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The Navy wants to begin initial concept design efforts and an analysis of alternatives in fiscal year 2019 for a new unmanned surface vehicle that has already seen preliminary success at the Defense Department's preeminent research agency.

The medium displacement unmanned surface vehicle (MDUSV) is a continuation of the Defense Advanced Research Projects Agency's anti-submarine warfare "continuous trail" unmanned vessel, also called Sea Hunter. DARPA's program for the vessel, which would focus on tracking diesel electric submarines, transitioned to the Office of Naval Research at the end of January.

MDUSV, a new start in the Navy's FY-19 budget, is seeking $2.8 million for concept design efforts to be done between the first quarter of FY-19 and the second quarter of FY-20, according to Navy budget justification documents. That money would also fund an analysis of alternatives to be conducted during the second quarter of FY-20 and the first quarter of FY-21.

"Two development contracts will be competitively awarded in FY23 following a notional [milestone] B decision," the budget documents said.

Further, the budget documents noted MDUSV is an "ideal candidate for an accelerated acquisition approach and that will be evaluated as an option."

MDUSV is a part of the Navy's future surface combatant strategy which will be "optionally manned and will operate autonomously while collaborating with the U.S. Navy combatants. . . . Expected missions include electronic warfare, anti-surface warfare, strikes, or others," according to the budget documents.

A sailor was pronounced dead Saturday after being struck earlier in the week by a spinning UH-1Y Venom tail rotor blade, according to a Marine Corps statement.

Navy Lt. James Mazzuchelli died from injuries sustained during the Feb. 21 incident. He was a flight surgeon assigned to Marine Light Attack Helicopter Squadron-267 and stationed at Marine Corps Air Station Camp Pendleton, CA.

No additional details were available about how the incident happened or the nature of Mazzuchelli's injuries. An investigation into the mishap is ongoing.

Some must-reads from this week's edition of Inside the Army:

1. A half billion-dollar reduction in aircraft procurement funding in the Army's fiscal year 2019 budget request is "a slight dip in one year," not evidence of a diminished commitment to the branch, according to the director of aviation on the Army staff.

Full story: DAMO-AV chief deems FY-19 ITEP funding 'a win,' touts FVL work

2. The Bipartisan Budget Act of 2018 provides for topline increases for the Defense Department in fiscal year 2018 and FY-19, but the Army's share of that funding growth has not yet been finalized, according to a senior service official.

Full story: Horlander offers estimate of FY-18 topline increase, notes Congress has final word

3. The Pentagon has "realigned" $20 billion initially pegged for its fiscal year 2019 Overseas Contingency Operations request and directed it toward the military's base budgets to adhere to a bipartisan congressional spending deal, according to a detailed breakdown provided to Inside Defense.

Full story: Pentagon breaks down $20B OCO 'realignment' for FY-19

4. The Army's fiscal year 2019 budget request seeks funding to launch research and technology projects that aim to spawn new ways to strike the enemy -- the vanguard of capability development spawned by the service's Multi-Domain Battle concept -- with an eye toward a potential land-based, anti-ship missile and a new single, multimission attack missile.

Full story: Army seeks new missile technology in FY-19 to support Multi-Domain Battle

The leader of the Pentagon's Silicon Valley outpost has departed, with no immediate successor named.

Raj Shah stepped down yesterday from his position as managing partner of the Defense Innovation Unit Experimental, Pentagon spokeswoman Lt. Col. Michelle Baldanza confirmed in an email. Navy Capt. Sean Heritage will serve as acting managing partner until a new one is named, she said.

"Raj will still remain attached to DIUx as a part-time Air National Guardsman," Baldanza added. She did not provide a reason for Shah's departure.

His exit comes as the Pentagon seeks more funding for DIUx. The department requested $71 million for the organization in fiscal year 2019, up from the $54 million it sought in FY-18.

Former Defense Secretary Ash Carter established DIUx in 2015 as a way to connect the Pentagon to the commercial technology industry. DIUx has technology portfolios in autonomy, artificial intelligence, human systems, information technology and space. It plans to soon add a "power and energy" portfolio as well.

Carter named Shah managing partner of DIUx in May 2016 as part of a shake-up of the fledgling organization's leadership and structure. An Air National Guardsman and F-16 pilot, Shah joined DIUx after co-founding and overseeing a technology start-up.

During the 2016 Reagan National Defense Forum, Shah said the organization's mission is "not to prototype technologies . . . but rather to prototype cultural and process changes that can then scale across."

Comparing the organization to a start-up, Shah said DIUx is taking an iterative approach. Those companies "try small steps, see what works, do more of that, [and] stuff that doesn't work, kill it quickly," he said. "I view us at DIUx as doing the same thing from a cultural and process standpoint. We're trying new things to see what works and what doesn't work."

In August, Defense Secretary Jim Mattis endorsed the DIUx mission during a trip to its headquarters in Silicon Valley, assuaging concerns he might disregard the Obama-era initiative.

"There is no doubt in my mind that DIUx will not only continue to exist, it will actually grow in its influence and its impact on the Department of Defense," Mattis told reporters during the trip.

