March 5 Weekly Defense Industry Roundup

Air Force Playing Hardball with Space Industry

Sandra Erwin, National Defense. Nothing in the defense budget is escaping scrutiny and the space budget is no exception. The Air Force is taking a hard look at launch, maintenance and support programs for satellite systems. All of the various programs are being subjected to “should cost” cost reviews, meaning each aspect of the contracts are being evaluated for what the government thinks they ought to cost the government. What is interesting about this piece is the attitude of the Air Force Director of Space Programs, talking about how they have figured out where the savings ought to be, but aren’t going to say what they are until negotiations so they don’t “tip off” the industry representatives. It sort of takes all of the “working as partners with industry” talking points we keep hearing from DoD and throws them right out the window.  These will be painful negotiations and the government intends to hold the upper hand.

As Military Demand Shrinks, Who Will Lead Defense Sector Consolidation?

Loren Thompson, Forbes. Long time defense analyst Thompson takes a look at the defense industry and concludes that most of the top five defense manufacturers are unlikely to be leading the charge in M&A during the coming drawdown. Going against the stream a bit he sees potential for BAE Systems, ITT Exelis and Alliant Techsystems as being uniquely positioned as possible purchasers of firms struggling in the budget reductions. It will be interesting to see how things shake out in the next two to three years.

Why Major Acquisition Programs Fail

Bill Sweetman, Paul McLeary and Francis Tusa, Aviation Week. This is an interesting collaborative effort looking at where programs have gone awry and led to cancellations both in the U.S. and in European acquisitions. They see three main factors being keys to successful programs: 1) Effectiveness, defined in the U.S. by key performance parameters (KPP) that can include speed, range, survivability and reliability and other characteristics. 2) Time and money required to deliver a KPP-compliant system to the customer. 3) Procurement and operating cost, so the user can afford the desired force size without shorting other operational needs.  They also acknowledge a fourth, unwritten criteria that the KPPs must be matched to the threat and to national security strategy and remain so over the system’s lifetime, or the system needs to be adaptable to changes. It’s an interesting read with several solid examples of where things have gone wrong, often from pure unchecked opitimism.

Pentagon Sees ‘Substantial Savings’ in Block Buying of V-22 Ospreys, Subs

Tony Capaccio, Bloomberg. Things are certainly tight in the defense budget these days, but the DoD still sees savings in multiyear programs with block purchases. Congress was notified this week that the department is moving forward with block purchases of the V-22 Osprey, Virginia-class attack submarines, the DDG-51 Arleigh Burke destroyers and the CH-47 Chinook heavy-lift helicopter. The programs seem to be in good shape with such solid votes of confidence and precise acquisition plans.

The week ahead

Themes: Congress is still rolling through the budget process with another full set of hearings scheduled for this week including some interesting ones on the potential BRAC request from DoD and challenges in VA contracting efforts. Prime Minister Netanyahu of Israel is in town Monday and his visit will drive a conversation on Iran’s moves towards nuclear weapons for a good part of the week. The debate on intervening in Syria is heating up as well and Super Tuesday should shake the Republican race for President up a bit.

Tradeshows: No major tradeshows that we aware of this week.

Congress: The full Congress is in session this week. There are 25 aerospace, defense and veterans related committee hearings scheduled this week.

Senate:

Senate Armed Services Committee – Hearing (9:30 AM, Tues, 6 March) Full committee hearing on “The U.S. Central Command and U.S. Special Operations Command in review of the Defense Authorization Request for FY2013 and the Future Years Defense Program.” Witnesses: Marine Corps Gen. James Mattis, commander of the U.S. Central Command; and Navy Adm. William McRaven, commander of U.S. Special Operations Command, testify Location: 216 Hart Senate Office Building

Senate Budget Committee – Hearing (10:30 AM, Tues, 6 March) Full committee hearing on the FY2013 budget for the Defense Department. Witnesses: Michael O’Hanlon, senior fellow at the Brookings Institution; retired Lt. Gen. David Barno, senior adviser and senior fellow at the Center for a New American Security; and James Jay Carafano, director of the Allison Center for Foreign Policy Studies at the Heritage Foundation, testify Location: 608 Dirksen Senate Office Building

Senate Armed Services Committee – Hearing (9:00 AM, Weds, 7 March) Full committee hearing on the situation in Syria. Witnesses: Defense Secretary Leon Panetta; and Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey testify Location: 106 Dirksen Senate Office Building

