July 2007 Archives

In case you're curious what Iran has to say about the multi-billion dollar arms package going to US allies in the Gulf region, which is presumably with the intent to offset reports of new Iranian deals with Russia, here's the Iranian News Agency today:

Foreign Minister Manouchehr Mottaki said on Tuesday that the US plan to sell billions of dollars worth of arms and prepare illusive scenarios in the region is an instance of adventurism and a disparate effort.

"Washington has taken such a move to save the US arms manufacturing companies from bankruptcy," said Mottaki in reaction to recent claims by the US Secretary of State Condoleezza Rice.

He said the White House rulers, some of whom being major shareholders of the large arms companies, want to use their influence at the end of their tenure in office and wage a
psychological war so as to garner growing benefits for owners of their arms companies.

Last week's "Top 10" list suffers from one major flaw. It tracked the money flowing from the seven largest defense companies into the re-election accounts of each lawmaker during the first six months of 2007, but it didn't include the additional money flowing into the "leadership PACs".
These are the PAC funds that allow one lawmaker to donate to another lawmaker. Some of them have very odd names (Dirigo??). But, as you can see from the amended list, they are clearly a huge piece of the campaign finance system.

Please download the new and improved spreadsheet to see the new results. Download file

The idea is to make this project participatory. Feel free to crunch the numbers yourselves, and let me know what you find. I've added fields for party affiliation and state, so you can have a little more fun.

Now, without further delay, the Top 10 of Big D are:

1) Rep. John Murtha (D) $57,500; 2) Rep. Steny Hoyer (D) $53,500; Sen. Ted Stevens (R) $41,000; 4) Rep. Silvestre Reyes (D) $31,000; 5) Sen. Carl Levin (D) $30,500; 6) Sen. Susan Collins (R) $30,000; 7) Sen. Jack Reed (D) $26,000; 8) Rep. Joe Courtney (D) $25,000; 9) Rep. Jim Clyburn (D) and (tie) Rep. Pete Sessions (R) $24,500; 10) Sen. James Inhofe (R) and (tie) Rep. Jim Moran (D) $24,000.

Quick takeaways:
-- None of the presidential candidates (Clinton, Hunter, McCain, Obama) appear on the Top 10 or on the full list. I have no idea what this means. Any answers?
-- Factoring in the leadership PAC funds, Rep. Reyes's position slips from #1 to #4, but even that still surprises me. Why are the seven largest defense companies pumping so many dollars into this particular lawmaker's campaign treasury?
-- Comparing my list to the list here of earmark sponsors in the latest appropriations bill, there are relatively few correlations.

I'm going to go out on the limb and say that I believe in five months the US military aircraft industry will have to look back on 2007 as the "Year of Boeing".

I'm betting that Boeing is on the verge of scoring an incredible string of contract victories, while solidifying its current product line-up by years to come by locking in new production deals.

A lot is still uncertain, but my bet is that Boeing scores a mobility trifecta (Joint Cargo Aircraft, C-17 extension and at least a share of KC-X), a naval unmanned aircraft double-win (X-45N and unmanned G550) and keeps its grip on CSAR-X and KC-135 depot maintenance. Add to that record the $2 billion contract awarded last month to re-wing the A-10 and new international and domestic sales for the F/A-18E/F Super Hornet.

Try to follow the logic:

1: The Department of Defense submits a budget request in February, requesting to buy 12 JSFs -- 6 CTOL and 6 STOVL -- for $2.65 billion. (See page 26 here.)

2: The House Appropriations Committee passes its version of the defense budget on July 25. The lawmakers approve the Pentagon's exact request for 6 CTOL and 6 STOVL aircraft, which seems like good news for the program.

3: But there seems to be a catch. The House appropriators allocated only $2.41 billion to buy all 12 aircraft. That's $220 million less than the requested amount for the same quantity of aircraft, which is roughly the cost of one of the originally priced fighters.

4. So is it a typo, a clerical error? The guess here: no, it's a message. The House wants DOD to know that $2.6 billion is too much for 12 fighters, even at this early stage of the production program. The question is: will $2.4 billion really be enough, or is Lockheed going to get rolled?

[Full disclosure: a family member is a Lockheed Martin employee.]

The seven largest US defense companies have contributed nearly $3 million to congressional election campaigns through the first six months on 2007, according to my own analysis.

I am making my spreadsheet available for others to download. Please crunch the numbers as you see fit, and let me know if you come up with any surprises. Download file

The top 10 lawmakers are listed below. Representative Silvestre Reyes maintains his mysterious (to me anyway) lead among defense lobby recipients.

The big change since last month's tally is the huge bump for Representative Joe Courtney, whose home base in Connecticut has apparently made him a huge target for cash from General Dynamics, which operates the Electric Boat submarine plant in Groton, of course. Courtney has received $22,000 from General Dynamics alone so far this year, which is by far the biggest single contribution any lawmaker has received from one of the seven largest defense companies.

