China launched a large missile on Monday that reached 10,000
km (6,250 miles) above the earth, the highest suborbital launch
seen worldwide since 1976, according to Jonathan McDowell at the
Harvard-Smithsonian Center for Astrophysics.

China has said the rocket, launched from the Xichang
Satellite Launch Center in western China, carried a science
payload to study the earth’s magnetosphere.

However, a U.S. defense official said U.S. intelligence
showed that the rocket could be used in the future to carry an
anti-satellite payload on a similar trajectory.

“It was a ground-based missile that we believe would be
their first test of an interceptor that would be designed to go
after a satellite that’s actually on orbit,” said the official,
who was not authorized to speak on the record.

Representative Mike Rogers, chairman of the U.S. House
Intelligence Committee, declined to comment specifically on the
rocket launch, but said China was clearly taking a more
aggressive posture in space.

“Any time you have a nation-state looking to have a more
aggressive posture in space, it’s very concerning,” Rogers said
at a Reuters Cybersecurity Summit.

The United States remains concerned about China’s
development of anti-satellite capabilities after Beijing shot a
missile at one of its own defunct satellites in orbit in 2007,
creating an enormous amount of debris in space.

Monday’s rocket launch was similar to launches using the
Blue Scout Junior rocket that were conducted by the U.S. Air
Force in the 1960s for research on the Earth’s magnetosphere,
McDowell said in an emailed response to questions.

He said all the previous suborbital launches above 10,000 km
(6,250 miles) had been conducted by the United States. All
China’s previous missile tests went to less than 2,000 km (1,250
miles), although Beijing had launched orbital vehicles higher,
including to the Moon, he said.

Most scientific suborbital launches are at most 1,500 km
(940 miles) or so, McDowell added. The 1976 launch was Gravity
Probe A, when NASA and McDowell’s institute worked together to
launch an atomic clock to 10,280 km (6,425 miles).

Monday’s launch came less than a week after U.S. Deputy
Defense Secretary Ashton Carter unveiled what he called a “long
overdue” effort to safeguard U.S. national security satellites
and develop ways to counter the space capabilities of potential
adversaries.

U.S. military space officials are taking steps to improve
the resilience of national security satellites in orbit, the
defense official said. These include using new wave forms to
make it more difficult for adversaries to jam signals from
space, putting U.S. sensors on commercial satellites and using
terrestrial high frequency communications.

Last week, the Pentagon released an 83-page report on
Chinese military developments that highlighted China’s
increasing space capabilities and said Beijing was pursuing a
variety of activities aimed at preventing its adversaries from
using space-based assets during a crisis.

(Reporting By Andrea Shalal-Esa; Editing by David Brunnstrom)

Chief Financial Officer Bruce Tanner said Lockheed had not been officially informed about the impact of the furloughs, but civilian government workers have played a big role in supporting flight testing and other work on the $396 billion F-35 jet, the Pentagon’s costliest weapons program.

“We’ll lose the capability to remain on schedule for some of our programs if in fact the government support that goes hand in hand with our flight tests, for example, is reduced,” Tanner told Reuters in an interview at the company’s media day.

Lockheed and other big weapons makers railed against budget cuts required under a process known as “sequestration” for over a year, warning that their across-the-board nature could result in significant layoffs throughout the industry.

Defense Secretary Chuck Hagel on Tuesday said he decided to move ahead with civilian furloughs only after exhausting every other option to meet the congressionally mandated cuts. The furloughs will begin on July 8, resulting in roughly one day of unpaid leave per week for more than 600,000 workers through September, the end of the fiscal year.

Lockheed’s chief lobbyist, Greg Dahlberg, told reporters he expected the Pentagon to release details about how the mandatory budget cuts would affect procurement programs in early June.

He said the department had developed a list of 2,500 affected programs, but no details had yet emerged.

He said it was unlikely that Congress would be able to undo the sequestration cuts for fiscal year 2013, but industry executives were still hoping that lawmakers would reach agreement on other deficit-reduction measures, which could help avert the same across-the-board type cuts in future years.

