Mission Success Starts with a CLEAR PICTURE

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TEL AVIV — A visit to the IsraelNavy’s high command center, thefirst ever by an international

media organization, validates theold truism that first impressionsare often deceiving.

Belying the stark simplicity ofthe cramped basement war roomknown here as Mishlei — a He-

brew acronym for Supreme Con-trol Post — is a sophisticatedsensor-fused command-and-con-

trol network that supports powerprojection, allows for interopera-

bility with air and land forces, andprovides a high-fidelity picture ofmaritime activity hundreds of

miles beyond Israeli borders.From here, through a handful of

screens and workstations, Israel’s

smallest service monitors themore than 90 percent of Israelicommerce that comes from the

sea and controls an operationaltheater many times larger than theIsraeli airspace and ground terri-

tory combined. Through an in-house-developed

C4 network, the Mishlei builds a

continuously fortified situationalpicture from stationary coastal

See ISRAEL NAVY, Page 6

Inside Israel Navy’s High Command Center

JACK GUEZ/AFP/GETTY IMAGES

High-Seas Intercept: Israeli naval commandos stand on the deck aboard the

Panamanian-flagged Klos-C as it is escorted into the southern Israeli port of Eilat by

Israeli warships on March 8, 2014, after it was intercepted by the Israeli Navy.

Fused DataFortifiesMaritime Control

By BARBARA OPALL-ROMEWASHINGTON — Boeing, which

along with partner Lockheed Mar-tin submitted the losing bid in thecompetition to build the US Air

Force’s new Long Range StrikeBomber, filed a protest Friday withthe Government Accountability

Office over the Defense Depart-ment awarding the contract to Nor-

throp Grumman on Oct. 27.The GAO now has 100 days to re-

view the protest and issue a ruling.

Boeing and Lockheed Martincalled the selection process for theLRS-B “fundamentally flawed” in a

joint statement. Specifically, theytake issue with the government’scost evaluation, saying it did not

properly reward the team’s propos-als to break the upward-spiralinghistorical cost curves of defense

acquisitions, and did not properlyevaluate the relative or compara-tive risk of Northrop Grumman’s

ability to perform, as the solicita-tion required.

Northrop Grumman, maker of

the stealth B-2 bomber, won theaward in part because of a project-ed cost per plane of $511 million in

2010 dollars, well below the Penta-gon’s cost cap of $550 million. Infiscal 2016 dollars, those figures

translate into $563 million and$606 million, respectively.

Randy Belote, Northrop Grum-

man’s vice president of strategiccommunications, said in a state-

ment that the company is “disap-

pointed” by the protest. The AirForce’s “thorough and disciplined

process” took into full account the

bids’ abilities to execute the pro-

Boeing ProtestsNorthrop’sLRS-B Contract

By ANDREW CLEVENGER and LARA SELIGMAN

See BOMBER PROTEST, Page 8

WASHINGTON — When the US de-

stroyer Lassen passed near a new-ly built artificial island on SubiReef in the South China Sea’s

Spratly Islands on Oct. 27, it wasalready being escorted by severalChinese Navy warships. The US

ship represented a challenge to

China’s attempt to create land anddeclare it and the surrounding

areas sovereign territory.

The Chinese naval ships, report-

ed a US Navy source, behaved pro-fessionally during the Lassen’stransit. “They shadowed the Las-

sen but stayed at a safe distance.”But several smaller vessels, de-

scribed by the source as merchant

ships or fishing vessels, were moreprovocative, crossing the Lassen’sbow and maneuvering around the

destroyer even as they kept theirdistance.

“There were Chinese merchant

vessels present that were not asdemure as the Chinese Navy,” the

US Navy source said Oct. 30. “One

came out of its anchorage in the is-

land and crossed the destroyer’s

See CHINA PROXIES, Page 6

China’s ‘Little Blue Men’ Take Navy’s Place in Disputes

By CHRISTOPHER P. CAVAS

US NAVY

Proxy Confrontation: A Chinese trawler

manned by maritime militia attempts to

interfere with the US intelligence ship

Impeccable in March 2009 in the South

China Sea.

EUROPE

Setting New PrioritiesBritain expects soon to release itsnew Strategic Defence and Secu-rity Review, along with a new

national security strategy. Page 4

18 Turkey: US footdragging irks officials.

NORTH AMERICA

Boost for Navy?Canada’s maritime industry ex-pects a financial lift with a with-

drawal from the F-35 program.Page 18

3 US: Lockheed completes Sikorsky buy.

ASIA & PACIFIC RIM

China Expands ReachBy deploying advanced fighter

aircraft to Woody Island in theSouth China Sea, Beijing broad-ens its ability to control and

intimidate. Page 24

INTERVIEW

Homaid Al ShemmariThe chairman ofEmirates DefenceIndustries Com-

pany discusses global defenseindustry trends, the changinggeopolitical landscape around the

UAE, and efforts to develop itsmilitary industry. Page 30

Note to ReadersThe next print issue of DefenseNews following this double issue

will publish Nov. 30. Follow thelatest news at DefenseNews.com.

MIDDLE EASTSECURITY 11

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November 9-16, 2015

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InBrief

WASHINGTON — Lockheed Martincompleted its $9 billion acquisition

of Sikorsky Aircraft on Friday, re-placing United Technologies as theAmerican helicopter maker’s par-

ent company. “Today we are proud to welcome

the Sikorsky team to Lockheed

Martin,” said Marillyn Hewson,Lockheed Martin chairman, presi-dent and CEO, in a prepared state-

ment. “Lockheed Martin andSikorsky share a legacy of innova-

tion and performance that hasshaped the history of aviation formore than a century.”

Lockheed Martin named DanSchultz, former vice president ofLockheed’s Ship & Aviation Sys-

tems segment, as president of Si-korsky. Sikorsky will be assignedto Lockheed Martin’s Mission Sys-

tems and Training business unit.In a recent interview with De-

fense News, Samir Mehta, presi-

dent of Sikorsky’s DefenseSystems & Services unit, said

while talks between the company

and its new owner were limited today-one integration while the salewas pending, the two companies

appear to be a good fit.“Lockheed’s a great company so

we’re excited about joining that

portfolio,” Mehta said. The two companies have already

worked on the presidential heli-

copter and naval programs, sothere is already an established re-lationship between the two com-

panies, he said. “I think it’s fair to say that they

are excited by some of the thingswe’re working on, and we’re excit-ed by some of the things they’re

working on,” he said. “I think it willbe a good fit. Once we’re part of thefamily they’ll have to make inde-

pendent judgments, but the feed-back we’re [receiving] across theboard has been pretty positive.”

Customers, both in the US andabroad, have asked whether Sikor-sky, maker of the Army’s iconic

Black Hawk helicopter, will retainits corporate identity, he said.

“Lockheed didn’t go and buy our

company and pay $9 billion to turnus into a department of Lockheed.Part of what they paid for was the

brand, the reputation, the historyand the legacy, all the things that

go with it. I don’t think they want todestroy value there, either,” hesaid.

Even under new ownership, thekey to success will be to focus onproviding customers with a com-

petitive advantage on the battle-field, Mehta said.

“If you keep that in mind and in-

novate technologies and prod-ucts,” he said, and keep them“aimed towards that singular ob-

jective of maintaining that compet-itive advantage on the battlefield,

you will win. Your ideas will win

out. Your technology will win out.”The deal, one of the largest de-

fense mergers in recent memory,

caused Pentagon acquisitionschief Frank Kendall to suggest that

congressional action may be nec-essary to give the US Defense De-partment the ability to disallow

certain deals deemed not to be inthe Pentagon’s best interest.

While not specifically criticizing

the Lockheed-Sikorsky deal, Ken-dall indicated that he was con-cerned by the trend toward few

prime platform contractors in thedefense industrial base. N

Staff writer Aaron Mehta contributed tothis report.

Lockheed CompletesSikorsky Acquisition

By ANDREW CLEVENGER

MC3 ANDRE RICHARD/US NAVY

Team Effort: Sikorsky and Lockheed Martin already cooperate in building the MH-60RSea Hawk helicopter for the US and allied navies, with Sikorsky handling the airframewhile Lockheed supplies the mission systems. Here, an MH-60R flies near the Aegisdestroyer Chung-Hoon.

Netherlands Sticks With Patriot The Netherlands has decided to

modernize its existing Raytheon-

made Patriot air and missile de-fense batteries instead of buying anew system like Lockheed Mar-

tin’s Medium Extended Air De-fense System.

The decision doesn’t help build

the momentum that Lockheed andMBDA Deutschland — who arejointly developing MEADS for Ger-

many — are hoping to gain for

MEADS among NATO countries.Instead of buying MEADS, an in-

dustry source said, the Dutch will

modernize their Patriot batteriesbetween 2017 and 2021, extending

the system’s life to at least 2040.The Dutch reasoned, according

to the source, that modernizing Pa-

triot would be better than waitingfor a system that likely won’t be

completed inside of 10 years.

The Dutch recently removed itsPatriot batteries from Turkey’sborder with Syria in order to mod-

ernize the systems. The US also re-moved its batteries.

Italy Wins US OK To Arm ReaperYears of frustrated waiting by

Italian Air Force officials finally

ended with US State Departmentapproval of arming Italy’s ReaperUAVs.

The deal, which must still be cer-tified by Congress, will make Italy

the second country after the UK to

be authorized by the US to arm itsReapers, and comes four years af-

ter Italy first requested permission

in 2011.The green light from the US in-

volves a $129.6 million deal, with

General Atomics acting as primecontractor, for weapons purchasesby Italy. The proposed sale in-

cludes 156 AGM-114R2 Hellfire IImissiles, 20 GBU-12 laser-guided

bombs, 30 GBU-38 Joint Direct At-

tack Munitions and other arma-ments.

Egypt Receives Delayed F-16sThe Egyptian Air Force has tak-

en delivery of the final four of 20

ex-US Air Force Block 52 F-16Dmultirole fighter jets in yet anothersign of thawing diplomatic and de-

fense relations between the na-tions.

The US halted delivery of the

jets, which were ordered in 2006,along with other key items underthe $1.3 billion annual US military

aid package to Egypt in July 2013

after the Army toppled the coun-try’s first democratically elected

president, Mohammed Morsi, in a

bloody coup that was led by cur-rent President Abdel Fatah el-Sisi.

In March of this year, US Presi-dent Barack Obama signed a de-cree to restore military aid to

Egypt. In July, eight F-16s were de-livered to Egypt; the last four air-

craft arrived Nov. 4.

NATO Chief: Counter RussiansNATO head Jens Stoltenberg

said the alliance must counter aRussian military build-up in theBaltic, Black Sea and eastern Med-

iterranean, which could give Mos-cow control of key areas in a crisis,Agence France-Presse reported.

He said the alliance must alsoconsider doing more to reassureeastern member states, which

have been unnerved by Russia’s in-tervention in Ukraine.

As ties with the West have deteri-

orated, Russia has boosted its mil-itary presence in its Kaliningrad

enclave, which sits west of and on

the blind-side of the Baltic states.Moscow also has deployed troops,aircraft and Navy ships to Syria.

Stoltenberg said Russia is gain-ing the ability to exercise controlover strategic points, and NATO

must ensure it can carry out itsmissions in this environment. N

FOR THE RECORD

n Tom Neil discusses his days as a WorldWar II wing commander in the Royal Air Forceduring the Battle of Britain.n Retired Capt. Max Duncan, US Navy,discusses submarine patrols and the spirit ofinnovation in the Pacific during World War II. n Commission Vice Chair Edwin Foun-

tain, US World War One Centennial Commis-sion, reviews commission efforts to build amemorial commemorating World War I.TV.DefenseNews.com

MOST POPULAR

On the WebLockheed Gets Nod for $5B JSF

Deal

With a preliminary agreement in hand, talksbetween Lockheed Martin and the Pentagonfor the Joint Strike Fighter Lot IX Joint Strikelow-rate initial production contract continue. DefenseNews.com

On VideoF-35 Fires Gun During Aerial Test

for First Time

For the first time, a US Air Force F-35 fighterjet has fired its internal gun from the air.DefenseNews.com

On TwitterRussian Militancy Drives Eastern

European Modernization

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4 DefenseNews November 9 - 16, 2015 www.defensenews.com

WorldNews

LONDON — Five years after Britain’s dire fi-nances triggered a Strategic Defence and Se-

curity Review (SDSR) that axed capabilities,force numbers, readiness and ambition, thegovernment gets to have another go at set-

ting out its military priorities in the next fewweeks when it wheels out the new version ofthe review.

A more capable intelligence, surveillanceand target-acquisition force, reversing cuts

to combat aircraft numbers, a decision onthe size of the F-35 fleet, a commitment tothe new Type 26 frigates, spending on inno-

vation, improving readiness levels andgreater international partnerships could beamong the themes the SDSR will address,

said analysts and others. The week starting Nov. 23 has been pen-

ciled in to release the SDSR, along with a

new national security strategy and a govern-ment-wide spending review.

The Ministry of Defence budget may effec-

tively be protected, but the departmentcould still be required to meet huge efficien-cy savings targets as part of the spending re-

view. While July’s unexpectedly positive five-

year defense-spending settlement has put

the MoD in a much better place, toughchoices remain for the government on prior-ities across a range of equipment, manpow-

er and other issues.It’s not just the budgetary situation that

has changed the standing of defense.

Analysts said the government now acceptsthat the rapidly changing geopolitical situa-tion posed by Russian aggression, develop-

ments in the Middle East and North Africa,and the growing pressures on homeland se-

curity require a revised approach.

One of the capability judgments the Brit-ish must make is whether Russia will be the

potential enemy against which it measures

its forces, said Ben Barry, senior fellow forland warfare at the International Institute ofStrategic Studies think tank in London.

“The UK has to decide whether Russiancombat capability is to be its benchmark,”he said. “If Britain is serious about contrib-

uting to NATO deterrence then the forces itsends to exercise in the alliances front-linestates need to be of sufficient quality to act

as a real deterrent. That has big implicationsfor armoured vehicle and other programs.”

The international dimension of SDSR will

likely be reflected by the British bolsteringdefense engagement and overseas partner-ships, analysts said.

“A new naval base is being built for the

Royal Navy in Bahrain and foreign secretaryPhilip Hammond said at the Manama Dia-

logue last week that Britain would shortlygo further and unveil a new Gulf strategy,”Barry said. “That may involve a more sus-

tained presence in the region with exer-cises, deployments and even some modestforward basing of forces.”

Alex Ashbourne Walmsley, of Ashbourne

Strategic Consulting, said there will likelybe more emphasis on international partner-

ships, as well.

“You can expect cooperation not just withour usual partners, France and the US, but

also with the Netherlands and Germany,”she said. “Look for announcements comingup on joint training, and cooperation in

counter terrorism and cyber.”While the likely contents of SDSR 2015 are

now known to only a select few politicians,

military officers and civil servants, therehave been several broad pointers as to whatit may contain.

Most prominently, Gen. Sir NicholasHoughton, the chief of the defense staff, out-lined some possible priorities during a Sep-

tember speech to the Chatham House think

tank. He picked out war-fighting resilience,boosting special forces, spending more on

innovation, increasing RAF combat num-bers, improving surveillance and targetingcapabilities, and resolving critical manpow-

er shortage challenges among the key issueson the SDSR agenda.

Houghton’s speech followed earlier state-

ments supporting raised ISTAR and specialforces spending by Prime Minister David

Cameron after the Conservative general

election win in May.Last month, Cameron preempted the

SDSR by announcing that the Royal Air

Force (RAF) was to buy more than 20 un-manned air vehicles to replace the 10 armedPredator machines presently deployed

against the Islamic State group in Iraq andSyria.

There’s also a hangar full of other capa-

bility issues that could be addressed, includ-ing committing to a new maritime patrolaircraft, improving cyber defense and offen-

sive capacity, extending the out-of-servicedate of the C-130J Hercules fleet and goingahead with a new mechanized infantry vehi-

cle for the British Army.

In terms of capital spending, the Navy willbe the main beneficiary with a renewedcommitment to the new nuclear deterrent,

the operation of the second aircraft and,possibly, the trailing of a future submarinecapability beyond the Astute hunter-killers

now entering service, Ashbourne-Walmsleysaid.

