The Insider

By Jaspreet Gill
December 6, 2019 at 4:15 PM

The Army is looking for technology to develop a "Tactical Intelligence Targeting Access Node."

According to a Dec. 4 Army notice, the service wants "a future mobile intelligence ground station architecture to operate at brigade, division, corps and field Army echelons, in vehicles and shelters organic to the formation."

Led by the Program Executive Office for Intelligence, Electronic Warfare and Sensors, TITAN will be the Army's intelligence ground system and provide access to low-earth orbit satellites.

The system is a part of the future Battle Management Command and Communication program, a new-start in fiscal year 2020 estimated to cost the Army $93.5 million.

TITAN would reduce the footprint of existing radio frequency receiving and transmitting equipment, leverage content delivery network technology and support situational awareness and understanding, the notice says.

Examples of existing technologies include artificial intelligence algorithms; hyper-converged architecture solutions; cloud gateways and "integrated Command, Control, Computers, Communications, Cyber, Intelligence, Surveillance and Reconnaissance Modular Open Suite of Standards solutions."

TITAN is planned to replace the current Tactical-Intelligence Ground Station, Operational-Intelligence Ground Station, Advanced Miniaturized Data Acquisition System Dissemination Vehicle and Remote Ground Terminal, according to the notice.

The Army is considering using other transaction authority for prototyping efforts. Responses are due Dec. 20.

By Marjorie Censer
December 6, 2019 at 2:23 PM

The chief executive of Science Applications International Corp. said this week the company is seeing only minor effects from the continuing resolution in place.

During a call with analysts, Nazzic Keene said there are "a couple of specific cases where the customer cannot expand the work based on the CR situation."

"But it's very minor," she continued. "We don't see a significant impact to the portfolio, and we'll continue to navigate it. We have navigated CRs many times in the past."

Asked about significant recompetitions ahead for SAIC, Keene said the company is preparing to defend its work for Army Aviation and Missile Command.

"It is not a single task order or a single contract; it's bundled around several," Keene said. "But over the course of the next 12 months to 18 months, that portfolio will go through a recompete cycle."

Keene said SAIC sees an upside, however, because as the Army continues "to refine [its] acquisition strategy, the opportunity actually exists for SAIC to expand its footprint and its work with this particular customer."

Meanwhile, SAIC said this week sales in its most recent quarter reached $1.6 billion, up 38% from the same three-month period a year earlier. The company reported quarterly profit of $55 million, up almost 15% from a year earlier.

By John Liang
December 6, 2019 at 2:12 PM

This Friday INSIDER Daily Digest has news on Navy force structure assessments and Air Force nuclear cruise missile designs, along with coverage of the effects of the ongoing continuing resolution.

Chief of Naval Operations Adm. Michael Gilday and Deputy Chief of Naval Operations for Warfighting Requirements and Capabilities Vice Adm. James Kilby detailed the service's view of future force-structure assessments at this week's U.S. Naval Institute Defense Forum:

Navy eyeing 'ongoing process' for force structure assessments

The Navy plans to continue the analysis work for its force structure assessments on an ongoing basis to ensure the service's investment priorities remain relevant.

The Air Force recently achieved a new milestone for the Long-Range Standoff Weapon:

Air Force approves Lockheed, Raytheon to proceed with nuclear cruise missile designs

The Air Force has completed system-level reviews of Lockheed Martin and Raytheon's respective designs for the Long-Range Standoff Weapon and has given its stamp of approval for both contractors to continue with their plans.

We also have coverage of the effects of the ongoing continuing resolution on the Missile Defense Agency, Marine Corps and Air Force:

MDA: Yearlong CR puts key FY-20 missile defense priorities at risk

High-priority Missile Defense Agency projects slated for fiscal year 2020 are at risk of being hamstrung beginning this month if Congress and the White House do not agree to a spending bill, with a Standard Missile-3 Block IB multiyear procurement deal, launch of the Next Generation Interceptor program and more at risk in the event of a yearlong continuing resolution.

Marine Corps general says program waivers under CR are 'very unlikely'

A Marine Corps general overseeing weapons acquisition said today he is skeptical his service would receive program waivers under the current continuing resolution.

Air Force sent OSD a CR anomalies list in October

The Air Force has sent the Office of the Secretary of Defense a list of priority programs for potential waivers from Congress under the ongoing continuing resolution.

By John Liang
December 5, 2019 at 3:36 PM

The Defense Department this week announced it met its small business contracting goal in fiscal year 2018, marking the fifth consecutive year DOD has reached its target.

