Mil-Tech

US budget cuts diminish Raytheon’s contract win

Raytheon Co.’s winning bid over Alliant Techsystems Inc. to continue development and possible production of the satellite-guided Excalibur artillery shell is undercut by the Army’s decision to shrink the program almost 80 percent, according to new figures.

The program has been reduced to 6,264 shells from 30,000, said Audra Calloway, an Army spokeswoman. That will save $800 million in production costs over the program’s life, or $400 million through 2016, she said.

Raytheon’s mixed news shows the budget risks companies face as the US combat mission in Iraq changes to an advise-and-assist role, said Loren Thompson, a defense analyst for the Lexington Institute in Arlington, Va.

“When wars end, demand for munitions plummets,’’ he said. “Even companies that win competitions have to wonder about the profitability.’’

Waltham-based Raytheon, the fifth-largest US defense contractor, is the incumbent producer and already has assembled more than 2,800 Excaliburs. It received a $23 million contract Aug. 25 to continue final projectile design and, if successful, produce under three contract options as many as 3,430 weapons after passing qualification tests. The contracts may be worth about $160 million, Calloway said.

“I don’t think it would be appropriate to comment in this case,’’ Jaclyn Gutmann, a spokeswoman for Raytheon, said in an e-mail. “The Army’s decision to reduce their procurement numbers is not something Raytheon can affect or control.’’

Defense Secretary Robert Gates seeks savings of $100 billion over five years. The Army wants to save $10 billion through 2016.

Most of what Gates intends to reduce is overhead, excess personnel, and redundant practices, transferring the savings into weapons and personnel programs.

Still, the Excalibur decision indicates weapons systems are not off the table, Thompson said.

www.boston.com

Raytheon Wins Dual Contracts

The National Aeronautics and Space Administration (NASA) has awarded a contract worth $120 million to a subsidiary of Raytheon Company. Per the contract, the subsidiary, Raytheon Technical Services Company, will support facilities and operations for astronaut training at NASA’s Johnson Space Center (JSC) and Sonny Carter Training Facility in Houston. The tenure of the contract begins from Oct 1, 2010, and lasts through Sep 30, 2015.

The contract calls for Technical Services Company operating, maintaining, and undergoing engineering services for equipment and software used at the Neutral Buoyancy Laboratory and Space Vehicle Mockup Facility.

Earlier, in April, Raytheon received the NASA Goddard contract to maintain and manage large volumes of sensing data and imagery from space instruments.

Raytheon also received another contract from the Department of Defense. The U.S. Navy has awarded Raytheon a contract worth $11.3 million to provide spare parts for a thermal sight system on a light armored vehicle used by the Marine Corps in Iraq with expected completion scheduled in December 2011.

Raytheon Network Centric Systems in McKinney, Texas, will provide the spare parts for the Improved Thermal Sight System on the Light Armored Vehicle 25-A2 used in Operation Iraqi Freedom and Operation Enduring Freedom.

Subsequent to the second quarter and through Aug 30, Raytheon has already won contract worth $916.5 million from the U.S. Navy.

We expect the company to perform well in the upcoming quarters based on continued contract wins, strong order bookings and backlogs.

We maintain our “Neutral” recommendation on Raytheon. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.

Army wants soldiers to have improved carbine

Soldiers, get ready for a better carbine. The Army has launched a dual strategy designed to give you a more accurate, durable and lethal weapon that will be the mainstay for the next 40 years.

The first part of that strategy is to radically overhaul the M4 starting now and give grunts an improved version of the special operations M4A1. Simultaneously, the second part challenges industry to come up with a new carbine that can outperform the M4. The competition opened in early August.

“This is an historic event. We have not done a carbine competition in our lifetimes,” Col. Douglas Tamilio, project manager for soldier weapons, told Army Times. His office is spearheading the M4 Carbine Improvement Program. “We don’t switch rifles and carbines too quickly, and it is not an easy thing.”

The M4 has faced some criticism from soldiers and others who have cited problems with its lethality and reliability, including a 2007 “dust” test in which the M4 performed the worst among four weapons tested, with the greatest number of stoppages.

Tamilio, a career infantry officer, said the weapon has “served the Army extremely well” and touted the 62 improvements made to the M4 in the past 19 years. But, he said, “We can’t sit on our laurels and say M4 is good enough.”

Deadlier weapon

The improvements have begun on thousands of M4s being built now, and thousands more will get conversion kits.

The upgrades will be done in phases. The improvement plan’s first phase essentially distributes an improved M4A1, which is notable for its heavier barrel and automatic fire. The heavier barrel reduces warping and erosion, resulting in better performance and longer life. It also allows for a higher sustained rate of fire.

The Army also is adding ambidextrous controls.

The Army has 12,000 M4s on the production line, and has told manufacturer Colt to turn them into A1s, said Brig. Gen. Peter Fuller, Program Executive Office Soldier.

In addition, 25,000 M4A1s would be purchased beyond existing contracts, as well as roughly 65,000 conversion kits, Tamilio said.

“The Army would like to convert about 150,000 in the near term for infantry brigade combat teams,” he said. The optimal plan would be to convert all the M4s, he added, but funding will be a large factor in that decision.

More changes external to the weapon are also improving its reliability and lethality, Fuller said.

Soldiers will experience fewer jams, thanks to a new magazine that doesn’t allow rounds to move, he said.

And the new M855 A1 ammo provides more stopping power at shorter distances. The older round had to get into a yaw dependency for maximum effect. If it hit the enemy straight, it would punch right through them. The new ammo is not yaw dependent. If it hits the enemy, he is going down.

Many combat vets surveyed in 2006 described how enemy soldiers were shot multiple times but were still able to continue fighting. The survey included 2,600 soldiers who served in Iraq and Afghanistan.

One in five U.S. soldiers polled recommended a more lethal round. The new round is designed to address that.

“It’s not enhanced performance, it’s consistent performance,” Fuller said. “It really performs the way you want a round to perform, and it’s optimized to the M4.”

Better accuracy

The second phase of the M4 improvement program begins this fall and will focus on increasing the M4’s effectiveness and accuracy, with emphasis on the bolt, bolt carrier assembly and the forward rail assembly.

Over time, reliability will degrade with the bolt, as that component provides the weapon’s action. Officials will host an open competition for a new bolt assembly to determine whether different materials and coatings can enhance the bolt. The Army also is interested in “unique design changes” that have arisen within the industry, Tamilio said.

The service also looks to strengthen the forward rail assembly on top of the receiver. This lends stability to the weapon and serves as the mount for weapon attachments, but restricts the barrel movement that is required for accuracy when re-engaging the target. The Army wants to determine whether a free-floating rail is the answer.

