The Insider

By John Liang
April 18, 2013 at 10:29 PM

House Armed Services seapower and projection forces subcommittee Chairman Randy Forbes (R-VA) and Ranking Member Mike McIntyre (D-NC) have sent a letter to Defense Secretary Chuck Hagel regarding the release of the Navy's required ship construction plan.

"The Navy Department's statutorily required Annual Naval Vessel Construction Plan is an essential tool in understanding the Navy's future force posture and determining whether our Combatant Commanders will receive the resources they need to protect U.S. interests," Forbes said in a statement, adding: "Given the accelerated consideration of this year's defense budget, Congressman McIntyre and I urge Secretary Hagel to release the Plan prior to the Seapower Subcommittee's April 24 hearing where we plan to discuss the Navy FY14 budget submission."

By John Liang
April 18, 2013 at 5:01 PM

Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey and his South Korean counterpart, Gen. Jung Seung Jo, today convened the 37th Republic of Korea-United States Military Committee Meeting, according to a joint communique issued by the Pentagon.

"Both chairmen reaffirmed that the Republic of Korea-United States alliance is stronger than ever," the communique reads, adding:

On the basis of the mutual defense treaty, the two chairmen reaffirmed not only the commitment to enhancing mutual security, but also the commitment to the enduring mission of the alliance, which is to defend the Republic of Korea through a robust combined defense posture. They also reaffirmed that both countries will respond firmly to any provocation by North Korea, in accordance with the Republic of Korea-United States Bilateral Counter-Provocation Plan.

Gen. Dempsey reiterated the firm and unwavering commitment of the United States to defend the Republic of Korea, using all available military capabilities, including forces postured on the Korean Peninsula, its nuclear umbrella, conventional strike and missile defense capabilities.

Gen. Jung echoed the Republic of Korea's commitment to strengthen the level of its capabilities and enhance the level of military cooperation in the region, in response to North Korea's ongoing pattern of defiance and provocative actions, which pose a serious threat to the Korean Peninsula, Northeast Asia, and international peace and security.

Both chairmen also reaffirmed their commitment to further enhance the alliance's deterrence capabilities and highlighted the bilateral decision to prepare sufficient capabilities for the defense of the Republic of Korea.

In addition, the Republic of Korea-United States Military Committee reaffirmed that preparations for wartime operational control transition are on-track with the Strategic Alliance 2015 implementation plan. To ensure a resolute and enduring combined defense posture, the military committee shared perspectives on the future command structure and agreed to refine the specifics and make a recommendation and seek approval at the security consultative meeting this October.

Both chairmen assessed that the discussions at the 37th MCM have made a significant contribution to enhancing the Republic of Korea-United States alliance and strengthening the military relations between the two countries. Both chairmen expect to hold the next military committee meeting at a mutually convenient time in 2013.

Inside the Pentagon reports this morning that Rep. Doug Lamborn's (R-CO) disclosure of a military intelligence assessment of North Korean nuclear missile capabilities made headlines last week, an episode that may be most noteworthy for the prominent role unnamed Capitol Hill staffers played in funneling the information to the congressman and shaping the ensuing media buzz. Further:

At issue is a two-line fragment from a Defense Intelligence Agency report, which Lamborn read to Defense Secretary Chuck Hagel and Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey during an April 11 House Armed Services Committee hearing. According to Lamborn, the otherwise classified report included an unclassified section that states: "DIA assesses with moderate confidence the North currently has nuclear weapons capable of delivery by ballistic missiles. However, the reliability will be low."

Dempsey, who was asked whether he agreed with the assessment, declined to comment out of fear of discussing sensitive information publicly and because he had not seen the report.

News stories about the exchange began popping up quickly after the hearing, highlighting the potential of the new DIA finding to be a game-changer for U.S. policy regarding an already tense situation on the Korean peninsula. Common to many stories was a reference to one or more House Armed Services Committee aides, who were quoted anonymously. The Wall Street Journal, for example, quoted a staffer describing the assessment as "more forward-leaning about the threat than they've previously said." In addition, the staffer told the paper, "Clearly, they are very alarmed, and the information they are seeing shows a great deal of alarm -- and now more information is coming out for the American people to see."