Lockheed Chief Executive Marillyn Hewson told reporters she continued to voice the company’s opposition to the cuts in frequent meetings with U.S. lawmakers and still hoped that Congress would reverse or restructure the cuts, which are slated to take effect over the next decade.

Most of the company’s weapons programs take years to build, which meant that the cuts would not have a huge impact on contracts in the short-term, although shorter-term orders and services were already seeing some slowdown, she said.

Tanner said government workers were involved in flight testing of the F-35 jet in a variety of different jobs, including working in the air traffic control tower, providing mid-air refueling and piloting planes.

If those workers were missing 20 percent of the time, or the bases where the planes are being tested shut down, the program’s schedule could be delayed, Tanner said.

He said the company was also bracing for a possible slowdown in contract payments as a result of the reduced work time for civilians, since a large part of the company’s bills were handled at a Defense Department facility in Columbus, Ohio, which is staffed by many non-military employees.

“If all of a sudden people are only there for four days out of five, do I get paid 80 percent of the bills that I send in, or does it take that much longer,” he said.

(Reporting by Andrea Shalal-Esa; Editing by Gerald E. McCormick and Diane Craft)

Army General Keith Alexander, who heads the National Security Agency and U.S. Cyber Command, told the Reuters Cybersecurity Summit in Washington that U.S. computer networks were already under constant attack and billions of dollars worth of intellectual property were flowing out of the country each year.

“Mark my words, it’s going to get worse. The disruptive and destructive attacks on our country will get worse and … if we don’t do something, the theft of intellectual property will get worse,” Alexander said at the summit.

Alexander said he was not aware of any cyber assaults against the United States as destructive as the one that damaged computers at Saudi Arabia’s national oil company, Aramco, last year. But he said similar attacks could well be seen “in the not-too-distant future” on key U.S. infrastructure sectors, such as public utilities and financial services.

The general argued forcefully for legislation that would make it easier for the government to work with industry on monitoring private computer networks for signs of intrusion, despite concerns raised by privacy advocates.

But he said the NSA had no interest in reading the emails of U.S. citizens.

“We can protect our networks and protect our civil liberties and privacy,” Alexander told the summit.

He said proposed legislation would not allow government agencies to view data that identified individual people, except in specific cases that required special waivers.

(Follow Reuters Summits on Twitter @Reuters_Summits)

(Reporting By Andrea Shalal-Esa and Deborah Charles; Editing by Tiffany Wu and Paul Simao)

Michael Gibbons, Boeing vice president for F/A-18 and EA-18 programs, spent part of this week pitching additional sales of Boeing’s last fighter jet to congressional staffers in a triple-wide trailer packed with simulators, displays and souvenirs.

His mission? To safeguard funding for 21 EA-18G Growlers in the Pentagon’s fiscal 2014 budget, and underscore the advantages of the Super Hornet, for which Boeing has developed a package of upgrades aimed at making it more competitive with Lockheed Martin Corp’s (LMT.N: Quote, Profile, Research, Stock Buzz) fifth-generation F-35 multirole fighter.

The F/A-18 is Boeing’s last fighter jet in production after it lost the F-35 contract to Lockheed in 2001. Boeing has sought to parlay delays and cost overruns on the F-35 program into more sales of its jets, but its efforts have taken on new urgency in recent years as F/A-18 production begins to wind down.

“It’s a make or break year for the F/A-18 and Boeing,” said Virginia-based defense consultant Jim McAleese. He said the company was scrambling to drum up more sales since the Navy’s current plans call for no further Super Hornet purchases.

Boeing backers in Congress have repeatedly added F/A-18s to the Navy’s budget in recent years, arguing that the Navy needs more fighters to bridge the gap until the F-35 can be fielded.

Gibbons told Reuters that Boeing wanted congressional aides to see the F/A-18 as a viable option if the Navy revamped its current plan to use two squadrons of F-35s and two squadrons of Super Hornets on its aircraft carriers.

