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26 Jul 18. General Dynamics Receives Delivery Order to Upgrade 100 Abrams Main Battle Tanks. The U.S. Army has signed a delivery order for General Dynamics Land Systems to upgrade 100 more M1A1 Abrams Main Battle Tanks to the state-of-the-art M1A2 System Enhancement Package Version 3 (SEPv3) configuration. The delivery order is part of an Army Requirements Contract signed in December 2017 through which the Army can upgrade up to 435 M1A1 Abrams tanks to the M1A2 SEPv3 configuration. The M1A2 SEPv3 configuration features technological advancements in communications, reliability, sustainment and fuel efficiency, plus upgraded armor. Work on this delivery order will be performed at Land Systems locations in Scranton, Pa., and Tallahassee, Fla., and at the Joint Systems Manufacturing Center in Lima, Ohio, the only operational tank plant in the country. Initial pilot M1A2 SEPv3 Abrams tanks were delivered to the Army in October 2017.
26 Jul 18. NATO and the Claim the U.S. Bears 70% of the Burden: a False and Dysfunctional Approach to Burden-Sharing. Not without cause, the furore over President Trump’s meeting with Putin has focused on Russia. The fact remains, however, that the NATO Summit meeting and its aftermath may well have been equally, or more, destructive to the security interests of the U.S. and its allies. The day-to-day jockeying for position between the U.S. and Russia is one thing. Undermining the unity and strength of the NATO alliance is quite another. Part of the potential destructiveness of the NATO Summit meeting lay in the uncertainty of the President’s commitment to NATO. On the one hand, he signed a Summit statement that strongly supported the alliance. On the other hand, he also implied that he might make serious force cuts if nations like Germany did not spend more. He also questioned the U.S. commitment to Montenegro. When a Fox News commentator asked him “Why should my son go to Montenegro to defend it from attack?” The President replied, “I understand what you’re saying. I’ve asked the same question.” While it was certainly unintentional, his response did bear an unfortunate similarity to Neville Chamberlin’s famous statement about Czechoslovakia at the time of the Munich crisis in 1938, “a quarrel in a faraway country between people of whom we know nothing…” What may do more lasting damage is the debate over NATO burdening sharing. President Trump seems to have relied on an approach to measuring NATO burden sharing that he inherited from NATO and past Presidents. One key aspect of this is an approach that focuses on statistically meaningless national goals like making defense spending reach at least 2% of GDP, and allocating 20% of defense spending to equipment rather than creating the strategy, forces, and military capabilities the Alliance actually needs. It takes time to explain just how stupid and irrelevant these two goals are to U.S. and NATO security needs – and such an analysis is available in Burke Chair report entitled, NATO “Burden Sharing”: The Need for Strategy and Force Plans, Not Meaningless Percentage Goals, Third Major Revision, July 19, 2018. At the same time, the President has relied heavily on a NATO assessment of the total cost to the U.S. of its role in NATO that is both false and dysfunctional. NATO released updated defense expenditure data the day before the Summit meeting that again showed that total U.S. defense spending has been nearly equal to 70% of the total defense spending of all the countries in the Alliance for well over a decade. If one uses the average percentages of U.S. spending as a percent of total NATO spending, the NATO defense spending data do seem to indicate that the U.S. spends an average of around 70%. This figure would indicate that the U.S. is spending far more on Europe’s defense than Europe, and bears far too much of the “burden.” However, these NATO data ignore the fact that almost all European spending is spent on national defense in Europe. It ignores the fact that the U.S. is a global superpower that serves its own interests by spending on U.S. forces and capabilities that meet many other U.S. strategic objectives and that are designed primarily for other missions and regions. (Source: defense-aerospace.com/Center for Strategic and International Studies)
26 Jul 18. U.S., South Korea Conclude 14th Integrated Defense Dialogue. The South Korean defense ministry and the Defense Department have concluded the 14th Korea-U.S. Integrated Defense Dialogue in Seoul, defense officials announced today in a joint U.S.-South Korean statement. South Korean Deputy Minister for National Defense Policy Yeo Suk-joo and Acting Deputy Assistant Defense Secretary for East Asia Marine Corps Brig. Gen. Roberta Shea led the talks, which were held July 25-26. Key South Korean and U.S. defense and foreign affairs officials also participated, officials said. During the talks, the delegations assessed that through inter-Korean and U.S.-North Korea high-level and working-level talks, the two nations are making meaningful progress towards achieving denuclearization and peace on the Korean Peninsula as agreed to at the two inter-Korean summits in Panmunjom and the U.S.