Senate Veterans and House Veterans’ Affairs Committees – Joint Hearing (10:00 AM, Weds, 7 March) Senate Veterans’ Affairs Committee and House Veterans’ Affairs Committee joint hearing on the legislative presentation of the Veterans of Foreign Wars. Witnesses: TBD

Location: G-50 Dirksen Senate Office Building

Senate Appropriations Committee – Hearing (10:30 AM, Weds, 7 March) Defense Subcommittee hearing on the budget for the Department of the Navy. Witnesses: Secretary of the Navy Ray Mabus; and Adm. Jonathan Greenert, chief of naval operations, testify Location: 192 Dirksen Senate Office Building

Senate Commerce, Science and Transportation Committee – Hearing (2:30 PM, Weds, 7 March) Oceans, Atmosphere, Fisheries, and Coast Guard Subcommittee hearing on “The President’s FY2013 Budget Proposals from the Coast Guard and the National Oceanic and Atmospheric Administration.” Witnesses: Commerce Undersecretary for Oceans and Atmosphere Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration; and Adm. Robert Papp, commandant of the U.S. Coast Guard testify Location: 253 Russell Senate Office Building

Senate Armed Services Committee – Hearing (9:30 AM, Thurs, 8 March) Full committee hearing on “The Department of the Army in review of the Defense Authorization Request for FY2013 and the Future Years Defense Program.” Witnesses: Secretary of the Army John McHugh; and Chief of Staff of the Army Gen. Raymond Odierno testify Location: 106 Dirksen Senate Office Building

House of Representatives:

House Appropriations Committee – Hearing (10:00 AM, Tues, 6 March) Homeland Security Subcommittee hearing on the budget for the U.S. Coast Guard. Witnesses: Commandant of the Coast Guard Robert Papp testifies Location: B-318 Rayburn House Office Building

House Appropriations Committee – Hearing (10:00 AM, Tues, 6 March) Defense Subcommittee hearing on the budget for the Air Force. Witnesses: Secretary of the Air Force Michael Donley; and Chief of Staff of the Air Force Gen. Norton Schwartz testify Location: H-140 U.S. Capitol

House Armed Services Committee – Hearing (10:00 AM, Tues, 6 March) Full committee hearing on “FY2013 National Defense Authorization Budget Requests from U.S. Southern Command and U.S. Northern Command.” Witnesses: Air Force Gen. Douglas Fraser, commander of the U.S. Southern Command; and Army Gen. Charles Jacoby Jr., commander of the U.S. Northern Command and North American Aerospace Defense Command, testify Location: 2118 Rayburn House Office Building

House Veterans’ Affairs Committee – Hearing (12:00 PM, Tues, 6 March) Oversight and Investigations Subcommittee hearing on “The VA’s Dubious Contracting Practices: Savannah.” Witnesses: TBD Location: 334 Cannon House Office Building

House Armed Services Committee – Hearing (1:30 AM, Tues, 6 March) Military Personnel Subcommittee hearing on “Military Personnel Budget Overview – Service Personnel Chiefs’ Perspectives.” Witnesses: Army Lt. Gen. Thomas Bostick, deputy chief of staff (G-1); Navy Vice Adm. Scott Van Buskirk, chief of naval personnel and deputy chief of naval operations; Sheryl Murray, assistant deputy commandant for manpower and reserve affairs for the Marine Corps; and Air Force Lt. Gen. Darrell Jones, deputy chief staff for manpower and personnel, testify Location: 2212 Rayburn House Office Building

House Armed Services Committee – Hearing (3:00 AM, Tues, 6 March) Strategic Forces Subcommittee hearing on “FY2013 National Defense Authorization Budget Request for Missile Defense.” Witnesses: Deputy Assistant Defense Secretary for Nuclear and Missile Defense Policy Bradley Roberts; Army Lt. Gen. Patrick O’Reilly, director of the Missile Defense Agency; Deputy Assistant Defense Secretary for Portfolio Systems Acquisition David Ahern; and J. Michael Gilmore, director of Operational Test and Evaluation in the Office of the Defense Secretary, testify Location: 2118 Rayburn House Office Building

House Appropriations Committee – Hearing (10:00 AM, Weds, 7 March) Defense Subcommittee hearing on the FY2013 budget for the Army. Witnesses: Secretary of the Army John McHugh; and Chief of Staff of the Army Gen. Raymond Odierno testify Location: H-140 U.S. Capitol