Similarly, a Defense News article leaned heavily on an anonymous committee staff source who said the White House had tried to suppress the information Lamborn cited. (That story also said the congressman had sent "ripple waves around the world.")

Meanwhile, Lamborn has not read the DIA report in its entirety, spokeswoman Catherine Mortensen told Inside the Pentagon this week. "The only portion he has seen is the unclassified quote," she said, adding that one of the committee's senior staffers with the requisite security clearance had read the whole DIA document.

Read the full story.

By John Liang
April 18, 2013 at 4:48 PM

The Defense Security Cooperation Agency this week announced it had notified Congress of $3.6 billion worth of proposed weapon sales to foreign countries, including:

* a possible $2.7 billion Foreign Military Sale to Israel for 864 million gallons of petroleum based products;

* a possible $170 million Foreign Military Sale to the United Kingdom for follow-on support for the Tomahawk Weapon System (TWS);

* a possible $300 million Foreign Military Sale to a NATO consortium for follow-on contractor logistics support for NATO Airlift Management Program C-17 aircraft;

* a possible $95 million Foreign Military Sale to the United Kingdom for 500 AGM-114-N4/P4 Hellfire missiles; and

* a possible $371 million Foreign Military Sale to Kuwait for one C-17 Globemaster III cargo aircraft.

Inside the Pentagon reports this morning that the Defense Department wants to more than double the funding for a pilot program designed to better harmonize the need for protecting critical technologies in American weapons while enabling their export to foreign governments:

The fiscal year 2014 budget request, submitted to Congress last week, requests $3.8 million for the program that helps prepare warfighting systems for non-U.S. use, with nearly $19 million requested over the future years defense plan.

More money is needed in FY-14 to expand the number of systems to be included in the Defense Exportability Features (DEF) pilot program, according to DOD. Defense officials will use the systems to "define and implement DEF 'best practice' program management, system engineering and program protection measures in the DOD acquisition process," according to the budget document.

The Pentagon is slated to determine later this fiscal year what programs to add to the pilot, DOD spokeswoman Maureen Schumann said.

The Pentagon had designated seven major defense acquisition programs in FY-12 and another eight programs in FY-13 to participate in the pilot, according to the budget documents.

"Early results of the DEF studies indicate there could be a significant return on [research, development, test and evaluation] investment from DEF through the economies of scale in production and sustainment from foreign sales," the Pentagon's budget overview states. "Increasing the sample size of MDAPs in the pilot program will provide us greater confidence in DEF prior to implementing DEF into acquisition policy."

Read the full story

By Gabe Starosta
April 17, 2013 at 8:22 PM

The Defense Department plans to move ahead with a scheduled ballistic missile test launch in late May, Assistant Secretary of Defense for Global Strategic Affairs Madelyn Creedon told Congress today. Her comments come about 10 days after DOD canceled a similar test launch out of Vandenberg Air Force Base, CA, because of concerns the test would lead to a reaction from North Korea.

DOD performs about three Air Force-run Minuteman III intercontinental ballistic missile test launches per year, with those events scheduled for April, May and September of 2013. The April launch was scrapped after a series of provocative incidents occurred in quick succession, among them a North Korean nuclear test and a B-2 stealth bomber flight over South Korea. But for now, DOD intends to keep the May test on the calendar.

"We thought it was wise to postpone for a while the last launch because of the situation on the Korean Peninsula," Creedon said. "Right now, it is the plan of the department and the plan for the Air Force to do the next launch. We have a window of May 21-23. That is the current schedule. What we’ve actually done is the system that was going to be launched, this particular launch is going to just move to the right, so we’ll move everything to the right a little bit."