-North Korea summit in Singapore, officials said. The two sides highlighted North Korea’s reaffirmation of its commitment to complete denuclearization, as agreed to by North Korean leader Kim Jong Un. They also highlighted efforts for repatriation of the remains of U.S. service members, and concurred that they need to continue to seek measures to build mutual trust between all parties so long as North Korea continues negotiations in good faith, defense officials said. They also agreed that the United Nations Security Council sanctions will continue to be enforced until North Korea takes concrete and verifiable steps towards denuclearization. At the security policy initiative session, South Korea and the U.S. discussed cooperative measures to deepen and expand the South Korean-U.S. alliance by continuing to maintain robust bilateral coordination amid changes in the security situation, officials said. The two sides assessed that their close bilateral defense cooperation has contributed to progress in realizing the inter-Korean and U.S.-North Korea summit agreements, and pledged to continue to strengthen their mutual communication and coordination. They also shared the view that they need to continue to maintain a robust combined defense posture while negotiations seek to ease tensions with North Korea, defense officials said. South Korea and the U.S. highlighted the relocation of the U.S. Forces Korea and United Nations Command headquarters to Camp Humphreys, officials said, and expressed their shared belief that USFK, beyond serving as a symbol of the South Korean-U.S. alliance and defending the Korean Peninsula, will continue to play an important role in maintaining peace and stability of Northeast Asia and the world. In addition, the U.S. expressed its appreciation of South Korea’s contribution to construction of Camp Humphreys and reaffirmed its intention to maintain the current U.S. forces levels on the Korean Peninsula, defense officials said. The South Korean and U.S. delegations concurred that bolstering the South Korean military’s defense capabilities and enhancing the two militaries’ interoperability are important for advancing comprehensive alliance capabilities, and committed to continue to deepen cooperation in various fields, to include defense industry, science and technology, cyber, and space, officials said. They also highlighted the historical significance of this year’s 50th South Korean-U.S. Security Consultative Meeting scheduled to be held here at the end of October, defense officials said, and pledged to work together to make it a valuable opportunity to further deepen and develop the future South Korean-U.S. alliance in a mutually reinforcing manner, building upon the achievements of the bilateral defense cooperation of the past half-century.
At the conditions-based operational control transition working group meeting, officials said both sides confirmed that progress continues in preparation for the transition of wartime operational control and pledged to strengthen their cooperation to meet the necessary conditions for the OPCON transition expeditiously, while fully taking into consideration future changes in security situation on the Korean Peninsula. Both parties noted that the South Korean-U.S. Combined Forces Command has been critical in maintaining peace and stability on the Korean Peninsula in the past 40 years, and shared the understanding that, post-OPCON transition, CFC should continue to carry out the central role of South Korean-U.S. combined defense posture, defense officials said, noting that the two nations will aim to finalize several key documents ahead of the 50th South Korean-U.S. Security Consultative Meeting in October. At the deterrence strategy committee plenary session, officials said the two sides discussed various means to enhance effective deterrence capabilities, taking into consideration the security situation on the Korean Peninsula. The United States reaffirmed its commitment to continue to provide extended deterrence capabilities. Both sides assessed that the 14th Korea-U.S. Integrated Defense Dialogue reaffirms the close bonds of the alliance and further bolsters bilateral coordination, defense officials said. The South Korean defense ministry and U.S. Defense Department share the view that close bilateral defense cooperation is important amid dynamic security situation on the Korean Peninsula, officials said, and they pledged to maintain and strengthen their everyday cooperation and coordination.
26 Jul 18. U.S. House passes defense bill targeting Chinese investments. The U.S. House of Representatives on Thursday passed a $716bn (£546.19bn)defense authorization bill that aims to rein in China’s investments in the United States and prohibits the U.S. government from using technology from major Chinese telecommunications firms. The John S. McCain National Defense Authorization Act, which must also be approved by the Senate, passed the House by a vote of 359-54. While the measure puts controls on U.S. government contracts with ZTE Corp (000063.SZ) and Huawei Technologies Co Ltd [HWT.UL] because of national security concerns, the restrictions are far weaker than initially drafted. Additionally, in an action largely targeted at China, it also strengthens the Committee on Foreign Investment in the United States (CFIUS), which reviews proposed foreign investments to weigh whether they present national security concerns. The White House praised House passage of the legislation, noting that it includes a pay raise for military troops.
“It also takes positive steps that are consistent with the Administration’s commitment to maintaining a strong and resilient manufacturing and defense industrial base,” Sarah Sanders, the White House press secretary, said in a statement.
