The Insider

This Wednesday INSIDER Daily Digest has news on Army funding for unmanned systems, Navy submarine funding, the Marine Corps' Autonomous Low Profile Vessel program and more.

The Army's top civilian spoke at the Defense News conference in Arlington, VA this morning:

Wormuth expects line item consolidation for UAS, cUAS, EW funding to show up in FY-26

The areas of unmanned aerial systems, counter UAS and electronic warfare are slated to undergo budgetary line item consolidation when the fiscal year 2026 budget is rolled out next spring, Army Secretary Christine Wormuth said today.

A Biden administration request for continuing resolution "anomalies" obtained by Inside Defense states that "language is needed" to appropriate $1.95 billion to the Navy's shipbuilding account for "expenses necessary for procurement of two Virginia-class submarines":

White House seeks nearly $2B in CR relief for Navy subs

The White House is asking Congress to avert a government shutdown next month by passing a stopgap continuing resolution that would run through mid-December and include nearly $2 billion to procure two Virginia-class submarines, according to the Office of Management and Budget.

Document: OMB's request for CR 'anomalies'

The Autonomous Low Profile Vessel (ALPV) -- a 55-foot, semi-submersible unmanned platform developed by the Marine Corps over the past year and a half as a means of carrying missiles and other equipment to land forces -- has performed well in recent tests according to Brig. Gen. Simon Doran, who said the service is eager to field the system:

Marine Expeditionary Unit to begin testing autonomous resupply vessel in Indo-Pacific this fall

The Marine Corps will send a developing autonomous vessel, intended to covertly resupply stand-in forces with weapons and supplies, to the Japan-based 3rd Marine Expeditionary Unit for field testing this fall, according to the head of the Marine Corps Warfighting Laboratory.

A new Defense Department inspector general's report "found that the Air Force did not consistently hold contractors accountable in a timely fashion for providing defective spare parts, nor did it obtain restitution from the contractors for those defective parts":

DOD watchdog: Air Force not consistent in seeking restitution for defective spare parts

The Air Force has taken on millions in losses because personnel lack training to adequately identify defective parts or correctly seek restitution from contractors, according to a recent report from the Pentagon’s inspector general.

Document: DOD IG audit of Air Force defective parts and contractor restitution

A new Pentagon proposal would change language in the 2023 Code of Federal Regulations on other transaction agreements for prototype projects:

DOD proposes rule to streamline prototyping

The Defense Department is proposing to expand and clarify language in the regulatory code allowing the implementation of authorities granted by Congress in a 2023 update to the U.S. Code regarding procurement of prototype projects, according to a recent Federal Register notice.

This Tuesday INSIDER Daily Digest has news on artificial intelligence and more.

The launching of the Defense Department's chief digital and artificial intelligence office's Open Data and Analytics Government-owned Interoperable Repositories (Open DAGIR) initiative was the office's recognition that the government’s typical practice of selling software capabilities in vertically integrated stacks wouldn’t produce the best results for DOD:

DOD innovators wrestling with bureaucracy, cultural barriers

The Defense Department's aversion toward risk and change, coupled with its tendency to cling to traditional acquisition processes, are its biggest barriers to adopting new technologies and capabilities, according to Pentagon innovation leaders.

A new Accreditation of GEOINT AI Models, or AGAIM, will evaluate the "methodology and robustness" of an artificial intelligence model's development and test procedures:

NGA piloting AI model validation system

The National Geospatial-Intelligence Agency is piloting a program to accredit artificial intelligence models to create a unified validation system across the agency, according to director Vice Adm. Frank Whitworth.

A $200 million "administrative settlement" between the State Department and RTX will resolve 750 violations of the Arms Export Control Act and International Traffic in Arms Regulations:

RTX to pay $200M fine for allegedly exporting defense tech to China

RTX, formerly known as Raytheon Technologies, has agreed to pay a $200 million civil penalty for allegedly exporting U.S. defense technology and intellectual property to foreign countries, including China, according to a new State Department announcement.

