A 5-year, $17 billion deal will build 10 Virginia Class Block IV fast attack submarines for the US Navy, bringing production to 2 boats per year at long last. The USA’s nuclear submarine fleet gives it unmatched flexibility, but it’s confronted with rising submarine numbers in China and around the Pacific, even as its Los Angeles Class submarines are beginning to exit the fleet. Aircraft carriers may dominate in peacetime, but as anti-ship missiles gain longer reach and greater lethality, and sensors improve, some analysts are coming to see submarines as the key to wartime naval power…
The US Navy has taken delivery of 10 of the 7,800t Virginia Class submarines since 2004 (SSN 774 – 783), with 8 more currently under construction. They’re derived from the lessons of the SSN-21 Seawolf Class, an extremely advanced submarine whose expense per boat ended production at 3. The Virginias achieved excellent flexibility and a reputation for extreme quietness, but changes have continued since the first boat, as the US Navy tried to drive costs down.
Block III submarines (SSN 784 – 791) took a big step forward by replacing the 12 vertical launch tubes with a more flexible “6-shooter” approach, and swapping a water-backed, horseshoe-shaped LAB sonar array for the existing air-backed spherical array.
The Block IV is the next increment, and so far, few details have been released. PEO Submarines Rear Admiral David Johnson has said that the new design would reduce the submarine’s lifetime number of major maintenance visits from 4 to 3, raising full-length deployments during their lifetimes from 14 to 15.
Beyond that, a number of improvements have been discussed over the years, from stretched versions to a new composite sail with space for more special forces. Other clues to possible future changes come from the Pentagon’s FY 2013 DOT&E report, which seem to stress special warfare and arctic operations.
For special operations, the Navy modified the SEAL Delivery Vehicle (SDV) Auxiliary Life Support System (ALSS) to handle increased air pressure, allowing longer missions. Unfortunately, the Virginia Class needs to upgrade its air supply system before it can support those pressures. This is an important mission in the present environment, which makes this shortcoming a good Block IV improvement candidate if it can be done at reasonable cost.
In the Arctic, the Virginia Class needs better methods of removing carbon dioxide and hydrogen waste gas, insulation improvements to avoid “excessive condensation” that can interfere with electronics, and a hardened sail that can handle the same ice thicknesses as Improved Los Angeles Class and Seawolf Class SSNs. This isn’t a crisis yet. In the short term, it’s easy to just bias Virginia Class deployments toward locations like the Pacific Ocean, Mediterranean Sea, and Indian Oceans, leaving the Los Angeles and Seawolf boats to spend more time up north. As Virginia Class submarines become a larger and larger share of the US Navy’s submarine force, however, those kinds of gaps will begin to matter more. It’s be up to the US Navy to decide when that day comes.
The Contract Co-production
July 20/17: Two Tomahawk vertically-launched cruise missiles have been successfully test-fired from the Virginia-class submarine USS North Dakota. The test aimed to verify the capabilities of the recently installed Block III Payload Tubes, designed to replace the original Virginia-classes 12 vertical launch missile tubes. Integration of the tubes are part of upgrades to the class’s missile launch systems—which includes the Virginia Payload Module launch system—and will triple the capacity for Tomahawks and allow greater flexibility for installing other vertical launch weapons systems. Improved Tomahawk Block IV missiles are expected to be deployed from 2019 and will be in the US Navy inventory beyond 2040.
March 23/15:
Navy officers are pushing for improved firepower for the Virginia-class submarines through the addition of four vertical launch tubes, representing a 76% increase in strike capability.
April 28/14: General Dynamics Electric Boat Corp. in Groton, CT received the $17.646 billion fixed-price incentive multi-year contract, which runs from FY 2014 – 2018 to order submarines 792 – 801. HII Newport News, VA will remain as the sub-contractor, and options for on-board repair parts in support of each submarine could bring the cumulative value to $17.828 billion. SSN 801, the last boat under this contract, is scheduled for delivery in 2023.
Work on this contract will be performed in Newport News, VA (24%); Groton, CT (18%); Quonset Point, RI (16%); Sunnyvale, CA (8%); Cheswick, PA (1.7%); Annapolis, MA (1.2%), and various sites throughout the United States (31.1%). Work is expected to be complete by August 2024.
