The Insider

Justin Katz | September 18, 2018 at 5:22 PM

The Navy today awarded Austal USA and Lockheed Martin contract modifications to build three Littoral Combat Ships, according to a Defense Department statement.

Austal received a contract modification to build two LCSs, while Lockheed will build one ship.

The dollar amount of the contracts was not disclosed. In fiscal year 2018, Congress appropriated $1.5 billion for LCS procurement.

"The Navy may release a competitive solicitation(s) for additional LCS class ships in fiscal [year] 2019, and therefore the specific contract award amount for this ship is considered source selection sensitive information and will not be made public at this time," according to the statement.

The three FY-18 LCS awards represent the Navy's 30th, 31st and 32nd procurement, fulfilling the service's requirement. However, congressional appropriators agreed to fund three LCSs in FY-19, despite the White House's objections. The Navy only requested one.

The number of LCSs appropriated in FY-19 became a contentious issue on Capitol Hill earlier this year because the Navy is scheduled to begin procuring a new frigate in FY-20.

Elected officials -- particularly those representing the states in which Austal and Lockheed's shipyards are based -- argued the extra ships were necessary to retain skilled workers, smoothing the transition to building the future frigate.

Tony Bertuca | September 18, 2018 at 3:52 PM

President Trump said today the United States is "very seriously" considering establishing a permanent military base in Poland.

"Well, we're looking at it very seriously," Trump told reporters at the White House. "I know Poland likes the idea very much and it's something that we are considering, yes."

Polish President Andrzej Duda told reporters at the White House he has asked Trump to establish the base and would like to possibly name it after the American president.

"For me it's the most important, and I hope that we will build Ft. Trump in Poland together," Duda said.

Poland for several years has lobbied the U.S. government to permanently station American troops to deter Russian military activity on its eastern border. Approximately 3,000 U.S. troops are currently based in Poland on a rotational basis.

Trump said he especially likes the idea of a permanent base because Poland has offered to contribute financially.

"Poland is willing to make a very major contribution for the United States to come in and have a presence in Poland, and certainly it's something we'll discuss," he said. "If they're willing to do that, it's something we will certainly talk about."

Congress is also interested in potentially establishing a permanent U.S. military presence in Poland as the FY-19 National Defense Authorization Act requires a Pentagon report on the feasibility of stationing a brigade combat team there, as well an assessment of actions Russia might take in response.

John Liang | September 18, 2018 at 3:03 PM

This Tuesday INSIDER Daily Digest features news on the defense appropriations bill, low-yield nuclear weapons, a cloud database for the Defense Intelligence Agency and more.

The full Senate earlier today passed the FY-19 "minibus" that includes defense spending:

Senate passes defense spending 'minibus'

The Senate voted today 93-7 to pass a final fiscal year 2019 appropriations "minibus" that includes $675 billion for defense.

Low-yield nuclear weapons aren't especially popular with some House and Senate Democrats:

Democrats introduce bill to ban low-yield nuke spending

A team of House and Senate Democrats have introduced legislation that would block research, development, production and deployment of low-yield nuclear warheads for submarine-launched ballistic missiles on the grounds that such weapons risk entering the United States into a nuclear war.

Document: Lawmakers' proposed 'hold the LYNE' bill

The head of the Defense Intelligence Agency spoke this week at the Center for Strategic and International Studies in Washington:

Defense intel chief wants new cloud database within three years

The Defense Intelligence Agency wants to upgrade its legacy database with a machine-assisted, cloud-based system and seeks to hit initial operational capability within the next three years, preferably two, according to DIA Director Lt. Gen. Robert Ashley.

Investments in cloud technology haven't been restricted to the intelligence community, though. In case you missed it:

Spending bill restricts funding for Pentagon's JEDI cloud

The defense spending bill agreed to by conference negotiators limits how the Pentagon can spend its funding for cloud efforts, including the high-profile Joint Enterprise Defense Infrastructure initiative.

In defense business news this week, SAIC's credit rating has been lowered:

Following Engility deal announcement, Moody's lowers SAIC's rating outlook

Moody's Investors Service said last week it has lowered Science Applications International Corp.'s rating outlook to negative from stable following the contractor's announcement it will buy Engility.

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Marjorie Censer | September 18, 2018 at 2:25 PM

SOS International said today it has named Michael Haney chief information officer.

Haney joins SOSi from Booz Allen Hamilton, where he was senior director of enterprise systems delivery. According to SOSi, Haney had worked at Booz Allen since 1991.

