The effect of COVID-19 on world defence spending will have a major impact unless governments address the issue now to ensure that, perhaps most importantly of all, the industrial supply chain does not wither and collapse.
The pre-COVID-19 threats still exist, and the widespread cutting of national defence budgets would not only impact national industries, but perhaps lead to a de-stabilisation in strategic balances.
DEFENCE AND COVID-19
COVID-19’S EFFECT ON GLOBAL DEFENCE SPENDING
The challenge for government defence spending will be how to address all the threats that still exist and have not gone away, despite the pandemic, without specialising and narrowing the band of issues being faced, stated Bastian Giegerich, director of Defence and Military Analysis at the International Institute for Strategic Studies (IISS).
Speaking during a podcast entitled The future of European defence spending in a post-COVID world, on 22 June, He said that in the case of the Europeans, they had tended to compare the speed at which they are moving in terms of spending on defence with a few years ago, rather than addressing whether that is still enough now that there has been a return to Great Power competition.
Fenella McGerty, senior fellow for defence economics looked at the global picture of defence and found that “some countries have already announced adjustments to their 2020 defence budget including Indonesia, South Korea and Thailand, and have redirected funds to crisis relief and economic stimulus.”
In the Middle East, Saudi Arabia had already altered the defence budget before the crisis had taken effect but now Bahrain and the Sultanate of Oman had followed that example.
She said that the outlook for Europe and North America was negative, but that there was an understanding that support for the defence industry was necessary.
“There is a recognition that defence was cut after the global financial crisis which had negative implications. In areas such as in the aerospace and defence industry in Europe, the commercial side was able to carry defence through the last crisis, but the commercial side is now far more affected, which has led to governments prioritising certain defence programmes to maintain local defence industry and the supply chain.”
The stimuli for increased defence spending among NATO members in recent years had come from three factors: economic improvement (since the financial crisi; the Russia annexation of Crimea; and the pressure from the US as well as that country’s pivot to Asia. These had resulted in stronger defence spending in Europe.
McGerty said that factors had changed: the security threat to Europe means that it is not as secure as it was; economic contractions are more severe; and the US retreat from involvement around the world could still trigger European defence spending.
Giegerich illustrated one area that had been impacted already. Looking at the plan for the European Defence Fund, he said that some of the flagship programmes had already been cut, such as military mobility, by the end of 2019 because member states could not agree on fund allocation.” However, some funding has now been reinserted although still not as much as originally envisaged.
Giegerich questioned whether governments would bring money forward that had been planned for future years to try and support industry, although there were limits on how much could be done.
In terms of trans-Atlantic relations, he questioned the scope of President Trump’s withdrawal plan, and said that a lack of strategic rational from the US President when it comes to NATO and the lack of meaningful consultation with allies, which is what the trust and predictable behaviour of alliances is based. However, European nations continue to rely on US defence support for the near future.
NATO RESPONDS TO UN REQUEST FOR AIR ASSISTANCE
A UK Royal Air Force (RAF) C-17 cargo aircraft was tasked to take materials for the construction of a field hospital, to Accra, Ghana, on Saturday 27 June, to help medical workers there in the fight against coronavirus.
The tasking resulted from a request by the United Nations (UN) to NATO’s Euro-Atlantic Disaster Response Coordination Centre (EADRCC). The disruption of commercial flights and the escalation of freight costs meant that a NATO flight was a good option.
“Last month, NATO agreed to support the UN’s global call for airlift assistance. I warmly welcome that the United Kingdom is the first NATO Ally to come forward with an aid flight, delivering supplies to build a field hospital in Ghana. This is a concrete demonstration of solidarity in action – NATO Allies stepping up to save lives,” said NATO Secretary General Jens Stoltenberg.
This is the first of five planned RAF flights that will transport supplies for the construction of a UK aid funded field hospital on behalf of the World Food Programme (WFP), which is handling infrastructure and logistics on behalf of the UN. The field hospital weighs approximately 130 tonnes and will have the capacity to care for up to 92 people.