Officials also will look to provide a more consistent trigger pull for better control, according to a June Congressional Research Service report.

New operating system

The third phase, focusing on the operating system, will begin in about 18 months, Tamilio said. The goal is to improve the gas system by allowing less gas and dirt in, or replacing it with a conversion kit similar to the HNK16 that would put a piston in the M4.

Both have their benefits and detractors, the colonel said. The piston reduces the number of moving parts and provides better stability, but there is “a little more metal on metal,” which can diminish durability and accelerate fatigue.

A gas-impingement system is far smoother in operation, and supporters say its reduced heat and carbon deposits will decrease malfunctions. But the gas system requires a lot more elbow grease to get it clean.

The 1st Special Forces Operational Detachment-Delta, or “Delta Force,” replaced its M4s with the HK416 in 2004, according to the congressional report. That weapon combines the operating characteristics of the M4 with the piston system.

“There’s a lot of dynamics involved,” Fuller said. “When you go to a piston charger, you’re actually driving that bolt down at an angle versus back, so you have to make sure you understand it might not be the same weapon.”

The next carbine

The competition for the Army’s next-generation carbine opened in early August, and the service is looking for the “future Army weapon for any environment,” Fuller said.

The Army’s open, industrywide Individual Carbine Competition was approved Aug. 4 by the Joint Requirements Oversight Council.

No caliber restriction has been placed on a new design. The requirements, instead, are for the most reliable, accurate, durable, easy-to-use and easy-to-maintain weapon out there, Tamilio said.

It will be at least a 500-meter weapon and have a higher incapacitation percentage, meaning if a shot doesn’t kill the enemy, it will put a serious dent in his medical record.

This weapon will be modular and able to carry all the existing attachments soldiers use.

It can have a gas or piston system.

Interchangeable barrel sizes, such as those seen in the SCAR, are not a “must have,” but “certainly won’t be a negative thing,” Tamilio said.

But above all, Fuller wants a weapon that has the soldiers’ approval.

“We really need to figure out lethality from a ‘soldier in the loop’ perspective,” he said. “If you can’t shoot the weapon accurately, it doesn’t matter how lethal it is.”

To meet that goal, Tamilio will release a draft request for proposal late this year. It is a warning order of sorts that will give industry a preliminary idea of what is expected. An industry day will follow in which officials will answer questions and provide clarity.

The official RfP will go out early next year, in the second quarter of fiscal 2011, which begins in January. Manufacturers will have a set time, typically a few months, to respond with their proposed weapons.

Next comes the “extreme, extensive testing” and selection of the weapons, Tamilio said.

During testing, hundreds of thousand of rounds will be fired over 12 to 18 months as weapons are tested to their destruction point. The primary goal is to determine if they meet Army specifications. But evaluators also will know whether a weapon can live up to its manufacturer’s claims.

“If they say it has a barrel life up to 20,000 rounds, we’ll test to that,” Tamilio said.

Weapons will also be tested to see if they maintain accuracy throughout their life cycle — something the military has not tested before, Tamilio said. A weapon typically loses accuracy as it ages.

“This is a huge importance for us,” he said.

Soldiers will be involved in virtually all aspects of this testing, Tamilio said. From the individual to unit, he said the tests will focus on what soldiers really care about: “When he pulls the trigger, it fires in a reliable fashion, and what he aims at, he hits.”

Mixed reviews

Investing in an improved M4 has met some opposition.

Sen. Tom Coburn, R-Okla., in April 2007 asked Army leadership why the service planned to spend $375 million on the carbine through fiscal 2009 “without considering newer and possibly better weapons available on the commercial market.” The senator’s letter questioned the M4’s reliability and lethality and called for a “free and open competition” to evaluate alternatives.

Nevertheless, improvements have been recommended from within the service. The Army Infantry Center in a Small Arms Capabilities-Based Assessment in 2008 identified 42 separate ideas for material solutions to address capability gaps. Thirteen solutions called for new or improved munitions, and 10 involved aiming devices, optics or laser designators. Only seven suggested modifying or developing new small arms.

After-action reports from soldiers both praise and criticize the M4’s reliability and lethality. The mixed reviews are reflected in the congressional report:

• A February 2001 U.S. Special Operations Command study said the M4A1 was “fundamentally flawed” and suffered “alarming failures … in operations under the harsh conditions and heavy firing schedules common in [special operations forces] training and operations.”

• An Army report from July 2003 on small arms performance during Operation Iraqi Freedom found the M4 was “by far the preferred individual weapon across the theater of operations.”

• A December 2006 survey requested by Army’s Project Manager for Soldier Weapons and conducted by the Center for Naval Analyses polled 2,600 soldiers who had engaged in combat action in Iraq or Afghanistan. More than half said they never experienced a stoppage in the M4 or M16.

The study found that the frequency of disassembled cleaning did not affect the number of stoppages. The type and amount of lubrication used had little effect on stoppages, though dry lubricant decreased reports for M4 stoppages. Nearly nine in 10 soldiers said they were satisfied with the M4.
• A December 2007 test — resulting from Coburn’s letter — evaluated the M4 against the HK416, the HK XM8 and the FNH SCAR. Each system had 10 weapons on the line, and each fired 6,000 rounds under sandstorm conditions. The XM8 had 127 stoppages, the SCAR had 226 stoppages, the HK416 had 233 stoppages and the M4 had 882 stoppages. The Army later modified that number to 296 stoppages, attributing the difference to discrepancies in the test and scoring.
When you’ll get it

A new weapon could be selected by the end of 2011. How long it would take to field a new weapon would depend on funding. Fielding could start fairly quickly, but will take up to 10 years, Tamilio said.

No cost estimate of producing a new weapon is available from the Army, as the dozens of potential manufacturers have yet to receive specifications and generate the subsequent design.

By Aug. 19, the Army had 41 respondents to its market survey, Tamilio said.

“Industry is waiting for this,” he said. “They are excited about this … and that’s exactly what we want.”

How the dual-path strategy unfolds remains to be seen, but it means every soldier should be getting a better carbine.

That’s because there are 1.1 million soldiers, but only 500,000 M4s in the system. If the Army selects a new carbine, it may purchase 1.1 million. But a more likely scenario would see 500,000 purchased for infantry brigade combat teams, and the existing and improved M4s given to support troops to replace their M16s.

If the M4 turns out to be the weapon of choice, then the ICBTs will likely be fitted with the improved M4s, and the existing M4s would again be given to support troops to replace their M16s.

