The Insider

Northrop Grumman isn't looking to compete for non-survivable drone programs and will focus on drones for high-end threats, CEO Kathy Warden told investors today during the company's first-quarter earnings call.

“We are not looking to compete in a more commoditized part of the market at very low cost and not survivable systems,” Warden said. “That’s just not our business model, and we know that.”

The call comes the day after the Air Force passed up Northrop for the first increment of the Collaborative Combat Aircraft, instead choosing Anduril and General Atomics to make prototypes of the autonomous teaming drones. Boeing and Lockheed Martin were also cut.

The comments also come as the Defense Department moves forward with its Replicator program to field thousands of attritable, autonomous drones in the next year and a half.

Northrop continues to see opportunities to expand its autonomous business globally, Warden said, particularly with the MQ-4C Triton.

“We will remain disciplined in where we invest and what pieces of that market that we pursue,” she said, “but we think that what we provide is still highly relevant.”

During the call, Chief Financial Officer Dave Keffer also noted a slower-than-anticipated growth in the company’s space business with the cancellation of one contract and the loss of another.

The Air Force canceled a classified space program due to budget “concerns and prioritization,” Warden said. The requirement for the capability in the program still exists, she said, and the company will “see how that plays out over time.”

The Missile Defense Agency also picked Lockheed Martin over Northrop Grumman to build the Next Generation Interceptor -- a decision that was made a year early due to budget constraints imposed by Congress as well. 

Northrop will offset some of the changes in the financial outlook with LGM-35A Sentinel and growth in the Space Development Agency portfolio, Keffer said.

The Navy views live, virtual and constructive training as an increasingly valuable capability because it allows the fleet to experiment and practice with new weapon systems and tactics without exposing them to adversaries, according to Vice Chief of Naval Operations Adm. James Kilby.

“We want to be able to train our strike groups and our amphibious ready groups at sea, not attached to a range on the United States, where we can maintain currency and proficiency, where we don’t have to divulge our tactics, where we don’t have to divulge our systems,” Kilby said today during an event held by the Center for Strategic and International Studies.

“Up until recently, we’ve had to kind of retract back and reset our force because we didn’t want people to watch our tactics,” Kilby continued during the panel discussion with other service branch vice chiefs.

LVC technology is used to simulate battle scenarios and virtually connect forces located in separate geographic areas, allowing ships on opposite sides of the globe to train together.

The technology is being used in various training events, including large-scale exercise 2023, which brought together six carrier strike groups, three amphibious ready groups and over 25 live and 50 virtual ships for joint exercises last July.

By allowing the Navy to covertly establish proficiency with new capabilities and then choose when and where to reveal them to adversaries, LVC enhances strategic deterrence, Kilby said today.

The Defense Department has announced $1 billion in military aid for Ukraine following the passage of a $95 billion security supplemental spending package that President Biden signed into law today.

“This package will surge munitions, weapons and equipment forward to support Ukraine’s ability to defend its frontlines, protect its cities and counter Russia’s continued attacks,” DOD said. “With the bipartisan support of Congress, Ukraine can count on strong and resolute U.S. leadership to provide consistent security assistance support -- together with some 50 Allies and partners -- to ensure its brave defenders receive the critical capabilities needed to fight Russian aggression.”

The new military aid package, funded via Presidential Drawdown Authority, includes:

• RIM-7 and AIM-9M missiles for air defense;
• Stinger anti-aircraft missiles;
• Small arms and additional rounds of small arms ammunition, including .50 caliber rounds to counter Unmanned Aerial Systems (UAS);
• Additional ammunition for High Mobility Artillery Rocket Systems (HIMARS);
• 155mm artillery rounds, including High Explosive and Dual Purpose Improved Conventional Munitions rounds;
• 105mm artillery rounds;
• 60mm mortar rounds;
• Bradley Infantry Fighting Vehicles;
• Mine Resistant Ambush Protected Vehicles;
• Humvees
• Logistics support vehicles;
• Tactical vehicles to tow and haul equipment;
• Tube-Launched, Optically Tracked, Wire-Guided missiles;
• Javelin and AT-4 anti-armor systems;
• Precision aerial munitions;
• Airfield support equipment;
• Anti-armor mines;
• Claymore anti-personnel munitions;
• Demolitions munitions for obstacle clearing; and
• Night vision devices; and
• Spare parts, field equipment, training munitions, maintenance, and other ancillary equipment.

In a speech at the White House, Biden said the weapons will begin being transferred from U.S. stocks to Ukraine immediately.

"I'm making sure the shipments start right away,” he said. “In the next few hours -- literally in a few hours -- we are going to begin sending equipment to Ukraine for air defense munitions, artillery for rocket systems, and armored vehicles.”

A PDA action of this kind for Ukraine has not occurred since December 2023 and follows months of partisan gridlock in Congress. The Pentagon did announce a $300 million weapons transfer to Ukraine in March but it was tapping unexpected savings from various Army contracts to do so.

The United States, according to a new DOD fact sheet, has committed more than $44.9 billion in security assistance to Ukraine since the beginning of the Biden administration.

The Senate voted 79-18 last night in support of a $95 billion defense supplemental package that would aid Ukraine, Israel and Taiwan, while also directing about $50 billion into the U.S. defense industrial base.

Defense Secretary Lloyd Austin has said $50 billion of the supplemental funds will flow through more than 30 states.

The Pentagon, meanwhile, is standing by to restart its transfers of U.S. weapons to Ukraine, where military officials say the battle against an ongoing Russian invasion has become dire.

President Biden has said he will sign the bill once it reaches his desk.

This Tuesday INSIDER Daily Digest has news on defense against space attacks, the Army's Project Linchpin and more.