House Armed Services Committee – Hearing (10:00 AM, Weds, 7 March) Full committee hearing on “FY2013 National Defense Authorization Budget Requests from U.S. Central Command, U.S. Special Operations Command and U.S. Transportation Command.” Witnesses: Marine Corps Gen. James Mattis, commander of the U.S. Central Command; Navy Adm. William McRaven, commander of the U.S. Special Operations Command; and Gen. William Fraser III, commander of the U.S. Transportation Command testify Location: 2118 Rayburn House Office Building

House Appropriations Committee – Hearing (2:00 PM, Weds, 7 March) Military Construction, Veterans Affairs, and Related Agencies Subcommittee hearing on the budget for military installations, environment, energy and base realignment and closure programs. Witnesses: Deputy Defense Undersecretary Dorothy Robyn; Assistant Secretary of the Army for Installations and Environment Katherine Hammack; Assistant Secretary of the Navy for Installations and Environment Jackalyne Ptannestiel; and Assistant Secretary of the Air Force for Environment and Logistics Terry Yonkers testify Location: H-140 U.S. Capitol

House Appropriations Committee – Hearing (2:00 PM, Weds, 7 March) Energy and Water Development Subcommittee hearing on the budget for the U.S. Army Corps of Engineers. Witnesses: Assistant Secretary of the Army for Civil Works Jo Ellen Darcy; and acting Chief of Engineers Maj. Gen. Merdith “Bo” Temple, testify Location: 2362-B Rayburn House Office Building

House Science, Space and Technology Committee – Hearing (2:00 PM, Weds, 7 March) Full committee hearing on “An Overview of the National Aeronautics and Space Administration (NASA) Budget for FY2013.” Witnesses: NASA Administrator Charles Bolden testifies Location: 2318 Rayburn House Office Building

House Armed Services Committee – Hearing (3:00 PM, Weds, 7 March) Seapower and Projection Forces Subcommittee hearing on “Assessing Mobility Airlift Capabilities and Operational Risks Under the Revised 2012 Defense strategy.” Witnesses: Air Force Gen. Raymond Johns, commander of the Air Mobility Command; Air Force Lt. Gen. Harry Wyatt, director of the Air National Guard; Air Force Maj. Gen. Christopher Bogdan, director of the KC-46 Tanker Mobilization Directorate; Maj. Gen. James Barclay, assistant deputy chief of staff; and a representative from the Government Accountability Office testify Location: 2118 Rayburn House Office Building

House Appropriations Committee – Hearing (10:00 AM, Thurs, 8 March) Defense Subcommittee hearing on the FY2013 budget for the Defense Health Program. Witnesses: Assistant Defense Secretary for Health Affairs Jonathan Woodson; Surgeon General of the Army Lt. Gen. Patricia Horoho; Surgeon General of the Navy Vice Adm. Matthew Nathan; and Surgeon General of the Air Force Lt. Gen. Charles Green testify Location: 2359 Rayburn House Office Building

House Veterans Affairs Committee – Hearing (10:00 AM, Thurs, 8 March) Economic Opportunity Subcommittee hearing on H.R.3329, to amend title 38, United States Code, to extend the eligibility period for veterans to enroll in certain vocational rehabilitation programs; H.R.3483, the “Veterans Education Equity Act of 2011″; H.R.3610, the “Streamlining Workforce Development Programs Act of 2011″; H.R.3670, to require the Transportation Security Administration to comply with the Uniformed Services Employment and Reemployment Rights Act; H.R.3524, the “Disabled Veterans Employment Protection Act”; H.R.4048, the “Improving Contracting Opportunities for Veteran-Owned Small Businesses Act of 2012″; H.R.4051, the “TAP (Transition Assistance Program) Modernization Act of 2012″; H.R.4052, the “Recognizing Excellence in Veterans Education Act of 2012″; H.R.4057, the “Improving Transparency of Education Opportunities for Veterans Act of 2012″; and H.R.4072, to amend title 38, United States Code, to improve employment services for veterans by consolidating various programs in the Veterans Affairs Department. Witnesses: TBD Location: 334 Cannon House Office Building

House Armed Services Committee – Hearing (10:00 AM, Thurs, 8 March) Tactical Air and Land Forces Subcommittee hearing on “Army and Marine Corps Ground System Modernization Programs.” Witnesses: Army Lt. Gen. Robert Lennox, deputy chief of staff (G-8); Army Lt. Gen. William Phillips, military deputy to the assistant secretary for acquisition, logistics and technology; Marine Corps Lt. Gen. Richard Mills, deputy commandant for combat development and integration; Marine Corps Brig. Gen. Frank Kelley, commander of the Systems Command; and William Taylor, program executive officer for land systems for the Marine Corps, testify Location: 2212 Rayburn House Office Building