This contract was procured sole source from Electric Boat Corp., pursuant to 10 United States Code 2304 (c)(1) and Federal Acquisition Regulation 6.302-1. US NAVSEA in Washington, DC manages the contract (N00024-12-C-2115). See also GD, “General Dynamics Awarded $18 Billion by U.S. Navy for 10 Virginia-Class Submarines” | Reuters, “General Dynamics, Huntington win huge U.S. Navy contract”.
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Turkey’s tank fleet is currently made up of American M-48s and M-60s, some of which have been modernized with Israeli cooperation into M-60 Sabra tanks, plus a large contingent of German Leopard 1s and Leopard 2s. That is hardy surprising. America and Germany are Turkey’s 2 most important geopolitical relationships, and this is reflected in Turkey’s choice of defense industry partners. The country’s industrial offset requirements ensure that these manufacturers have a long history of local partnerships to draw upon.
In recent years, however, a pair of new players have begun to make an impact on the Turkish defense scene. One was Israel, whose firms specialized in sub-systems, upgrades, and UAVs. The other is the Republic of [South] Korea, who has made inroads in the Turkish market with turboprop training aircraft, mobile howitzers… and now, main battle tanks.
Turkey’s new tank is named after Gen. Fahrettin Altay, a cavalry commander in Turkey’s War of Independence. The tank will use a 120mm smoothbore gun, with the usual 7.62mm coaxial machine gun and a pintle-mounted 12.7mm machin gun up top. Compared to the ROK’s K2 Black Panther, the Altay is reportedly longer, with an added road wheel and a slightly modified turret. It may also carry heavier armor.
The 2008 System Development deal includes the production of 4 prototypes worth $70 million dollars, and technology transfer worth $330 million dollars.
AltayOnce development is complete, a second set of production contracts will be signed. The Turks’ official goal was to design, test, and build the first Altay tank in 6.5 years, which would place the event in early 2015. So far, 2015 remains the target date for production to begin.
Turkey reportedly plans to produce 200-250 of the tanks locally.
IndustrialUnder this $400 million development deal, The Republic of Turkey will own all design and intellectual property rights to the final vehicle. Turkey’s Otokar will build the tanks in cooperation with various sub-contractors, including:
Foreign companies are reportedly under consideration for key items beyond the engine, including armor and complex systems integration.
Contracts and Key EventsROK governments have been building a formidable local defense industry as a matter of policy, and those efforts are beginning to win export sales around the globe. The Altay project is just the latest payoff.
Relations with Turkey have been especially warm, owing in part to the Turks’ heroic combat record in the Korean War. In recent years, that combination of warm relations and solid products has led to Turkish orders worth hundreds of millions of dollars for KT-1 turboprop training aircraft, and K-9/K-10 derived “Firtina” mobile howitzers. In July 2007, South Korea’s inroads became undeniable, as discussions began concerning a deal to develop Turkey’s next generation tanks. That was a major upset, but it had yet to coalesce into a deal. By the end of July 2008, however, the ink was dry on a deal that made Korea’s new XK2 the basis of Turkey’s co-produced Altay tank.
2016 – 2017 Altay unveiledJuly 20/17: Three Turkish defense firms will be asked to submit proposals to Turkey’s Altay tank program, which could reach beyond $10 billion. BMC, Otokar and FNSS—all private companies—will bid to secure a contract for the serial production of an initial batch of 250 Altay tanks, with Turkey planning to produce a total of 1,000 units. Ankara’s decision to include three bidders in the program comes after Otokar produced and successfully completed qualification tests of an Altay prototype, including mobility and endurance testing on rough terrain and climatic conditions, firing tests with various scenarios, and survivability testing. However, last month, the Turkish procurement agency deemed Otokar’s serial production sole-source offer as too expensive, instead opening up the competition to include other bidders.
June 16/17: Turkey has decided to ditch its sole-source negotiations with manufacturer Otokar for the serial production of the Altay tank, instead favoring to start an open bid for the same contract. Four prototypes were built by Otokar for developmental tests— successfully completed earlier this year—and clauses within the developmental allowed the firm, without competition, to make an offer for the serial production contract. However, Turkish procurement officials familiar with the Altay program, said that Otokar’s best and final offer failed to qualify for a single-source serial production contract. New bids are expected to be solicited by the end of the year, with FNSS and BMC expected to join Otokar in the new competition.
