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UNITED KINGDOM AND NATO
10 Oct 24. UK confirms single tender for New Medium Helicopter “competition.”
It was anticipated that Airbus, Lockheed Martin, and Leonardo would all tender for the NMH programme in a competitive procurement process.
The UK government has gone on the record to state that only Leonardo Helicopters had submitted a tender for the New Medium Helicopter (NMH) programme, intended to deliver a fleet of around 14 platforms to replace a range of outgoing rotary wing aircraft.
Responding to a parliamentary query on 8 October 2024, Luke Pollard, Minister for the Armed Forces at the UK Ministry of Defence (MoD), confirmed that neither Airbus Helicopters UK nor Lockheed Martin UK had elected to submit a tender, with the only response coming from Leonardo Helicopters UK.
“The New Medium Helicopter competition remains sensitive, and the evaluation and approval process needs to complete before further details, including aircraft numbers, can be confirmed,” Pollard said.
The prospect of a single tender submitted for the NMH, in what is supposed to be a competitive acquisition, has raised questions over the programme. Other competitive acquisitions in the naval sector, such as with the Type 31 frigate, have had to be restarted due to an insufficient number of compliant bids.
According to the UK House of Commons library, in 2021 the MoD adopted a new approach to defence procurement in the Defence and Security Industrial Strategy. This replaced the former policy of “global competition by default” with a “more flexible and nuanced approach”.
In doing so, the MoD would use competition “where appropriate” but also consider other approaches.
Social value and UK industry presence key
The UK’s NMH programme could replace up to five current in-service platforms, including the RAF’s Puma HC2 and Bell 412, the Army Air Corps Bell 212, and the Airbus AS365 Dauphins operated by UK Special Forces.
In late-February 2024 the UK MoD published an invitation to negotiate (ITN) for the NMH programme, which saw the emergence of the expected three competitors for the deal, with Airbus, Lockheed Martin, and Leonardo.
According to the ITN details, 25% of the decision-making consideration programme was dependent on ‘social value’ and ‘UK industrial capability’.
According to the UK Government the competition will be managed by Defence Equipment and Support (DE&S) and proposals were to be evaluated through 2025 when, subject to approvals, a contract award was originally anticipated.
NMH: the earlier expected contenders
Responding earlier this year to the ITN notice, Leonardo confirmed it would be putting forward its AW149 platform. The company stated that more than 60% of AW149 production would take place in the UK, from its facilities in Yeovil.
Leonardo’s already established facilities have been used by the UK to help in the production of the AW159 Wildcat and AW101 Merlin helicopters in service with the country’s military.
Meanwhile, Lockheed Martin’s Sikorsky UH-60 Black Hawk, a type in service with a number of militaries around the world, including the United States, was thought to be a likely offering.
In a September 2023 release Lockheed Martin stated that it estimated nearly 40% of total Black Hawk production and assembly could occur in the UK.
Additionally, Lockheed’s Black Hawk proposal would create approximately £470m ($597.3m at the time) of export opportunities for UK partners manufacturing sub-systems and components over the next ten years, equivalent to 40% of the total programme value, based on the expected export market to Black Hawk customers, the company stated.
However, a factor to consider for any UK selection of the Black Hawk would be the role that Poland’s PZL Mielec could play in limiting any potential export opportunities for UK-built platforms. PZL Mielec maintains the largest Lockheed Martin production plant outside the United States, delivering Black Hawk helicopters to 18 customers from 11 countries around the world since 2010.
The expected third option was thought likely to come from Airbus with its H175M platform, which would be assembled at the company’s UK site in Broughton.
Airbus stated in June 2023 that as well as boosting the economy by creating more than 400 jobs, a new UK production facility would be “strategically important for both Airbus Helicopters and the UK”, creating a new helicopter manufacturing line for exports.
Airbus’ focus also appears to make significant reference to developing industrial partnerships with companies in North Ireland and Wales.
(Source: army-technology.com)
08 Oct 24. DTEP Funding Announced for Three More UK SMEs.
The Defence Technology Exploitation Programme (DTEP) boosts defence innovation while supporting the technology supply chain
- Congratulations to High Temperature Material Systems Ltd.; OpenWorks Engineering and Mind Foundry Ltd.
- The Small and Medium-sized Enterprises (SMEs) will collaborate with an experienced higher-tier partner in the defence sector
- The Defence Technology Exploitation Programme (DTEP) boosts defence innovation while supporting the technology supply chain
Three UK based SMEs have been awarded funding through the latest rounds of the Defence Technology Exploitation Programme (DTEP). High Temperature Material Systems Ltd.; OpenWorks Engineering and Mind Foundry Ltd. will collaborate with a higher-tier supplier who will engage with the SME and mentor them over the duration of a forthcoming defence project. They will receive a government grant worth 50 percent of the project value with the aim of developing innovative new solutions that meet UK defence challenges and increase capability in the UK defence supply chain.
