The Insider

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

1. The Pentagon is eying increased investments in several leap-ahead technologies in fiscal year 2019, but the military's second-highest-ranking officer said the Defense Department would be "gambling" by submitting next year's budget request before Congress reaches an agreement on FY-18 spending levels.

Full story: Pentagon 'gambling' with FY-19 budget request submission

2. The Defense Department executed a ballistic missile defense flight test over Hawaii this week but will not disclose whether the interceptor hit the target.

Full story: Pentagon conducts major BMD intercept test, mum on salient details

3. The House, in a largely symbolic move by Republicans, voted 250-166 on Tuesday to pass a $659 billion fiscal year 2018 defense appropriations bill with no hope of passage in the Senate, where Democrats continue to oppose any spending measure that does not include a promise of immigration reform and also provide parity between defense and non-defense priorities.

Full story: House again passes FY-18 defense spending bill that can't clear Senate

4. Members of the House Armed Services Committee are raising concerns over the Pentagon cloud executive steering group's work to accelerate the U.S. military's adoption of commercial cloud computing.

Full story: Lawmakers concerned by 'lack of transparency' from Pentagon cloud group

The nonpartisan Congressional Budget Office now predicts the federal government will run out of money in early March unless the debt limit is increased, revising an earlier estimate that put the deadline sometime in late March or early April.

The new deadline is likely to further stress the political standoff over spending and immigration on Capitol Hill, where Congress is operating under a short-term spending bill -- its fourth for fiscal year 2018 -- set to expire Feb. 8.

"CBO projects that if the debt limit remains unchanged, the ability to borrow using extraordinary measures will be exhausted and the Treasury will most likely run out of cash in the first half of March 2018," according to a Jan. 31 report. "If that occurred, the government would be unable to pay its obligations fully, and it would delay making payments for its activities, default on its debt obligations, or both."

The report acknowledges, however, that CBO's timing could be off as the size of revenue collections and of outlays over the next few weeks "could differ noticeably from CBO's projections."

CBO previously projected that the "extraordinary measures" to extend the deadline would be exhausted by late March or early April, but revised that estimate after accounting for the revenue impact of the massive tax legislation package Republicans ushered through Congress.

Lawmakers are urging the White House to fully fund B-52 modernization in the fiscal year 2019 budget request, including $65 million for a B-52 re-engining effort.

In a Jan. 31 letter addressed to Office of Management and Budget Director Mick Mulvaney, six senators -- four Democrats and two Republicans -- call for continued investment in ongoing B-52 modernization efforts, which include a new bomb bay, improved satellite communications and a radar replacement effort. They also argue for near-term investment in a new engine for the aging bomber fleet, which is slated to fly through 2050.

"Funding the re-engining program in FY 2019 would enable production on a time line that enables engine enhancement or replacement before the current engines become obsolete," the letter states. "Beyond the critical need to push the engine sustainability through the service life of the B-52, the considerable benefits modernized propulsion would provide for the operational capability and cost-effectiveness of the aircraft make the case for re-engining clear."

The Air Force hasn't finalized an acquisition strategy for a B-52 re-engining, but floated a notional schedule during a Dec. 12 industry day. That schedule said the service could release a request for proposals and select an engine integrator in FY-18 and could choose an engine design as soon as FY-20.

"Because full funding for the re-engining program represents sound stewardship of both national defense and taxpayer money, we hope the president's FY 2019 budget request will fully fund this program," lawmakers state in their Jan. 31 letter.

Sens. Heidi Heitkamp (D-ND), Joe Donnelly (D-IN), Richard Blumenthal (D-CT), Christopher Murphy (D-CT), James Lankford (R-OK) and John Hoeven (R-ND) signed the letter.

Boeing is the B-52 prime contractor and Pratt & Whitney built the current TF33 engine. Pratt, GE Aviation and Rolls Royce have all expressed interest in the re-engining.

The Defense Department is slated to release its FY-19 budget request Feb. 12.

A recent missile defense intercept test, the Army's M109A7 self-propelled howitzer, the Pentagon's cloud strategy and more highlight this Wednesday INSIDER Daily Digest.

The Pentagon hasn't disclosed the results of a high-stakes shoot-down test of the Aegis Ashore combat system and Standard Missile-3 Block II interceptor:

Pentagon conducts major BMD intercept test, mum on salient details

The Defense Department executed a ballistic missile defense flight test over Hawaii today but will not disclose whether the interceptor hit the target.

More missile defense news:

Army moving to pave way for lower-tier missile defense sensor prototypes

The Army will hold an industry day next month to begin planning the way forward on its lower-tier air and missile defense sensor acquisition strategy.

The Army is preparing for the second test and evaluaiton of its M109 program in the second quarter of fiscal year 2018:

Army may eventually replace entire upper half of howitzer

A new breech is included in the plans for a future incremental upgrade to the Army's M109A7 self-propelled howitzer, as well as a new gun -- potentially meaning a complete replacement of the vehicle's upper half, according to program officials.