Without further ado, the top 10:

1: Rep. Silvestre Reyes; 2: Sen. Carl Levin; 3: Rep. Steny Hoyer; 4: Sen. Jack Reed; 5: Rep. Joe Courtney; 6: Rep. James P. Moran Jr.; 7: Rep. John P. Murtha; 8: Rep. Ike Skelton and Rep. Bennie G. Thompson (tie); 9: Rep. James Clyburn; 10: Sen. Susan Collins

Iran says here that it will soon unveil -- and fly -- its first domestically manufactured fighter jet.

(Source: Iran Defense Forum)

This is presumably a reference to a new version of the Northrop F-5F, potentially modified with the Russian RD-33 engine, Iranian radar and avionics, shoulder-mounted air intakes and -- most bizarrely -- a V-tail. I believe the program has been named Shafagh, but the new release calls it the Azarakhsh.

The program does not appear to demonstrate so much a leap in military capability but in domestic industrial prowess, assuming the aircraft can, indeed, fly.

Developing an indigenous aerospace manufacturing capability has become the hot new fad for countries on the US export control blacklist, with Iran leading the way. Last fall, Venezuela announced it was seeking to develop an indigenous industry to build military fighter trainers after the US blocked Brazil from exporting Super Tucanos to Caracas.

Why is Northrop Grumman a prime contractor for a fishing boat company (see here)? The answer is: because they're not stupid.

"Need some air cover?" (Source: DOD)

Irregular warfare is a growth market, and converting fishing boats into riverine patrol veseels could soon be a booming business with the US Navy, which is standing up a new riverine command for the first time since the Vietnam War.

So far, no company has applied the same approach with aviation, but that will probably change. US Air Force Special Operations Command is talking about standing up an Irregular Warfare wing, with a full squadron of single-engine turboprop fighters to serve as counter-inusrgency aircraft in the mold of the Vietnam-era Douglas A-1 Skyraider.

The Embraer Super Tucano, the Hawker Beechcraft AT-6 and the US Aircraft A-67 Dragon are all good candidates for the COIN aircraft role. But each will need a prime contractor, a la the riverine market, to usher the aircraft into operational service.

So, Northrop Grumman, L-3 Communications, Lockheed Martin, Boeing, Raytheon and BAE Systems, are you reading this?

Once upon a time (read: 2006), defense contractors didn't file legal challenges against their biggest customer on contract decisions even if they KNEW there was wrongdoing involved. (Lockheed Martin's loss of the original Small Diameter Bomb competition in 2003 comes to mind.)

But all that changed after GAO upheld the first CSAR-X protest last January. Raytheon is now protesting losing the Joint Cargo Aircraft award, and both CSAR-X protestors are re-protesting.

So, when Boeing pulled off a huge upset and scored the $2 billion contract to re-wing US Air Force A-10s, folks throughout the industry were watching to see if Lockheed would file a protest. Mind you, Lockheed was teamed with Northrop Grumman, which combined own the ongoing A-10 precision engagement program and Fairchild Republic's design right to the A-10. Boeing's victory would seem to be a huge surprise, and, in this day and age, thus ripe for protest.

Today, however, Lockheed has sent me a statement, saying the company "accepts the U.S. Air Force’s evaluation and execution of the A-10 wing replacement competition and award."

A nice person from Raytheon handed me a brochure this morning on the company's AESA fighter radars. I usually file such documents straight into the wastebasket, but this one got my attention.

You can look it up here.

On page 2, you'll find a silhouette of an F-16 with a radar pictured in the nose called the RANGR.

Presumably, this means it's the Raytheon Anti-Northrop Grumman Radar. (Or, perhaps Raytheon Active Next Generation Radar, but that's no fun.)

This must be Raytheon's ticket for exporting AESA on F-16s, including in the upcoming competition in India for a multi-role fighter. It's also presumably a candidate for other single-engine fighters, such as the Gripen and the A-50. I'll keep my eye on this one.

And I probably won't fill my trash can with marketing brochures so quickly any more.

What should be the news angle if the US Navy awards the UCAS-D contract to either Boeing or Northrop Grumman later this week, which as Defense News reports is a very large possiblity? I've got four options:

a) Assume Northrop Grumman wins. Bill Sweetman at Ares points out that Boeing has got nothing else in the pipeline after the F/A-18E/F/G runs its course (okay, they've still got P-8A and perhaps even YAL-1, but I'm looking for angles here, people, not facts. But clearly this is a problem for the company.
b) Assume Boeing wins. That would mean another strategic defeat for Northrop, coming soon after having its Kinetic Energy Inteceptor program downgraded to alternate booster status earlier this year, fumbling the AOC-WSI contract to Lockheed Martin last year and allowing the E-10A Multi-sensor Command and Control program to be abruptly derailed the year before that. So not a pretty picture there either.
c) Assume either wins. What are the future prospects for the the UCAS-D program's survival? Probably not very good, judging by the fact that industry-paid think-tanks in Washington DC are already hosting "congressional forums" to plead to lawmakers to save the program from budget cuts.
d) How does the US defense industry build another carrier-based strike aircraft if the UCAS-D line-item is eliminated? As my colleague The Woracle explains, the inudstrial base needs to start a new development program every five years to refresh the engineering talent. Without that talent pool to call on, the next development programme may be much more difficult.

