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19 Jul 19. Lockheed awarded $1.48bn Saudi missile defence contract – Pentagon. Lockheed Martin (LMT.N) was awarded a $1.48bn (£1.1bn) contract to build the THAAD missile defence system for Saudi Arabia, bringing the total value of the deal to $5.36bn, the Pentagon said on Friday.
The new contract was a modification to a previously awarded agreement to produce the Terminal High Altitude Area Defense interceptor for Saudi Arabia, the Pentagon said. In November 2018, Saudi and U.S. officials signed letters of offer and acceptance formalising terms for Saudi Arabia’s purchase of 44 THAAD launchers, missiles and related equipment.
In April Lockheed was awarded a $2.4bn contract for THAAD interceptor missiles, some of which are slated to be delivered to the Kingdom of Saudi Arabia. The latest contract is for interceptor support items.
Lockheed Martin, the biggest U.S. arms maker, builds and integrates the THAAD system, which is designed to shoot down short-, medium- and intermediate-range ballistic missiles. Raytheon (RTN.N), another U.S. firm, builds its advanced radar. (Source: Reuters)
19 Jul 19. Indian Defence, aerospace sector seeks separate finance corporation. Indian Defence and aerospace sector for seeks separate finance corporation on the lines of Indian Railway Finance Corporation (IRFC).
“Considering the huge potential of industrial growth in defence and aerospace (both civil and military) and challenges of meeting the financial needs for mega aviation projects in India, it is important to think of establishing an organisation like Indian Defence Finance Corporation (IDFC) on the lines of IRFC,” said Dr. R. K. Tyagi, Chairman of Aeronautical Society of India (AeSI) and former Chairman-HAL.
“With Defence Corridors planned in Tamil Nadu and UP, other initiatives of the Government, opportunities will abound in these sectors and we will need more money than ever”, he said at a seminar on ‘Energising indigenisation in Aerospace and Defence’ organised by AeSI and the Society of Indian Technologies and Industries (SIATI).
On civilian front, India will need at least additional 1,000 aircraft which means the country buying two aircraft per week in next few years and our industries must take advantage of such a situation by developing indigenous civil aircraft to ensure success of Government’s Regional Connectivity Schemes like UDAN, said Dr. Tyagi.
“The future belongs to technology and the use of Artificial Intelligence and Robots will be more pronounced”, he added.
Shekhar Srivastava, CEO Bangalore Complex, HAL, pointed out that material cost incurred drives up the cost of indigenous Indian products especially when one is dependent on foreign OEMs thus making the finished products unviable. It is therefore important that all stakeholders come together and find solutions for any indigenisation process to succeed, he said.
The topics for the day-long seminar included indigenisation plan of Indian Air Force, Navy and Army and opportunities for industry, ISRO model of sustainable supply chain, make-in-India plan for vendor development and panel discussion. (Source: Google/https://www.thehindubusinessline.com)
18 Jul 19. Iran’s deputy foreign minister says Tehran has not lost any drones. Iranian Deputy Foreign Minister Abbas Araqchi denied on Friday that Iran had lost a drone in the Strait of Hormuz after the United States said that a U.S. Navy ship had “destroyed” an Iranian drone.
“We have not lost any drone in the Strait of Hormuz nor anywhere else. I am worried that USS Boxer has shot down their own UAS [Unmanned Aerial System] by mistake!,” Araqchi said on Twitter, referring to a U.S. warship in the strategic waterway.
U.S. President Donald Trump said on Thursday that the drone had flown to within 1,000 yards (metres) of the USS Boxer and had ignored “multiple calls to stand down” in the latest episode to stir tensions in the Gulf. (See: BATTLESPACE ALERT Vol.21 ISSUE 18, 18 July 2019, USS Boxer Employs EW To Down Iranian Drone) (Source: Reuters)
19 Jul 19. Showdown with Iran poses broader challenge for the Indo-Pacific. Following a month of brinkmanship culminating in a number of tanker boardings, confrontation between the US, its allies and Iran appears to be around the corner. However, the increased hostilities present a major challenge for Indo-Pacific nations like Australia as US strategic emphasis is focused on the Persian Gulf – placing greater strain on Australia. With recent revelations that the US Navy’s USS Boxer had shot down an Iranian drone over the Strait of Hormuz following a fortnight of renewed tension culminating in tanker boarding operations and the deployment of Royal Navy assets to the region, tensions in the Middle East appear to again be rising as the world braces itself for potential conflict and the ensuing shocks to the global economy and geo-strategic paradigm.
Like scorned lovers, the tensions between the US and the Islamic Republic of Iran have long simmered since the Iranian Revolution in 1979 – while periodically tensions boil over, the continuing pursuit of nuclear power by Iran has emboldened the nation to continue its support of terrorist organisations, including Hamas and the Palestinian Liberation Organisation (PLO) among others throughout the Middle East.
Supported by oil and natural gas wealth and relationships with larger great powers, namely Russia and China, Iran is often cited as directly challenging the US-led post-World War Two order and a direct threat to the spread of economic and political freedoms.
