The Insider

February 17, 2017 -- 2:58 PM

President Trump today reiterated his concerns about the price of both the Air Force One and the F-35 Joint Strike Fighter, programs that have been in his cross hairs since late last year.

According to a pool report, while in South Carolina today to visit Boeing's facility, Trump said the price of Boeing's Air Force One is "too high, but we're negotiating."

He said of Lockheed Martin's F-35 program that "we're cutting prices."

"They have to cut prices," Trump added. But he said the program was "out of control, and now it's very much in control."

Last month he touted savings in the latest F-35 deal, saying the negotiations cut $600 million from the cost.

However, Trump has suggested Boeing's F/A-18 could play a role, tweeting last year that he had asked Boeing to price out a comparable plane.

Asked today whether the F/A-18 could replace some F-35 orders, Trump said "if the price doesn't come down, we would."

"The F-18's a great plane and now put a stealth component on it," he said.

According to the pool report, he also said his negotiations will save billions of dollars.

"Most important, we are going to have a great product from both Boeing and Lockheed," Trump added.

February 17, 2017 -- 1:59 PM

This Friday INSIDER Daily Digest has news on the effects of the presidential transition at the Pentagon, unmanned systems, space and much more.

The Republican head of the House Armed Services Committee spoke about the effects of Obama administration holdovers at the Pentagon:

Thornberry worries Mattis is 'alone' in effort to increase defense spending; McCord denies reports of 'crisis'

House Armed Services Committee Chairman Mac Thornberry (R-TX) said this week he is worried that Defense Secretary Jim Mattis might be unknowingly steered in the wrong budgetary direction by former Obama administration officials at the Pentagon, who, Thornberry asserts, have spent the past several years denying the existence of readiness problems and fighting congressional efforts to increase defense spending.

Unmanned systems news:

DARPA releases BAA for offensive swarming technologies

The Pentagon's advanced research arm is seeking industry's input to develop an architecture to enhance offensive swarming tactics with an eye for how this could help in challenging urban environments, according to a new broad agency announcement.

Document: DARPA's 'OFFSET' BAA


Air Force pursuing counter-UAS program of record in FY-18

The Air Force expects to set up a program of record to counter small unmanned aerial systems by the end of fiscal year 2018, according to a service spokeswoman, as the threat of armed small UAS grows in the Middle Eastern theater.

Space news:

New space vision drives Air Force to change SBSS Follow-on strategy

The Air Force said this week it will scrap parts of its strategy to replace the legacy Space-Based Space Surveillance satellite system, attributing the change of plans to its newly adopted, largely classified Space Enterprise Vision.

DOD says FCC acceptance of EU PNT system could boost resiliency

Defense Department space policy officials told Congress in a recent report that Federal Communications Commission acceptance of Europe's Galileo positioning, navigation and timing system would help address rising concerns about resiliency in the U.S. GPS constellation.

Joint Strike Fighter news:

Bogdan plugs incremental F-35 IOT&E plan, says delays driving costs

The F-35 program manager told Congress this week the program incurs an additional $30 million in costs for every six months initial operational test and evaluation is delayed -- one of several reasons he has pushed for an early start to the key testing phase.

Document: House hearing on the JSF program


F-35 officials report no ALIS issues during Red Flag training exercise

The commander of the 388th Fighter Wing, which operates F-35As at Hill Air Force Base, UT, said this week that widely reported development problems with the stealthy jet's diagnostics and health management system have become a "non-event" for the wing as the system matures and new software is fielded.

More news from this week's issue of Inside the Air Force:

Experts: Air Force's 'Third Offset' priorities could struggle, evolve in Trump era

Defense experts in Washington are mulling what the future of the Obama administration's "Third Offset" investments could look like under President Trump, as the Defense Department begins to shape its near-term budgets and updated national defense strategy.

Document: House, Senate hearings on the 'state of the military'


Resolute Support commander requests more funding for Afghan Air Force

Army Gen. John Nicholson, commander of the Resolute Support mission and U.S. forces in Afghanistan, last week pushed the Senate Armed Services Committee to approve additional funds for the Afghan Air Force, calling airborne fighters key to the continued push against the Taliban.