The sprawling piece of legislation – which is necessary to approve ongoing military operations – has historically enjoyed strong bipartisan support. Earlier in July, U.S. lawmakers cut measures from a defense bill that would have reinstated sanctions on ZTE Corp, abandoning an attempt to punish the company for illegally shipping U.S. products to Iran and North Korea. Lawmakers from both parties have been at odds with Republican President Donald Trump over his decision last week to lift his earlier ban on U.S. companies selling to ZTE, allowing China’s second-largest telecommunications equipment maker to resume business. An amendment backed by two Republicans and two Democrats would have reinstated the sanctions but was stripped out of the must-pass defense policy bill, lawmakers said on Friday. Lawmakers were also using the military authorization bill as a vehicle to pass new rules governing investment by foreign-owned entities in the United States.
“This agreement ensures the reforms to CFIUS are narrowly focused on national security while keeping America’s doors open to investment,” said Representative Jeb Hensarling, chairman of the House Financial Services Committee.
The remit of CFIUS, an interagency group led by the Treasury Department that assesses mergers and stock buys by foreign investors and companies to ensure that purchases do not harm national security, was broadened. Nothing in the bill will change CFIUS’ basis decision-making process – the deals that were ordered scrapped by CFIUS previously will still be scrapped and the deals that were allowed will still be allowed, according to several CFIUS experts. That said, the legislation will expand the number of minority investments reviewed by CFIUS and allows for abbreviated reviews of less controversial deals. It also provides for more funding for the agency.
“It expands CFIUS’ jurisdiction,” Stephen Heifetz, a CFIUS expert with the law firm Wilson Sonsini Goodrich & Rosati, said in a telephone interview. Separately, the legislation would authorize spending $7.6bn for 77 F-35 Joint Strike Fighter jets, made by Lockheed Martin Corp (LMT.N). It would prohibit delivery of the advanced aircraft to fellow NATO member Turkey. U.S. officials have warned Ankara that a Russian missile defense system that Turkey plans to buy cannot be integrated into the NATO air and missile defense system. (Source: Reuters)
25 Jul 18. US acts to release $195m in suspended military aid to Egypt. The United States has decided to release $195m in military aid to Egypt after withholding the assistance last year over human rights concerns, the State Department announced Wednesday. The department said the decision follows steps Egypt has taken in response to specific U.S. concerns, and it cited stronger U.S.-Egypt ties in security and counterterrorism while also acknowledging remaining areas of concern about human rights and governance. Independent monitoring groups have documented continued human rights abuses in Egypt over the past year. The New York-based Human Rights Watch describes the situation in Egypt as the “worst human rights crisis in the country in decades.” Egyptian police, the group said, systematically use “torture, arbitrary arrests and enforced disappearances to silence political dissent,” according to a recent assessment. Amnesty International reported an escalation in Egypt’s crackdown on civil society and pointed to routine “grossly unfair” trials of government critics, peaceful protesters, journalists and human rights defenders. The suspension of the U.S. military aid to Egypt in August 2017 came as a surprise as the two allies had forged increasingly close ties under President Donald Trump. In announcing the changes, the secretary of state at that time, Rex Tillerson, said he wasn’t able to certify that Egypt had met the human rights criteria set by Congress in order to receive the American assistance. Egypt responded angrily and called that decision a “misjudgment of the nature of the strategic relations that have bound the two countries for decades.” Egypt long has been a key U.S. ally in the Middle East, receiving nearly $80bn in military and economic assistance over the past 30 years. (Source: Defense News)
24 Jul 18. BIS Officially Publishes Order Terminating ZTE Denial Order. (83 Fed. Reg. 34825) – The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) has officially published in the Federal Register the Order Terminating Denial Order Issued on April 15, 2018, Against Zhongxing Telecommunications Equipment Corporation and ZTE Kangxun Telecommunications Ltd. Secretary of Commerce Wilbur Ross announced on July 13, 2018, that Zhongxing Telecommunications Equipment Corporation, of Shenzhen, China (“ZTE Corporation”) and ZTE Kangxun Telecommunications Ltd. of Hi-New Shenzhen, China (“ZTE Kangxun”) (collectively, “ZTE”) has placed $400m in escrow at a U.S. bank. Shortly after the deposit, the Department lifted the denial order on ZTE pursuant to a June settlement agreement that included the harshest penalties and strictest compliance measures ever imposed in such a case. The escrow funds are in addition to the $1bn penalty imposed by Commerce that ZTE paid to the U.S. Treasury last month. The $1.4bn paid under the new settlement agreement are in addition to the $892m in penalties ZTE has already paid to the U.S government under a March 2017 settlement agreement. ZTE will also be required by the new agreement to retain a team of special compliance coordinators selected by and answerable to the Department’s Bureau of Industry and Security (BIS) for a period of 10 years. Their function will be to monitor on a real-time basis ZTE’s compliance with U.S. export control laws. This is the first time BIS has achieved such stringent compliance measures in any case. The new agreement once again imposes a denial order that is suspended, this time for 10 years, which BIS can activate in the event of additional violations during the ten-year probationary period. Finally, ZTE also has replaced the entire board of directors and senior leadership for both entities. The Commerce Department press release notes that the purpose of this settlement is to modify ZTE’s behavior while setting a new precedent for monitoring to assure compliance with U.S. law. In the Commerce Department’s view, the unprecedented access afforded the compliance team by this agreement vastly improves the speed with which it can detect and deal with any violations. (Source: glstrade.com)
