The Insider

Cyber Watch: Supply Chains
By John Liang
March 15, 2013 at 12:00 PM

Vulnerabilities in global supply chains open opportunities for foreign adversaries to exploit U.S. critical infrastructure via cyber warfare, according to Director of National Intelligence James Clapper.

In his prepared testimony at a Senate Select Intelligence Committee hearing this week, Clapper wrote:

The U.S. and other national economies have grown more dependent on global networks of supply chains. These web-like relationships, based on contracts and subcontracts for component parts, services, and manufacturing, obscure transparency into those supply chains. Additionally, reliance on foreign equipment, combined with a contracting pool of suppliers in the information technology, telecommunications, and energy sectors, creates opportunities for exploitation of, and increased impact on, US critical infrastructures and systems.

Interdependence of information technologies and integration of foreign technology in US information technology, telecommunications, and energy sectors will increase the potential scope and impact of foreign intelligence and security services' supply chain operations. The likely continued consolidation of infrastructure suppliers -- which means that critical infrastructures and networks will be built from a more limited set of provider and equipment options -- will also increase the scope and impact of potential supply chain subversions.

Such a statement probably wouldn't surprise defense contractor Lockheed Martin.

Last November, senior Lockheed cyber officials said that as the company works to bolster its defenses against cyber attacks, adversaries are eying the company's supply chains. As InsideDefense.com reported:

Chandra McMahon, Lockheed Martin's vice president and chief information security officer for enterprise business services, said adversaries are focusing more on the supply chain to steal information for use in attacks on Lockheed. These adversaries have been successful, leading Lockheed to extend some initiatives to help its suppliers improve their cyber resilience, McMahon said at the National Press Club.

McMahon pointed to an attack last year that she termed a "double supplier compromise." An unnamed adversary was able to get information from Lockheed supplier RSA and from another supplier and put those pieces together to launch an attack against Lockheed, she said, though the company was able to stop the attack before losing any data.

View the full story.

Drone Encounter
By Christopher J. Castelli
March 14, 2013 at 7:15 PM

Pentagon Press Secretary George Little said today that an Iranian fighter jet "approached" a Defense Department surveillance drone this week.

"On March 12, an unarmed, unmanned, MQ-1 U.S. military aircraft conducting a routine classified surveillance flight over international waters in the Arabian Gulf was approached by an Iranian F-4 aircraft. The closest point of approach between these aircraft was approximately 16 miles," Little said in a statement.

"The MQ-1 was escorted by two U.S. military aircraft," Little added. "One of the U.S. aircraft discharged a flare as a warning to the Iranian plane, which then broke off pursuit. All U.S. aircraft remained over international waters at all times. Following the incident last November where an Iranian fighter aircraft fired upon an unarmed, unmanned MQ-1, the United States communicated to the Iranians that we will continue to conduct surveillance flights over international waters consistent with long-standing practice and our commitment to the security of the region. We also communicated that we reserve the right to protect our military assets as well as our forces and will continue to do so going forward."

UPDATE: DOD corrected the statement above after this entry was published, noting it did not discharge a flare as originally stated; the Iranian aircraft departed after a verbal warning.

Cool Chips
By John Liang
March 14, 2013 at 4:21 PM

The Defense Advanced Research Projects Agency is seeking technologies to cool electronic computer chips.

According to a DARPA statement issued today:

The increased density of electronic components and subsystems in military electronic systems exacerbates the thermal management challenges facing engineers. The military platforms that host these systems often cannot physically accommodate the large cooling systems needed for thermal management, meaning that heat can be a limiting factor for performance of electronics and embedded computers.

DARPA introduced the Intrachip/Interchip Enhanced Cooling (ICECool) program in June 2012 to explore 'embedded' thermal management. The premise of ICECool is to bring microfluidic cooling inside the substrate, chip or package, including thermal management in the earliest stages of electronics design. One track of the program, ICECool Fundamentals, has already begun basic research into microfabrication and evaporative cooling techniques. Under the new ICECool Applications Track, DARPA now seeks performers from the electronics and high-performance computing (HPC) communities to demonstrate microfluidic cooling in monolithic microwave integrated circuits (MMICs) and embedded HPC modules.

