Tag Archive: Defense Contracting


I read an interesting article recently regarding how federal agencies have been trying to deal with their overly backlogged Freedom of Information Act requests for information that have apparently been piling up since the 2009 change in Federal direction about granting such requests. 

According to the article by Joseph Marks, in Nextgov, August 31, 2012, about half the agencies have actually reduced the number of FOIA exemptions (information they refused to release formerly, under the premise that such information is exempt to FOIA requests). 

The article also talks about agencies using technology to improve processing time for FOIA requests and the use of the FOIA libraries to post information that might commonly be requested via FOIA requests. 

It seems to this observer that if the Obama administration truly wishes to increase transparency, that more transparent action taken toward prosecuting the many cases of wrongdoing and criminal activity in the realm of federal defense contracting needs to take center stage.  Corruption, influence pedaling, cronyism, fraud, technology theft, use of the “revolving door” by people between industry and the federal government (and vice versa) in order to better serve the needs of the corporations they serve, must be stopped cold in order to allow the oversight that supposedly is in place now to be able to actually function and prevent such atrocities.  The Administration must see that a general clean up is put swiftly into action, and mean it so that these issues are handled first for any genuine transparency in FOIA request handling to be a reality. 

As long as intensive efforts within corporations and their government confederates go into covering up corruption, theft, and fraud within the federal defense contracting world, and wrongdoers that are occasionally exposed, usually by federal employees trying to do their oversight jobs, the status quo, cover-ups and sudden retirements of culpable individuals and use by such of convenient revolving doors will continue to provide sufficient threat of exposure to thwart any serious transparency granted to a FOIA request hopeful, preventing s/he from every getting an honest and “transparent” accounting of what is really going on in federal agencies, particularly in relationship to defense contractors and other corporate interests. 

This article describes a tempest in a teapot, and does not address the real problems related to FOIA requests not being honored by those trying to get to the truth of wrongdoing in the federal government. 

GFS

Link to article:  http://www.nextgov.com/big-data/2012/08/agencies-continue-struggle-foia-requests/57819/

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As more accounts of problems with Boeing QA, and decisions made in the past which may not have been in the best interests of public safety and American Taxpayer’s interests, I expect we’ll see more articles like this.  CYA? 

-GFS

 

Boeing sues Alcoa over parts for F-22 Raptor fighters

Seattle Times aerospace reporter

Some of the U.S. Air Force’s new F-22 Raptor fighter jets are flying with a manufacturing defect in crucial titanium supports in a section built by Boeing.

The Air Force agreed to allow the defect to stay because of the cost and delay to fix it. But the jets will require more frequent inspections because of the potential for a catastrophic failure in flight.

Details of the problem emerged late last month when Boeing sued Alcoa, the Pittsburgh, Penn.-based subcontractor that forged the titanium parts. The suit seeks more than $12 million for extra costs incurred because of the alleged shoddy manufacturing.

Boeing said the jets are safe for military operations as long as the potentially defective parts are inspected regularly.

“The Air Force has determined there is not a safety-of-flight issue here and they have not grounded the aircraft,” said Boeing F-22 spokesman Doug Cantwell. “There will be more frequent inspections, making sure no cause for concern does develop. Boeing employees will keep an eye on them.”

Lockheed Martin is the prime contractor on the F-22, which will replace the Air Force’s aging Boeing-built F-15s and other aircraft. As a subcontractor, Boeing builds the Raptor wings and aft fuselage in Seattle.

From 2000 through 2005, Alcoa supplied Boeing with the forged titanium parts that provide structural support in a section of the aft fuselage that “connects the wings to the fuselage of the aircraft,” the filing states. This section’s “failure could result in the loss of the aircraft.”

Each aircraft has five forged titanium supports per wing; four on each side could be affected.

During manufacturing, these eight supports must be heat-treated in a furnace under precise conditions to strengthen the metal’s microstructure.

