The Insider

Sequestration Warnings
By Jordana Mishory
July 17, 2012 at 4:08 PM

The Aerospace Industries Association is out with a report today claiming that if Congress does not reach a compromise to halt sequestration cuts, 2.14 million jobs will be lost and the fragile U.S. economy will be pushed into a recession.

This report is the latest effort in AIA's campaign to stop sequestration. AIA President and Chief Executive Officer Marion Blakey called the study the "most comprehensive" one out yet.

At AIA's report release event, Sen. Kelly Ayotte (R-NH) said she hopes the document will serve as an "eye-opener" for members of Congress on both sides of the aisle, reminding them that they need to find a solution now to a year's worth of sequestration cuts "in a responsible way."

At the same event, Sen. Jeanne Shaheen (D-NH) said Congress must find a long-term solution to deal with the debt and deficit. Otherwise, she said, lawmakers will find themselves in the same predicament again. And, she added, the solution must involve at all aspects of the budget, including mandatory and domestic spending as well as revenue increases.

Ayotte emphasized that lawmakers need to find at least a short-term solution before the election. This, she said, would give lawmakers more time to create a more comprehensive and lasting way to fix the deficit.

A bipartisan working group should be formed to deal with the issue, Ayotte added, noting that some in the Senate already are discussing the idea. And Ayotte conceded that ways to boost revenues must be included in order to reach a bipartisan compromise.

Unclassified Nukes
By John Liang
July 17, 2012 at 4:00 PM

The Defense Department last week released an instruction memo that "updates policies, assigns responsibilities and prescribes procedures for . . . controlling unclassified information on the physical protection of DOD special nuclear material (SNM), SNM equipment, and SNM facilities."

According to the July 12, 2012, instruction:

a. Unauthorized dissemination of unclassified information pertaining to security measures, including security plans, procedures, and equipment, for the physical protection of DoD SNM, SNM equipment, SNM facilities, or nuclear weapons in DoD custody is prohibited.

b. Unclassified information shall be protected as DoD UCNI based on a determination that the unauthorized dissemination of such information could reasonably be expected to have a significant adverse effect on the health and safety of the public or the common defense and security by significantly increasing the likelihood of the illegal production of nuclear weapons or the theft, diversion, or sabotage of DoD SNM, SNM equipment, SNM facilities, or nuclear weapons in DoD custody.

c. Unclassified information regarding physical protection of DoD SNM and nuclear weapons in DoD custody shall be made publicly available to the fullest extent possible by applying the minimum restrictions, consistent with the requirements of Reference (c), necessary to protect the health and safety of the public or the common defense and security.

d. This Instruction and part 1017 of title 10 of the Code of Federal Regulations (Reference (g)) shall be used as guidance for handling DOE UCNI that is under DoD control.

e. This Instruction does not prevent a determination that information previously determined to be DoD UCNI is classified information in accordance with DoD Manual (DoDM) 5200.01-V1 (Reference (h)) and other applicable standards of classification.

Sen. Murray on Sequestration
By Jordana Mishory
July 16, 2012 at 7:18 PM

Democrats will only agree to a sequestration-replacement plan that includes revenue increases, Sen. Patty Murray (D-WA) said today.

During a speech at the Brookings Institution, Murray said Democrats were not willing to accept “wildly imbalanced” plans during supercommittee deliberations, and are not willing to do the same now. Without a plan in place, the Pentagon is facing hundreds of billions of additional cuts in spending slated to kick in next year. “Anyone that tells you sequestration will disappear because both sides want to avoid it is either fooling themselves . . . [or fooling] you,” said Murray, who chaired the supercommittee whose failure to achieve a $1.2 trillion deficit reduction plan triggered sequestration. Murray is a member of the Senate Appropriations defense subcommittee.

Murray said lawmakers have to deal with the planned cuts to both defense and domestic spending. She pointed to her efforts with Sen. John McCain (R-AZ), the ranking member of the Senate Armed Services Committee, to call for an analysis of the impacts of sequestration across the defense and non-defense sectors as a way to help lawmakers on both sides to move forward.

Throughout much of the speech, Murray pointed the finger at Republicans unwilling to raise revenues, or increase taxes for the rich, as the major roadblock to solving the crisis. Unless the Republicans end their commitment to preventing tax increases, she contended, “our country will face the consequence of Republican intransigence.”

