The Federal government’s acquisition regulations have grown into a demanding and complicated regime costing the nation millions of dollars just for compliance.
The Federal government’s acquisition regulations have grown into a demanding and complicated regime costing the nation millions of dollars just for compliance.
This week, the Chief Acquisition Officers Council, in collaboration with the Office of Federal Procurement Policy, the Chief Information Officers Council and the Federal Acquisition Regulation Council launched a new website seeking public comments to help craft “an efficient and effective acquisition system that maximizes the value of every taxpayer dollar.”
This is a welcome dialogue. AIA has been urging government to eliminate the unnecessary burdens on both industry and government that are present in today’s contracting process. Reducing the acquisition burden on industry and government will do more than just lower all-around costs, it will also help ensure the health and security of the industrial base is sustained.
The Chief Acquisition Officer’s Council is asking for feedback on reporting and compliance, procurement rules, and barriers to participation in federal contracting by small companies as well as those who traditionally don’t do business with government. They are asking the questions many of us ask too – and they’ve provided an opportunity for many voices to be heard. Let’s work with the Council to create an acquisition environment where our government benefits from our best while reducing costs, improving delivery times, leading innovation and technology, and build outstanding products for those who keep us safe.
All comments are due by May 5, 2014.
This document serves to inform AIA members and their supply chains about the first round of pending Conflict Minerals Specialized Disclosure filings to the SEC. With the complicated nature of the Conflict Minerals Report format and audit protocol, AIA has prepared this document as a training guide to help answer some of the most common questions about the process.
In addition, based on the AIA Conflict Minerals Working Group Charter, this training document completes one of key goals of this collective group. In order to provide our member companies and their supply chains with the necessary guidance, we have released this information broadly to allow for review and consider prior to the SEC filing deadline of June 2, 2014 for the first Conflict Minerals Specialized Disclosure.
Statement by Aerospace Industries Association President and CEO Marion C. Blakey on the meeting of Senate Armed Services Committee members to discuss solutions to sequestration budget cuts.
Arlington, Va. — The Aerospace Industries Association is encouraged by the news that members of the Senate Armed Services Committee are meeting to discuss solutions to the threat posed to our national security by indiscriminate budget cuts under sequestration during fiscal years 2016 through 2019. Senior Pentagon leaders have repeatedly warned that failure to address sequestration would impact readiness, troop levels and modernization, leading to an unacceptable loss in military capabilities. The Quadrennial Defense Review released last month states that defense is underfunded by $115 billion in that timeframe.
AIA has warned for years that these caps will force bad choices at a time of increasing global instability. We must make smart decisions regarding our country’s vital national security interests. We commend Senator Angus King’s (I-Maine) leadership in calling for this series of bipartisan meetings among the group of senators most intimately in tune with our nation’s armed forces and national security needs. We hope that the exchange of proposals in these meetings leads to a budget agreement that sets aside sequestration and protects the investments our nation needs to make to preserve our military capabilities and the industrial base that equips our warfighters.
The standards define a set of common business transactions in the ANSI X.12 format, profiling the general standards for use in the aerospace and defense environment.
These standards will soon be sold through the IHS portal.
e-Agreements provide global parties with a common set of rules by which they agree to exchange electronic data or to collaborate electronically. These rules supplement the basic underlying agreements for goods, services or collaborative efforts providing a framework for electronic trading and collaboration. Use of a standard template provides benefits to both Prime and Supplier. The terms and conditions in these templates can be reused by all Parties eliminating the need to re-negotiate independent terms and conditions for every new situation.
Global Electronic Collaborative Agreement (GECA)
The GECA provides global parties with a common set of rules by which they agree to exchange electronic data. The template is used to support electronic collaboration between companies engaging in domestic and international eBusiness practices. The GECA will supplement the primary terms and conditions and will govern the exchange of collaborative eData.
Global Trading Partner Agreement (GTPA)
The purpose of the model template GTPA is to supplement the primary terms and conditions governing the purchase and sale of goods and services between trading partners. This agreement provides the contractual framework governing general eBusiness exchanges. It will provide companies, large and small, with contractual language for the electronic exchange of information between global trading partners.
Architectural standards are intended to support the design and implementation of eBusiness solutions.
Service Oriented Architecture (SOA)
As Service Oriented Architecture (SOA) gains momentum within the information technology community, the OASIS Reference Model for Service Oriented Architecture provides a standard approach for categorizing and understanding the various key functional components. Therefore, this standard provides a common vocabulary of functions applicable to all SOA implementations. Member companies should reference the OASIS Reference Model for Service Oriented Architecture when discussing SOA with other organizations, such as vendors, customers, and suppliers.
Universal Data Element Framework (UDEF)
This Guideline for Implementing the Universal Data Element Framework (UDEF) will assist organizations in understanding how they can implement the UDEF and reduce the costs of building and maintaining application-to-application interfaces – whether within a single enterprise or between enterprises or across industries. The UDEF global indexing standard should be viewed as a strategic enabler for application integration cost reductions and for migration to a Service Oriented Architecture. Data standards such as ebXML, STEP, and others can each solve a portion of the problem; however, each alone lacks the unlimited extensibility to cover all domains that UDEF offers.
These standards provide the capability to exchange engineering information between different organizations, computer systems and functions in the aerospace and defense environment.
These guidelines provide strategic and tactical guidance for the adoption by industry of a common standard-based information backbone for engineering data, using the ISO 10303-239 (PLCS) standard. This will enable interoperability for product definition data across the aerospace industry supply network and throughout the product life cycle, from design and production to consumption and operation, reducing the cost, risk and complexity and increasing the speed of working with suppliers and partners at any level.
All participants in the aerospace value chain should be able to exchange information relative to product design, business relationships, transactions, and product support across an information backbone which is open and accessible to all.
To achieve this, AIA has, through industry agreements, helped eliminate the need for common IT tool adoptions across the industry. The AIA eBusiness center provides a single source for industry recommended solutions to online buiness interoperability which identify standards-based approach to components that help eliminate the cost of developing individual point-to-point solutions and delivering business benefits to prime contractors and suppliers.
The recommendations for eBusiness are maintained by AIA's Electronic Enterprise Integration Committee (EEIC), and chartered jointly by the eBusiness Steering Group and the Supplier Management Council. The methodology and framework for recommendationas being made is described in detail in the AIA eBusiness Implementation Guidebook.
The defined business scenarios and recommended solution components can be found by following the links below.
The EEIC Radar Chart (Powerpoint required to view) provides a simple reference for the various technology standards and initiatives that are under the attention of the EEIC.
The radar chart illustrates the maturity of the recommendation for each standard or initiative, with the outer ring populated by work that is being actively tracked by the EEIC, the inner ring showing work that is a candidate for adoption as part of the eBusiness Framework, and the central circle showing components that have been adopted as AIA recommendations.
The four quadrants of the chart show the AIA strategy for each component. In decreasing order of preference, the strategies include:
The following standards and initiatives have been adopted, or are under consideration:
Competition’s top 100 scoring teams answer national call for innovation
Arlington, Va. – After months of designing, building and launching home-made model rockets, hundreds of middle and high school students from across the country will advance to the national finals of the Team America Rocketry Challenge (TARC). Strong qualifying scores backed by countless hours of preparation propelled these students past thousands of their peers, earning their team a chance to compete for the national title. TARC’s top 100 teams will travel to Great Meadow in The Plains, Va., outside of Washington, D.C., to launch against fellow student rocketeers in the final fly-off on May 10.
With 5,000 annual participants, TARC is the world’s largest student rocket contest and a key piece of the aerospace and defense industry’s strategy to build a stronger U.S. workforce in science, technology, engineering and math (STEM). In the most difficult challenge of the competition’s 12-year history, teams must design and build a model rocket that can travel to exactly 825 feet and back within 48-50 seconds while carrying precious cargo — two raw eggs that must return safely to the ground undamaged.
Sponsored by the Aerospace Industries Association (AIA), the National Association of Rocketry (NAR) and a number of industry partners, TARC has proven successful in bolstering students’ engagement with STEM. A 2010 survey of TARC alumni found that 80 percent of respondents went on to major in STEM-related fields. The contest also aims to foster a strong culture of innovation inside and outside the classroom.
“TARC empowers students to explore the process of innovative research and development,” said AIA President and CEO Marion C. Blakey. “To achieve a successful launch, participants must build a rocket, test its capabilities, refine their design and repeat the process until they achieve their intended result — this is an extremely valuable skillset for American students who are preparing to enter a globally competitive workforce to possess.”
Representing 25 states and the U.S. Virgin Islands, and a variety of ethnicities and socio-economic backgrounds, TARC brings together a diverse cross-section of American youth. This year one additional team has been invited to participate in the national finals in recognition of their efforts to spread the word about TARC and the importance of STEM education to their peers and community.
Participants are competing for $60,000 in scholarships and prizes, as well as bragging rights for earning the national title. Raytheon Company will host the winning team at the Farnborough International Air Show in England this July to launch against student teams from the United Kingdom and France in an international rocketry contest. It is the ninth year Raytheon has supported the U.S. team’s trip to the international air show as part of the company’s broad-based MathMovesU® initiative to encourage students to pursue careers in STEM.
Additional funding and prizes are provided by Lockheed Martin Corporation and Space Exploration Technologies Corporation. Other industry sponsors include: Aerojet, Aurora Flight Sciences, Elbit Systems of America, Embraer Aircraft Holding, Inc., General Electric Company, Harris Corporation, Honeywell Aerospace, Kaman Aerospace Corporation, L-3 Communications Corporation, LMI Aerospace, Inc., Micro-Coax, Inc., Northrop Grumman Corporation, Parker Aerospace, Rockwell Collins, Rolls-Royce North America, Inc., and RTI International Metals, Inc.
For more information about TARC 2014, please visit www.rocketcontest.org.
AIA member companies have cooperated to develop and implement a program that will assist your company, other international aerospace suppliers, and U.S. importers in complying with U.S. Customs-Trade Partnership Against Terrorism (C-TPAT) supply chain security goals while minimizing the impact and effort needed, particularly for international suppliers with multiple U.S. customers.
International suppliers to AIA companies benefit from participation in AIA's C-TPAT Initiative with a reduced paperwork burden and a venue for suppliers to market a competitive advantage to potential customers in the United States.
Benefits of completing the AIA C-TPAT Self-Assessment Questionnaire include:
On April 1, 2014, Aerospace Caucus co-chairs, Senators Patty Murray and Saxby Chambliss, hosted an event on the importance of defense research and development (R&D) on innovation. The event featured Dr. Arati Prabhakar the Director of the Defense Advanced Research Projects Agency (DARPA), who spoke to the innovations that have entered the commercial marketplace because of defense R&D investments.
|Far left: Sen. Murray (D-WA) discusses ATM technology with Rockwell Collins representative. Left: Sen. Chambliss (R-GA) shakes hands with UTC representative in front of a display model ejection seat.|
The caucus event also featured industry R&D partners who had some of their innovative technologies on display. These displays included technologies such as satellite air traffic management, ejection seats and GPS equipment from aerospace and defense manufactures ATK, Harris Corp., Honeywell, Rockwell Collins and UTC.
AIA President and CEO Marion C. Blakey
“The tangible benefits we’ve obtained from healthy federal investment in R&D programs yield strong economic growth and significant technological advances,” said AIA’s President and CEO, Marion C. Blakey, as she opened the event. “Many of these technology innovations improve our everyday life through advances in cell phone and automobile capabilities, life saving medical science equipment and consumer electronics.”
The spinoffs made possible through defense related R&D are also highlighted in AIA’s latest report, Defense Research and Development: From the Warfighter to the American Consumer, Redefining Everyday Lives Through Innovation.
“We can’t afford to sacrifice these investments, and we can’t afford to lose our global leadership in innovation,” said Senator Murray. “If we were a business the last place we would look to cut back is where our future economic growth will be coming from, which is exactly what R&D represents.”
Senator Murray’s recognition of the need for further investment in R&D spending was followed by calling for more budgetary certainty in federal spending to ensure national security capabilities, strengthen the economy, and “close the innovation deficit.”
In the aerospace and defense marketplace it is innovation through R&D that has allowed the United States to stay ahead of its global competition and enabled it to respond to security threats around the world.
“The threats [we face as a nation] demand unconventional solutions,” said Senator Chambliss acknowledging America’s need to promote innovative ideas across borders, disciplines, institutions and ideologies. “We have to think, prepare, research, and build not just for the world we are in, but for the world that we will be in tomorrow and beyond.”
Senator Chambliss went on to discuss the need to provide the Defense Department with a more streamlined acquisition process that provides for better partnerships between government and industry; citing DARPA as an agency who has lead the way in delivering innovative technologies through strong industry partnerships. These partnerships have helped lead the way for the future.
DARPA Director, Dr. Arati Prabhakar
“Through more than five decades of tumultuous geopolitical and technological change, [DARPA] delivered outsized impact by focusing on our mission of breakthrough technologies for national security,” said DARPA’s Director, Dr. Prabhakar, speaking to the imaginative processes that have enabled the agency to advance new technologies for defense applications.
How the agency is approaching today’s national security problems also requires a rethink according to Dr. Prabhakar. The agency is looking to achieve far greater capabilities at lower cost by rethinking the next generation of defense systems, incorporating information at scale, looking to biology for technological and human understanding, and keeping an eye on the next horizon in defense technologies.
On April 1, 2014, Aerospace Caucus co-chairs, Senators Patty Murray and Saxby Chambliss, hosted an event on the importance of defense research and development (R&D) on innovation. The event featured Dr. Arati Prabhakar the Director of the Defense Advanced Research Projects Agency (DARPA), who spoke....
This tri-national summit will highlight North American supply chains and their environmental and energy implications. The NAFTANEXT Summit will honor NAFTA’s 20-year success and look to the future of our freight network from the mobility, energy and environmental perspectives. The Summit’s agenda will cover the overlapping issues of reducing environmental impacts and improving energy sustainability while growing good jobs and increasing private sector profitability to support the economics of all three nations.
For more information, please see http://www.naftanext.com/
Register Now: http://www.naftanext.com/registration/
AIA Members click here.
AIA helps ensure that the aerospace and defense industry remains on the cutting edge of technology and innovation by being strong advocates for our industry. This includes publishing periodic reports and white papers on matters important to our industry.
Federal investments in science and technology research and development are threatened by the current budget environment. The Aerospace Industries Association is embarking on an education effort to inform policymakers, elected leaders and the American public on the impact of federal R&D dollars on the innovations that redefine our everyday lives.
This report – the first in a series that examines the impact of federal investment programs – highlights four case studies of private sector technologies and products that have been largely defined or influenced by defense R&D spending. These case studies include the cellular smart phone, the hospital operating room, the modern automobile and the flat screen television. Each case study provides a narrated illustration of
the product and its connections to defense R&D.
The President’s budget for fiscal year 2015 requests a reduction in science and technology funding across both defense and non-defense discretionary accounts. This would reinforce existing reductions from the past several budget cycles. If sequestration is not addressed in fiscal year 2016 and beyond, this downward angle could turn into a nosedive. AIA believes policymakers must ensure a robust and balanced defense
research program, not only for the substantial benefits it provides to America’s warfighters, but also for the resulting commercial innovations that help grow our productivity and our economy.
Over the past six decades, federal investment in R&D programs has acted as an incubator for innovation, producing an immeasurable array of technological advancements that have come to define modern life and society at large. These investments have provided the basis for a revolution in electronic systems, communications, materials and medical science, the results of which have served as the building blocks for today’s most common technologies, including transistors, the Internet, GPS navigation and liquid crystal technology, to name a few.
The connection between research programs and commercial deployment of technologies is often multi-faceted. Program requirements can provide both the research impetus and critical opportunity for technology to mature through production and continual improvement. However, not all technologies that follow this path spill into the private market. Those that do are defined both by market demand and by calculated private investments that enable them to emerge as profitable products. These disparate paths demonstrate how investments made in advanced research can result in enormous contributions to the nation’s economy and industrial competitiveness.
During this age of austerity, the need for change to the status quo is clear. Dollars spent on burdensome compliance requirements that provide little value are funds not spent on sustaining America’s technological superiority, or preserving the readiness of our military.
Today’s acquisition system can be daunting. Its array of rules focuses on compliance and eradicating the risk of malfeasance in contracting. But it also discourages some companies from selling to the government, and it erects barriers to innovation and investment by the companies we rely on to innovate and deliver equipment needed by our armed forces. The costs of developing and enforcing a “zero-defect” acquisitions apparatus are steep: increased compliance expenses, diminished innovation, and delayed delivery of equipment needed by front-line troops.
Of course, we understand the importance of oversight. Our industry has a strong ethical commitment to working closely with our government customer to deliver the most effective and safest product at a fair price.
However, the mindset that “getting tough” on industry somehow looks out for the taxpayer negates the fact that it is actually the taxpayer – and ultimately the warfighter – who pay the price for a burdensome acquisition system. It creates significant barriers to participation in defense acquisitions, especially for mid and small-tier suppliers. It raises costs and does not add commensurate value.