DTEP, which seeks to improve the competitiveness of the UK Defence supply chain, is sponsored by the MOD’s Directorate of Industrial Strategy and Exports (DISE) and delivered through the Defence and Security Accelerator (DASA), Innovate UK, and ADS.
Anita Friend, Head of DASA, said:
“We are delighted to announce the distribution of further DTEP funding to three more SMEs. These innovative companies, in partnership with their higher-tier DTEP collaborators, are set to play a crucial role in enhancing the UK’s defence supply chain and supporting the ongoing success of future defence and security initiatives.”
Congratulations to the latest DTEP winners
Mind Foundry Ltd.
Mind Foundry builds AI for high-stakes applications. In defence, their work is designed for deployment, combining cutting-edge AI signal processing techniques to process, analyse and enrich feeds from sensors. Together with their higher-tier partner BAE Systems, they will collaborate to develop the capability for taking multiple data inputs from multiple sensor types, and utilise their inferences to demonstrate the potential for a single system to provide a unified operating picture.”
Brian Mullins, Mind Foundry CEO said: “In multi-domain operations, operators often have to analyse information across different sensor feeds manually. This is a risk, increasing the opportunity for error and the potential to miss vital contact information. Being awarded this DTEP funding, we aim to build capabilities to solve this problem and provide operators with a fuller, more robust tactical picture compilation. We are proud to be able to deepen our partnership with BAE Systems, whose experience in deploying sensor systems in complex, operational scenarios will prove vital in guiding not only the scientific art of the possible but in the operator’s need for a solution in practice.”
High Temperature Material Systems (HTMS):
HTMS produce a high temperature, lightweight and low cost material called Ceramic Matrix Composite (CMC). This type of material has multiple uses across the defence and security supply chain and has the ability to withstand temperatures of up to 1000 degrees centigrade. Together with their higher tier partner MBDA, HTMS will be scaling up the manufacturing of an innovative lower cost form of CMC which will fill a current gap in the UKs defence materials supply chain.
Dr. Richard Grainger, CTO and Co-Founder of HTMS said: “Being chosen for a DASA DTEP project is an important moment for High Temperature Material Systems (HTMS). This marks a significant milestone in our mission to revolutionise the high temperature composites market for Defence, Aerospace, Clean Transport, and other high performance industries.
This collaboration accelerates the development of our cutting edge materials, opening doors for increased funding, strategic partnerships, and deeper integration into supply chains. We’re forging a powerful alliance with one of the world’s leading defence entities, which not only strengthens our capabilities but sets a strong course for the future of high temperature composite materials.”
Dr. Danilo Di Salvo, CEO and Co-Founder of HTMS added: “DTEP paves the way for an enhanced market integration whilst empowering us to expand our expert team, bringing onboard more world class engineers and innovators. Working closely with DASA fuels our drive to deliver highly scalable, sustainable, and transformative composite materials. This is only the beginning. Our ambition is to push boundaries and create lasting impact — not just in the UK, but on a global scale. The future is here, and we’re leading the way.”
OpenWorks Engineering
OpenWorks Engineering will be working with higher tier supplier MBDA to provide an integrated counter-UAS (Unmanned Aerial System) system for the British Army to meet the current threat from drones. The project will deliver a state-of-the-art AI Optical Detection, Tracking and Targeting system which can be used against agile targets while driving at convoy speeds on unimproved roads. It will also deliver an upgraded production facility capable of manufacturing systems at 12 times the current rate with a higher level of quality and assurance.
Chris Down, Managing Director of OpenWorks Engineering said:
“We are proud to be working with DASA to develop the next generation in electro-optic tracking systems and build a fully digital manufacturing facility in the North-East. This DTEP grant will bring new technology to the defence and security forces of the UK and our allies as well as strengthening the UK’s defence supply chain and industrial base.
The grant will accelerate the fielding of new counter drone and GBAD systems. This will have an immediate impact in places like Ukraine as well as having the long-term effect of boosting the UK’s defence industry by increasing capacity in the supply chain for the high-tech equipment needed for the battlefield of the future.”
DTEP’s funding for OpenWorks Engineering, High Temperature Material Systems and Mind Foundry highlights the MOD’s commitment to fostering innovation and strengthening the UK defence supply chain through strategic SME partnerships. (Source: https://www.gov.uk/)
07 Oct 24. Ensuring the profit rate for non-competitive defence contracts is fair and robust. The SSRO has published the conclusions of our most recent engagement with stakeholders regarding improvements to our yearly baseline profit rate assessment process.