Document: Air Force's revised A-29 draft PWS


Document: Senate hearing on Afghanistan


AFSOC awaiting ISR AOA results, considering shrinking crews

Air Force Special Operations Command chief Lt. Gen. Brad Webb said Tuesday the command is exploring its options for replacing the U-28A and MC-12 fleets with platforms that can be used in low- and high-intensity operations in an analysis of alternatives slated to wrap up in July.

Air Force delays Huey recapitalization RFP release until summer

The Air Force is pushing back its final request for proposals for the UH-1N Huey replacement effort from this month until sometime this summer, a service spokesman said this week, and will release a second draft RFP in April.

February 17, 2017 -- 11:16 AM

Some must-reads from this week's issue of Inside the Air Force:

1. Joint Strike Fighter Program Executive Officer Lt. Gen. Christopher Bogdan told lawmakers Thursday he is pushing for early testing in part because the program costs an extra $30 million for every six months initial operational test and evaluation is delayed.

Full story: Bogdan plugs incremental F-35 IOT&E plan, says delays driving costs

2. Some think tank analysts in Washington worry the Trump administration will favor short-term readiness spending at the expense of research and development, while others say certain programs could get a second chance under the "Third Offset" umbrella.

Full story: Experts: USAF's 'Third Offset' priorities could struggle, evolve in Trump era

3. The Air Force said Thursday it will float the Huey recapitalization effort's final request for proposals this summer instead of this month, citing companies' inability to meet minimum requirements set out in a first draft RFP.

Full story: Air Force delays Huey recapitalization RFP release until summer

February 16, 2017 -- 4:14 PM

The Joint Strike Fighter program and Navy shipbuilding are among the highlights of this Thursday INSIDER Daily Digest.

Coverage of today's House hearing on the JSF program:

Bogdan provides public account of private phone calls with Trump, Boeing chief

Defense Secretary Jim Mattis' directive to review the Joint Strike Fighter program stems from a pair of phone calls then-President-elect Donald Trump had in January with F-35 Joint Program Office director Lt. Gen. Christopher Bogdan, the senior Air Force officer told lawmakers.

Bogdan says 'better deals' on F-35 production contracts could mitigate development costs

The head of the F-35 joint program office told lawmakers this week he is 'confident' he won't be asking lawmakers for more money to complete development, stating that favorable future negotiations could free up funds to mitigate additional costs.

Bogdan: Pentagon is testing F-35C nose gear fix and hopes to have results by March

The Pentagon is testing a fix to the F-35C's nose gear at the Naval Air Warfare Center in Lakehurst, NJ, and hopes to have results in March, according to the F-35 program executive officer.

Air Force concerned near-term F-35A procurement spike could drive retrofit costs

The Air Force may consider speeding up its procurement plans for the F-35A, but has cautioned that doing so prior to the delivery of Block 4 in the early 2020s would add considerable retrofit costs to the program.

Navy shipbuilding news:

Huntington Ingalls CEO: Major shipbuilding increase would require 'hard work'

The chief executive of shipbuilder Huntington Ingalls said Thursday that growing the Navy's fleet to the level President Trump has advocated would not be "a light switch that you just turn on."

Navy expects to finalize initial requirement for future surface combatant by July

The Navy has determined three types of vessels it would develop as part of future surface combatant programs, and the service expects to complete the initial capabilities document for the family of vessels by July, according to officials.

A look at how SECDEF Mattis could benefit from former National Security Adviser Michael Flynn's resignation:

Mattis seeks to calm waters as Flynn resignation reverberates through defense circles

Defense Secretary Jim Mattis, whose primary public role in the fledgling Trump administration has been the reassurance of foreign allies, could stand to benefit from the exit of Michael Flynn, the president's former national security adviser, who the White House said was forced from his job by the president after an "erosion" of trust stemming from statements he made about a wiretapped conversation with Russian officials.