But the organization is one of several that face questions about their future under the Pentagon's restructure of the acquisition, technology and logistics office.

The new under secretary of defense for research and engineering (R&E) will oversee DIUx and the Strategic Capabilities Office, both of which reported directly to the defense secretary's office. SCO is also without a permanent leader, as the office's original director, Will Roper, was confirmed as the Air Force acquisition chief earlier this month.

Pentagon acquisition chief Ellen Lord has said those organizations will not be less important under the restructure, but she argued they need to be pulled into DOD's formal bureaucracy to capture and scale their successful efforts.

Mike Griffin, former NASA administrator and newly confirmed under secretary of defense for R&E, is likely to play a significant role in picking both Shah and Roper's successors.

Between May 2016 and September 2017, DIUx awarded roughly $184 million for 59 pilot contracts. The organization has pioneered the use of other transaction authority as a way to quickly put prototyping projects on contract without having to go through a lengthy acquisition process. Using new authorities recently granted by Congress, DIUx has also transitioned several prototyping projects to production, including a recent cloud services contract worth upward of $950 million.

Air Force Secretary Heather Wilson confirmed Feb. 22 at the Air Force Association conference in Orlando, FL, the service plans to retire three aircraft from the E-8C Joint Surveillance Target Attack Radar System fleet in fiscal year 2019, bringing the fleet to 13 tail numbers.

Those three aircraft are "hangar queens," and retirement would not change the capabilities provided to combatant commanders because they are not currently flying, Wilson said.

She added the service's decision not to fund the JSTARS recapitalization in FY-19 could lead it to buy more RQ-4 Global Hawks and MQ-9 Reapers.

President Trump is set today to announce the 'largest-ever' package of new sanctions against North Korea, according to the White House.

"The Treasury Department will soon be taking new action to further cut off sources of revenue and fuel that the regime uses to fund its nuclear program and sustain its military by targeting 56 vessels, shipping companies, and trade businesses that are assisting North Korea in evading sanctions," according to a press pool report on Trump's prepared remarks for the Conservative Political Action Conference in National Harbor, MD.

The new sanctions come amid what some U.S. officials have dubbed North Korea's “charm offensive” at the 2018 Winter Olympics in South Korea and continued criticism over a series of missile tests tied to Pyongyang's nuclear program.

Vice President Mike Pence was scheduled to meet with top North Korean officials earlier this month, but the meeting was canceled at the last minute, according to press reports.

"We regret the failure to seize this opportunity," State Department spokeswoman Heather Nauert said Tuesday.

Overseas Contingency Operations funding, the Air Force's next-generation nuclear cruise missile, DARPA's budget and more highlight this Thursday INSIDER Daily Digest.

The Pentagon recently provided Inside Defense with a detailed breakdown of its proposed OCO budget:

Pentagon breaks down $20B OCO 'realignment' for FY-19

The Pentagon has "realigned" $20 billion initially pegged for its fiscal year 2019 Overseas Contingency Operations request and directed it toward the military's base budgets to adhere to a bipartisan congressional spending deal, according to a detailed breakdown provided to Inside Defense.

The Air Force's FY-19 budget request discloses for the first time the service's forecast to develop a replacement for the AGM-85B air-launched cruise missile:

Air Force pegs LRSO development at $4.5 billion, dramatically lower than previous estimate

The Air Force has revealed the development cost of the Long Range Standoff Weapon to be $4.5 billion, nearly half the tab for the next-generation nuclear cruise missile the service tallied two years ago, according to service budget documents.

DARPA is seeking $298 million in FY-19 for programs under its "electronics resurgence initiative," up from $75 million the previous year:

DARPA seeks massive boost in electronics research funding

The Defense Advanced Research Projects Agency is nearly quadrupling its planned investments in fiscal year 2019 for programs seeking to find new materials, architectures and designs for microelectronics.

Document: DARPA's FY-19 budget justification book

The Defense Department aims to dedicate nearly half its EDI funding to enhanced prepositioning, requesting more than $3.2 billion for this purpose -- almost $2.5 billion for the Army:

Army constitutes more than 70 percent of DOD's FY-19 request for EDI

The Trump administration aims to drastically increase the funding in fiscal year 2019 for the European Deterrence Initiative, designed to counter Russian adventurism on the continent, with Army equipment and activities comprising $4.6 billion of a total $6.5 billion request.

The Pentagon has allocated $1.9 billion for CPS development in its new five-year plan beginning in FY-19, nearly doubling the total amount requested the previous year:

DOD doubles planned Conventional Prompt Strike funding, hands Navy program in FY-20

The Defense Department is ratcheting up planned funding for the Conventional Prompt Strike program and plans to hand responsibility for the project -- the U.S. military's marquee effort to develop an intermediate-range, non-nuclear hypersonic weapon -- to the Navy beginning in fiscal year 2020.

As the government's security executive agent, the DNI is responsible for setting policies on background investigations and access to classified information:

Pentagon developing proposal to reform security clearance process

The Pentagon will soon deliver a proposal to the director of national intelligence to reform the security clearance process by relying more on the use of "continuous evaluation" technologies and automated record checks rather than periodic background investigations.