Howard Wheeldon, an analyst who spe-

cializes in air power, said he thought theSDSR would roll back some decisions madefive years ago to reduce fighter squadron

numbers. Two additional Typhoon squadrons made

up of Tranche 1 standard aircraft due to be

taken out of service in 2019 and, eventually,another F-35 squadron could be added tothe lineup, he said during a private briefing

of executives at a London law firm lastweek.

Defence Procurement Minister Philip

Dunne confirmed in Parliament Nov. 4 thatextending the lift of Tranche 1aircraft is part

of the SDSR deliberations.Wheeldon also said he expects to see the

RAF’s Sentry E-3 airborne early warning air-

craft fleet upgraded and retained in serviceuntil 2035 and the Sentinel battlefield sur-veillance platform continued until at least

2021, rather than being taken out of servicein 2019 as planned.

Ashbourne-Walmsley cautions, though,

that the SDSR may cover the capability is-sues but avoid the detail.

“I don’t think SDSR will be nearly as spe-

cific as people want,” she said. “The MoDwill be wanting to keep its options openrather than be precise about announce-

ments on kit or force numbers.“They have virtually no new money to

spend in the next two years, so why would

they box themselves in with detailed pro-curement announcements now?” she said.

One example of that is the decision about

whether or not to replace a maritime patrolaircraft (MPA) capability axed in 2010’sSDSR.

Sources say the government is unlikely togo much further than state a commitment tothe MPA requirement in the SDSR, rather

than go with the RAF’s preference to buy theBoeing P-8 or run a competition.

It’s not just military capabilities that are

likely to be on the review menu, either. In-dustrial capabilities will also be on the agen-

da.

Paul Everitt, CEO of the ADS Group de-fense and aerospace trade lobby, said thatthe message from industry has been about

the need to encourage research and devel-opment, the wider prosperity agenda, secu-rity of supply and sustaining key

capabilities.“I don’t know the detail of what they are

likely to say but innovation will be a key

theme, the prosperity agenda will be a keytheme and there will be some recognition ofthe economic and industrial contribution

made by the defense and security sectors,”he said. N

Email: achuter@defensenews.com.

MARCOS MORENO/AFP

New Capability: HMS Astute, one of the British Royal Navy’s new nuclear-powered submarines, lays at dock inGibraltar on its maiden call in March 2014.

Ahead of Latest Strategic Review,Britain Faces Tough Choices

By ANDREW CHUTER

6 DefenseNews November 9 - 16, 2015 www.defensenews.com

WORLD NEWS

sensors and onboard electronic, signals, op-tical and intelligence systems for operations

ranging from mere minutes to 48 hoursaway.

It was from here, underneath the Navy’s

administrative headquarters in the IsraelDefense Forces (IDF) compound in Tel Aviv,that Lt. Col. A., commander of the service’s

Maritime Control Group, spent 51days mon-itoring the beaches for enemy frogmen andcontrolling on behalf of upper-echelon brass

a third of all IDF artillery fired in the sum-

mer 2014 Gaza War.And it was here, from a setup smaller than

a typical municipal emergency response

center, that the same young officer man-aged the March 2014 capture of an Iranian

arms cache in international waters some

1,500 kilometers from Israel’s Red Sea port. “I sat here, next to the chief of staff of the

Navy and there sat the IDF chief of staff and

the defense minister. It was all managedfrom here,” the officer recalled of the high-

seas seizure of Klos C, a Russian-built, Mar-

shall Islands-owned, Panamanian flaggedweapons smuggling ship.

“Mishlei is the heart that manages and

controls all the activities of the Israel Navy.

We open it only in combat operations, spe-

cial missions or emergency situations ... andwe’re connected to all the other service and

territorial command centers feeding into

the pit,” the officer said, using the slang ref-erence for the IDF General Staff’s J3 opera-

tional center.He added, “In the Israel Navy, size doesn’t

matter. For us, it’s sufficient. And more im-

portantly, we know how to work in parallelto other posts.”

Col. G., commander of the Navy’s C4

Branch, noted that the central command-and-control network connecting all air-, sur-face-, undersea- and coastal-based sensors

and communications systems was devel-

oped at the service’s software developmentcenter in Haifa.

“We develop the capabilities exactly tai-

lored to our mission. Whether they’re on thecoast or on individual platforms, the entireIsrael Navy is connected by our in-house

systems,” the officer said. “And with thesupport of the IDF C4I branch, we’re con-

nected strategically with other services and

we’re becoming increasingly joined at thetactical levels.”

According to the Navy C4I chief, the ser-

vice is “a pioneer” in cyber defenses. “We’vemade huge efforts over many years to devel-

op cyber-secure capabilities, systems and

ISRAEL NAVYFrom Page 1

See ISRAEL NAVY, Page 8

bow but at a safe distance, and theLassen did not alter course as themerchant ship circled around.”

Fishing vessels in the area addedto shipping traffic in the immedi-ate area, the source said. But the

extra craft seem to have been pre-sent, the source noted, “becausethey anticipated the Lassen’s tran-

sit.”China has been known to use ci-

vilian ships as government prox-

ies, often to harass foreign vessels,and several analysts have beenscrutinizing current and recent in-

cidents to determine who’s onboard those mysterious vessels.

Andrew Erickson, an associate

professor at the US Naval War Col-lege and well-known authority onChinese naval and maritime af-

fairs, is pretty sure he knows. Hesuspects the Chinese naval militia,forces he’s dubbed “little blue

men” — a reference to the “littlegreen men” employed by Russia in

Crimea and the Ukraine to insinu-ate military forces into a regionwithout clear identification.

One clue, Erickson noted, is thatthere usually aren’t that many fish-ing vessels around Subi Reef.

“Actual numbers of fishing ves-sels regularly present in the Sprat-lys appear relatively low,” he

observed Nov. 2. “If you look at itrationally, it’s pretty clear the oper-ators of those fishing boats were

maritime militia, especially tohave done that maneuver” aroundthe destroyer’s bow.

“China is trying to use these gov-ernment-controlled fisherman be-low the radar to get the bonus

without the onus to support itsSouth China Sea claims,” Ericksonsaid. “It’s a phenomenon little-

known or understood in the US.“While Russia’s little green men

in Crimea are widely known, insuf-

ficient attention has been paid toChina’s little blue men in the SouthChina Sea,” he said. “It’s so differ-

ent from what the US does. Peoplearen’t familiar with it, it’s hard towrap their heads around it.”

At least a half dozen nations are

jockeying for territorial claims in

the western Pacific, including Chi-na, the Philippines, Vietnam,North and South Korea and Japan.

The most volatile region at the mo-ment is the South China Sea, a re-gion strewn with half-sunken or

submerged reefs that could be thekey to access energy sources, in-cluding oil and natural gas.

As the disputes have becomemore spirited, some nations, in-cluding China, have been employ-

ing coast guards and civilian shipsrather than naval units in poten-tially confrontational situations.

“As China is trying to show oppo-sition to these freedom of naviga-tion operations in the South China

Sea,” Erickson said, “we need to bemore attuned to the types of ves-sels and types of personnel they

may send there to create a morecomplex picture and even to pushback.”

Erickson and his associates havediscovered that militia have beeninvolved in numerous incidents,

including confrontations in March2009 when several Chinese fishing

vessels harassed the US intelli-gence ship Impeccable in theSouth China Sea.

“We have traced Chinese mari-time militia to direct involvementin the Impeccable incident,” Erick-

son said, “and in the HYSY 981 oilrig incident with Vietnam [whennumerous Vietnamese ships were

rammed by the Chinese, with atleast one sinking, in a three-and-a-half-month standoff in 2014], and

potentially with Chinese pressureon the Philippine resupply effort ofSecond Thomas Shoal” in March

2014, where the Philippines havestationed a grounded naval ship ona disputed shoal.

Erickson noted that at the timeof the Impeccable incident militiainvolvement was not widely dis-

cussed, but it has now been con-firmed by images and writtenevidence. Now, “we’re trying to get

ahead of the curve so that we canactually figure out who these traw-lers belong to that were spotted

near USS Lassen. I think it’s highlyunlikely that it was a coincidence.If you read Chinese maritime doc-

trine ... this is right out of the play-

book of typical techniques thatthey use and are designed for.”

Reports of the Lassen incident,Erickson observed, are “empiricalevidence matching up very closely

to what Chinese writings on themaritime militia say it’s designed

to be able to do, including obstruc-tion activities.”

The militia on board the ships

are often clearly identifiable.“They have uniforms — many if

not all of them have uniforms. We

have many photographs of themwith their uniforms,” he said. ThePLA Daily, a People’s Liberation

Army publication, even speaks tothis.

“ ‘Putting on camouflage [uni-

forms], they qualify as soldiers,’ ”

Erickson quoted. “ ‘Taking off thecamouflage, they become law-

abiding fishermen.’ ”“So China’s trying to have it two

ways here,” he noted. “Besides de-

ception and confusion, US and al-lied rules of engagement might bevery restrictive against fishermen.

“China is trying to use thesemaritime militia forces to put it in aposition that frustrates us in our

ability to respond.”Erickson and his associates have

tried to determine who is control-

ling the militia.

“The militia, often drawn fromlocal workers or demobilized

troops, are organized in a some-

what complex manner, reportinginitially to local People’s Armed

Forces Departments (PAFD).When activated, though, theycould report directly to naval au-

thorities,” Erickson said.“In peacetime their responsibil-

ities include supporting China’sNavy and Coast Guard. They al-ways answer to the People’s Liber-

ation Army through the PAFD. Butthey also report to whatever agen-cy they’re supporting at the time.”

While there are dozens of militia,several units stand out as frontlineelements, Erickson noted.

“The majority of maritime militiaare less elite, do more mundanetransport, crewing, repair, coastal

patrolling, and emergency re-sponse. But there is a small elitethat is better manned, trained and

equipped. They are developed tosupport those more advancedtypes of missions. Which include,

theoretically, some wartime capa-bilities.”

That the militia are an entity un-

to themselves, in addition to theNavy and Coast Guard, is only re-cently becoming apparent.

“This is not a type of force we un-derstand well enough,” Ericksonsaid. “They could conceivably

achieve some advantages throughelements of surprise and confu-sion. Then even if we know who

they are and what they’re doing we

might have great difficulty dealing

with them because of our rules ofengagement. China could go out ofits way to mis-portray some of

these personnel as random patri-otic fishermen, as vocal ‘residents’of these ‘islands’ in the Spratlys.

They’re very good at that kind ofpropaganda warfare.”

A greater awareness of the mili-

tia and their techniques, Ericksonsaid, could weaken their effective-ness.

“These forces have their greatestpower when they’re least known,least anticipated. The more we can

call them out to foresee their pres-ence and actions in advance, themore power we can take away

from them. These are forces withrather limited capabilities overall.And if they’re exposed as militia

that answer to the PLA chain ofcommand it can be seen in a differ-ent light.”

Erickson is trying to get theword out about the militia, andpublished an Internet piece Nov. 2

tying those forces to the Lassen’stransit.

The US and China, in an effort toreduce the possibility of violence,agreed earlier this year to the Code

for Unplanned Encounters at Sea(CUES). But the agreement onlycovers the Chinese Navy, not its

other maritime services.Erickson noted that while rela-

tions between the US and Chinese

navies might be cordial and pro-fessional, the Coast Guard and mi-litia are not bound by the same

constraints.“There’s a potential problem

whereby China’s Navy is bear-hug-

ging the US Navy to learn moreabout our best practices, talkingthe talk of a good cop, while the

bad cops — the Coast Guard andmaritime militia — are doing thedirty work in the East China Sea

and the South China Sea.“Our approach to China’s mari-

time forces and our interaction

with them is incomplete,” Erick-son said, “so long as two of thethree sea forces are running

around doing stuff that we consid-er very negative.” N

Email ccavas@defensenews.com.

CHINA PROXIESFrom Page 1

US NAVY

No Rules: Chinese trawlers manned by maritime militia stop in front of the US Navyintelligence ship Impeccable during confrontations in the South China Sea in March2009. While the Chinese and US Navies have worked to establish protocols forencounters at sea, no such rules govern relations with the Chinese maritime militia orCoast Guard.

8 DefenseNews November 9 - 16, 2015 www.defensenews.com

WORLD NEWS

gram on schedule and on budget,he said.

“Northrop Grumman offered an

approach that is inherently moreaffordable and based on demon-strated performance and capabili-

ties. Our record stands in contrastto that of other manufacturers’large aircraft programs of the last

decade,” Belote said. “As the onlycompany to ever design and build astealth bomber, we offered the best

solution for our nation’s security.We look forward to the GAO reaf-firming the Defense Department’s

decision so we can continue workon this critically vital program.”

US Air Force spokesman Maj.

Robert Leese said in a preparedstatement that the service looksforward to proceeding with the de-

velopment and fielding of theLRS-B once the protest is resolved.

“Although it is every competitor’s

right to file a protest, the Air Forceis confident that the source selec-

tion team followed a deliberate,disciplined and impartial processto determine the best value for the

warfighter and taxpayer,” he said.“The Air Force will fully supportthe GAO’s independent process.”

Byron Callan, a Capital AlphaPartners analyst, wrote in a note toinvestors that the protest did not

come as a surprise, and he wouldhave expected Northrop to protestif it had lost the competition.

Callan estimated a 15 percentprobability that the protest wouldbe successful.

“We absolutely believe that theAir Force assumed there wouldhave been a protest on the LRS-B

contract award,” he wrote. “Whilethere is the precedent of Boeingsuccessfully protesting the tanker

program to EADS and then win-ning the re-compete, this is a differ-ent acquisition team at the Air

Force.”Loren Thompson, a defense in-

dustry consultant and an analyst

with the Lexington Institute withstrong ties to Boeing and Lock-

heed, said the protesters feel thatthe US Air Force misapplied its se-lection criteria.

The price and the risk associatedwith the competing proposals wasnot adequately assessed,” he said.

The Air Force’s solicitation askedfor innovations that would breakthe cost curve, but did not correct-

ly give the Boeing team credit forthe savings that would follow itsnumerous innovations, he said.

“The Air Force didn’t take intoaccount the great disparity in capa-bilities between the two teams.

Cost was so decisive here that all ofthe superior capabilities that theBoeing team brought to the table

resulted in no net improvement inthe team score,” he said.

To enforce cost realism, the Air

Force looked at the history of theB-2 program, the last bomber plat-form developed by the US, which

was built by Northrop, he said.“The Air Force based its ‘should

cost,’ its estimate of the costs of the

development program, on histori-cal data that predated most of the

innovations they brought to thecompetition,” effectively exclud-ing any savings from technological

advances since the end of the B-2’sproduction run in 2000, he said.

The Boeing/Lockheed team bid

$11billion for engineering and man-ufacturing development (EMD),but the Air Force calculated EMD

at $21.4 billion, which shifts the riskfrom the contractor to the govern-ment, Thompson said.

Boeing has little to lose and much

to gain from a protest. The LRS-Baward could top $100 billion overthe life of the contract and will

mean decades of revenue for thewinner. Without LRS-B, Boeing’smilitary aircraft facility in St. Louis,

Missouri, could face extinction.But Boeing faces long odds. As a

recent annual report on the de-

fense acquisition system noted,only around 2 percent of defenseprotests were actually upheld in

2013, the last year data was avail-able. This rate is lower than theoverall federal rate for that year,

which was just under 4 percent.Additionally, the Air Force, clear-

ly eager to avoid a repeat of the dec-

ade-long tanker saga when aBoeing protest eventually reversedthe original award to Airbus, has

taken great pains to insulate theLRS-B award.

Service leadership tasked not

one but two independent cost esti-mators to evaluate the program, of-ficials revealed last week. Experts

also point to a recent Pentagon In-spector General audit of the LRS-B

acquisition process as evidence thecontract award is air tight.

In making the announcement,

Secretary Deborah Lee James

stressed that the selection processwas “deliberate and disciplined.”

“Award of this contract followeda deliberate and disciplined proc-ess, our team of professionals care-

fully considered the offerers’proposals in accordance with thesource selection criteria,” James

said. “The entire process was car-

ried out with a high level of trans-parency with our industry partnersand was scrutinized via DOD peer

reviews.”Despite the Air Force’s best ef-

forts, the protest could delay the

program and spark an ugly publicrelations battle, particularly givenBoeing’s clout on Capitol Hill.