News on the Commerce Department from this morning's Inside the Pentagon:

Survey finds circuit board industry is small and could be shrinking

Responses to a Commerce Department survey designed to gather information on U.S. companies that produce bare printed circuit boards found that the fragile industry is contracting, possibly forcing the federal government to turn to China, according to a source with knowledge of the study.

Commerce Department tracking facilities with classified defense contracts

The Commerce Department is in the midst of a three-year effort to gather information on all the facilities that have a classified contract with the Pentagon, according to a source with knowledge of the effort.

The Army will set up more security force assistance brigades:

Army plans Security Force Assistance Brigade units

The Army intends to establish six security force assistance brigades and a new academy to train them, according to an announcement from the service.

February 16, 2017 -- 3:40 PM

Huntington Ingalls confirmed Thursday it is still wrangling with the Navy over whether it can recover costs associated with closing its Avondale, LA, facility.

During a call with analysts Thursday morning, Chris Kastner, the contractor's chief financial officer, said the government's contracting officer has denied the company's claim.

According to a recent Securities and Exchange Commission filing, the claim was rejected "on the purported basis that the Company had not adequately shown savings and other benefits that would accrue to the U.S. Government from the closing of Avondale and consolidation of Ingalls Shipbuilding to the Pascagoula[,MS,] facility."

"While we are continuing discussions with the contracting officer, we will also pursue our claim under the Contract Disputes Act," Kastner said. "We remain confident that our claimed cost is allowable and allocable, and the resolution will be in accordance with our cost recovery expectations.”

Huntington Ingalls ceased shipbuilding operations at Avondale in late 2014. The company has estimated its "net restructuring and shutdown costs" as $276 million, according to the SEC filing.

February 16, 2017 -- 11:17 AM

The Senate voted 51-49 to confirm Rep. Mick Mulvaney (R-SC) as the new chief of the White House Office of Management and Budget.

Sen. John McCain (R-AZ) was the only Republican to vote against Mulvaney because he believes that, as a committed deficit hawk, Mulvaney will oppose efforts to increase defense spending.

Mulvaney, who repeatedly voted to cut defense spending as a member of the House, said during confirmation hearings he would support any plans President Trump put forth to increase the military budget, but would advocate cuts in non-defense spending to pay for them.

Mulvaney has also said he supports eliminating the Pentagon's Overseas Contingency Operations acocunt, which some analysts think might be the only mechanism available to increase defense spending above the caps mandated by the 2011 Budget Control Act.

February 16, 2017 -- 10:54 AM

Here are a few must-reads from this week's edition of Inside the Pentagon:

1. Defense Secretary Jim Mattis, whose primary public role in the fledgling Trump administration has been the reassurance of foreign allies, stands to benefit from the exit of Michael Flynn, the president's former national security adviser, who the White House said was forced from his job by the president after an "erosion" of trust stemming from statements he made about a wiretapped conversation with Russian officials.

Full story: Mattis seeks to calm waters as Flynn resignation reverberates through defense circles

2. Responses to a Commerce Department survey designed to gather information on U.S. companies that produce bare printed circuit boards found that the fragile industry is contracting, possibly forcing the federal government to turn to China, according to a source with knowledge of the study.

Full story: Survey finds circuit board industry is small and could be shrinking

3. The Commerce Department is in the midst of a three-year effort to gather information on all the facilities that have a classified contract with the Pentagon, according to a source with knowledge of the effort.

Full story: Commerce Department tracking facilities with classified defense contracts

February 16, 2017 -- 9:50 AM

Given current fiscal constraints, the chairman of the House Armed Services tactical air and land subcommittee said this morning that the military services are being forced to prioritize between building capacity in their fourth-generation tactical aircraft inventory to help mitigate some of the immediate readiness burdens on the current force or trying to accelerate a needed fifth-generation tactical aircraft capability.

"For national security purposes, it's not a question of one or the other -- the answer really is that we need to do both," Rep. Michael Turner said in his opening statement for a subcommittee hearing on the Joint Strike Fighter.