The department "awarded 24% of federal contract dollars -- or $72 billion -- to small businesses, an increase of almost $11 billion over the previous year," according to a statement posted on the Pentagon's industrial policy office website. FY-18 "marks the first time the department awarded more than $70 billion in prime contracts to small businesses. The department also awarded $49 billion in subcontracts to small businesses -- a $7 billion increase over FY 2017."

Additionally, DOD prime and subcontracts awarded to small businesses in FY-18 exceeded $120 billion for the first time, according to Scott Baum, acting director of small business programs within the office of industrial policy.

In FY-18, the department exceeded the prime contract goals for small businesses, service-disabled veteran-owned small businesses and small disadvantaged businesses, according to the industrial policy office. "DOD prime contract awards to small businesses represented 59% of all federal contract awards to small businesses. Additionally, the department represented 61% of federal subcontract awards to small businesses and surpassed the subcontract goal for women-owned small businesses."

By Marjorie Censer
December 5, 2019 at 2:29 PM

Early hypersonics efforts will likely "get necked down" into one or two production programs in future years, the chief financial officer of Lockheed Martin said today.

Speaking at a Credit Suisse conference, Ken Possenriede praised his company's focus on "attacking" hypersonics work as a corporation.

"We've done a nice job of mainly the space business, aeronautics, missiles and fire control, working in an integrated fashion," he said. "In parallel, you've had the customer set work more in alliance than you've normally seen."

Possenriede touted Lockheed’s awards in the Tactical Boost Glide and Hypersonic Conventional Strike Weapon programs, among others.

"This is all programs that are in development, prototype," he said, noting some of these programs will soon do first launches.

"Then I think what you’ll see is a lot of these programs will get necked down, morph into one or two programs and then become production programs," Possenriede added, noting that Lockheed speculates there could be production programs worth $5 billion over the next couple of years.

By John Liang
December 5, 2019 at 1:49 PM

This Thursday INSIDER Daily Digest has news on the FY-20 defense policy bill, the continuing resolution, the Joint Strike Fighter program and more.

Negotiations on the fiscal year 2020 defense policy bill could be nearing completion:

Smith sheds light on negotiations as defense policy bill potentially nears finish line

House Armed Services Committee Chairman Adam Smith (D-WA) said today "it is very much possible" that by the end of the day lawmakers could agree on a bipartisan path for the stalled fiscal year 2020 defense authorization bill.

Related policy bill news:

Trump's wall punted from defense policy bill to appropriators

Lawmakers negotiating the fiscal year 2020 defense authorization bill have decided it would be best for congressional appropriators to address President Trump's use of Pentagon funds to construct a wall on the U.S.-Mexico border without the consent of Congress, though the authorization bill remains stalled over other issues.

More coverage of the continuing resolution, which expires on Dec. 20:

Air Force sent OSD a CR anomalies list in October

The Air Force has sent the Office of the Secretary of Defense a list of priority programs for potential waivers from Congress under the ongoing continuing resolution.

Joint Strike Fighter news:

Lockheed targeting spring 2020 for F-35 Distributed Mission Training delivery

F-35 prime contractor Lockheed Martin hopes to begin deliveries next spring of a Distributed Mission Training capability that will allow Air Force aircraft to connect in virtual environments.

Vice Adm. Thomas Moore, the head of Naval Sea Systems Command, spoke to the media this week about the Navy's shipyards:

Navy to issue RFP for shipyard sustainment program management

The Navy in February plans to issue a request for proposals to manage its naval sustainment effort for shipyards.

Under Secretary of Defense for Research and Engineering Mike Griffin spoke at a U.S. Chamber of Commerce event on space this week:

Griffin: SDA a 'casualty' of ongoing continuing resolution

Under Secretary of Defense for Research and Engineering Mike Griffin said this week the fledgling Space Development Agency has had to slow down or pause some early architecture work as the Pentagon awaits congressional action on fiscal year 2020 defense spending legislation.

John Rood, the under secretary of defense for policy, spoke at a recent Defense Writers Group breakfast:

Top DOD policy official wants export control reform to allow greater tech transfer with U.S. allies

The Pentagon's top policy official said today he favors some of the proposals being promoted by current and former government officials who seek to establish a new technology transfer oversight regime for the United States and its most trusted allies.

By Ashley Tressel
December 5, 2019 at 11:17 AM

President Trump announced today he plans to nominate Jim McPherson as the new Army under secretary, a position he has occupied since June in an "acting" capacity.

