The Insider

Shifting Credit
By John Liang
August 4, 2010 at 5:10 PM

The European aerospace and defense industry's "main credit risks are likely to shift to defense from commercial in the next year," according to a new assessment by the Fitch credit-rating agency.

In a recent investor presentation in London, Fitch analysts found that:

With overall defense budgets in Western Europe under pressure from the general high budget deficits of most countries, the companies most exposed to European defense spending may see their traditional revenue base shrinking in real terms. These companies may choose to pursue growth in many emerging markets, although export opportunities are becoming increasingly competitive and politicised as more and more developed markets-based defense companies chase a limited number of sizeable contracts in countries such as India and Brazil.

Floored
By Dan Dupont
August 4, 2010 at 3:52 PM

The Senate Armed Services Committee today approved the nomination of Gen. James Mattis for the post of U.S. Central Command chief, as well as the nominations of a couple of key National Nuclear Security Administration officials, according to the panel.

In a statement, the committee said it voted favorably to approve the nominations of Anne Harrington as deputy administrator for NNSA, and Neile Miller for the slot of principal deputy administrator.

Jonathan Woodson's nomination for the post of assistant secretary for health affairs was also sanctioned. All three nominations were sent to the floor for full Senate approval.

In addition, "4,300 pending military nominations in the Army, Navy, Air Force, and Marine Corps" were sent to the floor.

Delayed START
By John Liang
August 3, 2010 at 10:35 PM

One of the main stumbling blocks to the Senate Foreign Relations Committee's efforts to approve the ratification of the follow-on Strategic Arms Reduction Treaty has been committee Republicans' wish to view the negotiating record of the talks between U.S. and Russian officials that culminated earlier this year. As Sen. Jon Kyl (R-AZ) said last month:

"There are so many things that we have not yet had permission to read," Kyl said, including the State Department's record of the negotiations between U.S. and Russian officials that concluded earlier this year. There are "still hundreds of questions that have not been answered from the administration. . . . Both the Armed Services Committee and the (Select) Intelligence Committee have more hearings and more work to do, even if the Foreign Relations Committee is ready to wind her up," he continued, adding: "And of course there's the resolution for ratification -- we have not even begun to consider the things that need to go into that.

"What thoughtful people need to do is to say, 'Slow down, you will have a better chance of getting the treaty through if you try to do it the right way," he continued. "If you try to run roughshod over those who have legitimate questions to ask, you try and jam it through and you don't take into account the things that we've raised here, then you are less likely to get it ratified than you are if you do it right,' even, I would suggest, if we get into the next Congress."

Looks like he and other treaty skeptics may have gotten their wish. In a letter sent to panel members by Chairman John Kerry (D-MA) this afternoon and first reported by Politico, Kerry writes:

Responding to requests from several senators, the Executive branch has now provided a thorough summary of the New START negotiating record regarding missile defense.

Kerry's letter also lists the other documents provided by the White House:

* On May 13, the treaty text, protocol, and annexes were submitted to the Senate, with a detailed article-by-article analysis of every provision.

* On May 13, the President also submitted a comprehensive plan for maintaining and modernizing the nuclear weapons complex.

* On June 30, the Intelligence Community submitted a National Intelligence Estimate assessing its ability to monitor compliance with the terms of the New START Treaty.

* On July 2, the State Department submitted a report assessing international compliance with arms control agreements, including Russia’s compliance with the original START Treaty.

* On July 12, the State Department submitted an analysis of the New START Treaty’s verifiability.

* Over the course of the last month, the Executive branch has responded to hundreds of questions for the record that members posed to Committee witnesses.

Kerry's letter states that committee members should be prepared to vote on approving the treaty on either Sept. 15 or Sept. 16.

UAVs vs Satellites
By John Liang
August 3, 2010 at 7:52 PM

Traditional satellite manufacturers should be quaking in their boots every time someone says a certain three letters: UAV. That's among the assertions made in a recent study conducted by independent research organization Market Intel Group LLC, which states that future UAVs "pose a commercial threat as well as a significant opportunity to existing and planned satellite networks." Specifically:

Truly persistent UAVs, first lighter-than-air then more traditional fixed-wing aircraft, will soon behave like satellites. At least five efforts are currently underway in the United States to prototype stratospheric airships as a means to fly UAVs over one point for between a month and five years. DARPA, the U.S. military’s Defense Advanced Research Projects Agency, finished initial work on such airships nearly three years ago and should reach the same point for aircraft by 2013.