The Department of Defense’s complex audit requirements are a case in point. They take much longer to complete than in the past, and lead to delays in contract awards and closeouts. While audits aren’t the only reason for the long time it takes to award contracts, they contribute to delays ultimately felt by the warfighter. And industry feels the effect too. Uncertainty makes financing more difficult for smaller firms who need predictable revenue projections to support operations. The backlog in incurred cost audits and contract closeout impacts payment – delaying critical revenue firms need to sustain their businesses.
We’re encouraged by the DOD’s Better Buying Power 2.0 initiative, which acknowledges audit requirements are a major factor driving lengthy procurement cycles, and with them, cost growth. And we are heartened by the willingness of the Defense Contract Audit Agency to listen to industry’s views and work to resolve issues. Clearing the audit backlog, reducing documentation reporting requirements, and focusing auditors’ efforts on problematic aspects of contracts will help remove barriers to participation.
The issue of protecting company intellectual property rights is another concern in defense contracting. Companies invest considerable capital – human and dollars – to develop intellectual property. They do so because the investment is intended to return value to their shareholders and owners. However, current DOD practices threaten to undermine these investments and are another negative influence on the defense industrial base. While DOD’s intention of reducing long-term costs and introducing as much competition as possible for contract awards is sound, current rules and policies could result in competitors reaping substantial rewards by having access to technical data they did not pay for or develop.
And these are only two examples. The fact is that defaulting to the most risk adverse regulatory environment creates a chilling effect on initiative and openness on both sides of the contractual relationship. And it drives some companies away.
|Photo from the presentation of the award. (Left to Right: Betsy Schmid, Vice President for National Security and Acquisition Policy, AIA, and Ray Mabus, Secretary, U.S. Navy)|
Betsy Schmid, AIA’s new Vice President for National Security and Acquisition Policy, has received the U.S. Navy’s Distinguished Public Service Award. Presented by Navy Secretary Ray Mabus in a March 19, 2014 ceremony, the award is the highest honor given to those outside of naval service.
“It is a tremendous honor to receive this award from Secretary Mabus, and especially for work that supported the men and women of the United States Navy and Marine Corps,” Schmid said. “It was the privilege of a lifetime to ensure that adequate resources and force structure were provided to our sailors and Marines when defense budgets were declining and global threats were growing more complex.
Schmid was recognized for “exceptional service to the Department of the Navy as a professional staff member and Staff Director for the Senate Appropriations Subcommittee on Defense. Ms. Schmid’s selfless service and compassion for the nation’s sailors and marines ensured they were provided the resources necessary to support and defend our nation’s interests around the globe.”
Schmid’s career has put her at the center of defense and intelligence committee budgets and policy over the last 12 years. As the senior defense budget advisor for the U.S. Senate on many of the most critical defense spending issues before the Nation, Schmid worked and consulted closely with senior officials in the Pentagon, intelligence community, and defense industry. She served both former and current Chairmen of the Appropriations Committee and Defense Subcommittee – the late Senator Daniel K. Inouye and now Senator Barbara A. Mikulski and Senator Dick Durbin. In this capacity, she was the lead Senate staff member responsible for oversight of half of the country’s discretionary budget and annual passage of the approximately $600 billion defense appropriation bill.
Prior to joining the Senate staff, Schmid worked in the Office of the Secretary of Defense on a variety of major issues and projects including the Quadrennial Defense Review and other defense planning guidance in support of our warfighters. She also supported research on national security issues for the U.S. Commission on National Security/21st Century, and the Center for the National Interest.
Schmid holds a master’s degree in National Security Studies from Georgetown University and a bachelor’s degree in Political Science from West Chester University.
Betsy Schmid, AIA’s new Vice President for National Security and Acquisition Policy, has received the U.S. Navy’s Distinguished Public Service Award. Presented by Navy Secretary Ray Mabus in a March 19, 2014 ceremony, the award is the highest honor given to those outside of naval service.
Betsy Schmid is Vice President of National Security and Acquisition Policy for the Aerospace Industries Association. Prior to joining AIA, she served for 12 years on the Senate Defense Appropriations Subcommittee, including most recently as the Staff Director responsible for analyzing and passing the annual defense appropriation bill. Betsy was a Presidential Management Fellow in the Office of the Secretary of Defense where she had assignments in the offices of OSD Policy, Comptroller, and Acquisition, Technology and Logistics. In addition, she was a Research Associate for the U.S. Commission on National Security.
Betsy has a Masters degree in National Security Studies from Georgetown University and a Bachelor’s degree in Political Science/International Relations from West Chester University, Pennsylvania.
The U.S. Government is responsible for developing an annual budget and appropriating funds for critical programs and activities that include some of our most basic constitutional principles such as to "provide for the common defense [of the United States]." At AIA we follow this process closely as it relates to the interests of our members and the aerospace and defense industry at-large. Of critical importance in every annual spending bill of the federal government, is that funding be maintained to ensure the future of our nation's national security, aviation infrastructure and safety and space programs.
For more than five decades, our national security space assets have grown tremendously more capable and essential to our nation’s armed forces and national security decision makers. They have been invaluable for they have provided our military with a uniquely asymmetric advantage. Unfortunately, the space sector – as the Pentagon noted in the 2011 National Security Space Strategy - is increasingly becoming “congested, competitive and contested.” As a consequence, current American space capabilities will be increasingly difficult to sustain in the face of declining defense budgets.
AIA is proud that our space industry has helped to assure that the United States’ armed forces are second to none and we remain committed to that objective.
The Team America Rocketry Challenge, or TARC as it is know by its faithful followers, is hosted anually by AIA and poses a different challenge every year. In 2014 the scoring criteria make this contest the most difficult one of the competition’s 12-year history. Check out the infographic that explains this year’s competition and flight of the rocket! For more complete rules visit www.rocketcontest.org.
WRITTEN REMARKS BY:
Marion C. Blakey, President and CEO
March 13, 2014
Madam Chair, Ranking Member Ayotte, and Members of the Committee, thank you for this opportunity to address the challenges to American competitiveness in the aerospace industry. I am Dennis Muilenburg, vice chairman, president and chief operating officer of Boeing.
Before beginning my testimony I want to express my condolences on behalf of Boeing to the families and friends of the passengers and crew of Malaysia Airlines Flight 370. We still do not know the cause of the airplane’s disappearance, but Boeing has joined with the National Transportation Safety Board team as a technical advisor and that team is now positioned in the region to offer assistance. We are committed to doing everything possible to sustain a safe and efficient global transportation system.
Madam Chair, the topic you have chosen for today’s hearing is both timely and important. United States is the world leader in aerospace, but with increasing competition from foreign countries that are investing substantial government funds into their emerging aerospace industries, the U.S preeminence in aerospace is eroding, and indeed is at risk.
Boeing has a proud history of excellence in aerospace that goes back nearly 100 years. During that time, Boeing has used technological innovation and a highly skilled workforce to create market-leading products that meet the demands of a diverse and growing global customer base. We evolve constantly to meet our customers’ requirements. As an example, a few months ago we launched the 777X with 259 orders and commitments, marking the largest product launch in commercial jetliner history by value. The tremendous market response to the 777X was due to the numerous features that make it 12 percent more fuel efficient than its competitor. They include an all-new composite wing based on the innovative wing developed for the super-efficient 787 Dreamliner, aerodynamic advances such as a hybrid laminar flow control vertical tail and natural laminar flow nacelles, and all-new GE9X engines developed by GE Aviation. The 777X is the latest in a long line of superior Boeing products that provide better value to our customers than those offered by our competitor.
Our Place in the Economy/Suppliers
William Boeing first began making twin-float seaplanes in 1915 from a small red boathouse, and while much has changed since then, our company remains unique in that we assemble, test and deliver all of our highly-competitive products right here in the United States. The final assembly facilities for our commercial products are located in the states of Washington and South Carolina, but we have facilities for engineering and manufacturing major components in multiple states beyond those two – including Oregon, Florida, California, Montana and Utah, where we have a growing presence. Our defense and space -related production primarily is located in the states of California, Missouri, Pennsylvania, Texas, Arizona, Florida and Alabama. Today Boeing has 160,000 employees in the United States, and I’m proud to say that 24,000 of those employees are military veterans. Boeing has been recognized as a top 100 Military Friendly Employer by G.I. Jobs Magazine, and we are very active in numerous national initiatives to help veterans find jobs and obtain the skills that they need to transition into the private sector.
Notably, we have continued to add jobs at Boeing in recent years while other sectors of the U.S. economy have shown little or no employment growth. Both during and in the wake of the recent global recession we hired new talent and critical skills at Boeing – a total of more than 15,000 new, high-paying jobs since 2005. Our hiring has been driven by our record backlog of $441 billion, including a record $374 billion commercial airplane backlog. With more than 5,000 commercial aircraft on order, our commercial backlog is diverse, with customers across the world committing to purchase a full range of Boeing airplanes.
As these numbers suggest, Boeing’s impact on the nation’s economy is substantial. Aerospace is one of the few sectors of the American economy where there exists a positive balance of trade – in large part because of Boeing’s exports. We are the world’s largest aerospace company and a leading U.S. exporter measured by sales. The company’s capabilities in aerospace include commercial jetliners, military aircraft,
helicopters, electronic and defense systems, satellites, and advanced information and communications systems. And Boeing’s exports benefit literally every state in America. Last year, we paid $48 billion to more than 15,600 U.S. businesses, including 6,600 small or disadvantaged businesses, which collectively support an additional 1.5 million jobs across the country. While 80 percent of our commercial airplanes go to airlines outside the United States, 80 percent of our supplier spend is with U.S. companies.
We also have suppliers and partners outside the United States. I mention that because I think it is important that members of the Committee understand the strategy behind our global partnering. It comes down to this. To ensure that we continue to design and build the best commercial airplanes and aerospace systems in the world we must seek out the best technologies, material resources and skills in the world, wherever they reside. In addition, global partnering is critical to Boeing’s success in foreign markets where there is an expectation that we invest as well as sell. Some 80 percent of our commercial airplane sales, and nearly 30 percent of our defense and space sales, are outside of the United States, so success overseas is critical to the success of our domestic workforce – and the workforce of our entire U.S. supply chain.
Boeing last year delivered more commercial airplanes than any other company in the world. Boeing for years has been one of the largest U.S. exporters, and we see significant opportunity going forward, with a strong and growing market for both our defense and commercial products and services. I will concentrate on the latter since today’s hearing is focused on commercial aviation. From 2013 to 2032, we project a demand for $2.5 trillion in aviation services and a $4.8 trillion global market for more than 35,000 new airplanes. Some will replace older, less efficient airplanes, but we expect the total world fleet to double in size over the next 20 years as a result of rising demand for passenger services and a rebound in air freight. The aviation market is broader and deeper than it was in the past, with demand being fueled by growth in
China, India and other emerging markets, as well as by rapidly growing low-cost carriers and legacy carriers which want to modernize their fleets. Our biggest challenge is to meet this demand, regain market share from aggressive competition, and have the profitability to invest in future products. For that reason, we are increasing the production rates across our 737 and 787 lines, as well as adding new models with the
787-9 and -10, 737 MAX, and the 777x. In February we began assembling the first 737NG at the new production rate of 42 per month, our highest rate ever, and we have announced that in 2017 we will boost 737 production to 47 airplanes per month. These record high production rates will support tens of thousands of jobs at Boeing, and many more in our extensive U.S. supply chain. Each time a Boeing commercial airplane is exported and lands somewhere in the world, it lands with millions of parts reflecting the workmanship of many of our 15,600 small, medium and large U.S. suppliers.
Foreign Competitive Landscape
The increasing demand for airplanes presents a great opportunity for Boeing and for U.S. commercial aerospace – but it is an opportunity that must be seized. Right now, the international market for airplanes is more competitive than ever, and that competition is only going to become tougher in the decade ahead. Competition with Airbus, our principal competitor, is particularly fierce, and airplane manufacturers in
Canada, Brazil, Russia and China are all, in one way or another, soon to enter markets currently served by Boeing products. We are working tirelessly to position ourselves to succeed in this highly competitive environment, and are taking steps – often challenging and difficult steps – to enable us to win in this rapidly changing marketplace. We are taking cost out of our supply chain, focusing relentlessly on our own productivity, and working with our customers to ensure we have the right product strategy.
We also have negotiated new long-term agreements with the IAM in both Puget Sound and St. Louis that will enable us to be more competitive while still maintaining marketleading pay and benefits for our employees. I cannot stress enough how important these agreements are to our collective future, or how grateful we are that members of the IAM recognize how intensely competitive the global aerospace industry has become. With agreements like these, we can and will move forward with confidence in our future as the world’s leading aerospace company.
But public policy and government actions also affect the competitive landscape as we face established and emerging state-supported competitors. In short, we need your help to ensure that the U.S. aerospace industry’s proud legacy of leadership continues in the face of these significant, and increasing, global competitive pressures.
WTO Ruling on Subsidies
Airbus has been heavily subsidized by European governments since its inception more than 40 years ago. The subsidies take many forms, but the most egregious is launch aid – the subsidy Airbus receives for new product development. In 2004, the Office of the U.S. Trade Representative (USTR) challenged Europe’s subsidies to Airbus with a request to the World Trade Organization for consultations – a step that led two years later to the filing of a formal complaint against the subsidies. A lengthy process ensued, but the bottom line is that in mid-2011 the WTO issued a final ruling stating that European governments had provided illegal subsidies to Airbus totaling $18 billion. It gave European governments six months to comply with its ruling – something that has yet to happen – which is why USTR now is seeking a non-compliance ruling from the WTO. We expect the WTO to make such a ruling in the first half of this year. The U.S. government is moving ever closer to being in a position to pursue sanctions against European exports to the United States if the Airbus-sponsor governments do not remove the harmful effects of their illegal subsidies.
Madam Chairman, this committee and the broader Congress have been very supportive of Boeing and its supplier-partners in this longstanding dispute, which we greatly appreciate. With your continued support we are confident we can end these marketdistorting and harmful European practices.
Policy – EX IM
I want to take a moment to discuss another important policy issue that affects our competitive position in the marketplace – the availability of export credit assistance. Today export credit assistance is provided to purchasers of U.S. manufactured products that are exported abroad, at no cost to the American taxpayer. Export credit assistance from the Export Import Bank is an important tool for all U.S. exporters, including
aerospace companies like Boeing, to compete against foreign competitors that have access to even larger export credit assistance programs administered by their own governments. Without Ex-Im, Boeing would be unable to compete on a level playing field for non-U.S. aircraft orders – a segment that makes up more than 80 percent of projected demand over the next 20 years. Boeing also would be at a competitive disadvantage in the global and intensely contested market for commercial satellites.
Airbus has unrestricted access from three European export credit agencies. Countries with rapidly growing economies like Brazil and China, which also are investing large amounts of government funds into their emerging aerospace industries, together now provide nearly half of all official export credit in the world today. And with the exception of Brazil, none of the emerging economies is party to international rules and frameworks regarding export credit. Measured as a percent of 2012 GDP, U.S. official export credit ranks below six countries: Korea, India, China, France, Germany and Italy. If the United States were to disarm unilaterally by ceasing or scaling back its official export credit program, it would put U.S. exporters – including Boeing – at even a greater disadvantage in global markets than we find ourselves in today.
Madam Chairman, I know that there are some in this body that question the appropriateness and utility of official export credit, arguing that it creates market distortions. However, our decades of experience selling airplanes does not support that contention. Today, the availability of export credit assistance ensures that Boeing competes and wins on the basis of price and product; it levels the playing field. We can agree to disagree. But calls to reduce or eliminate export credit assistance in the face of international availability amounts to unilateral disarmament. If it is eliminated, or reduced in any significant way, the impacts on Boeing will be felt immediately and there will be a negative impact on the United States and the positive balance of trade payments in the aerospace sector. We know from experience that airlines will flip orders for Boeing airplanes if U.S. export credit halts and European export credit is still available. Thousands of direct and indirect U.S. jobs will be lost and nothing will be gained. U.S. airlines that compete against other international airlines today will face that same competition tomorrow. The only difference will be that their foreign competition will be flying fewer Boeing airplanes and increasing numbers of Airbus aircraft financed with European export credit assistance.
Another very important issue for us is aircraft certification. The future of American competitiveness in aviation is dependent on a shared commitment by the FAA and industry to adapt to changing safety and certification priorities, domestically and abroad. This Committee has been very supportive of these efforts, and we thank you for your leadership on sections 312 and 313 of the past FAA Reauthorization bill. These
sections are the cornerstone of the reforms that will be needed to keep the United States at the forefront of innovation. Continued certification streamlining coupled with further use of delegation will provide better safety outcomes, more efficient use of FAA resources, and give industry the tools needed to remain safe and competitive.
STEM, R&D, and NextGen
There are three other public policy issues I want to mention here briefly. Boeing, like all high-tech U.S. companies, is concerned about the growing scarcity of talent in science, technology, engineering and mathematics – the so-called STEM disciplines – and we have numerous initiatives underway to attract more students to these academic disciplines. We know that many government officials share our concern, and we stand ready to partner with you to address the STEM issue because it is one that will have a significant effect one way or the other on U.S. competitiveness in general.