Creedon, responding to questions from Sen. Mark Udall (D-CO), was testifying before the Senate Armed Services strategic forces subcommittee. Udall is the subcommittee's chairman. Other witness at the unclassified portion of the hearing included Lt. Gen. James Kowalski, the head of Air Force Global Strike Command; Maj. Gen. Garrett Harencak, the Air Force's assistant chief of staff for strategic deterrence and nuclear integration; Rear Adm. Terry Benedict, the director of strategic programs for the Navy; and Andrew Weber, the assistant secretary of defense for nuclear, chemical, and biological defense programs.

Following the open portion of the hearing, Senators broke into a classified session where they met with the program manager for the Air Force's secretive Long-Range Strike Bomber, Col. Timothy Woods.

By John Liang
April 17, 2013 at 7:30 PM

Back in February, the Defense Department published in the Federal Register a proposed rule calling on contractors to develop science, technology, engineering and mathematics (STEM) programs.

DOD seems to have changed its mind, though. In a notice in this morning's Federal Register, the Pentagon announces it is canceling the proposed rule "without further action," adding:

DOD has determined that the proposed amendment to the Defense Federal Acquisition Regulation Supplement (DFARS) is not a necessary part of the Department's plan to implement a section of the National Defense Authorization Act for Fiscal Year 2012, that requires DOD to encourage contractors to develop science, technology, engineering, and mathematics (STEM) programs.

The notice adds:

At this time, DOD is in the process of reassessing the most effective and efficient methods by which it can encourage contractors to develop science, technology, engineering, and mathematics (STEM) programs.

Last October, Inside the Pentagon reported on a study by the National Academy of Sciences which found that offering higher salaries and a more creative workplace culture could help the Defense Department combat predicted shortages of workers in cybersecurity and intelligence.

Prepared at the request of Assistant Secretary of Defense for Research and Engineering Zachary Lemnios, the report discussed the challenges and expectations facing DOD's science, technology, engineering and mathematics workforce. According to the report, the fast pace of STEM developments means that predicting the exact skills that will be needed in the STEM workforce is virtually impossible. ITP further reported:

With much of DOD's STEM workforce reaching retirement age in the near future, shortages of cybersecurity and intelligence professionals are likely, though other areas may not see a shortage, according to the report. To draw in the needed workers, DOD should offer higher salaries that are more competitive with STEM salaries outside of the defense sector, the report recommends.

"As a means of addressing any future shortages, experience has shown that students will respond to the demand signal of higher salaries in a STEM field, suggesting a mechanism by which DOD can stimulate supply in a critical area," the report says.

The report also urges DOD to emulate Lockheed Martin's Skunk Works division, which works on theoretical problems and has an unconventional structure. A more inviting culture could convince STEM workers to chose the defense industry rather than other sectors, according to the report.

By John Liang
April 17, 2013 at 3:41 PM

A new Senate Armed Services Committee report on the Pentagon's annual $10 billion overseas spending "has found construction projects lacking congressional or Pentagon oversight, and allied contributions failing to keep up with rapidly rising U.S. costs," according to a panel statement:

The year-long review of spending in Japan, South Korea and Germany, where nearly 70 percent of spending to support our permanent overseas facilities takes place, suggests that changes to the management of such spending are necessary and that closer scrutiny is warranted to avoid future commitments that may be inefficient or unaffordable.

"Japan, South Korea and Germany are critical allies.  In order to better sustain our presence in these important locations, we need to understand and control our costs.  Federal dollars should always be spent with utmost care, but at a time when the Pentagon and the entire federal government face enormous fiscal challenges, the questionable projects and lack of oversight identified in this review are simply unacceptable," said Sen. Carl Levin, D-Mich., the committee chairman. "Every dollar spent on unnecessary or unsustainable projects is a dollar unavailable to care for our troops and their families, to maintain and modernize equipment, and to pay for necessary investments in base infrastructure."

"This report reaffirms the committee's commitment to ensure that the resources we provide to the armed forces, as well as contributions provided by our allies, are directed towards the most critical core defense requirements of our U.S. Military stationed overseas," said Sen. James Inhofe, R-Okla., the committee's ranking member. "In an unprecedented era of rapidly decreasing defense funds, we will continue to extend oversight to each and every taxpayer dollar spent for our national defense."

