Aerospace & Defense Update
The Senate Armed Services Committee unveiled a $700 billion defense authorization bill that will set the stage for a showdown with House budget planners and the White House over national defense spending priorities. The Senate plan calls for a lower wage increase for troops compared to the House version as well as a smaller boost to troop levels. Instead, the additional funding would procure new equipment, including $3.1 billion for 24 Joint Strike Fighters, $1.2 billion for 12 MC-130J aircraft for the Air Force, and $400 million for two KC-46A tankers. The Navy would receive an additional $1.7 billion for 10 F/A-18 Super Hornets and six P-8A Poseidon aircraft along with an incremental $5.0 billion in funding for five ships over the president’s plan. The Army would receive an increase of $2.2 billion for ground combat vehicles and $3.0 billion for helicopter procurement. With the Senate, House, and White House proposals far exceeding the $549 billion sequestration cap, Republican and Democrat lawmakers will need to negotiate a deal to surpass the established cap.
In panel deliberations for 2018 defense spending legislation, Representative Barbara Lee led an amendment to remove the Authorization for Use of Military Force (“AUMF”) language from the bill. The AUMF, signed by President George W. Bush in 2001, authorized the president to use “all necessary and appropriate force” against persons who participated in the 9/11 attacks. Although that bill passed nearly 16 years ago, the executive branch has continued to call upon the AUMF to bypass Congress and authorize troop deployments and other military measures to counter actions of various terrorist and militant groups. The amendment aimed to end what Lee described as “a blank check” for the president and reestablish Congressional oversight of the president’s war–making powers. The House Appropriations Committee approved the amendment and will send the bill, without the AUMF, to the House floor.
Government Technology Solutions Update
IBM and the Air Force Research Laboratory (“AFRL”) are uniting efforts and resources to develop a supercomputing system to deliver state-of the-art sensory processing. IBM’s TrueNorth Neurosynaptic System’s artificial intelligence (“AI”) capabilities provide the ability to convert data such as images, text, and audio into symbols. AFRL seeks to combine this technology with existing symbol processing systems to create an innovative and cerebral machine capable of deep neural-network learning and information discovery. Weapons systems are expected to benefit the most from this newly enhanced system. The Air Force hopes that this new system can improve computing capabilities and enable the Air Force and the country as a whole to maintain its technical advantage among world powers. The technology is expected to be implemented mid-year 2018.
In line with recent government IT trends, the Air Force is implementing several initiatives to help detect and protect its weapons systems against potential cybersecurity threats. These plans include the engineering of hardware that can patch holes in security walls, implement agile computing automation that can quickly detect threats, and identify potential cybersecurity weaknesses in early stages of weapons development. In addition, the Air Force has created a new unit specializing in the detection of potential cyber threats called the Cyber Resilience Office for Weapons Systems, (“CROWS”). Through detailed analysis and research, CROWS works to identify weaknesses in the weapons systems to further mitigate risks of future cyber-attacks. By operationalizing these efforts, the Air Force hopes to better secure mission planning as well as excel in defending its systems against cyber-attacks in the future.
Vectrus Inc. (up 7.1%) – Share prices were up this week on unusually higher trading volumes.
ManTech International (up 6.5%) – Share prices were up on a positive stock upgrade from Loop Capital.
AMS Technologies AG has acquired Elforlight Ltd., a provider of diode pumped solid state lasers and optical parametric oscillators. Terms of the deal were not disclosed.
Hensoldt Sensors GmbH has agreed to acquire Kelvin Hughes Ltd., a provider of security and maritime radar solutions. Terms of the deal were not disclosed.
Kellstrom Aerospace has acquired Vortex Aviation, Inc., a provider of on-wing engine maintenance services and quick-turn engine repairs across all major commercial aircraft engine platforms. Terms of the deal were not disclosed.
Spell Capital Partners, LLC. has acquired Jet Edge, Inc., a provider of ultra-high pressure waterjet technology for the world’s leading airlines, the automotive industry, and industrial manufacturers. Terms of the deal were not disclosed.
Trelleborg AB has agreed to acquire Automated Dynamics, a provider of composite parts in a wide variety of shapes and sizes, including cylinders, cones, box beams, I-beams, coils, flat laminates, and complex geometries. Terms of the deal were not disclosed.