Each year, the Secretary of State for Defence receives a recommendation of the profit rate (known as the baseline profit rate or BPR) from the SSRO. This rate is used in the following year to set profits for contracts that the MOD awards without competition. The BPR has been applied to contracts worth over £105 bn since 2014, including over £8 bn of estimated contract profit.
The BPR is the starting point for the agreement of contract profit rates and adjustments can be applied to tailor the rate to suit the specific contract in question.
As part of determining the annual baseline profit rate, we use benchmark profit data of companies who undertake activities that are comparable to those that contribute to the delivery of single source contracts.
In July, we consulted on proposals for changes to the way we select those companies. Stakeholders responded and we have updated our methodology to rationalise the activity types and refine the scope of the activities used in our analysis.
The improvements published today further strengthen the robustness of our assessment methodology. The BPR – currently 8.24 per cent – is the first in a series of steps used by the contracting parties to derive the contract profit rate, which is typically higher than the BPR. In 2023/24 contractors reported completed contracts earning 11.57 per cent profit on average. The majority of those completed contracts achieved a higher rate than was originally agreed when pricing, as a result of good contractor performance or successful risk mitigation during the contract.
We appreciate everyone who participated in the consultation and shared their opinions with us. We continue to gratefully receive any feedback and comments on further suggestions to enhance the baseline profit rate assessment process. (Source: army-technology.com)
EUROPE
09 Oct 24. Poland secures £3bn foreign financing loan for Apache acquisition. Poland and the US continue to strengthen defence ties amid Poland’s military modernisation. In a development for the Polish military landscape, the Ministry of National Defence of the Republic of Poland announced on October 1, 2024, that Poland and the United States had finalised an agreement for a $3.08bn (12.1bn zlotys) Foreign Military Financing (FMF) loan.
This loan, aimed at supporting Poland’s defence capabilities, will primarily fund the acquisition of AH-64E Apache helicopters, marking a step in the ongoing modernisation of the Polish Armed Forces.
This latest agreement marks the third FMF loan extended to Poland by the US government in recent months. The previous loan, finalised on July 1, 2024, along with this new agreement, brings the total amount of US direct loans to Poland to $7.08bn, solidifying Poland’s position as the largest beneficiary of the FMF programme in recent years.
Last month, the US State Department announced a $920m Foreign Military Financing (FMF) loan to Romania to support the country’s military modernisation efforts as a Nato partner on the Eastern Flank.
Modernising the Polish military
The AH-64E Apache, an attack helicopter, will play a role in Poland’s future defence strategy. The contract for the helicopters was signed on August 13, 2024, and this latest financing agreement will enable Poland to expedite the delivery and integration of these helicopters into its military operations.
Several countries are adopting the AH-64E Apache helicopter. South Korea recently approved a $3.5bn purchase of 36 additional AH-64E units, expanding its fleet of 36 helicopters. The UK is also enhancing its capabilities by acquiring 50 AH-64E helicopters, with 41 already delivered. Meanwhile, Australia is preparing for the arrival of 29 AH-64E helicopters.
The Apache is one of many programmes that show Poland’s dedication to the transatlantic alliance and its relatively new Western ties. GlobalData’s “Poland Defense Market 2024-2029” report highlights that the Boeing AH-64E Apache carries a 30mm M230 chain gun and usually comes equipped with AGM-114 Hellfire missiles and Hydra 70 rocket pods.
At the MSPO International Defence Industry Exhibition, Boeing encouraged the Polish Armed Forces to consider the CH-47F Block II Chinook transport helicopter to complement their incoming AH-64E Apache fleet. Boeing argues that using the Chinook alongside the Apaches would enhance operational effectiveness and expand the Polish military’s mission capabilities.
Integrating the Apache helicopters is expected to enhance Poland’s defence posture and provide an asset in joint operations with Nato allies.
The emphasis on supporting Ukraine and enhancing regional security will remain central to Poland’s defence strategy and its relationship with the United States.
The ongoing conflict in Ukraine is reshaping the defence landscape in Central and Eastern Europe (CEE), where countries historically under Russian influence are increasing military capabilities in response to perceived threats. Poland, aiming to become the largest military force in the EU by the end of 2023, has committed to raising its defence budget to 3% of GDP, with long-term goals of 5%. (Source: army-technology.com)
10 Oct 24. Türkiye expects positive signs from Germany on Eurofighters. Türkiye expects Germany to move forward with its long-discussed sale of 40 Eurofighter jets, sources said Thursday.