For soldiers “consistently using that M4 and satisfied with that M4, to know the Army is going out there to get you something better … that’s pretty damn exciting,” Tamilio said. “And that’s only going to make you more effective on the battlefield.”

www.armytimes.com

Internet and e-commerce industry in Iraq

We are to consider today Internet and e-commerce industry of one of the Arabic countries, located in Western Asia, Iraq. This Muslim country is spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert. Iraq is bordered by Jordan to the west, Syria to the northwest, Turkey to the north, Iran to the east, and Kuwait and Saudi Arabia to the south. The economy of the country is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings.

As for the country’s telecom market, it has undergone much repair and development since the end of hostilities. Until the overthrow of Saddam Hussein, Internet access was tightly controlled and very few people were allowed to go online.

Thus far, the most developed and mature appeared to be mobile sector, with four operators sharing the market. But Zain of Kuwait’s subsidiary Zain Iraq has much the largest market share, with well over 50% share. Actually, boom in mobile sector can be partially explained by the lack of any significant fixed-line market, with infrastructure almost non-existent outside of the capital, Baghdad. There is also a great lack of fibre-optic backbone infrastructure, both nationally and for international connections. With better backbone infrastructure mobile Internet services could probably be successful but as yet 3G/HSPA services are not available.

Since the overthrow of Saddam Hussein, Internet access has become commonplace. At present, the stress is making on developing the network, with the national regulator launching a tender for wireless local loop licenses. The major development has been the establishment and rapid growth of mobile services from a zero start following the award of three temporary mobile licenses.

Several Wireless Local Loop licenses have been awarded and operators have launched services using CDMA networks but they have not as yet made much impact.

The incumbent Internet services provider, Uruklink, used to be the sole Iraqi ISP. However, currently the leading operator faces competition from other ISPs, including broadband satellite Internet access services from both Middle East and European VSAT hubs.

The premier military telecom service provider competing the national incumbent appeared to be TS2, an Internet Provider for US Army soldiers in Iraq and Afghanistan. Despite most of all active TS2 users are Polish and US Army soldiers, the operator’s solutions have been implemented also for private companies and organizations. Before end of 2007 year, the TS2 solutions have been available for numerous NATO military entities. Since 2009 TS2 started advertising satellite Internet services for the US Marine Corps in Afghanistan. At present, TS2′s network in Iraq and Afghanistan has over 15 thousand military users of local broadband satellite connections. TS2 also delivers telecommunication services for Iraq-based Police Transition Teams.

Since 2006 several other companies were launched their services, offering cheaper services and smaller bandwidth affordable for single users such Advanced Technology Systems-Iraq. As of 2010, the top 4 ISPs in the capital of the country operate:

• Rose Telecom, delivering speed up to 4/0.7 Mbps in off-peak times and 512/128 in peak times
• Halasat, offering speed up to 3/0.5 Mbps in off-peak times
• Earthlink, targeting home/single users
• ATS-Iraq, also targeting individual users

Among other ISPs operating on the Iraqi market successfully, according to ostamyy there are:

• Afaq Link Technology – offers communication and Internet services by providing satellite system and wireless services in Iraq.
• Baghdad Telecom – provides infrastructure solutions in the areas of wireless, security and other IT solutions to small, medium and large entreprises in Iraq.
• Nashita – represents a leading ICT US-based ICT Company providing Satellite Internet in Iraq since 1999 and now provides both dedicated and shared VSAT satellite internet service in Iraq.
• Iraq Satellite Internet Services – delivers high-speed Internet connectivity in Iraq with our high-performance Galileo satellite network.

Interestingly, because of the disappearance of phone lines since 2004, all the Iraq’s ISPs uses the Wi-fi Technology to deliver Internet connection. The Iraqis are waiting for the current government to start repairing the phoneline to provide them with the cable/DSL Internet.

Internet access, limited prior to the war, has grown quickly since then due to the availability of satellite broadband access and the opening of Internet cafes. Nevertheless, Iraq has the lowest in the Middle East penetration level, with 1.1% Iraqis connected, as says www.internetworldstats.com. In order to compare, we are to note, that only 0.1% of people in Iraq, or 12,500, were subscribed to the Web. At present, mainly Iraqis get Internet access at Internet cafes with satellite connections.

Internet country code top-level domain (ccTLD) for Iraq is .iq, administered by Network Information Center of Iraq. Registrations are mainly available at third-level domains beneath following second-level categories:

• gov.iq – Governmental entities
• edu.iq – Educational Institutions
• com.iq – Commercial entitites
• mil.iq – Military Institutions
• org.iq – Non-profit organizations
• net.iq – Network Service Providers

Importantly, .iq domain name had previously been in limbo for years, as the delegated manager was imprisoned in Texas on charges of alleged connection to Hamas for which he was later convicted in 2005. Some talk of redelegation and relaunching began taking place at the time of the 2003 invasion of Iraq, and in 2005 a redelegation to the National Communications and Media Commission of Iraq was approved by ICANN.

As for e-commerce sector in Iraq, it’s eventually on the initial stage of its development due to the imperfection of Internet infrastructure in the country.

However, more and more businesses are launching their websites; and business cards are now displaying e-mail addresses.

Besides, there was launched a new Iraqi Business Center that represents a partnership between the CPA and the Iraq Ministry of Trade and provides on-site business counseling for the local Iraqi business community.

The Center is located at the Convention Center in Baghdad and has an informative website at www.iraqibusinesscenter.org, which however, is temporary under construction. The Iraqi Business Center website provides a database of Iraqi companies seeking subcontracts and international partners for work in Iraq.

The sites like this, or some others like, for instance, the US Department of Commerce Iraq Reconstruction Task Force website, target to promote the present and future use of the internet by businesses wishing to do business in Iraq.

Importantly, the US Commerce has one of the best websites for obtaining Internet information regarding business opportunities in Iraq.

An international business center was recently opened in Kirkuk. It is operated between the local government, Coalition forces, the Kirkuk Chamber of Commerce, and the Kirkuk Contractors Union. One of the prevalent goals is to facilitate coordination between local and international businesses and to facilitate unsolicited bids for reconstruction work.

Since 2003 the Central Bank of Iraq has authorized Iraq’s private banks to process international payments, remittances and foreign currency letters of credit. However, national banks are still not offering on-line banking services and transactions. Thus far, Iraqi banks need to do e-business in order to provide security. This would include authentication, data integrity, confidentiality, payment gateway.

As for the e-government page, since 2003 Iraq has been in transition and led by the US Coalition Provisional Authority. Future goals for the Iraqi and other e-governments include a national ID, health care database, and e-voting.

However, some barriers still exist in Iraq for successful e-government deployment. Among them, like in other countries in the region, there are: societal rigidity, weakness in ICT education, unfair income distribution resulting in lack of access to ICT education and technology. Iraq faced brain drain when thousands of Iraqis fled the country or were forced to leave during Saddam Hussein’s regime.