Murray said she's willing to talk anyone on either side of the aisle who is ready to compromise, and noted some glimmers of hope: Republicans, in backrooms and small numbers, are growing more willing to discuss the possibility of raising revenues, she said, noting that some are eager to engage in such discussions to protect the Pentagon.

Naval Incident
By Christopher J. Castelli
July 16, 2012 at 4:54 PM

The Navy oiler Rappahannock (T-AO 204) today fired a machine gun at a small boat after the vessel ignored warnings to stay away, U.S. Naval Forces Central Command said in a statement. The incident is under investigation.

From the statement:

FIFTH FLEET AREA OF OPERATIONS - An embarked security team aboard a U.S. Navy vessel fired upon a small motor vessel after it disregarded warnings and rapidly approached the U.S. ship near Jebel Ali, United Arab Emirates today.

In accordance with Navy force protection procedures, the sailors on the USNS Rappahannock (T-AO 204) used a series of non-lethal, preplanned responses to warn the vessel before resorting to lethal force.

The U.S. crew repeatedly attempted to warn the vessel's operators to turn away from their deliberate approach. When those efforts failed to deter the approaching vessel, the security team on the Rappahannock fired rounds from a .50-caliber machine gun.

Carter Abroad
By Christopher J. Castelli
July 16, 2012 at 3:33 PM

Deputy Defense Secretary Ashton Carter starts a 10-day trip to the Asia-Pacific region tomorrow, Pentagon Press Secretary George Little told reporters today.

Little said the trip, Carter's first to the region as the Pentagon's No. 2 leader, will involve a visit to U.S. Pacific Command in Hawaii, as well as stops in Guam, Japan, Thailand, India and South Korea. He did not provide further details on the agenda.

Earnings Outlook
By John Liang
July 16, 2012 at 3:14 PM

With defense contractors set to announce their second-quarter earnings later on this month, Wall Street investment firm Credit Suisse this morning released its own outlook for the defense and aerospace industry. Some excerpts:

*      Q2 earnings looks safe; but tone will be key: Despite mixed economic data and deteriorating broad market sentiment, Aerospace & Defense results generally should meet or beat expectations given the longer, later cycle nature of the sector.  Thus, we do not expect many negative surprises, with the exception of a possible guidance downgrade from COL. But, we think stocks will react to tone from management, particularly from defense contractors turning up the volume on the risks from sequestration. . . .

*      Sequestration overhang in defense:  EPS should meet expectations, likely with high margins once again offsetting soft sales.  But stocks will generally be held back by light bookings as acquisition officials stall new contracts in the face of uncertainty, especially in O&M accounts.  Lastly, we expect a rise in the rhetoric on the mounting threat to industrial stability and jobs.

*      Stocks: Into results we prefer BA and PCP in comm'l OE. In aftermarket, we favor TDG, although its recent resiliency (+39% YTD) could limit share upside from earnings. In Defense, we favor RTN (OP) on int'l and electronics long-term, but note LMT's & NOC's higher relative Air Force and lower Army exposure should benefit their order intake in Q2.

Carrier Move
By Christopher J. Castelli
July 16, 2012 at 3:12 PM

Defense Secretary Leon Panetta has accelerated by four months, to late summer, the deployment of the aircraft carrier John C. Stennis (CVN-74) and its strike group to the U.S. Central Command area of operations, Pentagon Press Secretary George Little told reporters today.

The decision, which will maintain a two-carrier presence in the region, was made in response to CENTCOM requirements, Little said.

He added that the move would not temporarily boost the presence there to three carriers. Asked whether concerns about Iran drove the decision, he said no single country or threat sparked the move.

Up and Away
By Dan Taylor
July 13, 2012 at 8:35 PM

A Marine pilot made the first non-test flight in an F-35B short-takeoff, vertical-landing variant of the Joint Strike Fighter this week.

Lt. Col. David Berke, the commanding officer of training squadron VMFAT-501, conducted the flight on July 10 at Eglin Air Force Base in Florida. It is the first of several flights lined up to certify him and other members of the squadron as F-35 instructors for the first batch of Marine Corps pilots that will arrive later this year.