If confirmed by the Senate, McPherson would succeed current Army Secretary Ryan McCarthy, who previously held the post.

McPherson previously served as the general counsel of the Defense Department's Counterintelligence Field Activity.

"A retired rear admiral, Mr. McPherson's final assignment was as the 39th Judge Advocate General of the Navy," according to the White House. "He first gained military experience as an enlisted member of the United States Army, later being commissioned as an ensign in the Judge Advocate General’s Corps."

By Justin Doubleday
December 4, 2019 at 3:56 PM

Google's cloud services arm today announced it achieved a "high impact" federal security authorization, clearing the way for the company to host the government’s most sensitive unclassified data.

Google Cloud Platform received a "High" authorization to operate for 17 products in five cloud regions under the Federal Risk and Authorization Management Program (FedRAMP), Google vice president for public sector Mike Daniels wrote in a blog post today. GCP also recently expanded its existing FedRAMP Moderate authorization to 64 products in 17 cloud regions, according to Daniels.

The new security authorization comes as Google looks to ramp up its enterprise services business, especially for public-sector customers.

"These new certifications reflect our continued investment and support for customers in the U.S. public sector, and is another example of momentum we’re seeing as government agencies move to the cloud," Daniels wrote.

Under FedRAMP, "High impact data" usually involves law enforcement and emergency services systems, financial systems, health systems, and any other system "where loss of confidentiality, integrity, or availability could be expected to have a severe or catastrophic adverse effect on organizational operations, organizational assets, or individuals," according to FedRAMP's website.

Google still lags behind cloud computing giants like Amazon Web Services and Microsoft Azure in its federal security certifications. Its lack of FedRAMP authorizations is one reason the company cited in its decision to forego bidding on the Defense Department’s potential 10-year, $10 billion Joint Enterprise Defense Infrastructure (JEDI) cloud services contract.

Last month, the Pentagon announced Microsoft as the winner of the JEDI contract, although Amazon is challenging the decision in court.

Google has also faced questions about its willingness to work with the federal government and DOD after it pulled out of the Pentagon's "Project Maven" artificial intelligence project last year.

In November, Google senior vice president for public affairs Kent Walker attempted to assuage concerns about whether the company is willing to engage with DOD and the broader national security apparatus. He said Google is still working with DOD on a number of initiatives, including cybersecurity, business process automation and healthcare.

"It is an area where it's right that we decided to press the reset button until we had an opportunity to develop our own set of AI principles, our own work with regard to internal standards and review processes," Walker said about the Project Maven contract.

"But that was a decision focused on a discrete contract, not a broader statement about our willingness or our history of working with the Department of Defense and the national security administration," he added.

By Sara Sirota
December 4, 2019 at 3:46 PM

The Air Force will hold an event with industry to discuss pre-engineering activities for a new command-and-control aircraft system that's intended to replace the aging E-4B National Airborne Operations Center.

The Survivable Airborne Operations Center will feature modern communications, networks and advanced C2 subsystems aboard a new, commercial derivative aircraft, according to a notice the service released today. The legacy E-4B fleet consists of four 1970s-era Boeing aircraft that are nearing the end of their service lives.

The SAOC program office will host the industry day next February at Hanscom Air Force Base, MA. Responses are due Dec. 20.

Meanwhile, the Air Force's fiscal year 2020 budget documents show the service anticipates needing more than $535 million in research and development funding over the next five years for the NAOC recapitalization effort. They describe SAOC as an optimized fleet that has the airborne command center capabilities provided by both the E-4B and Navy's E-6B.

By Marjorie Censer
December 4, 2019 at 2:15 PM

AeroVironment's chief executive said this week the company has submitted its proposal for a three-year, sole-source contract for the Army's Lethal Miniature Aerial Missile System.

"This hardware production contract to AeroVironment would cover government fiscal years 2020 through 2022," Wahid Nawabi said in a call with analysts. "We anticipate this award would be worth up to $160 million over that time period."

Nawabi said the award would be the "single largest sole-source, multiyear award ever for our innovative Switchblade solution."

Additionally, he told analysts the company has seen "significant progress" working with U.S. export authorities on exporting Switchblade.

"Multiple allies have expressed strong interest in Switchblade," Nawabi added.

Meanwhile, AeroVironment said sales in its most recent quarter totaled $83 million, up 14% from the same three-month period a year earlier. The company attributed the increase to product sales growth.