Ankara is expecting “positive signals from Germany” on the subject, said the sources, adding “technical talks” are still under way. The German Ministry for Economic Affairs declined to comment when asked by dpa.
Türkiye hopes to boost its defense capabilities with 40 Eurofighter Typhoons. Germany is involved in the production of the Eurofighters, and Berlin’s approval is required for an export deal.
Türkiye has been pushing for German approval for the purchase since last year. Turkish Defense Minister Yaşar Güler said at the time that Ankara already had the approval of the U.K. and Spain, the remaining contractors.
German news magazine Der Spiegel over the weekend reported that the German government may be preparing for a change of course in arms exports to Türkiye.
According to the Der Spiegel report, Berlin has approved arms exports worth several hundred m euros to NATO partner Türkiye – including 100 anti-aircraft missiles and torpedoes for the Turkish navy and material packages for the modernization of Turkish submarines and frigates.
The German Ministry for Economic Affairs did not want to confirm the report when asked.
Until the failed military coup in Türkiye in 2016, Germany approved arms exports to the country on a large scale.
German arms exports to Türkiye significantly reduced to a single-digit m range following the attempted coup and Türkiye’s counterterrorism operations against the terrorist PKK’s Syrian offshoot in northern Syria.
For the whole of 2023, there were around 17 Turkish arms import applications worth a total of €1.22 m ($1.34 m), according to the German government.
Türkiye’s interest in Eurofighters came after a prolonged process over its request to buy F-16 warplanes from the U.S. The deal was approved earlier this year after Türkiye endorsed Sweden’s bid to join NATO.
Giancarlo Mezzanatto, CEO of Eurofighter, has confirmed Türkiye’s interest in acquiring the fighter jets but revealed that Germany had obstructed the sale.
The warplanes are built by a German, British, Italian and Spanish consortium, represented by Airbus, BAE Systems and Leonardo.
Türkiye seeks to replace the aging F-16 fleet in the Air Forces Command’s inventory, which will be phased out starting in the 2030s.
Erdoğan’s chief adviser Akif Çağatay Kılıç acknowledged some progress on the deal in a recent meeting with Turkish journalists, though details were not disclosed, the Middle East Eye said.
Meanwhile, Turkish and German officials are working to arrange a visit by German Chancellor Olaf Scholz this month, it noted.
Germany’s concerns over Türkiye’s use of German-made weapons, such as Leopard tanks, in its military operations against terrorist organizations in Syria, have long strained relations, though recent developments suggest a possible shift. (Source: News Now/https://www.dailysabah.com/)
REST OF THE WORLD
09 Oct 24. Defence exceeding $5bn worth of contracts under Indigenous Procurement Policy.
Defence has set a new benchmark for Australian government departments and agencies, exceeding $5bn worth of contracts with First Nations businesses under the Indigenous Procurement Policy.
The milestone equates to about half of the overall $10bn Commonwealth spend to date under the policy.
Since the inception of the Indigenous Procurement Policy, Defence has exceeded the targets assigned by the National Indigenous Australians Agency, engaging more than 1,180 First Nations businesses across more than 25,100 Defence contracts.
Defence Indigenous Champion and Deputy Secretary Security and Estate Celia Perkins said the milestone was a key moment. She noted that since the government established the policy in 2015, Defence had helped to close the gap by partnering with First Nations businesses.
“We know that First Nations businesses are 100 times more likely to employ First Nations people than non-First Nations businesses,” Perkins said.
“By purchasing from First Nations businesses, Defence has been supporting efforts to build a self-sustaining First Nations business sector, where First Nation Australians are able to drive their own economic futures.”
Deputy Secretary Capability Acquisition and Sustainment Group Chris Deeble said the milestone demonstrated Defence’s commitment to closing the gap.
“The Indigenous Procurement Policy stimulates entrepreneurship and supports both business and economic development for First Nations businesses, as well as increases diversity within Defence’s supply chains,” Deeble said.
“We are incredibly proud of our role in supporting and delivering these important outcomes for First Nations people and businesses through the Indigenous Procurement Policy and our efforts more broadly.”
As Defence celebrated Indigenous Business Month in October, with the theme “Making our Mark”, conversations acknowledging the achievements of First Nations people in business and in leadership continued to be encouraged.
“Defence is proud to celebrate and recognise the history, culture and achievements of First Nations Australians,” Deeble said.
First Nations businesses seeking to engage with Defence should complete the Indigenous Procurement Policy questionnaire and email to (Source: Defence Connect)
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