Reuters l US Docking LM For F-35 Cost-tracking Flaws

February 29, 2012 § Leave a comment

The Pentagon on Tuesday told Lockheed Martin, the No. 1 U.S. defense contractor, that it would withhold about $1 million a month in billings on the latest F-35 fighter contract until the company fixes a complex system that tracks the program’s cost.

In a letter dated Feb. 28, the Pentagon’s Defense Contract Management Agency told Lockheed it was withholding just 2 percent of billings, instead of the 5 percent possible, because Lockheed had submitted a plan that was “reasonably expected to correct the remaining deficiencies” on the system.

Lockheed spokesman Joe Stout said the company was working closely with the Pentagon agency to regain approval of the cost-tracking system known as EVMS, or “earned value management system,” at its plant in Fort Worth, Texas.

The Pentagon’s Defense Contract Management Agency first flagged problems with the Lockheed cost-tracking system in 2007 and formally de-certified it in October 2010.

Lockheed is the first company to be hit by a new Pentagon rule that took effect this year allowing payments to be docked to contractors with deficient cost-tracking systems.

The money is being withheld only on Lockheed’s most recent contract with the Pentagon, a deal worth up to $4 billion for early work on a fifth batch of F-35 fighter jets. Lockheed can get the money back once its cost-tracking system is recertified.

This is the latest in a string of negative news items about Lockheed’s leadership of the F-35 Joint Strike Fighter, which is slated to cost $382 billion over the next decades, making it the Pentagon’s costliest weapons program.

The Defense Contract Management Agency launched a follow-up audit of the Fort Worth facility, headquarters of Lockheed’s aeronautics division, last month, said Pentagon spokeswoman Lieutenant Colonel Melinda Morgan.

Over the next few months, agency officials would evaluate data from all of Lockheed Martin’s aeronuatics programs, with an eye to completing their work in the summer, Morgan said.

Morgan said the audit could to lead to recertification of Lockheed’s EVMS system “if the DCMA review finds LM Aero has demonstrated compliance” with 32 guidelines set by the American National Standards Institute.

Lockheed mentioned the fresh Defense Contract Management Agency audit in its annual report to the Securities and Exchange Commission last week, but gave no details. It said the DCMA’s withdrawal of certification had no impact on its internal controls over financial reporting.

Lockheed had made progress correcting problems with similar systems at other company sites in recent years, but continued problems with the Fort Worth system prompted the Pentagon to take the unusual move of withdrawing its certification in 2010.

At the time, defense officials said they wanted to focus the contractor’s attention on making improvements to the system at the Fort Worth site, the headquarters of Lockheed’s aeronautics division and the F-35, the Pentagon’s costliest arms program.

Every bit of bad news fuels criticism of the F-35 program, which is already a key target of budget-cutters trying to find $487 billion in defense savings over the next decade.

The Pentagon this month announced a third restructuring of the $382 billion F-35 program, delaying orders for 179 planes to save $15 billion and allowing more time for testing.

Last week, senior officials got word that the Pentagon still estimates that it will cost about $1 trillion to operate a fleet of 2,443 F-35 fighter jets over the next 50 years, a staggering sum that Lockheed and the F-35 program office have been trying to whittle down for about a year.

Earned value management systems, or EVMS, are used by companies to plan, control and analyze the cost performance of programs and identify potential overruns.

By Andrea Shalal-Esa

February 29, 2012

Reuters l US Docking LM For F-35 Cost-tracking Flaws

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Reuters l General Dynamics Wins $663 Mln Navy Contract

February 29, 2012 § Leave a comment

General Dynamics has won a contract worth $663 million to start work on another DDG-51 destroyer for the U.S. Navy, the Pentagon said on Tuesday.

The U.S. Navy is exercising an option included in a contract first won by General Dynamics last fall, the Defense Department said in its daily digest of major weapons contracts.

It said the contract ran through August 2018.

General Dynamics welcomed the contract announcement about DDG 116, which is the fourth ship in the Navy’s program to continue building Arleigh Burke-class guided missile destroyers.

Jeff Geiger, president of Bath Iron Works, the General Dynamics unit that will do the work, said the additional work would help the company cut costs and refine its shipbuilding processes.

DDG 51 destroyers operate in support of the Navy’s carrier battle groups, surface action groups, amphibious groups and replenishment groups, providing a complete array of anti-submarine, anti-air and anti-surface capabilities.