Marjorie Censer | September 18, 2018 at 1:50 PM

Moody's Investors Service said last week it has lowered Science Applications International Corp.'s rating outlook to negative from stable following the contractor's announcement it will buy Engility.

"Initially, the transaction will add financial leverage and dampen the revenue growth expectations, and could entail significant integration risk," Moody's said.

The rating company's report also said the negative outlook reflects the stop-work order SAIC has received on its Amphibious Assault Vehicle upgrade program.

"The stop-work order suggests the program may get cancelled," Moody's wrote. "If so, there is the potential for stranded costs on the long-lead materials."

However, Bruce Herskovics of Moody's told Inside Defense the plan to acquire Engility would make the importance of this vehicle modernization work "less substantial."

Moody's noted it affirmed the company's ratings, noting the planned acquisition would "increase [the] diversity" of SAIC's services revenue and provide "access to a larger direct labor pool."

"Engility will also expand SAIC's base of employees with high clearance[s] and, importantly, increase its presence within the intelligence community and space-related agencies," the report said. Herskovics said intelligence agency funding "tends to be steadier."

Tony Bertuca | September 18, 2018 at 1:13 PM

The Senate voted today 93-7 to pass a final fiscal year 2019 appropriations "minibus" that includes $675 billion for defense.

If the House, which returns to session next week, can pass the bill and send it to the president for his signature before the beginning of the new fiscal year on Oct. 1, it will be the first time in recent memory that the Defense Department has received an on-time appropriation.

The $857 billion minibus also includes funding for the departments of Labor, Health and Human Services, Education and related agencies.

The defense portion of the bill includes funding increases for several big-ticket weapons programs including 93 F-35 Joint Strike Fighters, 16 more than the Pentagon's request, and three Littoral Combat Ships, two beyond the FY-19 request.

Additionally, the bill includes a stopgap continuing resolution to fund other agencies -- the departments of Homeland Security, Justice, State and others -- not included in current appropriations bills. Staffers have observed that attaching the CR to the defense minibus would make it more painful for President Trump to veto, if he is so inclined. Trump has demanded that any spending bill for DHS include funds for a southern border wall. The CR effectively punts the argument until after the November midterm elections.

The Pentagon, meanwhile, has begun each of the past nine fiscal years on CRs that lock spending at previous-year levels and prohibits the start of new programs or production increases for weapon systems.

Justin Katz | September 18, 2018 at 1:08 PM

The Navy has released the final request for proposals for the end user hardware contract portion of the Next Generation Enterprise Network recompetition, according to a Sept. 17 Federal Business Opportunities notice.

The final RFP's publication is significant because the Navy has made a point of changing the way it develops its solicitation for the NGEN-R competition.

"As opposed to waiting for an entire [request for proposals] . . . to go out for review, we are literally pushing documents out that are being built," Capt. Donald Harder, then principal deputy at the program executive office for enterprise information systems, told reporters last year at a roundtable.

Harder said the concept of "sprint contract development" was inspired by the "agile" method commonly used in software development.

The service had planned to award the NGEN-R contracts this November and December, however, earlier this month, the Navy issued NGEN incumbent Perspecta an extension to the current contract. That modification added "a new option period that will extend the potential ordering period by 12 months from Oct. 1, 2018 through Sept. 30, 2019," according to a Defense Department release.

NGEN delivers the Navy-Marine Corps Intranet, which spans 2,500 locations and 700,000 users. The recompete contract will split NGEN into two contracts: one for end user hardware and another for service management, integration and transport.

The deadline to respond to the RFP is Nov. 19.

Rachel Cohen | September 18, 2018 at 12:20 PM

NATIONAL HARBOR, MD -- Air Force Chief of Staff Gen. David Goldfein said today the service is "within weeks" of certifying 9th Air Force as a "core joint task force headquarters."

9th Air Force falls under Air Combat Command and is based at Shaw Air Force Base, SC. The organization oversees fighter jets, attack aircraft, combat search-and-rescue helicopters and the E-8C Joint Surveillance Target Attack Radar System, will be offered to the chairman of the Joint Chiefs of Staff and Defense Secretary Jim Mattis as part of a new "dynamic force employment model," Goldfein said in his keynote speech at the Air Force Association conference here Tuesday.

The announcement comes as part of a speech focused on how the Air Force is positioning itself to meet the Defense Department's new National Defense Strategy as well as for more integrated, multidomain operations.