Well, despite this Muslim country cannot boast about the high level of ICT progress and as the result of e-commerce sector development, some good signs of future success in this sphere are obvious.

BAE Systems, DRS Technology’s defense contract work slows as Iraq, Afghanistan missions shift

The changing missions in Iraq and Afgahanistan, coupled with discussions in Washington about creating a budgetary-minded culture in the Department of Defense, are signaling the start of leaner times for many military contractors.

Already, two area companies that work on overhauling or remanufacturing military ground vehicles have announced more than 200 layoffs, partly due to the reduction of combat forces in Iraq. Executives at several other companies say those working in the defense industry have to be prepared for anything, though they hope their contracts will be spared.

Last week, BAE Systems Inc., a U.S. arm of BAE Systems plc, said 131 employees would be laid off from its Lamont Furnace facility in Fayette County by the end of January. That is 53 percent of the work force at that site, according to company spokesman Randy Coble.

“This is absolutely the last thing anybody wanted to have happen,” he said. “But it’s unavoidable, due to changed business conditions. First, as the conflicts in Iraq and Afghanistan have become relatively stabilized, there’s been a decrease in demand for work on ground combat vehicles from our customer — as compared to peak demand levels when the conflicts were at their heights. Second, shifting national priorities are moving more federal dollars away from defense spending and toward other areas.”

For those being laid off, which are mostly production line jobs, the company is offering severance pay and help with job hunting or resume writing. By the end of January, the facility will have 115 employees.

In Johnstown, DRS Technologies Inc. has cut its work force twice this year, most recently last month, with a total of 150 jobs lost, said Richard Goldberg, senior vice president of public affairs and communications. Similar to BAE, DRS saw contracts end as a result of mission changes.

“No company gets any pleasure in doing it,” Goldberg said of the staff reductions. “Our business development folks are aggressively seeking contracts to fill in where others have stopped.”

DRS, based in Parsippany, N.J., has a global presence. With the latest reductions, the head count in Johnstown will be roughly 600. Goldberg said the company, which has about 90 percent of its business in defense, is looking for opportunities to transition some of its military products to commercial lines, such as creating rugged computers or refrigeration work.

At II-VI Inc., the military makes up roughly 30 percent to 35 percent of the Saxonburg-based company’s business. So far, the company isn’t seeing any changes in its defense orders, said Jim Martinelli, vice president of military and materials businesses, though it takes time to trickle down.

“Are there concerns? Absolutely,” he said. “Anybody supplying the defense industry would have concerns with the level of business.”

Looking at recent comments from Defense Secretary Robert Gates, it appears the department will be focusing on cutting overhead and staff, not deep reductions in weapons programs, Martinelli said. His firm works on optical components for intelligence, surveillance and reconnaissance products or improving capabilities of aircraft.

“When companies are involved with technology that the defense industry is working to improve, there can be budget cuts all around us and we will still do OK,” he said.

“I think that will be the case for II-VI. The technical niche we are in is a mission the defense department will continue to invest in.”

In fact, as the recession took hold, military work blunted some of the big cuts the company made. From June 2008 to June 2009, II-VI cut 400 employees, bringing its worldwide head count to 2,000. Some of the work force at the Saxonburg facility was able to move into military work when commercial and industrial work dropped. Now that industrial work is starting to tick up, the company actually has 30 to 40 job openings.

Like II-VI, RE2, a nine-year-old Lawrenceville robotics company that has grown to 30 employees based on its military work, is optimistic its projects will be spared.

At the same time, CEO Jorgen Pederson said the company is looking to expand into other markets, such as law enforcement and health care.

Jeff Kelly, CEO and owner of Hamill Manufacturing in Trafford, said he hasn’t heard from his customers of any changes in orders but that doesn’t mean he isn’t concerned. In 1992, the company lost 40 percent of its business when the Navy cut back its Seawolf class submarine program after the Cold War.

“My approach is to find other business, that’s what we did back in 1992. We call it our near death experience,” he said. “We decided not to be so dependant on the government, but it’s somewhat problematic since, unfortunately, for manufactured products, the markets are contracting unless you are able to go global, and, in that case, we face a lot of competition. We may not have as many opportunities as back in 1992.”

The overall uncertainty of the economy and political climate makes it difficult to plan for or even get into other markets, Kelly said.

“One thing I learned in 1992 is anything can happen,” he said.

“As we approach bankruptcy as a country, I don’t know if anyone can continue to exclusively provide service to the government. A lot of cost cutting is coming down.”

www.pittsburgh.bizjournals.com

ViaSat gives war effort a boost

Airplanes passing silently over enemy territory in Iraq and Afghanistan record and transmit videos in real time back to intelligence experts in the United States with the help of Carlsbad satellite communications company ViaSat.

Because those videos help inform military decisions, picture quality is extremely important, said Larry Taylor, the head of Government Satellite Communications Systems at the company.

“When you’re looking for intelligence on the ground, you would like to be able to look at a person and see if he is carrying a gun or a broom,” he said.

To boost the resolution and speed of these videos, ViaSat recently doubled the data rate its equipment can transmit, from 512 to 1024 kilobytes. This upgrade was made at the request of the Department of Defense, one of the company’s biggest customers, Taylor said.

“Everyone wants a higher speed, because the more we use video, the more demanding speeds we require,” he said. “The same thing is true in the Department of Defense.”

The company also recently improved military planes’ ability to send data back to the ground.

“Traditionally when we think of Internet access, we think about a simple mouse-click to load a complex Web page, which is a lot of data going out to a remote facility, but very little coming back,” Taylor said. “But with the Department of Defense, they are actually creating the data as videos or other intelligence information collected on an airplane, and that information has to be relayed to analysis centers on the ground.”

Giving an airplane a wireless connection is like hitting a moving target, because the plane’s antennas are never in the same place. ViaSat accomplishes this task with a network of 13 hubs on the ground connected to 13 satellites, which create a “worldwide footprint” of wireless connection, Taylor said.

“You can fly an airplane under any footprint virtually anywhere in the world and have a connection,” he said.

Boosting the planes’ data speed will allow them to send videos with higher resolution and more frames per second, both of which are important for military intelligence activities, Taylor said. Greater resolution means the video’s screen can be enlarged without creating a pixilated, or blurry, image, and increasing a video’s frames makes it smoother.

“Slower frame speeds mean the video has a jerky, flickerlike motion,” Taylor said. “If you were watching a movie, you wouldn’t stand for jerky motion, and for the military, a smooth video is even more important.”