“We’re here to … make sure that people on the Hill who are not close to aviation really understand why the Super Hornet … is actually a next-generation aircraft, and why it’s an affordable option, especially in a budget-challenged environment,” he said as a line of congressional aides tested the plane’s new touch-screen cockpit display.

The Navy began using the Super Hornet’s single-seat E-model and two-seat F-model in 2000. Although Boeing marketed the plane as an “upgrade” to the Hornet to secure funding during an earlier defense spending drawdown, experts say the Super Hornet is essentially a new aircraft. It has a larger wing and longer fuselage to carry more fuel and more powerful engines.

The company’s last multi-year contract with the Navy ends in mid-2015, but production of the Super Hornet and Growler is slated to run through late 2016 after Australia announced last week that it would buy a dozen more Growlers, a solid order, but only half the number Boeing had hoped to sell.

Boeing is also eyeing prospects in Brazil, Malaysia, several Middle Eastern countries that it declined to name, where Boeing has flown flight demonstrations in recent years. Analysts say Kuwait and several others may announce contracts as early as this year.

And Boeing is providing F/A-18 data to two other countries that are rethinking their F-35 plans: Canada, which is looking for 35 new jets, and Denmark, which needs 30 planes.

Altogether, Gibbons sees over 200 international orders up for grabs in coming years, and he views Boeing as a strong contender to win Brazil’s 35-aircraft competition, where a decision is expected by the third quarter.

Boeing has dramatically increased its presence in Brazil over the past year, partnering with Brazilian planemaker Embraer SA (EMBR3.SA: Quote, Profile, Research, Stock Buzz) and other companies on a range of projects.

The company is offering Brazil and other international customers a package of upgrades priced at $8 million to $9 million to add capabilities to the Super Hornet, including a larger touchscreen cockpit display, missile tracking, an engine with 20 percent more thrust, new fuel tanks and an internal weapons pod to make the plane harder to see on radar screens.

Northrop Grumman Corp (NOC.N: Quote, Profile, Research, Stock Buzz), a key supplier, and Boeing are building a prototype at their own cost to demonstrate the lower radar signature of the new Advanced Super Hornet – jokingly dubbed the “Super Duper Hornet” by some – on a Navy test range in late summer or early fall, Gibbons said.

He said the improvements would be available for use on the planes within three to six years. Continued production and upgrades of the Super Hornet would keep options open for the Navy as it braced for leaner times, he said.

He said Boeing saw a possibility of 75 to 150 additional aircraft sales to the Navy, especially given its operating cost, which is the lowest of any U.S. fighter in use.

And while Gibbons conceded that there were “a lot of decisions yet to be made,” he said the Super Hornet production line would likely keep running until 2020 and beyond.

At $16,000 per flight hour, Boeing said the jet’s operating cost is far below that of the F-35, and its procurement price is also lower. Lockheed and Pentagon officials say the F-35′s production price is coming down, and it offers the military far more capabilities, including advanced electronic warfare and jamming capabilities and better radar-evading signatures.

“What Boeing is hoping is that the Navy will decide that it cannot afford a carrier-based version of the F-35,” said Loren Thompson, a defense consultant with close ties to Lockheed.

(Reporting by Andrea Shalal-Esa; Editing by Richard Chang)

The news marks another delay for companies interested in
bidding for a program valued at $6 billion to $8 billion. The
Army’s decision was expected last December but had already been
put off until spring. On Wednesday, officials said they now
expected a decision in the summer or early autumn.

Industry executives say they hope to hear more in June or
July, but their hopes for a new acquisition program – one of few
on the horizon – have dimmed given disparaging comments by top
Army officials in recent weeks about flight demonstrations of
some possible “off-the-shelf” helicopters last year.

Lieutenant General William Phillips, military director of
Army acquisition, told a subcommittee of the Senate Armed
Services Committee that none of the existing helicopters in
production met the Army’s requirements, which meant that any new
program would require significant development work.

“We didn’t find a single aircraft that was out there that
could meet the Army’s requirements,” Phillips told lawmakers.
“So if we were to go forward with an armed aerial scout, it
would essentially be a development program.” He said he now
expected a decision around mid-summer.