Declining U.S. spending for research and development is another concern. Companies like Boeing are doing their part to develop new cutting-edge technologies and products. However, long-term research – the kind that advances basic science and may not produce a payback for 20 or more years, is very hard for the private sector to fund and manage. That is why the U.S. government historically has played a central role in longrange research and must continue to do so to keep our nation competitive and economically strong.
Lastly, I want to reiterate our support for NextGen air-traffic management. It is important to keep this vital aviation infrastructure project adequately funded because the longterm payback will be enormous. NextGen will enable airlines to fly far more efficiently, with real environmental benefits, and in the process will help our overall economy operate more efficiently. NextGen isn’t just an airline issue or aerospace issue; it is an
issue of national economic development and competitiveness.
We are proud of the position that Boeing holds in the global economy and what our employees all across the country achieve on behalf of the company. Again, I thank the Committee for examining these issues and allowing me the opportunity to testify today.
WRITTEN REMARKS BY:
Marion C. Blakey, President and CEO
March 13, 2014
The Aerospace Industries Association (AIA) appreciates the opportunity to present our views on the competitiveness of the U.S. aviation industry. Today, there is no sector of our economy that contributes more to U.S. net exports than commercial aviation manufacturing. This situation could change in the future if we are not careful.
I am Marion Blakey, President and Chief Executive Officer of AIA, the nation’s largest trade association representing aerospace and defense manufacturers. Our 380 members represent an industry directly employing one million workers, and supporting another 2.5 million jobs either indirectly or as suppliers. First, let me discuss the state of commercial aircraft manufacturing today.
U. S. aircraft manufacturers continue to hold strong positions in the world market due to the dedication and hard work of American workers, the wisdom of executives leading those companies, and the pursuit of technological advances that drive world markets. In fact, the aerospace industry continues to be the United States' leading exporter of manufactured goods. By value, our industry exported $72.1 billion more than we imported last year. This figure was up 10% over the previous year, even as the overall U. S. economy improved in fits and starts.
Without a doubt, the success in net exports is related to our dominance in commercial aircraft manufacturing. U. S. exports of civil aircraft, engines, avionics, and related components represent 88 percent of all aerospace exports and almost all of the increase we experienced last year. This is a sign of growth in the developing world. But it is also a testament to an industry which has invested billions of dollars in research and development to remain competitive through the use of increasingly sophisticated technologies. We have raised the fuel efficiency of jet engines by 125% since 1960 and by 20% in the past ten years. And
while increasing efficiency, our manufacturers have also increased safety. In fact, aircraft safety margins have doubled since 1990. Because of these advancements, the competitiveness of our industry remains strong.
Several of AIA’s member companies analyze global market trends, and they reach similar conclusions. Aircraft manufacturing will continue to experience growth that outpaces the growth in global GDP. About 60 percent of these new aircraft will be needed to accommodate global market growth. However, the high price of aviation fuel has been accelerating the replacement of older aircraft with more modern, fuel-efficient aircraft. A disproportionate share of this growth involves smaller, single-aisle aircraft in emerging markets led by the Asia-Pacific region and China in particular.
We are pleased that the business aviation and rotorcraft sectors are poised to recover from the economic downturn that began a few years ago. General aviation aircraft shipments were up about 6% last year and the forecast for this year is in that range (8.5%). Business jet deliveries have also recovered, with shipments up 6.3% last year. For the next five years at least, the majority of orders are expected to come from North America, and therefore will be largely dependent on the state of the U. S. economy. However, over the long term, our success in the business aviation market will become increasingly dependent on our market
share in the developing world, particularly Asia and Latin America. Likewise, sales of civil helicopters are increasing, and we expect this trend will continue over the next few years with modest growth. These markets include oil and gas exploration and production, public safety, and emergency medical services.
I should add that the downturn in U. S. military investment puts a drag on this positive message from our commercial industry. The U. S. military aircraft sector continues to shrink, falling 6.3 percent last year and almost 10 percent over the past three years. Many do not realize that several of our key military aircraft production lines are sustained today largely by exports. This situation contributes to a declining supplier base that can affect the commercial sector in its overall competitiveness.
Of course, other nations are not sitting idly by; they are trying to cut into our edge. The growth in emerging markets is naturally stimulating other nations to improve or establish their own aircraft manufacturing capabilities. Two years ago, Russia joined the International Coordinating Council of Aerospace Industries Associations (ICCAIA), and China is expressing interest. Manufacturers in Latin America, Russia, China, and elsewhere will increasingly compete with U. S. industry, particularly in the high-growth markets for singleaisle aircraft and regional jets. And it is important for us to realize that, in many cases, U. S.
companies are competing against foreign governments, not just foreign companies.
AIA also believes the global liberalization of aviation treaties -- in "open skies" agreements and multilateral trade agreements -- should continue to be supported by governments around the world. Initiatives such as these that increase the flow of goods, services and passengers provide economic growth for countries worldwide and benefit all of us.
Considering this situation, it is also imperative that we address long-term risks or barriers to our global competitiveness. Let me highlight a few of those issues.
While the U. S. is in a stable position today, there are risks and barriers that will undercut our position over the next few years if not addressed. These include FAA budget concerns, the inability to maintain a properly skilled workforce, appropriate financial support, and tax incentives for the development of new technologies. Let me address each of these in turn.
FAA Funding and Future Sequestration
The Federal Aviation Administration (FAA) provides critical services that directly affect the competitiveness of U. S. aviation manufacturers. Our industry has a wide range of aerospace products that are poised to enter the global marketplace. As a regulated industry, bringing these new products to the market requires FAA review, approval, and certification. However, in this fast-moving environment, we often find that FAA’s certification process moves too slowly.
We were pleased that Congress recognized this issue in section 312 of the FAA Modernization and Reform Act of 2012 (Public Law 112-95). This section, commonly referred to as “certification streamlining”, requires the FAA to examine the certification and approval process and provide recommendations for streamlining. The FAA commissioned an Aviation Rulemaking Committee and developed an implementation plan for those recommendations. We urge the agency to follow through on this plan as soon as possible. Given the current budget constraints facing the FAA, making this process more efficient will help ensure the industry does not have even longer wait times. The FAA needs to make maximum use of existing delegation systems and leverage best practices in their certification processes.
AIA does not believe FAA can maintain today’s level of service and invest adequately for the future if the agency is faced with additional Budget Control Act sequesters. We appreciate the near-term relief for fiscal years 2014 and 2015 that was provided in the Bipartisan Budget Act last December. However, sequestration returns with a vengeance in fiscal year 2016.
If fiscal year 2013 is any guide, when additional sequesters go into effect the investment accounts will bear a heavier share of the reductions. In 2013, the agency lost $637 million from a sequester that occurred in the middle of the year. To avoid employee furloughs, Congress authorized a one-time transfer of airport grant funds to the operating account. However, even with this flexibility, the agency had to reduce NextGen programs by almost $140 million, taking this initiative back to its fiscal year 2011 funding level and disrupting dozens of programs. The FAA's NextGen budget request for fiscal year 2015 does not recover from these reductions. In fact, that request is almost $200 million below the President's request of only two years ago. That is a steep funding drop for a critical program.
In addition, if the agency is forced to take a “today first” attitude, new technologies that could transform aviation may end up on the cutting room floor. Foremost among these is the budding market for unmanned aircraft systems (UAS). We think it was wise and important that Congress promoted the integration of UAS into our national airspace by the year 2015. The application of UAS for public safety missions and a variety of commercial uses is enormous, and other nations are just as interested. Our manufacturers lead the world in these technologies, and if we make sure the Congressionally-mandated integration stays on course,
we will see markets open up for our technologies, not only here in the United States, but around the world. We hope you will support funding for UAS integration activities, including the standards development efforts and the research and development programs that are needed for successful and safe NAS integration. And while we understand the desire to address privacy, we believe it can be adequately protected. We urge you to oppose any such legislation that would cripple or unduly restrict the growth of this important industry before it is given a chance to develop.
If the FAA is constantly distracted by continuing resolutions and budget cuts, long-term investments will suffer the most. I understand the need to keep today’s air traffic system running safely and smoothly. But to remain competitive over the next decade, our manufacturers also need continued investment in a twenty-first century infrastructure, including high technology and transformational systems like UAS.
Our failure to make these investments, just as we are hitting our stride, would embolden our overseas competitors. It would send the wrong message to the developing world – a message that the U. S. may not be able to meet their needs in the future. Equally important, it would break the faith with a manufacturing industry that is investing billions to advance in growing worldwide markets. We are investing in new supply chains, new plants and equipment, and new jobs employing skilled workers all around the country. We need the government to do its part -- to review and approve those products efficiently, support new markets, and expand our national aviation infrastructure.
Continuing to Improve Environmental Stewardship and Energy Efficiency
Because aviation is fundamentally global, it is critical that the U. S. maintain its leadership role in the international bodies that set standards and harmonize technical specifications for
aviation technologies – an issue with rising importance as market dynamics shift to developing nations.
There is no better example than the critical technologies underpinning aircraft fuel efficiency and low emissions. The high cost of jet fuel on the global market has made engine fuel efficiency a major driver of aircraft purchase decisions. The FAA’s commitment to the Continuous Low Emissions, Environment and Noise (CLEEN) program is important to our industry. This program is cost-shared with manufacturers on a dollar-for-dollar basis and is showing real results in the development of new engine technologies that dramatically reduce aviation noise, emissions and fuel burn. In addition, maintaining momentum in the multiagency
alternative fuels development program is an important initiative for the aviation industry as we work to reduce our dependence on petroleum-based energy sources.
Providing Globally Competitive Tax Policies
The Research and Experimentation Tax Credit (commonly called “R&D Tax Credit”) is an important incentive for national business investment in R&D. This is important for many sectors of our economy, but it is especially important for high-tech companies in the aerospace sector. Once again, the credit was allowed to expire at the end of last year, a political football caught up in the broader discussion of comprehensive tax reform.
U. S. commercial aerospace manufacturers are at a substantial disadvantage vis-à-vis foreign competitors whose home countries almost universally have more favorable and more predictable R&D tax credits. A permanent R&D credit has been proposed as part of the administration’s corporate tax reform package, and was included in Chairman Camp's bill released earlier this month. We urge the Senate to act favorably on these proposals either separately or as part of comprehensive tax reform legislation. At a minimum, legislation is urgently needed to restart the R&D tax credit and apply its provisions retroactively to the
beginning of calendar year 2014.
Providing a Skilled Aerospace Workforce
American aerospace workers are among the most highly productive and skilled workers in the world. With a global market that is growing rapidly, we must maintain an adequate supply of workers with degrees in science, technology, engineering and math (STEM) disciplines and specific manufacturing skills for U. S. industry to continue to dominate and benefit from the aerospace export market. And for aviation markets to meet the forecasted demand, we will need to recruit and train hundreds of thousands of new pilots and maintenance technicians, as a recent Boeing study has verified. We want to sell those aircraft, train those pilots, and hire those mechanics.
Unfortunately, today America is simply not producing enough workers with the right technical skills. The U. S. graduates around 300,000 students a year with bachelors or associate degrees in STEM fields. The February 2012 report of the President’s Council of Advisors on Science and Technology (PCAST) recommended that this be raised by one-third to meet our economic needs. One startling fact is that less than 40% of students who start college intending to earn a STEM degree actually complete the degree requirements. We need to turn that around, and AIA and our member companies are working to do just that. We are collaborating with other stakeholders to increase retention rates in engineering programs by putting in place policies and practices, such as internships and mentoring, which encourage and support the success of qualified students.
And this is not just about four year degrees. Community colleges and career technical education play an equally important role in meeting our workforce needs. In fact, today one third of our current STEM employees begin their education in community colleges. For years, aerospace companies have experienced challenges in filling certain manufacturing and other technical positions. Customized credentialing programs that prepare students with the specifically required skills are playing an important role in addressing the existing STEM skills gap and constitute another key element of our industry's workforce efforts.
Our STEM workforce challenge is exacerbated by the fact that the aerospace industry is graying. In 2007, we found that almost 60 percent of the U.S. aerospace workforce was age 45 or older. Today, 9.6 percent of our industry is eligible to retire, and projections are that by 2017 -- just three years from now -- 18.5% of the entire industry will be eligible to retire. At our largest corporations (those employing 100,000 or more), the percentage retirement eligible is already 18.6 percent. We are experiencing a shortage of STEM workers today, but the problem will be even greater when the bow wave of actual retirement hits us in the next
couple of years.
It was ten years ago that the Commission on the Future of the U.S. Aerospace Industry recommended "the nation immediately reverse the decline in and promote the growth of a scientifically and technologically trained U.S. aerospace workforce". Our industry paid attention, and AIA has been driving progress on STEM education and workforce issues for a number of years. We facilitate collaboration among our member companies and with other stakeholders – business groups, government, academia and the philanthropic community – at the national, state and local levels. We seek systemic change that will produce a prepared
and competitive twenty-first century workforce. AIA further raised the profile and rigor of its engagement in 2013 with the formation of a new, high-level Workforce Policy Council, and we remain committed to meeting this challenge.
Implementing Improved Export Policies
AIA strongly supports the goal of the National Export Initiative to double U. S. exports by the year 2014 and rationalize our outdated system of export controls. Export control reform is crucial to the success of the aerospace and defense industrial base to increase exports, and enhance interoperability with our allies and trading partners, while ensuring that advanced technologies are protected in the most appropriate manner. AIA appreciates the substantial achievements in satellite export reform enacted by Congress in 2012, and we are committed to working with the administration and Congress to see these reforms continue in other areas.
Missile Technology Control Regime and UAS Exports
One example of a current barrier to U. S. competitiveness involves the application of the Missile Technology Control Regime (MTCR) to the export of unmanned aircraft systems (UAS). We believe the MTCR’s “presumption of denial” for UAS exports capable of greater than a 300 KM range and a 500 KG payload must be balanced for risk management purposes on a consistent and clear basis. Other criteria to consider in overcoming the “presumption of denial” include the system’s additional capabilities (or lack thereof) and the specific allies and partners with whom we are considering sharing this technology to protect and promote
our common security interests. Absent such considerations, we run the risk of the same loss of market share and damage to the industrial base that occurred in the commercial satellite sector under similar one-size-fits-all export controls, and may also stifle the move to commercial use of such systems. We continue to work with the administration to develop a new way forward to control UAS systems for export appropriately in a way that benefits U. S. industry and jobs while protecting our valid national security interests.
FAA Authority to "Promote" Civil Aeronautics
In the 1996 FAA Reauthorization Act (Public Law 104-264), Congress deleted FAA's authority to "promote" new aviation technology. The agency is still allowed to "encourage" these developments, but not to "promote" them. We acknowledge the intent of Congress to have the agency focus solely on aviation safety. However, we believe FAA is interpreting this in an overly restrictive manner that affects the ability of U. S. manufacturers to sell our superior products overseas. One recent example is the agency's refusal to endorse basic information about air traffic control equipment currently in use by the agency out of concern
that this could be construed as "promotion". We believe a clarification of Congressional intent or some modest exception authority would be helpful.
Export-Import Bank of the United States
The Export-Import Bank of the United States also plays a vital role in helping American companies compete on a level playing field in the global marketplace. Last year, the bank aided 3,400 companies – large, medium and small – in supporting over 205,000 U.S. jobs, maintaining a robust network of aerospace suppliers, and facilitating a stronger U.S. presence in the global market. Significantly, nearly 88% of these jobs were at small businesses around the country. Many people do not realize that the bank is self-sustaining, and operates at no cost to U.S. taxpayers. In fact, through its fees and charges, the bank brought in more than $1 billion to the U.S. treasury in fiscal years 2012 and 2013. Simply put, the federal deficit will go up if the Export-Import Bank is shut down.
At a time when defense cuts are causing smaller suppliers to shrink their operations, Ex-Im financing maintains the financial health of a large number of aerospace industry suppliers, providing assistance to 30,000 of them. Many of these suppliers have looked to other aerospace sectors to compensate for lost revenue from the defense downturn. Furthermore, Ex-Im financing is a critical tool to the aerospace exporter in both general aviation and space services. From May 2012 to February 2014, Ex-Im financed over $1 billion in business jet exports, supporting over 5,000 jobs. Satellites and space launch services have become Ex-
Im's fastest growing sector. Prior to 2010, Ex-Im financed roughly $50 million annually in space services. That number has risen to over $1 billion in each of the last two years. In fact, over 60% of U. S.-built commercial satellite exports today are supported through Ex-Im financing.
Equally important, the bank allows U.S. exporters to effectively compete with foreign firms that have their own government-assisted financing. Our Export-Import Bank is one of 59 export credit agencies around the world. Each of them supports the export of manufactured goods in a highly competitive global marketplace. And many of these governments extend more credit, at more favorable rates, than the United States. In fact, as a percentage of GDP, U.S. export credit in 2012 ranked below six other countries. Germany and France extended nearly two and a half times as much export financing; China and India almost three times; and Korea ten times as much. The Export-Import Bank does not cost American taxpayers a dime. It helps our manufacturers compete and sell their products around the world. And since aircraft manufacturing is one of our nation’s biggest exports, it is not surprising that U.S. jobs depend on our government helping to maintain a level playing field. The bank's authority is set to expire on September 30, 2014, and we need your support to ensure there is no gap or shutdown in this important program's operations.