Although ViaSat originally only supplied its satellite connection technology to commercial vehicles, including business jets and trains, the Department of Defense asked the company to adapt its technology to military airplanes.

ViaSat’s satellite antenna and software are installed in more than 100 military aircraft and more than 100 business aircraft, Taylor said. The company is also expanding its reach into boats, and plans to have software in more than 750 maritime craft soon.

The average cost to equip military planes with the antenna and software to transmit videos is about $350,000, and ViaSat also has government contracts to work on upgrading the planes, he said. The company brings in about $50 million a year between its commercial and military customers, but Taylor said that number is expected to grow.

The company’s data rate from the air to the ground is also expected to grow to 2 megabytes “and beyond,” he said. It plans to transition to higher frequency bands and launch a new satellite next year.

“We have a very aggressive road map to get higher and higher data rates, and to reduce the cost and increase the speed of our services,” Taylor said.

Blackwater Reaches Deal on U.S. Export Violations

The private security company formerly called Blackwater Worldwide, long plagued by accusations of impropriety, has reached an agreement with the State Department for the company to pay $42 million in fines for hundreds of violations of United States export control regulations.

The violations included illegal weapons exports to Afghanistan, making unauthorized proposals to train troops in south Sudan and providing sniper training for Taiwanese police officers, according to company and government officials familiar with the deal.

The settlement, which has not yet been publicly announced, follows lengthy talks between Blackwater, now called Xe Services, and the State Department that dealt with the violations as an administrative matter, allowing the firm to avoid criminal charges. A company spokeswoman confirmed Friday that a settlement had been reached. The State Department spokesman, Philip J. Crowley, said he could not immediately comment.

The settlement with the State Department does not resolve other legal troubles still facing Blackwater and its former executives and other personnel. Those include the indictments of five former executives, including Blackwater’s former president, on weapons and obstruction charges; a federal investigation into evidence that Blackwater officials sought to bribe Iraqi government officials; and the arrest of two former Blackwater guards on federal murder charges stemming from the killing of two Afghans last year.

But by paying fines rather than facing criminal charges on the export violations, Blackwater will be able to continue to obtain government contracts. While the company lost its largest federal contract last year to provide diplomatic security for United States Embassy personnel in Baghdad, where the Iraqi government was incensed by killings of Iraqis in one highly publicized case, it still has contracts to provide security for the State Department and the C.I.A. in Afghanistan.

Blackwater, its reputation tainted in part because of the excessive use of force by some of its personnel in Baghdad, sought for years to extend its reach far beyond the war zones of Iraq and Afghanistan.

For a time, the company’s founder, Erik Prince, had ambitions to turn Blackwater into an informal arm of the American foreign policy and national security apparatus, and proposed to the C.I.A. to create a “quick reaction force” that could handle paramilitary operations for the spy agency around the world. He had hopes that Blackwater’s military prowess could be an influential force in regional conflicts around the world.

Mr. Prince, a former Navy Seals member and the heir to an auto parts fortune, took an interest in Africa, particularly Sudan, and he is said to have wanted Blackwater to step in to help the rebels in southern Sudan, which is predominantly Christian and animist, fight the Sudanese government and the Muslim north, despite United States economic sanctions.

Blackwater’s ambitions in Sudan were described in detail by McClatchy newspapers in June.

The settlement with the State Department, involving practices from the days before Blackwater was rebranded as Xe Services, comes as Mr. Prince is trying to shed his ties to Blackwater and its past activities.

He overhauled the company’s management in 2009, changed its name, and has now put the privately held company up for sale. He has just moved with his family to Abu Dhabi from the United States, a move that colleagues say was a result of his deep anger and frustration over the intense scrutiny he and his firm have received in recent years.

The State Department export controls require government approval for the transfer of certain types of military technology or knowledge from the United States to other countries. But Blackwater began to seek training contracts from foreign governments and other foreign organizations without adhering closely to American regulations.

The company also shipped automatic weapons and other military equipment for use by its personnel in Iraq and Afghanistan in violation of export controls, and in some cases sought to hide its actions, according to the government. In one incident, Blackwater shipped weapons to Iraq hidden inside containers of dog food.

A federal investigation into the company’s weapons shipments to Iraq led to guilty pleas on criminal charges by two former Blackwater employees who are believed to have cooperated with a broader federal inquiry.

Investigators reportedly looked into whether some of the weapons that were shipped to Iraq were sold on the black market and ended up in the hands of a Kurdish rebel group, the Kurdistan Workers’ Party, or P.K.K., which Turkey considers a terrorist organization. Turkish officials reportedly complained to the United States about American weapons seized from the group.

In 2008, after a federal investigation of Blackwater’s actions was begun, the company admitted “numerous mistakes” in its adherence to export laws and created an outside board of experts to supervise the firm’s compliance.

Current and former government officials say that the government’s inquiry into some of Blackwater’s export control violations began as part of a federal grand jury investigation in North Carolina, where Blackwater is based. But the matter was apparently shifted to the State Department when the criminal investigation in North Carolina narrowed its focus.

That grand jury handed down the indictments of the five former Blackwater executives earlier this year. That indictment includes charges that Blackwater executives sought to hide evidence that they had given weapons as gifts to King Abdullah of Jordan.

Despite the fines and investigations that have plagued Blackwater, the firm has continued to win contracts from the State Department and the C.I.A.

In June, the State Department awarded Blackwater a $120 million contract to provide security at its regional offices in Afghanistan, while the C.I.A. renewed the firm’s $100 million security contract for its station in Kabul. At the time, the C.I.A. director, Leon E. Panetta, defended the decision, saying that the company had offered the lowest bid and had “cleaned up its act.”

www.nytimes.com

Defense jobs face shift from wartime footing

Central Florida’s two biggest military contractors – Lockheed Martin Corp. and Harris Corp. – have received billions of dollars in contracts during the U.S. wars in Afghanistan and Iraq, yet their employment levels have remained nearly at a standstill.

Although both companies have made many new hires — engineers, technicians and financial analysts, to name a few — they say the added employees have generally been offset by retiring baby boomers and other forms of attrition.

As a result, after more than eight years of war-time work on multibillion-dollar military systems, their work-force totals in Central Florida are almost unchanged — or, in Harris’ case, down about 7 percent.

If the number of people working for the two companies hasn’t grown during almost a decade of war-time spending, what might happen in leaner times, as the Pentagon ratchets back its $700 billion-a-year budget?

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The answer to that question matters a lot in tourism-dependent Central Florida, which continues to look to high-wage, high-technology companies to provide badly needed economic diversification.

