Defense Contractor Consolidation A Security Concern: U.S. Air Force Acquisition Head (excerpt)
(Source: Reuters; published June 28, 2019)
By Jamie Freed
SINGAPORE --- The number of major U.S. defense contractors has shrunk to the point of becoming a national security concern, according to the U.S. Air Force’s acquisition head, who said his service needed to have more frequent competitions to benefit smaller companies.
The comment came after U.S. President Donald Trump this month expressed concern that United Technologies Corp’s plan to combine its aerospace business with that of Raytheon Co could harm competition and make it more difficult to negotiate defense contracts. The $121 billion deal would be the sector’s biggest-ever merger.
Will Roper, assistant secretary of the U.S. Air Force for acquisition, technology and logistics, said when his service was formed in 1947, over a dozen companies could make airplanes.
“Right now, we are down to just a couple of companies who can build tactical airplanes for us. We need to do everything in our power to start opening up that envelope again,” he told reporters on the sidelines of a defense technology conference in Singapore on Friday.
He said U.S. Air Force tenders for major equipment typically required so much design effort that it was unaffordable for all but the very biggest defense contractors to compete. (end of excerpt)
Click here for the full story, on the Reuters website.
As Key Part Producers Disappear, Future Advanced Aircraft in Peril, Pentagon Warns
(Source: Air Force Magazine; posted June 28, 2019)
By John A. Tirpak
Suppliers of parts critical to the design and manufacture of next-generation combat aircraft are withering away because there’s not enough work to keep them in business, a new Pentagon study on the industrial base has found. The report echoes warnings from a major study last fall that sounded the alarm that domestic producers of some defense-critical products are down to one or none, compelling the US to rely on foreign suppliers.
The Pentagon suggested several steps—such as laws to rein in counterfeit parts lifting restrictions on exports—that could make the difference in preserving capacity in some key sectors.
The May 2019 “Industrial Capabilities” report—required annually by Congress and released without announcement in mid-June—finds that current modernization programs don’t “provide enough opportunities to maintain skills to dominate major design and next-generation development work.” In fact, the report says that a coming lull in designing new combat airplanes—“an absence of new requirements in the next five to seven years”—will greatly worsen the problem, which will be further exacerbated by a coming wave of retirements among aerospace workers with specialized knowledge. This will lead to “a shortage of critical design capabilities,” the Pentagon warned.
“Maintaining innovation becomes nearly impossible while facing the constant threat of skilled aerospace, mechanical, electrical, and software engineers leaving the workforce and not passing along critical knowledge of next-generation technologies and fifth-, sixth-generation enabling capabilities to new employees,” the report concluded. This will directly affect new programs that will get underway in the mid-2020s, such as the Air Force’s Next Generation Air Dominance system and the Navy’s F/A-XX fighter.
It’s not just the designers at the big six contractors that aren’t getting enough opportunities to work on new things. The makers of the parts themselves can’t keep innovating if they have no new programs to work on, and that’s “stifling” the development of new engineers to be able to design new components, the report noted, citing a “lack of consistent” research and development funds as the culprit. (end of excerpt)
Click here for the full story, on the Air Force Mag website.