Army officials have said privately that a new development
program could take a decade to carry out, although some industry
executives say they could execute a program far more quickly.

Regardless of the direction the Army takes, it will proceed
with a separate program to improve the cockpit displays, sensors
and other capabilities of the current OH-58 fleet, Lieutenant
General James Barclay, the Army’s deputy chief of staff for
budget issues, told a subcommittee of the Senate Armed Service
Committee on Wednesday.

“That allows us to address safety and obsolescence issues
with the current fleet we have, which will bridge us to either
decision we make to procure new (helicopters) or to (extend the
life of) the current fleet,” Barclay said.

U.S. Army leaders had hoped to launch a new competition for
a replacement for the Kiowa Warrior helicopter, but mounting
budget pressures have raised questions about whether they can
proceed with a new program.

Army Chief of Staff General Ray Odierno recently told a
separate hearing that the Army needed to assess whether the
technology was far enough along to justify a new program, or
whether it should keep the current helicopters flying longer.

Those comments mark a setback for Boeing Co, Europe’s
EADS and other companies that planned bids based on
modified commercial helicopters, but could bode well for
Sikorsky Aircraft, a unit of United Technologies Corp,
whose high-speed S-97 Raider is in prototype development.

Bell Helicopter, a unit of Textron Inc and maker of
the current OH-58; AgustaWestland, a unit of Italy’s
Finmeccanica SpA, which had teamed with Northrop Grumman Corp;
MD Helicopters; and AVX Aircraft, had also expressed interest.

EADS, Boeing and the AgustaWestland-Northrop team recently
withdrew their bids for a separate Air Force search-and-rescue
helicopter program after concluding it was too narrowly
structured, favoring a helicopter built by Sikorsky.

This is the Army’s third attempt to start replacing the
OH-58 helicopters, the basic airframe of which dates back to the
Vietnam era, although it has been upgraded and modernized
several times.

The Army cancelled the Comanche helicopter program in 2004,
then scrapped a follow-on deal with Bell Helicopter for an armed
reconnaissance aircraft in 2008. It then launched a successor
“Armed Aerial Scout” program but decided to carry out flight
demonstrations to see what capabilities were already available.

Industry executives are perplexed about the Army’s recent
comments about its disappointment in the aircraft viewed last
year, especially since officials had previously talked about
some of those helicopters meeting or exceeding requirements.

In January, Colonel John Lynch, capability manager with the
Army’s Training and Doctrine Command, said several of the
aircraft seen in the flight demonstrations and factory visits
met or exceeded recommended performance requirements.

“We have established, really, for the first time, an integrated effort to bring together our space programs, all of them, with those folks who understand best the anti-satellite threat, and also how we can operate, if we have to, without spacecraft,” Carter told reporters at the National Press Club.

Carter said the initiative was looking at how to make U.S. military and intelligence satellite systems more resilient if they were threatened, or how to operate without them if need be.

He said the fiscal 2014 budget included funding for the initiative, as well as “investments in our own capability to deny the use of space against our forces in a conflict.” He did not provide additional details.

U.S. defense officials often note that U.S. satellites underpin nearly all military functions today since they provide critical communications, targeting and weather data, as well as warning of possible enemy missile launches.

The Pentagon on Monday released an 83-page report on Chinese military developments, saying China uses computer espionage to acquire technology to fuel its military modernization, but China dismissed the report as groundless.

The annual report also highlighted China’s increasing space capabilities, citing Beijing’s “multi-dimensional program to improve its capabilities to limit or prevent the use of space-based assets by adversaries during times of crisis or conflict.”

It said China was pursuing a variety of air, sea, undersea, space and counter-space capabilities, and military strategists there viewed the ability to utilize space and deny adversaries access to space as key priorities.

The report cited a Chinese military analysis which highlighted the importance of “destroying or capturing satellites and other sensors” during a military conflict.

The United States remains concerned about China’s development of anti-satellite capabilities after it shot a missile at one of its own defunct satellites on orbit in 2007, creating an enormous amount of debris in space.