GENERAL NEWS AND ITEMS OF INTEREST
US ARMED SERVICES COMMITTEE CALLS FOR INDO-PACIFIC DEFENCE INITIATIVE
“Currently, in the Indo-Pacific, that foundation of deterrence is crumbling as an increasingly aggressive China continues its comprehensive military modernisation,” stated the United States Armed Services committee in a statement entitled The Pacific Deterrence Initiative – Peace Through Strength in the Indo-Pacific.
The Committee warned that China’s modernisation of its military was steadily eroding US military superiority. “The best way to protect US security and prosperity in Asia is to maintain a credible balance of military power. But America’s ability to do so is at risk. And it’s not just US interests at stake. Allies and partners in the Indo-Pacific are watching closely, and wondering whether they will be able to count on America.”
The bipartisan National Defense Strategy Commission report called for the establishment of a Pacific Deterrence Initiative in the National Defense Authorization Act for Fiscal Year 2021. “The Pacific Deterrence Initiative will enhance budgetary transparency and oversight, and focus resources on key military capabilities to deter China,” the report revealed.
There are four pillars on which this initiative is to be built:
- The enhancement of budgetary transparency and congressional oversight: “This would allow Congress and the Pentagon to view the defence budget through a regional warfighting lens while increasing the visibility of options to advance US priorities in the Indo-Pacific.”
- Focus resources on key capability gaps: “Investments in theatre missile defence, expeditionary airfield and port infrastructure, fuel and munitions storage, and other areas will be key to America’s future force posture in the Indo-Pacific.
- Reassure allies and partners of America’s commitment to the Indo-Pacific region: “We hear over and over again from foreign counterparts that they are hedging their bets for the future because they don’t know if they can count on the United States.”
- The initiative will help deter Chinese aggression by strengthening the credibility of American deterrence: “The initiative will focus resources on efforts to convince the Chinese Communist Party that there is no quick, easy, or cheap victory to be had against the American military.”
US GOVERNMENT CONTRACTS
Highlighting a selection of $100 million+ government awarded contracts awarded between 22-26 June 2020:
MISSILE DEFENSE AGENCY
Raytheon Integrated Defense Systems has been awarded $2.2 billion contract under the Foreign Military Sales (FMS) programme to the Kingdom of Saudi Arabia (KSA). Under this production contract, the contractor will provide seven Army/Navy Transportable Surveillance and Control Model 2 radars, radar spares, obsolescence design, sustainment services and initial contractor logistics support for KSA. The Missile Defense Agency is the contracting activity.
US AIR FORCE
L3 Technologies has been awarded a $900 million IDIQ contract for simulator common architecture requirements and standards (SCARS). This contract provides for the definition, design, delivery, deployment and sustainment of a simulator common architecture across the Air Force’s training portfolio, along with the creation of a security operations centre and library and the execution of SCARS management services. The SCARS initiative will also incrementally implement a modular open systems approach, as well as a set of common standards for Air Force simulators. The Air Force Life Cycle Management Center is the contracting activity.
Northrop Grumman Systems has been awarded a $222 million contract for the Defense Support Program (DSP) Operations, Mission Threat Analysis and Engineering Sustainment (DOMES). This contract provides on-orbit satellite and anomaly resolution support, root cause analysis, mission threat analysis, mission test bed and space awareness and global exploitation as key components of the lifetime extension of the DSP. Space and Missile Systems Center is the contracting activity.
JCB received a $269 million contract for electric over hydraulic High Mobility Engineer Excavators, related hardware and ancillary services. US Army Contracting Command is the contracting activity.
GM Defense was awarded a $214 million contract for acquisition of the Infantry Squad Vehicle, installation kits, ancillary hardware and logistical support. US Army Contracting Command is the contracting activity.
Bath Iron Works has been awarded a $132 million modification contract to fund capital expenditure projects for shipbuilder and supplier industrial base efforts in support of the USS Arleigh Burke DDG-51 class destroyer programme. This modification will fund shipbuilder and supplier base efforts to address supply chain fragility and to ensure future readiness for the fleet. The Naval Sea Systems Command is the contracting activity.
