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The INSIDER daily digest
By John Liang
February 24, 2016 at 2:52 PM

The question of what is an "Arsenal Plane" highlights this Wednesday INSIDER Daily Digest.

Is the "Alternative Strike" program really the "Arsenal Plane" in disguise . . . ?

DOD wants 'Alternative Strike' -- or it the 'Arsenal Plane'? -- airborne as soon as 2018

Where is the "Arsenal Plane"? The Defense Department won't say. But the secretive Strategic Capabilities Office has kicked off a program called "Alternative Strike" that sounds strikingly similar, would have a "launch platform" ready for testing as soon as 2018, and is seeking a $200 million down payment in the fiscal year 2017 budget request.

The Aegis Ashore test facility in Hawaii could become operational:

PACOM chief calls for Aegis Ashore test site study

The Defense Department must begin a study on converting the Aegis Ashore test facility in Hawaii into an operational site to defend the homeland, according to the U.S. Pacific Command chief.

(Want more Aegis Ashore news? Check out our Notification Center, where you can sign up to receive email alerts whenever a related story is posted.)

Analysts weigh in on Raytheon's bid for the Air Force future training aircraft program:

Raytheon broadens portfolio with planned bid for T-X program

Raytheon's announcement this week that it will bid for the Air Force's next-generation trainer program signals an effort to move into adjacencies as defense spending shrinks, analysts say.

More submarines are needed in the Pacific:

PACOM chief sees attack submarine 'shortfall'

The chief of U.S. Pacific Command says he needs more submarines to facilitate the military rebalance to the Asia-Pacific region, an area of the world dominated by the world's largest ocean and an increasingly militaristic China.

Document: Senate hearing on PACOM, USFK

Keep an eye out for the results of a broad, interagency review of a DOD proposal to regulate defense industry mergers and acquisitions:

Kendall's proposal to regulate defense industry M&A under review

The Pentagon's acquisition chief says his newly drafted proposal recommending Congress take steps to regulate consolidation among major defense contractors is being reviewed by "interagency" authorities, including the Federal Trade Commission, the Justice Department and the House and Senate Judiciary committees.

Raytheon's GPS OCX effort is in trouble:

Kendall: DOD considering 'partial cancellation' of GPS OCX

The Defense Department will consider "at least a partial cancellation" of the next-generation Global Positioning System ground segment if prime contractor Raytheon doesn't deliver over the next few months, according to Pentagon acquisition chief Frank Kendall.

Protest spotlight
By Marjorie Censer
February 24, 2016 at 2:34 PM

(This regular feature highlights protests decided by the Government Accountability Office.)

Agency: Naval Surface Warfare Command

Awardee: Ocenco

Protester: Avon Protection Systems

What GAO found: Avon Protection Systems filed a protest against the award of a contract by Naval Surface Warfare Command to Ocenco for emergency escape breathing devices.

Avon and Ocenco first submitted proposals in December 2014, and the Navy selected Ocenco in May 2015. Avon protested the award, but GAO dismissed the case once the Navy said it planned to reevaluate the proposals.

"The reevaluation resulted in Avon's proposal and Ocenco's proposal receiving essentially the same ratings as the prior competition, except Avon's past performance improved to very relevant/substantial confidence and a slight increase in Avon's evaluated price," the report says. Avon submitted a proposal priced at $33.9 million, compared to Ocenco's price of just under $22 million.

In the latest protest, Avon argued the Navy should have found Ocenco's price "unrealistically low" and contended the agency improperly evaluated theOcenco proposal. However, GAO denied the protest.

Read the decision: http://www.gao.gov/assets/680/675381.pdf

DOD issues 'trusted suppliers' list
By John Liang
February 24, 2016 at 1:56 PM

The Defense Department recently released a comprehensive list of all the military contractors designated as "trusted suppliers."

The list showcases 71 suppliers from across the country ranging in areas like "design," "aggregation," "broker," "mask data parsing," "mask manufacturing," "foundry," "post-processing," "packaging/assembly," and "test."

Inside Defense reported last December that lawmakers want DOD to explain how losing U.S.-based trusted foundries negatively impacts its weapon systems that require trusted microprocessors:

In the fiscal year 2016 omnibus spending bill, which President Obama signed into law Friday, lawmakers call for the defense secretary to submit a report to the congressional defense committees within 90 days of the law's enactment that addresses these issues.