They carry Aegis combat systems, two embarked SH-60 helicopters, advanced anti-aircraft missiles and Tomahawk anti-ship and land-attack missiles.

By Andrea Shalal-Esa

February 29th, 2012


Reuters l General Dynamics Wins $663 Mln Navy Contract

Aviation Weekly l USAF Cancels Super Tucanos; Investigates

February 28, 2012 § Leave a comment

Citing concerns with the procurement process, the U.S. Air Force has canceled Sierra Nevada Corp.’s (SNC) $355 million contract to supply 20 Embraer AT-29 Super Tucano light attack aircraft for operation by the Afghan air force.

The decision to set aside the contract is a victory for Hawker Beechcraft (HBC), which took the Air Force to court after its offer of the AT-6 aircraft was disqualified, leaving SNC as the only bidder for the Light Air Support (LAS) program.

“While we pursue perfection, we sometimes fall short, and when we do we will take corrective action,” says Air Force Secretary Michael Donley in a statement. Citing the ongoing litigation, he adds, “I can only say Air Force Senior Acquisition Executive David Van Buren is not satisfied with the quality of the documentation supporting the award decision.”

Gen. Donald J. Hoffman at Air Force Materiel Command has initiated an investigation into the procurement, with the first report due March 12. “In the meantime, [Van Buren] will take specific near-term action to ensure these issues aren’t occurring in current, ongoing source selections,” says Donley.

Wichita-based HBC protested to the Government Accountability Office after being disqualified from the LAS competition in November, but its case was rejected in late December, clearing the way for award of the LAS contract to SNC.

HBC filed suit against the Air Force in the U.S. Court of Federal Claims on Dec. 27, forcing the service to issue a stop-work order to SNC and Embraer on Jan. 4. The case was due to be heard on March 6, but both sides have received extensions.

By Graham Warwick

February 28, 2012

Aviation Weekly l USAF Cancels Super Tucanos; Investigates

Market Watch l Siemens and Boeing Strategic Alliance Secures DOD Contract

February 27, 2012 § Leave a comment

Energy-efficient technologies to be installed at DOD site

The strategic alliance between Siemens and Boeing today announced that the alliance and a team of partners has been awarded a funded project by the U.S. Department of Defense (DOD) Environmental Security Technology Certification Program (ESTCP). Using Siemens and Boeing’s leading cyber-secure energy savings technology, the DOD will realize up to 40 percent savings in energy costs at this one installation. This is the alliance’s first awarded contract.

The team, which also includes the University of California at Berkeley and KEMA Services Inc., will implement intelligent energy-management solutions that include integrated controls for cooling and heating systems, lighting, ventilation and plug loads. The upgrades will ensure the ESTCP meets its mandate to improve DOD infrastructure energy security and reduce its facility energy costs.

“This project is a great example of the innovative ways in which Siemens and Boeing are working together to provide the best energy-management solutions to our government customers,” said Judy Marks, president and CEO of Siemens Government Technologies Inc. “Addressing the DOD’s security protocols in this demonstration project will provide a model for implementing intelligent energy-management technology at other DOD sites.”

Intelligent energy-management solutions will achieve the targeted savings by eliminating energy waste from unoccupied spaces and from uncoordinated load control, energy storage and on-site generation resources. Through dynamic demand response, which uses technology to manage energy consumption, the facility will achieve peak load shedding capability of approximately 30 percent. The intelligent energy-management technology will be deployed by Siemens Corporate Research and Technology and use the Siemens APOGEE Building Automation System. The technology brought to the DOD site will interoperate with the existing building automation systems, enabling maximum energy efficiency and demand management. Boeing’s services-oriented architecture will provide protected operation between all energy management systems to achieve an integrated, central microgrid energy management solution.

“Our services-oriented architecture provides scalability, interoperability and high availability by pushing intelligence across the network,” said Tim Noonan, vice president of Boeing Energy. “Boeing’s service-oriented architecture and Siemens building automation technology will remove bottlenecks in the communications, data-flow and decision-making process, resulting in a highly scalable and manageable system.”

The University of California team will be responsible for developing local gateways for managing the electricity usage of common office equipment such as printers, computers and monitors while KEMA Services will provide dynamic building energy modeling, retro-commissioning services, and energy optimization and balancing.

