The Weekly Wire: For Your Situational Awareness 2.22.18

 In Weekly Wire

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On February 16, the US Navy awarded five contenders $14.9 million each to provide conceptual designs for the next-generation guided missile frigate (FFG(X)) program. The five shipbuilders include Austal USA offering the Independence-class Littoral Combat Ship, Lockheed Martin offering the Multi-Mission Surface Combatant, General Dynamics Bath Iron Works offering the Navantia F-100 Frigate, Fincantieri Marine offering the FREMM frigate, and Huntington Ingalls, which has not revealed a design. The FFG(X) program is expected to be awarded in 2020, with the first ship delivery slated for 2023. The US Navy is acquiring 20 ships under the program worth up to $950 million per ship, bringing the potential contract value to $19 billion. Specific requirements for the FFG(X) program were released in July 2017, with the US Navy looking to outfit the frigates with COMBATSS-21 Combat Management System, SeaRAM anti-ship missile system, and over-the-horizon missile capability, to name a few requirements.

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On February 17, Indonesia and Russia signed a contract for 11 Su-35 fighter aircraft that is valued at $1.14 billion. According to the Indonesian Ministry of Defence, the first two fighters will be delivered in August 2018 and the nine remaining aircraft will be delivered by 2020. During negotiations in August 2017, it was announced that Indonesia would pay for the fighters by exchanging them for commodities such as palm oil, tea, and coffee for half the price of the contract value, and the remaining $570 million in cash. Indonesia has been interested in acquiring additional advanced fighters for some time, and has been helping to fund the KF-X aircraft being developed by South Korea. However, this contract comes during a period when Indonesia’s commitment to the KF-X is becoming more tenuous, although the long-term effects of this deal on the KF-X program are currently unknown. There is also increased likelihood of future trade deals with Russia, as sanctions from the US and EU force Russia to find alternative trade partners.

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On February 20, Parliamentary Armed Forces Commissioner Hans-Peter Bartels released a scathing report about the country’s military readiness, citing defense spending cuts as the primary reason for the overall decline in readiness, and providing a rather bleak outlook on the country’s military in the near term. The largest gaps in readiness are in personnel and procurement of military equipment according to the commissioner, with 21,000 additional soldiers needed and aging combat aircraft, tanks, and ships in need of repair. The report highlights Germany’s submarines – which have been docked for repair since late 2017 – and the country’s fleet of A400Ms as examples of platforms hindering readiness. Commissioner Bartels’ report comes at a time where Germany is committing more military resources to NATO and overseas engagement in Mali and Iraq. Germany’s defense spending falls far below NATO’s 2% threshold, though Chancellor Angela Merkel has stated that defense spending will increase to reach 2% of GDP by 2024. However, Avascent Analytics believes that Germany will likely fall short of its 2% goal by 2024, as that would require a 117% increase from 2017 to 2024 based on GDP projections.

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On February 20, the Romanian Senate approved the purchase of 54 High Mobility Artillery Rocket Systems (HIMARS) for over $1.6 billion, with an initial payment of $1 billion by the end of February. The HIMARS purchase was approved by the US State Department in August 2017, which estimated that the contract could be worth up to $1.25 billion, including services and additional rockets. Many of Romania’s combat vehicles are Cold War-era vehicles that were licensed-produced or modified Russian designs. Romania has increased defense purchases from Western suppliers in recent years, with a $1 billion order of over 200 Piranha V armored vehicles in January, and over $700 million initial purchase of the Patriot air and missile defense system. This is part of a larger effort to gradually bring the Romanian Armed Forces up to NATO standards. Future procurements include up to 40 additional F-16s and potentially three submarines, which could revive Romanian submarine operations after the country’s sole submarine, the Delfinul, was taken out of service in 1996.

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