US SPECIAL OPERATIONS COMMAND
L3 Unmanned Systems; Precision Integrated Programs; Arcturus UAV; Insitu; Wildflower International; and AAI, doing business as Textron Unmanned Systems is awarded six IDIQ contracts with a maximum combined ceiling of $975 million for Mid-Endurance Unmanned Aircraft Systems IV intelligence, surveillance and reconnaissance (ISR) services in support of US Special Operations Command enterprise requirements worldwide. This multiple-award acquisition supports competition at the task-order level to ensure the most capable platforms and payloads provide real-time, responsive airborne ISR solutions to Special Operations Forces. US Special Operations Command is the contracting activity.
Boeing was awarded a $439 million modification contract for new-build Apache AH-64E aircraft and Longbow crew trainers. US Army Contracting Command is the contracting activity.
BAE Systems has been awarded a $266 million modification contract for Bradley A4 Production Option Two, which awards 159 vehicles. US Army Contracting Command is the contracting activity.
Northrop Grumman Systems has been awarded a $333 million modification contract which exercises options for the production and delivery of three low-rate initial production MQ-4C Triton unmanned aircraft, two main operating bases and one forward operating base in an integrated functional capability-four and multiple-intelligence configuration, with associated export compliance support for the government of Australia. The Naval Air Systems Command is the contracting activity.
Ahtna-CDM JV; Bristol Design Build Services; Corbara MGS JV; Heffler Contracting Group; Macro Z Technology; and Teehee Engineering are awarded a nearly $100 million IDIQ multiple award construction contract for new construction, renovation and repair by design-build or design-bid-build of general construction projects located primarily within the Naval Facilities Engineering Command (NAVFAC), Southwest area of operations in California and Arizona. The work to be performed provides for new construction, renovation and repair within the North American Industry Classification System Code 236220. The various types of construction projects may include, but are not limited to, administration buildings, academic and applied instruction training facilities, maintenance/repair facilities, military operations facilities, aircraft hangars, fire stations, office buildings, laboratories, dining facilities, related structures and other similar facilities located in California and Arizona. The NAVFAC Southwest is the contracting activity.
DEFENSE LOGISTICS AGENCY
Steris was awarded a $225 million IDIQ contract for patient monitoring and capital equipment systems and accessories. The contracting activity is the Defense Logistics Agency Troop Support.
General Dynamics Electric Boat has been awarded an $869 million modification to previously awarded contract which includes continued design completion, engineering work, affordability studies and design support efforts for the Columbia Class fleet ballistic missile submarines (SSBNs). This modification also includes submarine industrial base development and expansion efforts as part of the integrated enterprise plan and multi program material procurement supporting Columbia SSBNs and the nuclear shipbuilding enterprise (Virginia class and Ford class). The contract modification also provides additional United Kingdom (U.K.) Strategic Weapon Support System kit manufacturing and effort to support expansion of the domestic missile tube industrial base. Specific effort includes design completion associated with the SSBN 827 technical variance documentation; non-recurring design effort for scope changes between the SSBN 826 and SSBN 827; design for affordability; lead ship component development lead yard support; follow ship lead yard support; and implementation of enhanced cyber security measures. Further, the action includes U.K. Strategic Weapon Support System kit manufacturing; expansion of the domestic missile tube industrial base; and submarine industrial base supplier development efforts. The submarine industrial base development and expansion efforts improve sub-tier vendor stability and gains economic efficiencies based on production economies for major components. The nuclear shipbuilding industrial base continues to ramp up production capability to support the increased demand associated with the Navy’s Force Structure Assessment. Improved capacity at the sub-tier vendors reduces risk across nuclear shipbuilding programs. The contract modification includes a fully priced option for the construction of SSBN 826 and SSBN 827, associated design and engineering support. For SSBN 827, the modification covers advance procurement, advance construction and subsequent fiscal 2024 construction of SSBN 827. This is a joint US and UK program. The Naval Sea Systems Command is the contracting activity.
No events reconfirmed this week.
No events reconfirmed this week.
Keep safe and healthy everyone.
Armada International / Asian Military Review