April 13/17: Despite issues with gaining certain technology transfers for the Altay, Turkey could begin serial production of the main battle tank as early as this May, according to Defense Minister Fikri Isik. Pakistan and some Gulf nations are believed to be lined up as potential customers for the vehicle. Talk of potential delays to the Altay surfaced when local contractor Tümosan was unable to continue working on providing a domestic diesel engine for the tank, after Austria’s AVL List GmbH, which it had as a technical support partner, ceased working with the Turkish firm amid concerns that the Turkish government were sliding on human rights issues. It now looks like Ankara may instead turn to Ukraine for help, with the Altay possibly adopting the Kharkiv Morozov Machine Building Design Bureau’s (KMDB) 1,500 hp 6TD-3 diesel engine.
March 5/17: The Turkish government has cancelled an engine development contract for the Altay main battle tank (MBT) with Tümosan after the company’s failure to secure a new design and development partner to replace AVL List GmbH from Austria. Tümosan’s need to find a new partner came about in January after they were forced by Ankara to cancel the deal with AVL List GmbH due to Turkey’s concerns with emerging political and regulatory issues in Austria, namely the Austrian government’s insistence on issuing export licenses with conditions. Speaking on the announcement, Tümosan cited reluctance from supplier governments to transfer technology and intellectual property and Turkey’s post-coup political events as major challenges in their ability to secure a new partner.
March 1/16: The Turkish government has granted land to defense firm BMC to relocate and build a new plant. The 222-hectare site will see $430 million invested by the company into the expansion with the plant believed to be operational within two years. BMC is currently bidding for the serial production of the indigenous Altay battle tank, which has been developed by rival company Otokar. While the bidding process has yet to begin, the winners would see a contract to produce up to 1,000 Altays after an initial run of 250 for the Turkish Army.
January 21/16: Turkey’s Undersecretariat for Defense Industries (SSM) has announced that a number of parties have expressed interest in purchasing their indigenous new generation main battle tank, the Altay. Those that may look to make purchases are regional allies, including a number of Gulf countries and Pakistan. Saudi Arabia in particular has been expressing keen interest after officials from these countries were invited to observe firing tests of the tank. While still in development, and a manufacturer for serial production is yet to be announced, the interest seemingly generated may lead to some big business for Ankara in the coming years.
2011 – 2014Nov 18/14: XK-2. South Korea’s WON 2+ trillion (about $1.84 billion) XK-2 tank project, which served as the basis for Altay, has experienced delays due to technical difficulties. Acceleration performance has been a particular issue, and the ROK plans to field it with a locally-made engine and transmission by 2017. So far, about 100 K-2 Black Panther tanks have been deployed in Korea. Sources: Yonhap, “S. Korea to put K-2 combat tank into full service by 2017”.
Feb 27/14: Engines. While talking to reporters about Airbus’ A400M contract, Undersecretary for Defense Murad Bayar mentions that:
“Turkey’s Altay tank’s engine must be made in the country. There are also proposals from two Turkish companies to produce the engine in Turkey.”
It’s a blow to initial engine provider MTU Friedrichshafen. Whether it ends up affecting the tank depends on whether Turkish firms produce an engine in time, with adequate performance, efficiency and reliability. Sources: Anatolia News Agency, “Airbus and Turkey Dispute Over A400M Military Aircraft”.
Nov 14/13: Industrial shift? SSM’s chief, Murad Bayar, tells Defense News that they’re looking at a different approach to Altay’s production contract. Koc-owned Otokar is very likely to remain the main manufacturer, but they’re reportedly considering a consortium/ cooperative approach composed of Turkish and even foreign firms. Politics is playing a strong role:
“Otokar is owned by Turkey’s biggest business conglomerate, Koc Holding, whose defense business may be a casualty of a row between Prime Minister Recep Tayyip Erdogan and one of its top executives after a month of civil unrest that battered the Turkish government. In one incident during June demonstrations, protesters tried to escape police tear gas and pepper spray by taking refuge in a posh Istanbul hotel, Divan, owned by Koc. Hotel management admitted the protesters to its lobby, but police fired more tear gas and pepper spray into the hotel lobby, although it is illegal to fire these chemicals into indoor spaces.”
The Erdogan government’s response was to relax the laws regarding police conduct, while calling the youthful protesters “terrorists” and promising to punish firms that helped them in any way. Koc has already lost a contract to build “Milgem” corvettes, so suspicions of a political motive over Altay are well founded. Defense News, “Turkey Mulling ‘Big Team’ for Tank Production” | Hurriyet Daily News, “Koc’s defense business a casualty of feud with government?” | Wikipedia, 2013 Protests in Turkey.