Iran is also strategically located at the heart of the world’s largest oil fields – the strategically critical Strait of Hormuz, a 65-kilometre-wide waterway linking the Persian Gulf and Gulf of Oman, is responsible for a third of the world’s liquefied natural gas and approximately 20 per cent of total global oil consumption.
The election of Donald Trump in 2016 and the appointment of hawkish National Security Adviser John Bolton signalled an end to the seemingly more conciliatory relationship between the two adversaries – marking a return to the more confrontational style of the preceding Reagan and Bush administrations and has seen a significant rise in the tensions.
In recent months, the tensions between Iran and the West more broadly have begun to bubble over – particularly following a series of attacks on oil and natural gas tankers in the Persian Gulf and the Gulf of Oman, threatening the global supply of liquid fuel and thus the global economy. This has prompted a resurgence of US military presence in the region, including:
- The USS Abraham Lincoln carrier strike group;
- Four B-52H Stratofortress strategic bombers;
- Patriot Missile batteries;
- An additional 5-10,000 US troops in support of the existing 60-80,000 US troops as part of US Central Command (USCENTCOM); and
- The recent deployment of the USS Boxer Expeditionary Strike Group and the Royal Navy’s HMS Duncan, a Type 45 Class guided missile destroyer, and HMS Kent, a Type 23 guided missile frigate.
In response, Iran has sought to double down on strategic and tactical mobilisation efforts, shifting the bulk of the nation’s armed forces towards the Gulf of Oman and Persian Gulf respectively in anticipation of a US-led strike and the potential for another protracted conflict in the Middle East draining not only the resources and manpower of the US, but also their strategic attention at a time when China continues to assert its tactical and strategic ambitions throughout the Indo-Pacific.
Meanwhile, both US and Iranian officials remain resolute and defiant towards one another, with bombastic US President Donald Trump declaring that the USS Boxer had taken defensive action in response to repeated ignored requests to disengage from what the US President declared as, “Iran’s attempts to disrupt freedom of navigation and global commerce”.
For Australia, the potential of another prolonged engagement in the Middle East is a matter for both tactical and strategic concern – as undoubtedly the US would expect Australian assistance in supporting ongoing operations against the Iranian government, drawing critical attention away from the rising challenges emerging across the Indo-Pacific arc across the continent’s northern approaches.
This is best expressed by Malcolm Davis, senior analyst at ASPI, who described the impact of the increasingly distracted state of the US, telling Defence Connect, “If war does break out between the United States and Iran, I would expect to see nations like Russia and China move to exploit a distracted US – with China’s moves likely to be made in the South China Sea.”
Distracted US – a rising China
The US emerged as the key strategic counterbalance in the Pacific following the end of the Second World War – a nation both Australia and its other major regional partner, Japan have been dependent on for both tactical and strategic manoeuvrability unhindered. However, the rise of China and its increasing economic, political and, concerningly, strategic ambitions for the Indo-Pacific will require both Australia and Japan to play a larger, more direct role to counter balance the distracted US.
Japan has closely followed both the modernisation of the Chinese armed forces and the increasing instability of the US, which has prompted the nation to respond with increased funding for the nation’s defence budget, expanding the capabilities of the Japanese Self-Defense Forces (JSDF) with plans to repeal the post-Second World War constitutional limitations and reinstate a power projection focused force structure and doctrine to be supported by Japan’s industrial capability to modernise and equip itself in the face of growing regional instability and tensions.
This has resulted in Japan pursuing a number of modernisation and recapitalisation programs, with a focus on acquiring a range of advanced American weapons systems and capability developments to support the maintenance of the US order in the Indo-Pacific.
Meanwhile, Australia’s security and prosperity are directly influenced by the stability and prosperity of the Indo-Pacific, meaning Australia must be directly engaged as both a benefactor and leader in all matters related to strategic, economic and political security, serving as either a replacement or complementary force to the role played by the US – should the US commitment or capacity be limited.
Questions for Australia
Despite Australia’s enduring commitment to the Australia-US alliance, serious questions remain for Australia in the new world order of President Trump’s America, as a number of allies have been targeted by the maverick President for relying on the US for their security against larger state-based actors, which has seen the President actively pressuring key allies, particularly NATO allies, to renegotiate the deals.