Check out the rest of his opening statement as well as the prepared testimony of JSF Program Executive Officer Lt. Gen. Chris Bogdan; Marine Corps Deputy Commandant for Aviation Lt. Gen. Jon Davis; Air Force Deputy Chief of Staff for Strategic Plans, Programs, and Requirements Maj. Gen. Jerry Harris; and Navy Air Warfare Director (N98) Rear Adm. Chip Miller here.

February 15, 2017 -- 5:49 PM

Senate Armed Services Committee Chairman John McCain (R-AZ) said today he will vote against Rep. Mick Mulvaney's (R-SC) nomination to become the next director of the White House's Office of Management and Budget on the grounds that Mulvaney, a prominent deficit hawk, will force the Pentagon into a budget battle.

McCain, in a speech on the Senate floor, said confirming Mulvaney would require Defense Secretary Jim Mattis to "spend less time fighting our enemies overseas and more time fighting inside-the-Beltway budget battles with an OMB director with a deep ideological commitment to cutting the resources available to his department."

Additionally, McCain said Mulvaney's beliefs, "as revealed by his poor record on defense spending," are at odds with President Trump's stated desire to increase military budgets.

"This record cannot be ignored in light of the significant authority exercised by the director of OMB over the federal budget," McCain said, pointing out that Mulvaney, as a member of the House, repeatedly voted to cut defense spending and also supported the total withdrawal of troops from Afghanistan.

"Congressman Mulvaney has spent his last six years in the House of Representatives pitting the national debt against our military," McCain said. "He authored and supported amendments to cut national defense funding year, after year, after year. And as my colleagues and I sought repeatedly to find legislative solutions to reverse dangerous defense cuts and eliminate arbitrary defense spending caps, it was Congressman Mulvaney and his allies that repeatedly sought to torpedo these efforts."

Mulvaney, for his part, said during confirmation hearings he would support any plans Trump put forth to increase defense spending, but would advocate cuts in non-defense spending to pay for them.

Mulvaney has also said he supports eliminating the Pentagon's Overseas Contingency Operations fund, which some analysts think might be the only mechanism available to increase defense spending above the caps mandated by the 2011 Budget Control Act.

The Senate is expected to take a final vote on Mulvaney's nomination Thursday.

February 15, 2017 -- 3:42 PM

A chat with the CEO of Engility, a potential upcoming release of an RFP for a new B-52 bomber engine and more highlight this Wednesday INSIDER Daily Digest.

Inside Defense chatted with the new head of Engility earlier today:

With new CEO, Engility reshapes from low-cost contractor to best-value company

After almost a year as chief executive of Engility, Lynn Dugle says the company has moved from an approach geared to lowest-priced, technically acceptable contracts to a best-value stance as it pursues growth.

Keep an eye out for an RFP for a program to replace the B-52 engine:

Air Force: Early planning indicates B-52 engine RFP could come in FY-20 if program gets funding

Amid reports from industry and the Air Force of peaked interest in a possible B-52 engine replacement, the service recently indicated it has started developing an acquisition strategy and, if it opts to pursue the effort, may release a request for proposals in 2020.

Document: Air Force B-52 engine sources-sought notice

Special operations news:

SOCOM official eyes OTA to speed information-sharing changes

Col. Craig Miller, director of the U.S. Special Operations Command J24 intelligence capabilities and requirements division, said Tuesday the United States could use new acquisition techniques to speed adoption of technology that would allow coalition partners to share information securely and selectively, amid complaints that clashing approaches to intelligence hurt international combat efforts in the Middle East.

Navy news:

GAO denies bid protests for Marine Corps MRAP May contract award

The Government Accountability Office recently denied two separate bid protests, from Raytheon and VSE Corp., for a lowest price technically acceptable contract the Marine Corps awarded in May 2016 for work on its Mine Resistant Ambush Protected vehicle fleet.