House Armed Services emerging threats and capabilities subcommittee Chairwoman Elise Stefanik (R-NY) and Ranking Member Jim Langevin (D-RI) are among those concerned that a Pentagon steering group is not being transparent with its cloud strategy:

Lawmakers concerned by 'lack of transparency' from Pentagon cloud steering group

Members of the House Armed Services Committee are raising concerns over the Pentagon cloud executive steering group's work to accelerate the U.S. military's adoption of commercial cloud computing.

Related stories:

• Shanahan directs DCMO to establish cloud-computing program
• Pentagon reorganizes cloud group after industry outcry
• Industry concerned about Pentagon plan to 'lock in' one cloud services provider

Yesterday's vote on the FY-19 defense appropriations bill, which occurred hours before President Trump's State of the Union address, is meant to highlight Republican efforts to increase defense spending and bolster the allegation that Democrats are obstructing national security:

House again passes FY-18 defense spending bill that can't clear Senate

The House, in a largely symbolic move by Republicans, voted 250-166 to pass a $659 billion fiscal year 2018 defense appropriations bill with no hope of passage in the Senate, where Democrats continue to oppose any spending measure that does not include a promise of immigration reform and also provide parity between defense and non-defense priorities.

If the Army Reserve is required to generate a particular capability for a full-spectrum conflict "on no notice," leaders have to assess the feasibility of meeting the time line, and adjust their preparations accordingly:

Luckey: USAR capabilities should be 'harmonized' prior to mobilization

The Army Reserve possesses an array of "niche capabilities" that contribute to total force readiness, but has to properly integrate them to ensure efficacy, its chief said last week.

Boeing said today it has named Jeff Shockey vice president of global sales and marketing for its defense, space and security business, effective immediately.

Shockey, who succeeds Tom Bell, joined Boeing in 2016 as vice president of federal affairs and international policy.

He has previously worked as staff director for the House Permanent Select Committee on Intelligence and as minority staff director for the House Appropriations Committee.

Textron said today its Textron Systems business saw sales of $489 million in the most recent quarter, down from $532 million last year.

The company said the decline was a result of "lower volume at Weapons and Sensors." Profit was down to $37 million, from $53 million during the same three-month period a year earlier.

However, Textron Systems saw increased sales over the course of the year. For 2017, the business recorded $1.8 billion in sales, up almost 5 percent from 2016.

Scott Donnelly, Textron's chief executive, said in a call with analysts this morning the company's sensor-fuzed weapon sales dropped by half last year. This year, the program, which the company announced in 2016 it would discontinue, won't provide any revenue, he said.

"There are a number of new . . . munitions programs that we're bidding on, that we're actively pursuing," he said, noting that the ongoing continuing resolution adds a challenge. "Obviously, we have a lot of work going on to get that piece of the business back in a growth trajectory."

Special Inspector General for Afghanistan Reconstruction John Sopko says he's glad the Pentagon "came to their senses" after reports said the U.S. military is not restricting data related to Taliban-controlled districts, although SIGAR has not received formal notification that it can release the information publicly.

In its latest quarterly report released today, SIGAR highlighted how the Defense Department for the first time restricted the release of data detailing the Afghan government's control of local populations and districts versus the Taliban's. SIGAR had been publicly reporting such information since January 2016.

Subsequently, Resolute Support campaign spokesman Navy Capt. Thomas Gresback told reporters "a human error in labeling occurred" and "it was not the intent of Resolute Support to withhold or classify information which was available in prior reports."

However, Sopko said SIGAR has yet to receive formal notification about the policy.

"SIGAR takes the classification and/or designation of information by a classifying authority, such as RS, very seriously; the implication being that it could have national security ramifications," Sopko said in a statement provided to Inside Defense. "We have yet to receive any formal notification that we are clear to release this information publicly."

Sopko said if it's true the data is not being restricted, "that's great."

"I'm glad they finally came to their senses," Sopko continued. "It's unfortunate that they only did so after the press started to ask questions. We hope now they will release all the other important information they have unreasonably withheld from the American people."

Furthermore, SIGAR spokeswoman Jennifer George-Nichol told Inside Defense that before publishing the quarterly report, SIGAR asked DOD and Resolute Support to "clarify" why the control data was marked as "not releasable to the public."

"They never gave us a response explaining the decision," George-Nichol said.

The controversy over public release of the data comes as Afghan security forces struggle to maintain control over a dwindling number of districts, while the Taliban continue to make gains.

When SIGAR first began reporting district and population control information in its January 2016 quarterly report, the Afghan government controlled or had influence over 71.6 percent of the country's 407 districts, while the Taliban controlled or had influence over 6.6 percent. Just over 21 percent were "at risk" at the time.

Two years later, the latest quarterly report would have reported the following if it was not mistakenly restricted, according to Gresback: As of October 2017, 56 percent of the country's districts are under Afghan government control or influence, 14 percent are under Taliban control or influence, and 30 percent are contested.