In conclusion, we believe that U. S. aviation manufacturers are in a strong competitive position today, but there are risks to our maintaining this position over the next decade. As a nation, we need to ensure that our tax policies and financial support provide incentives to maintain jobs here in the United States and are competitive with the policies of other nations. We need to provide improved infrastructure in air traffic control technology, not only for our own economic health but for its export potential. And we need to ensure that our aerospace workforce is prepared to handle the challenges and changes coming to the global marketplace
over the next decade or two. Thank you for the opportunity to submit testimony on this important subject.
Over the past quarter century, more than 300 commissions and studies have produced a variety of recommendations – some of which have become law – to change the way the U.S. military develops and buys new weapons systems. Yet the Department of Defense acquisition system continues to take longer and deliver less in quantity and capability while costs of modernization programs escalate.
AIA has taken a hard look at what is causing this problem to develop this issue paper about what was discovered to be a multi-faceted issue that largely revolves around extraneous and over burdensome policies, laws and regulations.
Solutions to reducing the burden include:
Successfully plans and executes all aspects of the Team America Rocketry Challenge (TARC), including serving as liaison to parties involved with the contest. This position also assists with Industrial Base and Workforce Development initiatives.
Nature and Scope of Work:
Reports directly to the Director of Workforce Development. Operational direction may also come from the leadership of the National Security and Acquisition Policy Division.
Responsible for managing and executing all aspects of AIA’s Team America Rocketry Challenge. Acts as liaison for TARC with organizations and individuals including registered teams, AIA member companies, academic institutions, Congressional staff, the National Association of Rocketry, NASA, the Department of Defense, consultants, and AIA staff.
Duties include, but are not limited to:
Other duties as assigned.
For questions, please contact Chantal Joos de ter Beerst at email@example.com.
Statement by Aerospace Industries Association President and CEO Marion C. Blakey on the release of the President’s fiscal year 2015 Budget Request for the Department of Transportation/Federal Aviation Administration.
Arlington, Va. — A number of important FAA programs face challenges under the President’s fiscal year 2015 budget request. In particular, the Next Generation Air Transportation System modernization program is entering several critical years of development and deployment of new technologies and today’s budget release highlights several notable areas of concern. A $65 million cut to the NextGen program’s funding from the current fiscal year poses new obstacles to meeting program milestones in the next several years, leading up to the 2018 mid-term objectives outlined by FAA leadership.
While AIA and our member companies recognize the austere budget environment requires continued efforts across government to trim spending, our industry remains concerned at the trend toward year over year reductions to the FAA’s modernization budget. The economic benefits of the NextGen program far outweigh the nominal budget gains that would be realized if the proposed cuts are enacted. Safety, the environment, America’s future competitiveness and numerous other benefits afforded by NextGen remain at risk if the program continues to be funded at shrinking levels.
Our industry urges a renewed commitment to NextGen as Congress takes up the President’s budget request. The fiscal year2015 NextGen request represents a cut of almost 20 percent from the amount proposed just two years ago. FAA’s budget also includes $370 million for the “NAS Sustainment Strategy,” a new effort to increase funding for the maintenance of FAA's buildings, facilities and other equipment. We believe this underscores the need for quick and comprehensive decisions on the realignment and consolidation of FAA facilities and equipment, as mandated by Congress in the FAA Modernization and Reform Act of 2012.
The extremely tight budget also poses significant challenges for manufacturers responding to a growing aviation marketplace. For example, while the requirements for FAA certification increase to accommodate global aviation growth and the integration of unmanned systems into our national airspace, the agency's budget represents no growth compared to the current year. This underscores the criticality of FAA implementing certification streamlining reforms endorsed by Congress in 2012, as well as the expansion of Organization Delegation Authority wherever feasible and safe.
AIA looks forward to working with Congress, the FAA, and other aviation stakeholders during this year's appropriations process to ensure that the agency has the right amount and balance of resources to meet today’s needs and invest for the future growth that we know is coming.
Statement by Aerospace Industries Association President and CEO Marion C. Blakey on the release of the President’s fiscal year 2015 Budget Request for NASA.
Arlington, Va. — The Aerospace Industries Association is pleased to see that President Obama’s proposed budget request for NASA in fiscal year 2015 continues stable investment in space programs for our nation’s future while also making key investments in aeronautics, science and technology development. At $17.5 billion, the request is nearly even with last year’s request and is a significant increase over the $16.6 billion NASA received in 2013 under sequestration.
Programs like the International Space Station, James Webb Space Telescope, Orion Multi-Purpose Crew Vehicle and the Space Launch System are all making great progress and are strongly backed by both parties in Congress. While budget details on specific exploration accounts are not yet available, we are encouraged that the President’s request supports human exploration and we look forward to learning more details on the President’s recommendations to increase space investments. These programs support important and unique developments that will improve life on earth from new medical breakthroughs to amazing scientific discoveries that fuel our understanding of the beginnings of the universe and propel our exploration efforts beyond Earth orbit.
In addition, we strongly support the proposal to extend the space station until at least 2024; the work that is being done there cannot be replicated at any other national laboratory. Strong investment in the commercial crew program is the quickest way for our nation to restore independent American access to the station and avoid the increasing uncertainties and costs of paying Russia to transport our astronauts. Finally, NASA’s aeronautics research budget should be fully supported, as it works hand-in-hand with the FAA on the Next Generation Air Transportation System, upgrading our aging national airspace infrastructure and saving billions of dollars in fuel and environmental impacts over the next decades. Innovations in aviation technology driven by NASA aeronautics contribute to the largest surplus in America’s balance of trade.
AIA urges Congress to fully fund the fiscal year 2015 NASA budget.
Statement by Aerospace Industries Association President and CEO Marion C. Blakey on the release of the President’s Budget Request for the Department of Defense.
Arlington, Va. — As Secretary Hagel has recently stated, under the existing budget caps we have a fundamental choice between either a much smaller military that is more technologically advanced as a result of minimizing cuts to modernization programs; or retaining the military at nearly its current size but creating and deploying few or no new capabilities. This budget reflects the harsh reality of the budget caps we are facing. At $154 billion, the request for weapons acquisition and research and development is less than the $155.8 billion approved by Congress for the current fiscal year and far less than what we need to maintain technological superiority.
AIA has warned for years that these caps will force bad choices at a time of increasing global instability in places like Afghanistan, North Korea, Syria and Ukraine. When it comes to our country’s vital national security interests we must make smart decisions. We agree with Secretary Hagel that we must be able to counter and surpass the technological advances of our potential adversaries. As Congress considers this budget, they should identify and protect core, military-unique capabilities that are most needed to defend our homeland and build security globally.
We strongly urge the Administration and Congress to take into account the rising tide of uncertainty and instability threatening American interests at home and abroad as they work through the budgeting process. Last year according to one poll, 83 percent of Americans believed that the world will become more dangerous in the next ten years. Recent events bear that out. We must invest appropriately to preserve our military capabilities and the industrial base that equips our warfighters as an indispensable asset to America’s security.
Statement by Aerospace Industries Association President and CEO Marion C. Blakey on the passing of Dr. Assad Kotaite
Arlington, Va. – Today we mourn the loss of Dr. Assad Kotaite, one of the most prominent and respected figures in the world of civil aviation.
Universally known as a master conciliator and consensus-builder, Dr. Kotaite served with the International Civil Aviation Organization for more than fifty years, including thirty years as the elected President of the Council, making him the longest-tenured senior executive in the history of the United Nations.
Dr. Kotaite’s dedication to the safe and orderly development of international civil aviation was a key factor in its phenomenal growth over the past sixty years. The global aviation community will miss his visionary leadership.
For more than five decades, our national security space assets have grown tremendously more capable and essential to our nation’s armed forces and national security decision makers. They are invaluable for keeping our military second to none. Unfortunately, the space sector – as the Pentagon noted in the 2011 National Security Space Strategy – is increasingly becoming congested, competitive and contested.
Current American space capabilities will be increasingly difficult to sustain in the face of declining defense budgets. As a result, reducing the cost of space systems is not just prudent – it is crucial. Any additional resources devoted to space systems would put pressure on other important programs in a very tight federal budget environment. At the same time, due to their force-multiplying benefits, space systems enable substantial savings elsewhere.
Industry and government organizations are responding to these challenges and successfully reducing the cost of national security space systems, devising innovative ways of doing business, from “right sizing” to match changing market demand to increasing exports of space systems and components.
In May 2013, AIA’s National Security Space Committee held a Cost Reduction Workshop that identified successful initiatives providing the best capabilities in this challenging environment. These include:
Throughout the workshop, a consistent theme emerged: Our nation’s aerospace industry is committed to its ongoing partnership with government in support of national security.
Arlington, Va. — No doubt about it, we’re facing a very challenging future. As Secretary Hagel has recently stated, under the existing budget caps we have a fundamental choice between either a much smaller military that is more technologically advanced as a result of minimizing cuts to modernization programs; or retaining the military at nearly its current size but creating and deploying little or no new capabilities. We agree with Secretary Hagel that we must be able to counter and surpass the technological advances of our potential adversaries.
When it comes to our country’s vital national security interests we must make smart choices. As this Congress and the Administration consider future defense planning, we advocate that our leaders adopt an industrial base strategy to mitigate looming investment deficits and sustain the U.S. defense industrial base. We should identify and protect core, military-unique private sector capabilities that are most needed to defend our homeland and build security globally.
We strongly urge the executive and legislative branches to take sensible, long-term, measures to mitigate the current harm underinvestment is doing to our military and the industrial base that equips it. Failing to do so would undercut our role as a reliable and responsive provider of urgent wartime needs and as an indispensable asset to America’s security.
Arlington, Va. — AIA welcomes today’s announcement of two new public-private manufacturing innovation institutes. It demonstrates a clear commitment on the part of the administration to strengthen American manufacturing and invest in innovative new technologies that will grow our economy and support our national security.
The aerospace and defense industry historically has been a leader in manufacturing and design innovation and has continually developed products and processes that benefit the economy and society at large. It is exciting that these and potentially future institutes will be devoted to investing in the advancement of aerospace and defense technologies.
We are encouraged that so many of our member companies are already fully engaged with this initiative. AIA and our Technical Operations Council have been particularly supportive of the president’s vision and looks forward to the opportunity to partner with the government and companies across all sectors of the economy.
|Photo from the Feb. 21 Ex-Im Bank event at Gulfstream facility in Ga. (Left to Right: Ex-Im Bank Chairman Hochberg, AIA President and CEO Marion C. Blakey, Gulfstream President Larry Flynn)|
On February 21, 2014, the U.S. Export-Import Bank announced at an event held at the Savannah, Ga., headquarters of Gulfstream Aerospace Corporation that it had surpassed its goal of financing $1 billion in sales of American-made business aircraft and helicopters.
“The tremendous achievement of Ex-Im Bank to reach this target so quickly proves its value not only to general aviation, but also to space systems and commercial aviation,” said Marion C. Blakey, President and CEO, AIA. “We must remember that the bank does its great work at no cost to the American taxpayer and in 2013 actually returned $1.1 billion to the U.S. Treasury.”
At the European Business Convention and Exhibition in May 2012, Chairman Hochberg announced that the Bank intended to provide financing for at least $1 billion in business-aircraft and helicopters by the end of 2014. The goal was met with months to spare.
The Bank’s contributions help grow domestic employment and provide work at both major manufacturers and thousands of small businesses across the country – for Gulfstream this has meant thousands of new jobs over the past few years.
“The increase in international demand [for business aircraft] has led to more jobs here in the U.S. In 2010, Gulfstream announced that it would add 1,000 jobs in Savannah over a seven-year period,” said Larry Flynn, President, Gulfstream Aerospace Corporation. “I’m proud to say that a little over three years later, we’ve added not 1,000, not 2,000 – but 2,500 jobs. We could not have done this without the tremendous support of many, including Ex-Im Bank, the Aerospace Industries Association and our elected officials.”
Domestic job growth is just one byproduct of the Bank’s focus on promoting U.S. exports through helping foreign buyers secure financing for the purchase of American-made products. These products cover a broad range of industries beyond aerospace and include: oil and gas, mining, agribusiness, renewable energy, medical equipment, construction equipment and power generation. The Bank’s success in crossing the billion dollar mark is the result of a recently approved deal with China-based Minsheng Financial Leasing Company to secure a 300 million dollar loan guarantee for the purchase of eight new business aircraft from Gulfstream.
“Business aircraft is a great example of a homegrown American industry that is creating jobs in communities across the country, thanks to support from the Export-Import Bank,” said Fred P. Hochberg, Chairman and President of the Bank. “Despite an increase in the number of foreign competitors, America’s business jet manufacturers continue to demonstrate the advantages of manufacturing high technology, high-quality products in the USA. Our loan guarantee, which pushes us over the $1 billion threshold for business-aircraft and helicopter financings months before our in-house deadline, will boost the export of eight of these state-of-the-art, American-made business jets to China and bolster U.S. jobs in Georgia. It is great to see that even in this competitive global marketplace, the Chinese continue to buy American.”
On February 21, 2014, the U.S. Export-Import Bank announced at an event held at the Savannah, Ga., headquarters of Gulfstream Aerospace Corporation that it had surpassed its goal of financing $1 billion in sales of American-made business aircraft and helicopters.
Arlington, Va. — Elizabeth L. “Betsy” Schmid has joined the Aerospace Industries Association as Vice President for National Security and Acquisition Policy, bringing extensive legislative experience on budget policy from the Senate Appropriations Subcommittee on Defense.
“Our industry faces a long-term environment of constricted budgets, requiring enhanced advocacy both to Congress and the administration,” said AIA President and CEO Marion C. Blakey. “We could not ask for a better-qualified policy expert than Betsy to lead our efforts in the national security and acquisition policy arenas.”
Schmid has been at the center of work on the defense and intelligence community budgets and policy over the past 12 years including the recently completed negotiations on the fiscal year 2014 defense spending bill. As Staff Director and Professional Staff Member, she has worked closely with the Defense Department, the intelligence agencies, industry and both former and current Chairmen of the Senate Appropriations Subcommittee on Defense – the late Senator Daniel Inouye and Senator Dick Durbin.
Prior to joining the staff of the Senate Appropriations Committee, Schmid worked in the Office of the Secretary of Defense on a variety of major issues and projects including defense strategy, the Quadrennial Defense Review and other defense planning guidance, commercial technology applications for the warfighter and other areas. She also supported research on national security issues for the U.S. Commission on National Security/21st Century, and the Center for the National Interest.
Schmid is a graduate from the Georgetown University with a master’s degree in National Security Studies, and holds a B.A. in Political Science from West Chester University.
AIA relies on interns to support a wide array of activities, ranging from policy and regulatory advocacy to marketing and event support. the subject line. To apply, please submit a resume and to jobs[at]aia-aerospace.org and include your requested department.
AIA is looking to fill internships in all of our major functional areas including:
Aerospace Research Center
National Security and Acquisition Policy
Internships are flexible depending on students’ schedules. Interns are eligible to receive a monthly stipend. All submissions should be sent to: firstname.lastname@example.org
The Research Intern contributes to all activities undertaken by the Research Department, under the guidance of the Research Manager. Projects typically involve quantitative research related to the U.S. and foreign aerospace markets. While the majority of projects are quantitative in nature, many involve presenting the research findings in written reports, briefs, and position papers. Consequently, strong writing skills are also frequently utilized.
• Researches and prepares Aerospace Facts and Figures, a statistical handbook used worldwide as the authoritative compendium of U.S. aerospace industry data
• Maintains AIA databases; this frequently involves use of Microsoft Excel and Access
• Produces written, tabular, and visual materials for research reports, presentations, and publication
• Summarizes, revises, or interprets complex or specialized literature for general audiences
• Composes and edits specialized reports for internal or external circulation; proofreads material for publication
AIA is seeking a dynamic, motivated individual to join the communications team for an internship. AIA represents the largest aerospace and defense industry players before Congress and the administration. The communications team facilitates that interaction through publicity, media outreach and coordinating efforts among members with a broad diversity of interests. We have a number of special events this year, including the first-ever National Aerospace Week, an Executive Committee meeting and our 45th Annual Year-End Review & Forecast Luncheon. We are looking for a communications or journalism major to help out in all aspects of our busy office. Duties include: writing articles for newsletter, web site features and press releases; helping organize meetings and other event planning; and special projects. Join us for a first-hand look at the conjunction of industry and policy!
Work with an exciting team at the most prominent aerospace related association in the United States. AIA’s membership department manages, coordinates and supports AIA’s over one-hundred full members – companies like Lockheed Martin, The Boeing Company, ITT, GE, Northrop Grumman, Raytheon, General Dynamics, Textron, Rolls Royce, and a host of other top notch global aerospace primes and suppliers make up the regular membership. One of membership’s most critical tasks is organizing and staffing AIA’s annual Members and Board of Governors Meetings. There are two major meetings held by AIA during the year. To assist and support our annual events, AIA is looking for an intern that is motivated, well organized, has a pleasant personal and telephone demeanor, writes well, and can work at a fast pace with a great team of AIA professionals. Reaching out to members, assisting with organizational and administrative aspects of the event, attending and supporting the events, assisting our civil, space, and international divisions organize CEO and senior management briefings, and many other tasks make up the duties. We also have an exciting membership campaign underway and a host of other tasks.
