The Insider

The INSIDER daily digest
By John Liang
February 16, 2016 at 3:26 PM

We kick off this Tuesday INSIDER Daily Digest with news on the LRS-B protest and more.

Boeing's protest of the Air Force's LRS-B contract award to Northrop Grumman has been denied:

GAO did not consider Lombardi conflict of interest in LRS-B protest decision

The Government Accountability Office did not consider a recent disclosure of a potential conflict of interest in the Air Force's decision to award the lucrative Long-Range Strike Bomber contract to Northrop Grumman as part of its decision to deny Boeing's protest of the award.

The Air Force has revealed the full scope of its new Huey replacement program:

Air Force grows nuclear helo fleet program to $2.4B project, potential five-way competition

The Air Force has revealed the full scope of its new Huey replacement program to be a $2.4 billion acquisition -- more than twice the amount the service previously planned -- a prize being eyed by five potential prime contractors who await a planned decision as soon as this spring on an acquisition strategy for the nuclear fleet support helicopter modernization project.

DOD wants $18 billion over the next five years for its "Third Offset" strategy:

Pentagon breaks down 'Third Offset' FYDP investments

The Pentagon is requesting $3.6 billion in fiscal year 2017 and $18 billion over the next five years to invest in the so-called "Third Offset" strategy meant to stem the erosion of U.S. superiority on 21st century battlefields.

The Defense Department has issued a new IR&D policy proposal:

Pentagon proposes new policy for independent research and development spending

After backing down from plans to require a sponsor for independent research and development projects last year, the Pentagon on Tuesday released a new proposal that would require the defense industry to provide more visibility into its IR&D work.

Document: DOD notice on improving IR&D

DOD is figuring out how to spend $100 million allocated to a new "technology offset initiative":

DOD drafting plans to execute $100M, FY-16 'Technology Offset Initiative' created by Congress

The Pentagon is considering how to spend $100 million Congress added to the military's fiscal year 2016 spending bill for a new "technology offset initiative" created to accelerate fielding of high-payoff capabilities -- a goal that ostensibly tracks with an effort unveiled last fall to craft a Third Offset Strategy to bolster conventional deterrence against great powers.

Don't expect the Air Force to fly an "arsenal plane" anytime soon:

Air Force: 'Arsenal plane' still in concept phase

Discussions about a new "arsenal plane" are still in the concept phase, the Air Force said Feb. 12, confirming that the Pentagon has no near-term development plans for an airborne magazine.

A UAV won't be the solution for the Air Force's JSTARS recap effort:

Air Force shoots down UAV option for JSTARS recapitalization platform

Air Force officials settled the debate over the Joint Surveillance Target Attack Radar System recapitalization effort's chosen platform on Friday, affirming the service would seek a business jet over an unmanned aerial vehicle.

The mission scope of the Navy's V-22 Ospreys could be widened:

CNO: Navy is open to using Ospreys for other missions besides carrier on-board delivery

The Navy is purchasing V-22 Ospreys to fulfill its carrier on-board delivery mission, but the service does not want to rule out using the aircraft for other missions including those to support U.S. Special Operations Command, according to Chief of Naval Operations Adm. John Richardson.

Allies support ERI funding
By Jordana Mishory
February 16, 2016 at 3:08 PM

U.S. allies are in support of the Defense Department's decision to invest more money in the European Reassurance Initiative, an effort designed to help keep Russian aggression in check, Pentagon spokesman Peter Cook said during a press briefing Tuesday.

"On the NATO ministerial, we had an opportunity to reaffirm our enduring commitment to the alliance and our transition from reassurance to deterrence," Cook said. "In particular the U.S. decision to invest $3.4 billion, quadrupling spending on the European Reassurance Initiative, was well received by our allies."

"It is a tangible example of the new playbook the secretary has been talking about since last June," Cook continued.

The $3.4 billion figure quadruples the Pentagon's $789 million FY-16 request, which went to fund rotational activities and exercises to "reassure allies and partners of our commitment to their security and territorial integrity," according to a Feb. 2 ERI fact sheet released by the White House.

Seabury promotes Meyer
By Marjorie Censer
February 16, 2016 at 2:12 PM

Seabury Global Aerospace & Defense Consulting said today it has named Paul Meyer, a former Aerojet Rocketdyne executive, chief operations officer.

Meyer joined the company last year as executive vice president after retiring from Aerojet as senior vice president of advanced programs and business development. He also previously served as general manager of Northrop Grumman's advanced programs and technology division and worked at Lockheed Martin's Skunk Works.

