Defense Procurement Bumped Up by $26b

defense-spendingBudget cuts and a lack of direction have created an anxious atmosphere for many Defense vendors.  Recent events, however, provide cause for cautious optimism.  For one thing, the 2015 Defense budget made it through the Senate appropriations committee. This is a hopeful sign that the government may avoid the dangerous, near-default showdowns that have made supplying the military so difficult and unpredictable. Defense Industry Daily has a nice summary on the latest budget.  One detail that caught my eye, the beloved “warthog” (A-10C) is getting an upgrade.

Another cause for optimism for Defense vendors is an announcement that mid-year projections for procurement and research are $26 billion higher than before.  However, not everyone trusts these projections. Below, we reprint an article than originally appeared in Bloomberg Government.

Defense Firms To See $26b More In Outlays By Sept. 30, DoD Says

Revised Pentagon mid-year projections call for $26b more in procurement, research outlays by Sept. 30 than first estimates, according to newly disclosed figures.

Pentagon’s on-paper estimate now projects spending $110.7b on procurement by end of fiscal yr, up from $92.1b April forecast; as well as $63.3b in research, up from $56b, according to Pentagon spokesman Navy Commander Bill Urban.

Military personnel outlays drop to $149.5b from $154.2b; operations and Maintenance slip to $246.3b from $272.8b.

Projections not outlined in July 11 OMB Mid-session Review.

Industry analysts in April said defense spending might plunge, based on Pentagon’s “Green Book” blueprint indicating drop in outlays for weapons, research of combined 18.5% compared with FY13.

Todd Harrison, defense analyst for non-partisan Center for Strategic and Budgetary Assessments, says “new outlay projections” mean “near-term will not be so bad for U.S. defense firms as DOD previously projected.”

“However, I suspect most defense firms were not basing their internal projections on DOD’s prior outlay forecast, so it may not mean any material change for these companies,” he says.

“Companies have dismissed the projected drop and supported their own guidances,” says Roman Schweizer, defense policy analyst with Guggenheim Securities.

“Change may improve sentiment for the sector but not affect financial performance,” Schweizer says.

Schweizer says larger question is: given the revision can the Pentagon “Green Book projections be trusted?

What’s in your bag?

felix the catSuppose you have a bag of plug-and-play hardware/apps for your laptop, what would be in it? AMREL has a proprietary technology that allows you to instantly install hardware in your DVD/CD drive. So far, we have modules for different radio frequencies, biometric enrollment, targeting solutions, operator control units for unmanned systems, and others. What would you like to instantly install in your laptop? CAC card reader? RFID scanner? Coffee cup holder? Please leave a comment.

For more information visit: Flexpedient.


UAV gives an inside look at fireworks [VIDEO]

Ever wonder what fireworks looked liked from inside the explosion?  Wonder no more, because an intrepid UAV enthusiast gives you an inside look with this wonderful video.

Building the 2021 Affordable Military [DOWNLOAD]

The bipartisan Center for Strategic and International Studies (CSIS) has been rated the “…number one think tank for security and international affairs” (Wikipedia).  Power brokers and key influencers staff the CSIS, and when they talk, people listen.Building the 2021 Affordable Military

What they have to say about how we spend money on Defense will undoubtedly be heard by important decision makers. The 120-page “Building the 2021 Affordable Military” was created by a CSIS study team over the course of two years. It is “…a methodological approach for how DoD could minimize the impact of a deep budgetary reduction and provide the military capabilities needed for the strategic realities of 2020+.”

They even developed cost calculators for making trade-off decisions. They don’t simply advocate a specific strategy; they tell you the cost of various “alternative militaries.”

The great thing about this study is its unqualified embrace of details. What to find out how many tankers the Air Force Reserve has now? Will need? With or without sequester? With or without the Pacific tilt? This report has an answer for you. Same goes for battalions, submarines, and pretty much anything else you can think of.

One little tidbit I found on page 3 was “In the past, drawdowns ended below $400 billion in constant 2013 dollars; this one will bottom out at over $500 billion. In FY 2017, even though DoD is spending over $100 billion more, it will ‘buy’ an active duty force that is 34 percent smaller than in 1978 and six percent smaller than in 2000. This means not just fewer defense dollars but also a “weaker” defense dollar in terms of its purchasing power.”

So, the people who are complaining that Defense spending is at a historic high (during a drawdown) and those that are warning about  “hollowed-out” military capabilities are both right.

“Building the 2021 Affordable Military” is an ideal reference work for those doing serious market research on Defense issues.  Download it here.


DARPA Robotics Challenge

Unmanned Ground Vehicles (UGV) don’t get much love. Their aerial cousins, usually described by the technically inaccurate term “drone,” receive much more publicity, as well as greater funding. UGV developers fear that the Defense budget squeeze will disproportionately affect them.

However, one federal agency still believes in promoting UGV development. Defense Advanced Research Projects Agency (DARPA) is sponsoring the DARPA Robotics Challenge, “… a competition of robot systems and software teams vying to develop robots capable of assisting humans in responding to natural and man-made disasters.” In addition to a $2 million prize for the top contestant, this challenge represents a wonderful opportunity to explore capabilities and for developers to network.

Read more