Ashley Tressel | September 18, 2018 at 11:35 AM

Despite the Army requesting no funding to modernize humvees for the National Guard in fiscal year 2019, House and Senate appropriators have decided to give the program $100 million.

The upgrade integrates the humvee cab onto a new chassis, provided by AM General.

The service is replacing all of its humvees in the active component -- except for the ambulance variant -- with the Joint Light Tactical Vehicle made by Oshkosh Defense, which suffered only a minor cut in the spending bill.

Conferees included a $40 million decrease in JLTV procurement, citing unit cost and engineering change proposal cost growth and test support excess.

The Senate Armed Services Committee proposed a bigger cut, $250 million, in its mark of the FY-19 policy bill, but the final National Defense Authorization Act included only a $32 million decrease.

The spending bill also denied the Army $2.7 million in research, development, test and evaluation funding under JLTV engineering and manufacturing due to a lack of need.

The Army this month awarded AM General a potential $800 million hybrid contract to procure 2,800 ambulance variants of active-Army humvees, with the first delivery scheduled for the second quarter of FY-19.

Tony Bertuca | September 18, 2018 at 10:24 AM

A long-awaited defense industrial base report slated for release this week has again been delayed, according to the Pentagon.

"I can confirm that the defense industry report will not be released this week," Lt. Col. Mike Andrews, a Defense Department spokesman wrote in an email. "When it is released, the department will be open and transparent about the unclassified portion of the report."

The Pentagon delivered its portion of the report to the White House Office of Trade and Manufacturing Policy in April. The report's release has been delayed several times.

Under Secretary of Defense for Acquisition and Sustainment Ellen Lord said earlier this month that the report, mandated last year by an executive order, will partly review the fragility of DOD's supply chain and dependence on foreign sources.

Marjorie Censer | September 18, 2018 at 9:21 AM

Oshkosh said this week Thomas Hawkins has been named senior vice president for government relations, while Jay Kimmitt, the company's longtime government operations chief, will retire at the end of the year.

Hawkins most recently was national security adviser in the office of Senate Majority Leader Mitch McConnell (R-KY). He previously was a senior professional staff member on the Senate Appropriations state, foreign operations and related programs subcommittee as well as the defense subcommittee.

Kimmitt, who spent more than 17 years leading Oshkosh's government operations team, will step down Dec. 31.

Justin Katz | September 17, 2018 at 2:40 PM

The Navy will procure a hybrid version of the advanced weapons elevator integrated onto the aircraft carrier Gerald Ford (CVN-78) to be used for land-based testing through a $13 million indefinite-delivery, indefinite-quantity contract awarded last week to Federal Equipment Co.

The hybrid unit will be configurable as an upper- or lower-stage elevator and will be procured within the first year of the five-year contract, according to a justification and approval document published today on the Federal Business Opportunities website.

FEC will also provide associated technical support to troubleshoot and repair the unit as well as installation services to integrate it into the testing site at Naval Surface Warfare Center Philadelphia.

The advanced weapons elevator has proven to be one of the more problematic technologies integrated aboard the Navy's lead Ford-class aircraft carrier. Last month, Inside Defense reported the Navy requested $12.7 million be reprogrammed to re-baseline the advanced weapons elevator program.

The contract was not competitively awarded because "FEC is the only company with the exception of the shipbuilder . . . who is able to install the AWE system," the document states. Further, the shipbuilder has "relied heavily on FEC during installation to align, groom and troubleshoot the process."

Newport News Shipbuilding is CVN-78's prime contractor; however, the shipbuilder's name is redacted in the justification document.

The Navy also said it had limited access to technical data from which to produce a test unit if the service had competitively awarded the contract.

"Consequently, it would be impossible for another vendor to attempt to recreate the AWE system without a complete drawing and technical package," the document states.

"There have been previous attempts to require FEC to provide the complete drawing and technical package for the hybrid LBU, and those requests have resulted in absolute refusal from FEC," the document continues.

Work is expected to be completed by September 2023.

John Liang | September 17, 2018 at 2:22 PM

The potential price of a proposed Space Force leads off this Monday INSIDER Daily Digest.

We now have a better idea of how much it would cost to establish a new Space Force:

Air Force projects Space Force will cost $12.9 billion through 2025

NATIONAL HARBOR, MD -- The Air Force estimates establishing a new space service would cost $12.9 billion from fiscal years 2020 to 2025 and require an additional 13,000 personnel, according to a new memo obtained by Inside Defense.

