Pentagon Faces Yet Another Continuing Resolution

(By Shaun McDougall, Military Markets Analyst, Forecast International)   The Joint Light Tactical Vehicle is among the programs impacted by a continuing resolution. Source: U.S. Arm President Trump and congressional leaders reached an agreement that will keep the U.S. government operating at FY17 funding levels through mid-December. The continuing resolution (CR), part of a broader legislative package that also included a three-month increase to the debt ceiling and nearly $8 billion in hurricane relief funding, was signed into law on September 8.  Republicans had been pushing for a longer extension  to the debt ceiling, but the agreement sets up critical votes on both the budget and the debt ceiling in December. The Pentagon is no stranger to continuing resolutions, which have become the norm over the past decade. CRs extend funding at the previous year’s levels, meaning that programs are left with misalignments in funding levels. The Pentagon is also unable to launch new start programs.  CRs typically last only a few months, but the 2017 fiscal year was more than half over by the time Congress passed a budget. Occasionally, a CR may include funding exceptions, or “anomalies,” for certain programs that are either of critical importance, or which could be particularly harmed by the limitations of a CR. For example, a CR during the FY17 budget process contained anomalies for the Columbia-class ballistic missile submarine, the KC-46A tanker, and multiyear contracts for Apache and Black Hawk helicopters. In August the Pentagon sent the White House lists, obtained by InsideDefense.com, of planned production increases and new start programs that would be impacted by a CR in hopes of... read more

Adaptive optics market for defence applications heading for rapid growth

(By Tim Mahon)   According to market research published by Markets & Markets earlier this month, the adaptive optics market is expected to grow to an approximate annual figure of USD2.2 billion by 2023. The rapid growth in the market – the report predicts a compound annual growth rate of over 40% over the five year period – is due in large part to the adoption of adaptive optics in both the ophthalmology and retinal imaging sectors. The latter – with implications for both defence and security markets, in terms of biometric identification and surveillance applications – has prompted considerable increases in government funding, which are in turn driving research and development programmes as well as inspiring wider and more rapid commercialisation. Adaptive optics improve the efficiency and performance of existing optical systems by reducing the effect of wavefront distortions, correcting the deformations of incoming wavefronts by deforming a mirror or a liquid crystal array to compensate and deliver more accurate images to operators in real-time. Principal applications until now have been in astronomical telescopes and laser communication systems to remove the effects of atmospheric distortion. As observation and area surveillance systems are increasingly being tasked with missions at longer and longer ranges and on a bewildering variety of platforms – on land, in the air and on the sea – the use of adaptive optics to refine and enhance images in time for effective action to be taken (the delivery of ‘actionable intelligence’ in security speak) will inevitably become more widespread. This growth area may, in fact, rescue the business sector from a problem that some point to as... read more

Major Expansion of U.S. Navy Amphibious Warfare Fleet?

(By Stuart Slade, Senior Naval Systems Analyst, Forecast International)   The decision to use the LPD-17 design as the baseline for the LX(R) has opened up a major discussion on the future size and composition of the U.S. Navy amphibious warfare fleet.  This decision resulted from the Navy’s determination that the Ingalls Shipbuilding production line for LPD-17s is now working so efficiently that another ship could be ordered to bridge the gap between LPD-17 construction and the start of the LX(R) program. As a result, lawmakers provided $1.8 billion for LPD-29, the 13th ship in the class, in the fiscal year 2017 spending plan. The key here is that the U.S. Navy structures its amphibious assault forces around a three-ship task group.  Each group contains one LHA/LHD, one LPD-17, and one LSD-41 (or its LX(R) successor) each.  During the Obama administration, a force level of 33 ships (11 amphibious assault groups) was set, despite knowledge that this was inadequate to meet the Navy’s strategic responsibilities. It has been apparent for some months that this force level has been discarded in favor of an increased level.  The question is, what will the new force level become? The order for a 13th LPD-17 supports the perception that a minimum of 39 ships (13 amphibious warfare groups) is now contemplated.  This would require the construction of two LX(R) class ships beyond the 11 originally planned. These additional ships also mean that the last LPD-17s and first LX(R)s would be built in parallel, reducing the acquisition costs of both.  An additional pair of amphibious assault groups would also require the acceleration of the... read more

