The Insider

JFCOM Reassignments
By John Liang
May 2, 2011 at 8:03 PM

The Pentagon released a statement this afternoon outlining "the approved reassignment" of organizations and functions related to the soon-to-be-defunct U.S. Joint Forces Command "to designated combatant commands, military services and the Joint Staff." Specifically:

These organizational reporting reassignments ensure the most critical functions and expertise are maintained for the joint warfighter.  This reassignment plan was developed in coordination with the Office of Secretary of Defense, the Joint Staff, combatant commands, and the Services.  This organizational transfer of authority for critical functions includes such reassignments as the Joint Enabling Capabilities Command to U.S. Transportation Command, the Joint Warfare Analysis Center to U.S. Strategic Command, the Joint Personnel Recovery Agency to the Air Force, and the NATO School to U.S. European Command.

"Our goal is to transfer streamlined, relevant joint functions to appropriate Department of Defense entities," said Gen. Raymond Odierno, commander, U.S. Joint Forces Command.  "We will ensure we sustain the momentum and gains in jointness while maintaining critical interaction with NATO and other multi-national partners."

When the transition is complete, nearly 50 percent of USJFCOM personnel and budget will remain in the Hampton Roads area of Virginia along with core missions, such as joint training, joint force provider, joint concept and doctrine development, and joint integration.  These functions will be aligned under the Joint Staff for leadership and direction.

The formal transfer of these organizations and functions to designated commands will be completed by late summer.  Under the current timeline, USJFCOM will be disestablished as a four-star combatant command by the end of August 2011.  The physical moves of all USJFCOM activities will be completed by March 2012.

Last month, Inside the Pentagon reported that JFCOM had recently completed its "most complex modeling simulation" exercise -- the kind of joint exercise that will fall under the purview of the Joint Staff J-7 directorate as JFCOM prepares to disestablish, according to JFCOM Chief Gen. Raymond Odierno. Further:

The exercise, known as the Unified Endeavor Afghanistan mission rehearsal exercise, was conducted Jan. 18 through Feb. 4, said JFCOM spokeswoman Kathleen Jabs.

Odierno mentioned the exercise in his testimony on Capitol Hill last week as he tried to assure Congress that JFCOM's disestablishment plans would streamline, rather than hamper, the military's commitment to jointness.

Unified Endeavor was, "the most complex modeling simulation exercise that we've done where we incorporated and exercised preparing units from Afghanistan," Odierno told the House Armed Services readiness subcommittee March 31.

"It was completely joint -- joint and multinational in every way," Odierno said.

Participants included U.S. Army's 1st Cavalry Division, the Marine Corps' II Marine Expeditionary Force and the 1st German Armored Division, Jabs said.

U.S. Raid Killed Bin Laden (Updated)
By Christopher J. Castelli
May 2, 2011 at 7:55 AM

A small, elite team of U.S. forces killed Osama bin Laden Sunday in a firefight during a "surgical" and "especially dangerous" helicopter raid on a protected compound in the affluent Pakistani city of Abbottabad, senior administration officials told reporters in the wee hours Monday following President Obama's Sunday-night announcement of the killing.

Senior administration officials declined to clarify whether the American personnel involved were U.S. military forces, although officials noted the intelligence community and the Pentagon worked together to plan the mission.

Senior administration officials provided only a few details of the raid, which they said lasted about 40 minutes. The "extraordinarily unique" compound where bin Laden was killed, worth about $1 million, is roughly eight times larger than other nearby homes, with 12- to 18-foot walls equipped with barbed wire, internal security walls, few windows and no phone or Internet connection, officials said.

U.S. officials believe the compound was built in 2005 to hide bin Laden, though they said it is unclear how long he had been living there. Before the operation, administration officials had high confidence that the compound harbored a high-value terrorist target, very likely bin Laden.

Bin Laden died after resisting the assault force, officials said, noting U.S. forces now have his body and will treat it consistent with Islamic traditions. Officials said two of bin Laden's couriers and another man, perhaps one of bin Laden's sons, were also killed along with a woman who was used as a human shield. One helicopter suffered a mechanical failure during the operation, but U.S. forces were able to depart in another helicopter, officials said.

