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August 27 Weekly Defense Industry Roundup

Posted by Fred Wellman

Oshkosh, Lockheed, AMGen Win $190M Deal for Army JLTV

Sydney J. Freedberg, Jr., AOL Defense. The long awaited selection of three companies for the engineering, manufacturing and development phase of the Army and Marine Corps Joint Light Tactical Vehicle program came last Wednesday afternoon with Oshkosh Defense, Lockheed Martin and AM General picked up for this next phase. Oshkosh had just wrapped up a successful media day on their L-ATV when the announcement was made and AOL Defense was on hand to get a close up look at one of the contenders for the Humvee replacement. The services are hoping to purchase almost 60,000 of the vehicles eventually with the crew protections of an MRAP but the ability to be transported on existing means of conveyance. Check out this story for some great video of one of these bad boys in action not far from ScoutComms world headquarters at Stafford County airport.

Analyst Suggests Contractors are Bluffing on Sequester Layoffs

Jeremy Herb, The Hill. The Center for Strategic and Budgetary Assessments was out with a new analysis of the effects of sequestration and found that the dire warnings from many in the defense industry are probably overblown. While there will be immediate cutbacks on Jan. 2 analyst Todd Harrison says it will take years before contractors feel the full 10% across-the-board cuts as most programs are operating on previously obligated funds for several years.  Harrison has a host of good points but he is discounting the indirect effect of cuts as government contractors and commanders make cuts to contracts in anticipation of pending cuts. There are already many reports of precautionary shelving of plans and initial cuts to employees and contracts in anticipation of coming restrictions, and we are sure that will only increase if true sequestration kicks in. This analysis, while valuable, has completely ignored the mental aspects of government budgeting and only focused on the contractual aspects, leaving out a key factor in how these things go.

Surge in Canceled Deals Offers Preview of Sequester Damage Ahead

Nick Taborek, Washington Post. The hints of the effects of looming budget cuts are indeed already being felt in spite of those who say there is nothing to worry about for the near future. As it turns out the federal government terminated 13,579 contracts in the last fiscal year. That represented more than double the number from just five years ago and covers deals worth over $2.15 billion. Many of the cancellations were associated with cutbacks in plans in post-war Iraq as well as a general reduction in wartime spending even as spending in Afghanistan went up. Analysts are expecting that uncertainty about future funding levels are more likely to lead to slowdown in new contracts more than a rash of cancellations of existing ones, as hesitancy to try something new becomes the norm.

US Marines See Autumn Start to Amphibious Vehicle Competition

Reuters. Marine Corps Commandant Gen. James Amos held a conference with reporters last week where he laid out his expectations that the long awaited Amphibious Combat Vehicle competition will be launched this fall. He said the service is scrubbing their plans now and he is determined to avoid setting unaffordable or unrealistic requirements for the system such as those that led to the cancellation of the much maligned Expeditionary Fighting Vehicle program last year. Amos did not specify how many of the vehicles the Marines might be buying but stated they still need to equip 12 battalions of Marines to get from ship to shore. The ECV program had been cut down to a requirement of 573 vehicles before it was canceled by then SecDef Gates in January 2011. It’s clear that Amos is bending over backwards to make sure that doesn’t happen again.

The week ahead:

Tradeshows and Conferences:  No significant tradeshows or conferences we are aware of this week.

Congress:   The full Congress is not in session this week with the August recess and will not return until September 10th.

Think tanks and other news events: 

National Press Club: Luncheon with Gen. James Amos, Washington, DC (12:30 PM, Tues 28 Aug) Description: General James Amos, commandant of the U.S. Marine Corps, will discuss the role of the Marines as America’s crisis response force at a National Press Club luncheon on Tuesday, August 28. Since being confirmed in October 2010 as the first career aviator to lead the Marines, Gen. Amos has overseen a force exhausted by a decade of war. Tickets cost $19 for Press Club members, $30 for guests of members, and $37 for general admission. To reserve tickets, e-mail [email protected] or call 202-662-7501. Participants: Gen. James Amos, Commandant of the U.S. Marine Corps Location: The National Press Club, 529 14th St. NW, 13th Floor, Washington, DC 20045

Changes in Defense Media:

Foreign Policy picks up another experienced national security journalist with Gordon Lubold leaving the U.S. Institute for Peace and joining Kevin Baron who recently left National Journal.  Lubold was the founder of Politico’s Morning Defense and has been at USIP since January, 2011. You can follow him on Twitter as @GLubold.

The L.A. Times welcomed Shashank Bengali as their latest national security journalist on the Pentagon beat this week. Bengali left McClatchy where he had been national security editor.  You can follow him on Twitter at @SBengali.

Fred Wellman with General Petraeus in Iraq

Fred Wellman, President ScoutComms, brings us his weekly review of defense industry news via The Scout Report. Fred served over twenty years as an Army officer in both aviation and public affairs. You can follow Fred on Twitter @ScoutComms.

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This entry was posted on Monday, August 27, 2012 2:03 pm

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