Trade show season kicks off, virtually; Air Force’s ICBM award; A ‘clean’ CR and more.
With summer receding in the rear-view mirror, it’s that time of year where I remind you there’s a marathon of events and other happenings between now and Christmas. But of course this year is different.
About six months into the coronavirus pandemic, the fall trade shows that draw tens of thousands of service members, government civilians, and defense industry employees have been transformed into online shadows of their former selves. But they’re still happening, albeit virtually, thanks to the immense amount of stock that the industry places on them. Many defense companies are taking the upcoming trade shows very seriously indeed; their employees have spent lots of time this summer preparing for everything from virtual exhibit hall booths to remote media briefings.
Next week’s Air Force Association Virtual Air, Space & Cyber Conference is the first trial of a full-scale virtual trade show, including more networking and exhibit aspects than previous events. Modern Day Marine and the Association of the U.S. Army’s annual symposium will be next in early October.
While the top brass will still show up virtually for panel discussions, it’ll be interesting to see if industry continues to find these events valuable. And this will likely dictate how much companies spend on these types of events in the future.
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From Defense One
DoD Explains How Contractors Will Get Reimbursed for COVID Expenses — If Congress Cuts a Check // Marcus Weisgerber
Ellen Lord says the bill would come to $10 billion to $20 billion.
Pentagon Awards JEDI Cloud Contract to Microsoft, Again // Frank R. Konkel and Aaron Boyd
The decision follows a months-long legal challenge filed by Amazon Web Services.
US Shipyards Lack Needed Repair Capacity, Admiral Says // Marcus Weisgerber
And that's just in peacetime.
White House, House Dems Agree to “Clean” CR
The continuing resolution would fund the government from Oct. 1, the first day of the new fiscal year, likely through November’s election. “Though the White House has a track record of reneging on various agreements, it is unlikely that there will be changes that would risk a shutdown with an election only 56 days away,” Avascent’s Matt Vallone writes in a Sept. 9 email. Congress and White House have not been able to pass any 2021 appropriations bills, a new coronavirus relief package, or the National Defense Authorization Act. “While there may be some hemming and hawing, particularly if there’s eventually movement on a COVID-19 relief bill, it seems likely that the new fiscal year will start with minimum fuss in October,” Vallone writes.
Northrop Grumman Wins $13.3B ICBM Deal
Boeing’s decision not to bid took the surprise out of this one, but the Air Force on Tuesday awarded Northrop a $13.3 billion deal to start working on new intercontinental ballistic missiles — called the Ground Based Strategic Deterrent — to replace the Cold War-era Minuteman III. The total contract for 450 new ICBMs could be worth $85 billion. What’s notable is that the Air Force awarded the deal less than two months before November’s elections. A project under contract is always more difficult to cancel regardless of the political party in power.
The engineering & manufacturing development, or EMD, contract also locks in Northrop as the contractor responsible for two of the three legs of the future U.S. nuclear triad since Northrop also builds the B-21 stealth bomber. “The program advances the Nation’s ability to maintain a robust, flexible, tailorable, and responsive strategic nuclear deterrent to meet current and changing global threats,” the Air Force said in a statement.
What does this week’s contract cover? “The Air Force Nuclear Weapons Center announced that the effort will span 8.5 years and include weapon system design, qualification, test and evaluation and nuclear certification,” Northrop said in a Sept 8 statement. “Upon successful completion of EMD, the Northrop Grumman team will begin producing and delivering a modern and fully integrated weapon system to meet the Air Force schedule of initial operational.” capability by 2029.”
Wall Street’s reaction: “While there’s no surprise that NOC won, it’s good to get this big program under contract heading into a potentially pressured budget environment,” Citi’s Jon Raviv wrote in a Sept. 8 note to investors. The next day, Cowen’s Roman Schweizer wrote, “We expect EMD will continue regardless of the Presidential election. Nuclear Triad spending is DoD's top priority, and Congress has supported all three..This multi-decade franchise ramps through late 20s. Our estimates project GBSD & B-21 funding could triple by 2027 as EMD winds down and production ramps up.”
The arms control community said the deal “highlights how the U.S. nuclear modernization effort is driven more by political inertia than strategic necessity.” Former Defense Secretary William Perry said, “we shouldn’t spend our limited resources on new nuclear weapons that we don’t need and make us less safe.”
US Air Force Expands Use of Predictive Analytics, Maintenance
California-based C3.ai has signed an agreement with the U.S. Air Force’s Rapid Sustainment Office to deploy its technology. The agreement “represents the next stage in scaling predictive maintenance solution across the defense enterprise as C3.ai maximizes mission capability with AI-driven maintenance operations,” the company said in a Sept. 2 statement. The Air Force will now use the company’s platform on the HH-60 Pave Hawk search-and-rescue fleet. It has used the technology on more than 920 aircraft, including the E-3 AWACS, C-5 Galaxy, F-16 and F-35. The company predicts (see what I did there) that predictive maintenance could save the Pentagon upwards of $5 billion annually if used to manage all military aircraft.
Hungry Orders Lynx Fighting Vehicles
The deal Germany’s Rheinmetall is worth more than €2 billion is for 218 Lynx infantry fighting vehicles. “Hungary is the first NATO and EU member nation to order Rheinmetall’s newly developed Lynx infantry fighting vehicle,” the company said Thursday. “This important contract represents a major breakthrough in the global defence market for the Düsseldorf-based technology group’s innovative new combat vehicle.”
- Retired Army Gen. Keith Alexander, a former National Security Agency director and commander of U.S. Cyber Command, has been named to Amazon’s board of directors.
- President Trump on Sept. 8 nominated Jon Kreitz to be assistant Air Force secretary for manpower and reserve affairs.
- Tech executive Victoria Coleman has been appointed director of the Defense Advanced Research Projects Agency, a position she will assume later this month, according to Space News.
- Boeing named Ed Dandridge senior vice president and chief communications officer, effective Sept. 28. He comes to Boeing from AIG where he was global chief marketing and communications officer of AIG General Insurance
- Space Foundation CEO and retired Rear Adm. Thomas Zelibor has been named to the Defense Innovation Board Space Advisory Council.