Retired Air Force Lt. Gen. C.R. Davis, who previously served as the military deputy to the service's acquisition chief and now is chief executive of Seabury's aerospace and defense group, told Inside Defense that he and Meyer will remain the group's two full-time employees. The consulting group relies on a cadre of independent contractors with lengthy experience in aerospace and defense to work with its clients.

"Demand is keeping us fully engaged right now," Davis said. "We're going to grow this very slowly and very judiciously."

He said Seabury is particularly finding work in helping companies refine their strategies and figure out how to structure their proposals to ensure they're providing what the government is seeking.

Deloitte report: U.S. defense industry expected to add jobs in 2016
By Marjorie Censer
February 16, 2016 at 12:07 PM

A new report from Deloitte predicts the U.S. defense industry will add more than 31,000 employees in 2016.

The report, authored by Tom Captain, notes that U.S. defense companies over the last five years have cut their headcount to adapt to budget cuts. However, the budget is returning to growth.

"Prime defense contractors in the US are expected to be the key beneficiaries from the increase in defense budgets, thereby contributing to the expected rise in employment in the overall [aerospace and defense] sector in 2016," the report says.

In 2014, the defense industry employed 845,000 people, down from 1 million four years earlier, marking an 18 percent drop, according to Deloitte.

Full report: http://www2.deloitte.com/content/dam/Deloitte/us/Documents/manufacturing/us-ad-labor-market-study-2016.pdf

 

Triton completes operational assessment
By Lee Hudson
February 16, 2016 at 10:33 AM

The Navy recently wrapped up the operational assessment for the MQ-4C Triton, the final hurdle before the Pentagon can decide if the system should transition into low-rate initial production.

The service is completing final data analysis before a milestone C decision is made this spring. The Northrop Grumman-built Triton unmanned air vehicle completed about 60 flight hours during the assessment, according to a company statement.

"The aircraft system's ability to classify targets and disseminate critical data was also examined as part of the operational effectiveness and suitability testing," the statement reads.

Inside Defense reported last November that the OA began several months after it was originally anticipated because of continued integration work.

Pakistan approved for $700M in F-16s
By Courtney McBride
February 16, 2016 at 9:55 AM

The State Department has approved the possible sale of fighter aircraft to Pakistan, according to a Feb. 12 notice from the Defense Security Cooperation Agency.

The potential sale would include eight F-16 Block 52 Aircraft (two C and six D models), as well as 14 Joint Helmet Mounted Cueing Systems (JHMCS), for an estimated major defense equipment value of $564 million and a total estimated value of $699 million.

The aircraft would “facilitate operations in all-weather, non-daylight environments, provide a self-defense/area suppression capability, and enhance Pakistan’s ability to conduct counter-insurgency and counterterrorism operations,” according to DSCA.

The agency says the proposed transaction “contributes to U.S. foreign policy objectives and national security goals by helping to improve the security of a strategic partner in South Asia.”

No contractors have been selected for the potential sale, which is not projected to adversely impact U.S. defense readiness.

The State Department notified Congress of the possible sale on Feb. 11.

Notice: http://dsca.mil/sites/default/files/mas/pakistan_15-80.pdf

Inside the Army highlights
By John Liang
February 16, 2016 at 9:05 AM

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

1. The Army is expected to move forward with a competition for a Patriot-replacement radar this year if the Office of the Secretary of Defense approves an analysis of alternatives, according to just-released budget documents and service officials.

Full story: Vendor competition for lower-tier antimissile radar could begin this year

2. Two lawmakers on the House Armed Services Committee last week proposed legislation that would stop Army end-strength reductions at 475,000 troops, an idea that had service officials questioning where the requisite funding would come from.

Full story: Lawmakers move to halt active Army cuts at 475,000 soldiers

3. The Army plans to use some money in fiscal year 2017 to finance survivability-enhancing pilot projects on its key combat-vehicle fleets, to include experiments with commercial active-protection systems, according to officials and budget documents.

Full story: Abrams, Bradley, Stryker are in line for active-protection pilot projects

Inside the Navy highlights
By Lee Hudson
February 16, 2016 at 9:00 AM

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

1. The Navy is aiming to zero out a fund used for sealift and auxiliary ships, a move the service first tried and failed to make two years ago, but may now have a better chance of getting approved after congressional appropriators prohibited using the account to award new contracts in the latest annual spending bill.