24 Jul 18. Will the F-35 Program Meet Its Cost Target? The recent agreement between the Pentagon and Lockheed Martin for the latest lot of F-35s includes a 6% price reduction compared to the previous buy. And while the two parties contend that the agreement indicates the price of a single F-35A will drop to $80m by 2020, past cost estimates by the aircraft’s manufacturer and program office have proved overly optimistic. Following the announcement of the handshake agreement for the 11th lot of F-35s for 141 jets, Pentagon acquisition executive Ellen Lord told Aviation Week in a statement, “With each production lot, the F-35 Unit Recurring Flyaway costs continue to come down across the board.”
Congressional sources point out that the 6% cost reduction for Lot 11 is considered average, given the number of aircraft. Lot 11 is the final production buy before the Joint Program Office (JPO) and Lockheed Martin enter a block-buy contract for F-35 international partners and Foreign Military Sales (FMS) customers for production Lots 12, 13 and 14. U.S. participation is constrained to economic order quantity (EOQ) procurement in fiscal 2019 for Lot 13 and fiscal 2020 for Lot 14 production contracts because Capitol Hill would not sign off. Congress is waiting for the aircraft to complete operational testing before authorizing the Pentagon to enter the block buy. The JPO estimates the total U.S. and international savings from the F-35 EOQ is $1.2bn compared to a traditional contracting construct. However, the Pentagon’s Cost Assessment and Program Evaluation (CAPE) office, in a report viewed by Aviation Week, notes the savings will be roughly $595m, or about half of the figure projected by the JPO. The disparity between the two Pentagon offices is sounding alarm bells in Congress. “While these savings are still significant, as certified by the Undersecretary of Defense (Acquisition and Sustainment), the Committee is dismayed by the inaccuracy of the initial JPO estimates,” reads the Senate Appropriations Committee’s mark-up of the fiscal 2019 spending bill. (end of excerpt)
(defense-aerospace.com/EDITOR’S NOTE: Even for Aviation Week, it is extraordinary that an article on whether the F-35 will meet its cost reduction goal can ignore a July 18 report by the Rand Corporation on the “F-35 Block Buy: An Assessment of Potential Savings.”
This report looked at how much could be saved by combining three annual lots into a single, three-year Block Buy Contract covering 441 aircraft.
Rand found that “the combined [Block Buy] savings is approximately $2.1bn, or 4.9 percent of the cost of annual contracting,” which translates into a reduction of $4.7m per aircraft. This is much lower than the savings that Lockheed Martin and the F-35 Joint Program Office have claimed for each successive annual lot; on Lot 11, for example, they claimed unit price declined by 6%. It is difficult to reconcile Rand’s estimate of $4.7m savings over the three years of the Block Buy, with Lockheed’s claim of a 6% reduction in a single year. The planned Block Buy contract, which Congress has said it will not approve until the F-35 successfully completes its Initial Operational Test and Evaluation (IOT&E) scheduled to end in the fall of 2019, calls for buying 441 aircraft.) (Source: defense-aerospace.com/Aviation Week & Space Technology)
23 Jul 18. Strong defence exports will boost US manufacturing base. Trump’s new rules on drone sales free America to compete with China and Russia. The US plans to remain the global leader for interoperable defence systems, partnering with allies and friends to develop cutting-edge military capabilities and then exporting them. That is why President Donald Trump sent a high-level delegation to the UK’s Farnborough Airshow this month. The global defence market has evolved over the course of the past decade and prior US restrictions on arms transfers, including those regarding drones, have not kept up with the changing marketplace. That has created opportunities for China and Russia. Both are attempting to leverage defence sales to strengthen their military capabilities, economies and defence industrial bases — even as civilians in areas of conflict are put at risk because neither China nor Russia factor into their sales end-use monitoring or human rights considerations. While China and Russia will continue their efforts, the US intends to remain the global partner of choice for defence co-operation. America’s allies know that acquisition of our defence systems brings state-of-the-art capabilities with attractive industrial partnership opportunities. To ensure America’s global leadership, and to improve alignment of conventional defence trade policies with his national security strategy and the national defence strategy, Mr Trump is reforming US policies and procedures. The new rules