Of the 575 projects submitted to the ESTCP program, 27 were selected.

Siemens and Boeing previously announced a strategic alliance for DOD energy modernization that will jointly develop and market “smart grid” technologies to improve energy surety and security for U.S. military installations, including next-generation, secure energy infrastructures that lower operational costs and increase energy efficiency.

February 27, 2012

Market Watch l Siemens and Boeing Strategic Alliance Secures DOD Contract

DoD Buzz l A year after victory, Boeing says tanker is on track

February 24, 2012 § Leave a comment

Future generations will look on with amazement when we tell them that we survived the Tanker War.

The scandal … the money … the political grandstanding and gamesmanship … it’s been long enough since the saga ended that one almost doesn’t even believe one’s own memories: The ad blanketing by EADS and Boeing on every surface and screen in Washington. The hearings and speeches on Capitol Hill — the charges and counter-charges of unfair business practices and subsidies. An unending tailspin of dysfunction. As we’ve observed, it would make a great movie — though there are probably only a few hundred people who’d actually see it.

All that’s dead and gone, Boeing seemed to say Friday, and everything today with its KC-46A tanker is hunky-dory. The company marked the year since it won the award with an announcement reaffirming that it’s on track to execute its contract as agreed and deliver its first airplanes on schedule:

“KC-46 Tanker program today marked the first anniversary of receiving a U.S. Air Force contract to build the next-generation aerial refueling tanker, the KC-46A. Over the past year, the program has completed key milestones in support of the design and development phase on or ahead of schedule, and is now preparing for a Preliminary Design Review (PDR) in March.

“The KC-46 program is on a good path. Boeing’s performance thus far has been solid,” said Maj. Gen. Chris Bogdan, KC-46 Program Executive Officer, U.S. Air Force. “Our commitment is to deliver the KC-46A to the nation’s warfighters, on schedule and ready to go to war on day one, as the world’s most advanced tanker. I’m pleased to report that Boeing is meeting its commitments.”

Since receiving the contract on Feb. 24, 2011, the Boeing KC-46 team has completed several major milestones, including a System Requirements Review, Integrated Baseline Review, 767-2C PDR, and Firm Configuration Reviews for the 767-2C and the KC-46A Tanker.

“I’m very proud of our joint team,” said Maureen Dougherty, Boeing KC-46 Tanker vice president and program manager. “We’re drawing on the best of Boeing’s industry-leading commercial airplane and defense expertise as we design and develop the KC-46A, which is a next-generation derivative aircraft. We remain on plan to deliver the first 18 combat-ready tankers by 2017.”

The PDR, which will ensure that Boeing’s design meets system requirements, will be followed by a Critical Design Review (CDR) in the third quarter of 2013. The CDR determines that the design of the KC-46A is mature and ready to proceed to the manufacturing phase of the program.

Boeing will build 179 next-generation aerial refueling tanker aircraft that will begin to replace the Air Force’s fleet of 416 KC-135 tankers. Based on the proven Boeing 767 commercial airplane, the KC-46A tanker is a widebody, multi-mission aircraft updated with the latest and most advanced technology to meet the demanding mission requirements of the future, including a digital flight deck featuring Boeing 787 Dreamliner electronic displays and a flight control design philosophy that places aircrews in command to maximize combat maneuverability. The KC-46A also features a modernized KC-10 boom with a fly-by-wire control system, and a refueling envelope and fuel offload rate that is greater than the KC-135 it will replace.

To be sure, Boeing’s first year hasn’t been all tea and cakes — the company announced it would close its plant in Wichita, Kansas, which was to have been instrumental in tanker production, and it became crystal clear that Big B is taking a bath on its early airplanes. The company’s bid to defeat EADS was so low, and its actual costs could grow so much, that it may make no profit on the initial tankers for the Air Force. It will have to depend on good longer-term performance to recoup those costs, because the deal means it’s responsible for all costs beyond the ceiling, and it can’t just bill Uncle Sam. (Allegedly.)

Overall, however, DoD and Air Force officials probably breathe easier every day there’s a tanker program, as opposed to open tanker warfare.