AIA has an open position for an intern who could assist on a project in the technical operations area. This project is coordinated by AIA for a group of experienced aerospace engineers who are responsible for the maintenance of the National Aerospace Standards (Fasteners) of the aerospace industry.
The project requires digitizing several hundred drawings, transferring text data and technical drawings into a standardized electronic template, and preparing a document for release to the NAS Committee. The AIA assumes professional responsibility for the work being done.
We are looking for someone who is familiar with general engineering principles, such as product specifications and technical drawing skills. The candidate should have experience with AutoCAD systems. The workflow of the project includes electronic, virtual as well as paper-based documentation and discussion; good communication skills are therefore very desirable.
This position provides administrative and analytical support to the Vice President, Assistant Vice President, and Director, as well as provides general assistance to the Division. Incumbent will be supervised by the AVP, Acquisition Policy.
Nature and Scope of Work:
Greets visitors to the office, ascertains their business and announces them to supervisor. Schedules and confirms appointments. Answers and screens incoming calls and responds to inquiries on routine matters, routing others to the appropriate staff member or department. Takes messages in the absence of other office members.
Maintains calendars and schedules meetings for the VP and AVP. Plans VP and AVP travel and makes appropriate travel arrangements for them. Resolves difficulties that may arise. Prepares individual expense reports and invoices; follows through to ensure payment has been made.
Receives and scans all incoming correspondence. Notes items of current interest and retrieve/attach background material before forwarding to appropriate staff member. Responds directly to requests for releases, distributive materials and general program information. Drafts replies on routine matters for VP, AVP or Director signature.
Creates, edits, prints, telecommunicates, and files a variety of documentation. Composes or transcribes from drafts including: correspondence, releases, agenda, minutes, speeches, listings, position papers, reports, charts and tables. Also reviews correspondence prepared by others requiring signature for general presentation. Ensures all documentation is appropriately coordinated and routed prior to release.
Plans meeting and events. Facilitates Council, Committee and Working Group meetings by ensuring all meeting notices, read ahead materials and follow-up materials are provided to participants in a timely manner. Corresponds with hotels and member company representatives regarding meeting requirements. Makes travel arrangements. Resolves difficulties with hotel service and travel arrangements. For meetings, ensures all logistics for meetings are in place and operating (for example: sets up conference room, ensures audio-visual equipment is in place and operating, and refreshments, takes minutes/notes). After meetings, drafts meeting minutes, provides breakdown of meeting expenses, computes individual meeting attendee share and invoices accordingly. Sends notices for past due accounts and collects payments.
Maintains the office's working, subject, publication and operational files current by filing and retrieving material, establishing new files and sections as needed, and periodically purging files of outdated material. Maintains the Division web site, keeping all posted materials current, accessible and accurate.
Monitors the Division’s operating budget. Tracks actual expenses against allocated budgets and presents monthly funds status reports/analysis to the VP and the AVP.
Places routine office supply orders weekly, checks and stores deliveries, and codes receipts.
Substitutes at the reception desk during short regularly scheduled periods, providing reception and telephone services.
Larry Flynn, President, Gulfstream
February 21, 2014
Thank you for joining us this morning. I would especially like to thank Chairman Hochberg, AIA President and CEO Marion Blakey, Senator Isakson and Representative Kingston for being here to help us recognize this important milestone in the history of the Export-Import Bank.
On behalf of the more than 14,000 Gulfstream employees around the world, I want to thank Ex-Im for its efforts to help companies like Gulfstream grow, even under challenging market conditions.
Ex-Im is crucially important to Gulfstream because exports are a large part of our business. You couldn’t say that when we started here in Savannah in 1967 – or even 30 years later. But you can now.
Ten years ago, 18 percent of the Gulfstream fleet was outside of the United States. Now, about 35 percent of the fleet – that’s more than 750 aircraft – is based outside of the country.
Most of that international growth has happened over the last six years – in places such as China, Russia and Brazil.
And it’s still going strong.
Approximately 60 percent of our nearly 14 billion dollar backlog is international. We used to be a Savannah-based company that did some business internationally. Today, we are an international company that is proud to be based in Savannah.
Gulfstream would not be as successful as we’ve been without the support of Ex-Im. The Bank’s ability to secure financing for many of our overseas customers has put us on a level playing field with our competitors.
The best news of all is that the increase in international sales has led to more jobs here in the U.S. In 2010, we announced that we would add 1,000 jobs in Savannah over a seven-year period. I’m proud to say that a little over three years later, we’ve added not 1,000, not 2,000 – but 2,500 jobs.
We could not have done this without the tremendous support of many, including Ex-Im Bank, the Aerospace Industries Association and our elected officials.
And for that, I thank you.
Marion C. Blakey, President & CEO
February 21, 2014
Please allow me to tie a ribbon around the tremendous sales package we’ve heard about today. As a spokesman for our industry, it’s a pleasure to salute a great American company that excels at creating new export markets and job opportunities here at home.
This impressive deal, on top of Gulfstream’s recent speed records with the G650 and G280 represent the continuing excellence that personifies our industry at its best.
I might add I’m no stranger to the worldwide scope of your activities. Last fall I toured Gulfstream Beijing’s Maintenance, Repair and Overhaul facility at the Beijing Capitol International Airport. It’s top-notch, part of a linked chain of business relationships that enable American workers here in Savannah and throughout Gulfstream’s supply chain to benefit from the burgeoning growth of China’s aviation system.
But as we well know, in today’s competitive international marketplace, U.S. manufacturers need a level playing field to succeed in penetrating emerging markets. With more than 59 foreign export credit agencies supporting their nation’s firms, it’s imperative that U.S. companies have ready access to credit and are able to compete fairly on a global scale.
As AIA has said loudly and often, the Ex-Im Bank is an essential partner for America’s job creating manufacturers, and for the many supply chain companies that support them. I’m gratified that under Chairman Hochberg’s leadership, the Bank has made such a strong commitment to supporting not only general aviation, but also space systems and commercial aviation. And lest we forget, the export credits that made this and other sales possible come at no cost to the taxpayer – actually returning more than $1.1 billion last year to the Treasury.
Obviously, these have been challenging times for our industry. The recession and reduced federal budgets for defense, space and civil aviation have resulted in significant job losses, especially among small and medium sized companies. Yet we’ve forged ahead, working hard to keep our industrial base strong by seizing market growth opportunities in places like China. When you realize that China could account for 20 percent of all business jet deliveries by decade’s end, up from about seven percent now, the importance of today’s announcement is clear.
Companies like Gulfstream have identified a promising path for our industry. And with the continued support of the Ex-Im Bank, the future looks bright. American aerospace companies can continue exporting the world’s best aviation products and delivering the largest manufacturing surplus of any American business sector.
With that said, thank you very much for the opportunity to be a part of this very noteworthy announcement.
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This document is a template that your company may use to better manage government property. This template is an overview of what constitutes commonly held best practices for the aerospace and defense industry. It is not a legal document and should not be viewed as such. These guidelines are required by FAR 52.245-1 Government Property.
AIA Property Plan (currently under review)
These guidelines, definitions, and metric tools are considered Industry Leading Practices on the performance of Contract Property Management Self Assessments and measuring the health of a property management system. Based on the maturity of the property management system, an entity must determine which metrics they will utilize and in turn which of these documents, will be used in whole or part.
These Industry Leading Practices (ILP) are documented to assist in the establishment and performance of contract property management plans, processes, and systems. When implementing these ILPs, an entity may utilize all or part of these practices.
This guideline creates an Industry standard for Contractor Self Assessment process (CSA) for Government Property management to comply with the FAR 52.245-1 Government Property, while providing reasonable assurance in assessing the effectiveness of a contractor’s property management system.
This guideline provides suggested language for standardizing a prime contractor’s flow down requirements to a subcontractor or supplier that possesses Government owned property.
This form provides a standard template for obtaining supplier information in assessing the health, strength, and compliance of a supplier’s property management system.
* These documents are best practice documents only and should not be viewed as legal documents. For guidance on handling government contract compliance, please consult with a lawyer.
Challenging competition engages students’ STEM-focused skill sets
Arlington, Va. – More than 700 student teams representing 48 states, the District of Columbia and the U.S. Virgin Islands are preparing for the 2014 Team America Rocketry Challenge, the world’s largest student rocket contest and a key piece of the aerospace and defense industry’s strategy to build a stronger U.S. workforce in science, technology, engineering and math (STEM).
The competition challenges each team to design and build a model rocket that can travel to a height of 825 feet and back within 48 to 50 seconds. Each rocket must also deploy two identical parachutes carrying precious cargo — two raw eggs that must return safely to the ground undamaged. Scores are determined by how close they come to the required height and time; damaged eggs disqualify the flight. TARC poses a different challenge each year, and 2014’s dual-parachute requirement combined with the tight timing window and other structural criteria make this contest the most difficult in the competition’s 12-year history.
Sponsored by the Aerospace Industries Association, the National Association of Rocketry and more than 20 industry partners, the contest aims to bolster U.S. student engagement with STEM. In a 2010 survey among TARC alumni, approximately 80 percent of respondents said they planned to pursue a STEM-focused college major.
“We are proud and grateful for the influx of talent TARC has injected into the aerospace and defense industry’s workforce development pipeline since the program’s inception,” said AIA President and CEO Marion C. Blakey. “During a time when America struggles to match our international counterparts in producing sufficient graduates in STEM education fields, TARC has helped thousands of skillful and knowledgeable young people get started on challenging career paths.”
This year’s diverse cohort includes several teams that are utilizing 3-D printers to develop rocket components; a team from Hawaii that hopes to be the first from their state to qualify for the national finals; and a team from Alaska that will spend the winter launching test flights in sub-zero temperatures. The program has also experienced a two percent growth in female participation over the past year and a number of all-girls teams are vying for the chance to compete in the national finals.
Teams have until March 31 to launch and submit their qualifying flight scores. Those within the top 100 will advance to the National Finals on May 10 at Great Meadow in The Plains, Va.
Participants compete for scholarships and prizes totaling $60,000 as well as bragging rights for winning the world’s largest student rocketry competition. The winning team will travel to the Farnborough International Air Show in July courtesy of the Raytheon Company to compete in the International Rocketry Challenge. The American team will face off against teams from the UK and France in hopes of defending the international championship won by Georgetown, Texas 4H last year in Paris. For more information about TARC 2014, please visit www.rocketcontest.org.
Last year, AIA partnered with IHS and CADENAS PARTsolutions to create authorized 3D computer-aided design (CAD) models of components based on critical National Aerospace Standards (NAS). The result was a valuable new tool for engineers across the aerospace industry to accelerate innovation, shorten design cycles and reduce costs. 3D models are now available for the most used NAS/NASM/NA/NAM parts. The catalog was made available through IHS and PARTsolutions last month.
The 3D CAD model catalog provides a solution for a problem that confronts the aerospace industry. Currently, the creation and management of AIA/NAS-based 3D information involves various diverse approaches, multiple systems, a variety of mechanical design automation and computer-aided design (CAD) software and the unique revisions of these models, stored in a variety of product lifecycle management (PLM) systems. The AIA/NAS 3D CAD Model solution provides a lightweight and flexible product option that includes 3D models along with attribute datasheet files. Companies subscribing to the AIA/NAS 3D catalog will have access to authorized 3D models that can be used in their 3D designs alongside the companion attribute datasheet files. The AIA/NAS 3D catalog facilitates a more efficient and reliable design process when utilizing aerospace standards, as well as updating of parts to new revisions and making better overall use of computer infrastructure.
Key benefits of this solution include:
• Reduced modeling and design cycle times;
• Improved engineering productivity;
• Elimination of duplicated effort;
• Assurance of quality through the use of authorized CAD models;
• Increased consistency in parts used on projects; and
• Greater accuracy in bills of materials.
For more information, please go to: http://www.aia-aerospace.org/national_aerospace_standards/nas_3d_cad_models/
On February 3, AIA submitted a comment letter to the Federal Acquisition Regulatory Secretariat of the U.S. General Services Administration on behalf of its member companies in response to FAR CASE 2012—032, a proposed rule regarding “Higher-Level Contract Quality Requirements” to support initiatives pertaining to the proliferation of counterfeit parts.
AIA’s letter pointed out that the A&D industry already has in place sound management systems to address the counterfeit parts issue. Further, the letter addressed the following concerns: 1) the scope of the proposed rule is unduly broad, extending counterfeit prevention requirements beyond electronic parts; 2) the proposed rule broadens the application of higher quality standards beyond commodity-specific procurement activities, which in the long-run would cause unintended product costs to the government with no additional benefits; 3) expanding the scope of the Contractor Purchasing System Review process would intrude on existing industry business processes; 4) small businesses would be unduly burdened by the regulation; 5) commercial items generally and commercial off-the-shelf items in particular should be extended safe harbor exemptions by the government; and 6) in the fight against counterfeit parts, a more effective government focus would be to strengthen policy associated with obsolescence management as this is a key contributor to counterfeit risk.
AIA also co-signed a letter on the subject submitted by the Council of Defense and Space Industry Association. This combined approach ensures multi-industry solidarity with the prominent messages being conveyed to the FAR council prior the incorporation of the pending rule.
AIA and its member companies are committed to detecting and avoiding the proliferation of counterfeit parts sold in the global market and those potentially in the aerospace and defense supply chain. Initiatives already supported by industry provide the foundation to ensure civil aviation safety and tactical military superiority remains uncompromised.
For more information regarding the AIA Comment Letter, please contact: Gery Mras, AIA’s Director, Life Cycle Management, (703) 358-1065.
To review all Comment Letters pertaining to FAR CASE 2012-032, please visit: http://www.regulations.gov/#!docketDetail;D=FAR-2012-0032
Last November, Defense Federal Acquisition Regulation Supplement (DFARS) case 2011-D039 was published as a rule for safeguarding unclassified technical information. This rule amends the original DFARS by adding requirements for the safeguarding of unclassified information within contractor information systems. The purpose of this DFARS rule is to ensure contractors and their suppliers are implementing adequate security measures and safeguards for DOD unclassified technical information on a contractor’s information systems.
Operating under AIA’s Business Technology Council, the Cyber Security Steering Committee is developing an industry guidance document that will provide clear and consistent implementation guidelines for prime contractors and their suppliers for complying with this rule. This document is expected to be released later this year.
The European environmental directives for Restrictions of Hazardous Substances (RoHS), which includes restrictions on the use of lead in electronics, has affected the global supply chain for materials used in aerospace products. The result of this market shift is important for AIA member companies, forcing a transition away from tin-lead (SnPb) alloys used in the assembly and coating for high performance electronics.
On February 5, AIA’s Technical Operation Council (TOC) hosted with IPC, the global trade association serving the printed board and electronics assembly industries, an executive forum on lead-free (Pb-free) electronics at the Lockheed Martin Global Vision Center in Virginia. During the forum, attendees shared information about Pb-free electronics impacts on our industry’s ability to confidently design high reliability avionics and electrical systems. The meeting also addressed how commercial and defense industries are approaching the issue.
Forum participants produced a list of actions and recommendations that an industry-government partnership could utilize to transition to lead-free in a controlled manner. Among the recommendations was to encourage the federal government to support coordinated and focused research to fill current knowledge gaps on Pb-free alternative materials, to standardize the information from this research, investigate lead-free alternatives, and make the data available to the technical community. The TOC and IPC will be refining their conclusions and plan to publish a report about the subject in the coming months.
A short white paper on RoHS published by the TOC is available on the research reports section of the AIA Website: http://www.aia-aerospace.org/assets/CEO_level_RoHS_awareness_-_2013-_11-21.pdf
AIA’s new Workforce Policy Council (WPC) is forming working groups to address each of the council’s five focal issues. Companies represented on the WPC and any other interested AIA members are encouraged to name subject matter experts for the following:
The Workforce Analytics Working Group will focus on obtaining high quality demographic data and identifying key workforce trends. The group will advise Aviation Week & Space Technology magazine on the annual aerospace and defense workforce study. Data and analyses will be sought for understanding how to effectively retain a current critical workforce as well as how to recruit top talent into the industry.
The Workforce Learning and Development Working Group will identify the skills needed for the future workforce, and consider establishing in partnership with relevant federal, state and local agencies job training programs that support employment readiness. The group will provide recommendations for igniting a demand-driven education and training system for tomorrow’s workforce. It will also address the issues of skills certification and credentialing as well as the effectiveness of other training and development programs for current aerospace industry employees.