AeroVironment's quarterly profit reached $7.5 million, up 24% from the prior year.

By Marjorie Censer
December 4, 2019 at 1:57 PM

(Editor's Note: This story has been updated with a Justice Department statement.)

A newly unsealed court filing by a former Navistar Defense employee alleges the company undertook a "pervasive and long-running scheme to charge the U.S. Government wildly inflated prices for components of Mine-Resistant, Ambush-Protected vehicles."

The court filing alleges the company presented forged invoices and fabricated catalogue prices as supporting documentation for the commercial prices of components from the engines to the suspension systems.

"The forged and fraudulent documents presented to the Government served to mask that these components either had no commercial sales history at all, or when they did, that the true commercial price was as little as half the price that Defendants charged the Government," the complaint reads.

The whistleblower is Duquoin Burgess, identified in the court filing as contracts manager at Navistar Defense from 2009 to 2012 and director of contracts in 2012.

Additionally, the complaint alleges that Navistar Defense leadership, including its president and vice president, were aware of the fraud.

In a statement released today, the Justice Department said it has intervened in the suit. It said in 2009, the Marine Corps sought to upgrade MRAP vehicles purchased from Navistar Defense with a modified independent suspension system.

"During the course of negotiations for the ISS, the Marine Corps asked Navistar Defense to provide evidence of prior commercial sales of the various parts that made up the ISS to ensure that the prices paid were fair and reasonable," the Justice Department says. "The lawsuit alleges that Navistar Defense knowingly submitted fraudulent invoices that falsely purported to show prior, comparable commercial sales to conceal the inflated prices it was charging the Marine Corps. In reality, the lawsuit alleges, those sales never occurred."

The government, in a court document filed in September, said it would intervene in the part of the case that "alleges Navistar Defense inflated the government price for the Independent Suspension System, in part, through the submission of fraudulent sales history."

However, the government said it would not intervene in the part that alleges the government did not receive preferred customer volume discounts for Navistar Defense vehicles.

In the same filing, the government noted the "United States and Navistar are currently exploring settlement, which provides the possibility of avoiding litigation and conserving judicial resources."

In a statement, a Navistar spokeswoman said the company does "not believe the relator's unsealed complaint is well founded in fact or law. The company intends to defend itself as necessary and appropriate."

By John Liang
December 4, 2019 at 1:41 PM

This Wednesday INSIDER Daily Digest has news on the defense secretary's recusal from the Army's Lower Tier Air and Missile Defense Sensor contract award and more.

Defense Secretary Mark Esper wasn't involved in the decision to select Raytheon to build the Army's Lower Tier Air and Missile Defense Sensor:

Esper recused himself from selection of Raytheon as LTAMDS winner, DOD says

A Pentagon spokesman said Defense Secretary Mark Esper took no part in the Army's selection this fall of his former employer Raytheon to build the Lower Tier Air and Missile Defense Sensor, a project company officials expect will deliver a potential $20 billion line of new business.

The Joint Strike Fighter program office is in the midst of a 180-day sprint to deliver major improvements to its software development environment:

F-35 JPO to sole-source DevSecOps support to Amazon provider

The F-35 joint program office is preparing to award Amazon a sole-source contract to support its "digital transformation" and incorporate a more agile, secure and rapid software development approach.

General Dynamics this week nabbed a multibillion-dollar Virginia-class submarine contract:

Navy awards GD Electric Boat $22 billion modification for Virginia Block V multiyear contract

The Navy this week announced a $22.2 billion contract modification to General Dynamics Electric Boat for Block V of the Virginia-class submarine program.

And in case you missed it, here is some defense budget news, specifically the ongoing continuing resolution:

Inhofe says GOP and Dem leaders must break defense policy bill 'logjam'

Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said today the fiscal year 2020 defense authorization bill is being "held hostage" by legislative disagreements beyond his committee's jurisdiction and can only be finalized by Republican and Democratic party leaders.

Budget impasse delays DOD progress payments study

Congress' inability to pass a fiscal year 2020 budget is delaying the start of a Pentagon study that could change the way defense contractors have been paid for years.

Army official: Extended continuing resolution would impact STE efforts

An extended continuing resolution would impact the Army’s Synthetic Training Environment efforts, according to a service official.

By Justin Katz
December 4, 2019 at 11:41 AM

Chief of Naval Operations Adm. Michael Gilday has published his first strategic guidance to the fleet.