It used to be that only two US defense companies made infrared countermeasures for jamming shoulder-fired surface to air missiles: Northrop Grumman and BAE Systems, and both relied heavily upon the same systems supplier -- Selex. That was back when the only targets for MANPADS were military aircraft and the only shooters anybody worried about wore military uniforms.

Those days are bye-bye.

You can't go a week now without seeing a new defense company jump into the IRCM market. First, it was Raytheon, which has been adapting the AIM-9X IR seeker into a pointer-tracker called Scorpion. Last week, General Dynamics announced it was developing its own IRCM technology called CMAPS. Finally, on Monday, the world learned that ITT is also jumping into the game, developing a new IR pointer-tracker that lacks a name.

The guess here is that the complexity and high-cost of military-oriented IRCM systems has created a potential sweetspot in the market for cheaper, simpler systems, especially for the VIP business jet market.

Ever wonder who US defense industry lobbyists like to spend their hard-earned PAC money on?

Well, now you can find out. I've spent the last few hours researching PAC spending so far this year by the seven largest US defense companies (Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, Raytheon, L-3 Communications and BAE Systems), which I'll use as my index. The disclosure statements at the Federal Election Commission's web site are valid through May 31.

Here is the Top 10:

1. Rep. Silvestre Reyes ($31,000); 2. Sen. Carl Levin ($30,000); 3. Rep. Steny Hoyer ($28,500); 4. Rep. James Moran ($24,000); 5. Sen. Jack Reed; 6. Sen. James Inhofe; 7. Rep. John Murtha ($22,500); 8. Rep. Ike Skelton ($21,000); 8-tie. Rep. Jerry Lewis ($21,000); 10. Rep. Dutch Ruppersberger; 10-tie. Rep. James Clyburn.

The biggest surprise to me is Congressman Reyes's popularity in the defense industry. Who knew?

Here is the original 7E7 artist's concept when Boeing launched the program on April 26, 2004:

And this is an image of Boeing's first actual 787-8 Dreamliner. Quite a difference, no?

On the shuttle bus to the pre-rollout media reception for the 787 in Everett, Washington, on Saturday night, myself and a busload of mostly foreign aerospace journalists were suddenly transported back to the bad old days of Darleen Druyun, KC-767 tanker leases and John McCain.

There, before our eyes, stood the forlorn shape of the KC-X tanker that Boeing built on spec, back in 2002 when they believed they had the $23 billion lease deal (or $18 billion, or $26 billion -- depending on the USAF, the GAO or OMB, remember?) in the bag.

It was being used as a stand-in for the mighty 787 airliner as Boeing employees rehearsed the roll-out event for the last time before the big show on Sunday afternoon.

The aircraft we saw was painted USAF gun-metal gray (does anybody know the precise name of that color?), but lacked any markings or even engines on the wings. The irony was clear: it was the eve of the public unveiling of what could be Boeing's greatest commercial triumph, and there before us was a reminder of that company's greatest military downfall, a catastrophe that is still costing stockholders millions of foregone revenue per year.

Raytheon says it is protesting losing the Joint Cargo Aircraft contract for three reasons:

a) the joint program office rated performance equally between the two competitors
b) Raytheon's C-295 procurement price tag beat L-3's C-27J acquisition cost by 15%
c) and lifecycle costs were not factored into the joint program office's evaluation

B and C are interesting points but may not be very meaningful in a "best value" competition.

But, if Raytheon's claims are accurate, A would be a stunner. How could the joint programme office devise an evaluation system that created an equal rating for these two aircraft. I've never heard Raytheon make the claim that the C-295 is the equal of the C-27J as a military aircraft. That's because, by all reasonable measures, it's not. That doesn't mean it isn't more cost effective and more appropriate for the army's mission (if not the air force's), but the question remains.

Is the comic strip Doonesbury really just a front for anti-Chinook propaganda? Could Lockheed Martin or Sikorsky have planted a punch line in Saturday's comic strip that just happens to be rhetorical landmine in the ongoing controversy over the selection of the HH-47 for the CSAR-X contract?

The answer is: Of course not!

But the coincidence seems uncanny. You be the judge. First, read the comic strip. Then, read about the controversy.