Boeing and Lockheed will likelywage intense lobbying campaigns.Boeing is expected to tap the Mis-

souri delegation, including influen-tial Democratic Sen. ClaireMcCaskill and Republican Sen.

Roy Blunt, while Lockheed willlook to the Texas delegation, par-ticularly Fort Worth’s Republican

Rep. Kay Granger and HouseArmed Services Committee Chair-man Rep. William “Mac” Thornber-

ry, also a Republican.Before the announcement last

week and after a hearing on

streamlining defense acquisitions,Thornberry acknowledged con-cerns over a possible LSR-B pro-

test and the litigious nature ofacquisitions in general.

“It’s part of the way acquisitionculture has developed that everybid award has protests, and you’re

expected to protest — basicallywith no penalty,” he told reporters.“So, a number of members have

had ideas about improving that sit-uation, and it’s something that wewill continue to discuss.” N

Email: aclevenger@defensenews.com,

lseligman@defensenews.com.

BOMBER PROTESTFrom Page 1

NORTHROP GRUMMAN

A Big Deal: The huge contract to build the US Air Force’s next-generation Long Range

Strike-Bomber creates substantial competition for other budget priorities.

products that are not on the market today.” He credited technology and planning divi-

sions of the IDF’s C4I Branch — part of the

IDF General Staff — for a military-wide ef-fort to forge connectivity through satelliteand radio communications links, ever-in-

creasing bandwidth and storage so that allrelevant organizations enjoy common andpersistent situational awareness.

“We have very strong, almost full connec-

tivity with the ground forces and the IsraelAir Force,” said A., commander of the Mis-

sion Control Group, which operates the Mis-hlei war room. “We see the air picture inhere and they see our sea picture in their

command center. It’s the same with theground forces and the territorial com-

mands.”

In a recent visit, the officer demonstratedthe shared picture, where Israeli ground

forces patrolling or exercising around the

Gaza Strip were clearly visible and labeledon computer screens.

“We know where the jeep of the battalion

commander is on our systems. It allows us

to open up a corridor for them; to improvetheir situational awareness by providing an-

other angle and another dimension that theycan’t get from the ground or from [un-manned sensors] in the air. We speak the

same language and know how to engage tar-

gets together,” the officer said.

He added, “This is not a trivial achieve-ment.”

The officer noted that in Israel’s summer

2014 Protective Edge campaign in Gaza, da-ta coming into the Mishlei from a 19-year-oldfemale conscript first spotted Hamas frog-

men approaching Israel’s Zikim beach at thenorthern part of the strip. That data wastranslated into fire orders from the Mishlei.

“We detected them on our radars ... in theend, everyone participated in the firing thatdestroyed this terrorist infiltration threat.”

In the coming year, plans call for further

strengthening connectivity with the AirForce, where the Navy’s powerful, long-

range sensors at sea could provide anotherangle of visibility in detecting threats fromLebanon- or Syrian-launched gliders or

UAVs. “Our coordination is already tight, but the

plan is to solidify cooperation. They already

have an officer who is permanently herewith us. And starting in 2016, we’ll have a

Navy officer at the rank of captain or major

permanently with them,” he said.As for Mishlei’s monitoring of activity on

the high seas — where freedom of naviga-

tion is sacrosanct, yet must be carefully bal-

anced with Israel’s need for early warning ofpotential threats — the officer said the Navy

is constantly striving to broaden its aware-ness within its so-called economic waters.

“Today, because of our economic waters,

we’re building a much bigger, wider picture

westward of 100 miles and more. In many

cases, we start checking at 200 nauticalmiles, or about 48 hours before they reachour sovereign waters,” the officer said.

The Navy does this, he says, by its ownseapower projection presence, its use ofmaritime patrol aircraft and UAVs, sophisti-

cated analytical software, as well as tradi-tional monitoring means such as automatedinformation system transmissions.

“It’s congested here in the Middle East, soif a ship leaves from Cyprus, it’s less than200 miles or 48 hours. The same applies for

ships coming from Egypt, where ranges are

shorter.”According to the officer, the challenge is

to discriminate between innocent mer-chants and suspicious ships.

“Essentially everything that moves in our

maritime theater, we monitor. Our proce-dures are clear: About 48 hours prior, we get

all the data and check if everything is legiti-

mate. We check the people on the ship, theroute, where it came from and more. If there

are no anomalies, we establish contact

again about 100 miles out to validate all theprevious information and make sure noth-ing has changed.

“Then, at dozens of miles out, we check

again. If even one data point is not as re-corded, we will investigate. ... At the end of

the day, the sea is open to everyone. Thereare no fences and it’s hard to put sensors inthe depth of the sea. That’s why it’s so im-

portant to keep fortifying our maritime

awareness. We do that all here by fusing all

the information and building up the tacticalpicture,” the officer said.

On computer screens here in the Mishlei,

Israel’s maritime sector is clearly delineatedwith several lines followed by the dottedblue line representing Israel’s 12-nautical

mile territorial border. On the day of our vis-it, the commander was dealing with an os-tensible anomaly where a ship sailing from

Israel’s Mediterranean port of Ashdod wasbroadcasting its destination as Port Said,Egypt; yet was turning right, in the direction

of Cyprus.

With a click of a mouse, all the ship’s in-formation — its owner, its flag, its UN Inter-

national Maritime Organizationregistration, its history, its associations withother ships and all journeys taken and ports

visited — appeared on the screen. “Here’s a ship we called and talked to

twice already. If they didn’t supply logical

answers, we would have asked them to stopuntil we clarified the situation,” the com-

mander explained.

Ultimately, the Israel Navy contacted theship’s local agent, who explained to the ser-vice’s satisfaction that they changed the de-

livery order, yet forgot to change the

routing.

“In this case, everything checked out. It

was merely an event that hones our readi-ness,” the officer said. N

Email: bopallrome@defensenews.com.

ISRAEL NAVYFrom Page 6

11SPECIAL REPORT

INSIDE

YEMEN Saudi-led Operations in Final Phase 12

ISRAEL Startup Scours Seas for Threats 14

MIDDLE EASTSECURITY

November 9-16, 2015 www.defensenews.com

M ANAMA and DUBAI — Speaking at theInternational Institute of Strategic

Studies’ Manama Dialogue, Iraq’s min-ister of defense called for a counterterror-ism agreement to be signed between the

Gulf states, Iraq and Iran.

Defense Minister Khaled Al-Obaidi said

the agreement would be the cornerstone forthe Middle East’s future efforts to fight ter-

rorism.

“Building a defensive posture in the MiddleEast cannot happen passively. and we under-

stand that. But we also understand that there

is an opportunity to do that,” he said.This opportunity, Al-Obaidli continued, fo-

cuses on the defeat of extremists with the Is-

lamic State group in Iraq and Syria.“This can only happen with open commu-

nication between the militaries of the region

and their national institutions to develop

common strategic objectives, this has be-come a necessity and not a choice becausewe have to rip out the roots and not the

branches of terrorism,” he said.Obaidi called for a holistic approach to

tackle terrorism through combined exer-

cises, command-and-control centers, intelli-gence sharing, border and marinemanagement strategies as well as refugee

management and rebuilding areas liberatedfrom ISIS.

Al Obaidi’s comments came just as the Ira-

nian foreign minister and the Saudi foreignminister were pitted against each other dur-ing Syrian talks in Vienna.

Saudi Foreign Minister Adel Al-Jubeir has

stated that all points were agreed upon ex-

Iraqi Leader Calls for GCC, Iran To Join Counterterror Pact

By AWAD MUSTAFA

CARLO ALLEGI/AFP

Syria Talks: USSecretary of State JohnKerry, left, and SaudiArabia's ForeignMinister Adel al-Jubeirchat upon arrival for anOct. 23 meeting todiscuss the Syrianconflict in Vienna.

See COUNTERTERROR PACT, Page 12

12 November 9 - 16, 2015 MIDDLE EAST SECURITY

MANAMA and DUBAI — Politicalleaders from the Saudi-led Arabcoalition say that operations in Ye-

men have entered their final stage.Saudi Foreign Minister Adel Al-

Jubeir and his Yemeni counterpart

expressed optimism last week atthe International Institute of Stra-tegic Studies’ (IISS) Manama Dia-

logue in Bahrain over thecoalition’s military operations.

“I would say, and I’m an optimist

by nature, that the Yemeni conflicthas entered its final stage,” Al-Ju-bier said in Manama. “We look for-

ward and hope for a stable nationand a prosperous Yemen.”

The United Arab Emirates, Qa-tar, Bahrain, Kuwait, Sudan, Jor-dan and Morocco have joined the

Saudi-led air campaign targetingHouthi militias since March.

In October, Sudan presented 500

special operations forces experi-enced in mountain warfare.

“The Houthis’ and former Presi-

dent Ali Abdullah Saleh have ac-cepted the UN Security Councilresolution 2216 and the re-opening

of Yemeni ports by coalition forceswere good signs that the countrywas ready to enter the resolution

phase of the conflict,” Al-Jubeirsaid. “Legitimate governmentforces are now in control of the

vast majority of Yemeni territory.There still remain some areas thatneed to be liberated, including

Sanaa, but the trend is moving inthe right direction.”

Al-Jubeir stressed that the

Houthis are welcome to join futurepeace talks, but said they shouldnot make up the bulk of repre-

sentatives.

“The Houthis and the Yemenishave every right to be part of theYemen political process, we have

said that from the very beginning.The only thing they cannot have isa privileged position because that

would distinguish them from otherYemenis, and that would not befair,” Al-Jubeir said.

On Nov. 2, the UAE armed forcesannounced a second batch of sol-diers are preparing to perform new

duties in Yemen as part of the co-alition. The General Command ofthe UAE Armed Forces said the ro-

tation of soldiers will see the firstbatch replaced by another as partof Operation Restoring Hope.

Despite the optimism expressedat the Manama Dialogue, senioranalysts said that the war in Yemen

seems far from over.“I believe that with the Houthis,

the story is yet to begin,” said Max-

im Shepovalenko from the Mos-cow-based Center for Analysis ofStrategies and Technologies

(CAST). “What we saw until lately

was barely a preface to it. “Houthis ... are operating basical-

ly within their native territory, or in

a wider context, the territory theycan exercise control of, i.e. theNorthern Yemen. They turned out

to be no less professional than theHezbollah and therefore would bea hard nut to crack in the mountain

environment. To say nothing aboutIran’s covert — and perhaps overt— assistance,” he said.

Shepovalenko added that the co-alition finds itself under significanttime pressure, since the Saudis

have already unsealed their cur-rency reserves. With the currenttempo and cost of operations, they

could run critically short of fundsin the next five years.

“On the contrary, the Houthis

could sustain long enough, as evi-denced by their belligerency since2004,” he said.

Shepovalenko said he considersthe declarations of Al-Jubeir andhis Yemeni counterpart as sort of a

self-cheering mantra or wishfulthinking.

Yemen affairs expert MareikeTransfeld from Berlin-based thinktank Stiftung Wissenschaft und

Politik echoed his assessment.“I think these statements are

grossly exaggerated,” she said.

“There seems to be somewhat of apush right now with military vehi-cles entering Taiz, Yemeni pilots

being trained and more foreigntroops from Sudan. But thereseems to be a lot of misinformation

by the GCC states on the front inMarib.

“I doubt the Saudis are as suc-

cessful here as they claim. Every-thing north of Taiz and Marib is stillcontrolled by the Houthis. I think

they are trying to improve theirbargaining position with thesestatements before the talks in No-

vember,” Transfeld added.If the talks fail and fighting con-

tinues, she said, it will be a great

challenge to gain control of Sanaa.According to Paul Sullivan, a

professor at the National Defense

University in Washington, total op-timism in this circumstance does

not seem solidified.“The underlying reasons behind

the conflict have not been re-

solved,” he said. “Until they are, Ye-men will remain unstable andunresolved. Winning one or even

100 battles tactically does not stra-tegically win a war. The most diffi-cult part of any war is what

happens after the guns are silent.The guns will be not be completelysilent any time soon.”

Sullivan added that once theguns are silent, Yemen as a post-conflict country needs to be devel-

oped with the creation of jobs andhope. Otherwise, he warns, thecountry will fall right back into

conflict. N

Email: amustafa@defensenews.com.

Saudi-Led Coalition Announces FinalPhase In Yemen Operations — ButAnalysts Disagree

By AWAD MUSTAFA

SALEH AL-OBEIDI/AFP/GETTY IMAGES

Analysts Wary: A UAE Armed Forces vehicle of the Saudi-led coalition, supporting forces

loyal to Yemen’s Saudi-backed President Abedrabbo Mansour Hadi, is seen at an oil

refinery in Yemen’s port city of Aden on Nov. 1.

MOHAMMED AL-SHAIKH/AFP/GETTY IMAGES

Leaders Optimistic: Saudi Foreign Minister Adel al-Jubeir, right, shakes hands with

Yemeni Foreign Minister Riad Yassin during the International Institute for Strategic

Studies’ (IISS) Manama Dialogue in the Bahraini capital, Manama, on Oct. 31.

cept two.

“In Vienna, we have not been able to reachan agreement yet. We, however, have agreed

on how Syria should have a new constitution

based on Geneva [Convention] principles,amongst other points, but two points remain

in contention,” he said. “No agreement onthe timing of Assad’s departure and on whenforeign forces will leave Syria, especially the

Iranian forces and their proxies like Hezbol-lah, which we view as occupying forces,” headded.

Furthermore Al-Jubeir said in Manamathat with regard to ISIS fight in Syria andIraq, the “two white elephants” are “Bashar

Al-Assad and the reforms in Iraq”.

“So long as Bashar Al-Assad is in power he

will act as a magnet for extremists to joinISIS, and any attempt to go after ISIS in Syriawill be useless so long that Al-Assad is in

power,” he said. “As for Iraq once the reformare implemented the fertile ground for ISISin Iraq will no longer exist and it will be easi-

er to mobilize the country to destroy the ter-

rorist organisation.”Despite Saudi Arabia’s demands in Vienna,

former member of the Iranian National Se-

curity Council and nuclear negotiator Dr.Seyed Hossein Mousavian stated that Iran

and Saudi Arabia will be able to find a solu-tion.

“The Saudis’ first priority is Assad must go,

and the Iranian first priority is the terrorists

must go; here is the key difference. That’swhy Jubeir does not talk about the timeline

for terrorists’ departure from Syria,” he said.

“However, I believe that they will be able to

bridge the gap.”To secure the Middle East, Mousavian sug-

gested three paths Saudi Arabia and Iran can

take to overcome their differences.“The first is formal, official high-level talks

between foreign ministers and other senior

representatives of the respective govern-ments. Unfortunately, the Saudi governmentdoes not appear receptive of this option at

this stage,” he published in a recent op-ed.“Another alternative is for the two coun-

tries to engage in track one-and a-half or

track-two diplomacy — contacts betweenformer officials and prominent non-govern-ment figures and experts — to discuss a

package to build trust and move towards of-ficial dialogue. There have been some efforts

made on that front, but it is crucial that they

be significantly expanded,” Mousavian said.

The third way is for Saudi Arabia and Iran

to confidentially exchange special envoys.“These meetings would be strictly off the

record and allow for the two sides to engage

in high-level talks and more effectively hashout their differences. During the mid-1990s, Iengaged in precisely this type of diplomacy

with Saudi Arabia in my capacity as a seniordiplomat and advisor to then-president AliAkbar Hashemi Rafsanjani,” he said.

“I negotiated and agreed on a ‘peace package’ with then-Crown Prince Abdullahbin Abdulaziz, during that time. After four

nights of intense negotiations, we reachedagreements which paved the road for amica-ble relations between our countries that

would last until the mid-2000s,” Mousavianadded. N

Emal: amustafa@defensenews.com.

COUNTERTERROR PACTFrom Page 11

14 November 9 - 16, 2015 MIDDLE EAST SECURITY

TEL AVIV — A Tel Aviv startup com-pany is distinguishing itself in Isra-

el and with clients on fourcontinents by its ability to clearaway the clutter on loosely regulat-

ed, often fraudulent high seas.Using what it calls activity-based

intelligence, Windward, a five-

year-old maritime data and analyt-ics firm here, probes beyond theship-tracking services available on

today’s market to validate identi-ties of ocean-going vessels.