Full story: Navy again proposes disestablishing National Defense Sealift Fund

2. Marine Corps Commandant Gen. Robert Neller says he is willing to pare down infantry brigades and other operational forces in order to fill cyber, electronic warfare and information warfare specialties within the service.

Full story: Neller: Marines could cut operational forces to man cyber, IW roles

3. The F-35 joint program office will kick off its Block 4 modernization program six to 12 months late because the program's requirements are not validated.

Full story: F-35 modernization program delayed by six to 12 months

DOD reports to Congress on North Korean threat
By Tony Bertuca
February 12, 2016 at 4:31 PM

North Korea continues to put resources toward developing a nuclear missile capable of reaching the continental United States, according to a recent Pentagon report sent to Congress.

The report, released Feb. 12, comes on the heels of a North Korean nuclear test in January and a long-range rocket test earlier this month.

North Korea's key weapon for potentially striking the U.S. homeland remains the KN08 Intercontinental Ballistic Missile, which “if successfully designed and developed . . . would be capable of reaching much of the continental United States, assuming the missiles displayed are generally representative of missiles that will be fielded,” the report states.

“However, ICBMs are extremely complex systems that require multiple flight tests to identify and correct design or manufacturing defects,” the report continues. “Without flight tests, the KN08’s current reliability as a weapon system would be low.”

The report also highlights North Korea's cyber capabilities.

“North Korea has an offensive cyber operations (OCO) capability,” the report states. “Implicated in malicious cyber activity and cyber effects operations since 2009, North Korea probably views OCO as an appealing platform from which to collect intelligence and cause disruption in South Korea and other adversaries including the United States. North Korea likely views cyber as a cost-effective, asymmetric, deniable tool that it can employ with little risk from reprisal attacks, in part because its networks are largely separated from the Internet and disruption of Internet access would have minimal impact on its economy.”

The Pentagon names North Korea as a top threat to U.S. security in its recently released $583 billion budget request.

The INSIDER daily digest
By John Liang
February 12, 2016 at 2:04 PM

We kick off this Friday INSIDER Daily Digest with news on the Long-Range Strike Bomber and more.

The Pentagon's inspector general is looking into the LRS-B competition:

IG investigating potential conflict-of-interest in LRS-B source selection

The Air Force said Friday that it's "too early to tell" whether the recent disclosure that the spouse of a top acquisition official has a Northrop Grumman retirement account will impact the ongoing protest of the Long-Range Strike Bomber award.

The Air Force wants more money to pay for additional unmanned aerial vehicle pilots:

Air Force's FY-17 budget boosts RPA pilots, combat patrols

In its proposed fiscal year 2017 budget request, the Air Force focused base budget funds on improving its ailing remotely piloted aircraft force, while relegating overseas contingency operations funds for the vehicles that could satisfy the service's insatiable ISR need.

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

Remember that big Army blimp that broke its tether and floated over a few states? Well, it could be making a comeback:

Pentagon pushing to let missile-defense blimp fly again

Top Pentagon leaders are said to favor replacing a military airship that was hovering north of Baltimore to watch over the Washington region until it broke from its tether in a spectacular accident that attracted national attention last October, according to defense officials.

The Marine Corps wants to cut the number of Joint Light Tactical Vehicles it would buy in FY-17:

Neller: FY-17 JLTV buy reduced to protect Amphibious Combat Vehicle, new radars

The Marine Corps' top official says the service chose to cut its Joint Light Tactical Vehicle purchase by 77 trucks in fiscal year 2017 to protect high-priority programs like the Amphibious Combat Vehicle.

(Related: The U.S. Court of Federal Claims on Thursday denied Lockheed Martin's request to make Oshkosh halt all work on the Joint Light Tactical Vehicle until an ongoing dispute over the contract award is resolved. Click here for more.)

The buyer of iRobot's defense and security business has additional plans:

Private-equity buyer plans to expand iRobot defense unit's capabilities

An executive at private-equity firm Arlington Capital Partners, which has agreed to buy iRobot's defense and security business, said Thursday he expects to add to the business with acquisitions.

The Army wants to save money in the way it buys helicopters:

Army wants to lock down bulk of helicopter purchases in pair of deals worth $7 billion

The Army wants to consolidate the bulk of its major helicopter purchases into a pair of multiyear contracts beginning in fiscal year 2017 -- a $3.3 billion deal with Boeing and a $3.7 billion deal with Lockheed Martin's Sikorsky -- a move the service claims could save nearly $900 million.