By Philip Ewing

February 24th, 2012

DoD Buzz l A year after victory, Boeing says tanker is on track

US Airforce l Industry leaders briefed on ISR future

February 23, 2012 § Leave a comment

Lt. Gen. Larry James, Air Force Deputy Chief of Staff for Intelligence, Surveillance and Reconnaissance, briefed industry leaders about the service’s ISR future during the Aviation Week Defense Technology, Affordability and Requirement Conference here, Feb. 15.

The Air Force provides distinctive global ISR capabilities to its joint, interagency and coalition partners and must remain at the cutting edge of technology to remain successful, James said.
With current fiscal constraints looming, the Air Force looks to improve upon existing capabilities which have been successful in supporting the warfighter in Iraq and Afghanistan and improve ISR capabilities as it focuses on a changing role in the Asia-Pacific region.

“We must look beyond the permissive environment we have been using in Afghanistan where you can fly Predators and Reapers with impunity because there is no aerial threat,” James said. “In the future we must be prepared to operate in a different environment where there is an air threat.”

As the Air Force prepares for its future needs and requirements outlined in the national defense strategy, it must find new ways to combine and deploy emergent capabilities, James said.

A key future goal for the Air Force ISR enterprise is to combine information obtained from a variety of air, space and cyberspace assets into an integrated network that can provide a single source of full spectrum, actionable data to analysts around the globe. This would go a long way toward ensuring more efficient and effective support to combatant commanders and other ISR customers, James said.

The force must also decide which future collection vehicles it will need to maintain technological superiority given today’s austere fiscal environment, James said.

“We took some decrements in terms of the ISR budget and we had to make some tough decisions,” James said. “I would offer that in this budget, and if you look at the future, ISR will fare as well as if not better than most areas of our budget simply because of the understanding of the importance of ISR.”

Continuing to utilize the U-2 because it could meet the mission requirement, verses investing funds on the Global Hawk Block 30, was the deciding factor in plans to move away from that platform, James said.

“The U-2 currently has better sensor performance, in general, and therefore we didn’t need to invest the dollars to bring the Global Hawk Block 30 on when we could meet the combatant commander requirements with the reliable U-2.”

A lot of tough choices were made for fiscal year 2013 within the ISR enterprise, and the Air Force is already looking ahead to FY14 to understand what future requirements will be needed, James said
“This is not just your father’s imagery analyst anymore where you just sit down and look at an image try to ascertain what is there,” James said. “It is really this all-source intelligence analyst who is able to critically think and figure out the answers to some of the hard problems out there.”

To maintain the level of support Joint, Coalition and interagency partners have come to expect from the Air Force, training Airmen properly and ensuring proper equipment availability is imperative to ISR’s future success, James said.

“I think the Air Force from a Service perspective sets the standard in terms of global ISR and I think that is important as we move forward into the future,” James said.

by Tech. Sgt. Richard A. Williams, Jr.

February 23rd, 2012

US Airforce l Industry leaders briefed on ISR future

Aviation Week l Lockheed Dismisses Korea F-35 Schedule Issue

February 22, 2012 § Leave a comment

A Pentagon decision to reduce near-term F-35 purchases will not hinder Lockheed Martin from meeting South Korea’s demand for an early 2016 first delivery under the F-X3 fighter program, insists David Scott, director of F-35 international customer engagement for the prime contractor.

Current production capacity can build 48 aircraft annually, and with the U.S. looking to buy around 30 aircraft per year, there are slots to meet South Korea’s demands, as well as other near-term international buyers such as Japan, Turkey, Italy and Norway.

A Joint Strike Fighter steering board will convene soon to update and reconcile purchase plans. If there is need for extra tooling to be acquired either at Lockheed Martin or in the F-35 supply chain, there would be time to do so, Scott tells Aviation Week during the Singapore air show.

The South Korean competition to supply 60 fighters will pit the F-35A against the Boeing F-15 Silent Eagle and, potentially, European bidders.

The international buys also will help maintain production of F-35s at a more economical rate, Scott notes.

Lockheed Martin would need a waiver to sell the fighter to South Korea because of a U.S. prohibition of exporting hardware before an aircraft has entered service with the U.S. The waiver is likely to be granted, though, with the U.S. government having already granted one for Japan.

Still unclear is what the next big F-35 competition will be overseas. The focus, after South Korea, likely will shift to solidifying plans with Singapore, Australia and others already involved in the program at various levels.

By Robert Wall

February 22, 2012

Aviation Week l Lockheed Dismisses Korea F-35 Schedule Issue

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