The STEM Workforce Working Group will seek opportunities to build partnerships on STEM education and long-term workforce development programs that are innovative, targeted and scalable. The group advises AIA on how we can grow the Team American Rocketry Challenge (TARC) and strengthen its effectiveness and impact as an aerospace workforce development program. In partnership with the NDIA STEM Workforce Division and working with Battelle, the group this year will conduct meetings of STEM stakeholders on the subject of workforce preparation in Cleveland, Ohio; Newport News, Virginia; and Huntsville, Alabama.
The Workforce Diversity and Inclusion Working Group will make recommendations on programs, partnerships, policies and other best practices to advance diversity and inclusion. Given the aging of the aerospace and defense workforce and changing national demographics, both practicality and fairness demand that our companies recruit and retain more females and ethnic minorities than in the past. Hiring from other underrepresented groups, such as the disabled, and young military veterans is also a priority.
The Workforce Messaging and Branding Working Group will develop a communications strategy including projects, events and tactics to strengthen and expand industry branding and messaging on workforce issues. One set of messages may highlight how federal R&D spending impacts education and talent development that in turn shapes the capabilities of our workforce and its capacity to innovate and remain competitive. Other areas to be explored include sponsoring joint exhibits at conventions and conferences to recruit professionals, and partnering with the Department of Defense on a campaign to excite and inspire middle school students with technology and programs related to national security.
To name a representative to any of these working groups, please contact Susan Lavrakas: email@example.com
The 2014 schedule of AIA workforce meetings is available on the AIA website.
There is good news for the civil space program in the Fiscal Year 2014 budget adopted by Congress. Within H.R. 3547, a joint House and Senate omnibus bill, NASA, NOAA’s National Environmental Satellite, Data and Information Service and the FAA’s Office of Commercial Space Flight were funded close to or at the President’s budget request.
NASA FY 2014 funding will be $17.65 billion, an amount just below the President’s budget request, but most significantly, $750 million above what the space agency would have received had sequestration budget levels remained in effect.
AIA is pleased that the final NASA budget is consistent with our position that the NASA budget enable “the agency and its contractors to execute the key programs agreed upon by Congress and the President.” A number of other bill provisions follow AIA recommendations from its 2013 suite of civil and commercial space advocacy papers, including the extension of the Commercial Space Launch Act’s (CSLA) launch indemnification regime for three years. The extension of launch indemnification beyond a one year renewal (as happened in 2013) will provide the commercial launch industry much needed stability and a more level playing field with foreign launch competitors. Also, NASA’s priority programs - the Orion Multi-Purpose Crew Vehicle, the Space Launch System, the International Space Station and the James Webb Space Telescope - are funded at levels very close to the President’s request. This aligns with AIA’s 2013 advocacy for steady support and funding of NASA’s priority programs. Unfortunately, the Commercial Crew Program, which is vital to restoring independent US crew access to ISS, was underfunded by $125 million.
NASA’s Science Mission Directorate’s allocation of education and outreach program funding was maintained in the bill, which tracks with AIA’s space organization group letter submitted in 2013. The letter asked Congress to “reject the proposed consolidation of all STEM activities as requested in the President’s Fiscal Year 2014 budget submitted to Congress.” The bill included language explicitly rejecting the proposed reorganization.
NOAA’s “flagship weather satellite programs” were fully funded at the President’s requested levels of $5.4 billion. AIA had strongly advocated for such funding given NOAA’s need “to replenish aging (weather) satellites and avoid disastrous coverage gaps.”
Finally, full funding of $16 million was provided for the FAA Office of Commercial Space Transportation, consistent with AIA’s support for “timely and appropriate licensing for commercial space launch activities.” This office licenses new commercial space capabilities; adequate funding assures prompt license processing.
Throughout AIA’s Second to None campaign, one of our most effective communications tools has been the use of social media, including twitter, Facebook, Linkedin among other platforms. Last year, for example, we made great use of our twitter feed @AIAspeaks to promote our “We are the Explorers” movie trailer for the film “Star Trek: Into Darkness.” Also, for the past 100 days, AIA has tweeted success stories from NASA and the space industry as examples of important progress the space program has achieved. And just in the past week, AIA has jumped on board a tweeting firestorm that resulted from Slate.com’s publication of Charles Seife’s polemical attack on NASA, “What is NASA For?” joining a growing cascade of commentary about NASA’s and the space industry’s achievements filed under the hashtag #WhatIsNASAFor.
While a more thoughtful writer might have raised legitimate points about the relative expense, riskiness and scientific merit of NASA’s space endeavors, Seife’s piece as Planetary Society blogger Casey Dreier pointed out was “full of rhetorical tricks, cheap jabs, lazy logic.”
Thankfully, a number of people came to the same conclusion after reading the piece and let their voices be heard. Angela Gibson, an educator who participates in NASA’s social media outreach read the article and decided to start the #WhatIsNASAFor hashtag. In less than a week, it has resulted in an impressive outpouring of tweets that in 140 characters or less speak volumes to the question Seife raised. Here’s a sampling of twitter responses to the article that have amassed an impressive 7.5 million potential viewers:
• More than 35,000 people worldwide have been saved by NASA-powered search and rescue.
• Think NASA is just about space? I walked past an entire building of people doing food security and famine protection every day.
• NASA technology to help develop noninvasive medical treatments.
• NASA scientists develop new device to track planets; equivalent to measuring a dime from 2 miles away.
And my favorite, which seems vaguely familiar: “To explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before.”
Here’s a link to the various comments about NASA’s contributions to our scientific and technological progress, which includes AIA’s tweets. Significantly, NASA Deputy Assistant Administrator for Public Affairs Bob Jacobs noticed our efforts and tweeted the following: “An impressive campaign of #WhatisNASAFor posts from @AIAspeaks. Wonder if @Slate knew what it would unleash with its one-sided epistle.” I might add that other AIA member companies have also tweeted using this now famous hashtag, demonstrating how social media tools can be effective communications devices in countering the noise which substitute for reasoned arguments these days.
In the coming months, AIA will continue to use social media and other communications formats to get the word out about the value of our national aerospace programs to the safety and well being of the public.
The Supplier Management Council is a unique forum where prime contractor company representatives and suppliers (of all sizes) come together to discuss supply chain issues and to develop solutions. Its mission is to integrate and focus the collective capabilities of the supply chain, at every level, to exert unique influence in the formation of strategy, policy, and regulations that enable the U.S Aerospace and Defense Industry to successfully compete in the global market, be profitable, and strengthen the U.S. position as a world leader.
You cannot afford to miss the aerospace and defense supply chain event of the year.
The Aerospace Industries Association is offering a one-time, limited opportunity for non-members to attend its Spring Supplier Management Council Meeting, hosted by L-3 Communications, March 25-27, 2014 in DFW Airport, Texas.
Take advantage of this special opportunity to see the benefits of membership in AIA, meet with L-3 buyers, and engage with senior aerospace and defense leaders and decision makers. A business-to-business meeting with L-3 is guaranteed - - but only for a limited number of non-members. In addition, if you attend the meeting as a non-member, we will credit your registration fee towards membership in AIA.
If you are not a member of AIA and are interested in attending the meeting, please contact David Mandell, Vice President, Membership & Business Development at firstname.lastname@example.org to see if you qualify.
THE MEETING PROGRAM
We're expecting an excellent program, which will feature:
BUSINESS TO BUSINESS MEETINGS WITH L-3 COMMUNICATIONS (Limited to one meeting per company and two company representatives per meeting)
L-3 Communications will be scheduling one-on-one business meetings with AIA members and their Supplier Management Leaders across selected elements of their Electronic Systems and Aircraft Modernization Groups. L-3 representatives will include individuals from the company's Socio-Economic Business offices and Supply Chain Management professionals with expertise in the following areas:
To schedule a one-to-one business discussion with an L-3 representative on Tuesday, March 25th, please complete the information requested in the online registration and be sure to include the type of product line for your company. An L-3 representative will send you an email with the time of your meeting.
Chaired by Michael Strianese, Chairman, President & Chief Executive Officer, L-3 Communications Corporation, AIA is the most authoritative and influential association representing the aerospace and defense industry. Our membership consists of more than 350 of the leading aerospace and defense manufacturers and suppliers.
Unlike many other associations, CEOs of our member companies and their senior managers define and drive our agenda. We offer opportunities to get closer to your customers, potential customers, and competitors. There is a reason membership in AIA has grown more than 60% in the last two years. We encourage you to experience the benefits.
If you are not a member of AIA and are interested in attending the meeting, please contact David Mandell, Vice President, Membership & Business Development at email@example.com.
Chair: Kurt Ravenfeld, Lockheed Martin Corporation
Vice Chair: John Kraynak, BAE Systems
Vice President, Global Supply Chain
Pratt & Whitney, United Technologies Corporation
President & Chief Executive Officer
Chairman of the Board
BTC Electronic Components, Inc.
Seal Science, Inc.
Vice President, Corporate Procurement
L-3 Communications Corporation
Vice President & Chief Operating Officer
Frontier Electronics Systems Corporation
Vice President, Supply Chain NCS
Director, Supply Chain Strategy & Architecture, Boeing Defense, Space & Security
The Boeing Company
Vice President, Supply Chain Management
Director, Procurement, Land and Armaments
Senior Corporate Director, Procurement Shared Services
Northrop Grumman Corporation
Chairman of the Board
The Ferco Group
Vice President, Material and Supply
Senior Vice President, International
Tri Polus, Inc.
Vice President of Business Development for the Aerospace & Defense Group
Director, Strategy, Systems & Solutions, Corporate Global Supply Chain Operations
Lockheed Martin Corporation
Presient and Chief Executive Officer
Air Industries Machining Corporation
Acutec Precision Machining, Inc.
Robert Sprole, III
President & Chief Executive Officer
President/Chief Operating Officer
Chief Executive Officer
Integrity Aerospace Group
Spirit Electronics, Inc.
Vice President & Division Manager
Ben E. Ames, Jr., Vice President, Co-Operative Industries Defense, LLC
Gus Bateas, Director Enterprise Global Sourcing, Goodrich Corporation
Ryan Bogan, COO, LMI Aerospace
Greg Bolles, Director, Business Development, Plexus Corp.
Dan Brady, Vice President, Aerospace, Aurora Flight Sciences
Pierre Chao, Managing Partner, Renaissance Strategic Advisors
Mel Crosier, Vice President Sales, Consolidated Precision Products (CPP)
Don Deptowicz, Director of Technical Excellence, PCC Airfoils
Briggs Forelli, President, Precision Gear
Karl Hutter, Chief Operating Officer, Click Bond, Inc.
Jillanne Johnson, Vice President Sales and Program Management, National Utilities
Don Majcher, Vice President, Technology and Innovation, OAI
Brig. Gen. Robert E. Mansfield, Jr., USAF (Ret.), Executive Director, Embry-Riddle Aeronautical University Worldwide
Bob Maydoney, Vice President, Sales, Pinkerton Government Services
Clare McGarrey, Vice President, InterConnect
Anne Shybunko-Moore, President, GSE Dynamics
Michael Mowins, President, Aerospace Licensing Division, Phillips Screw Company
Dan Murphy, Vice President, Aerospace and Defense, Alcoa Defense
Ash Padwal, Chief Strategic Officer, Global Strategy & Research, Allied Telesis
Tony Patti, Vice President/Executive Advisor Computer Sciences Corp (CSC)
William Peterson, Defense/Security/Aerospace Solutions Director, Plexus Corporation
Craig Pfefferman, President & General Manager, IEC Electronics Corporation
Matt Reagan, Vice President, Industrial Metals Int'l Ltd
Kent Sharp, Purchasing Compliance Officer, Rolls-Royce America
Mark Swofford, Supplier, Performance Management, Embraer Services, Inc.
Frank Thompson, Vice President, Supply Chain, Parker Aerospace
Stan Vogt, Vice President, Business Development and Materials, Montana Metal Products, LLC
Don Weiss, Director, Supply Chain, Harris
For more information, please contact Rusty Rentsch at firstname.lastname@example.org.
For more information, please contact Rusty Rentsch at email@example.com.
For more information, please contact Rusty Rentsch at firstname.lastname@example.org.
Register for this event - running through May 9 - with Cvent here.
One of the primary methods of supporting Conflict Minerals control is through responsible sourcing of the products that may contain conflict minerals. Responsible sourcing is an important principle of the AIA Supplier Management Council (SMC). The AIA SMC is now actively educating AIA member companies about the release of the SEC Final Rule and the pending disclosure requirements, working with other shareholders and industries involved with this challenge to synergize activities, and providing member companies useful guidance, in the form of best practices.
This document provides a thorough analysis of the issue and along with helpful tips for companies dealing with conflict mineral disclosures.
We hear it often: It takes entirely too long to develop new military aircraft and other defense systems. We wistfully long for the bygone era when legendary outfits like Kelly Johnson’s Lockheed Skunk Works team actually went from proposal to production of a new aircraft concept, the XP-80 jet, in only 143 days.
The reality is that today’s military airplanes – actually complex platforms with advanced composite material airframes, sophisticated avionics, radars, combat systems, and weaponry, all with software requiring millions of lines of code – require much longer development times. Each aircraft demands an incredible amount of research, development and testing to ensure that all its component parts are sound and correctly integrated.
Compounding this natural increase in cycle times is our current budget austerity. Without adequate funding for over-the-horizon research, it’s harder to achieve breakthroughs in designing and developing our next generation of bombers, fighters and unmanned aircraft.
That said, the defense contracting community can do our part to help identify areas of efficiencies in the acquisition system to make the process of developing new defense platforms and systems much more streamlined and less costly.
One way to mitigate some of the pressure budget austerity is placing on our defense industrial base, while achieving greater value for the American taxpayer, is to encourage the Department of Defense to purchase commercial items. Commercial items provide the DOD with distinct military advantages including access to a wide array of technologies and products developed through industry investment, generally at a lower cost and with a quicker turn-around time than through traditional acquisition programs. Commercial purchases allow for faster insertion of technologies, lower life cycle costs and greater access to – and support from – the vast array of companies that make up the U.S. civil and military industrial base. They also help our small supplier companies by allowing them to consolidate operations into a single commercial/military enterprise, without having to waste resources setting up separate divisions or facilities required to fulfill government contracts.
Since the 1994 passage of the Federal Acquisition Streamlining Act, Congress has directed DOD to buy commercial items and to use a simplified acquisition process when buying inherently commercial items. Unfortunately, the department’s acquisition practices have a long way to go before the act’s goals are met. While some progress has been made in simplifying and streamlining the government’s terms and conditions for commercial products and services, many contracts are still inconsistent with commercial practices. Contracts that could – and should – be categorized as commercial are instead being treated more as government-unique, with all the associated data requests and reporting provisions that can be prohibitive to commercial firms.
For example, DOD has erected major barriers with respect to intellectual property rights and cost/pricing data for firms trying to sell commercial items. Often DOD requires that a company relinquish any product-related patent rights and technical data – even those developed privately and independently of the government. Small and mid-sized businesses with limited resources have an especially difficult time protecting their rights when faced with intrusive government demands.
Restricting the use of commercial products and forcing vendors to relinquish their intellectual property deters companies from competing for defense business and denies our military prompt access to technologies that can speed new aircraft development.
We encourage DOD to take the following steps to encourage commercial practices that will help speed up product development cycles:
Maintain current commercial items definitions and fully implement the 1994 law as intended by Congress.
Reinforce respect for companies’ proprietary data and encourage commercial items purchases.
Consider commercial items early in new systems’ requirements definition process.
Include options for commercial items in program acquisition strategy plans.
Hold frequent discussions with industry to highlight the potential use of commercial items.
Work collaboratively with industry to define the right data framework to determine if prices for items are fair and reasonable.
If we are able to make significant progress on DOD’s commercial items agenda, the result will be more capable, affordable and more rapidly obtainable systems at a time when our military is in great need of all these characteristics.
One of the primary methods of supporting Conflict Minerals control is through responsible sourcing of the products that may contain conflict minerals. Responsible sourcing is an important principle of the AIA Supplier Management Council (SMC). The AIA SMC is now actively educating AIA member companies about the release of the SEC Final Rule and the pending disclosure requirements, working with other shareholders and industries involved with this challenge to synergize activities, and providing member companies useful guidance, in the form of best practices.
The following frequently asked questions document about conflict minierals outlines the background issues surrounding the issue, what the applicability and scope of the reporting requirements are, what a reasonable country of oragin inquiry (RCOI) is, what is acceptable due dilligence in reporting, how to report conflict minerals in manufactured products, and what an indipendent private sector audit is.
Arlington, Va. – The Aerospace Industries Association has appointed Michael T. Strianese, Chairman, President and CEO of L-3 Communications as Chairman of AIA’s Board of Governors for 2014. David L. Joyce, President and CEO of GE Aviation will serve as Vice Chairman for 2014. Marion C. Blakey has been reappointed as President and CEO and Ginette C. Colot has been reappointed as Secretary‑Treasurer.
Additional members of the Executive Committee for 2014 are:
William M. Brown, President and Chief Executive Officer, Harris Corporation
Wes Bush, Chairman, Chief Executive Officer and President of Northrop Grumman Corporation
Jerry DeMuro, President and Chief Executive Officer, BAE Systems, Inc.
Scott C. Donnelly, Chairman and Chief Executive Officer, Textron Inc.