View the full report.

By John Liang
April 16, 2013 at 3:14 PM

Military contractors will probably say that defense orders are "likely" to be "soft" in the near future when they hold their quarterly earnings conference calls later on this month, according to a preview published this morning by Wall Street analysis firm Credit Suisse:

We expect March's triggering of Sequester to have dramatically slowed order flow towards the end of the quarter. At our Pentagon conference in March, several DOD officials said order flow had slowed considerably since Sequester's trigger, adding that in some departments order activity had stopped completely. Thus, while EPS numbers for long-cycle defense contractors should be in-line or above consensus on previously booked business and margins, an order shortfall could drive some volatility. For some companies, such as [Huntington Ingalls Industries], the Continuing Resolution was a bigger overhang in 2013 than was Sequester. Now that the CR is resolved, we would look for an update from such companies on visibility into year-end.

Huntington Ingalls plans to hold its earnings conference call on May 8. As for the traditional "big five," Lockheed Martin plans to hold its earnings conference call on April 23; Boeing, Northrop Grumman and General Dynamics on April 24; and Raytheon on April 25.

By John Liang
April 15, 2013 at 5:21 PM

The total number of security clearances held by federal government employees and contractors at the end of fiscal year 2012 was 4.92 million, compared to 4.86 million in FY-11, according to a report to Congress submitted by the office of the director for national intelligence late last week.

The April 12 report states:

Although agencies are making significant progress to improve the timeliness of security clearance determinations, the ODNI will continue to stress the need for improvements in the investigative and adjudicative clearance processes. The IC faces challenges in clearing individuals with unique or critical skills -- such as highly desirable language abilities -- who often have significant foreign associations that may take additional time to investigate and adjudicate. Further, compartmentalization and variations in information technology platforms within the IC are impediments to the implementation of automated systems that have the potential to improve the timeliness of processing non-issue cases and allow security specialists to concentrate on issue cases.

By Maggie Ybarra
April 12, 2013 at 7:47 PM

The Defense Department has approved a charter for a panel that will examine the structure of the Air Force and report its findings to Congress by February 2014.

The charter, dated April 11, shows that in considering the structure of the Air Force, the panel should give particular consideration to evaluating a structure that meets current and anticipated requirements of the combatant commands as well as "maximizes and appropriately balances affordability, efficiency, effectiveness, capability and readiness." Per DOD, the panel should also achieve an appropriate balance between the active and reserve components of the Air Force, taking advantage of the unique strengths and capabilities of each and ensuring that the service has the capacity needed “to support current and anticipated homeland defense and disaster assistance missions in the United States,” according to the document, obtained by InsideDefense.com.

The charter also shows that DOD wants to see the panel take into consideration that there is a need for sufficient numbers of trained personnel "from which the personnel of the reserve components of the Air Force could be recruited." Also, it would be preferable if the panel maintain "a peacetime rotation force to support operational tempo goals of 1:2" for the active-duty Air Force and "1:5 for members of the reserve components of the Air Force," the charter states.

Panel members are expected to deliver their report to lawmakers by Feb. 1, 2014. Those members will serve on what is known as the "National Commission on the Structure of the Air Force" -- a panel that was established in the Fiscal Year 2013 Defense Authorization Act.

The names of those members were announced this month.

The panel consists of Lt. Gen. Bud Wyatt, a former Air National Guard Director; Whit Peters, a former Air Force secretary; Erin Conaton, a former Air Force under secretary; Les Brownlee, a former Army under secretary; and retired Gen. Raymond Johns, Air Mobility Command's former commander who left the service a few months ago. Additionally, Janine Davidson, a former deputy assistant secretary of defense for plans; retired Marine Corps Lt. Gen. Dennis McCarthy, a former assistant secretary of defense for reserve affairs; and Margaret Harrell, the director of the RAND Corporation's Army health program have been nominated as panel members.

