3Q M&A. The multinational professional services consulting firm PwC said there were 92 mergers and acquisition deals worth $11.1 billion in the global aerospace and defense market in the third quarter, “largely in line” with trends. However, the number of deals is the lowest dating back to the fourth quarter of 2016, according to data provided by PwC in their third quarter review. Year to date, deal value has increased nearly three-fold to $80.3 billion versus the same period a year ago, due solely to the $52 billion pending acquisition of Raytheon by United Technologies announced during the second quarter. The increase is similar to the 10-year average.
Cyber Contract. General Dynamics’ Information Technology segment recently received a potential five-year $325 million contract from the Department of Homeland Security Cybersecurity and Infrastructure Security Agency to continue providing priority telecommunications services (PTS) to the agency’s Emergency Communications Division. The contract is legacy work performed by the former CSRA, which GD acquired last year. Under the contract, GDIT will support upgrades to the PTS program to include adoption of 5G wireless technology.
DoD 3-D Printing. A new report from the Pentagon’s inspector general has determined the department is meeting an initiative to promote additive manufacturing and 3-D printing across the services, while recommending improvements to standardize efforts. According to the report, DoD has established at least 81 military depots, facilities and field locations that are using 3-D printing to produce new parts. The IG notes that the Office of the Secretary of Defense has met a previous mandate to implement policy meant to coordinate additive manufacturing efforts among the military branches and the Defense Logistics Agency. However, the report includes recommendations to expand the use of additive manufacturing by standardizing data elements and reporting requirements for 3-D printed parts and implementing a method for sharing data among the services to reduce duplicative efforts.
Boeing People. Boeing has elected retired Chief of Naval Operations Adm. John Richardson to its board, where he will sit on the new Aerospace Safety Committee formed in August to help oversee the company’s commitment to safety in the wake of two 737 MAX passenger aircraft crashes in the past year. He will also serve on the board’s Special Programs Committee. Separately, as part of Boeing’s leadership shakeup last week at its Commercial Airplanes segment, the company announced that Vishwa Uddanwadiker is now interim chief information officer and senior vice president of Information Technology & Data Analytics. He is taking over for Ted Colbert, the new CEO of Boeing’s Global Services Segment, who in turn is taking over for Stan Deal, the new CEO of Commercial Airplanes.
…More People. Lockheed Martin announced the election of Debra Reed-Klages to its board effective Nov. 1. She retired last December as executive chairman of Sempra Energy, where she had also been president and CEO. Textron announced that Lionel Nowell III has been elected to the company’s board of directors effective Jan. 1, 2020. He is the retired senior vice president and Treasurer of PepsiCo Inc. Finally, President Trump appointed Matthias Mitman to be executive director of the National Security Council. Mitman is a career member of the Senior Foreign Service and most recently served as chief of staff to the Special Presidential Envoy for Hostage Affairs.
NCI/DISA. NCI Information Systems announced on Oct. 22 it has received a potential four-year, $270 million deal to provide IT support for DISA’s Joint Service Provider office. Under the deal, the largest award to the company in 10 years, NCI will provide artificial intelligence-powered tools to simplify JSP operations and improve efficiencies with its “Shai” technology framework. “With NCI’s Shai, our team now has digital teammates working for them—and JSP will benefit from one of the first federal AI-enabled service desk capabilities,” Paul Dillahay, CEO of NCI, said in a statement. “Our team of highly-trained and motivated professional personnel, combined with AI-powered tools, will shift employees’ time and efforts from low-value to high-value work, allowing the JSP organization to focus on solving the most pressing, mission critical challenges they face.”
ERCA Industry Day. The Army will host an industry day in the second half of November for the latest iteration of its Extended Range Cannon Artillery program, as the service readies the release of a potential request for prototype proposals in April 2020. The event will take place at Picatinny Arsenal in New Jersey and will provide an overview of near-term opportunities in the ERCA Increment 2 program. Specifically, Army officials will provide an operational overview, detail on the acquisition strategy, a breakdown of key system capabilities that will be required and an update on the Combat Capabilities Development Center-Armaments Center’s current developmental efforts. Officials said the industry will be the first of several engagements planned through the second quarter of FY ’20. The eventual RPP will detail plans to produce 200 ERCA Increment 2 vehicles.
Bipartisan AI Initiative. Reps. Will Hurd (R-Texas) and Robin Kelly (D-Ill.) announced on Oct. 24 they have launched a new bipartisan artificial intelligence initiative that will work toward developing a national AI strategy. The group, with assistance from the Bipartisan Policy Center, will work on a framework to assist Congress and the White House with addressing AI-related policy priorities. “If America loses its advantage in technology, it will have a devastating effect on our economy and national security. We need a national AI strategy to ensure the U.S. is prepared to lead on technology that will define the course of this century,” Hurd said in a statement. Hurd and Kelly said the group will bring together policy experts, public and private sector leaders and consumer advocates to discuss AI policy challenges.
NATO. The Senate voted Tuesday in support of North Macedonia joining NATO by a vote of 91-2, with Sens. Rand Paul (R-Ky.) and Mike Lee (R-Utah) objecting. Twenty-two NATO member nations have now ratified its accession, and seven member-nations must still vote in favor of the Balkan state before it can join the alliance.
One Less HASC Member. Rep. Tulsi Gabbard (D-Hawaii) said Friday that she will not seek reelection for her congressional seat in 2020, and will focus solely on her campaign for the Democratic presidential nomination. A major in the Hawaii Army National Guard, Gabbard was elected to Congress in 2012 and currently serves on the HASC subcommittees for intelligence, emerging threats and capabilities as well as readiness. Her plans to leave Congress no matter what the outcome of the Democratic presidential race mean eight HASC members have so far announced plans to retire or run for another office in 2020.