The death of bin Laden is the culmination of years of work by the U.S. government. Prior to the operation, the intelligence community gathered data on bin Laden's personal couriers using information from detainees, officials said. One courier in particular had the constant attention of U.S. intelligence officials. For years, U.S. officials were unable to identify his true name or location, but four years ago they uncovered his identity and about two years ago they found areas where the courier and his brother operated, an official said. Still, they were unable to pinpoint where the couriers lived. Last August, U.S. officials found the couriers' residence in the compound about 35 miles from Islamabad in the relatively affluent Abbottabad, the official added.

The administration began planning the mission last year, officials recounted. By mid-February of this year, officials decided there was a sound intelligence basis for pursuing bin Laden at this location. By mid March, Obama began chairing at least five National Security Council meetings on this effort, an official said. No intelligence related to the mission was shared with Pakistan or other countries in advance of the operation, officials said, noting only a very small number of people in the U.S. government knew of the operation in advance.

UPDATE 2 p.m.: U.S. Government Graphics Of Osama Bin Laden Compound

Cash Flow
By John Liang
April 29, 2011 at 4:09 PM

Beginning July 1, the Pentagon will require all contracting officers to use a new analysis tool to compare the costs and benefits of using performance-based payments instead of the usual progress payments, according to a memo posted this week on the Defense Department acquisition portal website.

Last September, Pentagon acquisition chief Ashton Carter issued a "better buying power" memo in which he called on the director of defense procurement and acquisition policy "to develop a cash flow model to be used by all contracting officers contemplating financing other than customary progress payments, such as Performance Based Payments (PBP). In addition, guidance was to be developed that ensures that the improved cash flow opportunities provide benefit to both industry (at both the prime and subcontractor level) and the taxpayer," the April 27 memo, signed by DPAP Director Shay Assad, states. Further:

The timing and amount of cash flows provided to the contractor through Government financing has a measurable cost to the Government and a measurable benefit to the contractor. Those costs and benefits can be determined by performing a discounted cash flow analysis which takes into account the amount and timing of cash flows over the contract period. Discounted cash flow is the technique commonly employed by businesses to analyze the financial return on a project or investment opportunity involving a series of cash flows over time.

PBPs offer the contractor improved cash flow as compared to customary progress payments. Because of the differing view of the time-value of money between industry and the Government, PBPs provide a unique opportunity for a win-win financial arrangement. This difference in the time value of money produces a PBP price that is lower than that warranted with customary progress payments, and yet is a better financial arrangement for the contractor.

As a matter of practice, for new contract awards, the basis of negotiations for fixed-price contracts shall be the use of customary progress payments. For competitive fixed-price acquisitions the request for proposal[s] will state that the proposal and award will be based on the use of customary progress payments. After agreement on price, or contract award in the case of competitive acquisitions, the contractor shall have the flexibility to propose PBPs for the Government's consideration. This will allow the contracting officer to determine the reasonableness of the consideration being offered by the contractor for a more favorable payment structure.

PBPs are not practical for use on all fixed-price contracts and require considerable effort between the contractor and Government to identify the appropriate PBP events and establish the proper completion criteria for those events. Therefore, the contractor should be instructed that if PBPs are desired, a proposed PBP schedule should be submitted which includes all PBP events, completion criteria and event values along with the contractor's expected expenditure profile. This will allow the Government and the contractor to determine the practicality of PBPs for that contract. If PBPs are deemed practical, the Government must evaluate and negotiate the details of the PBP schedule.

The contracting officer must clearly identify the consideration received in the post-negotiation clearance document whenever a payment schedule more favorable to the contractor than customary progress payments is negotiated. Because the tool we developed uses the cash flows provided by customary progress payments as the baseline against which to determine the win-win arrangement, it is perfectly suited to evaluate the consideration offered. The negotiated consideration must be specifically approved by the clearance official or one level above the contracting officer, whichever is higher.

Consequently, Assad's office developed a Microsoft Excel-based analysis tool that would "allow the contracting officer and industry to easily compare the financial cost and benefits of using PBPs versus customary progress payments. The model will also determine a win-win price that equitably accounts for the cost, benefits and potential risk associated with PBPs."