"Maintaining a United States-based foundry that supplies trusted microprocessors for the Department of Defense and the intelligence community is a concern," according to the omnibus. "It is noted that near-term and long-term plans are being developed by the Department of Defense to address access to microprocessors from trusted sources."

The defense secretary's report, which can be submitted in a classified form if necessary, should list out DOD weapons that require trusted microprocessors and "a description on how the loss of a United States-based trusted foundry impacts these systems," according to the omnibus.

Navy CIO updates IT 'acceptable use' policy
By John Liang
February 23, 2016 at 4:03 PM

The Navy's chief information officer has updated the service's information technology "acceptable use" policy.

Robert Foster, in a Feb. 12 memo, writes:

DON IT resources greatly enhance our warfighting and business processing capabilities. Appropriately controlling access to, and personal use of, DON IT resources is a leadership issue. Commanders, commanding officers, civilian leaders and officers in charge must ensure users use DON IT resources in an acceptable manner and in accordance with policy. Adhering to this policy and instilling a climate of accountability combined with an effective command education program supports a solid defense-in-depth approach.

Inside the Navy reported last July that the service would establish an information technology systems engineering team in 2016 to implement cybersecurity initiatives focused on the Navy's internal intranet system.

Navy spokesman Edward Austin said at the time that the Naval Enterprise Networks Systems Engineering Team works on efforts directed by the Navy-Marine Corps Intranet network operator, Naval Networks Warfare Command.

"The program continues to improve support to the operational commander, and the standup of this team is a key part of continuing to improve the cybersecurity posture of NMCI," he told ITN in a July email.

The INSIDER daily digest
By John Liang
February 23, 2016 at 1:53 PM

We kick off this Tuesday INSIDER Daily Digest with news on the Navy's unmanned aerial tanker and more.

Expect to see a draft RFP for the Navy's unmanned aerial tanker soon:

Navy will release CBARS solicitation within the next few months

The Navy intends to release a draft request for proposals within the next few months for the highly anticipated unmanned airborne tanker operating from an aircraft carrier, according to a service official.

A look at Rockwell Collins' government business unit:

After reshaping, Rockwell Collins' government unit pitches commercial advantage

Rockwell Collins' government business has shrunk to adapt to tougher times, but the unit's top executive says it's now well positioned to take advantage of Pentagon interest in commercial technology.

LRSO production is scheduled to begin production in 10 years:

Air Force to start Long-Range Standoff Weapon production by 2026

The chief of Air Force Global Strike Command has reaffirmed the service's commitment to the Long-Range Standoff Weapon after announcing plans to begin production of the Air-Launched Cruise Missile replacement in 2026 and reach initial operational capability by 2030.

Putting more money into OCO might not be so bad, according to the top Democrat on the House Armed Services seapower and projection forces subcommittee:

Rep. Courtney: House Dems may not be staunchly opposed to OCO increase

A top Democrat on the House Armed Services Committee says increasing fiscal year 2017 Overseas Contingency Operations funding above the $59 billion requested by the Obama administration may not be a total non-starter for members of his party on the panel.

The lead ship of the Navy's Ford-class aircraft carrier could face a new delay:

Ford-class aircraft carrier delivery may be delayed up to three months

Delivery of the Navy's multibillion-dollar Ford-class aircraft carrier lead ship may be delayed by up to three months, according to the shipbuilder and fiscal year 2017 budget justification documents.

The Navy wants to upgrade the MQ-8 Fire Scout's landing system:

During integration, Navy identified MQ-8 landing system prone to failures

After discovering the MQ-8 Fire Scout's landing system is susceptible to failures the Navy is looking for new technologies to augment the existing approach, according to a service official.

Looks like the Littoral Combat Ship will be getting a Harpoon missile system:

Navy picks Harpoon missile for quick deployment on LCS

The Navy is contracting with Boeing to install a Harpoon missile system on a Littoral Combat Ship this year, carrying out a directive from a top official last fall to outfit forward deploying LCSs with over-the-horizon missiles.

GOP delays budget blueprint
By Tony Bertuca
February 23, 2016 at 11:52 AM

The GOP-led House Budget Committee will not take up the fiscal year 2017 budget resolution this month, according to a committee aide, who said consideration of the blueprint was being punted until March.

The aide said an existing FY-17 budget resolution enjoys "overwhelming support" among committee members, but added that the committee feels it would be best to wait until it can be first introduced to the broader GOP conference.

The existing resolution includes multiple options for Congress to consider that would direct mandatory savings, though neither the Budget Committee, nor the resolution, endorses a specific course of action.