For Australia, a nation defined by its relationship with traditionally larger, yet economically weaker, regional neighbours, the growing economic prosperity of the region and corresponding arms build-up, combined with ancient and more recent enmities, competing geo-political, economic and strategic interests, places the nation at the centre of the 21st century’s “great game”. (Source: Defence Connect)
18 Jul 19. Statement From Chief Pentagon Spokesperson Jonathan Hoffman on USS Boxer. Statement from Chief Pentagon Spokesperson Jonathan Hoffman on USS Boxer: At approximately 10 a.m. local time, the amphibious ship USS Boxer was in international waters conducting a planned inbound transit of the Strait of Hormuz. A fixed wing unmanned aerial system (UAS) approached Boxer and closed within a threatening range. The ship took defensive action against the UAS to ensure the safety of the ship and its crew. (Source: US DoD)
18 Jul 19. Iran – Strait of Hormuz: US Navy Destroyer employs electronic warfare system to down Iranian military drone. At approximately 0530Z on 18 July, the USS Boxer US Navy Destroyer reportedly employed its on-board electronic warfare (EW) system to down Iranian military drone via electromagnetic interference (EMI) operating in-flight over airspace near the Strait of Hormuz. The US has indicated that the Iranian drone was downed at a range of approximately 0.6 miles (1km) after ignoring multiple calls to stand down threatening the safety of the USS Boxer and its crew. Background information regarding Iran from the US FAA and an associated NOTAM for FIR Tehran (OIIX) remains valid through 9 September (KICZ A0016/18). The NOTAM indicates that there remains a continued ‘risk’ to US civil aviation operations over FIR Tehran (OIIX) due to a lack of deconfliction between military activities in Iran and civilian flights. The US FAA background information highlights the following as concerns in the airspace over Iran: unannounced military activities, GPS interference, EMI activity, heightened Iranian air defence ‘sensitivity’, Russian air and naval cruise missile strikes into Syria along with Iranian military ballistic missile launches. Regional tensions have significantly escalated in wake of the 20 June US drone shoot-down by Iran coupled with the US downing of the Iranian drone on 18 July, though the situation remains fluid and subject to change. EMI and/or GPS interference and from military activity represents a notable civil aviation safety-of-flight concern. Extended duration re-routing of civil aviation to airports in the country, within Iranian airspace or over the Persian Gulf, Strait of Hormuz and Gulf of Oman remains an increasingly likely scenario in the near-term.
Analysis
On 21 June, the US FAA issued an updated NOTAM for Iranian airspace (FIR Tehran (OIIX)) covering the Persian Gulf and Gulf of Oman which prohibits US civil aviation operators from conducting flight operations over these areas at all altitudes until further notice (KICZ A0019/19). The NOTAM follows the downing of a US military RQ-4A drone over the Gulf of Oman via Iranian conventional surface-to-air missile (SAM) system engagement on 20 June and the attempted shoot-down of a US military MQ-9 drone over the Gulf of Oman by Iran via unsuccessful manportable air defence system (MANPADS) engagement on 13 June. The assessed Iranian use of a conventional SAM system capable at altitudes well above FL260 and MANPADS capable below FL260 to engage US military drones in-flight over the Gulf of Oman coupled with US EW system employment to down an Iranian military drone via EMI over the Strait of Homuz is highly concerning as the airspace in the vicinity of these areas of FIR Tehran (OIIX) includes numerous high-traffic ATS routes used by civil aviation operators. There remains a significantly increased likelihood of additional short-notice near-term airspace restrictions; similar to the US FAA NOTAMs above, being enacted for Iranian airspace within FIR Tehran (OIIX) portions of the Persian Gulf, Strait of Hormuz and/or Gulf of Oman by EASA along with the UK, French and/or German civil aviation authorities. We continue to assess southern Iran, to include over-water areas of the Persian Gulf, Strait of Homuz and the Gulf of Oman, to be a HIGH risk airspace operating environment at all altitudes; this is being kept under constant review. We continue to assess the remainder of northern Iran to be a MODERATE risk airspace operating environment above FL260 and HIGH risk below FL260.
Risk area recommendation: Comprehensive risk mitigation measures
- Flights below FL260 not advised; essential flights over FL260 via measures below
- Defer diverting from flight plan with the exception of life threatening situations
- Security and operational risk-based identification of pre-planned divert airports
- Reliable and redundant communications with an established communications plan
- Fully-coordinated and robust emergency response plan supplemented by asset tracking
Advice
Approvals: As a precaution, conduct operational risk-based identification of divert and alternate airports for flight schedules with planned stops at aerodromes in the country or with overflight of the airspace. Operators are advised to ensure flight plans are correctly filed, attain proper special approvals for flight operations to sensitive locations and obtain relevant overflight permits prior to departure. In addition, ensure crews scheduled to operate to or over the country in the near term are fully aware of the latest security situation.
Military Air Activity: Increased military air operations have the potential to cause airspace congestion and impact the safety of civil aviation flights. Any significant increase in the amount of air operations over the country may impact the availability of airports along with access to the airspace. Aviation operators should monitor airport/airspace-specific airspace-specific notices, bulletins, circulars, advisories, prohibitions and restrictions prior to departure to avoid flight schedule disruption.
Shoot-down Policy: The country has an aggressive air intercept and shoot-down policy which allows air and air defence forces to intercept and disable aerial targets violating airspace regulations. Military air and air defence assets may be employed to down aerial targets under the auspice of the policy. While legal civil aviation flights are unlikely to be directly targeted, there remains a latent but credible risk of misidentification and interception by military air and air defence assets. (Source: Osprey)
18 Jul 19. India terminates business dealings with Swiss firm Pilatus Aircraft. The Indian government has terminated business dealings with Swiss company Pilatus Aircraft Ltd. for one year following allegations of monetary kickbacks in 2012 in relation to an Indian Air Force contract for 75 basic trainers. A July 12 statement by the Ministry of Defence said that “business dealings with Pilatus with remain suspended for one year or until further orders for violation of the integrity pact.”
