The Weekly Wire: Week of 7/20/15

 In Weekly Wire

Brazil flag


The Brazilian ministry of Defense recently announced that BAE Systems Combat Vehicles, of York, PA won a $54.6m contract to upgrade the Brazilian Army’s venerable fleet of M113 armored vehicles.  This deal will likely extend the same work that BAE did in a previous $131m contract to bring 150 M113’s up to the M113A2MK1 designation.  Brazil has made a considerable effort to upgrade and modernize its land forces, investing in both its M113’s and M109’s, while at the same time expanding its capabilities with the VBR-MR (8×8), VBTP-MR (6X6), and VBTP-LR (4×4).  Leveraging its considerably advanced industrial capabilities, Brazil has made a point of developing its own defense offerings.  Brazilian modernization efforts have been able to keep a strong pace with other developed nations, largely due to their ability to competitively produce both subsystems and entire platforms.

S. Korea flag

South Korea

On July 14, the Defense Security Cooperation Agency (DSCA) cleared a $2.5 billion foreign military sales (FMS) package of F-16 upgrades for South Korea, via Lockheed Martin. This represents South Korea’s second attempt at upgrading its fleet of 134 KF-16C/D fighter aircraft. The first attempt ended acrimoniously in November, 2014, when the ROK government terminated a $1 billion contract it awarded to BAE Systems, balking at a $750 million (70%) increase in costs that Seoul claimed were not part of the original agreement. The original agreement represented the first time a country did not select the original manufacturers of the F-16, Lockheed Martin Corp., for upgrades to the long-serving fighter aircraft – and a significant victory for BAE Systems in breaking into the aviation upgrades market. The current package requested by the ROK government –likely to be awarded back to Lockheed Martin – feature upgrades of the avionics systems as well as a fresh supply of munitions and active electronically scanned array (AESA) radars. Somewhat surprisingly, the DSCA announcement includes a $2.5 billion price tag – noticeably higher than the revised price of the original contract – but including significant offset requirements which likely explain the increase in cost.

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