"DARPA wants two things from this solicitation: ICECool concepts and techniques that can be readily integrated into the commercial off-the-shelf supply chain, and development and implementation of electrical-thermal-mechanical co-design techniques," said Avram Bar-Cohen, DARPA program manager. "To get there, we believe those already working with MMICs and HPC modules can add microfluidic cooling to established technologies. This is an open solicitation, and I encourage researchers within these communities and others to present their ideas."

View the full DARPA statement.

Cyber Watch: Ops Briefing
By John Liang
March 14, 2013 at 3:44 PM

House Armed Services Committee members next week will be able to attend the first quarterly "cyber operations briefing," intelligence, emerging threats and capabilities subcommittee Chairman Mac Thornberry (R-TX) reminded his colleagues at a hearing yesterday.

The upcoming meeting "is similar to the counterterrorism quarterly updates that we have been receiving," Thornberry said. "This is a new provision in the Defense Authorization Act, and we'll have that classified briefing next week."

In his opening statement, subcommittee Ranking Member James Langevin (D-RI) noted:

DOD cyber operations are quite literally a growth business, and it's one of the rare portions of the DOD that will be growing indefinitely into the future, and there have been significant developments in just one year since our last posture hearing.

View yesterday's prepared testimony of U.S. Cyber Command chief Gen. Keith Alezander, Pentagon Deputy Chief Management Officer Elizabeth McGrath and Chief Information Officer Teri Takai.

Cyber Watch: Civil Authority
By Charlie Mitchell
March 13, 2013 at 7:17 PM

An American Civil Liberties Union official today urged lawmakers to codify civilian control over federal cybersecurity programs, a position that members of both parties on the House Homeland Security Committee seemed to embrace.

"Some are now arguing . . . that military agencies like the National Security Agency (NSA) should be empowered to collect more information about every-day American Internet users in order to respond to online threats," ACLU's Michelle Richardson said in prepared testimony to the committee. "Doing so would create a significant new threat to Americans' privacy, and must be avoided."

Richardson said it was "critical for civil liberties" that any expansion in the government's authority to collect and share cybersecurity information be run by civilian agencies like the Department of Homeland Security.

She told committee members that cybersecurity issues were "overwhelmingly" civilian in nature and are "not a defense issue." She added, "As we look at critical infrastructure, it absolutely has to be under civilian control," largely at the Department of Homeland Security. Any legislation that allows expanded information sharing between the federal government and the private sector must be civilian-run and should minimize the collection of personal data, she said.

Homeland Security Committee Chairman Michael McCaul (R-TX) said Richardson was raising "legitimate concerns" about the need for civilian control. McCaul told reporters after the hearing that NSA had a role to play in monitoring foreign intelligence sources, but he praised the formulation offered by Gen. Keith Alexander, head of U.S. Cyber Command, that DHS was the appropriate "interface" between the government and private sector.

McCaul said he was aiming to mark up legislation this spring that would codify DHS' role in securing critical infrastructure and other cybersecurity programs. That goal enjoys bipartisan support on the committee, but other elements likely to be included in McCaul's bill -- such as liability protection for companies that share cyber-threat information with the government -- are certain to provoke partisan debates.

Task Force Smith
By John Liang
March 13, 2013 at 4:00 PM

House Armed Services tactical air and land forces subcommittee Chairman Mike Turner (R-OH) yesterday gave what he painted as a stark example "of how complacency following the drawdown from major contingencies can result in death and defeat on the battlefield."

Turner, in a speech at the McAleese/Credit Suisse defense conference in Washington, was referencing Task Force Smith, an Army infantry division that was overrun by North Korean tanks in 1950 during the Korean War because the weapons the U.S. force had couldn't stop those tanks:

Think about that for a minute.

Your country just sent you to fight an enemy far from home and the equipment that you were provided just bounced off of the enemy.

Although they were outnumbered 10 to 1, Task Force Smith was able to delay the advancing North Koreans, but they eventually were overrun and suffered hundreds of casualties and wounded.

It is important to note that toward the end of World War II a more advanced bazooka was developed, which would have aided American troops in Korea.

