Significant market share lost due to unfair preferences for labor performed by federal inmates through a government-run corporation known as Federal Prison Industries (FPI)

In recent years, manufacturers have lost significant market share in DOD clothing and textiles because of FPI’s preference. FPI as a mandatory source should be limited so more job opportunities can be provided to the U.S. domestic manufacturing base. While FPI certainly has a legitimate function, it is also imperative that they be required to compete by the same rules as industry.

If you feel the same, please add your signature to reach the 25,000 signature threshold required by the White House by March 1, 2012 and influence the administration to respond to this issue.    Please review the attached information and then: 1) Go to https://wwws.whitehouse.gov/petitions. Follow the link at the bottom of the page to create an account.  2) Activate your account by clicking on the link sent to your email (it will take a few minutes for the email to reach your inbox).  3) Change your password using the link provided.

4)  Click on Open Petitions in the Green boxes at the top of the page. (sometimes the White House server is slow, please try again if the page doesn’t load correctly)  5) Locate petition titled “Reform DOD Procurement Policies that Benefit Federal Inmates.” (you may need to close your browser and sign in again in order for this to work)  6) Click the green words “Find Out More”.

7) Click the green button “Sign this petition”.  Thank you for supporting this initiative.

https://wwws.whitehouse.gov/petitions

Army to Launch JLTV Competition

The Joint Light Tactical Vehicle - Photo Courtesy of the Army Times

Debt Crisis?  Bah!  The US Army has announced that it’s getting close to holding a full and open competition for its next generation Joint Light Tactical Vehicle (JLTV).  This ground pounding bad boy has brought out almost all of the stars in the prime contracting galaxy, including Lockheed Martin, BAE Systems, AM General and General Dynamics; not to mention a huge network of subcontractors.

That the JLTV is nearly ready for prime time is not a huge surprise.  There has been plenty of coverage of the development phase here and elsewhere.  What is somewhat surprising is the timing of the announcement, what with all of the shenanigans  taking place in that big white building clearly visible across the Potomac from the Pentagon.   If the Army gets its way, the JLTV, along with the Humvee Recap and the upcoming Ground Combat Vehicle program, it would be making a huge investment in the ground vehicle inventory. We’ll just have to see what happens on Capitol Hill.

For a more in-depth analysis, check out Philip Ewing’s article on DoD Buzz.

Default Day Looms: Will you get paid? Who knows!

Sometime in early August, Uncle Sam’s checking account is going to get pretty messy if Congress and the President can’t arrive at some sort of meaningful solution.  Is this a stupid, manufactured disaster?  Probably so.  Will that change the facts on the ground if the government is in default?  Not at all.

In the middle of the noise surrounding debt payments and social security checks, there’s been very little noise about that other category of government payees:  the government contractors.  If the US government has to start prioritizing who gets paid first, you may not be too high on their list.  Granted, no one at DoD or Treasury can even begin to predict the downrange impacts of default, but it’s pretty obvious that payments would almost immediately be affected.

Let’s hope that cooler heads prevail, but I would keep my eye on this one.  It could get ugly in a hurry.

 

Happy Trails, Atlantis!

Atlantis Thundered off the Launchpad on Her Final Voyage

Today was a big day in the history of manned spaceflight in the US.  The last flight of the space shuttle Atlantis marks the end of one of the most iconic (and expensive) programs the country has ever undertaken.  Whether the shuttle program was worth it will be debated by historians for a long time to come.  There is, however, no question about the inspirational power of that beautiful spaceship and its influence on a generation of dreamers around the world.  There’s no way I would be sitting in this chair if it weren’t for my first space shuttle poster in 1980.  The big question now is: what’s next?

Sure, there are some programs in the offing.  Constellation and Orion are still in development, but NASA’s funding is sure to take a hit along with the rest of government.  SpaceX is also cranking out more sophisticated versions of its Falcon launch vehicles under the NASA COTS contract, and their Dragon capsule is set to be tested later this year.  Still, it’s conceivable that Americans won’t reach orbit on a homemade platform until well into the middle of the decade.  In the mean time, Russia will be carrying the freight.  What a country!

Congrats to the NASA team at KSC and Johnson, and to the hundreds of contractors who made it possible to fly such a magnificent system.  Now lets look to our Congress to ensure that America continues to play a leadership role in manned spaceflight.  To give up that mantle puts us permanently out of the inspiration and innovation business, and that’s not good for anyone.

Now Everybody Wants Their Own…

US Air Force MQ-9 "Reaper" (Photo Courtesy of USAF)

If imitation is the highest form of flattery, then the US defense industry should be awfully proud of itself.  Just look around the world at all of the new unmanned systems in development.  In today’s Washington Post, there’s a great piece on the global proliferation of unmanned drones, and the implications for both the US military and industry.  My favorite quote was this little nugget:

“The United States doesn’t export many attack drones, so we’re taking advantage of that hole in the market,” said Zhang Qiaoliang, a representative of the Chengdu Aircraft Design and Research Institute, which manufactures many of the most advanced military aircraft for the People’s Liberation Army. “The main reason is the amazing demand in the market for drones after 9/11.”

This quote captures the horrible crunch that our industry and government partners face as a result of strict US export rules.  On one hand, we don’t want our best technologies falling into the hands of the bad guys.  On the other hand, we’re giving Mr. Zhang (quoted above) a pretty strong market incentive to copy our technologies at a lower cost and beat us over the head in global markets.  That stings.

