Defense Business Brief: Fiscal New Year’s Eve; General Dynamics teases new Abrams; Drone submarine problems; and more.
Happy (fiscal) New Year’s Eve!
The House and Senate passed a continuing resolution that would fund the government until Dec. 16, well after the November midterm elections. That bill now heads to President Biden's desk. Remember, continuing resolutions fund the government at the prior year’s spending levels and do not allow the Pentagon to start new projects. That’s why there are typically a boatload of contracts awarded today, so make sure to check here after 5 p.m.
Also, expect to hear a lot about how a CR this year is different from in years past due to high inflation.
Of note: Sens. Patrick Leahy, D-Vt., and Richard Shelby, R-Ala., the chairman and ranking member of the Senate Appropriations Committee, are both retiring. “So they'll be eager to get a full-year approps bill done” by the end of the year, Cowen’s Roman Schweizer pointed out in a recent note to investors.
“We do not expect a bipartisan spending deal until after midterms, and nondefense spending may be [a] sticking point with a new GOP House majority,” he wrote. Experts believe Republicans will win back the House this fall.
Meanwhile, Wells Fargo downgraded Lockheed Martin and L3Harris Technologies stock projections. Analyst Matthew Akers also lowered stock price targets for the two firms, as well as those of General Dynamics. But he raised his projection for Northrop Grumman.
The U.S. is readying another $1.1 billion in weapons for Ukraine. HIMARS, Humvees, and counter-drone tech are among the items included in the package. More here.
A new assessment found that the F-35 stealth fighter program contributes $72 billion to the U.S. economy each year. The independent assessment by AeroDynamic Advisory was even higher than Lockheed Martin’s $65 billion economic impact projections. The reason for the increase: Lockheed’s assessment did not fully capture lower suppliers and sustainment impacts. “Through a broader examination of the supply chain and repair capacity available on the program, and accounting for all work done in both the production and sustainment of these aircraft, AeroDynamic Advisory concludes that the actual annual economic impact of the F-35 program on the U.S. economy is $72 billion, some 10% higher than Lockheed Martin’s original’s estimate. As such, any additional investments or cuts to the program will result in significant impacts to the national defense industrial base.”
The Association of the U.S. Army’s annual meeting and exposition isn’t until Oct. 10, but tank maker General Dynamics Land Systems has already teased a video of AbramsX, which is “debuting” at the conference. We’ll be on the lookout.
Weekend reading: There’s a new, critical Government Accountability Office assessment of the Navy’s Extra Large Unmanned Undersea Vehicles, or XLUUV. The effort’s cost estimate has increased $242 million (64 percent) since and is at least 13 months behind schedule, according to GAO. “The Navy determined that XLUUV was critical to fulfilling an emergent need, which, under DOD policy, generally requires a capability be provided within 2 years,” GAO wrote. “However, the Navy did not develop a sound business case, including cost and schedule estimates, to ensure that it could deliver the vehicles quickly to the fleet because XLUUV is a research and development effort.”
A good week for Palantir. The software firm won $339 million in government contracts—two from the Army and one from the Department of Homeland Security. The first is a $229 million Army Research Laboratory deal to “support all branches of the Armed Services, Joint Staff, and Special Forces as they test, utilize, and scale artificial intelligence (AI) and machine learning (ML) capabilities across the Department of Defense.” The second, a $14.8 million Army deal with BigBear.ai, includes Palantir as a partner for “an enterprise-wide intelligent automation platform that provides the Army with a holistic view of its global force structure. Lastly, DHS awarded Palantir $95.9 million to renew a contract that supports homeland secretary investigations.
The Senate Armed Services Committee voted 21 to 5 to advance Radha Plumb’s nomination to be deputy undersecretary of defense for acquisition and sustainment.
Huntington Ingalls Industries has named Todd Borkey chief technology officer. He was previously CTO for HII’s mission technologies segment since 2021. Read more from Ross Wilkers at Washington Technology, here.
L3Harris Technologies named Jon Rambeau president for its Integrated Missions Systems segment, effective Oct. 17. Rambeau has been vice president and general manager of Lockheed Martin's integrated warfare systems and sensors business. He will replace Sean Stackley, the former Navy acquisition chief, who will become L3Harris’ senior vice president for strategy and growth. More from Ross here.
Northrop Grumman’s board has elected Roshan Roeder corporate vice president and president of the company’s defense systems sector, effective Oct. 17. Roeder succeeds Mary Petryszyn, who intends to retire in January 2023.
From Defense One
After Big Pentagon Contract Wins, L3Harris CEO Eyes More Growth // Marcus Weisgerber
Three years after merger of L3 Technologies and Harris, the company is striving to "compete on a level playing field," CEO Kubasik says.
How Will the Military Use 5G? A New Drone Experiment Offers Clues // Patrick Tucker
High-speed networking promises to help bring AI to bear on floods of battlefield sensor data.
Autonomous Systems Took Center Stage At AFA // Lauren C. Williams
The idea of teaming uncrewed systems with manned aircraft was a focal point in panels at annual conference, and on the showroom floor.
US to Send 18 More HIMARS to Ukraine Under Latest $1B Aid Package // Tara Copp
But they won't be available for two years, Pentagon says.
Oversight Of Nuclear-Weapons Contractors' Cyber Practices Has Been 'Inconsistent': GAO // Lauren C. Williams
The National Nuclear Security Administration incompletely implemented some cyber practices and didn't have clear knowledge about what its subcontractors were doing, the watchdog agency reported.
Much-Delayed Carrier Won't Go Far in Its First Deployment // Caitlin M. Kenney
Five years into service, USS Ford will exercise in the Atlantic ahead of a full deployment in 2023.
Nord Stream Leaks Underline Gray-Zone Risks // Elisabeth Braw
Damaging a neighbor's environment can be easy, cheap, and deniable.
CNO: Navy Is Equipping Ships with a Software Arsenal, Taking Lead on New Destroyer Design // Bradley Peniston
A Q&A with Adm. Mike Gilday, U.S. Chief of Naval Operations.