“This flight represents the increasing maturity of the Joint Strike Fighter air vehicle system and logistical support required to commence the operational training flights to be conducted by Marine Corps pilots in the fifth generation aircraft,” reads a July 13 Marine Corps statement.

Reid on Sequestration
By Christopher J. Castelli
July 13, 2012 at 5:36 PM

Senate Majority Leader Harry Reid (D-NV) responded yesterday to House Armed Services Committee Chairman Buck McKeon's (R-CA) June 27 letter about the threat of sequestration under the Budget Control Act. McKeon's letter urged Reid to allow a plan to resolve sequestration to come to the Senate floor. But Reid's response blames Republican leaders for refusing to make hard decisions required for a compromise.

"Instead, Mitt Romney and the congressional GOP leadership have fallen in line behind Grover Norquist, the radical lobbyist who opposes closing even the most outrageous corporate loopholes to reduce the deficit," Reid writes. "In fact, not only has the GOP leadership refused to ask special interests, millionaires and billionaires to pay their fair share, now they are demanding even more budget-busting tax breaks for those who need them least." Reid's letter predicts that Congress will, "in time," reach an agreement to avoid sequestration.

"My preference would be to reach agreement sooner, rather than later," Reid writes. "But that will happen only when Republican leaders are finally willing to stand up to rigid ideologues and make the compromises needed. Given your concerns about sequestration, I would encourage you to focus your energy on convincing Republicans that forging a balanced compromise that protects the middle class is more important than adhering to the Tea Party's rigid, extreme ideology."

Radio News
By John Liang
July 13, 2012 at 3:05 PM

With this morning's big news about the Joint Tactical Radio System (see story here and FOUO acquisition decision memo here), it's a good time to check out more of InsideDefense.com's coverage of the JTRS program over the past three months:

JPEO JTRS Envisions Catalog Of Certified Interoperable Radio Devices
Inside the Army - 07/02/2012

Reprogramming Request For JTRS Vehicle Radio Arrives On Capitol Hill
Inside the Army - 06/18/2012

MAINGATE Radios Slated To Run In Next NIE; GD Moves To Obviate MNVR
Inside the Army - 06/04/2012

Senate Authorizers Move To Ensure JTRS Competition Is 'Full And Open'
Inside the Army - 05/28/2012

Radio Wars Rage On As GD And Harris Jockey For Support On Capitol Hill
Inside the Army - 05/21/2012

JTRS Network Manager For Soldier Radio Waveform Gets Testers' Blessing
Inside the Army - 05/07/2012

House Authorization Panel Backs Full Funding For JTRS HMS Program
Inside the Army - 04/30/2012

Official: Defense Acquisition Board To Review AMF-JTRS 'Shortly'
DefenseAlert -- 23 April 2012

Raytheon's MAINGATE Waveform Accepted Into JTRS Repository
Inside the Army - 04/23/2012

Army G-4 'Non-Concurs' On JTRS RR 'Contractor-Only' Sustainment
Inside the Army - 04/23/2012

Kendall Approves MIDS-JTRS Production, Fielding
Inside the Army - 04/16/2012

Army's JTRS Vehicle Radio Stalls Pending Congressional Reprogramming
Inside the Army - 04/16/2012

OPSEC Memo
By John Liang
July 12, 2012 at 4:00 PM

The Defense Department recently issued a directive "to update established policy and assigned responsibilities governing the DOD [Operations Security] program." According to that June 20 memo:

It is DoD policy that all DoD missions, functions, programs, and activities shall be protected by an OPSEC program that implements DoD Manual 5205.02 (Reference (c)).

a. OPSEC shall be considered across the entire spectrum of DoD missions, functions, programs, and activities. The level of OPSEC to apply is dependent on the threat, vulnerability, and risk to the assigned mission, function, program, or activity, and available resources.

b. OPSEC and other security and information operations programs shall be closely coordinated to account for force protection and the security of information and activities.

c. DoD personnel shall maintain essential secrecy of information that is useful to adversaries and potential adversaries to plan, prepare, and conduct military and other operations against the United States and shall safeguard such information from unauthorized access and disclosure in accordance with DoD Manual 5200.01 (Reference (d)).

d. The OPSEC process shall be used to identify and mitigate indicators of U.S. intentions, capabilities, operations, and activities.

e. OPSEC countermeasures shall be employed to deny to adversaries and potential adversaries indicators that reveal critical information about DoD missions and functions.