The document, titled "Frago 01/2019: A Design For Maintaining Maritime Superiority," aims to "simplify, prioritize, and build on the foundation” of Gilday's predecessor, Adm. John Richardson, who published a new maritime strategy in December 2018.

"Our Navy's strategic direction, focused on great power competition, is sound," Gilday writes.

The document outlines roughly a dozen goals ranging from quickening ship depot-level maintenance and modernization to improving the service's cybersecurity capabilities.

Marine Corps Commandant Gen. David Berger this summer published his own guidance.

Both four-star officers focused on improving the integration between the two services.

"Together, we will build Navy-Marine Corps integration by aligning concepts, capabilities, programming, planning, budgeting, and operations to provide integrated American naval power to the joint force," Gilday writes.

By Tony Bertuca
December 4, 2019 at 10:39 AM

The senior Pentagon official who certified in May that Ukraine should receive $250 million in U.S. military aid because it had made sufficient progress combating corruption said today he never got a "very clear explanation" from the White House as to why the funds were delayed over the summer.

"In the weeks after signing the certification I did become aware that the aid had been held," John Rood, the under secretary of defense for policy, told reporters this morning.

"I never received a very clear explanation other than there were concerns about corruption in Ukraine," he continued.

The delayed aid is at the center of an impeachment investigation into President Trump. Democrats, backed by testimony from current and former government officials, allege Trump sought to leverage the funds to pressure the Ukrainian government into announcing an investigation into former Vice President Joe Biden and his son. Biden is a leading Democratic candidate for the 2020 presidential nomination and the investigation could have benefited Trump politically.

Trump says he did nothing wrong and he his being defended by many Republicans who say his concerns about corruption in Ukraine were well-founded.

Rood said he learned of the White House hold on the aid, which was part of a larger $400 million assistance package, "significantly after May," when he certified that Ukraine had made sufficient anti-corruption progress to receive the aid.

"It was a requirement under the law that we certify that and I was the person that certified it," he said.

Democrats have pointed out that Rood’s letter undercuts the Trump administration's continued assertion that the president ordered the aid withheld because of concerns about corruption.

Rood also said he cannot recall from memory which defense secretary knew of the delayed aid and when because there were three different acting Pentagon chiefs during that period -- Pat Shanahan, Richard Spencer and Mark Esper.

Esper was eventually confirmed as defense secretary July 23. The hold on the aid was released in September.

Rood said "the people serving in the role of the secretary of defense were aware of the situation," but could not provide an exact answer as to which ones were briefed about it.

"Certainly, the secretary of defense was kept apprised of those things," he said.

The Pentagon, along with other executive branch agencies, has refused to comply with House subpoenas related to the aid and the impeachment investigation.

Esper and other defense officials have sought to distance the Pentagon from the situation, though one senior official, Laura Cooper, agreed to testify privately and publicly, saying she pushed to have the aid released and became worried when it was not distributed.

The focus of the aid is to help Ukraine deter Russian military aggression, partly with anti-tank weapons.

Rood today sought to frame the issue as one of "execution" in which DOD has now sent all but $8.5 million of the aid to Ukraine and will distribute the rest in the coming months.

"Our desire has been to work with our Ukrainian colleagues to provide security assistance as envisioned," he said.

By Justin Katz
December 4, 2019 at 10:26 AM

After already delaying two ship maintenance contracts in November, Navy officials today told Congress the current continuing resolution could delay five additional contract awards.

Navy acquisition executive Hondo Geurts and Naval Sea Systems Command chief Vice Adm. Thomas Moore said in joint written testimony today those contract awards "may be adversely impacted by the second CR," which expires Dec. 20.

Geurts and Moore appeared before the Senate Armed Services seapower and readiness subcommittees.

Geurts last month confirmed he already postponed awarding two maintenance contracts, one for the Arleigh Burke-class destroyer Gonzalez (DDG-66) and another for the Bainbridge (DDG-96).

Also testifying alongside Geurts and Moore is Diana Maurer, director of defense capabilities and management at the Government Accountability Office. Her agency last week published a report analyzing the Navy's $21 billion, 20-year plan to optimize the four public shipyards.

The government watchdog concluded the service's plans created "risks that together could add billions to the ultimate cost" of the plan, according to the report.

"Navy officials stated that they wanted to provide Navy leadership and congressional decision makers with a rough order-of-magnitude estimate, not a budget-ready cost estimate," GAO's report stated.

Geurts and Moore said the Navy is working to implement the watchdog’s recommendations to improve the cost estimate.