Tanker Victory Spells Risks For Boeing

NEW YORK - Boeing's triumph over European rival EADS for a major U.S. Air Force tanker contract poses risks amid defense spending cutbacks and multiple delays to its commercial projects.
On Feb. 24, the Defense Department declared Boeing the "clear winner" of a $30-plus billion contract to supply up to 179 refueling tankers to the Air Force.

It is undoubtedly a major prize for the firm, but industry analysts highlighted the challenges that come with submitting what the Chicago-based firm itself called an "aggressive" bid.
"Since the KC-46A is a very competitively bid fixed-price contract for both development and production phases, it carries some execution risks for Boeing," Standard & Poor's analysts said in a client note.
Particularly, they said, "given the company's substantial cost overruns on some of its commercial and military programs in recent years."
Moody's Investors Service said that the difficulties could start early for Boeing, in the initial development phase.
"The development could distract engineering resources from other key programs including the near-term ramp-up of the B-787 Dreamliner," said Robert Jankowitz, senior vice president at Moody's.
The tanker contract comes as Boeing is under pressure from its new 787 Dreamliner program that is now running three years behind the original schedule.
"Given Boeing's headaches getting its new passenger planes out the door, there should be concern about the company's ability to deliver the new tanker on time and on budget," said Paul Ausick of 24/7WallSt.com.
And budget will be at the forefront of policymakers' minds, as the Pentagon, like other U.S. government bodies, struggles to cut the country's massive budget deficit.
"If Boeing misses deadlines and busts budgets, it's reasonable to expect that the Congress and the Pentagon will be reluctant to go ahead with the full complement of tankers," he said.
But there are definite rewards for the company, despite the risks.
Jefferies analysts said the contract spells benefits of "a few pennies per share" in the short term, and in the long-term a healthier business.
"Tomorrow's benefit is that the award adds balance to Boeing's business base, and continues a successful product line into the foreseeable future," they said, referring to the 767 commercial aircraft that will serve as the basis for the KC-46A tanker.
The 767 production line "would have closed within five years without this win," according to Richard Aboulafia, an analyst at aerospace consultancy Teal Group.
Orders for the long-haul, wide-body plane, which entered service in 1982, have dwindled in recent years. Only three 767s were manufactured last year.
But whatever the drawbacks and advantages, the contract may not yet be in the bag.
Feb. 24 was the second time Boeing bested Airbus parent EADS for the contract in the world's largest defense market.
The contract was awarded in 2008 to EADS and U.S. partner Northrop Grumman, but the deal was canceled after the government upheld Boeing protests of a flawed process.
EADS has 10 days after the award to protest the Pentagon decision.
"The battle could go into overtime if EADS decides to appeal, and it's not out of the question given the outlook for defense spending in the years ahead," said Ausick of 24/7WallSt.com.
"Given the budget environment and increasingly high fuel costs, the (EADS) KC-30 was at a disadvantage. But there are a few Southern Republican politicians who may decide to hold up funding," Aboulafia told AFP.

IAF lost 40 planes, 16 pilots since 2008

New Delhi, Feb 23 (IANS) The Indian Air Force (IAF) lost 40 planes and 16 of its pilots in air crashes in the past three years, the Rajya Sabha was told Wednesday.
'During the last three years, from Feb 1, 2008, to Feb 17, 2011, 40 accidents of IAF aircrafts have taken place. In these accidents, 16 pilots, 24 service personnel and five civilians have lost their lives,' Defence Minister A.K. Antony said in a written reply to the upper house during question hour.

Antony said every IAF aircraft accident was thoroughly investigated by a court of inquiry to ascertain the cause and remedial measures were taken accordingly to check their recurrence.

Apart from this, the IAF had taken various measures relating to strengthening the aviation safety organisation, streamlining of accident and incident reporting procedure, analytical studies and quality audits of the aircraft fleets to identify vulnerable areas and institute remedial measures to reduce aircraft accidents, he said.

'Visit of all flying bases by senior aerospace safety functionaries of the IAF is undertaken to enhance aviation safety. Measures like Operational Risk Management and Crew Resource Management have been implemented to generate a safe flying culture,' he added.

He said the accident prevention programmes had given an added thrust to identify risk-prone and hazardous areas specific to the aircraft fleets and operational environment to ensure safe practices and procedures.

To another question, he said that in 2010, the IAF reported 12 air crashes and in these five pilots, 11 armed forces personnel and four civilians were killed.

From Jan 1 to Feb 18 this year, there was one air crash, but no pilot, service personnel or civilian was killed, he added.

A MiG-21 fighter jet had crashed Feb 4 this year, 140 km off Gwalior airfield while enroute to Jamnagar. No casualty was reported in the accident.