Document: GAO decisions on Marine Corps MRAP contract award bid protests

Marines aim to accelerate production of F-35B jet, CH-53K helicopter

The Marine Corps would accelerate the Navy's procurement of F-35B Joint Strike Fighters and CH-53K heavy-lift helicopters if the military budget is increased, according to top service officials.

Army news:

Army seeks broad participation to reduce software vulnerabilities

The Army is working across the force and collaborating with industry to address obsolescence and security issues with the software on its platforms, according to the head of the service's Communications-Electronics Command.

SMDC/ARSTRAT completes D3I contract award process

The Army has made the last contract awards for its Design, Development, Demonstration and Integration (D3I) program, which previously saw contracts issued in 2015 and 2016.

February 15, 2017 -- 1:03 PM

Reiterating a campaign pledge made by President Trump, Defense Secretary Jim Mattis today prodded his NATO counterparts to pony up the money they owe to pay for the alliance's common security.

"A decade ago, when I was serving as Supreme Allied Commander for Transformation, I watched then-Secretary of Defense Robert Gates warn members of this Council that Congress and the American body politic would lose their patience for carrying a disproportionate burden of the defense of Allies," Mattis said in a North Atlantic Council speech at NATO headquarters in Brussels.

Mattis noted that only five nations meet the 2 percent defense spending target: the United Kingdom, Estonia, Poland, Greece and the United States. "A number of other nations have demonstrated that they will meet that spending target. By contrast, the commitment of other nations lags considerably despite benefiting from the best defense in the world.

"The impatience Secretary Gates predicted is now a governmental reality," Mattis continued. "As noted by a European minister of defense, calling for 2 percent defense spending is a 'fair' demand from the American people to their long-time allies and friends in Europe. . . . No longer can the American taxpayer carry a disproportionate share of the defense of western values."

Mattis told his fellow ministers that the United States "will meet its responsibilities, but if your nations do not want to see America moderate its commitment to this Alliance, each of your capitals needs to show support for our common defense."

February 15, 2017 -- 10:52 AM

The Senate is set to move forward today with the process to confirm Rep. Mick Mulvaney (R-SC) as the next chief of the White House Office of Management and Budget, but a final vote is not expected until Thursday, after 30 hours of debate forced by Democrats who oppose his nomination.

Mulvaney's nomination has also been scrutinized by Republicans who advocate increased defense spending, as he is a prominent deficit hawk and Tea Party member who has voted to cut military funding in the past and supports eliminating the Pentagon’s Overseas Contingency Operations fund.

As OMB chief, Mulvaney would be highly influential in crafting the federal budget in coordination with government agencies, including the Defense Department. Mulvaney's arrival at OMB would come as DOD is crafting a fiscal year 2017 supplemental budget request as well as building its FY-18 budget submission.

Senate Armed Services Committee Chairman John McCain (R-AZ), who is angling to increase defense spending by an additional $90 billion in fiscal year 2018, has said he is considering opposing Mulvaney's nomination.

"You've spent your entire congressional career pitting the debt against our military," McCain said during a Jan. 24 hearing. "I am deeply concerned about your lack of support of our military."

Sen. Claire McCaskill (D-MO) has also criticized Mulvaney for his past positions on military spending as well as his statements in support of government shutdowns.

"I don't think it's a good idea to have somebody running the Office of Management and Budget who thinks it's a good idea to default on our obligations," she said. "I don't think it's ever a good idea to have somebody running the Office of Management and Budget who has demonstrated a willingness to not fund our military to the extent that we must fund it in order to protect our nation."

Mulvaney, however, has said he supports increased defense spending, but said he would advocate paying for it with cuts to non-defense discretionary spending. Analysts say such a stance amounts to a defense cut because Democrats will refuse to cooperate.

But Mulvaney has said he will do "whatever the president asks me to do" if Trump settles on a different policy.

February 15, 2017 -- 10:48 AM

Robotics company Roboteam North America said Tuesday it has appointed retired Army Lt. Gen. Charles Cleveland to its board of directors.