2020. Rep. Katie Hill (D-Calif.), a freshman HASC committee member whose district includes Edwards AFB, may face a more challenging reelection race in 2020 as the House Ethics Committee pursues an investigation that she engaged in an inappropriate relationship with a congressional staff member, in violation of House Rules. The committee announced its investigation Wednesday. Hill already faces at least one competitor: retired Navy officer F/A-18 fighter pilot and Raytheon former vice president of business development Mike Garcia (R).
U.S.-French Space Collab. The Department of Commerce said Wednesday it has signed a declaration of intent to partner with the French space agency Centre National d’Etudes Spatiales (CNES) on space situational awareness, space traffic management and other efforts related to commercial space development. The two agencies plan to sign a memorandum of understanding in the near future, per the signed agreement.
X-37. Air Force RCO Director Randall Walden told reporters the “data is still out” as to whether the office would develop more X-37 orbital space vehicles. “I would say those two we have are workhorses,” he said Friday after an AFA event in Washington, D.C. “They are doing quite well in the experimentation and the prototyping that we ask it to do.” Boeing developed the two current X-37 vehicles, which among other experiments are helping the Air Force demonstrate reusable space technologies.
Ford Elevators. Secretary of the Navy Richard Spencer said on Wednesday the USS Gerald R. Ford’s (CVN-78) beleaguered and delayed Advanced Weapons Elevators (AWEs) are moving forward. Speaking at a Brookings Institution event, he admitted that while the Navy has problems with the elevators, it will work them out. “This morning we signed elevator number four over. Deep elevators, five and six are moving in the ship. They’re going to be tested and certified. Everything will be working when she goes IOC [Initial Operating Capability].” Spencer also said the Ford will reach the fleet before 2024, then have the standard 18-month period to get the air wing certified before it can go on deployment.
… Hill and HII Share The Blame. Responding to sharp questioning from Rep. Elaine Luria (D-Va.) in a House Armed Service Committee hearing Tuesday regarding Ford, Spencer shot back that “we need everyone to realize that these are massively complex systems. Did we do things wrong? Yes, we did things wrong. We put a price cap on there. I would love to know that Congress understands what a price cap does…” While Spencer admitted fault in the Navy not building a ground-based AWE test model before putting it on the ship, he said not everything is the Navy’s fault, putting blame on the shipbuilder. “And I love the fact that, and I’m going to be very aggressive here, that Congress turns around and says Navy this is your fault,” he continued. “I have an extra seat up there when I testify and I have not seen Huntington Ingalls Newport News called up on the Hill to testify on the outrage that my board of directors sees on the Ford. Let’s have open transparent conversations.”
…And Management. Spencer harshly criticized Huntington Ingalls, saying the company’s management in the spring said elevators actually will not be done until 2020, characterizing it as “we really have on idea what we’re doing.” However, he claimed the Navy is making progress now that a service team has taken over the project. “Faith and confidence with HII senior management when it comes to this project is very, very low.”
Shared Responsibility. Under Secretary of the Navy Thomas Modly on Friday tried to soften Spencer’s comments at a Military Reporters and Editors event. He said the service has no tactic of bashing industry, but is trying to explain “the frustrations that we have with industry in this environment that we’re in, that we’ve put ourselves in.” The Navy and DoD “have a lot to be held accountable for with respect to the Ford,” particularly decisions to add several new technologies on to a new platform at once. While accepting responsibility, “I think what the Secretary was trying to say was that it’s the Navy that gets bashed on this and there is a shared responsibility here between us and industry on this problem.”
…HII Trying. Modly pointed out he and HII CEO Mike Petters lived next door for three years while at the Naval Academy together. He praised Petters as a good, smart, and a very effective executive. “I know he’s trying to do everything he can. I know all the people at Newport News are trying to do everything they can to make this thing right,” Modly said. However, “they’ve struggled and I think they would admit they’ve struggled…there is no strategy or tactic that we’re up here trying to bash industry., that’s not the case at all. We’re just trying to explain our position,” Modly added.
Mine Challengers. A Navy official named Russia and China as the biggest mine warfare challenges as near-peer threats during an National Defense Industrial Association event in Annapolis, Md., last week. They “are very capable” at taking our capital assets and Marines, so the service has a “tremendous amount of challenges as we move forward,” Capt. Chris Merwin, Director for Mine Warfare at the Surface and Mine Warfighting Development Center, said. Merwin said Russia is a very prolific miner, with mining a clear part of their doctrine while both Russia and China have very modern mine inventories.
LCS-17. The Navy will commission the newest Freedom-variant Littoral Combat Ship, the future USS Indianapolis (LCS-17), during a ceremony on Oct. 26 in Burns Harbor, Ind. Odd-numbered Freedom-variant ships are built by Fincantieri Marinette Marine in Wisconsin under prime contractor Lockheed Martin.
Dynamic Mariner. Eighteen NATO allies participated in the Dynamic Mariner 2019 exercise off the coast of Spain from Oct. 8-18 to test the NATO Response Force Maritime Component Commander and enhance the flexibility and interoperability of allied nations. Participants included Albania, Bulgaria, Belgium, Canada, Denmark, France, Germany, Greece, Italy, the Netherlands, Norway, Poland, Portugal, Romania, Spain, Turkey, United Kingdom and the United States. This event involves 32 surface ships, two submarines, and 18 aircraft training across warfare areas. The Navy said NATO Maritime Command sponsored and evaluated the exercise, but the Spanish Maritime Force Commander exercised operational control of forces, acting as Marine Components Commander. Dynamic Mariner involved a simulated NATO Response Force operation. The exercise culminated in forces splitting into friendly and hostile players to simulate a realistic ‘free play’ scenario escalating into a NATO Article 5 operation in collective defense of a member.