Other Hill staffers said the delay was being driven by the need for GOP leadership to sell the plan to fiscal conservatives from the Freedom Caucus, who strongly criticized spending levels authorized by a bipartisan budget deal that staved off a government shutdown last year. The spending levels were above those mandated by the 2011 Budget Control Act.

The Budget Committee aide said congressional consideration of appropriations bills is not expected to occur until April, noting that the panel has plenty of time to introduce and consider a budget resolution next month.

"This proposal enjoys the overwhelming support of the committee members, and the chairman looks forward to sharing it with the broader Conference as we continue moving this process forward," according to committee spokesman Ryan Murphy.

Kate Blakeley, an analyst at the Center for Strategic and Budgetary Assessments who used to work at the Congressional Research Service, weighed in.

"Sounds like they will couple topline discretionary numbers -- possibly lower than the budget deal of 2015 -- with a menu of proposals to cut mandatory programs -- Social Security, Medicare, etc. Probably reprising frequent pitches like raising the eligibility age for [Social Security]," she wrote in an email.

"They might do a queen-of-the-hill style vote, where the bill with the most votes is the one that is considered to have passed, so they can try out multiple options while only committing to the winner," she added. "That's what they did with competing budget proposals in the House in 2015."

But Blakeley said the "bigger picture" was how the "fiscal hawk/Tea Party side" of the House Republican Caucus continued to buck House Speaker Paul Ryan's (R-WI) authority.

"There's been stories in the last few days about House conservatives/fiscal hawks wanting to keep spending for FY-17 at the BCA levels and pursue mandatory spending changes to reduce the deficit, while Ryan wants to stick to the negotiated FY-17 BCA level and tackle mandatory spending later," she said. "This is the first big test of Ryan's ability to thread the needle within his caucus -- either bringing the Tea Party folks along, or having to buck and pass things with Dem[ocrat] support, like [former House Speaker John] Boehner did."

DOD touts proposed Gitmo closure savings
By Tony Bertuca
February 23, 2016 at 10:29 AM

The Defense Department formally submitted the Obama administration's plan for closing the Guantanamo Bay detention facility today, a proposal that would allegedly save $335 million over the next 10 years and $1.7 billion over 20 years, according to a statement from Pentagon Press Secretary Peter Cook.

"The plan does include ranges of costs for closure, including low-end and high-end potential one-time costs and recurring costs," he said. "It also discusses savings that would be achieved by closure. The savings range reflects differing variables, like location selected and differing options in detention models."

Recurring costs at Guantanamo would be between $65 million and $85 million higher annually than at a U.S. detention facility, according to Cook.

"The one-time transition costs would be offset within three to five years due to the lower operating costs of a U.S. facility with fewer detainees," he said.

Cook, however, acknowledged that there "are currently statutory provisions restricting the transfer of Guantanamo detainees to the United States and the use of funds to build or modify facilities for such transfers," but adds that "the administration looks forward to working with Congress to lift those restrictions."

The plan does not endorse a specific facility to house Guantanamo detainees and the administration "seeks an active dialogue with Congress on this issue to identify the most appropriate location as soon as possible," Cook said.

Many in Congress are expected to oppose the administration's proposal and House Speaker Paul Ryan (R-WI) has called any plan to re-locate Guantanamo-based detainees to the United States a "non-starter."

General Dynamics acquires Bluefin Robotics
By Marjorie Censer
February 22, 2016 at 5:10 PM

General Dynamics Mission Systems said today it has purchased Bluefin Robotics, which manufactures unmanned undersea vehicles.

In a statement, Chris Marzilli, president of the GD business unit, said Bluefin's underwater technologies align with GD's experience in undersea systems integration. The deal, he said, would position the company well to support the Navy.

Bluefin will become part of the GDMS maritime and strategic systems business line. The company said it would not disclose the price it paid.

The INSIDER daily digest
By John Liang
February 22, 2016 at 12:37 PM

We kick off this Monday INSIDER Daily Digest with some budget news and more.

DOD issued its defense-wide FY-17 RDT&E and procurement budget books:

DOD's defense-wide FY-17 RDT&E budget justification books

DOD's defense-wide FY-17 procurement budget justification books

A preview of how DOD plans to fund its Strategic Capabilities Office:

Pentagon plans $2.1B for Strategic Capabilities Office investments over FYDP

The Pentagon is planning to fund the Strategic Capabilities Office to the tune of $2.1 billion over the next five years in the hopes of supporting the secretive outfit's efforts to develop "game-changing" capabilities intended to give the United States a technological edge over emerging global threats, according to new budget documents that outline the SCO's planned investments.