Despite a DOD-wide freeze on traveling expenses in light of recent budget cuts, panel members shall be allowed travel expenses including per diem while on out-of-town business, according to the charter.

By John Liang
April 12, 2013 at 3:39 PM

A Patriot Advanced Capability-3 missile successfully shot down a tactical ballistic missile target in a flight test today at White Sands Missile Range, NM, PAC-3 builder Lockheed Martin announced this morning.

"Two PAC-3 Missiles were ripple-fired in the test per current doctrine," the company statement reads. "The first interceptor destroyed the target and the second PAC-3 Missile self-destructed as planned. Mission objectives were focused on reducing risk for a flight test of the PAC-3 Missile Segment Enhancement (MSE) scheduled later this year."

Richard McDaniel, vice president of PAC-3 Missile programs at Lockheed Martin Missiles and Fire Control, said: "Today's flight test provided us the opportunity to demonstrate the PAC-3 Missile against a challenging TBM target."

Preliminary data show "all objectives were achieved," he added.

By Sebastian Sprenger
April 11, 2013 at 4:48 PM

Pentagon leaders are expected to study the Defense Department's support agencies, as well as the combatant commands and their service-specific outfits with an eye toward savings, according to senior officials. Referring to those organizations as "the fourth estate," Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey told lawmakers today that an ongoing strategic review commissioned by Defense Secretary Chuck Hagel would address the potential of streamlining.

During his brief time as the chief of staff of the Army, Dempsey put the brakes on a plan, proposed by his predecessor Gen. George Casey, to have one Army component command service both U.S. Northern Command and U.S. Southern Command, and one provide forces for both U.S. European Command and U.S. Africa Command, Inside the Army reported in June 2011.

By Jen Judson
April 10, 2013 at 9:59 PM

Bell Helicopter unveiled its tiltrotor helicopter design -- the V-280 Valor -- that it submitted last month to the Army's Joint Multi-Role technology demonstrator competition, according to company briefing slides released today.

Industry submitted at least four proposals to the Army for a chance to build a JMR technology demonstrator air vehicle that will guide possible designs and concepts for the service's Future Vertical Lift helicopter expected to take flight around 2035, according to company sources. Of the proposals, two designs will be selected to be built and flown during the demonstrator phase. The Army is expected to make awards in late 2013. The demonstrators would be ready for flight in 2017.

While Boeing and Sikorsky announced earlier this year that they would join forces to submit a design proposal for a JMR demonstrator aircraft centered around Sikorsky's X2 helicopter technology, Bell is taking a turn to tout its offering.

Bell's V-280 Valor features an advanced tiltrotor design that can achieve cruise speeds of 280 knots, has "turbo-like ride quality," is fuel efficient, has an advanced composite fuselage and "superior high-speed handling qualities," the slides note. The helicopter design doubles the range capability of current platforms, the document shows.

Bell and Boeing were awarded, as a team, a $4 million, 18-month study contract to look at tiltrotor designs for the JMR effort in 2011. Boeing has experience building the V-22 Osprey, a tiltrotor aircraft flown by the Marines and the Air Force. Bell was also awarded another JMR study contract independently. Sikorsky and AVX Aircraft Company were the remaining companies to receive JMR study contracts.

EADS and AVX Aircraft Co. also submitted demonstrator designs to the Army last month. So far, EADS has chosen not to discuss details of its proposed design. AVX submitted a design centered around its coaxial rotor and ducted fan technology, company spokesman Mike Cox said in February.

By Tony Bertuca
April 9, 2013 at 6:26 PM

Oshkosh Corp. announced today that its defense division will be laying off nearly 1,000 workers this summer due to expected decreases in military vehicle sales.

The company will reduce its work force in Oshkosh, WI, by approximately 700 hourly positions starting in mid-June and will cut another 200 salaried workers through July, the announcement states. The company will be left with 2,800 defense employees after the reductions are complete.