Earlier this month, Heidi Shyu, the former top Army acquisition official, was named chairman of the board. She had joined an advisory board for the company in 2016.

Cleveland, who retired from the service in 2015, previously served as commanding general of Army Special Operations Command. Roboteam said he "will provide direction on the advancement of tactical ground robotics as well as counsel the leadership team as they expand their customer footprint."

The news was first reported by GovCon Wire.

February 14, 2017 -- 4:43 PM

A new CBO cost analysis of U.S. nuclear forces, plus a pair of speeches by the head of SOCOM and the sergeant major of the Army are among the stories included in this Tuesday INSIDER Daily Digest.

The Congressional Budget Office did a recent cost estimate of maintaining and modernizing U.S. nuclear forces:

CBO pegs cost of nuclear forces at $400B over next decade

It will cost $400 billion over the next 10 years to operate, maintain and modernize U.S. nuclear forces, an average of $40 billion annually, according to a recent report from the Congressional Budget Office.

Document: CBO report on 'projected costs of U.S. nuclear forces, 2017 to 2026'


The head of U.S. Special Operations Command spoke at a special operations and low intensity conflict conference this morning:

SOCOM chief: Command's review of forces has gone through staffing

U.S. Special Operations Command has staffed a review looking at its forces and any gaps that exist, according to the head of SOCOM.

The sergeant major of the Army spoke about end strength earlier today:

Dailey calls for funding to support higher end strength

The Army faces "a unique challenge" as it adapts to the larger end strength authorized by Congress for fiscal year 2017 amid budgetary constraints and readiness challenges, according to its senior enlisted leader.

More Army news:

Army officials highlight practical applications of cyber capabilities

As the Army continues to advance its cyber capabilities, the service is also examining practical applications for those capabilities, according to officials.

G-3: Leaders have a plan for 1.2 million-soldier Total Army

The Army has developed plans to increase total end strength to 1.2 million, thereby lowering the risk to the force from its current "high" to a "moderate" level.

Hix cites historical precedent in urging modernization

The Army needs to modernize as it faces an evolving global threat environment, and must "look to our past to help anticipate and understand our future," according to the service's chief strategist.

Army official outlines advances in cyber, electronic warfare capabilities

The Army is moving forward with steps to improve its cyber capabilities while also developing electronic warfare capabilities, according to the head of the service's cyber directorate.

The Aerospace Industries Association recently touted the virtues of its members' trade surplus:

Aligning with Trump priorities, AIA touts trade balance and jobs

In an oblique appeal to the Trump administration, the Aerospace Industries Association is touting a "record trade surplus of $90 billion in 2016" and continued support of the U.S. manufacturing sector.

Navy news:

Pentagon grants Navy waiver for not-yet-mature technology on Columbia-class submarine

The Pentagon's acquisition executive last month -- while approving the Navy's request to initiate the Ohio Replacement Program as a major defense acquisition program by starting engineering and manufacturing development on the new ballistic missile submarine -- waived a statutory requirement for one technology that has not yet demonstrated the prerequisite to operate in a relevant environment.

Navy delivers fleet architecture studies to Congress

The Navy has delivered three congressionally mandated studies to lawmakers that could generate potential changes in the way the service designs and postures its fleet in the future.

Document: Navy report on 'alternative future fleet platform architecture study'


Hiring freeze impacts Marine Corps 194,000-force build up

The federal workforce civilian hiring freeze will negatively impact the Marine Corps' ability to execute its 194,000-troop force buildup, according to the service's assistant commandant.

February 14, 2017 -- 12:56 PM

The Mitre Corp. said today its board has named Jason Providakes president and chief executive, effective March 6.

Providakes, who previously served as senior vice president and general manager of MITRE's Center for Connected Government, will succeed Alfred Grasso. Grasso, who announced late last year he would step down, will continue to be a member of the not-for-profit organization's board of trustees.

Providakes joined MITRE in 1991 and has previously served as director of its Homeland Security Systems Engineering and Development Institute and of the joint and defense-wide systems division within its National Security Engineering Center.