 Class’ and Navy guided missile ‘51 Class’ AEGIS ships. Work on the ships is expected to be completed by 2025
Lockheed Martin Rotary and Mission Systems, a subsidiary of the Maryland-headquartered Lockheed Martin Corp., received a $50.3 million U.S. Navy contract modification for upgrades to the Aegis missile defense system, the Defense Department announced.
The contract calls for Lockheed to provide Aegis shipboard integration engineering, and test team support for the ship’s engineering modernization, ballistic missile defense, and ancillary Aegis support activities, The Navy said. The integration and testing includes test activities for nine planned DDG 51 ‘Arleigh Burke-class’ destroyers, and the major modernization of seven other ships of the same class.
The Aegis Combat System is an advanced command and control and weapon control system using computers and radar to track and guide weapons to destroy enemy targets.
According to the company, about half the work on the contract will be performed at its Moorestown, New Jersey facility, 12 percent of the work will be done in Romania, and most of the remainder at locations around the United States, with a completion date of September 2024.
In December, Lockheed Martin received a contract valued at $1.96 billion from the government of Saudi Arabia for four Multi-Mission Surface Combatant ships.
The ships are derived from the Navy’s Freedom-class littoral combat ships (LCS), and will be built at the Fincantieri Mariette Marine shipyards in Mariette, Wisconsin, the same shipyard currently producing the Navy’s littoral combat ships.
The diesel-powered ships, about 377 feet long, are steel mono-hulls with an aluminum superstructure and have the capability of navigating at sea, as well as close inshore. Each is armed with an Mk 110 57 mm gun, an Mk 49 surface-to-air missile launcher, and multiple .50 caliber M2 machine guns.
Work on the four ships is expected to be completed by June 2026. The contract is part of a $20 billion modernization of Saudi Arabia’s navy and was authorized under the terms of the Foreign Military Sales agreement between the U.S. and Saudi Arabia.
In November, Lockheed Martin received a $184.5 million repair capabilities on a production lot of F-35 aircraft operated by the Pentagon and other non-Department of Defense program participants.
The contract, announced Wednesday by the Department of Defense, tasks Lockheed with establishing organic depot level repair capabilities for the F-35 aircraft under a previously awarded low-rate initial production Lot 11 contract.
The work to support the Air Force, Marine Corps, Navy and non-DOD participants is expected to be complete by March 2023. Half of the work will be done at a facility in Fort Worth, Texas, with the rest at locations across the United States.
Among the aircraft systems and parts the company will be working on are common components, conventional controls, surfaces and edges, electrical/mechanical activation, firewall shutoff valve, radar, wing flap actuator system, hydraulic power generation system, arresting gear, standby flight display, fuel system fan, alternating current contractor module and rudder pedals, according to a Pentagon press release.
The previous month, the Pentagon and Lockheed Martin reached a $34 billion deal that calls for the delivery of 478 F-35s at a cost below $80 million each.
The contract is the largest contract for military material and the lowest price per plane for the F-35 series, according to the UPI press agency.
A statement by Lockheed Martin on Tuesday noted that the cost per plane in each of three delivery cycles known as Lot 12, Lot 13 and Lot 14 is reduced from the previously-delivered planes in Lot 11.
“The cost overrun of the plane and its constant need for repair and improvement has been an issue at the Pentagon and with the U.S. Congress,” observed the news agency at the time.
“Although [the F-35] is regarded as the best stealth fighter plane made, faulty ejection seats, delays in software and problems with helmet displays have slowed production and increased costs. It is estimated that Lockheed Martin’s facilities will not achieve full-scale production for another 13 months.
In December, Lockheed Martin has reached an agreement with IFS to use the Swedish software company’s supply chain and logistics applications in its work for the U.S. Army under a roughly $3.5 billion contract to maintain training systems, according to a Thursday announcement.
That same month, the company received a contract valued at $7 billion for sustainment of the Air Force’s F-22 ‘Raptor’ fighter aircraft.
The long-term award is a modification of a prior contract and provides for the “exercise of an option for an additional five-year ordering period for comprehensive F-22 air vehicle sustainment,” according to a statement released by the Pentagon.
The F-22 is a fifth-generation fighter plane and an element in the U.S. military’s Global Strike Task Force. Designed primarily as an air superiority fighter, it also has ground attack, electronic warfare, and signal intelligence capabilities, and is regarded superior to any known or projected fighter plane. About 200 have been built since it entered U.S. Air Force service in 2005.
Contract work will be performed at Joint Base Elmendorf-Richardson, Alaska; Nellis Air Force Base, Nevada; Tyndall Air Force Base, Florida; Joint Base Langley-Eustis, Virginia; and Joint Base Pearl Harbor-Hickam, Hawaii, as well as at support facilities in California, Utah, Oklahoma, Texas and Georgia.
Sikorsky, General Electric Et Al.
In November, the Navy awarded Sikorsky Aircraft Corp. a $717 million contract to provide supply and logistics support to the entire fleet of in-service CH-53E Super Stallions and MH-53E Sea Dragon helicopters.
The following month, the company received a $556.1 million deal to produce and support Black Hawk helicopters for the U.S. Army, according to the Pentagon. The deal funds production, engineering, program system management technical data and publications for the Black Hawk UH/HH-60, the Army’s utility tactical transport helicopter.