Boeing’s complaint, filed in U.S. District Court in Seattle, alleges Alcoa “failed to follow required procedures” and failed to add a crucial extra 20 minutes in the furnace that was needed for proper forging.

After that was discovered in fall 2005, Boeing’s testing established that the imperfect forging procedure “increases the rate of crack growth and reduces the damage tolerance life” of the parts — defined as “the length of time for a crack to propagate undetected from a manufacturing defect to cause the catastrophic failure of the aircraft.”

In April 2005, Alcoa was replaced as supplier of the forgings “because of cost issues” unrelated to the defect, Boeing’s Cantwell said.

By then, Alcoa had delivered 695 of the forged titanium supports, of which 384 were installed on 48 jets, 88 were installed on 11 partially assembled aircraft and 179 were at a stage where they could still be inspected and tested.

To date, a total of 459 of the forgings have been inspected and 71 have proved defective. Inspections will continue into next year.

Boeing and Alcoa attempted to develop a “reheat” procedure to fix the defective parts, but this caused metal distortion and “proved economically infeasible,” the filing states.

The inspections and extra engineering required to develop the reheat procedure cost Boeing at least $5.3 million.

In addition, the Air Force withheld $27 million in payments until it reached a settlement with Boeing last June. The settlement requires Boeing to perform $6.4 million worth of extra work at no cost.

Boeing wants Alcoa to reimburse all the extra costs plus legal fees.

Alcoa spokesman Kevin Lowery downplayed the issue as a “commercial dispute” and said, “We weren’t able to come to some kind of agreement. Now we’re going to move the commercial dispute into another venue.”

Lowery conceded “there is a defect there” but declined to discuss who was at fault.

Lockheed Martin spokesman Rob Fuller declined to comment.

In the end, Boeing, Lockheed Martin and the Air Force chose to live with the defective Alcoa forgings in the first batch of 101 aircraft, because they “may only be removed at substantial cost and disruption to aircraft-production operations,” Boeing’s filing said.

Boeing’s filing describes the continued use of the defective forgings as “commercially reasonable.”

“Discontinuing use of the Alcoa … forgings would shut down the F-22 aircraft production line for months, exposing Boeing and Lockheed Martin to damage claims from the Air Force,” the filing states.

Air Force public-affairs officer Lt. Col. Jennifer Cassidy said in an e-mail, “The Air Force would never do anything that would compromise the safety of our airmen.”

This year’s Air Force budget estimates put a price tag of $137 million to the F-22 Raptor. Lockheed has so far delivered 110 Raptors.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Cutbacks likely on Army work

Budget constraints are likely to force the U.S. Army to cut back on the combat capabilities of the $159.3 billion system of vehicles, drones and communications that Boeing is developing for the service, congressional auditors said Thursday.

There are “significant technical challenges” in producing software codes and communications for the Future Combat Systems (FCS) program, the Government Accountability Office said.

Army cost estimates are based on “uncertain” data, and as the program moves to full production in 2013, it will compete for funds with the Army’s need to replace equipment lost or damaged in Iraq, new weapons and continued conversion of the force into brigades from divisions, GAO Director of Acquisition Management Paul Francis told a House Armed Services Committee panel.

“The Army will likely continue to reduce FCS capabilities in order to stay within available funding limits,” Francis said.

The Army wants about $3.6 billion next year for the program.

Boeing and Science Applications International are the top contractors leading the development phase.

Bloomberg News

 

Role of military planes declines in Boeing’s defense business

Seattle Times aerospace reporter

Boeing once built massive fleets of World War II and Cold War military planes. But right now, the world’s biggest airplane builder can’t boast even a single prime contract to supply the U.S. military’s next generation of fighters, bombers, tankers and transport planes.

Last month’s loss of the Air Force tanker contract to Northrop Grumman and its European partner, if it stands, further weakens Boeing’s already diminished role in producing future warplanes.