Nov 15/12: With about $500 million invested in development to date, Otokar officially rolls out its first 2 Altay tank prototypes at its Sakarya plant. Prototype #1 is already in use for mobility tests, with over 2,000km of mileage under its treads. Prototype #2 will be used for firing tests. Any changes will feed back into the design and construction of prototypes #3-4.
Kudret ONEN, Head of Koc Holding Defence Industry Group and Otokar’s Chairman of the Board, says that the project currently has 550 engineers (260 at Otokar), and nearly 100 subcontractors. Mass production is still promised for 2015. Otokar [in Turkish].
Rollout
June 11/12: Update. While announcing its vehicle lineup for Eurosatory 2012, Otokar provides a project update:
“The first phase of the project, ‘Conceptual Design Process’, has been completed in 2010. And we presented the full-scale model, which reflects the concept design of ALTAY, at IDEF Exhibition, last year. In scope of the ‘Detailed Design Process’ which is the second and the most critical phase of the project, ‘Preliminary Design Phase’, has been successfully completed by the last quarter of 2011. During this phase, manufacturing of prototypes took start in line with this process. Following the completion of the Second Phase, we’re planning to start the ‘Prototype Development and Qualification Phase’ which is the third and the last phase. In scope of the project plan we continue investing in the first prototype of the ALTAY tank which will be ready for testing by the last quarter of this year. In addition to our existing facilities within Otokar plant, we have recently established a new Tank Test Center with an investment of USD 10 million.”
March 27/12: SSM’s plan. Turkey’s SSM procurement agency has unveiled their new 5-year strategic plan, with timetables for key acquisitions. The plan commits to begin deliveries of the Altay tank by 2015. Hurriyet Daily News
2005 – 2010 XK2, firingJuly 6/09: US Pressure on Israel. The Jerusalem Post reports that the USA had pressured Israel out of Turkey’s tank competition, in order to give American firms better odds. Israel would have entered the competition with a strong position to build on. Turkey’s existing M-60 tanks were heavily modernized by Israeli firms, based on the same “Sabra” modification set that Israel used on its own M60s. Beyond Sabra, Israel’s current Merkava family tanks are purpose-built for the needs of warfare in the Middle East, with unique features for urban warfare and counter-terrorism conflicts.
Within a couple of years, worsening relations between Turkey’s Islamist government and Israel made any such project unthinkable anyway.
July 30/08: Representatives of the Turkish and South Korean governments sign the $400 million System Design & Development Memorandum of Understanding, making the Altay tank project a reality. This contract does not include the mass production process. The South Korean Defense Ministry added that:
“The signing of the contract on the ROK-Turkey technology cooperation in tank development is expected to greatly help boost the cooperation between the two countries in the defense industry sector, while the Ministry of Defense and the DAPA plan to provide full support to ensure smooth technology cooperation throughout the entire process of tank development from designing to production and testing.
Meanwhile, Defense Minister Lee held ministerial talks with his Turkish counterpart in Ankara on July 28/08, in which the two agreed to continue building a cooperative relationship between their militaries…”
See: ROK Ministry of Defense | Otokar Aug 1/08 release | KOIS | Korea Times |Turkish Daily News (beforehand) | Turkish Daily News (post-deal) | Today’s Zaman (Turkey) | Aviation Week Ares | Agence France Presse.
Altay Development MoU
March 2007: According to a resolution adopted at the meeting of the National Defence Executive Committee, the Turkish government decides to begin contract negotiations with Otokar, as the nominee for prime contractor.
February 2007: Bid evaluation process, aiming to appoint the prime contractor, is completed in February 2007.
July 2006: RFP bids are submitted by Otokar’s team, and by the BMC-FNSS Consortium.
FNSS Savunma Sistemleri A.S. makes some of Turkey’s armored personnel carriers; it is a joint venture between BAE Systems and the Turkish Nurol Group. BMC Sanaye Ve Ticaret A.S. makes wheeled vehicles and trucks for the Turkish armed forces, and is part of the large Turkish conglomerate Cukurova Holding.
February 2006: SSM issues the project’s Request for Proposals.
RFP
April 2005: Feasibility study complete. The path forward is defined as “designing and development of the main battle tank inside Turkey by getting technical support and assistance from abroad whenever required.”
2005: The Turkish SSM defense procurement agency charges a 3-firm Turkish industrial consortium with a feasibility study to determine the production pattern for the Turkish National Main Battle Tank Project.
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