Washington is keeping a watchful eye on China’s activities in space after an intelligence report last year raised concerns about China’s expanding ability to disrupt the most sensitive U.S. military and intelligence satellites.

Sources familiar with the report said it contained credible information about China’s ability to potentially damage U.S. satellites in higher orbits using its own satellites, missiles or ground-based jamming techniques. It has already conducted several anti-satellite tests in lower orbits.

(Reporting By Andrea Shalal-Esa; Editing by Cynthia Osterman)

The last of four unmanned experimental military aircraft
built by Boeing flew for at a top speed of Mach 5.1 over the
Pacific Ocean on May 1, the Air Force said. The total flight
covered 230 nautical miles in just over six minutes before the
hypersonic cruiser plunged into the ocean.

“It was a full mission success,” said Charlie Brink, who
runs the X-51A program for the Air Force Research Laboratory
Aerospace Systems Directorate.

The Air Force said it was the longest of the four X-51A test
flights and the longest air-breathing hypersonic flight ever.
The technology opens the door to future practical uses for
hypersonic jet-fueled aircraft.

A hypersonic aircraft developed by NASA used hydrogen as a
fuel to fly briefly at even higher speeds in 2004, but it would
take a giant fuel tank to fly for longer periods.

“All we have learned from the X-51A Waverider will serve as
the bedrock for future hypersonics research and ultimately the
practical application of hypersonic flight,” Brink said.

A video released by the Air Force showed the Waverider
dropping down from under the left wing of a B-52 bomber at an
altitude of about 50,000 feet and then accelerating away at
great speed, leaving behind a long vapor trail.

The cruiser accelerated to March 4.8 in about 26 seconds,
powered by a solid rocket booster built by Pratt & Whitney
Rocketdyne, a unit of United Technologies. After
separating from the booster, the cruiser’s scramjet engine lit
and accelerated the vehicle to Mach 5.1 at 60,000 feet.

The vehicle continued to send back data to the control
station at Edwards Air Force Base in California until it made a
controlled dive into the Pacific Ocean.

“This demonstration of a practical hypersonic scramjet
engine is a historic achievement that has been years in the
making,” said Darryl Davis, president of Boeing Phantom Works,
the company’s advanced research and prototyping arm.

“This test proves the technology has matured to the point
that it opens the door to practical applications, such as
advanced defense systems and more cost-effective access to
space,” Davis said.

The first of the four X-51A vehicles flew in May 2010,
hitting nearly Mach 5 for nearly two and a half minutes.

The nearly wingless X-51 was made using mostly standard
aerospace materials such as aluminum, steel and titanium,
although some carbon composites were used in the fins. For heat
protection, the vehicle used insulation tiles similar to those
used on board the NASA Space Shuttle orbiters.

The Air Force said the four X-51As were built to demonstrate
the new technology, not as a prototype for a new weapon system.
The program is aimed at paving the way to future hypersonic
weapons, hypersonic intelligence, surveillance and
reconnaissance, and future access to space, it said.

Since scramjets are able to burn atmospheric oxygen, they
can be made lighter than conventional rockets, which may allow
satellites to be launched into orbit more efficiently and
cheaply.

“We’re moving forward as we planned all along,” said Kelly Burdick, spokeswoman for the Navy office that is overseeing the competition, one of the few for new military helicopters in coming years.

Burdick said the Navy’s latest effort to buy new presidential helicopters was carefully structured to be affordable given mounting pressures on U.S. military budgets. She said it was not immediately clear if the program would be affected by across-the-board budget cuts that took effect on March 1. “What will be, will be,” she said.

The Navy posted the final request for proposals for a new Marine One helicopter on Friday, setting an August 1 deadline for proposals to be submitted and saying it planned to pick a winning bidder in the third quarter of fiscal year 2014.

The Navy’s last attempt to buy a new presidential helicopter ended in 2009, when then-Defense Secretary Robert Gates canceled a program run by Lockheed Martin Corp after numerous requirement changes threatened to double the cost of the program to more than $13 billion.