David P. Hess, Retired President, Pratt and Whitney, United Technologies Corporation
Marillyn Hewson, Chief Executive Officer, President and Chairman of the Board, Lockheed Martin Corporation
Raanan Horowitz, President and Chief Executive Officer, Elbit Systems of America
John S. Langford, Chairman and Chief Executive Officer, Aurora Flight Sciences
Tim O. Mahoney, President and Chief Executive Officer, Honeywell Aerospace
Thomas S. Marotta, Chairman and Chief Executive Officer, Marotta Controls, Inc.
David F. Melcher, Chief Executive Officer and President, Exelis, Inc.
Dennis A. Muilenburg, Vice Chairman, President and Chief Operating Officer, The Boeing Company
Phebe Novakovic, Chairman and Chief Executive Officer, General Dynamics Corporation
William H. Swanson, Chairman and Chief Executive Officer, Raytheon Company
Scott Thams, Chief Executive Officer, Integrity Aerospace Group, Inc.
Additional Members of the Board of Governors for 2014 are:
David C. Adams, Co-Chief Operating Officer, Curtiss-Wright Corporation
Sudesh K. Arora, President and Chief Executive Officer, Natel Electronic Manufacturing Services
Raynard D. Benvenuti, Chairman, Align Aerospace, LLC
David E. Berges, Chairman and Chief Executive Officer, Hexcel Corporation
Peg Billson, President, Ontic Engineering and Manufacturing, Inc.
Gregory Bloom, President, Seal Science, Inc.
Michael Bloor, President and Chief Operating Officer, ESI North America
Warren M. Boley, Jr., President, Aerojet Rocketdyne
Kenneth Bram, President, AUSCO, Inc.
Ralph W. Carpenter, Aerospace and Defense Industry Lead, Oracle USA, Inc.
Kevin Cummings, President and Chief Executive Officer, GKN Aerospace North America
Scott A. Dean, President and General Manager, Pacifica Engineering, Inc.
Raymond G. Duquette, President and General Manager, CAE USA, Inc
Bradley Feldmann, President and Chief Operating Officer, Cubic Corporation
Jeffry D. Frisby, President and Chief Executive Officer, Triumph Group, Inc.
Thomas A. Gendron, Chairman of the Board and Chief Executive Officer, Woodward, Inc.
Brian Glackin, Vice President, Government Relations, Cobham North America, Inc.
Roy Goldsmith, Executive Vice President, Sales and Marketing and Revenue Sharing Programs, Barnes Group
James M. Guyette, President and Chief Executive Officer, Rolls-Royce North America, Inc.
Guy C. Hachey, President and Chief Operating Officer, Bombardier Aerospace
Dawne S. Hickton, Vice Chair, President and Chief Executive Officer, RTI International Metals, Inc.
Cheryle Jackson, Vice President, Government Affairs and Corporate Development, AAR Manufacturing, Inc.
Neal J. Keating, Chairman, President and Chief Executive Officer, Kaman Aerospace Corporation
Robert J. Khoury, Director and Co-Founder, B/E Aerospace, Inc.
Tom Kilkenny, General Manager, Global Aerospace and Defense, IBM Corporation
Lance Kwasniewski, Vice President, Engineering Belcan Corporation
Blake Larson, Senior Vice President and President, Alliant Techsystems, Inc. (ATK)
Larry A. Lawson, President and Chief Executive Officer, Spirit AeroSystems
Rob Leibrandt, Senior Market Manager, Camcode Division of Horizons, Inc.
Joseph P. Marino, Managing Director, PWC Aerospace and Defense Advisory Services
Michael McGuire, President, Celestica Aerospace and Technology Corp., Celestica Corporation
Richard L. McNeel, Chairman of the Board, Lord Corporation
Dwight Moore, Chief Marketing and Sales Officer, National Technical Systems
Tony Moraco, Chief Executive Officer, Science Applications International Corporation
Robert K. Ortberg, Chief Executive Officer and President, Rockwell Collins
Takayoshi Oshima, Chief Executive Officer, Allied Telesis, Inc.
Frank W. Pace, President, Aircraft Systems Group, General Atomics Aeronautical Systems, Inc.
Anthony C. Patti, Vice President, AandD/Executive Adviser, CSC
Erik A. Paulhardt, Vice President, Aerospace and Defense, Timken Aerospace Transmissions, LLC
Art Prangley, Director, Aerospace and Defense Industry, HP, Federal Sales Team
Anthony Reardon, Chairman, President and Chief Executive Officer, Ducommun Inc.
Curtis Reusser, President and Chief Executive Officer, Esterline Technologies
Lorraine Rienecker, Executive Vice President, Strategy Sales and Marketing, Meggitt PLC
Eric Roegner, President, Alcoa Defense
Mark Rosenker, Member of the Board of Directors of Sequa, Chromalloy
Ronald S. Saks, Chief Executive Officer, LMI Aerospace, Inc.
Kevin Sandkuhler, President, Chief Executive Officer and Director, Securitas Critical Infrastructure Services, LLC
John Scannell, Chief Executive Officer, Moog, Inc.
John Schmidt, Managing Director, Aerospace and Defense Lead North America, Accenture
Roger Sherrard, President, Aerospace Group, Parker Hannifin Corporation
Robert L. Smith, President and Owner, Acutec Precision Machining
Randy Snyder, President, Wesco Aircraft Hardware Corporation
Gary J. Spulak, President, Embraer Aircraft Holding, Inc.
Rob Strain, President, Ball Aerospace Technologies
Mitch Waldman, Corporate Vice President, Government and Customer Relations, Huntington Ingalls Industries
George T. Whitesides, Chief Executive Officer, Virgin Galactic, LLC
Uday Yadav, President, Aerospace Group, Eaton Corporation
Please contact Garnett Black at email@example.com for more information.
Statement by Aerospace Industries Association President and CEO Marion C. Blakey commending the omnibus appropriations agreement reached by the U.S. Senate Appropriations Committee.
Arlington, Va. – We congratulate the Appropriations Committees, particularly Chairwoman Mikulski, Chairman Rogers, Ranking Member Shelby, and Ranking Member Lowey, on reaching agreement on an omnibus appropriations bill for Fiscal Year 2014. This major achievement provides federal agencies, American taxpayers, and private industry the predictability that is so urgently needed to make sound decisions for our government, our businesses and everyday lives.
Coming right on the heels of last month's Bipartisan Budget Act, this legislation was a major undertaking that involved many long days and late nights of hard negotiation over the holidays. We recognize the herculean effort of these two committees, their leaders and their staffs, in putting policy differences aside to create legislation that is good for the nation. AIA applauds this agreement as a sign of true bipartisanship. We encourage all members to vote in favor.
Our industry urges Congress to continue this progress during the FY15 appropriations cycle, finding the right balance of fiscal austerity and investment for our national security, our technological leadership, and our economy. Over the next eighteen months, Congress must find an alternative to sequestration, which is still in effect for fiscal year 2016 and beyond.
The Director, Acquisition Policy supports the Assistant Vice President for Acquisition Policy on all matters relating to DOD acquisition, procurement and finance and represents AIA on these and related issues to the membership, USG agencies, outside organizations, executive branch agencies, and legislative offices.
The incumbent works with and seeks input from member companies, councils, and committees, and is responsible for monitoring, analyzing, recommending, and advocating policies on: acquisition/procurement-related legislation and regulations (including financial, contract cost, financing and administration, legal, intellectual property, security, and tax matters) and their implementation; civil-military integration; independent research and development; product liability; work measurement; material management and accounting systems; and other related areas.
Nature and Scope of Work:
This position reports directly to the Assistant Vice President for Acquisition Policy, and interacts with member company representatives in the membership.
The incumbent maintains regular contact with government officials and representatives from a variety of cabinet and related departments including but not limited to the Departments of Defense (primarily Offices of the Under Secretary for Acquisition Policy & Logistics) and other cabinet agencies and related offices. The Director, Acquisition Policy may accompany the Assistant Vice President for Acquisition Policy and Vice President for National Security and Acquisition Policy, other senior staff from AIA, including the President and CEO of AIA, to: meet with members of Congress and staff, and prepare testimony on authorized association positions before Congress and others; meet with senior Administration officials; and meet with senior member company representatives.
The incumbent serves as a central resource person and responds to inquiries from member companies, government officials (civilian and military), the public, and the press seeking information and background data. These inquiries range from general questions to highly technical requests requiring significant effort to assemble data and background information.
The incumbent may be called upon to present industry’s views orally and in writing to government and industry officials and to the media, and to represent the association in coalitions that are formed to present a unified approach on acquisition policy issues of mutual interest. The Director, Acquisition Policy may also represent AIA positions as a spokesperson at conferences and seminars. The incumbent will contribute articles and news items to AIA publications, highlighting issues and developments falling within the sub-division’s domain, and prepare summaries of such issues for use during AIA or outside meetings.
The Director, Acquisition Policy will support the AVP for Acquisition Policy, who has the responsibility for supporting, coordinating and otherwise assisting with activities of a variety of AIA sponsored councils, committees and working groups, including, but not limited to:
Procurement and Finance Council; Cost Principles Committee; Cash Flow Committee; Intellectual Property Committee; Legal Committee; Conflict Minerals Working Group; Procurement Techniques Committee; Government Property Systems Committee; the Chief Financial Officer’s Council; and the Aerospace and Defense Controllers Committee.
Additional related duties include:
Analyzes significant industry problems and synthesizes the concepts and ideas coming from government contacts and the numerous council, committee and working group activities into cohesive patterns and trends; provides insights into future aerospace developments to prompt deliberations and actions; builds industry consensus among member companies on all topics related to relevant issues and serves as staff liaison to internal and external groups dealing with related issues; and, oversees meeting arrangements for periodic council, committee and working group meetings (including, developing the agenda; assembling background information and materials; arranging for speakers and other participants; site selection and facility; and ensuring that minutes are prepared), and approves expenses associated with all council and committee meetings.
All submissions should be sent to: firstname.lastname@example.org
Statement by Aerospace Industries Association President and CEO Marion C. Blakey supporting new aircraft repair station security rule published by the U.S. Transportation Security Administration (TSA).
Arlington, Va. – Today’s release of new regulations outlining security improvements for domestic and foreign repair stations marks the end of a prohibition on the approval of new repair stations by the Federal Aviation Administration (FAA). The Aerospace Industries Association is pleased that the U.S. aviation industry once again will be able to resume normal operations and be competitive globally.
The regulations will break a log jam that had prevented more than 80 repair stations from receiving certification review by FAA. Congress had prohibited the certification of new foreign repair stations until issuance of this rule by TSA.
We commend the government’s actions to balance the requirements to bolster security while also opening up new maintenance and repair options for airlines and industry.
AIA has partnered with IHS and CADENAS PARTsolutions to offer authorized 3D computer-aided design (CAD) models of components based on critical National Aerospace Standards (NAS), providing a valuable new tool for engineers across the aerospace industry to accelerate innovation, shorten design cycles and reduce costs. The NAS 3D CAD model library will be offered in an annual subscription format beginning in January 2014. Read the Press Release announcing the partnership here.
Key benefits include:
For more information about the AIA/NAS 3D CAD standards, please refer to this IHS sponsored page.
Following the October 15 CEO call hosted by Marion Blakey, AIA’s Workforce Policy Council (WPC) on October 25 held a call-in session for member companies to discuss the workforce impacts of the federal government shutdown and best practices for dealing with the effects. Practices shared with the WPC were compiled into a checklist of recommended actions for AIA members to consider in the event of another government shutdown or similar situations. The checklist has been distributed by email to all AIA members and posted on the AIA website for future reference.
In other business, the WPC agreed to commit $20,000 to support the 2014 workforce study with Aviation Week & Space Technology and to create an AIA Workforce Analytics Working Group to recommend revisions to the annual survey and a path forward. Among changes the Working Group was asked to consider are: minor adjustments to reduce costs and make the results more useful; reducing the number of questions asked; not conducting all five parts of the survey every year; focusing the corporate survey on truly value-added components; and bringing in other studies in which member companies participate to be part of the annual effort.
Dr. Reginald Brothers, Deputy Assistant Secretary of Defense for Research, spoke to the WPC about current and future workforce challenges faced by the Department of Defense. Stating that big changes are taking place in the threat space and in the technology space, Brothers noted DOD is striving to develop technological overmatch, which involves two dimensions: human and material. Brothers emphasized that an innovative workforce characterized by diversity of thought and the ability to embrace change is essential. He added that our industry doesn’t have an overall workforce numbers problem but rather lack the right quality and fit of skills.
Referring to the 2012 report from the National Academies, Assuring the U.S. Department of Defense a Strong Science, Technology, Engineering and Mathematics (STEM) Workforce, Brothers described what the DOD is doing to maintain the technical quality of its workforce. Chaired by the Assistant Secretary of Defense for Research and Engineering (ASD(R&E)), the DOD STEM Executive Board, established in July 2011, provides strategic leadership to the Department’s STEM programs to ensure the DOD has enduring access to a highly competent technical workforce to support research and development of capabilities in existing and emerging technical areas.
Brothers also said DOD is looking to initiate a STEM Diversity Campaign based on DOD technologies and challenges that will hopefully excite and inspire women and minority students to map out STEM career pathways.
The WPC and Brothers saw fertile ground for working together in various ways, including experienced-based learning with co-ops; and industry and DOD labs growing talent jointly through rotational internships.
National Security STEM Engagement Campaign
On November 15, Brothers and several members of the AIA STEM Workforce Working Group participated in a workshop hosted by Northrop Grumman to begin outlining the goals and objectives, messages, and governance of a DOD-industry sponsored National Security STEM Engagement Campaign. Communications firm GMMB and WUSA*9, the local Gannett station, are also involved in designing the campaign.
2014 State STEM Meetings
Building on a very successful District of Columbia STEM Call-to-Action Forum held October 28-29, AIA and NDIA are now fleshing out plans for state meetings in Ohio, Virginia and Alabama next year. The Ohio Aerospace Institute will host the meeting in Cleveland April 8-9. A Virginia meeting will take place at Huntington-Ingalls in Newport News during the first part of June. AIA and NDIA have partnered with the Business-Higher Education Forum and the University of Alabama at Huntsville to hold a meeting in October-November to launch a regional aeronautical and aerospace engineering workforce project. Confirmed dates and venues for the Virginia and Alabama meetings will be available in January.
On September 30, AIA’s NAS411 Working Group completed an important milestone with the release of the third revision of National Aerospace Standard 411 (“NAS411”), Hazardous Materials Management Program (“HMMP”) and the creation of a new standard known as NAS411-1, Hazardous Material Target List (“HMTL”). In use for almost twenty years, AIA’s NAS411 provides a customizable process to reduce and manage HAZMAT risks in contractually-developed hardware (including their associated operating and support requirements), facilities construction and non-product maintenance and support services. The new HMTL identifies and categorizes specific materials for risk management actions and was jointly developed by the Department of Defense and AIA to provide guidance on restrictions and/or reporting requirements for HAZMAT on military contracts.
Over the past two years, the NAS411 WG (comprised of industry and DoD representatives) has been evaluating proposed improvements in contractual HAZMAT risk management efforts and agreed-upon improvements have been incorporated into the two NAS. Both NAS411 and NAS411-1 now reflect approaches for differing levels of HAZMAT risk and risk management and provide guidance for reducing and managing those risks. The outcome of the collaborative effort has aligned the two documents with military requirements contained in MIL-STD-882E Task 108 that may be imposed on military acquisition contracts. However, the use of two NAS is not limited to military contracts and can be used on non-military government and commercial product and service contracts.
NAS411 and targeted materials lists are well established in military acquisition contracting and have been shown to effectively support the minimization and control of HAZMAT risks and costs over the lifecycle of a product. AIA believes the structure and process provided by the revised NAS411 and the new NAS411-1 will continue to reduce HAZMAT-related lifecycle costs and improve HMMP performance by limiting the variability of targeted materials in military contracts. Both NAS411 and NAS411-1 will be reviewed at least annually, but possibly more frequently based on several factors, including feedback on the standards received by AIA and the increasing understanding of both the risks HAZMAT poses to human health and the environment and regulatory efforts to control those risks.
AIA has developed the National Aerospace Standards for 75 years. More information about the NAS standards can be found on-line at www.aia-nas.org.
On December 2, leaders of a diverse range of organizations representing research universities, public service providers, aerospace and defense companies, and the broader manufacturing sector gave concrete examples of how long-term federal budget cuts are harming the national interest. The hashtag #AmericanWorkforce was the social rally cry that gave this message legs to reach a broader audience of people online.
What follows is a story created through social media activity occurring around the event on December 2.
A new Strategic Standardization Forum for Aerospace (SSFA) video demonstrates the value of providing standards as digital data. Standards content is typically provided in a paper or PDF document. The SSFA is discussing ways that standards developers supporting the aerospace and defense industry can provide standards content in a digital format. The video shows how one manufacturer has converted their internal company standards into a format that can be used and read by downstream applications. The process offers improvements in data quality, interoperability, and reduced costs.