It also said the investigation by Indian agencies discovered that the Swiss firm engaged in corrupt practices to win the PC-12 Mark II basic trainer aircraft contract.
Last month, India’s national investigation agency, the Central Bureau of Investigation, lodged a legal case against Pilatus Aircraft, arms dealer Sanjay Bhandari, and unknown officials with the Air Force and MoD. CBI alleged irregularities in the contract for the basic trainers.
Pilatus was awarded the $437.5m contract in 2012, and all the deliveries were made in two years.
The India government said it had received reports of engagement of agents by Pilatus for assistance in the sale of the basic trainer for the Air Force and alleged the payment of a commission was offered.
India does not permit defense companies to engage defense agents to carry out defense business activities for the purpose of securing contracts.
In January 2017, the Swiss company informed the MoD that it had engaged one domestic company, Offset India Solutions, for the purpose of facilitating offsets plan and government relations for the basic trainer program. Pilatus reportedly made a payment of 1m Swiss franc (U.S. $1.01m) to Offset India Solutions in 2010 to facilitate this deal.
Pilatus was asked by the MoD to explain payments it allegedly made to Offset India Solutions, but the Swiss company did not furnish a satisfactory reply, according to the Indian government.
Incidentally, Bhandari promotes Offset India Solutions and the local firm has also been barred from carrying out defense activity with the MoD and the Indian military. The MoD would not comment on whether Pilatus will be blacklisted or further penalized. (Source: Defense News)
17 Jul 19. Indonesia allocates USD143m for two naval hydrographic vessels. Key Points:
- Indonesia has approved an additional sum of IDR2.04trn for the country’s 2019 defence budget
- The funds will be allocated towards the procurement of hydrographic survey vessels that can be quickly converted into vessels of opportunity for submarine rescue
The Indonesian Ministry of Finance has approved an additional IDR2.04trn (USD143m) for the country’s 2019 defence budget, with a view on accelerating the procurement process for two new hydrographic survey ships that can be swiftly converted into vessels of opportunity (VOO) for submarine rescue operations.
The funds will be added to the country’s previously approved 2019 defence budget of IDR108trn, according to an official document seen by Jane’s on 17 July. (Source: IHS Jane’s)
18 Jul 19. Practice makes perfect in the case of amphibious operations. As Australia continues to reorientate its strategic focus towards the Indo-Pacific, developing and refining force structures and high-intensity power projection capabilities like amphibious warfare operations will become increasingly important – however, as technology and peer competitors continue to evolve, commitment, resourcing and practice will remain critical.
From the rocky shores of the Gallipoli peninsula through to the tropical beaches of south-east Asia, Australia has a long and proud history of conducting amphibious operations in the modern era – however, the advent of increasingly complex, integrated and lethal anti-access/area denial (A2/AD) systems are further supporting the capability of the defender.
Storming beaches has always been an action where the odds are stacked against the attacker and for Australia, an island nation surrounded by a complex network of oceanic and littoral archipelagos, amphibious warfare operations are critical to its resurgent period of engagement in the Indo-Pacific. Recognising this, Australia and regional allies the US, New Zealand and Japan have utilised Exercise Talisman Sabre 2019 to perfect contemporary amphibious operations.
Major General Roger Noble, Deputy Chief of Joint Operations for the Australian Defence Force, clarified the importance of amphibious operations and Australia’s commitment to evolving the capabilities, saying, “Australia’s defence policy continues to be based on the three interconnected strategic interests of a secure, resilient Australia, with secure northern approaches and proximate sea lines of communications; a secure nearer region, encompassing maritime south-east Asia and south Pacific; and a stable Indo-Pacific region and rules-based global order.”
Australia’s pursuit of a dedicated amphibious force in the 2nd Battalion, Royal Australian Regiment (RAR), as part of Plan Beersheba makes important progress in developing Australia’s land-based power projection capabilities, particularly following the reorganisation of the airborne 3rd Battalion, RAR in 2011, resulting in all airborne (parachute) operations being maintained by Australian Special Operations Command (SOCOMD).
Despite these changes, Australia’s Army has long been the first responder for policy makers, spearheaded by elite Special Forces, the growing shift towards expeditionary capability in the form of amphibious regiments and the new doctrine of ‘accelerated warfare’ are both reshaping the role of the Army and the tactical and strategic value it provides Australian decision makers.
Strategic and tactical independence
Modern warfare has rapidly evolved over the last three decades, from high-tempo, manoeuvre-based operations that leveraged the combined capabilities of air, sea, land and space forces to direct troops, equipment and firepower around the battlefield during the first Gulf War, to low intensity humanitarian and peacekeeping operations in southern Europe and the south Pacific, and the eventual rise of asymmetrical, guerrilla conflicts in the mountains of Afghanistan and streets of Iraq.
However, the growing conventional and hybrid capabilities of peer and near-peer competitors – namely Russia and China – combined with the growing modernisation, capability enhancements and reorganisation of force structures in the armies of nations including India, Indonesia, Vietnam and Thailand, all contribute to the changing nature of contemporary warfare.