However, because of the peace dividend following the war and the belief that ground forces would play a minor role based on the National Security Strategy, the modernized bazooka program was terminated.

Just five years after the United States led the world to victory in World War II, the force was hollowed to the extent that it was very nearly driven into the sea by the North Korean Army.

To this day the Korean War provides a stark reminder of the consequences of sending an under-trained and poorly equipped force into battle.

Merger Talk
By Christopher J. Castelli
March 12, 2013 at 6:49 PM

Deputy Defense Secretary Ashton Carter said today he expects "a lot" of proposals from contractors for new mergers and acquisitions, many of which will likely be necessary and healthy.

The Defense Department is open to market-driven proposals that make good long-term sense, Carter told the audience at a McAleese/Credit Suisse defense conference.

DOD has concerns about competition, which would be addressed when considering proposed transactions, he said. But these mergers and acquisitions will for the most part be the means by which industry stays financially and technologically healthy, Carter said.

When To Fold 'Em
By Jen Judson
March 12, 2013 at 5:05 PM

Sen. John McCain (R-AZ) picked out the Long Endurance Multi-Intelligence Vehicle today as an example of the Defense Department's failure to pull the plug on foundering programs before making substantial investments.

"When it was started in 2010, the LEMV was supposed to deliver what was essentially a high-altitude and surveillance reconnaissance blimp in support of ongoing operations in Afghanistan," he said today at a McAleese and Associates and Credit Suisse-sponsored conference on defense programs at the Newseum in Washington, DC.

"As it turned out, program delays prohibited LEMV from ever leaving New Jersey," McCain added.

InsideDefense.com first reported the LEMV program -- a giant hybrid airship the Army was developing -- had been canceled last month.

"It was killed after the department sunk $356 million dollars into it," McCain said today. "It was supposed to cost $500 million."

The hybrid airship was built and inflated at Joint Base McGuire-Dix-Lakehurst and had its first flight in August 2012. It did not fly again before the program was canceled. The technical issues delaying the program caused the Army to miss its window to fly the airship in theater. LEMV's fate was in question since earlier last year as the Army continued to push back its first flight. The airship was once scheduled to deploy in Afghanistan in December 2011.

The decision to cancel the Northrop Grumman-built LEMV was correct, "but how did we get to that point? Maybe those decisions could have been made at a point when less taxpayers funding had been wasted," McCain said. "Critically, why were these programs allowed to continue beyond the point when senior acquisition management and their industry partners knew or should have known that their original cost, schedule, performance assumptions were no longer valid? What do these failures tell us about how the department manages its programs or activities and in particular the department's ability or, rather, inability to identify price and program risk, especially integration risk?"

Force Structure Briefing
By Maggie Ybarra
March 12, 2013 at 2:51 PM

A senior Air Force official will brief Congress tomorrow on the service's recommendation for where to base 32 cargo aircraft.

Lt. Gen. Michael Moeller, the Air Force's deputy chief of staff for strategic plans and programs, said today during an Air Force Association breakfast that he expects to tell Congress on Wednesday the recommendations of the service's Intra-Theater Airlift Working Group.

The Air Force established the group to address a congressional mandate in the fiscal year 2013 Defense Authorization Act that the service retain 32 cargo aircraft as part of its force-structure strategy. To date, the group has briefed Air Force Secretary Michael Donley on its recommendations but refrained from providing that information to Congress until incoming Defense Secretary Chuck Hagel had the opportunity to review and approve it, Moeller said.

"The delay was to make sure that we had the opportunity to brief the new secretary of defense. [We] wanted to make sure that in his first week on the job there were no surprises," he said.

The Air Force plans to retain C-130 cargo aircraft only, even though Congress gave the service the option of choosing a mix of C-130s and C-27Js. Moeller told Inside the Air Force following the breakfast that those states that have already seen changes to their aircraft inventory and those that were due to receive new missions would not benefit from the service's C-130 basing decision.

"But for the units that were harmed by FY-13, those are the units specifically that we looked at. And then how you add capabilities back in, it's very specific, and you'll have to wait till tomorrow," he said.