An SSFA teleconference planned in the next few months will discuss how other aerospace manufacturers are using standards content and the possibility of standardizing content delivery in a digital format. If you are interested in participating in the SSFA teleconference, please contact Chris Carnahan at chris.carnahan[at]aia-aerospace.org.
AIA would like to thank The Boeing Company for their work to produce the video.
From November 17th - 21st AIA members participated in the 2013 Dubai Airshow (DAS), held for the first time at the new Al Maktoum International Airport in Jebel Ali, Dubai. AIA supported more than 450 U.S. government and military personnel from the U.S. Department of Commerce, Department of State, and Department of Defense participating at DAS.
DAS 2013 featured more than 1,000 exhibitors in this year's record-breaking show, which generated over $200 billion worth of orders, including more than $100 billion worth of orders for the Boeing Company alone, which announced the launch of its new 777X on the first day of the show. GE Aviation, through its joint venture company CFM International, also captured $40 billion worth of orders.
During DAS, AIA helped organize and maintain the U.S. Departmnt of Defense Corral, which featured aircraft including the F/A-18 Super Hornet, F-15E Strike Eagle, MV-22 Osprey, E-2C Hawkeye, C-130J Hercules, AH-1Z Cobra, UH-1Y Huey, and, making its international trade show debut, the P-8 Poseidon. In addition to the aircraft in the static display both the F-22 Raptor and B1-B Lancer flew in the daily flying displays, and the CH-47 Chinook participated in demonstration flights.
Also at DAS, AIA hosted a luncheon that featured Vice Admiral Joseph Rixey, the new director of the Defense Security Cooperation Agency (DSCA), and Ms. Heidi Grant, Deputy Assistant Secretary of the Air Force for International Affairs (SAF/IA). And AIA supported a number of aircraft corral tours and the opening Airshow industry reception on the aircraft carrier USS Harry S. Truman. AIA hopes to build on this successful event increasing our advocacy and industry/government coordination efforts at the upcoming 2014 Singapore Airshow.
We thank our members for making the U.S. presence and activity at DAS 2013 such a success.
The International Forum on Business Ethical Conduct (IFBEC) held its fourth annual conference on October 15th and 16th in Alexandria, Virginia. Over 80 ethics and compliance professionals from the aerospace and defense industry, government agencies, and non-governmental organizations heard a diverse set of panels cover such topics as best practices, ethics in the global marketplace, and the impact of corruption on the aerospace and defense market. Among the topics discussed was the need for comprehensive training and communication, with examples provided by Raytheon’s high quality training videos and Lockheed Martin’s mobile training “Go-Kits,” and the value of developing industry initiatives to mitigate risk in global supply chains and in offset contracts.
In the conference’s second annual “Tone from the Top” panel, five executives from the largest global aerospace and defense contractors discussed the vital importance of operating in an ethical manner and how to instill ethical values in their companies. The executives featured were Chris Raymond, Vice President of Business Development & Strategy for The Boeing Company; John Dieter, Executive Vice President of Corporate Development at EADS; David Perry, Corporate Vice President and Chief Global Business Development Officer for the Northrop Grumman Corporation; Rick Kirkland, Vice President of Corporate International Business Development for the Lockheed Martin Corporation; and Tom Culligan, Senior Vice President of the Raytheon Company and CEO of Raytheon International.
IFBEC was founded in 2010 when member companies of AIA and ASD united to endorse the Global Principles of Business Ethical Conduct. Since holding its first conference in Berlin, Germany, IFBEC has expanded to 25 companies representing the top global aerospace and defense firms as well as members of their supply chain. This year IFBEC took the important step of welcoming its first member from outside of the AIA and ASD communities, Elbit Systems, Ltd. In 2014 IFBEC plans to build upon this success by expanding its membership to more global aerospace and defense firms, further refining the Global Principles, and developing new initiatives to support business ethical conduct in our industry. For more information about IFBEC and how to become a member, please contact Doug Farren, email@example.com.
With nearly 300 individuals in attendance, AIA’s Fall Board of Governors (BOG) and Membership Meeting was the largest in history. The star-studded program featured actor, columnist and Presidential speechwriter, Ben Stein; Seal Team Six Leader, Robert O’Neill; Principal Deputy Under Secretary of Defense for Acquisition Technology &Logistics Alan Estevez; and Commander of the U.S. Air Force Air Mobility Command General Paul J. Selva.
The program incorporated a number of panel discussions, including “The Growth of Commercial Aviation and the Current and Future Challenges Impacting its Expansion”; “Emerging and Future Cyber and Insider Threats to National Security”; and “The Industrial Base After a Decade of War and in an Era of Declining Budgets.”
In addition, the membership came together to issue a timely letter urging President Obama and Congress to work together on a budget deal. The letter, which featured 112 signatures, was sent to the President and each member of Congress.
The Fall BOG meeting also served as a platform to announce the new members of the 2014 Executive Committee and Board of Governors. A full membership list of the Board of Governors and Executive Committee can be found here.
To recognize the successful NASA and industry partnership, AIA Vice President for Space, Frank Slazer joined NASA Administrator Charles Bolden, SpaceX President Gwynne Shotwell, Orbital Sciences Vice President Frank Culbertson Jr., NASA Manager of the Commercial Crew and Cargo Program Alan Lindenmoyer, and NASA Director of Commercial Spaceflight Development Phil McAlister for a news conference at NASA Headquarters on November 13.
“The commercial space industry will be an engine of 21st century American economic growth and will help us carry out even more ambitious deep space exploration missions," said Bolden. Bolden also awarded the NASA Exceptional Service Award to COTS Program Manager Alan Lindenmoyer, Orbital and SpaceX.
Slazer remarked that the COTS program has strengthened America’s space industrial base at a time when the difficult federal budget environment has placed downward fiscal pressure on the space industry. “Right now, NASA’s budget is under a lot of threat between sequestration as well as the overall decline in the federal spending” said Slazer. The savings seen through the COTS program are enabling a cost-effective way to sustain ISS until 2020, and hopefully beyond.
Slazer noted that the approximately $800 million dollars invested in COTS is about the cost of one Space Shuttle flight. This relatively low investment by the government was made possible by the U.S. space industry co-investing its own capital in the development of these new systems. The COTS program yielded two new launch systems and two new cargo delivery capabilities for the nation – systems that are now being used to re-capture commercial launch business in our country.
Looking at the future benefit of this type of program, Slazer remarked, “AIA believes that COTS has pointed the way for NASA’s Commercial Crew Program as the most expedient way to reestablish independent U.S. crew access to the station.”
In addition to providing direct service to the ISS, COTS has also freed resources for NASA’s other important human spaceflight mission, beyond low Earth orbit exploration. Slazer noted that the investment in COTS has allowed NASA to focus on developing the Orion Multi-Purpose Crewed Vehicle (MPCV) and the Space Launch System (SLS) for exploration beyond low Earth orbit. “COTS has shown… that leadership in space by our nation isn’t just something that we can look back fondly on, but is our road to the future, and something that we’re going to continue to excel in.”
To watch the full press conference recording from NASA TV, click here.
With support from AIA, the Federal Aviation Administration (FAA) on November 7 unveiled a long-awaited milestone for integrating unmanned aircraft systems (UAS) into our national airspace. FAA Administrator Michael Huerta invited AIA to represent industry as his agency released its integration roadmap which addresses current and future policies, regulations, technologies and procedures required to integrate unmanned aircraft on a routine basis.
Huerta said the FAA is committed to maintaining the United States’ position as a global leader in the UAS market. He emphasized the need to capitalize on transforming our airspace to accommodate this growing arena and to take advantage of technological breakthroughs as we move into the second century of flight.
Huerta also reaffirmed that one of the FAA’s priorities is to ensure that privacy concerns in the management of the six test sites that were announced on December 30, 2013 are addressed. He further noted the FAA’s commitment to help the JPDO address the remaining technical challenges standing in the way of full UAS implementation. The JPDO comprehensive plan details the multi-agency approach to the safe and timely integration of both small and larger UAS, into the air system and fosters America’s leadership in advancing this technology.
Domestic UAS have the potential to create thousands of jobs, as the FAA predicts 7,500 small UAS will be integrated into the domestic air space over the next five years, and 30,000 UAS operating domestically within the next 20 years.
AIA is a strong proponent of the beneficial civil uses of unmanned aerial systems. AIA President and CEO Marion C. Blakey has spoken frequently in public forums about the tremendous potential UAS have for firefighting, severe storm forecasting, search and rescue, precision agriculture, pipeline monitoring, wildlife conservation, and eventually, cargo delivery.
The release of these documents provides pertinent information that will help guide companies’ business decisions as the UAS sector moves forward.
On Tuesday, November 13, the Aerospace Industries Association held its third "Faces of the Industrial Base" outreach event on Capitol Hill. The day featured meetings with Congressional staffers and members of Congress at which leading defense suppliers warned how budget austerity is adversely impacting their ability to participate in the supply chain and attract a new generation of skilled workers. The suppliers in attendance included GSE Dynamics, UEC Electronics, Harry Krantz Company, TW Metals, Pro-Fab Inc., Innoventor, Patriot Machine, Zero Point Frontiers Corporation, NATEL, Microsemi, and McCann Aerospace Machining Corp.
AIA President and CEO Marion C. Blakey testified before the Senate Appropriations Defense Subcommittee November 13 regarding sequestration's long-term effects on the defense industrial base. Blakey emphasized that budget conversations have not adequately focused on the defense suppliers, companies that constitute the majority of the industrial base and have taken the brunt of sequestration budget cuts. Blakey also noted the negative impact sequestration has on defense modernization and R&D programs. "The total reduction in modernization spending over the next five years could be as high as $147 billion,” she said. “Ultimately, slashing procurement and R&D will threaten our industry's ability to deliver these capabilities in the future."
The other hearing witnesses emphasized sequestration's impact on industry’s ability to attract new engineering talent into the workforce. "We truly are in a crisis mode,” said Greg Bloom, President of defense supplier and AIA member, Seal Science, Inc. “We are not having the engineers coming in to transfer the knowledge."
Larry Williams, then President and CEO of BRS Aerospace, noted the difficulties associated with the current budget environment: "We continually face the challenges of an unstable workforce associated with a lack of stability in defense contracting. The maximum employment outlook we have is three months."
Other speakers at the hearing were: Dr. Steven Fuller, Professor at George Mason University; Lt. General Lawrence Farrell, President and CEO of National Defense Industries Association; Owen Hernstadt, Chief of Staff at the International Association of Machinists and Aerospace Workers; and Rockford, Illinois mayor Lawrence Morrissey.
The next time you travel in the air or near coastal waters, you can thank the professionals in the Federal Aviation Administration (FAA) and Coast Guard for helping ensure your safety. Every single day, FAA employees review aircraft and component designs to ensure their airworthiness; air traffic controllers guide our aircraft through the skies; and hazardous materials inspectors ensure that cargo placed on those aircraft are not endangering passenger safety. Likewise, the U. S. Coast Guard protects us when we purchase a recreational boat or travel on a cruise ship. The service is on the scene when an oil spill or marine accident puts coastal lands and properties at risk. They interdict cargoes of illicit drugs headed toward the United States. And their aircraft and surface ships pluck us from the waters, often at great risk to their aircrews, when disaster strikes.
These agencies are well respected by America’s taxpayers, because they provide critical services to all of us. But their operations have been negatively impacted by the ongoing push to cut budgets. The air traffic controller and safety workforces are already lower than two years ago. And if additional cuts occur, they will be reduced even more, despite an expanding worldwide aviation industry that needs support.
To protect its operations, the FAA could decide to reduce its capital investments – especially in the long overdue Next Generation Air Transportation System (NextGen) modernization program. But with an aging infrastructure, and sequestration still on the books for the six fiscal years after FY 2015, delaying the replacement of obsolete and faltering equipment is not a viable, long-term solution. The Government Accountability Office recently reported that unscheduled outages of FAA equipment increased by 45 percent between 2001 and 2012, and said “many of the existing systems that have to be maintained for many years face growing agency concerns about parts availability and technology obsolescence.” The agency cannot save itself by eating its seed corn.
In the Coast Guard, investments in new aircraft and ships are needed to replace an aging fleet. Yet last year, the service had to cut out $240 million, including $84 million from its capital program, due to the sequester. Coast Guard officials have testified that operating hours were reduced 25 percent last year, affecting activities such as harbor patrols, security boarding, and drug interdiction. Older assets continue to be pressed into service, while contracts for replacement equipment are delayed. As a result, the Coast Guard is meeting less than half of its approved performance requirements.
Supporters of budget austerity need to reduce their expectations the next time a distress call comes into a Coast Guard station, an air traffic controller has trouble handling the traffic in his sector, or an aircraft manufacturer misses an opportunity to get cutting-edge designs into the marketplace. AIA urges the Congress to address these funding shortfalls before devastating service cuts to these critical federal agencies become the new norm.
Easing the sequester’s near-term effects under the congressional budget deal reached in late December was welcome news for our industry providing a measure of relief for important federal national security, civil aviation and space functions. But although we won’t be facing the full brunt of sequestration’s worst two years—or another government shutdown for the foreseeable future—defense spending will still be $30 billion below the President’s budget request for the year, and funding for FAA, NASA and NOAA will still be on the downward arc that began in 2010. That said, the deal represents a first step toward a long-term agreement that could eliminate sequestration altogether, reverse the current “investment deficit” in programs that make our nation strong and secure, and finally address the mandatory spending accounts that are the real drivers of our nation’s debt and deficit problems.
We remain deeply concerned about the consequences of ongoing budget cutting to the health of the industrial base and our ability to support America's national security and economic requirements today and in the future. These concerns were reinforced by the results of the recently released 2013 Aerospace and Defense Market Survey, jointly sponsored by AIA and the Computer Sciences Corporation (CSC). “There is no doubt that sequestration is having a direct impact on government/military OEMs and their tiered suppliers,” report the authors of this 13th annual survey. “These companies are juggling the financial impacts of delays, workforce displacement, supplier disenfranchisement and general uncertainty.”
A key survey finding was that 91 percent of companies report moderate to significant challenges in attracting and retaining skilled workers and 35 percent reporting that the aging and retiring workforce has resulted in an erosion of knowledge in their firms. “The retirement rate in aerospace and defense is creating a growing knowledge gap that needs to be filled with the next generation of workers,” observed Tim Ellis, CSC’s Aerospace and Defense industry general manager. “To compete with an array of tech companies and green industries, A&D companies need to embrace the modern workplace such as ‘Bring Your Own Device,’ social media, telecommuting and more.”
For the second consecutive year, when asked about what are the top three aerospace and defense industry macro forces affecting their organization over the next two to three years, the largest response given was “reductions and reallocations in defense spending and pricing pressures in the commercial market.”
Another key finding of the survey is that commercial companies are under increased pressure to lower aircraft acquisition costs and ongoing operational costs. The survey found many of them are using the following strategies to grow revenues and remain competitive:
• Design and produce innovative products.
• Focus on new revenue streams in aftermarket services or new geographies.
• Offer more flexible pricing to meet customer cost demand.
• Implement process improvement programs with the highest near-term return on investment.
I think the main take-away from the survey is that it demonstrates the importance of our nation’s continued investment in dynamic and cutting-edge research and programs. As the respondents clearly stated, our ongoing budget austerity is degrading the capabilities of the aerospace and defense industrial base. We’re losing skills and knowledge as workers are forced to leave our industry – skills that once lost cannot be replaced. AIA will continue to make it our top priority for 2014 and beyond to ensure that we have adequate, stable and predictable budgets for the programs that will allow our supply chain companies to retain and recruit the quality workforce our nation counts upon to maintain American leadership in all matters related to national defense, civil aviation and space.
Dak Hardwick currently serves as the international affairs director at AIA. His primary responsibilities include international defense and space trade issues. In addition, he oversees AIA’s role in bilateral and multilateral trade relationships in key markets, international cooperative programs, and foreign military sales.
Before joining AIA, Hardwick worked at Harris Corporation, an international communications and information technology company. At Harris he was the primary interface with the U.S. Government for a variety of Harris programs within the government communications systems business unit, including national airspace modernization, intelligence and meteorological ground system communication programs. At Harris he also responsible for working with U.S. Government and international officials to ensure timely export of Harris tactical radio communications products for U.S.-allied nations.
Hardwick's prior experience also includes time spent on Capitol Hill where he served as the legislative director and military legislative assistant for Congresswoman Niki Tsongas. Before that, he began his career as a presidential management fellow at the U.S. Department of Defense (DoD). During his service at DoD, he held a variety of critical national security positions, including serving as the country director for Georgia and the Republic of Moldova and as the director for peacekeeping operations in the Office of the Secretary of Defense.
An active member of the Alexandria, Virginia community, Hardwick serves on the Board of Directors of New Hope Housing, an organization dedicated to ending homelessness in Northern Virginia, and is a member of the Executive Committee of the Alexandria Chamber of Commerce. In addition, he serves on the City of Alexandria’s Budget and Fiscal Affairs Advisory Committee, appointed by members of the Alexandria City Council.
Hardwick holds a B.S. in public affairs from Indiana University and M.P.A. from West Virginia University.