Rather than requiring the commander of U.S. Space Command to provide Congress notice of attempts to "disrupt, degrade or destroy" any such national security space capabilities, a new Defense Department legislative proposal says SPACECOM would only need to tell Congress if the capability is deemed "critical":

DOD seeks changes to reporting on space attacks, space domain awareness sharing

The Defense Department would only need to report foreign attacks on "critical" national security space capabilities under a legislative proposal submitted to Congress last week.

Some Army AI news:

Army focusing on AI 'risk framework' is it embarks on Project Linchpin

The Army is developing a "risk framework" for artificial intelligence as a key priority as the service looks to build out Project Linchpin -- the service's first pipeline for AI and machine learning.

The Defense Department's strategy of ceding intellectual property rights to Lockheed Martin for the F-35 program has so far resulted in poor performance, lawmakers in the House and Senate have said this month, with limited spares and depot capacity being available for repairs, significant delays pushing back deliveries of modernized capabilities and dramatic cost overruns:

Lessons learned from F-35: Air Force will now purchase IP rights of its weapon systems

When the Air Force began buying the F-35 Joint Strike Fighter about 20 years ago, it took a total system approach, meaning prime contractor Lockheed Martin earned the rights to total control of the program, including the intellectual property of its technologies and mechanical parts.

Don't expect major funding for an Army high-energy laser project anytime soon:

Army guts $4.8 billion from IFPC-HEL in new five-year plan, focuses on 'try' before 'buy'

The Army has cut $4.8 billion from planned future spending on the Indirect Fire Protection Capability-High Energy Laser in the service's new five-year spending plan, a dramatic reduction that removes future funding stability for a cruise-missile-killer-and-more project that a key service official says remains a priority.

The Defense Innovation Board's next meeting will take place in July:

DIB discusses studies on partnerships and technology adoption at meeting

The Defense Innovation Board held a meeting yesterday in which guest speakers presented their opinions on two ongoing studies surrounding innovation with allies and accelerating technology adoption, with final recommendations on the studies set to be provided at the board’s July meeting.

Senior defense officials will speak at two closed meetings of the Defense Business Board on May 7 and 8, leading discussions on a variety of Defense Department challenges like adapting technology in line with the National Defense Strategy, global security issues and ways to become a better industry partner.

After welcome remarks from Board Chair Deborah James, the first meeting on May 7 will kick off with a discussion led by Jay Dryer, director of the Strategic Capabilities Office, focused on creating operational strategic effects through implementing emerging technologies, according to a Federal Register notice.

“This discussion will focus on using existing DOD tools and processes to adapt developing technology to key operational challenges in the National Defense Strategy (NDS),” the notice said.

Then, Defense Secretary Lloyd Austin will lead a discussion on DOD current affairs.

“This session is expected to focus on the state of the current global security environment and its implications for current and future business operations,” the notice said.

Additionally, the board will hear a briefing on Naval Research Lab operations, followed by a tour. The briefing and tour will cover management constructs, workforce development and talent management.

“This portion of the meeting will cover how NRL partners with industry to fulfill their mandate and demonstrates capabilities made possible by NRL's organizational constructs and authorities,” the notice said.

James and Deputy Defense Secretary Kathleen Hicks will then provide remarks, although it’s unspecified what they will discuss.

Next, Lt. Gen. Robert Skinner, director of the Defense Information Systems Agency and commander of the joint force headquarters-DOD information network, will update the board on industry partnerships with DISA and explain specific challenges that come with managing a DOD agency.

“The director will offer an overview of DISA's partnerships with various stakeholders to bolster warfighter capabilities, including how DISA is developing global situational awareness and assessing the threat against DISA operations and assets,” the notice said.

Finally, Skinner will also supply recommendations found in the DBB IT User Experience Study conducted in February.

To start the second meeting on May 8, Erin Simpson, director of the joint production accelerator cell in the office of the Pentagon acquisition chief, will lead a discussion on growing production capacity during crises and hurdles impeding DOD’s creation of resilient supply chains.

“The conversation is expected to delve into actions the DOD is taking to prioritize resources and to create a modern, resilient defense industrial ecosystem designed to deter United States adversaries and meet the production demands posed by evolving threats,” the notice said.

Then, Maj. Gen. Joseph McGee, Army director for strategy, plans and policy, J5, will lead a discussion on emerging global threats facing supply chains and the possible outcomes these threats could have.

“This discussion will focus on strategic proactiveness to ensure adaptability, resilience, and continued effectiveness in an ever-evolving security landscape and on how the DOD can partner with industry before and during crises,” the notice said.

Hicks will lead the final discussion on transforming DOD into a more attractive partner for non-traditional companies.

“The Deputy Secretary will share successes the DOD has realized in becoming a better partner for non-traditional defense companies, along with how combinations of traditional and non-traditional companies are working together to accelerate capability development and delivery,” the notice said.

Senior defense officials are scheduled to speak at several events this week and the Army's aviation association hosts a conference in Denver, CO.

Tuesday

AFCEA Washington hosts a discussion with the Space Force staff director.

The Stimson Center hosts a discussion with Navy Secretary Carlos Del Toro.

The Center for Strategic and International Studies hosts a discussion with Chief of Naval Operations Lisa Franchetti for a "smart women, smart power" event.

The Atlantic Council hosts a discussion on "space industry for space strategy."

Wednesday

The Center for Strategic and International Studies hosts a discussion with several senior Pentagon officials during the 2024 Global Security Strategy Forum.

The Army Aviation Association of America hosts its Mission Solutions event in Denver, CO. The event runs through Friday.

Thursday

Defense One hosts a discussion on the Marine Corps.