Budget Priorities
By Christopher J. Castelli
March 12, 2013 at 2:28 PM

Why did the threat of defense cuts not perform the forcing function many expected by motivating Congress to avoid sequestration? The answer has less to do with defense and more to do with entitlements, panelists said this morning at a budget discussion sponsored by Ogilvy Washington and InsideDefense.com.

The "real story" is not so much about defense but that Congress was willing to permit huge defense budget cuts because it was unwilling to grapple with tough challenges posed by growing entitlements, said former House Budget Committee Chairman Jim Nussle (R-IA), who led the Office of Management and Budget under former President George W. Bush after leaving Congress. Lawmakers have yet to make the toughest debt-reduction choices, which concern entitlement and tax reform, said Robert Bixby of the Concord Coalition.

QDR Watch
By Jason Sherman
March 11, 2013 at 8:33 PM

The Navy has tapped Rear Adm. Kevin Donegan to lead its Quadrennial Defense Review team.

The appointment was “officially” made last week, Lt. Cmdr. Chris Servello told InsideDefense.com. Donegan, a test pilot and former wing commander who early in his career took part in the famed 1986 air strikes against Libya, will spearhead the Navy's contribution to the statutorily required review of the U.S. military enterprise, which is expected to revise the Defense Department's long-term blueprint by next February.

The director of warfare integration on the Navy Staff (N91), Donegan has held a number of key staff assignments; he has served as Navy Staff strategy and policy director, aide to the deputy chief of naval operations for plans, policy and operations, and director of operations, U.S. Central Command.

The two-star QDR representatives from the other services are Army Maj. Gen. John Rossi; Air Force Maj. Gen. Steven Kwast; and Marine Corps Maj. Gen. Kenneth McKenzie.

Foreign Intrigue
By Maggie Ybarra
March 11, 2013 at 4:33 PM

Kansas lawmakers are asking Defense Secretary Chuck Hagel to provide "a thorough, compelling explanation" for the Defense Department's decision to award a multimillion-dollar contract to build aircraft for the Afghan military to a foreign bidder at a higher price than its domestic competitor offered during a time when financial restraint "is mandatory" for DOD.

In a March 8 letter, Kansas Sens. Pat Roberts (R), Jerry Moran (R) and Rep. Mike Pompeo (R) told Hagel that they had "significant concerns" about the $427.5 million the Air Force awarded to Sierra Nevada Corp. and Brazil's Embraer last month. That contract would provide 20 light-attack aircraft to the Afghanistan air force as part of the Light Air Support program, with the first plane delivery scheduled for the summer of 2014. Pompeo told Inside the Air Force on Friday that the Kansas congressional delegation became concerned about the contract award after they discovered that Beechcraft Corp., which competed for and lost the contract, had offered to produce the planes at a vastly reduced price.

Beechcraft placed a bid on the contract that was about 30 percent less than the one the Air Force accepted from Sierra Nevada and Embraer, Pompeo said.

"We learned this week that America didn't have enough money to keep the White House open for tours, and yet it's got enough money to pay one-third more for an airplane? That's befuddling to me," he said.

Also on Friday, Beechcraft -- which has a production facility in Kansas -- announced that it planned to formally protest the Air Force's decision through the Government Accountability Office. The company offered to provide its AT-6 aircraft to Afghanistan while its competitors, Sierra Nevada and Embraer, offered to provide Afghanistan the A-29 Super Tucano aircraft.

Sitting Duck?
By John Liang
March 11, 2013 at 3:59 PM

A report released today by the Center for a New American Security argues that the aircraft carrier "is in danger of becoming too vulnerable to be relevant in future conflicts."

The report, written by Navy Capt. Henry Hendrix, "examines the life-cycle costs and utility of the aircraft carrier and recommends a new approach for American naval operations," according to a CNAS statement, which adds:

Captain Hendrix explores the evolution of the aircraft carrier and suggests a course that emphasizes greater use of unmanned aerial systems as well as submarines in combination with long-range precision strike missiles. The author analyzes the value of naval presence and the carrier's efficiency and survivability before concluding: "The carrier had its day, but continuing to adhere to 100 years of aviation tradition, even in the face of a direct challenge, signals a failure of imagination and foreshadows decline. Money is tight, and as the nautical saying goes, the enemy has found our range. It is time to change course."

