Defense Business Brief: See-ya 2021! Here’s what’s on tap for 2022.
As Washington prepares to shut down for the Christmas holiday, it’s time to look back to the past year and look ahead to the next. Unfortunately, many issues that dominated this year will likely dominate at least the beginning of 2022, especially as the Omicron variant of COVID-19 spreads rapidly across the country.
The virus has wreaked havoc on the global supply chain, driving up costs and delaying weapons projects. Over the past year, some projects started recovering from 2020 COVID-related lockdowns, but the highly contagious Omicron and its rapid spread are sure to test the resiliency of U.S. manufacturing.
Another pandemic-related item: vaccine mandates. With the Biden administration’s federal contractor vaccine mandate tied up in the courts, companies including Boeing and Huntington Ingalls Industries have suspended enforcement of the quickly approaching Jan. 18 deadline.
We’re nearly one year into the Biden administration and we still don’t know much about its defense acquisition policy priorities. That’s because nearly all of the top political positions in the Pentagon’s acquisition and sustainment office are vacant and filled by acting officials. The administration has nominated Draper CEO Bill LaPlante, who served as the Air Force’s top weapons buyer during the Obama administration, to be the Pentagon’s top weapons buyer.
It’s very much a getting-the-band-back-together moment for former Obama administration acquisition officials—Frank Kendall, Heidi Shyu, LaPlante, and Andrew Hunter—assuming the Senate confirms everyone. Kendall (former top weapons buyer) is already Air Force Secretary, Shyu (former Army acquisition executive) is undersecretary for research and development, and Hunter (former head of the Joint Rapid Acquisition Cell) has been nominated to be Air Force acquisition executive. The Senate just needs to confirm LaPlante, Hunter, and Doug Bush, who has been nominated to be the Army acquisition executive.
Once all of these officials are in place, we’ll likely better understand the Pentagon’s perspective on mergers and acquisitions across the defense sector. It was one year ago this week when Lockheed Martin announced it would buy Aerojet Rocketdyne. The deal was supposed to close by the end of 2021, but Lockheed now says it won’t be done until the first quarter of 2022, amid an antitrust review.
Speaking of the first quarter, in February we should see the Biden administration’s first comprehensive budget proposal—one that takes into account recommendations from the Pentagon’s China-focused global posture review. Something else to keep an eye on is inflation, which is certainly on the minds of Pentagon officials.
Among the big international stories is the Australia, United Kingdom, United States pact that will lead to Australia acquiring nuclear submarines. The U.S. has certainly stepped up ties with Australia as part of its counter-China efforts, so we’ll be looking to see how those ties strengthen in the coming year.
Lastly, both Switzerland and Finland chose the F-35 over Boeing’s F/A-18 Super Hornet and European fighter jets. The next big international competition is in Canada, where the F-35 is competing against the Saab Gripen.
We’ll explore the year ahead for weapon programs when we’re back in a few weeks. Happy holidays to you and yours. Until we meet in 2022, stay safe and healthy!
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