It compares their patterns of be-

havior and past associations withother ships — even where theyloaded or didn’t load in specific

ports of call. By trolling for myriad bits of ob-

jective fact and fusing them into

what Windward co-founder andChief Executive Ami Daniel calls“a ship’s DNA,” the firm is able to

serve up “subjective conclusions”that help clients flag potential

threats as well as opportunities.Then Windward “dives deeper”

into building so-called unique IDs

and risk-modeling based on specif-ic client interests.

“We organize the data into layers

and in a way that becomes clear

what each vessel has done,” Daniel

said.“It brings them from a place of

being data rich but information

poor; from having a lot of frag-mented and often unreliable datato a place where they can start do-

ing what they should be doing,which is threat analysis,” he said.

A prerequisite to the information

culled from those “deep dives” ispersistent cleansing from clutterand fraud to validate the ship’s so-

called DNA.“Nobody knows who’s the real

owner of 75 percent of the world’s

vessels,” said Daniel. “The reasonis, for business reasons, they areregistered under various flags of

convenience by a lawyer who hasone share and nobody knowswho’s on top of him.

“So the tools of looking at databases or registries are great in the-ory, but not in practice.”

The same holds true, companyexecutives here say, for the Auto-

mated Information System (AIS),satellite-supported tracking sys-tem initiated in recent years by the

US Coast Guard and now requiredby ocean-going vessels and pas-senger ships.

“Ships go dark. And what you put

into your transmitter or what youreport does not necessarilymatch,” Daniel said. “People can

type in different IMO numbers[than those provided by the UN In-ternational Maritime Organiza-

tion], and they can changenumbers daily. So when you get

into the system, you often have noidea if the data you’re looking at istrue and authentic.”

Last year, the company pub-lished a report illustrating the mag-nitude of fraudulent behavior

associated with AIS transmissions. Using its proprietary programs

to analyze 200,000 vessels from

July 2012 to August 2014, the com-pany found that “AIS data has mas-sive vulnerabilities when used for

tracking ships, and that these vul-nerabilities are being increasinglyexploited by ships or interested

parties intent on concealing theiridentity, destination or activities.”

According to the report, vulner-

abilities come in several “flavors”— identity fraud, obscuring desti-nations, going “dark,” GPS ma-

nipulation and spoofing.“All share a single goal: distort-

ing the maritime picture and with it

the ability of decision-makers toact on valid, reliable data,” the re-port warned.

Specific findings from the reportshowed an increase in GPS ma-nipulation of 59 percent over the

past two years; that 55 percent of

ships misreport their actual port ofcall for the majority of their

voyage; that large cargo ships shut

off AIS transmissions 24 percentlonger than others; and that 19 per-

cent of the ships that “go dark” arerepeat offenders.

Although the report has not been

updated since last year, “We seethese trends continuing and shipsbecoming increasingly inventive in

what they do to conceal their iden-tities and avoid detection,” said Mi-chal Chafets, Windward’s head of

communications.To illustrate this point, Wind-

ward conducted an analysis spe-

cifically for Defense News, in

which the company employed “re-

verse engineering” of a knownarms smuggling incident to high-

light similarly suspicious behaviorby a ship that managed to evadedetection by law enforcement au-

thorities.Its baseline case was the Had-

dad, a 39-year-old, Bolivian-flagged cargo vessel that em-barked from Iskenderun, Turkey,

in early September. It was ulti-mately seized by Greek authoritiessouth of Crete with a cache of

some 5,000 shotguns and a halfmillion rounds of undocumentedammunition.

Using the route plied by the 66-meter Haddad, which sailed alongthe Turkish coast en route to Libya

before being stopped, Windwardcame up with a similar profile ofanother ship which, for a variety of

legal and proprietary reasons, itpreferred to call Vessel X.

Like the Haddad, Vessel X was

more than 30 years old and aroundthe same size, about 75 meters. Itleft the same Turkish port on Aug.

19 — less than a month prior toHaddad — bearing a flag of conve-nience, this one from the South Pa-

cific island of Vanuatu. A day later, Vessel X stopped in

an area near the Turkish shore

where there was no port or anyother reason to stop at that loca-tion, company analysts found.

“In all likelihood, this was a

rendezvous point with smaller,non transmitting vessels that prob-

ably loaded cargo onto the vessel.

Clearly, if the cargo was legal, thistype of loading would be done at

port,” Windward noted.It then continued west along Tur-

key’s coast for two days, stopping

again close to shore — in an areawhere there are no ports — for fivedays near the Greek island of Kar-

pathos.“Since ships are economic enti-

ties, spending five days near an is-

land with no port and no way forthe ship to reach shore is highlysuspect. This is likely the drop off

point for the cargo, possibly as an

entry point into Europe,” Wind-ward analysts noted.

Further, a search of Vessel X’spast behavior shows that in thepast four years, it never sailed

south of Crete, where conditionsare known to be much harsher inopen seas.

“This deviation from the ship’spattern of life is another significantrisk indicator,” analysts wrote.

On top of that, Vessel X shut offits transmission for eight hours,during which time AIS transmis-

sions indicated it covered a mere13 nautical miles. If it had been sail-ing at usual speed, it should have

taken only 1.5 hours to cover thesame distance, analysts noted.

“This means that there are 6.5

‘dark’ hours close to shore duringwhich time the ship was engagedin some activity. Again, we believe

this was likely a meeting place tounload cargo.”

Once Vessel X resumed trans-

missions, it “tried to cover itstracks,” Windward noted, sailing

north along the Crete shorelineand then reverting southwest to-ward Tunisia.

“This is what we call an uneco-nomical journey, because a shipshould always take the shortest

route between points A and B andthere were no extreme meteoro-logical conditions at the time that

might have explained this type ofdeviation.”

On Sept. 1, en route to Tunisia,

Vessel X again shut off transmis-sions for 22.5 hours, sailing a dis-tance that should have been

covered in less than three hours.“That leaves nearly 20 hours unac-counted for. The ship could easily

have conducted illegal activity dur-ing this time,” Windward sup-posed.

After a short port call in Tunisia,Vessel X set sail toward Malta andcontinued to Italy. According to

the firm’s “sources,” it was stoppedby authorities in September, but nosuspicious cargo was found.

“Had authorities stopped theship earlier in its journey, it could

have been caught in the act,” Cha-

fets said. “It’s just one illustrationof how Windward’s maritime in-

telligence solutions are bringing

real visibility, for the first time, tothe maritime domain, which re-mains a Wild West of sorts even in

2015.”Over the past few years, the pri-

vately owned firm has raised $17.3

million in funding. Its stakeholdersinclude a major investor from Swe-den, Hong Kong-based Horizon

Ventures, Israel’s Aleph CapitalVentures and, most recently, pri-vate investment from retired US

Army Gen. and former CIA Direc-tor David Petraeus. N

Email: bopallrome@defensenews.com.

Israeli Startup Scours the Seas for ThreatsBy BARBARA OPALL-ROME

MEIDAN BRAND/WINDWARD

Vessel Watch: A screen grab shows Windward's tracking of a suspicious vessel nearCrete.

Rugged computers& communication- Made in Sweden

www.aqeri.com

Aqeri - We make the impossible possible!

New Aqeri mini-series:rugged computers,routers and more- in mini format

16 DefenseNews November 9 - 16, 2015 www.defensenews.com

NORTHA AMERICA

WASHINGTON — Two powerful US lawmak-ers on defense say acquisition reform provi-

sions advancing as part of the 2016 defensepolicy bill are just the start of incrementalchanges they’re planning to make weapons

buying less wasteful and more agile. The ambitious efforts — spearheaded by

the chairmen of the House and Senate

armed services committees, Rep. William“Mac” Thornberry, and Sen. John McCain,respectively — mark the latest in a multi-

decade string of efforts by Congress and thePentagon to improve how weapons systemsare acquired. The stakes couldn’t be higher

as military-relevant commercial technol-ogies threaten to outpace a Pentagon whereit is widely acknowledged that weapon ac-

quisition programs often take much longer,cost more than promised and deliver fewer

quantities and capabilities than planned.The Pentagon invested $1.4 trillion to ac-

quire more than 78 major weapon systems

as of March. Over the prior year, 41programsin the portfolio lost buying power resultingin $5.3 billion in additional costs, the Gov-

ernment Accountability Office (GAO)found. Overall, it is not unusual for deliverytime and cost to be underestimated by 20 to

50 percent, the GAO reported on Oct. 27.“If you’re Ford and you build a Ford Tau-

rus that’s five years late, has a $50,000 stick-

er price, and it gets bad gas mileage — your

customer walks,” said Paul Francis, the

GAO’s managing director of acquisition andsourcing management. “In the Departmentof Defense, when you get a program started,

it’s a revenue stream. It’s not an expense. Soyou get a bigger budget share. … If it costs

too much, it takes longer, it underperforms,the customer’s still going to buy.”

Lawmakers would be taking on an acquisi-

tions culture resistant to reforms and fixes.Too few new programs are based on soundbusiness cases because the competitive

process rewards companies and officialswho over-promise a prospective weapon’sperformance and understate its likely cost

and schedule demands, Francis said. In amarket with a single buyer (the Pentagon),low volume and a limited number of major

sources, there are too few incentives to de-

liver a program on time and within cost.

When costs increase and delays grow, itweakens the defense dollar’s buying power,which means troops get less capability than

promised, weapons perform worse thanplanned and opportunity costs are unclear.

The 2016 NDAA was meant as the first step

in a multiyear effort to streamline this laby-rinthine acquisition system that’s deemedunfriendly to Silicon Valley and a hindrance

to Pentagon efforts to embrace cutting-edgetechnology.

“I believe we can’t have a 2,000-page bill

that fixes acquisition. We have to take it astep at a time,” Thornberry said. “I think wemade some good progress, good first steps

in the Fiscal Year 2016 National Defense Au-thorization Act, working on some of the ba-sics when it becomes law.”

After President Obama vetoed a previousversion in a larger dispute over the federal

budget, the House approved a new bill lastweek, teeing up a Senate vote.

The new NDAA bill’s key measure would

hand service chiefs and secretaries overallresponsibility for acquisition programswithin services — a shift away from the Of-

fice of the Undersecretary of Defense for Ac-quisition, Technology and Logistics, whichhas held milestone decision authority over

programs for roughly 30 years.Looking ahead, Thornberry and McCain

say they want to hold hearings to review the

1986 Goldwater-Nichols Act. The move

could amount to a re-examination of sweep-

ing defense legislation that created the mil-itary’s current chain of command, frompresident to defense secretary to combatant

commanders, bypassing the service chiefs.Thornberry said another target is decou-

pling technology development from product

development, which he called “invent-as-you-go” acquisitions. GAO highlighted thatit’s easier for the Pentagon to move imma-

ture technologies into weapon system pro-grams since they tend to attract biggerbudgets than science and tech projects.

HASC held a hearing on Oct. 27 with inputfrom Francis and other acquisition policyexperts about the Pentagon’s systemic prob-

lems and potential fixes. Andrew Hunter,former director of the Pentagon’s Joint Rap-id Acquisition Cell and now with the Center

for Strategic and International Studies, out-lined key elements for agile acquisitions:flexible funding; shortened lines of author-

ity; continuous communication between theacquisition community and the operationalcommunity; and focusing on ready, adapt-

able systems that can evolve over time.Institute for Defense Analyses President

David Chu said the Pentagon frequently sets

technical parameters that stretch physics,and then program managers and the ser-

vices are incentivized to keep the programsalive, whether or not they’re realistic. Herecommends the Pentagon build attainable

systems, especially in major platforms, plan-ning for longer-term block upgrades.

Joe Pasqua, of Business Executives for

National Security, suggested the Pentagoncould adopt a private-sector model: favorsmall, iterative evaluations versus “big

bang” acquisitions, and test concepts in in-

formation technology to buy as needed. N

Email: jgould@defensenews.com

US Defense Policy Bill 1st Step in LatestAcquisition Reform Efforts by Congress

By JOE GOULD

EVY MAGES / GETTY IMAGES

Leading the Charge: House Armed Services

Chairman Mac Thornberry spearheads the effort along

with Senate Armed Services Chairman John McCain.

ABERDEEN PROVING GROUND, Md.— The US Army is reconfiguringthe tactical network nodes now on5-ton vehicles into a smaller pack-

age in order to fit onto Humvees,according to Lt. Col. LaMont Hall,the Warfighter Information Net-

work-Tactical product manager. The service is fielding its second

increment of WIN-T, taking a sys-

tem that could only provide con-nectivity at the halt and giving it an

on-the-move capability. The net-

work is connected via line-of-sightnodes spaced around a battlefieldalong with satellite connectivity.

But WIN-T, which requires a lotof moving parts on vehicles fromrouters to radio antennas to bring

the network to life on the move,can only fit on larger vehicles.

“Everyone wants a smaller ver-

sion of this that goes on a Humveeplatform and so we are developingthat now,” Hall said.

“The value of that is our early en-try forces like the 82nd, the 10thMountain and the 101st all want a

capability that they can bring in on

an aircraft or sling-load on a heli-copter,” he said. “It’s smaller, light-er and more easily deployed, and

that is what this capability willbring.”

The WIN-T nodes on Humvees

will provide basic communicationand networking equipment withline-of-sight and satellite commu-

nications both on the move and at

the halt.The plan is to test the smaller ver-

sion of WIN-T on a Humvee at theNetwork Integration Exercise inMay 2017 and then the Army will

start to field the new capability it’scalling the Tactical Communica-

tions Node Lite (TCN) and the Net-

work Operations and SecurityCenter Lite (NOSC).

The Army is building these

WIN-T vehicles now, having al-ready awarded the contract toGeneral Dynamics and passed

through the critical design review

phase, Hall said.The first low-rate production

quantities — one NOSC and eightTCNs, enough for an entire brigadecombat team — will be completed

in the next four to six months. As

the Army prepares to demonstratethe new WIN-T equipped Humveesat the spring Network Integration

Evaluation (NIE) in 2017, it will putthe systems through rigorous inter-nal testing, according to Hall.

The WIN-T program office alsohas worked to improve the net-work in other ways from usability

to reliability, Hall said. The numberone priority, he said, is reducingthe complexity of the system at ev-

ery level.

The Army partnered with Micro-soft over the last six months to de-

velop the Rapid Vehicle

Provisioning System (RVPS),which at a basic level means the

workload to configure one WIN-Tsystem is reduced drastically.

“Everything you see in these

racks, what is on a vehicle, routers,switches, servers, you’ve got dis-plays, satellite modems, radio an-

tennas and modems, and all of thatis on one vehicle,” Hall said. “To-day it takes a soldier hours and

hours and hours to be able to loadall the software, load all the config-urations, connect to the satellite,

stand up the line-of-sight network,

load eight servers, four routers,

two switches and a satellite mo-dem.”

Hall said with Microsoft the

Army has built a system where“we’ve connected everything to-

gether with a gigabit Ethernet con-

nection. A soldier with one laptopcan then plug into that vehicle andwith one button, he hits configure,

and everything is configured in the

background.”The new system was tested at

NIE 16.1 with 18 vehicles as a proofof concept and “it worked,” Hallsaid. At the next NIE in May 2016,

the Army plans to configure an en-

tire brigade combat team using the

system. If all goes well, the servicewill begin fielding the capability.

The process speeds up the time it

takes to set up WIN-T vehiclesfrom 24 hours to two hours. Con-figuring an entire brigade with 70-

plus vehicles can take four peopleand three weeks. Configuring anentire brigade with the new system

will take four days, Hall said.“I want every soldier to be able to

fix the network. I don’t need engi-

neers, I don’t want to have to havePhDs ... to fix the network.” N

Email: jjudson@defensenews.com

US Army Moving WIN-T Onto HumveesBY JEN JUDSON

ARMY PEO C3T

On the Move: The Army is building a smaller version of Warfighter Information

Network-Tactical nodes to fit on Humvees.

18 DefenseNews November 9 - 16, 2015 www.defensenews.com

EUROPE

ANKARA and WASHINGTON — As the

US continues to modify its strategyfor Syria, Turkish officials are rais-ing concerns that Washington is

moving too slowly to provide itsally with needed military goods.

Turkish officials are bristling at

what they see as delays in the de-livery of weapons and ammo need-ed to fight Kurdish militant groups.