Doom and gloom aside, I think this analysis, while excellent, misses an important point.  China, India, Russia and Israel can have all the drones they want, and probably will.  What they don’t have is almost as important as what they do have: Global Positioning Systems, highly encrypted SATCOM, and other high dollar systems that make the US drones a more integrated component of our arsenal.  I’m not losing any sleep just yet, but this is a trend to keep your eye on.

Read the whole Washington Post article here.

So Long, Mr. Secretary, and Welcome Home!

Robert Gates is Stepping Down as Secretary of Defense

After 30 years of public service under eight presidents of both parties, Robert Gates is stepping down as the 22nd Secretary of Defense.   His 4 1/2 year tenure as SecDef under presidents Bush and Obama was arguably one of the most difficult and eventful terms ever served. Leon Panetta, his relief, is another longtime Washington hand, but he has some pretty big shoes to fill.  Gates’ skill on Capitol Hill and inside the byzantine Pentagon bureaucracy will be hard to match.

What’s next for the newly minted “Mister” Gates?  Well, he’s been talking about that house here in the Northwest for a while now, so keep your eyes peeled if you’re bumping around the Kitsap Peninsula.  You never know where he might pop up.

Joint Strike Fighter: The Map Says it All

Today’s modern weapons systems possess the most advanced features known to humanity: sophisticated avionics, advanced materials, high performance power plants, and most importantly… extremely well planned supply chains to ensure survivability.  To that end, take a look at Lockheed Martin’s newly released map of supply chain impacts of the F-35 around the United States.

Coming in at almost $150M annually, the 4 Northwest states didn’t do too badly, but given that the total life of the program is valued at $380B, you can imagine that a few states are doing pretty well (I’m looking at you CA, TX and, unexpectedly, NH.)  It doesn’t take a genius to understand how this map affects the political impact of the program.  While the F-35B may be on the proverbial hot seat, this shows you what an uphill battle opponents of the B-variant will have in killing it.

Take some time and enjoy the map in all of its glory here.

Paris Air Show: New Russian Firefighting Plane

The Paris Air Show is now in full swing, and a number of our good friends in the blogosphere are featuring wall-to-wall coverage of all the news coming out of Le Bourget.  Sadly, the PNDC budget doesn’t support such a fancy-pants excursion, so I’m relegated to reading about it like most of the rest of the world.

This interesting bit of news coming out of Paris caught my eye. While quite a bit of the news on this site refers to DoD issues, PNDC has a number of members (like Simplex Manufacturing and Columbia Helicopters) who are players in the airborne firefighting market.  This relatively new plane from Russian aircraft manufacturer Beriev being shopped around Paris has been fighting fires in Europe, and is knocking on the door of the North American market.  Looking at the huge fire currently burning in  AZ, I think such a machine just might find a market.

Read the original story from msnbc.com here.

Ground Vehicles Lead the Spending Charge

Army Mine Resistant Ambush Protected (MRAP) Vehicles

 

If you want to know where the Pentagon is dropping taxpayer dollars in vast quantities, look for big rolling objects.  That’s the word from an analysis by Michael Fabey in AvWeek’s Aerospace Daily and Defense Report.  Here’s an excerpt:

While the Pentagon lists tracked combat vehicles, wheeled combat vehicles and trucks as individual line items within the top 10 of the Defense Department expense list for 2010, the three categories together tally up to about $12.8 billion, which would put them at the top of the list — the same spot their combined total occupied a year ago, according to an Aerospace DAILY analysis of data provided by the National Institute for Computer-Assisted Reporting.

Tracked combat, assault and tactical vehicles lead the ground expenses with about $5 billion in contracts and modifications, the analysis shows — good enough to place fourth in total individual-line Pentagon transactions.

Pending any decisions on force strength in Afghanistan, this looks to be an area where the Pentagon will be forced to spend dollars for quite a few years to come.  Given the number of metals manufacturers in Portland and Seattle that supply the heavy vehicles market, it’s a fair bet that a chunk of the supply chain is located around these parts.  Absent from the short list of big recipients is local favorite Daimler Trucks North America, which manufactures a number of large military trucks for Uncle Sam.

Kudos to Philip Ewing at DoD Buzz for catching the story.  Read the full article here.

Exports: Saving our Bacon?

10 C-17s are heading to India

The budget situation in the United States looks pretty awful for the foreseeable future.  Where the Department of Defense will land in the upcoming slew of red ink is still an open (and much debated) question, but nobody is placing bets on a boom in major defense programs any time soon.

That’s why the recent decision by the Indian government to order 10 C-17′s from Boeing is such a relief to companies up and down the West Coast and around the country.  This win for Boeing guarantees that their Long Beach, CA based production line will be cranking out the Globemaster until 2014.  The effects of this one order can be seen all over the Northwest, including companies like Portland based Precision Castparts Corp, who supplies parts for the cargo plane.

This new order from India highlights a trend of major exports of US defense products.  W.J. Hennigan penned an excellent summary of the export market in today’s Los Angeles Times, and it’s definitely worth a read.   While the future climate for the domestic US defense market could still best be described as lousy, every dark cloud has a silver lining.  Perhaps the export market is just what the doctor ordered.

Update (6/17/11):As if on cue, Australia makes me look awfully smart.