This perfect storm of factors, swirling like a maelstrom across Australia’s northern borders, has largely gone unnoticed by the Australian public, beyond the odd port visit by American or, as recently happened, Chinese naval vessels that seem to cause momentary flurries of concern – meanwhile, Australia’s strategic and political leaders appear to be caught in an increasingly dangerous paradigm of thinking, one of continuing US-led dominance and Australia maintaining its position as a supplementary power.
The capacity for Australia to rapidly respond to a range of competing contingencies throughout the Indo-Pacific will place increasing pressure on both the Australian Army and Navy – as both will increasingly operate in a symbiotic nature without dramatically hindering the broader capability of the Australian Defence Force and the individual branch’s capacity to respond to national security requirements.
MAJGEN Noble reinforced the importance of developing and maintaining amphibious capabilities: “The Australian Defence Force must be capable of operating as a joint force across sea, land and air domains, maintaining high-end capabilities to act decisively when required. A credible amphibious capability significantly broadens the options for Australia and the United States to fulfil these requirements.”
Army’s role in supporting power projection
The introduction of ‘Accelerated Warfare’ builds on the reorganisation and modernisation efforts outlined in Plan Beersheba, which sought to establish the Australian Army as an integrated, combined arms force, which Major General Gus McLachlan, retired Commander Forces Command, described: “In Plan Beersheba we have the spine, the backbone of our 21st century, combined arms force, but it isn’t the future. That is where Accelerated Warfare comes into play, it aims to make Army an adaptable and capable force.”
This focus on the capability, particularly the expeditionary capability of Army, is supported by Dr Malcolm Davis of ASPI, who told Defence Connect, “I feel that the ADF needs responsive and effective power projection, air and naval, and boosting Army’s strategic mobility and amphibious capability.
“It is better to build our force structure to project power forward, deep into maritime south-east Asia and beyond, and also have forward military presence in the Indian Ocean and the south Pacific.”
Your thoughts
Enhancing Australia’s capacity to act as an independent power, incorporating great power-style strategic economic, diplomatic and military capability serves not only as a powerful symbol of Australia’s sovereignty and evolving responsibilities in supporting and enhancing the security and prosperity of Indo-Pacific Asia – shifting the public discussion away from the default Australian position of “it is all a little too difficult, so let’s not bother” will provide unprecedented economic, diplomatic, political and strategic opportunities for the nation. As Australia’s role in Indo-Pacific Asia and the strategic balance of power continues to evolve, the Australian Army will be called upon to fulfil a range of roles beyond those it has conducted over the past 50 years. Power projection and the application of ‘hard power’ in both a high and low intensity capacity will dramatically reshape the Australian Army despite an unprecedented level of investment. (Source: Defence Connect)
12 Jul 19. India likely to miss NATO+ grouping of US arms buyers. Multiple people involved in the framing and movement of the legislative provision through US Congress attributed the collapse of these efforts, in background interviews, to opposition from the state department and some to the Congress for India’s planned purchase of Russian S-400 missile defence systems. The US House of Representatives is scheduled to pass on Friday a defence budget legislation without a provision that would have put major defence purchases intended for India on the same fast-track mechanism that is now used for clearing arms deals for America’s NATO allies and a handful of other countries. This will effectively end efforts to catapult India into that category in 2020, as the US Senate’s defence bill for the coming fiscal, passed late June, also did not contain that clause.
Multiple people involved in the framing and movement of the legislative provision through US Congress attributed the collapse of these efforts, in background interviews, to opposition from the state department and some to the Congress for India’s planned purchase of Russian S-400 missile defence systems.
“It’s disappointing,” said one of them, “but we will not give up and try again in 2020 (for the 2021 budget).”
If enacted, the provision would have speeded up the clearance of major defence purchases intended for India, by cutting the current 30-day period for US Congress to raise objections or block them under the Arms Export Control Act to 15 days, a privilege the United States extends only to its NATO allies and five other countries, together called the NATO+5. The reduced clearance period is aimed at “increasing efficiency” and reducing Congress’s blocking window, said a former official, “for sales that are effectively meant for allies”.
India’s inclusion in that list would have made it NATO+6. This is not the same as countries designated Major non-NATO allies, which New Delhi has rejected because the group also includes Pakistan. India will stay in the 30-day clearance category, for now, or until 2021, by which time both countries would have seen off issues surrounding India’s S-400 deal.
The Russian missile system proved in the end the chief reason for blocking India’s elevation into the NATO+ group. The National Defence Authorization Act, as the defence budget is called, also seeks to punish Turkey, a NATO ally, for purchasing the same Russian S-400 system. A person familiar with the deliberation said how could the same legislation oppose a NATO ally’s purchase of S-400 and move India to the NATO+ category, effectively rewarding it, for also buying those systems.
The administration is also understood to have argued that according that status to India might have sent it a wrong signal that a waiver from CAATSA (Countering American Adversaries Through Sanctions Act, which applies to significant purchases from Russia) was coming.