“The Boeing Co. morphed,” said Wall Street analyst Joe Campbell of Lehman Brothers. On the defense side, building airplanes “is not even what they’re known for anymore,” he said.

In recent years, Boeing’s defense unit has shifted focus from planes to big-ticket electronic-hardware systems: satellites, missile defense, networked warfare and border-surveillance projects.

The company’s commercial and defense units also have different perspectives, as the debate over the tanker loss makes apparent.

On one side, Boeing Commercial Airplanes sells most of its airplanes to international buyers and champions free trade and offshore outsourcing.

On the other, the defense division relies on the U.S. government for the vast majority of its business, and warns of the dangers of giving a European company the lead role in building the Air Force tankers.

“Where’s the synergy?” asked Teal Group industry analyst Richard Aboulafia skeptically.

Increasingly, the two main divisions of the Boeing colossus — formed by a series of late-1990s mergers — look more like distinct companies with divergent interests.

“These are two legs walking in opposite directions,” said defense analyst Loren Thompson of the Lexington Institute.

Almost 8,000 of Boeing’s 70,000plus employees in Washington state work in the defense division, and many of those jobs depend on the shrinking overlap between Boeing’s commercial and military airplanes.

A tanker win was supposed to be a vindication of the company’s “One Boeing” strategy: deploying people, technology and resources so that the commercial and defense sides complement each other.

With the loss, it’s clear that more than ever there are two Boeings. One makes airplanes. The other increasingly does not.

Flying Fortress

Boeing made its first big impact in military aviation with the World War II B-17 Flying Fortress; it built 6,981, and other companies using its design built 5,745 more.

In the following decades it made large quantities of long-range bombers and fighters.

It’s no accident, however, that Boeing’s military division — the 71,000-employee Integrated Defense Systems (IDS) — now doesn’t have airplanes in its name.

IDS delivered just 84 airplanes last year, including 16 big C-17 transport airplanes and 44 fighter jets. Boeing’s commercial side, by contrast, delivered 441 airplanes.

Boeing’s first jet, the 707, gained a massive advantage against its commercial competitors, thanks to military sales for the original air-refueling tankers the company built starting in the 1950s.

“The Air Force has more 707s than any airline in the world has of a single airplane type,” said Campbell. “Historically, Boeing wouldn’t have been Boeing without all those 707s.”

But now, IDS’ contracts for U.S. military jets are running out.

In 2001, Lockheed Martin beat Boeing in the landmark contest for the F-35 Joint Strike Fighter (JSF) program. That plane will replace the Navy’s F/A-18 Super Hornets and the Air Force F-15s, built at Boeing’s plants in St. Louis.

Though Boeing builds part of the Air Force F-22 high-tech fighter jet in Seattle, prime contractor Lockheed assembles it in Georgia.

International sales may extend some of the older programs, but not forever.

The Boeing defense plant in Long Beach, Calif., will stay open only as long as it can get new C-17 cargo-jet orders, which are expected. Without them, IDS Chief Executive Jim Albaugh said last month, the line would close around 2010.

Boeing also builds the two main helicopters for the U.S. Army and the body of the tilt-rotor V-22 Osprey, a hybrid of helicopter and turboprop plane.

The tanker loss, which Boeing challenged March 19 in a protest to the Government Accountability Office, would shut IDS out of one more big military-airplane category.

For the next generation of military planes, Boeing is the prime contractor on just one program: the Navy’s P-8 submarine hunter.

Based on the 737 commercial jet, the P-8 demonstrates how the company’s two divisions can collaborate, with aircraft assembly work by Boeing Commercial in Renton and high-end systems engineering by IDS employees in Seattle.

But apart from that, Boeing’s defense division could wind up more a parts maker than a plane maker.

Around 2000, IDS’ primary business focus shifted from building airplanes to planning and implementing a succession of hugely expensive defense programs. These included a constellation of classified intelligence satellites, a ballistic missile-defense system, a futuristic network of Army combat vehicles and a “virtual fence” along the U.S. border.