Russia to build Bangladesh’s first nuclear plant

Russia also will train workers to run the plant, to be built in Rooppur, 75 miles (120 kilometers) north of Dhaka. – File Photo by AP

DHAKA: Russia has agreed to build energy-starved Bangladesh’s first nuclear power plant, the government said Friday.
Bangladesh’s Ministry of Science said officials from the two countries signed an agreement in Dhaka late Thursday for the $1.5 billion plant.
Russia will supply two reactors capable of generating a total of 2,000 megawatts of electricity for the plant, which is to be built by 2018, the ministry said. It will also supply fuel for the plant and take back the spent fuel, it said.
Russia also will train workers to run the plant, to be built in Rooppur, 75 miles (120 kilometers) north of Dhaka.
Relations between the two countries have been close since Russia backed Bangladesh in its 1971 war of independence with Pakistan.
Bangladesh’s decades-old gas-fired power plants are unable to generate enough electricity for the country’s 150 million people, with a daily shortfall of about 2,000 megawatts. Businesses complain that the shortages interfere with production.
The World Bank and the Asian Development Bank say Bangladesh’s economy, which has grown by more than 5 percent in recent years, will suffer if more electricity is not generated to support industries and agriculture.
The country also is looking at options to switch to coal-fired power plants. It has six coal fields with about 3.3 billion tons of estimated reserves. – AP

German DoD Given a Year To Reach Budget Goals

BONN - The German Defense Department has been given an additional year to achieve its saving targets of 8.3 billion euros (11.43 billion).
According to the German Treasury Department, part of these cuts, which were agreed upon last June, now will be stretched from 2014 to 2015. However, the 8.3 billion-euro figure will not be changed.

Under the original plan, the budget would be cut by 1 billion euros in 2013 and an additional 3 billion euros in 2014 as part of the military's structural reform. In addition, the department had to save about 600 million euros in 2011, about 1.1 billion euros in 2012, and another 1.3 billion euros in 2013 and in 2014 in its administrative sector.
The Defense Department declined comment before the new savings plans is drawn up.
The defense budget cuts are part of the German government's overall austerity package, aimed to reduce its global expenditures by around 80 billion euros until 2014.

U.S. Military Pulls Out of Eastern Afghan Valley

WASHINGTON - The U.S. military has begun pulling soldiers out of the Pech valley in eastern Afghanistan, a location once said to be vital to the war effort in the region, the Pentagon said Friday.
The commander of U.S.-led forces in eastern Afghanistan, Major Gen. John Campbell, is "repositioning" forces "within the province to achieve greater effect and allow for more flexibility," said Lt. Col. Elizabeth Robbins, a Pentagon spokesperson.

Campbell, "is moving forces around within his area of responsibility away from isolated static security outposts and more toward protecting the population in Kunar [province]," said Robbins.
"There are dozens of mountain passes and we cannot be in all of them," Robbins said, confirming the news first reported in the New York Times and the Washington Post.
The Post said that a battalion of some 800 U.S. troops have been deployed to the valley since 2006.
"If your forces are static, it takes away your opportunities and flexibility," Campbell told the Post.
The Times reported that U.S. soldiers began withdrawing from the valley starting on Febr.15 in a two-month-long operation. Afghan army units will remain in the valley.
However the Afghan army many not be up to the task.
"It will be difficult for Afghans to hold these areas on their own. The terrain there is very tough," Afghan Defense Minister Rahim Wardak told the Post.
"I personally fought against the Soviets in that area," he said.
During the 1979-1989 Soviet occupation of Afghanistan, the Pech valley, located near the border with Pakistan, was the scene of some of the fiercest fighting between the Afghan resistance and Soviet soldiers.
The Soviets pulled out of the valley in 1988, and many Afghans saw it as a key turning moment in the war, the Times said. Within six months the mujahedeen resistance groups had taken the valley from the Soviet-supported Afghan army.
Nearly 1,500 U.S. troops have died in Afghanistan in the longest U.S. war, launched in 2001 to root out Al-Qaeda extremists responsible for the Sept. 11 attacks on the United States.
President Barack Obama ordered a 30,000-strong surge under a last-ditch war strategy in late 2009, ahead of handing security to Afghan forces in 2014.

Study: Put General In Charge of U.S. Army's GCV

FORT LAUDERDALE, Fla. - The U.S. Army appears to be taking seriously a new study that describes problems that plague service acquisition, from writing requirements to full-rate production.