Among the large orders that areheld up is a February 2014 deal be-tween Sikorsky and Turkey’s gov-

ernment to co-produce 109 utilityhelicopters. Another is a request totransfer three Oliver Hazard Perry

frigates, two of them floatable andone for spare use, along with

a military trailer, to Turkish forces.An official from a state-con-

trolled Turkish defense company

said that other US-made equip-ment and systems Turkey hasasked the US to ship include com-

bat UAVs, smart military supplies,frigates and military trailers.

“Turkey has been requesting

armed drones over the past sevenyears and only at the beginning ofthe year signs of a positive re-

sponse started to emerge,” he said.“But those systems remain unde-

livered or approved.”

The question facing Turkish offi-cials: Are the goods being held updue to complicated regional poli-

tics, or are they just caught in theUS Foreign Military Sales (FMS)system’s inherent bureaucracy?

One Turkish government officialsaid delays stemmed from US bu-reaucracy rather than a major dis-

pute between allies. “It is true that we have in the last

few years placed requests for the

delivery of certain systems andequipment,” he said. “Sometimessuch delays are normal.” He would

not comment further.But another senior procurement

official did not deny or confirm any

US decision to hold shipments, cit-ing the matter’s “political nature.”

Politics certainly play a role inany FMS decision, and the compli-cated web between Turkey, Syria

and Kurdish forces fighting alongthe border of both countries hasnot helped. While Turkey views

groups like the Kurdistan Workers’Party (PKK) as terrorists and haslaunched a series of attacks on

them, some in Washington viewthe Kurds — of which there areseveral factions in Syria — as the

best hope for defeating IslamicState militants in Syria and Iraq.

Those politics come to play in

Congress, where there are indica-tions some members have held upTurkey’s buys for political reasons.

“Turkey is having a really hardtime on the Hill ... Its image as ademocratic ally often comes under

scrutiny,” said Soner Cagaptay, di-rector of the Washington Institutefor Near East Policy’s Turkish Re-

search Program. But, he warned, “I think Turkey

has an even more profound prob-

lem with the DoD across the river.”A series of rough interactions

since 2003’s Iraq invasion, particu-

larly after the Arab Spring upris-ings, has shredded the 60-yearrelationship between the Penta-

gon and Turkey’s military, he said.“While there is cooperation

flourishing versus ISIS, it’s notwhat it used to be,” he said. “Therewas always a deep, profound fond-

ness felt by the US military towardTurkey. That’s gone, and I don’tknow that will come back so long

as [the ruling party] AKP is the gov-ernment in Turkey.”

The most recent example of how

politics can interfere with Turkey’sweapons procurements was a $70million sale of Joint Direct Attack

Munitions (JDAM) kits to Turkey,cleared by the State Department

on Oct. 29. That clearance, whichwas on hold for more than 570

days, paves the way for Turkey toreplenish its weapon stocks in itsongoing strikes against the PKK.

A Turkish defense officialadmitted that Turkey’s stocks ofUS-made smart ammunition has

visibly diminished after serial air-strikes against Kurdish militantstrongholds in northern Iraq since

July 20, when the Kurds ended a2013 cease-fire.

Sen. Bob Corker, chairman of theSenate Foreign Relations Commit-tee, told Defense News “there

were a number of issues along theway” that needed to be dealt withbefore members of the committee

were OK with the agreement.Rachel Stohl of the Washington-

based Stimson Center says con-

cernsthat Turkey could use JDAMsagainst Kurdish forces likely

played into the sale’s holdup.

“The US has struggled with pro-viding weapons to Turkey for dec-

ades because of their record of useagainst groups they call terrorists

but that may provide strategic sup-port for US interests,” Stohl said.

Another issue, Corker indicated,

is Turkey’s dialogue about buying aChinese missile defense system.The US and its European allies

have raised concerns that it wouldcreate interoperability issues withother NATO partners and could

even create back-end access forBeijing into Western systems.

Cagaptay said the China missiledefense system decision had “ahuge” impact on Turkey’s relation-

ship with Western partners lately.“Turkey miscalculated NATO

and US reaction to that decision,”

he noted. Corker later noted that he met

with Turkey’s ambassador before

the JDAM deal moved, which hesaid “could have been” a factor inthe deal being pushed through. N

Joe Gould contributed from Washington.

Turkish Officials Wonder If andWhen US Will OK Weapons Exports

SEBASTIEN BOZON/AFP/GETTY IMAGES

Still Waiting: Turkey and Sikorsky agreed in March 2014 on a co-production deal for 109

utility helicopters based on the US company’s S-70i — similar to this US Army Black

Hawk — but the US Foreign Military Sales deal is still pending.

By BURAK EGE BEKDIL and AARON MEHTA

VICTORIA, British Columbia — While Canadian

firms stand to lose business with the coun-try’s withdrawal from the F-35 program, its

maritime industry is expecting a potential

windfall from a change in defense priorities.Prime Minister Justin Trudeau has prom-

ised to put more money into Canada’s ailing

naval shipbuilding, including any savingsfrom a cheaper alternative to the F-35 fighterjet. Maritime industry officials said that

could mean more ships and more work.Trudeau promised the shift in defense pri-

orities during his recent election campaign

and before taking power on Nov. 4.

The prior Conservative Party governmentlaunched the National Shipbuilding Pro-

curement Strategy (NSPS) in 2011. That out-

lined an ambitious CAN $30 billion plan (US$23 billion) to construct new vessels for the

Royal Canadian Navy and Canadian CoastGuard. NSPS would see construction of 28major warships and 116 smaller vessels.

Former Prime Minister Stephen Harper –

defeated by Trudeau – dismissed the Liberalpromise to spend more on shipbuilding as

unnecessary, noting that his government

originally put enough funding into NSPS.But the shipbuilding strategy has been

dogged by concerns from industry. Defense

analysts, the Royal Canadian Navy and Audi-tor General Michael Ferguson have allwarned there is likely not enough money to

build all the needed vessels.Before the Conservative Party’s defeat,

Defence Minister Jason Kenney said the

NSPS plan – supposed to build up to 15 re-

placement ships for the Navy’s frigates anddestroyers – might only finance 11 vessels.

Trudeau hasn’t detailed how his govern-

ment will proceed with improvements to theshipbuilding program, but he has committed

initially to the construction of an additionalArctic Offshore Patrol Ship (AOPS).

“Canada is immensely lucky to have the

longest coastline in the world and Canadi-ans expect we give our Navy the propertools to protect that coastline,” he said.

The NSPS called for five AOPS. Trudeau’sgovernment would build a sixth. Maritimeindustry sources also suggest the Liberal

government could build another supplyship. The NSPS committed to building two,but the Navy originally wanted three.

Peter Cairns, president of the Shipbuilding

Association of Canada, said it is too early totell how many more ships could be pro-duced under the Liberal government or

whether its plan would ensure enough fund-ing for vessels already planned in the NSPS.

Cairns, however, said it was rare that a Ca-

nadian government would specifically make

promises during an election about ship-building and rebuilding the Navy.

“It’s very good news for both industry andthe Navy,” said Cairns, a retired vice admiraland former Navy commander. “At least it’s

an acknowledgment that the Navy has beenfacing significant challenges.”

In particular, there is concern about the

lack of funding for the Canadian SurfaceCombatant program, the replacement fleet

for the frigates and destroyers, he noted. In-

dustry will be closely watching what Tru-deau does with that program, Cairns added.

Trudeau said his government will ensure

the Navy “will once again be able to operate

as a blue water fleet and remain so.”Brian Carter, president of

Seaspan Shipyards in Vancouver – whichwill build the two supply ships starting nextyear – didn’t comment on whether a third

ship is expected to be built. But he wel-

comed the new government’s support.“What’s happening in the shipbuilding in-

dustry in Canada is truly great,” he said of

the NSPS. “To have government understandthe need to make that a success over thelong term and to have government support

that is another shot in the arm” for industry.Cairns, however, cautioned that even if the

new government contributes more funding,

it doesn’t mean construction will speed up.He noted that the last time Canada’s industry

built large warships was in the 1990s.

The Conservative government has facedcriticism for its naval shipbuilding plan. Noship under NSPS has yet been completed,

and only two have been started.In 2006, Harper promised a fleet of armed

Polar-class icebreakers, but that was scaled

back to one unarmed icebreaker yet to bebuilt. In 2007, he said up to eight AOPSwould be built by 2013. But that program fell

behind schedule, and the number to be builtdropped to five. The first AOPS will be readyby 2018, with the last delivered by 2022. The

Canadian Surface Combatants won’t bebuilt until after 2022. N

Email: dpugliese@defensenews.com.

Canadian Naval Industry Eyes Boost From F-35 PulloutBy DAVID PUGLIESE

NORTH AMERICA

20 DefenseNews November 9 - 16, 2015 www.defensenews.com

EUROPE

PARIS — France’s planned acquisi-

tion of four C-130 Hercules for €330million (US $361 million) hasfueled a debate between the armed

forces and procurement officialsover buying the US airlifter, whileAirbus scrambles to develop a

competing offer, defense execu-tives and analysts said.

Later this month, France expects

to receive a US letter of accep-tance setting out the price of four

Lockheed Martin C-130Js, a de-fense specialist said.

The financial details from the US

are eagerly awaited as the revisedmultiyear budget sets aside fundsfor the four C-130s, two of which

will be fitted for helicopter in-flightrefueling.

The office of the defense minis-

ter asked for an official letter of re-quest to be sent to the US as therewas concern over an unofficial

French estimate of US $800 millionfor four C-130Js and two years of

maintenance, the specialist said.The price of the C-130J is tightlyheld, so the US reply will help De-

fense Minister Jean-Yves Le Driandecide the procurement path byyear’s end.

Airlifters are a key asset, air chiefGen. André Lanata told the parlia-mentary defense committee.

“As to transport aircraft, this is asensitive capability as it is verymuch in demand in the field and

deserves close attention,” he saidon Oct. 7. “The C-130 fleet constitu-

tes an indispensable complement

to the A400M, particularly for mis-sions conducted by the specialforces.”

French authorities are studyingtwo options: buying older, second-hand aircraft or new planes from

the US, he said.That acquisition would modern-

ize the capability and deliver a

long-term solution as the servicewould fly the A400M as a “strate-gic” cargo lifter, and the C-130 for

“medium” loads, which would helpthe special forces, he said. “Thetwo fleets … would be comple-

mentary,” he said.The French forces asked for the

C-130s to support troops deployed

against insurgents across the sub-Saharan Sahel in Africa. That re-quest reflects a late delivery of the

A400M and its lack of helicopteraerial refueling in the present ver-sion.

A key mission for the specialforces is to fly helicopters for com-

bat search and rescue missions.Among the services there is con-

cern a split buy of two secondhand

C-130H and two new C-130J ver-sions of the Hercules would lead toa “micro fleet” of the latter, which

would be costly to maintain, a de-fense specialist said.

Buying secondhand planes saves

money in the short term, but thereare worries about the long-termmaintenance costs, an officer said.

A secondhand batch is beingconsidered as the €330 millionbudget is too low for four of the J

model, the specialist said. There isconcern among the services onwhy such a low figure was submit-

ted to the budget law, as that slowsdown acquisition of the newC-130J.

A slow and complex acquisitionof the Hercules is seen as helpingAirbus, which could compete with

its C-295 and A400M airlifters.The Direction Générale de l’Ar-

mement — the French defense

procurement agency — was un-available for comment.

Airbus is developing a refueling

kit for its C-295 medium transport,Miguel Angel Morell, head of engi-neering at Airbus Defence &

Space, told journalists on Oct. 27 inSeville. The kit also would fit onthe C-235 light transport, allowing

the planes to carry respectively 9and 6 tons of fuel.

The transport planes could refu-

el helicopters, turboprop aircraftand UAVs. Airbus aims to build anew control system for hose and

drogue, and update technologythat stems from the 1950s and1970s.

Airbus aims to be ready this yearto deploy in flight a hose anddrogue on the C-295. A ground test

bench has started for system vali-dation, with a hose installed.

Other work on the C-295 in-

cludes an extreme short take-offand landing under 500 meters, and

a new defensive aids suite using adirectional infrared countermea-sure against missile attacks.

Airbus is working to find a solu-tion to helicopter refueling on the

A400M, a contractual capability

which has generated technicalproblems, as the four powerful tur-boprop engines generate aerody-

namic risk for helicopters.Airbus is in advanced negotia-

tions on the A400M with nine pros-

pective clients, said AntonioRodriguez Barberan, head of mili-tary aircraft sales.

The French Air Force has 27Transall C-160s, which are nearingthe end of operational life, 14 Her-

cules and 27 CN-235s.Britain is considering extending

the operational life of the C130-Js,

and the strategic defense and secu-rity review soon to be releasedmay refer to the Hercules. N

Email: ptran@defensenews.com

Airbus Scrambles To CompeteAgainst French Plan To Buy 4 C-130s

By PIERRE TRAN

STAFF SGT. R.J. BIERMANN/US AIR FORCE

Heading for Exercises: About 150 US Army soldiers from the 173rd Infantry Brigade Combat Team, Airborne, depart for exercises in

Estonia from Aviano Air Base, Italy, on two US Air Force C-130J Super Hercules in April 2014.

HELSINKI — The Nordic governments aremoving to cooperate against threats posed

by jihadist groups Islamic State and al-Qai-da.

National security and defense issues,

along with the potential adoption of com-mon platforms to bolster collective action,were explored at the Nordic Council of Min-

isters in Reykjavik on Oct. 27. The council serves as an inter-governmen-

tal body for political, economic and security

cooperation among the Nordic countries. The Reykjavik meeting took place as Nor-

dic countries adopt new initiatives to

strengthen their anti-terrorism and treasonlaws to deal with threats posed by citizens

and domiciled residents returning to the re-

gion as radicalized Islamic jihadists after

fighting with al-Qaida and ISIL.

The Nordic countries are determined touse collective strategies to improve defense

and security in the region, said Finnish

Prime Minister Juha Sipilä. Finland is set toassume the presidency of the Nordic Coun-cil of Ministers in 2016.

“Our joint objective is to build a secure androbust Nordic region within Europe. Togeth-er we can strengthen security in our own

area and bring greater weight to promotinginternational security,” Sipilä said.

Closer cooperation is expected to improve

channels between military and national se-curity services to share intelligence on po-tential terrorism threats and radicalized

groups. Nordic governments are closely watching

Danish plans to toughen its anti-terrorism

and nationality laws.

The Danish initiative comes in the face of a

perceived growing threat from radicalizedIslamic groups. Finland, Norway and Swe-

den are also planning to reinforce laws on

nationality, counter-terrorism and the fund-ing of extremist groups.

Denmark’s military intelligence and na-

tional security agencies, including the Dan-ish security and intelligence service PET,will receive greater funding and expanded

surveillance powers. The Danish government plans to intro-

duce legislative changes to severely punish

citizens or non-national residents who leavethe country to fight for foreign Islamic mil-itant groups such as ISIL and al-Qaida in Syr-

ia and Iraq. Such acts will be regarded astreasonable under new laws.

Under the new Danish “patriot” law pro-

posals, so-called “foreign fighters” would

face lifetime prison sentences for taking

part in armed conflict abroad, while thosewho radicalize or recruit “foreign fighters”in Denmark will receive jail terms of up to 16

years. “The starting point is that anyone who

lives in Denmark must be loyal to Denmark.

We should not accept that militant extremistgroups can succeed in recruiting foreign

fighters in Denmark,” said Danish Justice

Minister Søren Pind. The legislative changes, said Pind, will

punish those who choose extremism over

“loyalty” to Denmark.

“Anyone who chooses to fight under thebanner of extremism will need to know that

they will be closely monitored, and their ac-tions will have serious consequences upontheir return to Denmark,” Pind said.

Nordic States Push Joint Action Against Homeland ThreatsBy GERARD O’DWYER

See HOMELAND THREATS, Page 22

22 DefenseNews November 9 - 16, 2015 www.defensenews.com

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EUROPE

MOSCOW — A draft copy of Rus-sia’s 2016 federal budget showsthat its military spending will re-

main essentially flat next year,with a modest increase of 0.8 per-cent, while the majority of Russian

government spending is set forcuts amid an economic downturn.

Russian military spending has

been rising each year since an am-bitious 20 trillion ruble (US $700billion at the time) modernization

and rearmament program waslaunched in 2011. The program

kicked into high gear when expen-ditures jumped 26 percent over2014.