The Joint Strike Fighter program is facing a new delay:

F-35 modernization program delayed by six to 12 months

The F-35 joint program office will kick off its Block 4 modernization program six to 12 months late because the program's requirements are not validated, according to an official.

SAIC CEO: DOD's Silicon Valley push provides opportunity
By Marjorie Censer
February 12, 2016 at 1:34 PM

Tony Moraco, chief executive of Science Applications International Corp., said today federal contractors could play an important role in helping non-traditional players provide their technology to the Pentagon.

Speaking at a Northern Virginia Technology Council breakfast, Moraco said "getting non-traditional players in the game is important."

"If you are strictly commercial, finding a federal contractor partner may be a path that you consider," he said.

In turn, he added, federal contractors can be effective at helping commercial technologies get through the challenges of doing business with the government.

Federal agencies, he said, "not only need the technology, but they demand compliance around program management, system engineering, procurement requirements."

"You have to be compliant or you put your whole program at risk," Moraco added.

Future SBIRS
By Courtney Albon
February 12, 2016 at 11:58 AM

The Pentagon's cost assessment and program evaluation office has signed off on a two-year-long review of the Air Force's Space-Based Infrared System.

Maj. Gen. Roger Teague, director of space programs in the Air Force's acquisition office, told reporters this week that the service is now working to develop an acquisition strategy for the SBIRS follow-on program.

The recently completed analysis of alternatives considered 80 potential new SBIRS architectures and then narrowed those options to just nine.

Lockheed Martin loses JLTV stop-work request
By Sebastian Sprenger
February 12, 2016 at 8:33 AM

The U.S. Court of Federal Claims on Thursday denied Lockheed Martin's request to make Oshkosh halt all work on the Joint Light Tactical Vehicle until an ongoing dispute over the contract award is resolved.

The docket report in the case shows that Judge Charles Lettow issued a sealed order to that effect, asking all parties to submit a joint status report "addressing further proceedings in this action."

Lockheed believes its offering for the big-ticket vehicle program was unfairly evaluated when the Army and Marine Corps gave Oshkosh a production deal last summer.

Oshkosh celebrated announcement in a statement Friday morning.

"This decision is another indication that the U.S. Army conducted a thorough, methodical procurement process, and we are confident that the original JLTV contract award to Oshkosh will be upheld," Wilson Jones, Oshkosh president and chief executive officer, was quoted as saying, adding: "The Oshkosh JLTV team, including our employees and hundreds of suppliers, is pleased to continue our work to deliver JLTVs to our nation's Soldiers and Marines."

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

Inside the Air Force highlights
By John Liang
February 12, 2016 at 8:00 AM

Here are some must-reads from this week's edition of Inside the Air Force:

1. The F-35 joint program office will kick off its Block 4 modernization program six to 12 months late because the program's requirements are not validated, according to an official.

Full story: F-35 modernization program delayed by six to 12 months

2. The Air Force's fiscal year 2017 budget for the next-generation Global Positioning System ground control system includes a "late add" of $234 million to account for its best guess at how a new, two-year development delay will impact the near-term costs and shows a $1.6 billion spike in the program's total cost.

Full story: FY-17 budget shows $234M increase for OCX, $1.6B jump in total cost

3. As the Air Force continues to explore options for financing a B-52 re-engining project, the office in charge of the effort is optimistic the service will identify a feasible way ahead.

Full story: Air Force OTI office optimistic about business case for B-52 re-engining

4. The Air Force could lay out its acquisition strategy for the UH-1N replacement this spring, a plan that has moved away from a modified service aircraft option toward a possible sole-source acquisition.

Full story: Air Force steps away from modified service aircraft for Huey replacement

DOD's latest operational energy strategy
By John Liang
February 11, 2016 at 4:21 PM

The Obama administration's shift in focus to the vast expanse of the Asia-Pacific region "necessitates a second look at operational energy priorities," according to the Pentagon's latest Operational Energy Strategy.

The Defense Department's emphasis on buying oil and gas "as close as possible to the point of use" also poses inherent risks for the U.S. military, the report reads, adding:

In response to these challenges, the 2016 Operational Energy Strategy takes advantage of improved technology and the Department's steadily improving understanding of operational energy challenges to ensure the consistent delivery of energy to the warfighter.

Specifically, the Department will pursue the following objectives:

*       Increase future warfighting capability by including energy throughout future force development.

*       Identify and reduce logistics and operational risks from operational energy vulnerabilities.

*       Enhance the mission effectiveness of the current force through updated equipment and improvements in training, exercises, and operations.