View the full report.

A senior Defense Department official said last week that the deferral of high-complexity, high-cost maintenance procedures as a result of sequestration and the limits of a continuing resolution could set DOD back by as much as 18 months for every one month those restrictions are in effect.

The implication from John Johns, the Pentagon's deputy assistant secretary for maintenance policy and programs, is that it could take DOD as long as nine years to fully recover from delaying work like an aircraft carrier overhaul by six months, Inside the Pentagon reported last week, adding:

The Navy is in the unenviable position of having to pause a refueling and complex overhaul of an aircraft carrier, a process that takes well more than a year to complete, and will have to deal with similar personnel costs.

"These are two carriers. One is in process right now and we will stop work on it," he said. "Imagine a year-to-18-month complex overhaul on a carrier, four months from completion. You stop work on it and send your workforce home. Thirty-seven-hundred people are working on that. How long do you think it will take to start that up?"

View the full story.

Beechcraft Blues
By John Liang
March 8, 2013 at 3:16 PM

Beechcraft Corp. announced this morning the company would formally protest the Air Force's award of the Light Air Support contract to its Brazilian competitor, Embraer.

In a statement, Beechcraft -- which used to be known as Hawker Beechcraft -- said:

"Following our debrief with the Air Force earlier this week, we are very perplexed by this decision," said Bill Boisture, CEO, Beechcraft. "Our belief that we have the best aircraft was confirmed by the Air Force rating our aircraft 'exceptional' and the fact that we are the lower cost solution was confirmed by the USAF’s public award announcement."

Last year, an Air Force investigation found evidence of bias toward Brazil-based Embraer and its Nevada-based partner, Sierra Nevada (SNC), which led to the decision to restart the competition. Although SNC later sued the Air Force attempting to enforce the biased decision, U.S. Court of Federal Claims Judge Christine O.C. Miller wrote in her Nov. 1, 2012, opinion that based on the investigation's evidence of bias "the Air Force's decision to cancel the contract award to SNC and re-solicit proposals was reasonable and rational and should stand."

"We simply don't understand how the Air Force can justify spending over 40 percent more -- over $125 million more -- for what we consider to be less capable aircraft," Boisture said. "Given our experience of last year and our continued strong concern that there are again significant errors in the process and evaluation in this competition, we are left with no recourse other than to file a protest with the GAO. The Air Force needs to make the right decision for the nation and our future allies."

Approximately 1,400 jobs in Kansas and other states are at risk as a result of the Air Force decision, according to Beechcraft's statement.

Check out Inside the Air Force's recent coverage of the LAS issue:

Sierra Nevada Wins Hotly Contested LAS Contract For Afghan Aircraft

Hawker Beechcraft Emerges From Bankruptcy, Prepares For LAS Contract

Hawker Focuses On Smart Weapons, Sees Light Attack Industry Growth

USAF Spokeswoman Says LAS CDI Results Show A Need For Improvement

House Staffers To Get Briefing On Light Air Support Requirements

Bottom Up?
By Christopher J. Castelli
March 7, 2013 at 10:41 PM

The Pentagon is keeping mum about how it will frame the 2014 Quadrennial Defense Review after receiving a letter from former top defense officials who believe the Defense Department should eschew the traditional QDR process and emulate the 1993 Bottom-Up Review by conducting a comprehensive assessment of the U.S. defense posture.

"We have seen the letter and respect its authors and their service to the country," said Defense Department spokesman Col. Jim Gregory. Politico and The New York Times reported this week on the letter, which was signed by five former deputy defense secretaries. "DOD will prepare a QDR report this year, as it is legally obligated to do, but the secretary has not yet issued specific guidance for the review process," Gregory added. That does not rule out a Bottom-Up Review; Gregory said Defense Secretary Chuck Hagel has not yet issued guidance for the QDR process, to include how it will be prepared.

In addition, Hagel has not yet picked the co-chairs of the independent panel that will assess the QDR, nor has he determined "how best to engage them during the review process," Gregory said.