Structured
By Gabe Starosta
July 12, 2012 at 3:20 PM

Rep. Randy Forbes (R-VA) this morning expressed his support for an "independent assessment" of the Air Force's proposed future force structure, an assessment already recommended by the Senate Armed Services Committee.

Forbes, the chairman of the House Armed Services readiness subcommittee, said at a hearing on the Air Force's fiscal year 2013 force structure recommendations that he would be supportive of an independent panel. Though Forbes didn't mention it by name, the only such panel proposed so far is the Senate Armed Services Committee's "National Commission on the Structure of the Air Force," which -- if approved -- would report back to Congress in time for the fiscal year 2014 budget submission.

Forbes said he is in favor of implementing force structure changes that have broad support while seeking more information on the rest of the Air Force's proposals.

"Additional clarity on the requirements that support the overall force structure has been lacking for many years and is clearly warranted," he said in his opening statement.

Background information on the proposed commission is available in this Inside the Air Force piece from early June:

Senate Commission Could Lean On Internal Active-Reserve Analyses

The sector of the Air Force's strategic planning directorate that focuses on developing the right mix of active-duty, Guard and Reserve responsibility for individual mission areas has recently prepared analyses for several types of aircraft and is awaiting direction on how it can contribute to a commission proposed by the Senate Armed Services Committee.

In its fiscal year 2013 defense authorization bill, the Senate panel recommended creating a "National Commission on the Structure of the Air Force" to analyze the way the Air Force utilizes its active-duty, Air National Guard and Air Force Reserve components. That recommendation is in response to the service's FY-13 budget request, which proposed the retirement of hundreds of Air National Guard aircraft and has drawn intense criticism from members of Congress and state governors for its disproportionate impact on the Guard.

Highlights of the legislation were made public last month, but the full bill text and report were not released until June 5. That commission would be required to report to Congress by the end of March 2013, in time for lawmakers to consider any recommendations as they evaluate the Defense Department's FY-14 budget request. The House defense authorization bill, passed by the full chamber last month, did not include similar language, and House leadership has not publicly objected to the commission's creation.

The Air Force internally evaluates how it divides responsibility between the active and reserve components using its Total Force Enterprise (TFE) review process. The TFE division, a branch of the Air Force's strategic plans and programs directorate, conducts detailed analyses of the way operations should be divided between the components within particular mission areas, and those analyses -- once fused together -- could help inform the commission's work. The review process also helps inform service basing decisions and personnel assignments, including the implementation of active associations at various sites across the country.

In a June 6 interview at the Pentagon, Col. Eric Jorgensen, the TFE division's chief, explained to Inside the Air Force that over the past 30 years, the active-duty Air Force's manpower and inventory have decreased significantly. In contrast, the Guard and Reserve have remained stable in those areas, resulting in a heavy dependence on the reserve component. The FY-13 budget and other long-term plans are meant to orient the service slightly more heavily toward the active-duty force, he said.

CBO FYI
By Dan Dupont
July 11, 2012 at 7:50 PM

The Congressional Budget Office has released its annual assessment of the Pentagon's future years defense plan.

Its conclusions:

  • To execute its base-budget plans for 2013 through 2017, DoD would need appropriations totaling $53 billion (or 2.0 percent) more in real, or inflation-adjusted, terms than if funding for the base budget was held at the 2012 amount of $543 billion. For the entire projection period of 2013 through 2030, DoD’s base-budget plans would require appropriations totaling $1.2 trillion (or 12 percent) more than if funding for the base budget was held at the 2012 amount in real terms.

  • The primary cause of growth in DoD’s costs from 2013 to 2030 would be rising costs for operation and support (O&S), which accounts for 64 percent of the base budget in 2012. In particular, under DoD’s plans, there would be significant increases in the costs of military health care, compensation of the department’s military and civilian employees, and various operation and maintenance activities.

  • The costs of replacing and modernizing weapon systems would grow sharply during the next several years, from $168 billion in 2013 to $212 billion in 2018 in real terms—an increase of 26 percent. Acquisition costs would remain fairly steady at that level until 2025 before declining.