“We’ve grown these programs from concepts to billion-dollar franchises,” said Chris Raymond, the defense unit’s vice president of business development

But Boeing’s experience with such contracts has been challenging and sometimes painful.

Program abandoned

Boeing burned through at least $4 billion in federal money on a secret CIA intelligence satellite program called Future Imagery Architecture, The New York Times reported, before the government abandoned the entire program in 2005.

IDS’ Future Combat Systems project to outfit half the Army with networked weapons, drones and vehicles at a price tag of $160 billion is under imminent threat of severe cutbacks from Congress.

And Boeing’s initial 28-mile stretch of surveillance sensors on the Arizona border with Mexico — a $200 million project that’s relatively low-tech by Boeing standards — was months late and plagued by technical glitches. Plans to extend it have been effectively shelved.

Teal Group’s Aboulafia says these huge and lucrative defense projects come with big risks.

“Will Congress keep funding these behemoths?” he asked. “Some are so ambitious they may die of their own technological complexity.”

What’s more, he said, “no one really knows what the profitability is.”

Financial uncertainty

Boeing’s defense division has been highly profitable since 2004, with earnings averaging more than 10 percent of revenue. But ahead, IDS faces uncertainty.

After years in which the big high-tech projects swelled IDS revenues, in 2007 they dropped slightly.

The up-and-down cycles in defense and commercial sides were truly complementary between 2000 and 2004: Boeing Commercial revenue sank from $31 billion to $20 billion, while IDS sales took exactly the reverse trajectory and grew from $20 billion to $31 billion.

Many longtime Boeing employees in the Pacific Northwest still view negatively the 1997 merger with McDonnell Douglas that created the core of IDS, and wonder how the commercial unit has benefited.

But analyst Campbell sees the balancing of revenues as enough reason to call the combination a success.

“They merged, and the defense business went through the roof,” he said.

Boeing Chief Financial Officer James Bell, speaking at an IDS leadership meeting in California last month, talked up the importance of synergy between the defense and commercial units.

“It sets the stage for how we’ll differentiate ourselves from our peers,” he said.

Even after the tanker loss, IDS Vice President Raymond denies a divergence between the two divisions: “We’re getting to be a closer company.”

The defense unit taps into Boeing Commercial Airplanes’ expertise in lean manufacturing, Raymond said. And it uses the global network of commercial contacts to help sell military hardware overseas.

Management talent also migrates easily between the commercial and defense units, Raymond said. The new head of the 787 Dreamliner program, Pat Shanahan, crossed from commercial to defense, then back.

Still, the benefits seem to flow more toward IDS than the commercial division.

Raymond conceded that big defense contract awards “have become few and far between,” so a single competition can “alter your position significantly.”

Having lost the fighters and the tankers, what’s the next big hope for IDS? In January, Boeing announced it will team with Lockheed to compete for the right to build the next-generation U.S. bomber for service around 2018.

Even if Boeing wins, that aircraft won’t be based on a commercial plane.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

WORLD WAR II

B-17: Boeing built nearly 7,000 of the Flying Fortress bombers crucial to winning World War II. Other companies built 5,700 more using Boeing’s design. Above, workers at Seattle’s Boeing Field celebrate the 5,000th B-17 on May 12, 1944.

THE COLD WAR

KC-135: Several hundred tankers built by Boeing starting in the Eisenhower administration are still refueling Air Force planes.

VIETNAM WAR

B-52: The Stratofortress, built in Seattle and Wichita, Kan., as a long-range nuclear bomber, first entered combat in Vietnam using conventional weapons.

THE PRESENT

Missile defense

Boeing leads work on U.S. defenses against long-range ballistic missiles and manages other complex technical projects, but its roster of military airplanes is shrinking. At left is an IFT-9 Interceptor, readied for launch.