Lockheed and Harris say they have managed their work forces efficiently and conservatively as the U.S. has fought wars in two far-away countries, resisting the urge to over-hire or over-react to the ebb and flow of military orders.

Even before U.S. Defense Secretary Robert Gates warned last year that the war-time spending “spigot” would soon be closing, Lockheed was working on cost savings, said Ken Ross, a spokesman for Lockheed Martin Global Training & Logistics in Orlando.

“We feel that really we got the jump on this,” he said. “We’ve been looking for ways to do things much more affordably for our customers.”

Lockheed has closely matched its staff to its current workload and the program bids it expects to win, Ross said. (Lockheed’s Central Florida operations have received contracts worth about $1 billion so far this year.)

“We have not been in a situation yet where we’ve been able to really staff up,” he said. “But we have been able to fill the openings we have.”

Bethesda, Md.-based Lockheed has about 4,500 workers in its Orlando missiles and fire-control unit and nearly 2,000 in its simulation-training operation. Melbourne-based Harris employs more than 6,500 in Melbourne and Palm Bay.

They each make high-tech systems considered key to military operations in Afghanistan and Iraq, such as missiles and weapons-firing equipment for Apache helicopters (Lockheed Missiles & Fire Control), high-tech armored-vehicle training for tank and convoy personnel (Lockheed Global Training), and fighter-jet avionics and battlefield-command satellite communications (Harris).

Their wide-ranging operations for the military have sustained their work forces despite the nation’s economic woes — no small feat, say experts, given the loss of more than one million jobs nationwide in the Great Recession.

“If their employment base has been stable through all of this, then they are certainly better off than many industries that have been in decline,” said Paul Taibl, vice president of the Business Executives for National Security, a Washington-based defense-and-intelligence think tank. “This would have to be a case of the cup half full.”

There are some signs of cracks forming in the local employment picture, however.

Lockheed laid off 90 engineers last month in its Orlando missiles and fire-control operation — the first layoffs there in a decade. The company cited competitive pressures and shifting military requirements, among other factors. During the past year or so, Lockheed has also trimmed nearly 100 jobs from its local high-tech training and information-technology operations.

Harris streamlined its work force last year, laying off more than 100 people and eliminating another 300 jobs vacated by retirement or other attrition.

Both companies say no further job cuts are planned. And even with the layoffs, they have each continued to fill certain openings, often with newly minted engineering graduates.

“We take a long-term view of work-force development,” said Craig Vanbebber, spokesman for Lockheed Martin Missiles & Fire Control. “That applies to recruiting and mentoring college students. All of those initiatives have continued on track.”

Lockheed Missiles & Fire Control units in Orlando and Texas are working on new technologies that could eventually lead to job growth, he said. For example, the Orlando unit recently won a $1.1 million contract to develop “wearable robotics” — computerized hydraulic “suits” that enable soldiers to carry extraordinary amounts of gear on the battlefield.

Harris said it expects its employment to remain stable for the foreseeable future. In many cases, it moves workers from programs that are winding down to others in which activity is picking up, spokesman Jim Burke said.

He cited as an example a non-military program, Harris’ Census Bureau communications systems, in which the workload has subsided as the government’s nationwide census wraps up its collection phase.

“Some of those employees are shifting onto new programs that are ramping up, which we’ve won during the past year,” he said. “That has always been one of our strengths employment-wise.”

So far this year, Harris has won more than two-dozen military and non-military government contracts worth more than $1 billion combined. More than one-third of the programs are tied to its Melbourne and Palm Bay operations, including satellite commmunications, missile-defense radios and fighter-jet avionics.

But both Harris and Lockheed will be challenged in the months and years ahead as more Pentagon budget cuts take effect, said Taibl, the Washington think-tank official.

“Overall, the outlook for defense spending will be either flat or on a slow decline,” he said. “What we’re seeing right now is probably the tip of the iceberg in terms of cuts the Pentagon is going to have to make.”

www.orlandosentinel.com

Private contractors pose problems of cost, control

In June, a stone carver from Manassas, Va., chiseled another perfect star into a marble wall at CIA headquarters, one of 22 for agency workers killed in the global war initiated by the 2001 terrorist attacks.

The intent of the memorial is to publicly honor the courage of those who died in the line of duty, but it also conceals a deeper story about government in the post-9/11 era: Eight of the 22 were not CIA officers at all. They were private contractors.

To ensure that the country’s most sensitive duties are carried out only by people loyal above all to the nation’s interest, federal rules say contractors may not perform what are called “inherently government functions.” But they do, all the time and in every intelligence and counterterrorism agency, according to a two-year investigation by The Washington Post.

What started as a temporary fix in response to the terrorist attacks has turned into a dependency that calls into question whether the federal workforce includes too many people obligated to shareholders rather than the public interest and whether the government is still in control of its most sensitive activities. In interviews last week, both Defense Secretary Robert Gates and CIA Director Leon Panetta said they agreed with such concerns.

The Post investigation uncovered what amounts to an alternative geography of the United States, a Top Secret America created since 9/11 that is hidden from public view, lacking in thorough oversight and so unwieldy that its effectiveness is impossible to determine.

It is also a system in which contractors are playing an ever more important role. The Post estimates that out of 854,000 people with top-secret clearances, 265,000 are contractors. There is no better example of the government’s dependency on them than at the CIA, the one place in government that exists to do things overseas that no other U.S. agency is allowed to do.

Private contractors working for the CIA have recruited spies in Iraq, paid bribes for information in Afghanistan and protected CIA directors visiting world capitals. Contractors have helped snatch a suspected extremist off the streets of Italy, interrogated detainees once held at secret prisons abroad and watched over defectors holed up in the Washington suburbs. At Langley, Va., headquarters, they analyze terrorist networks. At the agency’s training facility in Virginia, they are helping mold a new generation of American spies.

Through the federal budget process, the George W. Bush administration and Congress made it much easier for the CIA and other agencies involved in counterterrorism to hire more contractors than civil servants. They did this to limit the size of the permanent workforce, to hire employees more quickly than the sluggish federal process allows and because they thought — wrongly, it turned out — that contractors would be less expensive.

Nine years later, well into the Obama administration, the idea that contractors cost less has been repudiated, and the administration has made some progress toward its goal of reducing the number of hired hands by 7 percent over two years. Still, close to 30 percent of the workforce in the intelligence agencies is contractors.

“For too long, we’ve depended on contractors to do the operational work that ought to be done” by CIA employees, Panetta said. But replacing them “doesn’t happen overnight. When you’ve been dependent on contractors for so long, you have to build that expertise over time.”

A second concern of Panetta’s: contracting with corporations, whose responsibility “is to their shareholders, and that does present an inherent conflict.”