What suppliers need to know about the UK’s new procurement system

The UK Ministry of Defence (MoD) will be introducing a new procurement system called Contracting, Purchasing and Finance (CP&F) in September 2016. This new system incorporates changes intended to enable far-reaching improvements and efficiencies in how the MoD undertakes its acquisitions. It will provide a single end-to-end capability that streamlines processes across the MoD and its supplier base, as well as delivering a significant step towards the government directive to ensure all procurement action is electronically conducted by 2017. The UK MoD has been in the process of streamlining and modifying its procurement process for over a year now. There are essentially two planned releases of this new functionality in 2016. “Go-Live” Release This phase of the programme changes the purchasing and payment functionalities of the entire procurement management system. This takes effect from 20 October 2016 and will replace the current P2P system. The key points for suppliers: • The main systems which suppliers use (Defence Contracts Online and Exostar) remain intact with no changes being implemented. • The MoD’s P2P system (the main procurement system used by MoD staff) will be re-platformed to CP&F. • Support for suppliers will cease to be provided by Capgemini and will be provided by Defence Business Services (DBS). Contact details will be advertised a month before the cut-over on Exostar and DCO. • Paper Orders and Invoicing will cease to be offered as an option for contracting. • Supplier connections to CP&F will be managed either through Exostar or directly with the supplier where required (all specific suppliers needing to be engaged have been). • The catalogue uploading process will change... read more

Turkey-Pakistan Defence Relations: Programmes in the Pipeline

Pakistan’s Ministry of Defence Production (MoD) released a statement on 15 July detailing three major defence deals between Turkey and Pakistan. The official announcement of these deals, in addition to reports of bilateral negotiations at the Farnborough Airshow, are indicative that Turkey is in line to become one of the biggest sources of defence materiel and technology for Pakistan. The three programmes included: Pakistan’s potential sale of trainer aircraft to Pakistan; Turkish upgrades to Pakistan Navy submarines; and the design and development of a fleet tanker in collaboration with Turkey. The latter two deals have already been signed and finalised while the deal for the sale of trainers to Turkey appears to be in its final negotiations. Defence relations between Pakistan and Turkey appear to have rapidly improved since the beginning of 2016. The two countries have also recognised the huge potential for collaboration in technology development and other commercial projects. Pakistan awarded a contract to Turkish firm STM to carry out mid-life upgrades to three Pakistan Navy Agosta 90B submarines. STM was selected over France’s DCNS on the basis of a “technically and commercially superior” package, even though it was originally DCNS that had designed and built the Agosta 90B submarines. Pakistan is also preparing to hold an inaugural ceremony for the Navy’s new fleet tanker in August. The fleet tanker was designed by Turkey’s STM under a deal that included co-production at Karachi Shipyard in Pakistan. Trade Deals in the Pipeline Trainer Aircraft: The MoD press release confirmed that Turkey will in fact be buying “quite a big number” of Super Mushshak flight trainers manufactured by the Pakistan... read more

India’s MTCR membership and what it means for defence trade

India is now set to be party to the Missile Technology Control Regime (MTCR), with a sign-off expected by the next MTCR plenary meeting in South Korea later this year. The Indian government, defence analysts and journalists have perceived this as a major achievement for India. It is the first time that India – a nuclear power not party to the Non-Proliferation Treaty (NPT) – is being accepted into one of the four multilateral export control regimes. India hopes that accession and compliance to the MTCR will make it easier to access critical technology for its advanced space and defence industries. Exports controlled by the MTCR Established in April 1987, the MTCR is a voluntary association of 34 countries — 35, once India is formally included — and four “unilateral adherents” that follow its rules: Israel, Romania, Slovakia, and Macedonia. The regime urges its members, which include most of the world’s major missile manufacturers, to restrict exports of missiles and related technologies capable of carrying a 500 kg (1,100 pounds) payload for a minimum distance of 300 km (186 miles), or delivering any type of weapon of mass destruction. Category I – governs complete missiles and rockets, major sub-systems, and production facilities. Category II – governs specialised materials, technologies, propellants, and sub-components for missiles and rockets. Potential exports of Category I and II items are to be evaluated on a case-by-case basis. Approval for Category I exports is supposed to be rare; some exceptions have been made by the US in the past for Ukraine and South Korea. The regime is not watertight, and there are allegations that France and... read more

Future Trends driving UK’s security industry

Excerpt from a policy briefing by the UK’s Aerospace, Defence and Security (ADS) Association 8 March 2016 The UK’s Defence Science and Technology Laboratory (DSTL) have developed an analysis of future science and technology trends which has significant applicability in the security sector. Furthermore, the paper recommended that the government inject funds into projects in these areas The future trends are defined by four main drivers. Below is an excerpt from the report, detailing these key future trends. Growing dependence on information: More and more data is being generated by a wide range of sensors and applications. This information is being understood and acted upon by computers far quicker than a human can process and respond. This presents both an opportunity and a threat. Whilst this can empower the security and intelligence agencies, nefarious use of this data can be a difficult threat to counter. It also links to a pressing dilemma for government and society as a whole, the decisions around which will have a profound effect on investigations and intelligence in coming years as more and more data is collected: to what degree is it acceptable to delve into individual citizens’ private data in order to investigate and prosecute criminal or terrorist activities? The human role will remain central, but change: There is a trend towards the proliferation of automated and remotely controlled systems acting on behalf of humans, for example unmanned air vehicles. However, critical decisions will remain in human hands. There also remains the need for contingency and the maintenance of skills needed to operate in conventional ways. The science of the bizarre will challenge... read more