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The Army announced it had commissioned the 120-day study last May and asked Gil Decker, a former Army acquisition executive, and retired Gen. Lou Wagner, who served as chief of the Army's Materiel Command, to lead the inquiry.
On the last day here of the Association of the U.S. Army's winter symposium, Wagner ran through the study's recommendations for improving the system. He was not originally on the conference's agenda, but was added after InsideDefense broke news of the study's findings in a Feb. 11 story.
While the study group has clearly outlined the scope of the acquisition problems, it remains to be seen whether its recommendations will lead to the kind of change required.
One of its recommendations is to put a general in charge of the Army's Ground Combat Vehicle (GCV) program, currently led by a colonel. GCV and similarly complex acquisition category (ACAT) 1 programs need to have a general in charge, Wagner said.
If it were the Air Force, a three-star would be in charge, Wagner half-joked.
The Army's track record in getting programs out of technology development and into production does not bode well for GCV, planned as a successor to the Bradley infantry fighting vehicle. The acquisition process for the entire U.S. military requires scores upon scores of reviews and layers of bureaucracy that can slow things down, but the Army's recent history appears particularly bad.
From 1990 to 2010, the Army terminated 22 major programs, Wagner said. Of course, several of those fell under the umbrella of the multibillion-dollar Future Combat Systems effort, which was canceled in 2009. This has led to a loss of trust by the Office of the Secretary of Defense, Congress and industry in the Army's ability to develop good requirements and move a system into production, Wagner said.
The study's recommendations fall into four broad categories:
* Make the requirements process collaborative and timely. This means bringing the key stakeholders in early from across the Army, something the service did do with GCV, Wagner said. For key ACAT 1 programs, the Army should establish a special task force chartered by the chief of staff or the secretary of the Army, Wagner said.
* Manage risk, don't be risk averse.
To this end, Wagner showed a chart that displayed how Army programs were categorized by risk, based on the amount of development work required. A program that intends to develop a system from scratch versus one that plans to upgrade an existing system does not need to go through the same process, Wagner said.
The Army should not undertake developing systems from the ground up unless the system is truly a game-changer, he added.
* Align organizations and accountability. For example, Program Executive Office (PEO) Soldier should be renamed PEO Soldier and Small Unit. PEO Combat Support and Combat Service Support, which currently manages more than 500 systems, should be broken up into two offices,
* Provide adequate requirements and acquisition resources. To reduce funding instability, the Army could fence off funds for larger programs or fund them with a "capital account."
Wagner said he has briefed many people in the Pentagon on the study, including Pentagon acquisition chief Ashton Carter.
So far, the feedback has been very positive, he said.

AUSA: U.S. Army Plans Integrated Network Tests

FT. LAUDERDALE, Fla. - As the U.S. Army reinvents its network strategy, it is planning a busy year of tests and evaluations that will compare program-of-record technologies to other available equipment developed by industry.
The first event is scheduled for June and July at White Sands Missile Range, N.M., and the Army is calling it the Integrated Network Baseline Test. The six-week exercise includes a series of limited user tests for important Army network programs.

Limited user tests are designed to grade a system's performance and collect data that can be used when the Army or the Pentagon make a production decision.
The Integrated Network Baseline Test will include limited user tests for two Joint Tactical Radio System (JTRS) programs: the Ground Mobile Radio and the Handheld, Manpack, Small Form Fit radios. It also will include limited user tests for the Modern Soldier System and the Joint Capability Release, which is the next generation of Force XXI Battle Command Brigade and Below battle command capabilities.
The first four weeks will comprise the limited user tests, and during weeks five and six, the Army will conduct brigade-level exercises with non-program-of-record network technologies.
Each battalion in the brigade will have different sets of equipment so the Army can judge interoperability but also compare the capabilities to each other, said Paul Mehney, spokesman for Program Executive Office (PEO)-Integration.
In October, the Army will conduct what it's calling a Brigade Combat Team Integrated Exercise (BCT-IE). This event is designed to bring in emerging capabilities and non-program-of-record technologies and get them into the hands of soldiers, Mehney said.
It is the Army's chance to evaluate what is available and see what could be added to capability sets in the future.
For a company like Harris, which has a radio with capabilities similar to those developed under the JTRS program, the opportunity is exciting. The Army has indicated it wants to evaluate the company's AN/PRC-117G radio, which is a huge change from a year ago, said Dennis Moran, vice president of government business development at Harris.
This year's focus is the company command post and the aerial tier of the network infrastructure. The Army will be looking at the maturity of the technology and its ability to be integrated into the overall network.
A culminating event, called the Integrated Network Test, will take place late in 2012. It will determine what goes into the Army's capability set for 2013 and 2014, Mehney said.
Bringing all of these disparate systems together is a new approach for the Army, said Col. Michael Williamson, deputy PEO Integration.
It is being spearheaded by Gen. Peter Chiarelli, the vice chief of the Army, who directed the service to start testing the separate network pieces together despite their different levels of technological maturity, Williamson said.
The Army tried it out for the first time during a giant network demonstration in July. To pull that off, the program managers and PEOs involved performed integration work that normally would have been done two years from now, Williamson said.
Tests on this scale require a lot of resources in manpower and dollars, but by combining programs' test events, the Army hopes to offset the costs, Williamson said.