“As discussed on numerous occasions, Oshkosh expects domestic military vehicle production volumes to decline significantly as the year progresses,” the statement reads. “The company’s lower expected vehicle production is due mainly to the reduction in U.S. defense budgets and a return to peacetime spending levels as the U.S. winds down war activities. Daily production volumes are expected to decline by approximately 30 percent this summer.”

John Urias, Oshkosh's executive vice president of defense, called the layoffs “difficult but necessary decisions” given the current business climate. “When other business segments of Oshkosh and many companies in the U.S. were enduring layoffs, pay cuts and furloughs during the Great Recession, Oshkosh Defense was hiring employees and retaining jobs which ended up helping many people manage through that difficult period,” he said in the statement. “However, circumstances have now changed.”

Urias added that Oshkosh has worked to save more than 165 production jobs by enacting various insourcing measures. “The company will be reaching out to the county and state workforce development agencies, as well as local employers to help those affected by the layoffs make the transition to other employment if they so desire,” the statement reads. “The company will continue to build high-quality trucks and trailers, and provide support service and training for its military customers around the clock and around the world.”

Oshkosh is the Army's primary provider of heavy-duty trucks and is the contractor for the Mine Resistant Ambush Protected All-Terrain Vehicle. The company is currently one of three competitors vying for a Joint Light Tactical Vehicle contract.

By Maggie Ybarra
April 9, 2013 at 3:59 PM

The Air Force has issued a stand-down order to its active-duty combat squadrons due to budget cuts that have negatively impacted Air Combat Command's operations and maintenance account, according to a service statement.

ACC's flying hours -- specifically, the training hours its airmen are allotted -- will be reduced by about 45,000 hours between now and Oct. 1, the statement indicates. Defense News reported on April 8 that the Air Force would begin grounding its combat squadrons today.

“ACC, as the Air Force's lead for Combat Air Forces, manages the flying-hour programs for four major commands,” the statement reads. “This decision to stand down or curtain operations affects about one-third of the active-duty [Combat Air Forces] aircraft -- including those assigned to fighter bomber, aggressor and airborne warning and control squadrons -- stationed in the United States, Europe and the Pacific.”

ACC commander Gen. Mike Hostage said ACC has had to implement a tiered readiness approach in which "only the units preparing to deploy in support of major operations like Afghanistan are fully mission capable.” The units will stand down “on a rotating basis” so that the Air Force's “limited resources can be focused on fulfilling critical missions.” Hostage noted that the stand-down would have a “significant and multiyear impact” on the Air Force's operational readiness.

Some of the combat squadrons, which include A-10 twin-engine planes, B-1 long-range bombers, F-16 fighter jets and F-22 fighter jets, will stand down “after they return from their deployments,” according to the statement. Other squadrons will stand down operations today, April 9. Additionally, active-duty airmen assigned to the Air Force Reserve or the Air National Guard's A-10 and F-16 squadrons will also stop flying until October, the statement adds.

The stand-down will continue throughout fiscal year 2013, “barring any changes to current levels of funding,” according to the statement.

“Units that are stood down will shift their emphasis to ground training. They will use flight simulators to the extent possible within existing contracts, and conduct academic training to maintain basic skills and knowledge of their aircraft,” the statement reads. “As funding allows, aircrews will also complete formal ground training courses, conduct non-flying exercises and improve local flying-related programs and guidance.”

By Jason Sherman
April 8, 2013 at 2:22 PM

The Defense Department plans to publish its FY-14 budget request online -- http://www.budget.mil -- Wednesday morning soon after President Obama officially unveils the overarching executive-branch FY-14 spending proposal, according to a Pentagon official. The White House Office of Management and Budget has not published the exact hour for that event.

As soon as 1 pm, Defense Secretary Chuck Hagel and Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey will present the Pentagon's spending plan to reporters followed immediately by Pentagon Comptroller Robert Hale and Lt. Gen. Mark Ramsay, the Joint Staff J8 director, who will provide a more detailed briefing on the spending plan.

In a series of successive briefings, senior officials from the departments of the Army, Navy and Air Force will then present their new budget plans to reporters. The Missile Defense Agency will not present a briefing this year, according to the DOD official.