That analysis tool can be found here.

Assad notes in his memo that federal acquisition rules do not allow "contracts from having both progress payments and PBP financing on a contract at the same time. Therefore, for modifications to contracts that already use PBP financing, the basis for negotiation must also be PBPs. In those situations, the tool above can be used in the same manner to help determine the win-win price for the modification."

Open Committee
By John Liang
April 29, 2011 at 3:31 AM

House Armed Services Committee Chairman Buck McKeon (R-CA) plans to make the most detailed release to date of documents related to the upcoming annual defense authorization bill, according to a memo sent to the press today. Specifically, the memo states:

Chairman McKeon is going above and beyond new House requirements to post all bill language online the day before consideration by a full committee or one of its subcommittees.  In fact, he has instructed Armed Services Committee professional staff to post the descriptive section-by-section analysis and Directive Report Language in addition to bill language.

As most of you know, this new level of transparency is a major break from previous committee practice, which was to release a detailed summary only after the full committee approved the legislation.  Specific bill and report language were traditionally not made available to you or the general public until all details were published by the Government Printing Office.

Below are specific dates and times for when you should expect the HASC Communications Office to release information about each of the subcommittee and full committee marks and post details on the Armed Services Committee website:

Military Personnel Subcommittee—Tuesday, May 3rd, at 10:15 a.m.

Emerging Threats and Capabilities Committee—Tuesday, May 3rd, at 11:45 a.m.

Strategic Forces Subcommittee—Tuesday, May 3rd, at 1:15 p.m.

Tactical Air and Land Subcommittee—Tuesday, May 3rd, at 2:45 p.m.

Seapower and Projection Forces Subcommittee—Tuesday, May 3rd, at 4:15 p.m.

Readiness Subcommittee—Wednesday, May 4th, at 9:15 a.m.

 

Full Committee—Monday, May 9th, at 12:00 p.m. (will include programmatic funding tables)

In addition to releasing and posting the bill language, section-by-section analysis, and Directive Report Language for each subcommittee at the above time, the HASC Communications Office will release opening statements for chairmen at the commencement of each mark, in addition to streaming each markup live on our website. Markups are scheduled to take place at the following times:

Military Personnel Subcommittee—Wednesday, May 4th, at 10:30 a.m.

Emerging Threats and Capabilities Committee—Wednesday, May 4th, at 12:00 p.m.

Strategic Forces Subcommittee—Wednesday, May 4th, at 1:30 p.m.

Tactical Air and Land Subcommittee—Wednesday, May 4th, at 2:30 p.m.

Seapower and Projection Forces Subcommittee—Thursday, May 5th, at 10:30 a.m.

Readiness Subcommittee—Thursday, May 5th, at 12:00 p.m.

Full Committee—Wednesday, May 11th, at 10:00 a.m.

Reviewing
By Christopher J. Castelli
April 28, 2011 at 9:09 PM

Defense Secretary Robert Gates has been meeting with senior defense officials about the Pentagon's upcoming budget-cutting review and plans to establish the outline of the review process by next week, Defense Department spokesman Col. David Lapan said today.

Gates recently discussed how the assessment might use the threat scenarios that informed the QDR as starting point for considering ways to eliminate missions and thereby glean savings to reduce the federal deficit.

JLTV Teaming
By Tony Bertuca
April 28, 2011 at 5:25 PM

BAE Systems and Navistar Defense -- partners on the Joint Light Tactical Vehicle program -- announced today that they were adding Northrop Grumman to their team, according to a statement from the companies. Northrop will be tasked with developing the vehicle's communications and surveillance systems.

“By applying Northrop Grumman and BAE Systems' substantial domain expertise, the team will develop a net-ready, open architecture system, allowing the warfighter to configure the JLTV platform rapidly and inexpensively for current and future mission needs,” according to the statement. “Northrop Grumman will serve as the C4ISR (command, control, communications, computers, intelligence, surveillance and reconnaissance) lead, responsible for the integration of command and control hardware and software, computers and communications equipment, sensors and sensor suites for intelligence gathering and force protection.”