The number of Air Force aircraft squadrons is set to increase:

SECAF: Air Force to add 74 operational squadrons from 2025 to 2030

NATIONAL HARBOR, MD -- Air Force Secretary Heather Wilson announced today the service will grow its total number of operational squadrons from 312 to 386 -- a 25 percent increase it plans to implement between fiscal years 2025 and 2030.

The Air Force will be giving a close look at imaging and targeting support:

Air Force ISR PEO looks to speed, lower cost of sensor acquisition

DAYTON, OH – Rapid-acquisition authorities could bring down the cost of next-generation sensor development, particularly for geospatial and signals intelligence, according to the Air Force's program executive officer for intelligence, surveillance and reconnaissance and special-operations assets.

Continuing our coverage of the FY-19 defense spending conference bill released last week:

Spending bill increases reporting requirements for OTAs

The fiscal year 2019 defense spending bill agreed to by conference negotiators adds new reporting requirements for Defense Department other transaction agreements and mandates a comptroller general review of their use, but it doesn't change DOD's ability to use such agreements.

Light-attack procurement effort receives $100 million in final spending bill

Congressional appropriators this week agreed to put $100 million toward the early stages of the Air Force’s O/A-X light-attack aircraft procurement program, after the Senate proposed three times as much money but the House offered none.

Lawmakers rescind $115 million in FY-18 Tomahawk funding, direct 'full review' of program

Lawmakers have rescinded $115 million in fiscal year 2018 Tomahawk missile funding and directed the Navy secretary to conduct a full program review following the service's request to repurpose some of those funds.

Army's Stryker upgrade plans still under scrutiny

House and Senate appropriators are backing the Army's aim to upgrade its Stryker combat vehicles -- approving $94 million more than requested -- but are not assured the service has a feasible plan to complete the upgrades at the desired rate.

Lockheed Martin has received an Air Force contract to build 22 follow-on GPS III satellites:

USAF awards Lockheed contract for up to $7.2B in sole-source GPS III Follow-On deal

The Air Force formally announced late last week that it has awarded GPS III incumbent Lockheed Martin a sole-source contract worth up to $7.2 billion to develop 22 follow-on satellites.

The Army will have several important responsibilities in the Pentagon's effort to develop a new hypersonic missile:

Army tapped for key roles in new DOD-wide effort to develop, build common hypersonic weapon

Pentagon leaders have assigned the Army key responsibilities to synchronize Defense Department-wide activities to continue development of -- and prepare for production of -- a new class of long-range, ultrafast maneuvering missiles.

The Air Force has changed the design of the oxygen system on board the T-6 trainer aircraft:

Air Force announces measures to address T-6 physiological episodes

The Air Force announced last week a number of efforts to address an uptick in unexplained physiological events experienced by training pilots, including a redesign of the T-6 onboard oxygen-generating system and adoption of new maintenance procedures.

Maximilian Kwiatkowski | September 17, 2018 at 12:50 PM

The award date for the Logistics Civil Augmentation Program V was delayed until mid-April to give the Army extra time to review proposals, a contracting spokesman told Inside Defense.

The award for the massive logistics program for military bases across the globe has been delayed before. At one point, it was slated for Sept. 13 but postponed to Oct. 10.

"While there remains a strong desire to meet established time lines, the integrity of the source selection process is the ultimate priority," Edward Worley, a spokesman with Army Contracting Command, told Inside Defense in an email. "Every effort will be made to maintain and even accelerate the current time line while simultaneously ensuring quality is not sacrificed."

The 10-year contract covers a number of services for personnel overseas, including laundry, food, maintenance and housing. It's structured as an indefinite-delivery, indefinite-quantity contract.

The entire contract is worth up to $82 billion, according to the Army's solicitation notice.

Marjorie Censer | September 17, 2018 at 8:55 AM

L3 Technologies said today it has named Sean Stackley, hired early this year, president of its communications and networked systems business.

He succeeds Andrew Ivers, who will retire at the end of this year “to pursue other opportunities,” L3 said.

The business unit Stackley will lead has been reshaped so that it includes all maritime capabilities, the contractor said today. Both the realignment of the business and Stackley's appointment are effective immediately.

Stackley previously served as acting Navy secretary. He also spent nine years as assistant secretary of the Navy for research, development and acquisition and was a staff member on the Senate Armed Services Committee.

Last month, L3 consolidated its aerospace systems business with its sensor systems unit to form a new intelligence, surveillance and reconnaissance systems segment. The company has also has an electronic systems unit.