Or as Gates, who has been in and out of government his entire life, puts it: “You want somebody who’s really in it for a career because they’re passionate about it and because they care about the country and not just because of the money.”

Contractors can offer more money — often twice as much — to experienced federal employees than the government is allowed to pay them. And because competition among firms for people with security clearances is so great, corporations offer such perks as BMWs and $15,000 signing bonuses, as Raytheon did in June for software developers with top-level clearances.

The idea that the government would save money on a contract workforce “is a false economy,” said Mark Lowenthal, a former senior CIA official and now president of his own intelligence training academy.

As companies raid federal agencies of talent, the government has been left with the youngest intelligence staffs ever while more experienced employees move into the private sector. This is true at the CIA, where employees from 114 firms account for roughly a third of the workforce, or about 10,000 positions. Many of them are temporary hires, often former military or intelligence agency employees who left government service usually to work less and earn more while drawing a federal pension.

Across the government, such workers are used in every conceivable way.

Contractors kill enemy fighters. They spy on foreign governments and eavesdrop on terrorist networks. They help craft war plans. They gather information on local factions in war zones. They are the historians, the architects, the recruiters in the nation’s most secretive agencies. They staff watch centers across the Washington area. They are among the most trusted advisers to the four-star generals leading the nation’s wars.

So great is the government’s appetite for private contractors with top-secret clearances that there are now more than 300 companies, often nicknamed “body shops,” that specialize in finding candidates, often for a fee that approaches $50,000 a person, according to those in the business.

Making it more difficult to replace contractors with federal employees: The government doesn’t know how many are on the federal payroll. Gates said he wants to reduce the number of defense contractors by about 13 percent, to pre-9/11 levels, but he’s having a hard time even getting a basic head count.

“This is a terrible confession,” he said. “I can’t get a number on how many contractors work for the Office of the Secretary of Defense,” referring to the department’s civilian leadership.

The Post estimate of 265,000 contractors doing top-secret work was vetted by several high-ranking intelligence officials who approved of The Post’s methodology. The newspaper’s Top Secret America database includes 1,931 companies that perform work at the top-secret level. More than a quarter of them — 533 — came into being after 2001, and others that already existed have expanded greatly. Most are thriving even as the rest of the United States struggles with bankruptcies, unemployment and foreclosures.

The privatization of national security work has been made possible by a nine-year “gusher” of money, as Gates recently described national security spending since the 9/11 attacks.

With so much money to spend, managers do not always worry about whether they are spending it effectively.

“Someone says, `Let’s do another study,’ and because no one shares information, everyone does their own study,” said Elena Mastors, who headed a team studying the al-Qaida leadership for the Defense Department. “It’s about how many studies you can orchestrate, how many people you can fly all over the place. Everybody’s just on a spending spree. We don’t need all these people doing all this stuff.”

Most of these contractors do work that is fundamental to an agency’s core mission. As a result, the government has become dependent on them in a way few could have foreseen: wartime temps who have become a permanent cadre.

Just last week, typing “top secret” into the search engine of a major jobs website showed 19,759 unfilled positions nationwide.

“We could not perform our mission without them. They serve as our `reserves,’ providing flexibility and expertise we can’t acquire,” said Ronald Sanders, who was chief of human capital for the Office of the Director of National Intelligence before retiring in February. “Once they are on board, we treat them as if they’re a part of the total force.”

The Post’s investigation is based on government documents and contracts, job descriptions, property records, corporate and social networking websites, additional records, and hundreds of interviews with intelligence, military and corporate officials and former officials. Most requested anonymity either because they are prohibited from speaking publicly or because, they said, they feared retaliation at work for describing their concerns.

The investigation focused on top-secret work because the amount classified at the secret level is too large to accurately track. A searchable database of government organizations and private companies, which can be found at topsecretamerica.com, was built entirely on public records.

The national security industry sells the military and intelligence agencies more than just airplanes, ships and tanks. It sells contractors’ brain power. They advise, brief and work everywhere, including 25 feet under the Pentagon in a bunker where they can be found alongside military personnel in battle fatigues monitoring potential crises worldwide.
Late at night, when the wide corridors of the Pentagon are all but empty, the National Military Command Center hums with purpose. There’s real-time access to the location of U.S. forces anywhere in the world, to granular satellite images or to the White House Situation Room.

The purpose of all this is to be able to answer any question the chairman of the Joint Chiefs of Staff might have. To be ready 24 hours a day, every day, takes five brigadier generals, a staff of colonels and senior noncommissioned officers — and a man wearing a pink contractor badge and a bright purple shirt and tie.

“Knowledge engineer” Erik Saar is the only person in the room who knows how to bring data from far afield, fast. Saar and four teammates from a private company, SRA International, teach these top-ranked staff officers to think in Web 2.0. They are trying to push a tradition-bound culture to act differently, digitally.

That sometimes means exchanging ideas on shared Web pages outside the military computer networks dubbed .mil — things much resisted within the Pentagon’s self-sufficient culture. “Our job is to change the perception of leaders who might drive change,” Saar said.

Since 9/11, contractors have made extraordinary contributions — and extraordinary blunders — that have changed history and clouded the public’s view of the distinction between the actions of officers sworn on behalf of the United States and corporate employees with little more than a security badge and a gun.

Contractor misdeeds in Iraq and Afghanistan have hurt U.S. credibility in those countries as well as in the Middle East. Abuse of prisoners at Abu Ghraib, some of it done by contractors, helped ignite a call for vengeance against the United States that continues today. Security guards working for Blackwater added fuel to the five-year violent chaos in Iraq and became the symbol of an America run amok.

Contractors in war zones, especially those who can fire weapons, blur “the line between the legitimate and illegitimate use of force, which is just what our enemies want,” Allison Stanger, a professor of international politics and economics at Middlebury College and the author of “One Nation Under Contract,” told the independent Commission on Wartime Contracting at a hearing in June.

Full story > www.courier-journal.com

Middle East and North Africa Developing Defences

Local arms manufacturing in the Middle East and North Africa region is set to grow. Robert Bailey outlines some of the projects and collaborations that are underway.

Middle Eastern and North African (MENA) defence industries are becoming more self reliant as they shift from direct equipment purchases to local production. Where technology transfer has for more than two decades been an established part of headline-catching, multi billion dollar offset programmes, the focus now, for even the smaller countries, is to require technology transfer as a first step to developing their own armaments producing capability.

Nevertheless, the MENA region is still a hugely lucrative market for Western arms producers. Its spending on military equipment continues to be the highest of any region outside North America and Europe. Saudi Arabia’s defence expenditure alone totalled more than $38 billion in 2008, ranking ninth in the world.