Three industry teams are competing for the JLTV contract, now in its technology development phase. The Army and Marines have announced plans to award up to two contracts for the engineering and manufacturing development phase in early 2012. The EMD phase will be subject to an open competition, however.

Other teams competing for JLTV include Lockheed Martin with BAE Armor Holdings, and General Dynamics with AM General. Earlier this month, Oshkosh Defense told Inside the Army it planned to compete for an EMD contract. Force Protection has also said it would explore a JLTV bid with its Ocelot vehicle.

Procurement Competition
By John Liang
April 28, 2011 at 4:15 PM

Pentagon Procurement and Acquisition Policy Director Shay Assad this week is seeking to amplify guidance he sent out last November on improving competition in defense purchases.

As Inside the Pentagon reported in December:

The Nov. 24 memo from Shay Assad, the Pentagon's director of defense procurement and acquisition policy, provides additional instructions for competitive situations in which only one offer is received. Assad's memo to the services, defense agencies, U.S. Special Operations Command and U.S. Transportation Command expands on Pentagon acquisition chief Ashton Carter's Sept. 14 guidance on boosting the department's buying power.

"The intent of this guidance is to ensure more effective competition that will result in more effective use of the department's resources and savings for the taxpayer," Assad writes.

To maximize the savings that are obtained through competition, contracting officers will no longer use the standard on obtaining certified cost or pricing data in Federal Acquisition Regulations to determine that the offered price is based on adequate competition when only one offer is received, according to the memo.

In a memo released yesterday, though, Assad writes:

The focus of my memorandum was on maximizing competition in situations where only one offer is received in a procurement utilizing competitive procedures. The purpose of this memorandum is to amplify that guidance in response to questions that have been raised.

The policy guidance set out in the November 24, 2010, memorandum is applicable to all competitive procurements 0f supplies and services above the Simplified Acquisition Threshold (SAT), including commercial items and construction. Further, it covers procurements accomplished under the procedures in Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Supplement (DFARS) parts/subparts 8.4, 12, 13.5, 14, 15, and 16.5. Exceptions to this policy are procurements in support of emergency acquisitions for contingency operations, humanitarian assistance, disaster relief, peacekeeping operations, or recovery from nuclear, biological, chemical or radiological attacks against the United States. However, the use of these exceptions does not mitigate the need for competition nor the requirement for a determination that the price is fair and reasonable.

Unless an exception applies or a waiver is granted, the following procedures apply:

* If the solicitation was advertised for fewer than 30 days and only one offer is received, then the contracting officer shall cancel and resolicit for an additional period of at least 30 days; or

* If a solicitiation allowed at least 30 days for receipt of offers and only one offer was received, then the contracting officer shall not depend on the standard at FAR 15.403-1(c)(ii) in determining the price to be fair and reasonable. Rather, the contracting officer shall use price or cost analysis in accordance with FAR 15.404-1 to make that determination. If the contracting officer believes that it is necessary to enter into negotiations with an offeror, the basis for these negotiations shall be either certified cost or pricing data or data other than certified cost or pricing data, as appropriate, in accordance with FAR 15.403-1(c). DFARS 215-403-1(c) and FAR 15.403-3(b). The negotiated price should not exceed the offered price.

Waivers to the policy requirement to resolicit or the requirement to conduct negotiations are permitted. The waiver authority is the Head of the Contracting Activity (HCA). However, the HCA may delegate this authority to not lower than one level above the contracting officer.

I realize that implementation of this policy may have the unintended consequence of increasing the contracting community's workload, but given today's scarcity of resources we need to ensure effective competition to the maximum extent possible. Every dollar saved through effective competition benefits the warfighter and the taxpayers.

Change of Command
By Christopher J. Castelli
April 27, 2011 at 8:03 PM

Assuming the Senate confirms CIA chief Leon Panetta as Defense Secretary Robert Gates' replacement, the White House's plan is for Gates to step down June 30 and Panetta to take over at the Pentagon July 1, a senior administration official told reporters today.

And if the Senate confirms Gen. David Petraeus as the next head of the CIA, the administration would like to have him take the post by the start of September, the official said, noting the general plans to retire from the military and would lead the CIA as a civilian.

