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Defense Systems News

Prime Minister Tony Abbott in the cockpit of a replica F-35 Joint Strike Fighter

DoD Details Planned Cuts If Budget Caps Remain

The Pentagon has laid out plans for how it would cut $66 billion in procurement and research-and-development projects between 2016 and 2019 should US defense spending caps remain in place. The cuts would affect dozens of DoD programs, including the Lockheed Martin F-35 joint strike fighter, Boeing KC-46 aerial refueling plane and Airbus Light Utility Helicopter. DoD’s 2015 base budget proposal conforms to spending caps. However, the White House submitted an additional $26 billion request in a separate measure known as the Opportunity, Growth and Security Initiative. The Pentagon’s five-year spending plan submitted with its 2015 budget proposal is $115 billion above defense spending caps.

Australia Confirms Plan To Buy 58 More F-35s, Bringing Total To 72

Italy plans to halve its F-35 buy

Air Force urges Congress to retire A-10 attack planes

Industry Yearns for Scout Helicopter Competition

Navy to award contract for Marine One helicopter fleet in shadow of previous failure

Navy MQ-4C TRITON Surveillance Drone Undergoes First Round of Flight Tests

Navy to award contract for Marine One helicopter fleet in shadow of previous failure

Altus, McConnell Air Force Bases selected to receive first KC-46A Pegasus refueling aircraft

AWST Opinion: Defense Contractors Need Looser R&D Purse Strings

F-35 Chief Puts Heat On Pratt's F-35 Engine Cost

Sikorsky achieves first flight of manned/unmanned Black Hawk

Navy Seeks Feedback on UCLASS Program

Pentagon readies new acquisition improvement reforms


Defense Industry News & Performance

Strong Quarter Makes Boeing Worth A Closer Look

Lockheed Martin says 13% operating margins will be difficult to maintain

UTC Reports First Quarter 2014 Result (EPS misses by $0.04, misses on revenue)

Hot hand in cybersecurity could lift Raytheon shares another 30%


Defense Budget Insights


Bloomberg Government analysts, in partnership with the Aerospace Industries Association (AIA), held a webinar on 19 March to examine how the defense industry will be affected by the White House’s release of the 2015 budget request.  Watch a replay here, but if you can't, here's their executive summary:

-- The FY15 Defense Budget Request of approximately $496 billion is consistent with the budget caps in the Budget Control Act, but the outyears are not.

-- Supplementing the request, but not really, is a $26 billion carrot -- the Opportunity, Growth and Security (OGS) fund, which, if Congress provides the money, will backfill depleted readiness accounts and procure a range of systems that didn't make the BCA-compliant budget request, including: eight P-8A aircraft, twenty-six AH-63E Apache helicopters, twenty-eight UH-60 Black Hawks, two CH-47 Chinooks, ten C-130J transports, two F-35A fighters, and twelve MQ-9 Reapers.

-- There has been no OCO (war supplemental) request made to date.

-- DoD as asked for $2.5 billion less in IT funding than was enacted in FY14.

-- R&D accounts have shifted to upgrading operational systems.

-- The Military Services are taking divergent approaches in their budget priorities, with the Air Force focused on hardware in the future, the Army focused on personnel in the present, and the Navy/Marine Corps somewhere in between.