Defense Department officials aren't paying full price for the F-35 Joint Strike Fighter just yet:

Pentagon withholding $5 million per tail as Lockheed delivers incomplete F-35s

The Defense Department is withholding about $5 million for each F-35 Joint Strike Fighter delivered with a truncated version of the Technology Refresh-3 software upgrade, a spokesperson with the F-35 Joint Program Office told Inside Defense.

In case you missed it last week, here's our deep dive into the Pentagon's Rapid Defense Experimentation Reserve program, now available to all:

DOD officials defend rapid experimentation projects at key tech demo

EDINBURGH, IN -- The Rapid Defense Experimentation Reserve may not appear to reflect the first word in its acronym to Senate appropriators who have criticized RDER for failing to transition more weapon systems to the battlefield, but senior Pentagon officials suggest that lawmakers looking to cut the program don’t fully appreciate RDER’s challenges given the slowness of the traditional acquisition and budgeting cycle.

Senior defense officials are scheduled to speak at several events around Washington this week.

Tuesday

The Billington Cybersecurity Summit begins in Washington. The event runs through Thursday.

Wednesday

The Defense News Conference is held in Arlington, VA.

The Association of the United States Army hosts a hot topic discussion on aviation.

The Justice Department has joined a whistleblower lawsuit against Georgia Institute of Technology and affiliate Georgia Tech Research Corp. for failing to implement cybersecurity requirements for defense contractors and submitting a false cyber assessment score to the Defense Department.

“Government contractors that fail to fully implement required cybersecurity controls jeopardize the confidentiality of sensitive government information,” Brian Boynton, head of the DOJ’s Civil Division, said in an Aug. 22 release.

Boynton said, "The department’s Civil Cyber-Fraud Initiative was designed to identify such contractors and to hold them accountable.”

The DOJ announced the launch of the Civil Cyber-Fraud Initiative in 2021 with the mission of using the False Claims Act to “pursue cybersecurity related fraud by government contractors and grant recipients,” according to a press release.

The latest release on the initiative details how the DOJ joined whistleblowers Christopher Craig and Kyle Koza, previous members of Georgia Tech’s cybersecurity compliance team, and filed a complaint-in-intervention against the university for its “failure since at least May 2019 (the relevant time period) to meet cybersecurity requirements of Department of Defense contracts.”

The lawsuit alleges the defendants “knowingly” fell short of DOD-mandated cyber requirements in National Institute of Standards and Technology Special Publication 800-171, including a failure to develop and implement system security plans, improper scoping of cyber controls and a lack of anti-virus and anti-malware tools on equipment used in a lab setting.

Further, Georgia Tech and GTRC allegedly “submitted a false cybersecurity assessment score to DOD for the Georgia Tech campus,” according to DOJ, in order to acquire their DOD contract.

The lawsuit highlights how Georgia Tech leadership allegedly enabled the fraud. It says, “With the tacit and, in some cases, explicit approval of senior leadership, Georgia Tech routinely bent on compliance with federal cybersecurity regulations and was undeterred by the risk of submitting ‘false claims’ to the federal government.”

It compares researchers who brought in federal contracts to “star quarterbacks,” arguing the research leaders used their power to “push back against compliance with federal cybersecurity rules.”

The university did not assess an IT system on which a campus lab “processed, stored, or transmitted sensitive DOD data,” the lawsuit says. “Instead of calculating and providing to DOD an accurate score for the Astrolavos Lab, Georgia Tech and GTRC provided DOD with a score for a ‘campus-wide’ IT system at Georgia Tech when no such campus-wide IT system existed.”

DOJ explains, “[T]he summary level score of 98 for the Georgia Tech campus that Georgia Tech and GTRC reported to DOD in December 2020 was false because Georgia Tech did not actually have a campus-wide IT system and the score was for a ‘fictitious’ or ‘virtual’ environment and did not apply to any covered contracting system at Georgia Tech that could or would ever process, store or transmit covered defense information.”