Time Pressure
By Sebastian Sprenger
April 27, 2011 at 3:59 PM

As Defense Department leaders begin tackling the kinds of existential questions posed by President Obama in his April 13 speech, Army Under Secretary Joseph Westphal sees different expectations about the timing of the review rising to the surface.

"For the services, it's important that it be done in a quick manner, but also in a comprehensive manner. I know the two things don't align very well," Westphal said in a speech this morning at the Center for Strategic and International Studies in Washington.

"I think the [defense] secretary is definitely looking for a longer-term, more expansive piece of work. The pressure that will probably come from the White House and probably come from the Congress will be, 'Hey, tell us now what that strategy is -- how you see the world in the future.'"

Westphal expects the deliberations to get "a lot of play" in the next two months, given what's at stake for service force structures.

Bulls And Bears
By John Liang
April 27, 2011 at 3:08 PM

Despite an expected downturn in federal defense spending, the Wall Street analysis firm Credit Suisse is fairly bullish on Lockheed Martin's growth prospects, according to a research note issued this morning:

*      LMT Highlights Growth Lanes, but We Remain Sidelined on Macro: Unlike some defense companies who have capitulated to unrelenting spending pressure, LMT maintains confidence in its growth. If all goes well, we agree LMT is the premier growth story in large cap defense. As such, we review major growth programs inside, but note that ultimately we think defense stocks will continue to trade with the forest, instead of the trees for now. Consequently, we remain Neutral while the deficit battle unfolds.

*      F-35 Milestones Key for Program in 2011, but Not Highly Impactful on EPS [earnings per share]: After earning only 20% of potential award fees on F-35 in 2010 and forfeiting the remainder, mgmt is laser focused on meeting milestones to prove the program is on track. We estimate each milestone translates into a little over $0.01 in annual EPS, so see these as qualitatively important for program continuity, but quantitatively insignificant from an EPS perspective.

Check out InsideDefense.com's coverage of Lockheed's conference call with analysts yesterday:

Joint Strike Fighter Program Offers Lockheed $52.5 Million In Incentives in 2011

Lockheed Martin stands to earn as much as $52.5 million in 2011 if it can meet five key benchmarks associated with the Joint Strike Fighter's development schedule, the company's chief executive officer said today.

Lockheed Delivers Joint Strike Fighter Contract Proposal

Joint Strike Fighter lead contractor Lockheed Martin has submitted its contract proposal for the fifth production lot of the F-35, the first step in a contracting process likely to last through the summer and into the fall.

Boeing is conducting its conference call right now. Click here to view the company's earnings statement, and stay tuned for any news from the call.

Skelton On Board
By John Liang
April 26, 2011 at 9:38 PM

Retired Congressman and former House Armed Services Committee Chairman Ike Skelton (D-MO) has joined EADS North America's board of directors, the company announced in a statement released this afternoon:

The EADS North America Board of Directors has confirmed the board appointment of Ike Skelton, who most recently served for 34 years as a U.S. Representative from Missouri. Skelton's Congressional career culminated in the role of chairman of the House Armed Services Committee, in which capacity he served from 2007 to 2011.

"Ike Skelton has a distinguished record of service to our nation, especially in support of the men and women of our military," said Ralph Crosby, Chairman of EADS North America. "His patriotism and leadership will be tremendous assets for EADS North America as we continue seeking to bring innovative, best-value solutions to the U.S. military in support of its missions."

Prior to his seventeen terms in the U.S. House of Representatives, Skelton served for six years as a Missouri state senator, beginning in 1971. Having begun his career in the field of law, he served in private practice and as a prosecuting attorney in Lafayette County, Mo., followed by three years in the role of Special Assistant to the Missouri Attorney General.

A lifelong native of Lexington, Mo., Skelton earned an Associate of Arts degree from Wentworth Military Academy and College in 1951 and went on to earn a Bachelor of Arts and a Bachelor of Laws degree from the University of Missouri in 1953 and 1956, respectively. He is the recipient of 14 honorary master’s and doctorate degrees and more than 60 awards and tributes.

Frankenstein ACV
By Cid Standifer
April 26, 2011 at 8:54 PM

The Marines plan to sacrifice one of their Amphibious Assault Vehicles to be cannibalized by industry as an Amphibious Combat Vehicle technology demonstrator, according to responses to "industry day" questions posted on the Program Executive Office Land Systems website.