Keep an eye out for a Defense Science Board study that's currently underway:

Kendall commissions 'gray zone' study in search of potential new playbook, technology

An influential Pentagon advisory panel is set to tackle the "gray zone" -- potentially laying the groundwork to formally codify an entirely new conflict paradigm for U.S. military planners alongside nuclear, conventional, and counter-terrorism operations -- in a new study that seeks to identify, among other things, new planning techniques and technologies the Defense Department might develop.

Document: DSB terms of reference memo for constrained military ops study

A look at the Army's recent Unified Quest campaign:

Speed of global security 'events' has Army questioning its organization

As global events affecting U.S. national security unfold increasingly quickly, the Army has begun wondering if its organizational principles have kept pace, according to service officials.

Some lawmakers don't want the Army to shrink below a certain size:

House bill on troop numbers may force Army to 'regroup,' bear additional costs

Legislation introduced by members of the House Armed Services Committee that would boost the end strength of the active Army to 480,000 at the end of fiscal year 2016 would force the Army to "regroup," as its FY-17 budget is predicated on reducing to 460,000, according to service budget officials.

Expect the Army to take delivery of some up-gunned Strykers in the middle of next year:

Army expects to take delivery of up-gunned Strykers beginning in July 2017

The Army expects to take delivery of 83 Stryker vehicles outfitted with 30 mm cannons over the course of one year, starting in July 2017, newly released service budget documents indicate.

The Army wants new engine concepts for its next-generation helicopter:

Army seeks proposals on Future Vertical Lift engines

The Army is seeking new engine concepts to support its proposed Future Vertical Lift (FVL) family of aircraft, which is intended to dramatically outstrip the speed and range of existing platforms.

The week ahead
By Tony Bertuca
February 22, 2016 at 11:59 AM

The week ahead is dominated by congressional hearings on the FY-17 defense budget, the most high-profile of which features Defense Secretary Ash Carter and Chairman of the Joint Chiefs Gen. Joseph Dunford appearing before House appropriators.

Tuesday

The Senate Armed Services Committee will hear from the chief of U.S. Pacific Command and the chief of U.S. forces in Korea.

The Senate Armed Services strategic forces subcommittee will hold a hearing with Defense and Energy department officials on atomic energy defense activities and programs.

Wednesday

The House Armed Services Committee will hold a hear from the chief U.S. Pacific Command and the chief of U.S. forces in Korea on challenges in the the Asia-Pacific region.

The House Armed Services emerging threats and and capabilities subcommittee will hear from Pentagon officials on fiscal year 2017 science and technology investments.

The House Armed Services strategic forces subcommittee will hear from U.S. Strategic Forces Command and the Pentagon's principal deputy under secretary for policy on U.S. strategic forces posture.

Thursday

The House Appropriations defense subcommittee will hear from Carter, Dunford and Pentagon Comptroller Mike McCord on the FY-17 budget.

Link: http://1.usa.gov/1TvkvBZ

The House Armed Services Committee will hear from chief of U.S. European Command on strategic challenges and deterrence in Europe.

The House Armed Services seapower subcommittee will hear from Navy officials on the FY-17 budget.

BWX Technologies is set to discuss its fourth-quarter earnings at 8:30 a.m.

Friday

The House Armed Services readiness subcommittee will hear from Army officials on the FY-17 budget.

Link to all House Armed Services Committee hearings: http://1.usa.gov/1Q6nKgI

Link to all Senate Armed Services Committee hearings: http://1.usa.gov/RmEbep

Raytheon, Alenia to join T-X trainer competition with T-100 bid
By Courtney Albon
February 22, 2016 at 11:26 AM

Raytheon announced Monday that it will partner with Alenia to offer the T-100 aircraft as part of its solution for the Air Force's competition to build a next-generation trainer.

The company is partnering with Alenia, CAE and Honeywell Aerospace to deliver a solution that combines the T-100 aircraft with a "leading-edge," ground-based training system, according to a press release issued Feb. 22.

"Our affordable, low risk, open systems solution combines a proven aircraft with a suite of fully integrated training technologies. Our team is best positioned to bring the essential experience, capabilities and core competencies together to meet the United States Air Force's mission requirements," Rick Yuse, Raytheon's president of space airborne systems said in the release.