But Russia’s economic crisis,spurred in part by Western eco-nomic sanctions following the an-

nexation of Crimea last year andthe collapse of global oil prices —which, in turn, cut the ruble’s value

by nearly half — appears to havethrown a wrench into procure-ment plans.

According to a draft 2016 military

budget, “the 2016 budget alloca-tion for national defense is

planned at 3.145 trillion rubles,” oraround 4 percent of Russia’s ex-pected gross domestic product

next year, the TASS news agencyreported.

Going into 2015, the State Duma

— Russia’s lower house of Parlia-ment — allocated about 3.3 trillionrubles for defense expenditures.

Economic realities this year laterforced a 5 percent reduction to justover 3.1 trillion rubles, which still

represented a 26 percent increase.If approved, next year’s budget

will see just 25.5 billion rubles, orless than 1 percent, added over2015.

With around two-thirds of Rus-sian military spending typically al-located for procurements under

the state rearmament program andthe value of the ruble contributingto inflation at home, it is not clear

that Russia will be able to continueits procurement programs asplanned.

In 2015, nearly 2 trillion rubles of

the budget was allocated to pro-curements. IHS analyst Craig Caf-

frey wrote in June that Russiawould need to begin hiking expen-

ditures by 10 percent each yearthrough 2020 to meet PresidentVladimir Putin’s spending targets.

“Since 2010, the budget has in-creased by an average of 20 per-cent a year,” Caffrey told Defense

News in response to follow-upquestions on Nov. 4, explainingthat without continuing this level

of growth, it will be difficult tofund modernization without sig-nificant cuts to operational spend-

ing.

While funding for the rearma-ment program may increase mar-

ginally over the next several years,the downturn in funding hikes may

force investment and procurementtargets to be pushed back into anupcoming procurement program

covering the period from 2016 to2025.

“So, what we may see when

the new 2016-2025 [modernizationprogram] is released is that somefunding is deferred and back-load-

ed into the 2020-2025 period,” Caf-frey concluded. N

Email: mbodner@defensenews.com

Russia’s ’16 DefenseSpending To StayEssentially Flat

By MATTHEW BODNER

SERGEI VENYAVSKY/AFP/GETTY IMAGES

War Preparation: Russian soldiers take part in the international military games “Masters

of Antiaircraft Battle - 2015” outside the southern Russian town of Yeisk on Aug. 8.

In its terror-risk assessment report, releasedin October, PET’s Center for Terror Analysis es-

timated that some 125 Danish citizens have leftDenmark as jihadist fighters to join ISIL sincemid-2012. The report acknowledged that the ac-

tual number “could be higher.” “We continue to believe that the conflict in

Syria/Iraq represents the most significant fac-

tor in the threat situation in Denmark,” said Sø-ren Jensen, the CTA’s director.

Sweden and Finland are also drafting legisla-

tion to ban their citizens and domiciled non-na-tionals from joining jihadist groups and fighting

in armed conflicts abroad.

Intelligence reports from Sweden’s nationalsecurity service Säpo estimate that about 300radicalized Islamic men and women have left

Sweden to join ISIL as jihadist fighters in Iraqand Syria since 2012.

“Compared to similar countries, a dispropor-

tionate number have traveled from Sweden,”said Säpo’s general director, Anders Thornberg.

Of the 300 radicalized Islamists who left Swe-

den, he said, some 40 were killed in variousISIL-led combat actions in the Middle Eastwhile an estimated 115 have returned to Swe-

den. The number still fighting with ISIL in Syriaand Iraq is estimated at 125.

Meanwhile, Sweden is extending its commit-

ment to train Kurdish soldiers in Iraq until the

end of 2016, part of the Swedish government’smulti-branch approach to counter ISIL in Swe-

den and support efforts to confront ISIL in Iraqand across the Middle East.

Sweden provided a NATO-style Operational

Mentoring and Liaison Team comprising 35 spe-cialist troops to back the Iraqi government’sfighter against ISIL in the summer.

The sudden influx of asylum-seeking refu-gees fleeing the war-torn Middle East is addinga significant new threat to Finnish security, said

Antti Pelttari, the head of Finland’s national se-

curity service.The main terrorism treat, said Pelttari, is po-

tentially linked to “individual asylum seekers”with connections to radicalized militantgroups.

The Finnish intelligence service estimatesthat of the 70 radicalized Islamist men andwomen who left Finland to join ISIL, some 50

have been killed while a further 20 have re-turned to Finland. N

Email: godwyer@defensenews.com

FRANCOIS GUILLOT/AFP

No to Islamic Violence: People gather on Feb. 22 in France to protest against terrorism, following attacks in Denmark

and mourning the 21 Egyptian Coptic Christians killed by the Islamic State group in Libya.

HOMELAND THREATSFrom Page 20

24 DefenseNews November 9 - 16, 2015 www.defensenews.com

ASIA & PACIFIC RIM

NEW DELHI — Under an offsets deal reached

by India and France regarding the acquisi-tion of 36 Rafale fighter jets, France hasagreed that it will fulfill its obligations only

within the aerospace arena and not partlythrough research and development pro-jects, an Indian Defence Ministry source

said. With a final agreement reached on offsets,

India and France are likely to sign a protocol

by the end of this month to buy 36 Rafalesand thereafter the price negotiations willfollow, leading to a final deal in the next four

to six months, the MoD source added.Ever since Indian Prime Minister Naren-

dra Modi announced in his April visit to Par-

is that India intended to buy 36 Rafales on agovernment-to-government (G2G) basis,

talks between India and France were stuckon the issue of offsets, with the French ini-tially not agreeing to discharge offsets at all.

India wants 50 percent of the total amountof the deal, estimated to be around $10 bil-

lion for 36 Rafales, including weaponry, tobe matched by offsets involving purchasesfrom the Indian aerospace sector, including

tie-ups and cooperation with domestic de-fense companies to boost India’s defenseproduction base.

The French wanted 20 percent of the off-sets to be discharged through R&D tie-upswith India’s Defence Research and Develop-

ment Organization (DRDO), but the MoD re-jected their request, the source added. Thelist of R&D projects in which the French had

evinced interest to participate is not known.But Dassault Chairman Eric Trappier said,

“We are working with the Indian authorities

on the offsets. Nothing has been decided.We are following the Make in India program.It’s going in the right direction. Talks are still

continuing.”The French Defense Ministry declined

comment. “The offset policy of 2012 allows offset ob-

ligations to be discharged through collabo-

ration with DRDO, subject to someconditions. However, offsets are best under-

taken through collaboration with industry,for direct impact on defense manufacturing.This may be the reason for the MoD’s posi-

tion,” said Vivek Rae, MoD’s former directorgeneral of procurement.

“It is not a good idea to discharge all off-

sets through DRDO.” “A G2G contract is a customized contract.

So the two countries can agree to a unique

set of terms of conditions, but these have tobe mutually acceptable. While doing so,

neither party can completely overlook thelaws, regulations, procedures and prece-dents,” said Amit Cowshish, MoD’s former

financial adviser.India typically allows companies to dis-

charge offset obligations through participa-tion in R&D projects, training, and the directpurchase of equipment and systems in des-

ignated areas from industry. The G2G deal on Rafale was a separate

deal to the 2007 request for proposal, which

has since been canceled. Under the 2007RFP, India was to procure 126 Rafales with108 being license-produced in India.

MoD’s top acquisition body, the DefenceAcquisition Council, on Sept. 1 gave the

go-ahead to the negotiation committee onpurchasing Rafale jets for the Indian AirForce. N

Email: vraghuvanshi@defensenews.com.

France, India, Agree toDetails on Rafale Offsets

By VIVEK RAGHUVANSHI

DASSAULT

Offsets Deal: France and India have reached agreement on how France will discharge its offset obligations in

the sale of 36 Rafales to India.

TAIWAN — China’s deployment ofthe more advanced J-11BH/BHS

fighter aircraft to Woody Island, re-vealed in photographs released viaonline Chinese-language media

websites in late October, under-scores how seriously the People’sLiberation Army Navy (PLAN) is

taking its claims to the South ChinaSea.

The placement of advanced

fighter aircraft on Woody Island,located in the Parcel archipelago,extends China’s fighter aircraft

reach an additional 360 kilometersinto the South China Sea from the

PLAN air base located on Hainan

Island.The new location could prove

troublesome for US surveillance

aircraft, such as the EP-3 Aries andthe P-8 Poseidon, that fly throughthe area on a regular basis. In 2001,

a collision between a Chinesefighter and EP-3 resulted in thedeath of a Chinese fighter pilot and

the forced landing of the EP-3 onHainan Island. In 2014, a Chinesefighter harassed a P-8 in the vicin-

ity of Woody Island, which fol-lowed with a strong verbal protestby the Pentagon.

Bonnie Glaser, director of theChina Power Project, Center forStrategic and International Stud-

ies, said the Chinese are demon-

strating to the US, other claimantsto the South China Sea and their

domestic audience that they intend

to protect their sovereignty.Farther south of Woody Island,

China is building air bases and port

facilities in the Spratly Islands.These include Subi Reef, MischiefReef and Fiery Cross. All three

have undergone significant land

reclamation efforts and expansionover the past two years.

“As China completes the facili-ties on its reclaimed features in theSpratlys, including air strips, hang-

ars and fuel storage tanks, it will be

able to base, or at least rotate on a

regular basis, fighters in the SouthChina Sea,” said Ian Storey, senior

fellow at the Institute of SoutheastAsian Studies, Singapore.

Some observers minimize the im-

portance of military facilities andoperational capabilities on China’svarious claimed features, rocks

and islands in the South China Sea,but Paul Giarra, president of Glob-al Strategies and Transformation,

disagrees.“Chinese military aircraft and

missile batteries spread through-

out the South China Sea serve a

number of important functions, all

to the disadvantage of the UnitedStates and our friends and allies[including Taiwan] who have a

stake in freedom of seas, the rule oflaw and their own territorialclaims,” he said.

Giarra said this strategy entailssix factors:n They fortify China’s maritime

approaches.n They militarize China’s politi-

cal claims, making it much more

difficult to challenge them legally.n They make it operationally

much more difficult to dislodge

China from these positions.n These individual military ca-

pabilities are part of a larger fixed

and mobile Chinese military net-

work, not only throughout theSouth China Sea, but on the Chi-

nese mainland.

n Military airfields throughoutthe South China Sea extend dra-

matically the operational range ofland-based military aircraft, whichcan recover on these fields, refuel

and swap crews in shuttle missionsthat change the military equationconsiderably.

n These maritime facilities pushout the limits of the military’s foot-print. This extends the boundaries

of China’s anti-access/area denial(A2/AD) envelope, and brings aconsiderably larger portion of Chi-

na’s maritime approaches under

the military’s firing arcs.

Taiwan-based Alexander Huang,chairman, Council on Strategic andWargaming Studies, said that it

might be too early to focus on mil-itary implications. Citing the prob-lems Taiwan’s Air Force faces with

the operational and seasonal de-ployment of fighter aircraft at Ma-gong Air Force Base, Penghu

Island, Huang said weather and thesalty sea air makes deployment onoff-shore islands difficult for ad-

vanced fighter aircraft.“If they intend to place J-11 on

Woody Island around the year, it

would be an ‘all-weather’ test to theairframe, parts and combat sys-tems onboard before I do military

implication analysis.”Glaser agrees. “My understand-

ing is that fighters are likely only to

be deployed for short time frames

in the Spratlys — the salty sea airwould cause havoc to the aircraft

over long periods.”

Giarra suggested that China's ac-tions in the South China Sea mirror

what the United States and its alliesin the region should be doing: “ex-panding operational perimeters,

distributing significant firepoweralong operational peripheries, andcombining the psychological and

legal elements of modern warfarein an integrated campaign.” N

Email: wminnick@defensenews.com.

China Expands Reach With Fighter Aircraft on Woody IslandBy WENDELL MINNICK

AFP PHOTO/CSIS ASIA MARITIME TRANSPARENCY INITIATIVE/DIGITALGLOBE

Chinese Expansion: This handout photo taken on April 2 shows a satellite image of a

general view of what is claimed to be an under-construction airstrip at the top end of

Fiery Cross Reef in the Spratly Islands in the disputed South China Sea.

26 DefenseNews November 9 - 16, 2015 R1 www.defensenews.com

BizWatch

DUNKESWELL, England — Walk into the

office of SC Group CEO Nick Ames,and one of the first things you spot onhis desk is a book about nuclear law.

It’s a reminder that the small Britishcompany known chiefly for buildingspecialist high-mobility vehicles for

the military is in the midst of a diversifi-cation push that could take it into nu-clear and other high-end engineering

activities.With the proposed £25 billion (US

$38.6 billion) Hinkley Point C nuclear

power station set to be built just a fewmiles from SC Group’s head office on aformer air base at Dunkeswell in south-

west England, Ames reckons the com-pany’s engineering capabilities put it in

a great position to secure productionwork if the scheme goes ahead.

Nuclear, including possible work at

the Atomic Weapons Establishment, isone of the sectors SC Group is pinningits hopes on to achieve more than dou-

ble its £25 million to £30 million annualrevenue (US $38.6 million to $46.3 mil-lion) over the next five years as it takes

its advanced engineering capabilitiesinto what it hopes will be new growthareas.

Previously known as SupaCat, thecompany underwent an identitychange and restructuring in September

to better reflect a business that alreadyhas interests across defense, renew-able energy, oil and gas, marine and

other sectors.“We will not be walking away from

our heartland, which is military vehi-

cles. What we were finding though isthat while SupaCat is a wonderfulname in defense it is completely un-

known outside the sector. For us to ad-

dress some of the non-defense areaswe needed a brand that gave us a bit of

headroom,” Ames said.

The result is the creation of fourbusinesses under the new SC Group

banner.Supacat remains the name of the mil-

itary vehicle business. SC Innovation

was created to provide engineering so-lutions for non-defense activities. Therecently acquired Blackhill Engineer-

ing fabrication and machining businessand a marine products business calledProteum complete its lineup for the

moment.Ames, a shareholder in the privately

held company, said the effort is about

getting the business a better balance to

even out the often feast-to-famine na-ture of defense contracts. At the mo-

ment, it’s probably more feast thanfamine for defense.

Many Supacat customers are special

forces, so deals are often done behindclosed doors, but some deals do get an-nounced. Norway said in May it had

signed a £23 million contract for the de-livery of HMT Extenda vehicles withan option to double the fleet. The high-

mobility vehicles have the virtue ofconverting from a 4x4 to 6x6 configura-tion depending on the role the military

user has for the machine at the time.The company also announced last

year it was supplying a similar vehicle

to the Australian special forces in a

AUD $105 million (US $75 million)deal.

SC Group’s biggest customer,

though, is the British Army, which pur-chased hundreds of the company’s

Jackal and Coyote vehicles to meeturgent operational requirements inAfghanistan. The machines were re-

tained by the military since the Britishwithdrawal last year.

“Defense is a great sector to be in,

particularly if you have product hittinga need, but it can be very lumpy so theopportunity to better balance the busi-

ness has always been important,”Ames said.

“You can diversify in defense but

when the UK government publishes its

Strategic Defence and Security Review

(SDSR) later this year and maybe takesmoney out of your sector it doesn’t doany harm to have other sectors in your

mix,” he said. “I’m not expecting SDSRto be a big story for us though.”

“The corporate graveyard of engi-

neering businesses in the UK is quitesubstantial,” Ames added. “I have nodesire to see SC Group added to that.

We need to make sure we are balanced,strong, investing in new products andtrying to equalize the turnover across

the businesses the best we can, he said.“We are convinced that the engineer-

ing talent and businesses we have in

the UK and Australia can be used infields other than defense. The launchand recovery system we developed for

the Royal National Lifeboat Institute isevidence of that,” he said.

“We have a vision of what the busi-

ness will look like in 2020 and that veryclearly articulates that we want to seethe other sectors grow up to the size of

our defense activities,” said the SCGroup boss.

“We also see growth in defense, as

well. There are opportunities in the UKwith the multi-role protected vehicle

(MRPV) program and beyond that themechanized infantry vehicle project.We will be interested to see how they

fare in SDSR,” he said. The SC Group boss said the company

has been doing some re-balancing in

defense with through-life support con-tracts, setting up defense operations inAustralia and looking at other sectors

like marine where they have donesome work on mechanized handlingsystems.

