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F-16 upgrade dropped from U.S. budget proposal, sources say

Jan. 28, 2014 - 07:16PM   |  
F-16's Taxi and Take Off
Sources said a major avionics upgrade for the F-16 will be defunded in the fiscal 2015 budget submission. (Air Force)

WASHINGTON AND TAIPEI — A major F-16 upgrade program is likely to be left out of the president’s fiscal 2015 budget request, according to multiple sources.

The Combat Avionics Programmed Extension Suite (CAPES) is an Air Force program to replace the avionics and radars for 300 F-16s. It would also upgrade 146 Taiwanese F-16A/B fighters purchased in the 1990s.

Sources said the Air Force has decided not to fund the CAPES program, instead reinvesting some of that money toward a general F-16 service-life extension program (SLEP) while putting the rest toward modernization efforts for other platforms.

While costs for the CAPES program are unclear, both Pentagon insiders and outside analysts put the figure in the billions.

The core of CAPES is a new active electronically scanned array radar. In 2013, Lockheed Martin, the prime contractor on CAPES, selected Northrop Grumman’s Scalable Agile Beam Radar to be installed in the planes. Northrop beat competitor Raytheon, which had put forth its Raytheon Advanced Combat Radar as an alternative.

In addition to the radar, CAPES would include a new high-resolution, color, multi-function display, an electronic warfare suite and an integrated broadcast service for multiple intelligence broadcasts, according to a government report.

By moving money toward the SLEP, the Air Force would provide some cover against the F-35 joint strike fighter slipping past its December 2016 initial operating capability date. It is also possible that some of the advanced avionics could become part of the SLEP, offering a cheaper, halfway method toward modernizing the F-16s.

“There is a real force structure problem looming. So something has to be done to keep the F-16, or at least part of the F-16 fleet, effective,” said Richard Aboulafia, vice president of analysis with the Virginia-based Teal Group.

The Air Force appears to be planning “the bare minimum, rather than something that would offer more capability,” he added. “That helps solve the force structure problem, but of course it doesn’t do anything for combat effectiveness.”

Aboulafia also noted that this could have ramifications on the international radar market. The Raytheon radar was selected by South Korea early last year, and Singapore remains in play, as well;if Northrop loses CAPES it could harm long-term prospects for other radar upgrade programs.

Northrop would appear to be the big loser if CAPES is defunded, and could activate its network of supporters in Congress to fight the cut. However, the Air National Guard would stand to benefit from a more robust SLEP, giving the move some support on the Hill.

A Northrop spokeswoman declined to comment on budget speculation, as did a spokesman for Lockheed. Per service policy, an Air Force spokeswoman declined to comment on budget details prior to its submission to Congress.

While losing out on CAPES would be a blow to the Pentagon’s fleet of F-16s, it would have much greater impact on Taiwan.

In 2011, the Air Force awarded Taiwan a $5.3 billion upgrade program for its remaining fleet of 146 F-16A/B fighters. Taiwan’s program would be directly based on the CAPES program, with USAF making all of the source selections.

The one complaint Taiwan’s Ministry of National Defense (MND) had with the deal was that Taiwan was being saddled with much of the nonrecurring engineering costs for integrating the radar.

Taiwan officials were confident, however, that riding CAPES’ coattails would prove wise. Officials were also anxious to please the Pentagon.

With CAPES defunded, MND officials are expected to “panic,” said Fu Mei, director of the Taiwan Security Analysis Center.

“This is a crisis,” he said. “Taiwan should have taken more control over the source selection instead of handing it over to the [US Air Force] to run it.”

“Now Taiwan’s MND will have to figure out an exit strategy even though the warning signs were there,” he said. “The MND did not begin exploring their contingency options soon enough even though warned by industry analysts.”

Without CAPES funding, Taiwan might not be able to afford the F-16 upgrade program. Last week, the MND announced a 20 percent cut in the size of the military over the next five years. Taiwan is struggling due to a decline in the economy and difficulty paying off $13 billion worth of military equipment procured from Washington since 2008.

The president’s budget is expected to be unveiled March 4. Sources have also told Defense News that Northrop’s Global Hawk unmanned system will be funded in the budget, despite the service repeatedly trying to kill the unmanned system.

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