“Being left out of the bill, however,” said a Congressional aide, who also spoke on background, “could work to India’s advantage as far as S-400s go.” The administration does not have to act as tough with a non-ally as it would feel compelled to with an ally who has crossed over to do business with a rival power. The Trump administration has threatened to cancel Turkey’s purchase orders for F-35’s, the military alliance’s newest fighter jets. (Source: glstrade.com/https://www.hindustantimes.com)
11 Jul 19. New Zealand updates defence procurement rules, maintains ban on offsets. Key Points:
- New procurement rules ban offsets but outline requirements for ‘broader outcomes’ such as economic benefits
- Guidelines are introduced as New Zealand pursues USD13bn military modernisation programme
The New Zealand government has updated rules governing procurement across sectors including defence.
The new ‘Government Procurement Rules, 4th Edition’ will become active from October 2019 and replace the ‘Government Rules of Sourcing’, which were first published in 2013.
According to the government, the new guidelines have been developed to align with its expectations that all procurement will be “leveraged to achieve broader outcomes”. Broader outcomes are described as “secondary benefits”, such as those that positively impact New Zealand’s economy, society, and environment.
“Broader outcomes require [procurement agencies and contractors] to consider not only the whole-of-life cost of the procurement but also the costs and benefits to society, the environment, and the economy,” the rules state.
Despite this, the new procurement rules state that offsets, including offsets in defence procurement, will continue to be banned. “An agency must not ask for, take account of, or impose any offset at any stage in a procurement process,” it says.
New Zealand regards offsets as discriminatory, with the procurement rules stating that offset is viewed as an “undertaking to develop the local economy or improve the balance-of-payments accounts that a supplier must fulfil in order to be awarded the contract”.
The key change in the 4th edition of New Zealand’s procurement rules is a transformation in the way value is assessed to support “broader outcomes”.
To this end, the rules state that each government procurement agency – including the Ministry of Defence (MoD) or New Zealand Defence Force (NZDF) – must “consider and incorporate where appropriate, broader outcomes when purchasing goods, services, or works”. (Source: IHS Jane’s)
17 Jul 19. SMEs hold the key to developing Australia’s defence sector. Australia’s SME ecosystem has gone from strength to strength as a result of the record $200bn worth of investment in Australia’s defence and defence industrial capabilities – in order to take the growth transforming Australia’s defence industrial base to the next level, greater focus needs to be placed on SMEs, explains Adrian Smith of the University of South Australia.
From base cleaning services to the creation of high-tech components for aircraft, military vehicles and naval vessels – there’s a huge opportunity for companies to grow their businesses through their participation in the Australian defence industry. The federal government’s defence procurement policies and focus on assisting SMEs into the industry have opened the opportunity but the growth of Australia’s defence sector is being held back by a lack of long-term supplier relationships.
It is estimated that the Australian defence industry comprises around 3,300 companies across Australia. Of these, some 300 are strategic partners with mature businesses, a clear plan for their defence engagement and the appropriately skilled management teams in place.
These companies tend to be larger in size, with a few select smaller businesses included. Of the remaining 3,000 companies – most of which are Australian SMEs – half are working on a transactional basis with no ambition to become a strategic, long-term supplier, while the other half have the desire and potential to become strategic suppliers, but don’t have management teams in place with the knowledge, skills or experience to develop their businesses into robust industry players.
Securing major contracts either directly with Defence or as part of the supply chain to prime contractors is a challenge for SMEs. Technical capability and capacity are necessary, but not sufficient, conditions for success. Defence equipment often remains in service for over 30 years and the industry wants a reliable supply chain that will be there for the entire journey.
This means Defence’s strategic partners must have the vision, plans and resources to enable their companies to grow into major suppliers. So, how can SMEs successfully secure such contracts and contribute to the future of Australia’s defence sector?
Know your customer
Knowledge is power, and if you’re an SME vying for work directly with Defence or to one of its primes on a major project, you’ll need to do your research into this ever-changing industry. Do you have the systems in place that match the size, scope and complexity of working with Defence or their primes? Have you done your research into how your future business plans can contribute to current and future defence capabilities? It’s important to establish the clearest way to communicate your vision to your potential customers, and ensure you have the systems and procedures in place that will lead to long-term success.
At present, many prime-led projects are using up to four suppliers to work across one small component of work. They do this to hedge their bets because they often don’t have confidence that any single supplier has the organisational maturity to become a sustainable strategic partner.
SMEs have a unique opportunity to pitch an all-in-one solution to the defence industry by developing a keen understanding of the big picture and creating long-term plans that are referenceable in tenders. By adopting a long-term view, Australian SMEs can increase their company’s engagement with both Defence and the primes.
Create growth roadmaps
A major impediment for SMEs not being able to achieve the level of engagement that they want is not being able to show that their business is set up for long-term growth. You can have all of the technical capabilities in the world, but it’s all for nothing if your leaders and middle managers don’t know how to grow the company sustainably.
It’s important for SMEs to develop long- and short-term plans that show clearly how the company will grow, how it will diversify its customers to manage the inevitable Defence project cycles, how it will develop the changing management skills required as a company grows and how they will attract the necessary capital to fund their growth.