will reflect the demands of today’s global threat environment. This policy change has been codified in two strategically integrated reforms announced in April. One reform updates the US policy on unmanned aerial systems, known as drones. The other better aligns conventional arms transfers with US goals. Together, these changes emphasise the administration’s enthusiasm for arms exports that are in the interests of national security, foreign policy and economic security. One key tenet of Mr Trump’s policy is that “economic security is national security”. The administration believes that responsibly expanding defence exports will strengthen the US’s manufacturing and defence industrial base, while strengthening partnership opportunities with allies. Key security alliances such as Nato benefit greatly from the ability of forces to be interoperable. Strong US exports and common Nato standards allow our armed forces to work together to deter and defend against common threats. When the US transfers weapons systems — the most technologically sophisticated and effective in the world — our friends and partners become more capable and our regional alliances become more integrated, stable and secure. This reduces the cost to US taxpayers of defending critical interests. On the economic front, a vigorous US defence export policy means more jobs for American workers in aerospace and advanced manufacturing, which offer strong wages and attractive career opportunities. Higher defence sales will also help reduce the more than $500bn-a-year trade deficit, a massive and persistent burden that represents an unacceptable transfer of American wealth, jobs and manufacturing capacity. By staying at the forefront of global defence exports, the US will also ensure that respect for human rights and international norms are important considerations in any arms sale. The departments of state, defence and commerce will continue to play their traditional roles in balancing such respect with the security considerations I have outlined. Our international allies should be encouraged by American leadership in this area. The Trump administration is fully invested not just in the success of US defence exports but also in the more stable and secure alliances such exports will support. (Source: FT.com)
23 Jul 18. The U.S. Defense Budget: Balancing Need Against Cost.
According to The Guardian, President Donald Trump’s call for a major boost in U.S. military spending has been met with an uproar from opponents warning that such a policy would waste millions of taxpayer dollars. To lend perspective on the issue, in fiscal year 2015, military spending in the United States accounted for 54 percent of all federal discretionary spending, according to the Institute for Policy Studies. Right now, the U.S. military has the ability to fight just under two world wars simultaneously. The International Institute for Strategic Studies says the U.S. accounts for more than a third of the world’s military spending. This begs the question, Why does the United States spend so much of its taxpayer dollars on defense?
In part, the answer lies in a concept called the Military-Industrial Complex (MIC). The MIC can be defined as an informal coalition between a nation’s military and the defense industry that supplies it, seen together as a vested interest that influences public policy. The military industrial complex definition states that a propelling factor behind the relationship between the government and defense-sector corporations is that both sides benefit – one side from procuring war weapons, and the other from being paid to supply them. According to the Stockholm International Peace Research Institute (SIPRI), the term is frequently used in reference to the military framework of the United States, where it is most prevalent and gained popularity after its use in the farewell address of President Dwight D. Eisenhower on January 17, 1961. According to the Washington Post, in 2011, the United States spent more (in absolute numbers) on its military than the next 13 nations combined.
So how does the U.S. Department of Defense get all of these taxpayer dollars? Fear. The DoD can easily alarm U.S. citizens of the potential for attack by other nations, with the result that the legislative and executive branches give the DoD whatever money it requests. The U.S. does need an adequate amount of funding to protect its citizens, and should get that funding. However, there are many DoD projects that fail and needlessly waste taxpayer dollars. One such example is the Joint Tactical Radio System. This was a 15-year project to build a software-defined radio. The radio was to simulate a computer in that different types of software could be installed for different missions. The JTRS program failed and cost U.S. taxpayers $6 bn.
So how much money should the U.S. DoD get to protect U.S. citizens? According to the Center for Arms Control and Non-Proliferation, President Trump is asking for a DoD discretionary budget for FY19 of $617.1bn, which is $90bn higher than the FY18 budget. Is that too much money? Is it not enough money? The answer, in part, depends on whether or not the U.S. can make to-date unsuccessful military equipment work and has an enemy to fight. The other part of the answer lies in what other policies U.S. citizens want to invest in.
U.S. defense spending has been a delicate issue for years, and will continue to be so as the debate goes on between the legislative and executive branches and their attempts to heed the will of the American public. (Source: UAS VISION/Forecast International)
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