SC Group’s work with Tata Motors todevelop a light armored multipurposevehicle for the Indian military could

find its way to the UK to address theMRPV requirement, Ames said.

“It’s not a million miles away from

the MRVP and I think it could be a veryinteresting proposition,” he said.

Other opportunities for selling the

SupaCat range of vehicles exist inEurope, the Middle East, Australia andelsewhere, Ames said.

Getting the company’s recurring rev-

enues above the £60 million mark froma diversified business could have bene-

fits beyond just creating a healthy bal-

ance sheet.Ames said a larger, diversified busi-

ness will help cure one of the compa-ny’s biggest headaches in the exportmarket: the offset packages that are a

requirement of many deals. “Offset is a significant worry for us

and the ability to be able to address the

requirement from a wider group will behugely beneficial. Offset is top of thepile when it comes to the difficulties

the SME community has in exporting,”he said. “The financial risk is huge.” N

Email: achuter@defensenews.com.

SC Group Eyes Nuclear,Marine Opportunities

By ANDREW CHUTER

DAVE HUSBANDS/UK MINISTRY OF DEFENCE

Diversification Push: British Army Jackal

vehicles in transit in Afghanistan. The vehicle’s

maker, SC Group, is looking to expand into

nuclear and other high-end engineering

activities.

Thai Missile BuyThailand’s request to buy

16 Raytheon Evolved Sea-

sparrow Missiles (ESSM)from the US government has

been approved by the USState Department, the Pen-tagon’s Defense Security Co-

operation Agency said.The agency delivered the

required certification notify-

ing Congress of this possiblesale on Oct. 28. The $26.9million sale, which awaits

congressional approval, in-cludes the missiles and asso-ciated equipment, parts and

logistical support.In addition to Raytheon,

principal contractors in-

clude BAE Systems, Saaband Lockheed Martin.

SABRE StakeBAE Systems has taken a

20 percent stake in a British

company developing an air-breathing rocket engine ca-pable of powering aircraft at

speeds in excess of 4,500miles per hour.

Europe’s largest defense

contractor announced Nov.2 it was investing £20.6 mil-

lion (US $31.8 million) in the

Abingdon, England-basedcompany Reaction Engines.

The synergetic air-breath-

ing rocket engine, or SABREfor short, uses ground-breaking technology able to

propel an air vehicle at morethan Mach 5 in the atmos-phere before transitioning

into a rocket mode givingspaceflight at speeds up toorbital velocity, equivalent

to 25 times the speed ofsound. The technologywould allow an aircraft to

take off from a conventionalrunway, accelerate to Mach5 and then convert to rocket

mode taking the vehicle up

to orbital velocity.

IED Jammer AwardThe US Navy has awarded

Northrop Grumman a $95million contract for low-rateinitial production of the

Joint Counter Radio-Con-trolled Improvised Explo-

sive Device ElectronicWarfare (JCREW) Incre-ment 1 Block 1 (I1B1), the

US-based company said.The contract, awarded by

the US Naval Sea Systems

Command (NAVSEA), in-cludes options which, if ex-ercised, would bring the

total value to $213 million.Work is expected to be com-pleted by January 2017.

JCREW systems are soft-ware-programmable jam-mers that provide protec-

tion from device-triggeredimprovised explosive de-vices. Northrop developed

mounted, dismounted andfixed-site variants to protectvehicles, troops and perma-

nent structures for the Navyand the US Air Force.

Trainer DevelopmentMassachusetts-based Ap-

tima has been awarded a

$12.4 million contract to de-velop a weapons trainer for

the US Air Force’s Distrib-

uted Common Ground Sys-tem (DCGS), C4ISR &

Networks reported.

Aptima “will provide a vir-tual training environmentproviding simulated mission

training to DCGS sites, cov-ering geospatial intelligencefull-motion video, high

altitude imagery, syntheticaperture radar imagery,electro-optical imagery, and

infrared imagery,” accord-ing to the DoD contractannouncement. “The weap-

on system trainer will allowthe Air Force to transitionthe DCGS intelligence ana-

lysts’ crew and positional

RAYTHEON

A US sale of Evolved Seasparrow Missiles to Thailand is pending

congressional approval.

RANDOM NOTES

www.defensenews.com November 9 - 16, 2015 DefenseNews 27

Send product information and financial news to

randomnotes@defensenews.com.

training from on-the-jobtraining during ‘live mis-

sions’ to simulated missionscenario training.”

Engineering ServicesSAIC was awarded a

prime contract by the Space

and Naval Warfare SystemsCenter Pacific to continue toprovide engineering ser-

vices to the US Navy’s afloatand ashore assets, the US-based company said.

The three-year indefinite-delivery, indefinite-quantitycontract is worth about $80

million. Work will be per-formed primarily in Norfolk,Virginia, and San Diego. Ad-

ditional work will be per-formed on US Navy shipsand shore sites globally.

Tactical Networks In-Ser-vice Engineering Activity isresponsible for the sustain-

ment of fielded systemsthrough end-of-life replace-ment, system upgrades, fol-

low-on or interrelatedsystem, distant support, on-

site repair, installations andsystem analysis.

Radar and Comms R&DThe Pentagon’s Defense

Advanced Research Pro-

jects Agency has awardedLeidos a prime contract toprovide research and devel-

opment in support of Phase2 for the Shared SpectrumAccess for Radar and Com-

munications program, theUS company said.

The contract has an 11-

month base period of perfor-mance, an 11-month option,and a total potential con-

tract value of about $14 mil-lion.

The program seeks to im-prove radar and communi-

cations capabilities throughspectrum sharing.

Vector HawkLockheed Martin was

awarded a $4.6 million con-

tract from the Pentagon’sCombating Terrorism Tech-nical Support Office for the

continued development of amaritime canister-launchedsmall unmanned aircraft

system (sUAS), the US-based company said.

Lockheed’s Vector Hawk

can reconfigure to matchspecific missions. LockheedMartin is working on a re-

configurable version of thecollapsible wing sUAS.

Vector Hawk is capable of

autonomous flight and land-ing. The system also incor-porates fail-safes to ensure

it can safely return to theuser or auto-land when nec-essary.

Engine ComponentsUS-based Pratt & Whitney

has awarded a contract toMulticut to manufacture

components for the F135 en-gine, the propulsion systemfor the fifth-generation F-35

aircraft.Multicut, a precision com-

ponent manufacturer locat-

ed in Vildjberg, Denmark,has signed a 10-year long-term procurement agree-

ment with Pratt & Whitney, aUnited Technologies com-pany. N

Send personnel news toonthemove@defensenews.com.

The head of Lockheed Mar-tin’s F-35 program, LorraineMartin, has been promotedto the new position of depu-

ty executive vice presidentfor mission systems andtraining, while her deputy,

Jeff Babione, will succeed her

as executive vice presidentand general manager of the

F-35 program, effective Jan.

1, Lockheed Martin said. Fred Ross, the vice presi-

dent for supply chain man-agement, will become thenew F-35 program deputy.

Cambridge, Massachu-setts-based Draper said it has

welcomed new board mem-bers — David Aronoff, a gen-eral partner at investment

firm Flybridge Capital Part-

ners, Boston and New York;Francis Kearney, a retired US

Army lieutenant general andpresident of Inside-Solu-tions-LLC consulting firm;

and national security con-sultant David Shedd, formerlydeputy and acting director

of the Defense Intelligence

Agency, chief of staff for thedirector of national intelli-

gence, and senior director

for intelligence programs atthe White House.

Robert Colwell, a consultantwho was director of themicrosystems technology

office at the Pentagon’s De-fense Advanced ResearchProjects Agency, joins the

not-for-profit research anddevelopment company’scorporation. N

ON THE MOVE

CalendarTO PLACE AN EVENT LISTING,CALL (703) 658-8365 OR EMAIL CALENDARAD@DEFENSENEWS.COM

DECEMBER

JANUARY

FEBRUARY

NOVEMBER

November 30 - December 4, 2015

I/TSEC 2015Orange County Convention CenterOrlando, FLwww.iitsec.org

I/ITSEC is the world's largest conferenceand display of training systems capabilitiesin the world. Over 500 exhibitors join topresent leading edge technology andinnovative concepts related to the Training,Modeling and Simulation industries for over14,000 visitors. Key government organiza-tions and key industry partners from acrossall training domains are present to include,transportation, health care, gaming, andeducation. The venue is host to numerouscollateral meetings and discussion oppor-tunities take advantage of the large numberof government and industry leadersbrought together in one venue. This repre-sents a huge offset to separate meetingsrequiring separate travel and logisticalsupport. In many cases, cross functionalmeetings between government, industryand academia would be impossible outsidethis venue.

December 9-10, 2015

NDIA MASTERING BUSINESSDEVELOPMENTSan Diego, CAwww.ndia.org/meetings/607A

January 19-21, 2016

27TH ANNUUAL SO/LICSYMPOSIUM & EXHIBITION Washington, DCwww.ndia.org/meetings/6880

November 16-18, 2015

NDIA 27TH ANNUAL INTERNATIONALINTEGRATED PROGRAMMANAGEMENT (IPM) WORKSHOPBethesda, MDwww.ndia.org/meetings/6IPM

December 1-2, 2015

NDIA INSIDER THREAT PROGRAMWashington, DCwww.ndia.org/meetings

February 3-4, 2016

NDIA HOW WASHINGTON WORKSReston, VAwww.ndia.org/meetings/643B

February 9-10, 2016

NDIA 2016 HUMAN SYSTEMSCONFERENCESpringfield, VAwww.ndia.org/meetings/6350

February 29-March 4, 2016

2016 PACIFIC OPERATIONALSCIENCES & TECHNOLOGYCONFERENCEHonolulu, HIwww.ndia.org/meeting/6540

December 8-10, 2015

GULF DEFENSE & AEROSPACEKuwait City, Kuwaitwww.GulfDefense.com

December 7-9, 2015

NDIA GLOBAL DEMILITARIZATIONSYMPOSIUMParsippany, NJwww.ndia.org/meetings/6580

This event continues to support US Department of Defense and Industry inglobal efforts directed at reducing thestockpile of excess and obsolete strategic,tactical, and conventional munitions.

28 DefenseNews November 9 - 16, 2015 www.defensenews.com

Commentary

DefenseNewswww.defensenews.com

EditorVago Muradianvmuradian@defensenews.com

Managing EditorDave Gustafsondgustafson@defensenews.com

Deputy Managing EditorGreg Couteaugcouteau@defensenews.com

European EditorAndrew Chuterachuter@defensenews.com

WASHINGTON STAFF WRITERS

Naval WarfareChristopher P. Cavasccavas@defensenews.com

IndustryAndrew Clevengeraclevenger@defensenews.com

CongressJoe Gouldjgould@defensenews.com

Land WarfareJen Judsonjjudson@defensenews.com

PentagonAaron Mehtaamehta@defensenews.com

Air WarfareLara Seligmanlseligman@defensenews.com

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T he Obama administration’s decision to put as

many as 50 special operators in Syria hasrenewed the debate over whether America

needs more boots on the ground at a pivotal mo-

ment in a complex civil war.America and its allies have been accused of doing

too little as Europe faces the biggest migrant crisis

in a generation, forcing governments to accommo-date the exodus of endangered Syrian and Iraqicitizens even as they seek ways to stop it.

Russia, meanwhile, has directly involved itself inSyria and the talks to resolve it, just as its combatoperations have worsened the crisis.

US Defense Secretary Ash Carter endorsed thenew troop commitment after the recent US-backedraid that saved more than 70 Iraqi hostages facing

execution. Though the raid cost the life of Spec Opssoldier Master Sgt. Joshua Wheeler, Carter rightlysaid more such raids would be conducted to save

lives, pressure ISIS and gather intelligence.But although these 50 troops are billed as the first

“boots” in the war-torn country, US intelligenceofficers have been on the ground for years.

There’s always a need for ground forces, and

depending on the conflict, sometimes in large num-bers. Syria, however, shouldn’t be one of those USmissions. Rather, the administration must maintain

as small a ground footprint as possible and usemore precision air power to degrade and destroyISIS. To date, US leaders have failed to use air pow-

er to its full potential to smash a militaristic terrorcult that fights more like a conventional army thanan insurgent force. It is an enemy suited to be relent-

lessly attacked from the air.First, Washington must change its approach to the

conflict, which has delayed progress. Officials have

suggested that Washington could have used more airpower to stop ISIS as it advanced on Palmyra todestroy its ancient ruins, but was concerned doing

so would have helped Assad’s forces.

If the mission’s goal is to destroy ISIS, that aim

must be at the core of an integrated strategy. Thisambiguity is why America’s European and Araballies worry there is greater interest in appearing to

fight ISIS than actually doing so. America invitedeveryone to the party, offering coordination but noleadership. Washington must now lead.

Second, America must carefully consider thediffering agendas of those it invites into its coalition.At Washington’s prodding, Turkey finally joined and

decided against attacking ISIS, instead strikingKurdish forces that bravely and successfully battlethe extremists. Other coalition fissures must be

addressed, too, including that Saudi Arabia, Turkeyand Qatar oppose Russia’s involvement, whileEgypt, Jordan and the UAE lean toward Moscow’s

approach. Washington also must remain wary ofIran’s role in this conflict.

Carter rightly tapped one commander to oversee

this vital mission. Army Lt. Gen. Sean McFarland, aseasoned battlefield commander, knows the region,

its players and the conflict’s intricacies. But he mustempower his command’s airmen to more vigorouslyprosecute the anti-ISIS air campaign. The approach

has worked before and can work again. If more USground forces are needed, they must be sparinglydeployed. If foreign forces are better suited, they

must be properly trained and equipped for the job.The fight against ISIS — as against the Taliban or

al Qaida and its franchises — will be long, hard and

slow work that will get worse before getting better.Refugee camps can become breeding grounds forfuture radicals when people spend years there.

Washington must leverage its asymmetric andsustainable advantages, from air power to financialand diplomatic tools, and not handcuff them. If

troops are deemed necessary to stabilize Syria andIraq while also rooting out ISIS, then Americashould forge a truly regional coalition to do the job

without occupying another Arab country.

EDITORIAL

FIGHTING ISIS

Don’t Handcuff Air Power

n Email letters to defenseletters@defensenews.com. Please includephone number. Letters may be edited. Submissions to Defense Newsmay be published or distributed inprint, electronic or other forms.

Freedom of NavigationExcerpted from a speech by US Defense

Secretary Ash Carter, delivered Nov. 4at the ASEAN Defense Minister-Plusmeeting in Kuala Lumpur:

With each minister I met, Idiscussed a range of vital securityissues, including counterterror-

ism, cybersecurity, non-prolifer-ation, ISIL, search and rescue,

disaster response and concernsabout reclamation and militariza-tion in the South China Sea. I

noted that every speaker beforeme raised this issue. That issuealso played a great part in many

of my bilateral conversationswith fellow ministers here and allover the world.

I understand this is a difficultissue for many countries. I re-minded everyone that the United

States does not take sides inthese maritime disputes, but wedo take the side of peaceful reso-

lution under international law. Weurge all claimants to permanentlyhalt land reclamation, stop the

construction of new facilities andcease further militarization ofdisputed maritime features.

[Chinese] President Xi said inWashington that China is “com-

mitted to respecting and up-holding the freedom of navigationand overflight that countries

enjoy according to internationallaw.” He pledged that China doesnot intend to pursue militariza-

tion of outposts in the SouthChina Sea. This is a positive state-ment, but we all must mean what

we say.For decades the United States

has exercised its rights throughour freedom of navigation opera-tions. And I have said many times

before, the United States willcontinue to fly, sail and operatewherever international law per-

mits. Freedom of navigation andthe free flow of commerce arenot new concepts. They’re not

theoretical or aspirational goals.In this part of the world, thesewere rules that worked for dec-

ades to promote peace and pros-perity. N

SPEECH

WORD FOR WORD

“Lockheed didn’t go and buy our company andpay $9 billion to turn us into a department ofLockheed. Part of what they paid for was thebrand, the reputation, the history and the legacy,all the things that go with it." Samir MehtaPresident of Sikorsky’s Defense Systems & Services unit

www.defensenews.com R1 November 9 - 16, 2015 DefenseNews 29

S yrian President Basharal-Assad’s visit to Moscow

last month appears born ofthe confidence that no one woulddepose him in his absence.