Major ports and critical infrastructure opportunities in India

The Indian government has identified as many as 150 critical projects to augment the country’s coastal infrastructure under a multi-year plan, called “Sagarmala Project”. The Minister for Road Transport, Highways and Shipping announced the plan and said that the project has been met with budget approval. A main part of the project would be the development of an unspecified number of major ports along India’s coastline. The project will see the demand for design, development, and integration of various construction projects, transport security projects, among other requirements such as vessel traffic management systems, communication systems, cargo-handling and tracking systems, to name a few. We’d like to point out that the Indian media has reported that all projects would be open to the private sector as well. We are keeping track of developments and expect to find out more about how foreign vendors can engage in these opportunities, given the ongoing “Make in India” drive. The government has discussed potential for developing a world-class trans-shipment port in India and promoting the usage of coastal shipping and inland waterways for transporting key commodities like coal, iron ore, food grains and petroleum products. The Ministry of Shipping is expected to showcase some of these opportunities to domestic and global investors in the first-ever Maritime India Summit (MIS) to be held in Mumbai from 14-16 April, 2016.   Related Links: “Government identifies 150 critical infrastructure projects under Sagarmala” http://realty.economictimes.indiatimes.com/news/infrastructure/government-identifies-150-critical-infrastructure-projects-under-sagarmala/50992651 Registration for the Maritime India Summit http://shippingtribune.com/india-maritime-summet-feb-2016/ Government plans to float tender for 3 greenfield ports by March http://www.hellenicshippingnews.com/india-shipping-ministry-plans-to-float-tenders-to-develop-three-greenfield-ports/ Maharashtra Cabinet approves new investor-friendly port policy... read more

US Cybersecurity National Action Plan

The White House has revealed some details of a comprehensive new plan to bolster the nation’s cybersecurity capabilities under the “Comprehensive National Action Plan (CNAP)”. The plan is part of the 2017 budget request which is expected to allocate more than USD19 billion for cybersecurity – representing a 35 percent increase over the 2016 enacted level. Given that the US is the biggest cybersecurity market in the world, any trends in procurement, regulations, and preparedness can be expected to influence budding markets across the world. This makes the CNAP of interest to many countries across the world which are on drawing board to establish cyber security strategies for their respective governments. The near term plan under the CNAP includes many crucial tasks and goals: Establish the “Commission on Enhancing National Cybersecurity” Release of the 2016 Federal Cyber Security Research and Development Strategic Plan to serve as guidelines Modernize Government IT and transform how the Government manages cybersecurity through the proposal of a USD3.1 billion Information Technology Modernization Fund. Empower Americans to secure their online accounts by moving beyond just passwords and adding an extra layer of security. According to a press release, this necessity for a multi-factor authentication will be central to a new National Cybersecurity Awareness Campaign launched by the National Cyber Security Alliance. Evaluate use of Social Security Numbers (SSN) for citizen verification Establish a National Center for Cyber Security Resilience to help businesses and organizations test security systems Invest over USD19 billion for cybersecurity as part of the President’s Fiscal Year (FY) 2017 Budget. Continued focus on Critical Infrastructure: There is a continued commitment to protecting... read more

Australia’s Capability Upgrade Requirements: 10- Year Outlook

Australia’s 2016 Defence White Paper has revealed that the Australian Defence Force (ADF) will replace its Airbus Helicopters Tiger armed reconnaissance helicopters in the mid-2020s with a mix of manned and unmanned assets. Other requirements include the planned acquisition of light helicopters for special forces use, and a plan to explore the possibility of a long-range combat search and rescue asset. The Australian government released the much-awaited White Paper on 25 February at the Australian Defence Force Academy in Canberra. The White Paper sets the stage for the planned acquisitions and force modernisation requirements of the ADF. Unsurprisingly, a high level of importance has been given to ensuring the competitiveness of Australia’s domestic industry, including planned investments for the shipbuilding sector. Defence budget outlook: The government announced an increase in defence spending of AUD29.9 billion over the next decade. The government will grow the defence budget to 2 per cent of Australia’s gross domestic product by 2020-21, increasing defence spending from AUD32.4 billion in 2016-17 to AUD58.7 billion in 2025-26, representing a significant investment in capability. The White Paper features an entire section dedicated to industrial development, including details about R&D efforts and funding streams for local companies. For example, the Centre for Defence Industry Capability will be funded by about AUD230 million from 2025–26, in order to connect the ADF’s needs with the innovation and expertise of the Australian defence industry. Capability Streams and Requirements: The Government will strengthen defence capability in six capability streams, which are briefly examined below. 1. Intelligence, Surveillance, Reconnaissance, Space, Electronic Warfare and Cyber capabilities This category includes various upgrades and the acquisition... read more