The document says the effort will be modeled on the Marine Personnel Carrier tech demonstrator, which bloomed in the Nevada Automotive Test Center desert as the Marines waited for a green light to officially start the program.

"The provision of AAVS loan to a selected Contractor may be considered as part of the acquisition strategy," the Q&A states. "Furthermore, the USMC is considering the value of providing fully or partially functional vehicles or vehicle hulls as a potential approach for both the development of a Technology Demonstrator and the design integration phase for the ACV."

Many of the requirements for the ACV have yet to be determined, although the program office says an initial capabilities document should be out this summer.

However, the Q&A states the Marines are pondering a medium-caliber cannon with a secondary coaxial weapon for lethality, and it also mentions that the Naval Surface Warfare, Crane Division is currently working on an Improved Up-gunned Weapons Station.

The program also has the option of using technology harvested from the Marines' former favorite brainchild, the Expeditionary Fighting Vehicle, which met its demise under the budget ax earlier this year. The document notes, however, that the EFV "is not necessarily the baseline from which the ACV will be derived."

The AAV, ACV and MPC will all be under one programmatic roof, according to the Q&A. The Marine Corps has pinpointed 26 areas that are ripe for commonality and expect industry partners to exploit them.

The document hints that technology used on the trio of swimmers could have other applications as well.

"[W]e are certainly interested in the potential cost savings (either [research and development] or procurement) associated with commonality with other vehicles across the [Defense Department], such as the [Army's Ground Combat Vehicle]," the list states.

This didn't meet universal acceptance among industry day attendees, evidently.

"Competition is the enemy of commonality," one attendee wrote in as a question. "US [government]/USMC goals are a dichotomy. What will give?"

The program office replied that the Marines plan to develop common interfaces for "form, fit and function" wherever they can, and expected industry teams to work collaboratively.

"Industry should be looking at a new business model to support this approach," the office warned.

Under Review, Under Wraps
By Sebastian Sprenger
April 26, 2011 at 6:31 PM

While defense leaders have been giving the impression that a review of military missions, as mandated by President Obama, is just getting under way, the Joint Staff had begun work on such a thing shortly before the president's April 13 speech, we're told by several officials.

A classified tasker from the Chairman of the Joint Chiefs of Staff, handed down about a week before the POTUS address, asked military leaders to look for "options" in the face of the strategic and "domestic" -- read fiscal -- environment, one source said.

Of course, Adm. Mike Mullen has noted for some time that the nation's debt is a key threat to national security.

After the Obama speech, the Mullen tasker seems to have become something of a nucleus for the kind of review that the president mandated. A follow-on phase, with more detailed guidance on world regions and DOD capabilities, just got started, we're told.

The Joint Staff's J-8 directorate and the Cost Assessment and Program Evaluation office on the one side, and the J-5 and the Pentagon's policy shop on the other, are key players in the effort, with one team looking at resources and the other examining strategic options, according to sources.

Eying Earmarks
By John Liang
April 26, 2011 at 4:28 PM

House Appropriations defense subcommittee Chairman Bill Young (R-FL) recently issued a "Dear Colleague" letter containing guidance for how panel members should submit their proposals for the fiscal year 2012 appropriations bill, and warning them that earmarks "will not be considered." Specifically, according to the April 20 letter:

Please consult the earmark disclosure statements included in prior appropriations Acts to assist in making a determination. If the activity was previously listed as a congressional earmark, the Committee will continue to treat it as such. In addition, corrections to past earmarks will also be considered earmarks. IF you have any questions, please consult the Subcommittee staff.

Please also be aware that any request for earmarks also invokes the Code of Official Conduct. Clause 17 of the Code prohibits Members from requesting a congressional earmark without disclosing certain information to the Chair of the Committee of jurisdiction. Members are advised to carefully consider their submissions to the Committee in light of this.

The above language on earmarks was also included in all the other appropriations subcommittee chairmen's letters to colleagues, and comes in the wake of the House Armed Services Committee's doing the same thing, as InsideDefense.com reported in March:

The chairman of the House Armed Services Committee has issued guidance banning all earmarks and requiring complete transparency in the process of amending future defense authorization bills.