It completes Vladimir Putin’scycle of Middle Eastern visitors:Israel’s Prime Minister Benjamin

Netanyahu, plus Recep TayyipErdogan of Turkey, a NATO part-

ner; Deputy

Crown PrinceMohammedbin Salman of

Saudi Arabia,a longtimeAmerican

partner; andAbdel Fattahel-Sisi, presi-

dent of Egypt,which has nothad Russian

interlocutorssince the YomKippur War.

After hismeeting with

Assad, Putin called Erdogan, King

Salman of Saudi Arabia, andel-Sisi, as well as King Abdullah IIof Jordan to update them.

It is unsurprising that Arableaders and Israel, traditionalAmerican allies, are listening

carefully to Putin. Even Afghani-stan and Pakistan are making

overtures to the Kremlin and

requesting military hardware.It behooves the American gov-

ernment to understand Russia’s

strategy — not to agree with it,not necessarily to cooperate withit or with him, but to understand

that there is logic behind it andit’s not altogether contrary toAmerican interests.

Strategy can be viewed fromeither end of the telescope; smallto large or large to small. Small to

large is to look at a problem andask, “How did that happen andwhat should we do about it?” The

benefit is that it produces dis-crete situations with which todeal. On the other hand, it tends

to lead to small, binary choices. President Obama had posited a

red line on Syrian use of chemical

weapons, perhaps in hopes ofdeterring Assad. But presentedwith evidence that Syria had

indeed used such weapons, thepresident retreated, saying Amer-ica’s choices were to do nothing

or to enter Syria’s civil war. In another instance, having

limited P5+1 negotiations with

Iran only to the nuclear issue, thepresident framed the choice to a

reluctant US Congress as binary:

Accept the document or go towar with Iran.

The problem of Syria is not

incidents of chemical warfareuse; it is war that has caused thecollapse of Syria and Iraq as

countries and allowed largeswaths of territory to lie ungov-erned and primed for ISIS. The

problem with Iran is not its nucle-ar program; it is Iran’s revolu-tionary ideology that informs its

35-year war against the UnitedStates and Israel.

Consider Russian strategy from

large to small. Vladimir Putin hastwo strategic goals:n To restore the 25 million

Russians who, as he told CharlieRose on 60 Minutes, woke up onemorning as former Soviet citizens

living in someone else’s country— Ukraine, the Baltics, etc. Hewants to reincorporate them, and

the territory on which they live,into Russia.

From this, Putin’s Europe pol-

icy becomes clear. Ukraine, Cri-mea, the 2008 Georgia war, cyberattacks on the Baltics, the drive

to control oil and gas resources inthe Middle East and Arabian Gulf

are all ways to squeeze Europe, to

punish Europe for bringing theformer Soviet colonies into theEU and/or NATO, and to make

the former colonies believe hemay forcibly restore the RussianEmpire.

n To deal a blow to Sunni jihad.Putin has no particular love forShiite Iran, Assad, Alawites or

Hezbollah. He and Netanyahu getalong pretty well. But Putin has apassionate hatred for Sunni jiha-

dists — particularly, but not onlyChechens, some of whom arefighting with ISIS and whom he

believes will return to Russia andrestart the wars that he so brutal-ly extinguished.

Saving the secular Assad regimeis essential, in his view, to keep-ing the lid on Sunni jihad.

Ah, you say, “But Russia isn’tstriking ISIS; it’s striking those‘other’ rebels in Syria.” True, but

from Putin’s point of view, that is

a small problem: “Should I drop abomb on ISIS today? Should I

drop a bomb on Jabhat al Nusra?” His concern is the large prob-

lem. “How do I hold the Syrian

state together until some endgame can be reached through

which Russia will keep its basesin western Syria?”

Putin is taking out the Sunnienemies of the Syrian state —sometimes rebels and sometimes

ISIS — and using the military tocreate conditions for a politicalsettlement that serves Russian

interests. That is, in fact, the essence of

political-military leadership.

FDR’s strategic goal was theunconditional surrender of NaziGermany, and he told Eisenhower

to go to Berlin to get it.That is not to compare Putin to

FDR, and several things could

ultimately derail Russia’s plans.Specifically, Russia cannot afforda long, drawn out war; it doesn’t

have enough troops for a large-scale ground campaign; the Rus-sian public is very opposed to

foreign military adventure; andfinally, indiscriminate bombingand shelling in Sunni Syria will,

indeed, breed more Chechen-likeSunni jihadists.

The recent phone call between

US Secretary of State John Kerryand Russian Foreign MinisterSergey Lavrov was not a coinci-

dence; Putin wants help. But tofind a cooperative mechanismthat serves American interests,

the US will first have to under-stand Putin’s bottom lines. N

Understanding Russian Strategy

By ShoshanaBryen, senior

director of The

Jewish Policy Center

and editor of

inFOCUS Magazine.

F aced with uncertain bud-

gets and demanding cus-tomers, defense executives

are pushing hard to drive cost-

effective technological improve-ments. With generous govern-ment-funded research and

development (R&D) now scarceand defensecustomers

calling forSilicon Valley-style technol-

ogy break-throughs,

Western de-

fense firmsare looking to

two sources of

external in-novation:commercial

firms andforeign de-

fense industrycounterparts.

While the

potential is clear, challengesabound — from differing busi-ness environments and clashing

corporate cultures to onerouscontracting and security rules.

To better understand the role

R&D-driven innovation will playin shaping the defense sector,Avascent surveyed more than 200

aerospace and defense exec-

utives. Our interlocutors were

unambiguous: Success in leverag-ing commercial or foreign-de-rived R&D for defense purposes

remains sporadic. Nevertheless,the defense sector is slowly butsurely signaling a sustained shift

in business processes.Ninety percent of our respon-

dents cited the vital importance

of R&D-driven technologicalinnovation for their home coun-try’s national security. It is a

sentiment that already registersamong potential adversaries.

China’s leadership, which for

decades counted on the sheermass of the People’s Liberation

Army, is now cutting personnel in

favor of technology investment.Stakeholders surveyed support-

ed the commercial and interna-

tional pathways to innovation,though more tentatively on the

latter. The survey noted the im-pressive impact of commercialtechnology on cyber and in-

formation technology, whileforeign defense industry counter-parts were seen as a source of

innovation across C4ISR, un-manned, training and simulation,weapons, and other technologies.

Despite much emphasis on therole commercial start-ups mayplay, industry observers placed

greater confidence in large, es-

tablished technology players.

This theme was magnified on theinternational front — nationalchampions, rather than new

entrants, were seen as the fore-front of tech innovation.

Does this reflect the limitations

of unproven technology, or a lackof awareness on the part of thedefense industry establishment?

And are established firms alwayslooking for the optimal outsidecontributions, for instance an

innovative or low-cost designapproach, rather than seeking to

replicate familiar subcontractor

roles?So if it is sold on commercial

and foreign-derived technology,

what is holding the defense in-dustry back? One challenge stoodout: 90 percent of those surveyed

said burdensome contractingrequirements are a major obsta-

cle. Real or perceived intellectualproperty restrictions companiesencounter were a close second.

Similarly, foreign content re-strictions driven by nationalsecurity concerns were the big-

gest obstacle to integrating inter-national R&D innovation.

Defense firms must not only

address these hurdles, they mustalso keep pace with innovationoutside their relatively insular

domestic national security com-

plex — no more so than in the

long self-sufficient US. Given asliding scale of capabilities,roughly 75 percent of firms were

convinced they could effectivelymonitor the commercial sectorfor new technologies, but confi-

dence eroded as respondentswere asked about their firms’ability to formally evaluate and

exploit emerging opportunities.The situation was even less

rosy when foreign-derived in-

novation was on the block; only athird of respondents were confi-

dent their organizations could

adapt and exploit technologyfrom abroad. This need not be a

permanent obstacle — most

defense-relevant innovation re-

portedly stems from Westerntrading partners such as the UK,

Japan, Germany and France.But what is the best way to

effectively leverage commercialor international technologicalinnovation? Interestingly, part-

nership and joint offerings werethe strongest contenders, fol-

lowed by IP acquisition or licens-

ing, and then mergers andacquisition (M&A) activity andjoint ventures (JVs). The survey

also revealed less appetite inrelative terms for JVs and M&A

activity in the international are-

na. Equally telling was the rela-

tively weak support for internal

investment to replicate the tech-nology in-house.

The defense sector needs to

make existing and non-traditionalR&D innovation go further. Firmswill have to undertake a number

of actions, including:n Effectively identifying and

vetting commercial and foreign

defense R&D.n Convincing potential part-

ners and their government end-

customers of the financial andtechnological wisdom of this

move.

n Integrating and exploitingthe most promising innovations

across the development lifecycle.

The defense sector has nochoice but to innovate. Custom-ers demand it. Adversary threats

require it. The question thatexecutives and policymakers

must consider is that when theyuncover the next compellingtechnology or process innovation

from abroad or in an unfamiliarmarket, what will they do aboutit? N

Industry Grapples With Emerging Tech Sources

By AleksandarJovovic, a principal

at Avascent, a

management

consultancy focused

on public sector

markets.

n Send your opinion pieces to

opinion@defensenews.com.

Submissions must be roughly 800

words long and are subject to editing

for space and clarity.

30 DefenseNews November 9 - 16, 2015 R1 www.defensenews.com

Interview

Q. How does EDIC view current global

defense industry trends?

A. Changing geopolitical and

security environments requirenew defense capabilities. Soarmed forces across the world

must adapt to new challengeswhile also facing budget re-straints from their governments.

The reality is that everyone wantsmore value from their defenseexpenditures.

In the case of the UAE, we canenhance value in four ways: lis-tening better and adapting to

clients’ needs, exploiting syn-ergies among defense industriesthat complement each other,

spreading know-how and ex-pertise, and transferring ad-vanced technology. These are the

principles by which EDIC is car-

rying forward its work to providebetter value to our principal

customer, the UAE armed forces.

Q. Is the rapidly changing geopolitical

landscape around the UAE driving for

more change and development in its

indigenous military industry? How?

A. As a strategic asset of the UAE

government, EDIC will continueto respond to the needs of our

primary customer, the UAEarmed forces, and will work to

keep them at a peak state of

readiness while also developing

industrial capabilities in the coun-try. In order to meet the future

needs of the armed forces, wemust further strengthen our busi-nesses by increasing the transfer

of advanced technology, capa-bilities and know-how. We look toachieve this by building on our

strong relationships with OEMs[original equipment manufactur-ers].

Q. Do you plan to make any announce-

ments at the Dubai Airshow?

A. EDIC is continuing to advancethe consolidation process, andwe are seeing steady progress

there. At the show, you will findAMMROC and GAL, our MRO

[maintenance, repair and over-

haul] providers; ADASI, our au-tonomous systems company; andTawazun Precision Industries, a

world-class manufacturing facil-ity in Abu Dhabi operating in thedefense, aerospace and oil and

gas business.

Q. The inception of the Emirates

Defence Industries Company came at a

time when many UAE defense compa-

nies started seeing the light and

supplying the armed forces. What were

the reasons and motivations behind

the establishment of EDIC?

A. Over the last two decades, the

UAE has built a robust and suc-cessful defense industry offering

a diverse range of products andservices across the air, land and

sea platforms. Very simply, the

time and conditions triggered theleadership to make the strategicdecision to bring these compa-

nies together under a commonplatform to position the industryfor the next phase of growth. As

a strategic asset of the UAE gov-ernment, this platform will helpto keep the UAE armed forces at

a peak state of readiness, whilealso developing industrial capa-bilities in the country.

This strategy is well-knownaround the world. The UAE joinsmany other emerging market

economies, such as South Korea,that have successfully consolidat-

ed companies under an integrat-ed platform.

As we integrate the companies

into the platform, we are workingto unlock synergies and increaseenterprise value through strategic

alignment with our principalclient, the UAE armed forces.Our long-term goal is to be recog-

nized as the region’s premierpartner for manufacturing, ser-vices and technology develop-

ment.

Q. How has EDIC developed over the

last 11 months?

A. Over the last year, we havebeen working through the com-

plex process of integrating arange of different companies.They came from three different

owners and many have jointventure partners, so this processis complex and takes time. Dur-

ing this process, we have beenfocused on maintaining the integ-rity and continuity of these busi-

nesses as they change owner, sothat service and quality levels aremaintained.

At the same time, we have been

exploring synergies between thecompanies, identifying additional

efficiency gains that can be real-

ized from the integration process.We have kept our eye on the

long-term goal of positioning theindustry for future growth, build-ing national capabilities and

generating new opportunities forUAE nationals.

When the transformation is

complete, EDIC will be a sub-stantial industrial services playerwith decades of homegrown

national defense industry experi-ence — and one of the largestcompanies in the Arabian Gulf

region, comprising 10,000 person-

nel employed in manufacturingand services across air, land andsea platforms.

Q. For years the UAE has been em-

barking on developing an indigenous

military industry and have partnered

with major global defense companies.

How well did the previous model of

business and technology transfer from

global defense partners fare out, and

how will EDIC enhance that?

A. The UAE has established astrong and globally respectednational defense industry over

the last two decades with thehelp of our international partners.EDIC is proud to carry on this

tradition. Working closely withour stakeholders and partners,we are building a new national

defense champion.We aim to develop existing

partnerships and identify new

commercial ventures, bringingnew products and services to theUAE. In essence, we are a hub

that can facilitate the UAE’srelationships with internationalOEMs, ensuring that our busi-

nesses and operations are strate-gically aligned with the needs ofGHQ [general headquarters]. Our

mandate is to increase the speed

of transfer of advanced technol-ogy, capabilities and know-how

to the UAE, and this is made

easier by being a larger entitywith more negotiating power.

Q. After acquiring a full plate of sub-

sidiaries in its inception stage, what is

EDIC’s next objective?

A. Our focus is on completing thelegal transfer of our companies

into EDIC by 2017, exploring

synergies between them. We areprogressively focusing more onoperating these companies, and

in some cases there will be fur-ther consolidation or mergersdepending on the individual com-

panies. All this takes time, andwe cannot lose sight of the needto maintain our high quality and

service levels during this period. Moving forward, we will also

work to promote innovation,

technology development, state-of-the-art manufacturing and humancapital development, specifically

growing the next generation ofEmirati engineers and projectmanagers.

Q. What does EDIC hope to get from

future partnerships with global de-

fense firms?

A. EDIC seeks to develop,strengthen and deepen relation-

ships with partners who, whilepursuing their own goals, will

work with us to meet our clients’

needs and increase value in theUAE beyond local assembly. This

last point, localization, is critical

to EDIC’s mission. We are fo-cused on localizing manufactur-ing, servicing, testing and core

elements of the supply chain. We seek future partnerships

that are mutually beneficial. We

hope to benefit from localization,knowledge transfer and capa-bility building, while our partners

will benefit from enhanced tech-nological resources and expertisefrom a centralized hub of world-

class products and services. N

By Awad Mustafa in Dubai.

HOMAID AL SHEMMARIChairman, Emirates DefenceIndustries Company

Emirates Defence Industries Company (EDIC) is an integratednational defense services and manufacturing business, providingfacilities, technology and support services for the UAE armed

forces. Established in December 2014, it has 16 subsidiaries under itsumbrella with assets worth more than US $860 million and 4,800 jobson its payroll.

EDIC’s companies include: Advanced Military Repair Overhaul Cen-tre (AMMROC), Abu Dhabi Autonomous Systems Investment (ADASI),Al Taif Technical Services, Bayanat for Mapping and Surveying Ser-

vices, Burkan Munitions Systems, C4 Advanced Solutions, CaracalInternational, Caracal Light Ammunition, Global Aerospace Logistics,

Horizon International Flight Academy, Naval Advanced Solutions,NIMR Automotive, Tawazun Dynamics, Tawazun Precision Industries,Secure Communications and Thales Advanced Solutions.

Homaid Abdulla Al Shemmari has served as the CEO of EDIC since2014. He is leading the strategic development of the aerospace industryin Abu Dhabi. Al Shemmari is a former chief executive of Aerospace &

Engineering Services at Mubadala Development Company, where hepreviously was a senior project manager and an associate director.

EDIC

Established: December 2014Assets: More than US $860millionSubsidiaries: 16Employees: 4,800Source: Defense News research

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