The defence industry wants to work with companies planning for a long and bright future. Contracts are secured by companies who are able to create and sell products with the durability and reliability to last over 30 years.
This means it’s vital for SMEs to communicate how their business intends on supporting these products for such a long period of time, and what safeguards will be instilled to ensure support and maintenance can be provided on an ongoing basis.
Have the right team behind you
It goes without saying that a plan is powerless if you don’t have the team to implement it. Building a professional management team that is robust and able to execute plans is vital to securing defence contracts – as is knowing when to expand and bring new team members on board. CEOs and business leaders must commit to growing a team that shares their vision of becoming a strategic supplier to Australia’s defence industry.
Having a long-term plan for growth is crucial for any business, but even more so for SMEs wanting to secure defence contracts. Successful Defence contractors have the knowledge and skills to lead successful growth companies, but most of the SMEs that could grow into strategic partners do not.
The good news is that these skills can be learned, and SMEs that set their plans in motion, have a clear understanding of their customer, and a strong team behind them are more likely to secure work contributing to the capabilities of the Australian Defence Force. SMEs hold the key to Australia’s expanding defence sector, and have the potential to open up a lucrative revenue stream for their business. (Source: Defence Connect)
16 Jul 19. Growing proliferation challenges the technological edge of Australia and allies. The first delivery of a Russian S-400 air and missile defence system to NATO ally Turkey – combined with the increasing proliferation of advanced Russian and Chinese weapons systems – is serving as the basis for a declining technological advantage for both Australia and its major allies, including the US, UK and Japan.
Since the end of the Second World War, military technology has constantly been a game of cat and mouse between the super and great powers – with a range of technology areas serving as the basis of the competition and the primary fuel for proxy wars of influence building and geo-political competition around the world, the 21st century is no different.
For many Western nations, including Australia the US and to a lesser extent, the UK, France and at the time West Germany emerged as the primary source of cutting-edge military technology as each of those nations played a critical role in maintaining the post-war economic, political and strategic order – mainly through integration in complex alliance frameworks like NATO.
In today’s world, the resurgence of Putin’s Russia and the increasing assertiveness of China are serving as not only direct challenges to the post-Second World War alliance system, but also to the qualitative technological edge the US and other Western allies have typically ensured – the growing proliferation of advanced, cost-effective platforms including advanced air and missile defence systems, advanced submarines, advanced 4.5 and fifth-generation fighter aircraft and ballistic and cruise missiles all serve as potent examples of the new arms race.
Seeking out the best value for money
This has become increasingly troubling with recent events, namely the Turkish acquisition of the advanced, Russian-designed and manufactured S-400 integrated air and missile defence system despite the US threatening to withdraw access to the fifth-generation F-35 Joint Strike Fighter for an increasingly recalcitrant Turkish administration with its own growing economic, political and strategic ambitions in the Middle East.
For Turkey, the threats made by the US seemingly fell on deaf ears, with the nation rubbing salt in the wound and using the recent Paris Airshow to reveal its own development of a fifth-generation fighter aircraft – incorporating technological and manufacturing lessons learned through the country’s participation in the global F-35 supply chain.
One would be forgiven for asking, why is this an issue? Clearly Turkey is pursuing value for money in an era of increasingly costly defence acquisition programs, however Turkey is one of the earliest members of NATO – an organisation designed and created to counter the threat of Soviet aggression towards Europe in the post-Second World War period.
While there is a number of issues behind the recalcitrance of the Turkish administration and its refusal to bow to US pressure – the clearest driving force is the conditional nature of access for some nations and cost of US and more broadly Western weapons systems for emerging powers. Answering the demand are nations like Russia and China, both of which are less conditional in their sale of weapons systems and have frequently sought to minimise the qualitative gap between their systems and those of Western competitors.
This competitor focus on easy access, combined with the cost-benefit analysis of the increasingly capable weapons systems, challenges the qualitative edge of technologies operated by great powers like the US and UK, and allies like Australia, causing a major rethink for many nations, including Australia. (Source: Defence Connect)
15 Jul 19. China says will freeze out U.S. companies that sell Taiwan arms. China’s government and Chinese companies will cut business ties with U.S. firms selling arms to Taiwan, China’s Foreign Ministry said on Monday, declining to give details of the sanctions in a move likely to worsen already poor ties with Washington.
China claims self-ruled and democratic Taiwan as its own and has never renounced the use of force to bring it under Beijing’s control. China regularly calls Taiwan the most sensitive issue in its relations with the United States.
Last week, the Pentagon said the U.S. State Department had approved the sale of the weapons requested by Taiwan, including 108 General Dynamics Corp (GD.N) M1A2T Abrams tanks and 250 Stinger missiles, which are manufactured by Raytheon (RTN.N). China said on Friday it would sanction U.S. companies selling weapons to Taiwan but did not elaborate. The latest deal involves $2.2bn worth of tanks, missiles and related equipment for Taiwan.
Chinese Foreign Ministry spokesman Geng Shuang said the arms sales were a violation of international law and harmed China’s sovereignty and national security.
“China’s government and Chinese companies will not cooperate or have commercial contacts with these U.S. companies,” he told a daily news briefing.