Released by Rep. Buck McKeon (R-CA) today, the guidelines state that budgetary legislative proposals "must be offered as an amendment to the bill (not the committee report)" when the full committee meets to mark up the defense authorization legislation. McKeon notes that the proposals must be voted on by the full committee.

"Only HASC members will be able to propose amendments during mark-up," McKeon writes in the guidance, noting that House members who do not serve on the committee can add proposals when the full House considers the legislation. "Please be advised that the full committee chair and subcommittee chairs will not include any member budgetary legislative proposals in their respective marks."

The guidance calls for all legislative proposals to be submitted by noon on April 11.

In addition, all proposed amendments must include a brief description stating both the amendment's purpose and "military utility." The guidance also prevents lawmakers from directing federal agencies to "expend the funds with (or award a contract to) a specific entity or within a specific locality."

Killing The F136
By John Liang
April 25, 2011 at 7:32 PM

The Defense Department has officially killed the Joint Strike Fighter F136 alternate engine program, according to a DOD statement issued today:

The Department of Defense today notified the General Electric/Rolls Royce Fighter Engine Team (FET) and the Congress that the F136 Joint Strike Fighter (JSF) engine contract has been terminated.

On March 24, 2011, Under Secretary of Defense for Acquisition, Technology and Logistics Ashton Carter directed the F-35 JSF contracting officer to issue an order to the FET to stop work on the F136 development contract.  The stop work order ended the expenditure of $1 million per day on an extra engine that the DoD has assessed as unneeded and wasteful.  The stop work order was put in place pending final resolution of the extra engine’s future in Congressional action on the fiscal 2011 budget.

Subsequently, H.R. 1473, the Department of Defense and Full-Year Continuing Appropriations Act for 2011 was passed by both houses of Congress and signed by the President on April 15, 2011.  H.R. 1473 contains no funding for the F136 engine.

Following this action, Carter directed the JSF Joint Program Office to cease all activity on the F136 development, and the JSF contracting officer determined to terminate the F136 contract.

The FET has been instructed to preserve and deliver government property. The Defense Contract Management Agency will assume responsibility for termination settlement.

As InsideDefense.com blogged this morning, however, GE isn't going down without a fight. And according to a company statement released in the wake of the DOD announcement:

While we are deeply disappointed by the DoD's "Notice of Termination," GE and Rolls-Royce remain committed to the F136 and the significant benefits it brings to the American taxpayer and our fighting men and women.

For 14 years, the F136 team has developed F136 technologies and engine prototypes at a cost of $3 billion to taxpayers.  They contain some of the world’s most advanced propulsion technologies. The intellectual property includes numerous patented technologies from both companies.

Over the coming weeks we will work with the US Government to comply with the Notice.  Throughout that process, GE and Rolls-Royce will take all necessary steps to ensure that the F136 assets and intellectual property are protected.

More than $200 million in F136 hardware is located in 17 facilities, including nine engines under various stages of assembly.

GE and Rolls-Royce will work closely with our Congressional supporters during the 2012 budget process in pursuit of incorporating the engine into the program, and preserving competition. We continue to be encouraged by the bi-partisan support for the engine on the merits of its performance and value. There is a significant willingness in Congress to revisit the F136 funding debate as the consequences of terminating the engine are being fully understood.

From a company personnel standpoint, the F136 termination notice has limited impact because of actions already underway at GE and Rolls-Royce.

Since the DoD “stop work” order in March, GE and Rolls-Royce has been in the process of realigning the GE Rolls-Royce Fighter Engine Team into a core technical team (about 100 people). The team is being sized in a manner consistent with overall JSF schedule slips.

The technical team seeks to protect, enhance, and advance the vital F136 propulsion technologies for JSF and future combat aircraft.

The F136 program has been called a “near model program” by the U.S. Senate.  The F136 engine has met or exceeded performance expectations and demonstrated significant advantages over the Pratt & Whitney engine.  The engine development has been under development since 1996 and is 80% complete with six development engines tested.

In addition to strong performance, the GE/RR F136 development program has been on or ahead of schedule.