After maintaining a low profile for many decades, the UAE has emerged as one of the world’s largest purchasers of advanced military equipment. Scarcely had the delivery of 60 of the latest Lockheed F-16 fighter aircraft been completed – to add to the 50 Mirage 2000 fighters acquired in 2008 – than the UAE authorities availed themselves of the Abu Dhabi defence exhibition, which was staged in early 2009, to order four giant Lockheed Martin C-17 and the smaller C-30 military transport aircraft, and jet fighter trainer aircraft from Italy’s Alenia.

The federation is also negotiating a $9 billion package for Lockheed’s terminal high-altitude air-defence system and Patriot air-defence missile systems. Three more Airbus A330 tanker aircraft are also slated to add to three already purchased and due for delivery in 2011.

Another relatively new armaments market is Algeria, which is pursuing a major modernisation programme. In the past two years, the growth in annual defence spending has more than trebled to 33 per cent. Potential suppliers have been courting Algeria’s top brass since an arms embargo was lifted in 2005. These include the UK, whose defence minister visited Algiers in October for talks with President Bouteflika.

However, it was a sign of the times that the Anglo-Italian group AgustaWestland discovered, when negotiating the sale of an extra 100 helicopters to supplement a completed $600 million order, that the deal could well depend on agreeing to a large proportion of them being assembled locally.

Libya is another country that has emerged from pariah status to be wooed assiduously by arms suppliers. Since the lifting of the international arms embargo, several countries – notably the UK, France and Russia – have beaten a path to Tripoli to offer equipment and military training.

France is reportedly negotiating a $6.4 billion arms package, including the supply of Rafale fighter jets, which could hinge on offering some local production and assembly. However, the Libyans may be more inclined to stick with their traditional Russian suppliers. A number of contracts involving the supply of Sukhoi-30 and MiG 29 fighter aircraft, as well as helicopters and the modernisation of Russian-supplied tanks, were confirmed in October.

Russia’s state armaments marketing organisation, Rosoboronexport Russia, is active in other Arab markets. It has offered to supply Lebanon with MiG 29 fighters to beef up its depleted air force, as well as air-defence missile systems and T90 main battle tanks. It is also working on $2 billion worth of contracts with Saudi Arabia for the sale of 150 helicopters, T90 main battle tanks and BMP infantry-fighting vehicles.

Retraining Iraq’s Russian-equipped army has been a long and complicated process. However, with more than $8 billion of orders for US helicopters, tanks and armoured combat vehicles in hand, Iraq is well on the way to rebuilding its equipment inventory with American arms. Most of this materiel was financed with aid, but as oil revenues improve, Iraq could become a leading defence market in its own right.

Another important defence provision that relates particularly to Iraq is security services. G4S, formerly Group Four Securicor, has 40,000 employees working in the Middle East, a large proportion of them in Iraq where it has nine branches. The British security firm, Aegis, which processes and monitors all private security operations in Iraq, also has a large presence with 15 branches.

Although the US Fifth Fleet is headquartered in Bahrain, and many other navies regularly visit Gulf waters, the Gulf Cooperation Council is assuming much more responsibility for its own security; naval and air defences are being reinforced. The Sultanate of Oman has taken delivery of the first of three state-of-the-art 2,700-tonne Corvettes from the UK’s Vosper Thorneycroft group, as part of a $715 million deal. Meanwhile, Bahrain’s navy is reportedly seeking to buy three new frigates.

However, MENA countries are now looking to develop their own capabilities. Arms production was pioneered by Egypt, which built its industry on the back of the Arab Organisation for Industrialisation, an abortive attempt in the 1980s to create a pan-Arab military industrial complex. Egypt has relied heavily on US military assistance and now builds US-designed tanks and other military platforms.

Offset, where typically the supplier invests 35 per cent of the value of a defence project in a local industrial undertaking, was pioneered by Saudi Arabia with the launch, in 1984, of Boeing’s Peace Shield programme, followed by British Aerospace’s Yamamah programme. Now it is widely used as a stepping-stone to local production.

For example, the UAE’s $817 million Baymunah naval programme involves the design, construction and outfitting of six Corvettes. The first ship was built by Constructions Mecaniques de Normandie in France; the remainder will be built by Abu Dhabi Shipbuilding (ADSB), which is 40 per cent owned by the Abu Dhabi government’s investment agency Mubadala. ADSB is also providing the UAE navy with 12 missile-armed fast-attack craft and four maritime patrol aircraft. The shipyard also has an order for a troop-carrying ship from Oman.

Mubadala has also established a helicopter pilot training school in Al Ain and has strengthened the Federation’s maintenance, repair and overhaul facilities by acquiring the Gulf Aircraft Maintenance Company, whose core business is servicing a variety of military aircraft, including the UAE’s F-16s and Mirage 2000-9s, as well as military and civilian makes of helicopter. It is sinking $500 million into revamping and broadening the scope of the company, which has now become Abu Dhabi Aircraft Technologies.

It has invested in Al Yah Satellite Communications Company, which provides the federation’s armed forces with a secure satellite communications system. The company’s first-launch satellite is currently being built by Europe’s EADS Astrium and Thales Alenia Space. Mubadala has also joined with the US company EDS Defence and Security, to create the Injazat Data Systems IT, an outsourcing company, to provide data security systems for the armed services.

Independent of Mubadala, Tawazum Holdings, an offshoot of Abu Dhabi’s Offset Programme Bureau, owns Caracal International, a company that specialises in manufacturing and distributing small arms. Tawazum has also joined forces with Al Jaber Group and Germany’s Rheinmetall Munitions Systems to build a munitions factory.

While a frontrunner in the development of a viable indigenous defence industry, the UAE faces strong regional competition. Jordan, similar to Egypt, is well on the way to building a national defence industry. A recent contract involved calls for 100 Turkish-designed armoured vehicles to be assembled locally. The King Abdullah 11 Design and Development Bureau is also carrying out additional upgrading work, in Amman, on US-made main battle tanks.

However, Saudi Arabia has embarked on the region’s technically most ambitious programme: a plan to develop a fully-fledged aeronautics industry on the back of local assembly of the Eurofighter Typhoon. The first 24 of a 72-plane, $32.9 billion order are being provided direct from the UK; the first two aircraft arrived in Taif last July. The remaining 48 are to be assembled by Alsalam Aircraft Company, in new factories being constructed in Riyadh. Another Saudi company, Advanced Electronics, is in talks with BAE Systems, the Eurofighter Typhoon’s prime manufacturer, to produce components for the fighters.

Global Arab Network

Robert Bailey is Global Arab Network consulting editor and writer specialising in the Middle East. This article is published in partnership with the Middle East Association.