Support for the ongoing investigation of charges is being provided by “the DOD Office of Inspector General, Defense Criminal Investigative Service, Air Force Office of Special Investigations and Air Force Material Command,” according to DOJ.

The Chief Digital Artificial Intelligence Office launched a call to industry Thursday in support of its attempt to expand collaboration across combatant commands and international allies, according to a Defense Department release.

The rollout of the initiative, called the Open Data and Applications Government-owned Interoperable Repositories (Open DAGIR) Challenge, comes exactly three months after the Pentagon’s AI office unveiled the Open DAGIR approach -- its effort to make government data more accessible and make the acquisition process for digital capabilities smoother.

CDAO will head the project, in partnership with the Office of the Under Secretary of Defense for Research and Engineering, the Joint Fires Network and the Defense Innovation Unit, according to the release.

The call to vendors interested in submitting contested logistics and sustainment solutions will "transform” GIDE by “leveraging the entire industrial base to rapidly apply industry solutions to warfighter needs,” DOD said in the announcement.

The challenge will be an accelerated, competitive and innovative acquisition vehicle that will support the department’s Combined Joint All Domain Command and Control effort, according to the release.

Interested vendors can submit their proposals via a five-minute pitch video starting Thursday through Sept. 6 and those selected will be onboarded via the Open DAGIR system, DOD said.

South Korean shipbuilder Hanwha Systems has secured a U.S. Navy contract for maintenance work on a logistics support ship, according to a company announcement, which presents the award as a leap forward in Hanwha's effort to enter the American Navy’s market for maintenance, repair and overhaul work.

Under the award, the 40,000-ton logistics support ship will undergo inspection and maintenance at Hanwha’s Geoje shipyard, located near the southern end of South Korea. The contract is the first of its kind awarded to a South Korean shipbuilder.

According to the announcement, the company signed a Ship Maintenance Restructuring Agreement (MSRA) with Naval Supply Systems Command in July, certifying the company to work on U.S. Navy vessels. Hanwha is now able to compete for U.S. Navy contracts for the next five years, the notice adds.

“Hanwha Ocean believes that this project, which the U.S. Navy is conducting as a pilot project in the Asian region, will be an important turning point for changes in the U.S. Navy ship [maintenance, repair and overhaul] market in the future,” the announcement states.

“In particular, with the recent acquisition of the Philly Shipyard in Philadelphia, U.S.A. and Hanwha Ocean’s winning of this project, Hanwha’s entry into the U.S. Navy ship business appears to be gaining momentum,” the notice continues.

Earlier this summer, Hanwha finalized a $100 million purchase agreement to buy Philly Shipyard from its Norwegian owner, investment group Anker ASA. The deal, which is expected to close before the end of fiscal year 2024, received Navy Secretary Carlos Del Toro’s blessing.

Del Toro visited multiple Japanese and South Korean shipbuilders -- including Hanwha -- earlier this year and has advocated for increased foreign investment in the U.S. shipbuilding market as a means of improving production capacity, driving down prices and injecting competition into the domestic industrial base.

The Air Force has awarded Northrop Grumman a $200 million contract for the second Deep Space Advance Radar Capability site, which will be built in the United Kingdom.

This is Northrop’s second DARC award as the company is also building site 1 in Western Australia, which is set to come online in 2026, the Defense Department said in December. That contract, awarded in early 2022, is worth $341 million.

“This site brings us closer to achieving global coverage of deep space, which is a critical mission for future security of the U.S. and its allies,” said Pablo Pezzimenti, Northrop’s vice president for integrated national systems.

The contract for DARC site 3 will likely be awarded next year, according to the most recent Government Accountability Office weapon system assessment report.

The three ground-based radar sites are designed to provide advanced geosynchronous-orbit object tracking around the clock in all weather conditions. The capability is part of the trilateral AUKUS agreement.

Work under the site 2 contract is expected to be completed in February 2030, according to the Defense Department’s Aug. 23 contract announcement.

An announcement from last year naming Northrop as the sole-source contractor for DARC listed June 2028 and June 2029 as the initial operational capability dates for DARC sites 2 and 3.