The Black Hawk, introduced in 1974 and used by the U.S. since 1979, provides combat air assault, general support, aeromedical evacuation, command and control and special operations support. It’s used by military forces in Japan, Colombia and South Korea as well as the U.S.
In June Sikorsky received $91.2 million for work on all versions of the Black Hawk and $15 million for Black Hawks in Saudi Arabia. U.S. Army funds for the full $556.1 million were obligated immediately at the time of the contract.
Work will be performed in Stratford, Connecticut with an estimated completion date of June 30, 2021.
Wisconsin-based Oshkosh Defense Inc. Corporation signed a contract with the U.S. Army Contracting Command for 2,721 Joint Light Tactical Vehicles (JLTVs).
The $803.9 million order includes JLTVs for the U.S. Army, U.S. Marine Corps, U.S. Air Force, and U.S. Navy. It also includes 30 vehicles for distribution by the Foreign Military Sale (FMS) to the nation of Montenegro, among the first NATO ally to receive the vehicle.
L3Harris Technologies received a $50 million follow-on delivery order for its Falcon III radios and related equipment from the U.S. Marine Corps as part of its High Frequency Radio II modernization program. The order is part of the Navy Portable Radio Program five-year IDIQ contract received in 2017.
The Melbourne, Florida-based company’s radios provide beyond-line-of-sight communications in satellite-denied environments.
The U.S. Navy’s Naval Information Warfare Center (NIWC Pacific), in partnership with the U.S. Air Force Space and Missile Systems Center (SMC), awarded Booz Allen Hamilton a $178 million contract to provide technical engineering services toward the modernization of advanced Global Positioning System (GPS) systems.
The NIWC Pacific Positioning, Navigation and Timing (PNT) Division is the Navy’s principal research and development center for navigation sensors and systems. SMC is the center of technical excellence for developing, acquiring, fielding, and sustaining resilient and affordable military space systems.
Pittsburgh, Pennsylvania-headquartered PPG Inc. completed construction of a $15.5 million upgrade of its aerospace research and technology (R&T) center in Burbank, California.
Upgrades to the 39,524-square-foot (3,672-square-meter) facility include “increased laboratory and testing space with climate-control capabilities, updated equipment to enhance PPG’s resources for the development of aerospace sealants and coatings, as well as an open floor plan with dedicated areas to promote collaboration,” the company said.
The facility currently accommodates more than 90 employees in various R&T, manufacturing, customer support and related service and administrative positions.
In December, the DOD announced that the Navy is awarding 1,870 multiple-award contracts worth an estimated $5 billion per year for up to 10 years to businesses for engineering support services and program management support services under its SeaPort Next Generation multiple-award contract vehicle.
SeaPort is the Navy Department’s electronic platform for acquiring support services in 23 separate areas that include engineering project, financial and program management.
“The government estimates approximately [$5 billion] of services will be procured per year via orders issued under the SeaPort-NxG multiple award contracts,” the statement reads. “The MACs have a five-year base period of performance with an additional five-year ordering period option.”
The services included in SeaPort Next Generation are broadly categorized into engineering services and program management services. Within those two categories, they are further broken down into 23 functional areas. The work spans across the Navy’s major commands and agencies, with the exception of Naval Air Systems Command, the DOD noted.
Waiting In The Wings
Not yet awarded is the contract—or contracts—for two Large Unmanned Surface Vessels (LUSVs) for the U.S. Navy.
The ships, which each displace about 2,000 tons and measure 200-300 feet long, operate without a crew and were requested by the Navy for 2020, with eight more to be constructed over the next five years at as-yet-unnamed shipyards.
The new Defense budget specifically seeks a plan from the Navy regarding the ships’ use, and expressly forbids the installation of expensive vertical launch system for missiles.
“Incremental upgrade capability for a vertical launch system may be addressed in future fiscal years,” the bill says. “It is directed that no funds may be awarded for the conceptual design of future LUSVs until the Assistant Secretary of the Navy (Research, Development and Acquisition) briefs the congressional defense committees on the updated acquisition strategy for unmanned surface vessels.”
The Navy has gone on the record stating that it envisions a ‘Battle Force’ including unmanned surface and underwater vehicles, in addition to traditional warships a major shift in creating a lower-cost and more realistic path to the 355-ship fleet it envisions within the next decade.
Bio: Michael D. White is a published author with four non-fiction books and well more than 1,700 by-lined articles on international transportation and trade to his credit.
During his 35 year career as a journalist, White has served in positions from contributor and reporter to managing editor for a number of publications including Global Trade Magazine, the Los Angeles Daily Commercial News, Pacific Shipper, the Los Angeles Business Journal, International Business Magazine, the Long Beach Press-Telegram, Los Angeles Daily News, Pacific Traffic Magazine, and World Trade Magazine.
He has also served as editor of the CalTrade Report and Pacific Coast Trade websites, North America Public and Media Relations Manager for Mitsui O.S.K. Lines, and as a consultant to Pace University’s World Trade Institute and the Austrian Trade Commission.
A veteran of the United States Coast Guard, White has traveled in both Japan and China, and earned a degree in journalism from California State University and a Certificate in International Business from the Japanese Ministry of Trade & Industry’s International Institute for Studies & Training in Tokyo.