House Armed Services Committee – Hearing (11:30 AM, Thurs, 8 March) Readiness Subcommittee hearing on “The Request for Authorization of Another BRAC (Base Realignment and Closure) Round and Additional Reductions in Overseas Bases.” Witnesses: Brian Lepore, director of defense capabilities assessment at the Government Accountability Office; Deputy Defense Undersecretary for Installations and Environment Dorothy Robyn; and Army National Guard Brig. Gen. Christopher Bishop, acting deputy assistant secretary of Defense for plans, testify Location: 2118 Rayburn House Office Building

House Armed Services Committee – Hearing (1:00 PM, Thurs, 8 March) Strategic Forces Subcommittee hearing on “FY2013 National Defense Authorization Budget Request for National Security Space Activities.” Witnesses: Air Force Gen. William Shelton, commander of the Air Force Space Command; Deputy Assistant Defense Secretary for Space and Intelligence Gil Klinger; Deputy Assistant Defense for Space Policy Gregory Schulte; and Betty Sapp, principal deputy director of the National Reconnaissance Office, testify Location: 2212 Rayburn House Office Building

House Veterans Affairs Committee – Hearing (1:30 PM, Thurs, 8 March) Disability and Memorial Affairs Subcommittee hearing on “Honoring America’s Fallen Heroes: An Update on our National Cemeteries.” Witnesses: TBD Location: 340 Cannon House Office Building

Think tanks and other news events:

Center for Strategic and Budgetary Assessments: The Road Ahead: Future Challenges and Their Implications for Ground Vehicle Modernization Washington D.C. (9:00 AM, Tues, 6 March) Description: A press event only. CSBA President Andrew Krepinevich and Analyst Eric Lindsey will provide a context for how to think about the U.S. Army and Marine Corps vehicle modernization effort. Their presentation will include key trends in the changing character of land warfare, impeding budget cuts and their influence on the Services’ modernization accounts; and recommendations on the priorities that should inform ground vehicle modernization. (RSVP Required.  Only media invited) Participants: CSBA President Andrew Krepinevich and Analyst Eric Lindsey Location:  CSBA, 1667 K Street NW, Suite 900, Washington, DC 20006

The Stimson Center:  The Chairman’s Forum Washington D.C. (12:00 PM, Tues, 6 March) Description: The Chairman’s Forum is a strategic conversation, featuring respected opinion leaders in the foreign and security policy arena. Lincoln Bloomfield, Jr., Stimson’s Chairman of the Board, holds these informal discussions about eight times a year to address the most relevant global issues we face today.  Lunch provided and seating for the press and general public is limited. Please RSVP to rsvp@stimson.org Participants: The Honorable Michele Flournoy, Former Undersecretary of Defense for Policy, US Defense Department

Location: The Stimson Center, 1111 19th Street, 12th Floor, Washington DC

Center for American Progress: Honoring Those Who Served – Combating Veteran Unemployment, Poverty and Homelessness with Smart Budget Choices Washington D.C. (10:00 AM Weds, 7 March) Description: As our nation winds down wars in Iraq and Afghanistan, hundreds of thousands of veterans are coming home. But too many of them are returning to levels of unemployment higher than that of the civilian population, poverty, and even homelessness. What can we do to ensure they return to jobs and opportunity? This event is with the Half in Ten campaign and the Center for American Progress Action Fund where the panel will explore how we can reduce the unprecedented level of non-war defense spending and invest in growing our middle class here at home to build greater prosperity for veterans and nonveterans alike Participants:  Robert Greenstein, President of Center on Budget and Policy Priorities, Lawrence Korb, Senior Fellow, Center for American Progress, Koby J. Langley, Senior Advisor to the CEO, Corporation for National and Community Service, Tom Tarantino, Deputy Policy Director, Iraq and Afghanistan Veterans of America, Moderated by Neera Tanden, Counselor to Center for American Progress Action Fund and President, Center for American Progress Location: Center for American Progress, 1333 H St. NW, 10th Floor, Washington, DC 20005

Fred Wellman with General Petraeus in Iraq

Fred Wellman, President ScoutComms, brings us his weekly review of defense industry news via The Scout Report. Fred served over twenty years as an Army officer in both aviation and public affairs. You can follow Fred on Twitter @ScoutComms.

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