Alenia and CAE had previously partnered with General Dynamics for the T-X trainer competition, but GD withdrew from the partnership last year. The new, Raytheon-led team will compete against a Northrop Grumman-BAE Systems team, a Boeing and Saab team as well as a Lockheed Martin-Korea Aerospace Industries team.

The Air Force expects to award a contract for T-X in fiscal year 2017.

Inside the Army highlights
By Sebastian Sprenger
February 22, 2016 at 9:05 AM

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

1. As global events affecting U.S. national security unfold increasingly quickly, the Army has begun wondering if its organizational principles have kept pace, according to service officials.

Full Story: Speed of global security 'events' has Army questioning its organization

2. Legislation introduced by members of the House Armed Services Committee that would boost the end strength of the active Army to 480,000 at the end of fiscal year 2016 would force the Army to "regroup," as its FY-17 budget is predicated on reducing to 460,000, according to service budget officials.

Full Story: House bill on troop numbers may force Army to 'regroup,' bear additional costs

3. The Army expects to take delivery of 83 Stryker vehicles outfitted with 30 mm cannons over the course of one year, starting in July 2017, newly-released service budget documents indicate.

Full Story: Army expects to take delivery of up-gunned Strykers in July 2017

4. The Army is seeking new engine concepts to support its proposed Future Vertical Lift (FVL) family of aircraft, which is intended to dramatically outstrip the speed and range of existing platforms.

Full Story: Army seeks proposals on Future Vertical Lift engines

Inside the Navy highlights
By Lee Hudson
February 22, 2016 at 9:00 AM

OCO spending and the Ford-class aircraft carrier are among the highlights of this week's Inside the Navy:

1. A top Democrat on the House Armed Services Committee says increasing fiscal year 2017 Overseas Contingency Operations funding above the $59 billion requested by the Obama administration may not be a total non-starter for members of his party on the panel.

Full Story: Courtney: House Dems may not be staunchly opposed to OCO increase

2. Delivery of the Navy's multibillion-dollar Ford-class aircraft carrier lead ship may be delayed by up to three months, according to the shipbuilder and fiscal year 2017 budget justification documents.

Full Story: Ford-class aircraft carrier delivery may be delayed up to three months

3. After discovering the MQ-8 Fire Scout's landing system is susceptible to failures the Navy is looking for new technologies to augment the existing approach.

Full Story: During integration Navy identified MQ-8 landing system prone to failures

Kratos closing Charleston Marine Container plant
By Marjorie Censer
February 19, 2016 at 4:18 PM

Kratos Defense & Security Solutions said today it is consolidating certain facilities used by its modular systems division and will close its Charleston Marine Container manufacturing plant.

"The facility consolidation is being driven by the need to improve MSD manufacturing efficiencies, operational performance, profit margins and cash flow," the company said.

In a statement, Eric DeMarco, Kratos' chief executive, said the company will retain the plant so that it can be reopened when there is enough new business.

For more on Kratos, check out Inside Defense's latest story on the company: http://insidedefense.com/daily-news/seeking-growth-kratos-chief-says-company-investing-new-technology

Courtney: House Dems may not oppose OCO increase
By Justin Doubleday
February 19, 2016 at 3:11 PM

A top Democrat on the House Armed Services Committee says increasing fiscal year 2017 overseas contingency operations funding above the $59 billion requested by the Obama administration may not be a total non-starter for members of his party on the panel.

In a Feb. 19 interview with Inside Defense, Rep. Joe Courtney (D-CT), the ranking member on the House Armed Services seapower subcommittee, said Democrats on the full committee have yet to caucus to discuss the Pentagon's budget request released Feb. 9.

But Courtney said he believes Democrats may not be completely opposed to an OCO increase. The issue thus far has pitted the administration against House Armed Services Committee Chairman Mac Thornberry (R-TX), who argues the budget agreement reached last year set $59 billion as a floor for OCO, not a ceiling. Thornberry wants to increase OCO funding by as much as $23 billion above the administration's request.

“I haven't talked to people explicitly yet, but to me, the take-away is I think people are going to be very cautious and recognize that this issue is very fluid in terms of how it actually plays out,” Courtney said of committee Democrats. “I don't think people are going to be digging in with a staunch position in opposition to looking at OCO, more OCO, as this thing unfolds.”

Some of the most pressing questions borne from the Navy's budget request, Courtney noted, hinge on the final OCO number. Read about the rest of the interview with the Connecticut lawmaker in the Feb. 22 issue of Inside the Navy.