  • The growth in DoD’s costs would be less than the growth of the economy, so costs would decline as a share of gross domestic product (GDP). Spending for DoD’s base budget was 3.5 percent of GDP in 2010 and would decline to 3.0 percent of GDP in 2017 and to 2.5 percent in 2030.

New NDU President
By Dan Dupont
July 11, 2012 at 6:39 PM

Army Maj. Gen. Gregg Martin is the new president of the National Defense University, according to an NDU release.

Chairman of the Joint Chiefs of Staff. Gen. Martin Dempsey presided over the change of command ceremony at NDU, located at Ft. Lesley J. McNair in Washington.

From the release:

Major General Gregg F. Martin previously served as 48th Commandant of the Army War College from 2010-12.

A 1979 West Point graduate, he is a career engineer officer who has served globally in peace and war from Platoon Leader to Commanding General (CG).

As a company grade officer, he served from 1980-85 in the Cold War defense of Europe in the 94th and 79th Engineers, 18th Engineer Brigade. Following company command, he earned master’s degrees in Civil Engineering and Technology Policy at MIT from 1986-88.

After serving as a Recruiting and Admissions Officer at West Point from 1988-91, he earned a Masters in National Security Studies at the Naval War College, and also completed his Ph.D. at MIT in Engineering Management and Public Policy with a dissertation on strategic leadership and organizational change (1991-92).

At Fort Lewis, WA, from 1992-95, he served in I Corps and the 864th Engineers and deployed on a short tour with JTF-Bravo in Central America, conducting stability and humanitarian support operations.

Assigned to the Department of Social Sciences at West Point, he taught American Politics, International Relations and National Security Studies from 1995-97.

He commanded the Fightin’ 5th Engineer Battalion at Fort Leonard Wood, MO, from 1997-99, where his Sapper-Scouts supported the 3rd Armored Cavalry Regiment (Brave Rifles!).

After earning a Masters of Strategic Studies at the Army War College, he joined the faculty and taught leadership and management from 2000-02.

He commanded the 130th Engineer Brigade (Sappers In!), in support of V Corps and CJTF-7 from 2002-04, which included deploying the Brigade from Germany to Kuwait, the ground offensive from Kuwait to Baghdad, and leading a 13,000-man joint-multinational brigade during the first year of the Iraq War.

He then served as Deputy G-3/5/7, of 7th Army and US Army Europe from 2004-05.

Next he served as CG of the Northwest Division, Army Corps of Engineers from 2005-07, which included civil works, disaster response, military construction and environmental programs across a 12-state region from Washington to Missouri, as well as service on the Mississippi River Commission as a Presidential appointee.

From 2007-08, he served as Commandant of the US Army Engineer School and Regiment, and then as CG of the US Army Maneuver Support Center of Excellence and Fort Leonard Wood, from 2008-10, educating, training and developing leaders; as well as capability and force development.

He deployed to Kuwait in January 2010 where he served as Deputy CG of 3rd Army and U.S. Army Central in support of operations in Afghanistan and Iraq, and throughout the CENTCOM AOR.

Energy Ops
By Gabe Starosta
July 11, 2012 at 5:15 PM

A newly obtained memo from the Defense Department's operational energy chief lays out the process by which DOD plans to certify, test and eventually buy alternative fuels.

The memo from Sharon Burke, DOD's assistant secretary for operational energy plans and programs, is dated July 5. The document outlines the steps the military services must take if they hope to introduce alternative fuels into their fleets and emphasizes that spending considerations and operational benefits are paramount.

“It should be stressed that operational military readiness and battlespace effectiveness are the desired end-state, not simply the use of alternative fuels,” Burke writes in the memo. “Alternative fuels can be a means to ensure combat effectiveness, logistical flexibility and to mitigate Anti-Access/Area Denial (A2AD) effects.”

The memo adds that all DOD alternative fuels investment will be “subject to a rigorous, merit-based evaluation” and will be reviewed annually as part of the department's internal budget certification process.

The alternative fuels development process is broken down into three phases, Burke writes. In the first, the services must consider a number of issues in determining what fuels to spend money qualifying their platforms to operate on; the second explains how the services would be expected to justify and pay for field demonstrations of those fuels; and the third involves working successfully tested alternative fuels into the Defense Logistics Agency's fuel-purchasing supply chain.