“I can’t reveal the details at the moment. But believe this – Chinese people always stress standing by their word.”
On Sunday, the ruling Communist Party’s official People’s Daily posted an article on its WeChat account identifying U.S. companies that could be vulnerable to sanctions. (Source: Reuters)
15 Jul 19. Saudi Arabia – Asir: Saudi-led coalition thwarts Yemeni Houthi rebel military-grade weaponised drone attack. At approximately 1530Z on 15 July, Saudi-led coalition forces reportedly thwarted a Yemeni Houthi rebel military-grade weaponised drone attack over the southwest province of Asir. The Houthis have claimed the drone attack was launched against Saudi military targets located at King Khalid Air Base in the city of Khamis Mushait. From 23 May through 15 July, Saudi-led coalition air and air defence assets have downed at least 20 Houthi rebel military-grade weaponised drones over Najran, Jizan and Asir provinces, including several targeting airports or airbases. Previously, the Saudi-led coalition confirmed that Yemeni Houthi rebel military-grade weaponised drone casualty causing attacks targeting the car park in the land-side area of Abha Airport (OEAB/AHB) of Asir Province occurred on 23 June as well as 1 July. In addition, the Houthis conducted a casualty causing cruise missile strike targeting Abha Airport on 12 June. On 19 June, Houthi rebels conducted a cruise missile attack on an industrial plant in Jizan Province, which has since been confirmed by the Saudi-led coalition. The southwest provinces of Asir, Jizan and Najran are located within the Security Control of Air Traffic and Air Navigation Aids (SCATANA) area of Saudi Arabia, which is covered by a notice and a publication issued by the civil aviation authority of the country (NOTAM OEJD W0438/18; AIP SUP AIRAC 05/18 and 07/18). EASA, Germany and France have issued notices to operators advising against conducting civil aviation flight activity within the southwest provinces of Saudi Arabia (EASA CZIB 2018-01-R3, NOTAM EDGG B0609/19, France – AIC A 03/19).
Analysis
The drone shoot-downs discussed above have occurred primarily via assessed US-made MIM-104 Patriot conventional surface-to-air missile (SAM) employment along with some taking place through fighter jet air-to-air missile (AAM) engagement. The Patriot has the capability to engage air targets at altitudes up to FL800 and at ranges out to 100 miles (160 km). The majority of Houthi rebel surface-to-surface missile (SSM) launches into the Kingdom and associated intercepts – along with drone downings – occur over the southwest provinces in the SCATANA area. On 14 May, the Saudi Arabian Oil Ministry indicated that two pumping stations west of Riyadh were targeted by military-grade weaponised drones. On 20 May, Saudi military Patriot conventional SAM systems downed at least two Houthi SSMs launched from Yemen near the cities of Taif and Jeddah in Mecca Province, respectively. Our analysis indicates Saudi Arabia has shot down over 115 Houthi-launched SSMs and drones over its territory since the start of 2018, including seven over Riyadh as well as two over Mecca Province and one over Yanbu, located deep within the interior of the country. Comparatively, just 16 SSM intercepts occurred over Saudi Arabia during all of 2017, with only three taking place near Riyadh. Continued SSM and additional drone launches into the Kingdom by Yemen-based Houthi rebels and associated intercepts via Saudi military conventional SAM engagement as well as fighter jet AAM employment are likely to occur weekly over the SCATANA area for the foreseeable future. In addition, quarterly SSM or drone intercepts near Riyadh or over main urban centres located deep within the Saudi interior are probable until a resolution between the factions in the Yemen conflict is reached. We assess territory in Saudi Arabia outside the SCATANA area to be a HIGH risk airspace environment at all altitudes. We assess the SCATANA area of Saudi Arabia to be an EXTREME risk airspace environment at all altitudes.
Advice
Approvals: As a precaution, conduct operational risk-based identification of divert and alternate airports for flight schedules with planned stops at aerodromes in the country or with overflight of the airspace. Operators are advised to ensure flight plans are correctly filed, attain proper special approvals for flight operations to sensitive locations and obtain relevant overflight permits prior to departure. In addition, ensure crews scheduled to operate to or over the country in the near term are fully aware of the latest security situation.
Shoot-down Policy: The country has an aggressive air intercept and shoot-down policy which allows air and air defence forces to intercept and disable aerial targets violating airspace regulations. Military air and air defence assets may be employed to down aerial targets under the auspice of the policy. While legal civil aviation flights are unlikely to be directly targeted, there remains a latent but credible risk of misidentification and interception by military air and air defence assets.
Drones: Operators are advised to review internal and external mechanisms for suspicious activity, safety and security reporting. Any revisions to processes should account for drone sightings as part of a wider aviation risk management strategy to protect aircraft, passengers and crew. Operators are advised to monitor government advisories as well as trends in terrorist tactics, such as the employment and proliferation of weaponised drones. In addition, we recommend aviation security managers to evaluate instances where drones were recovered in possession of terror suspects along with incidents where disrupted plots were to include drones for pre-attack reconnaissance and/or drone weaponisation. (Source: Osprey)
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