The Navy’s posting on Friday called for construction of six developmental helicopters during the engineering design phase, followed by nine helicopters during a low-rate production phase and up to eight more in the following years.

This time, Lockheed Martin is paired with Sikorsky Aircraft, a unit of United Technologies Corp, offering Sikorsky’s S-92 helicopter.

Lockheed’s partner on the previous program, Finmeccanica SpA unit AgustaWestland, has teamed up with Northrop Grumman Corp, to submit a possible bid based on the AgustaWestland 101 helicopter.

Boeing Co has said it is also studying a possible bid based on its H-47 Chinook helicopter or the V-22 Osprey tilt-rotor aircraft that it builds with Textron Inc’s Bell Helicopter unit.

The current presidential helicopters are VH-60N “Night Hawks” and VH-3D “Sea Kings,” both built by Sikorsky. The fleet is operated by the Marine Corps, but the acquisition program is overseen by the Navy.

The Navy included $1.85 billion for the program in its budget request for fiscal 2013 through 2017, with funding to increase from $61.2 million the first year to $687.7 million in fiscal 2017.

Congressional aides said the Navy’s plan to slowly ramp up funding for the program could ensure its survival, even if some additional cuts are imposed on the Pentagon as part of a compromise to avoid the full brunt of the cuts now planned.

(Reporting by Andrea Shalal-Esa; Editing by Phil Berlowitz)

The Australian plan, as outlined by defense sources and
analysts, will also call for the purchase of a dozen Boeing Co
EA-18G electronic attack planes, modified versions of
Boeing’s Super Hornets, purchased as a stopgap for the F-35.

It reinforces positive steps for the F-35, coming on the
heels of a decision by Norway to buy six F-35s a year earlier
than planned, and the Dutch parliament’s decision not to
reassess F-35 rivals to replace aging F-16s.

The program has been plagued by cost overruns and delays.

“Australia, Norway, the Netherlands — it’s all good news
for the F-35 program,” said a U.S. defense official, although he
added that U.S. budget cuts could still pare down Washington’s
order of 29 jets in fiscal 2013, which ends on Sept. 30.

U.S. Air Force Lieutenant General Christopher Bogdan warned
Congress again last week that the $396 billion F-35 program, the
most expensive ever U.S. arms program, remained at risk of a
“death spiral” in which cuts in orders drive up the cost per
plane, leading to more cuts.

But Singapore and South Korea, Bogdan said, were looking at
placing orders for the stealth-cloaked Lockheed fighter in the
northern summer.

Singapore is likely to order 12 jets, with an option for
eight more, according to sources familiar with the plans. Sixty
jets are at stake in South Korea’s competition, which has pitted
the F-35 against Boeing’s F-15 Silent Eagle and the Eurofighter
Typhoon built by EADS, BAE Systems Plc and
Finmeccanica SpA.

“There’s clearly better momentum on the program than there
was six months ago,” said Byron Callan, analyst with Capital
Alpha Partners. “The jury is still very much out on whether the
program will ultimately achieve the type of numbers that
Lockheed and the DOD (Department of Defense) have discussed.”

ORDERS BEING CUT

The United States and its allies plan to buy more than 3,100
of the jets in coming decades, although the numbers may change
as some countries pare back orders and others join the program.

The Netherlands may cut 17 to 33 F-35s from its planned
order of 85, although sources said the final number may not be
announced for some time.

Defense officials say most of the technical challenges
facing the new warplane have been addressed, flight testing is
advancing, and rising foreign orders will drive up production
rates despite U.S. decisions to postpone orders in recent years.

Additional budget cuts may knock five to seven F-35s out of
the fiscal 2013 U.S. Air Force, Marine Corps and Navy budgets.
Those decisions will not be finalized until late May, but
officials at all three U.S. services say they recognize that any
reduction will increase the cost of each of the remaining
aircraft to be built this year by several million dollars.

Jim McAleese, a Virginia-based defense consultant, said the
Air Force, which faced the loss of three to five jets from its
fiscal 2013 budget, was looking at shifting funds out of other
lower-priority acquisition programs to minimize the impact on
the F-35 program and a new Boeing aerial refueling tanker.

The target of up to 100 F-35s in the Australian blueprint is
likely be couched as “aspirational”, subject to economic
conditions, defense sources and analysts said.

AUSTRALIAN F/A-18S

The paper is expected to scale back a $275 billion weapons
buying plan released in 2009, but proceed with the purchase of a
dozen new Boeing EA-18G “Growlers,” advanced electronic attack
planes, a capability first for a U.S. ally in Asia.

Canberra’s future frontline air fleet would have up to 100
F-35s and 36 Super Hornets, counting the radar-jamming Growlers,
and make Australia’s air force one of the region’s most potent.

Australia had planned to retrofit a dozen Super Hornets with
the electronic attack capabilities, but has now decided to buy
new Growlers, said two sources who were not authorized to speak
on the record.

The Boeing buy, reduced to 12 from 24 planes, had threatened
to scale back Canberra’s F-35 purchase. Boeing is expected to
continue pushing the Super Hornet as a more affordable
alternative, particularly if any new F-35 crises emerge.

“Just wait until the slightest hiccup with the F-35, and the
Boeing people will be there making their argument,” one source
said.

U.S. Navy Captain Frank Morley last month said Australia
would decide by late spring or early summer whether to buy 12 or
24 of the Boeing planes. Even a 12-plane buy would extend the
Boeing production line well into 2016, he said.

Australia decided to stick with the F-35, heartened by
recent progress on the plane and its high-tech helmet that fuses
all the sensor data from the plane, said three sources familiar
with the plan.

Australia’s first two F-35s are due to be delivered in
2014-15. It has so far only committed to buying 14 F-35s.

Australia’s defence paper is also expected to commit to
building a fourth advanced air warfare destroyer, part-built by
BAE Systems and Spain’s Navantia, as well as advancing
with plans for 12 advanced conventional attack submarines with
range to reach the South China Sea, defense sources said.

The paper is the first reassessment of Australia’s military
priorities since the U.S. pivot to the Asia-Pacific, which
included U.S. Marine rotations through northern Australia.

Under the blueprint, Australia is also expected to buy a
fleet of Northrop Grumman RQ-4 maritime surveillance
drones to help guard offshore resource assets at a cost of up to
$3 billion, as well as new naval re-supply ships.

Foreign Minister Bob Carr said on Thursday that Asian
neigbours were already being briefed on the new defence paper to
allay strategic concerns about Canberra’s buildup of naval and
air forces, which includes two large amphibious assault ships.

The State Department said it reached the agreement with Massachusetts-based Raytheon after an extensive review showed the company’s “numerous violations demonstrated a recurring, corporate-wide weakness” in maintaining effective compliance controls.

Under the terms of the agreement, Raytheon neither admitted nor denied the allegations. However, the company voluntarily reported many — if not most — of the alleged violations to the government.

Half of the fine will be suspended on the condition that Raytheon will use the money for government-approved remedial compliance measures, including increased training and oversight. The company also agreed to hire an independent special compliance official to oversee the four-year consent decree.

Raytheon, which prides itself on generating more revenues overseas than its rivals, expects international sales to account for 27 percent to 29 percent of its total revenue in 2013.

The company said in a statement it would continue to work closely with the State Department “to achieve its goal of full compliance and industry-leading practices.”

The department said it would not debar Raytheon from further exports since the company voluntarily disclosed nearly all the violations covered by the settlement over the past decade.

Many of the violations involved the manufacture of hardware by foreign partners in excess of approved amounts, and the failure of Raytheon employees to submit documents in a timely manner, or with necessary amendments, the department said. Some violations related to classified material.

Violations continued to occur, even after Raytheon pledged to increase training, adopt a more robust information technology system, and hire more experienced personnel, it said.

Last year, United Technologies Corp, another large U.S. exporter, agreed to pay $75 million in fines for export violations, including the sale of software later used by China to develop its first modern military attack helicopter.

(Reporting by Andrea Shalal-Esa; Editing by Gary Hill and Edwina Gibbs)