Such persistent UAVs may end up taking away from satellites "traditional" and evolving functions as well as customers. They may also provide a robust opportunity for satellite vendors to "join-in on the action" in this market, by taking, for example, a healthy slice of the Command and Control sector.

The next technology forecast in Market Intel Group's (MiG) UAV series: UAVs for Commercial Applications – will detail traditional space capabilities that will probably migrate, to some extent, to persistent UAVs. Satellite vendors' response to this evolving threat is mixed: For example, Boeing's leadership is "bullish" on persistent UAVs and their space experts have partnered with their unmanned aircraft team. That company recently announced that its military aviation divisions would concentrate on unmanned aircraft for the foreseeable future.

On the other end, a number of satellite service providers have no idea that UAVs could be more than the flying camera and Hellfire platforms of current military operations.

Typical Stratospheric UAV Coverage Area (Radar, Laser & Optical)

Why is this important? UAVs that hold position at perhaps 65,000' over one point, indefinitely, function more like geostationary satellites than like aircraft. Such systems are sometimes called "pseudolites" by the GPS community, for example, because they will deliver 'satellite' capabilities from other platforms. But the UAV capabilities will be delivered at perhaps one-tenth of similar space capability costs, while also reaching unmodified transceivers like cell phones.

MiG's available UAV forecasts include studies on Border Security and Counter-Insurgency. Both of those fields will also be revolutionized by true persistence. For example, insurgents require anonymity to survive. The fight is essentially over when they are identified. Most of those prototype stratospheric airships are intended to strip that anonymity and so end the insurgencies in Iraq and Afghanistan. Today's satellite technologies will never deliver similar capabilities.

Counter-Point
By Sebastian Sprenger
August 3, 2010 at 4:23 PM

A story in the July 5 issue of Inside the Army about Harris Corp.'s offering for the Joint Tactical Radio System program made quite a splash in industry circles. Harris' Steve Marschilok contacted us about the story recently, and his letter to the editor is now posted below the original article.

Marschilok also forwarded a copy of a 2007 memo from John Grimes, the Defense Department's former chief information officer, to support Harris' case.

Naturally, we will continue to follow the debate about the "JTRS approved" label.

Live Fire
By John Liang
August 3, 2010 at 3:15 PM

The Army's plan to resume year-round, live-fire training at an Alaskan range is running up against significant concerns from both the Environmental Protection Agency and activists, Defense Environment Alert reports this morning.

Environmental activists are charging that the proposal will effectively violate a settlement agreement reached in a landmark case that contended Army training practices were breaching federal waste and water laws. Specifically:

The 2004 settlement had restricted the Army to using an impact range at Ft. Richardson's Eagle River Flats (ERF) seasonally, but the Army now wants to return to full training, contending the restrictions jeopardize troops' ability to be combat ready. The Army outlined its plans in a draft environmental impact statement (EIS), which the military released in March.

EPA Region X in recently submitted comments lists "serious concerns" with the potential impacts stemming from two different proposals analyzed under the draft document, particularly citing issues over water impacts, Superfund cleanup requirements and environmental justice impacts. At the same time, activists are raising issues over the plan's compliance with the 2004 settlement agreement that effectively limited live-fire training to certain seasons, and are specifically raising issues over water quality and endangered species.

"We are particularly concerned with the potential impacts to water quality, wetlands, Cook Inlet beluga, salmon stocks, shorebirds, other waterfowl, wildlife, recreation, visual resources, environmental justice (EJ), sensitive human populations, and commercial, recreation and subsistence fishing activities associated with the action alternatives," EPA Region X says in June 10 comments.

Live-fire training at ERF - a marshy area that has been used as a primary munitions impact area of Fort Richardson - has long been a contentious issue. In 2002, the Alaska Community Action on Toxics (ACAT) filed suit, alleging violations of the Clean Water Act and state and federal waste laws at the base, which is on the National Priorities List, the list of the nation's most hazardous waste sites. The suit alarmed high-level DOD officials, who worried that a damaging precedent could be set if the plaintiffs won and forced the military to stop training on an operational range, thereby impeding military readiness. Prior to the settlement, the military often cited the case as proof it needed Congress to relax environmental legal requirements in order to preserve military training.

Under the 2004 settlement, the Army halted live-fire training at ERF during summer and fall waterfowl migratory periods, which aimed to prevent the Army from stirring up white phosphorous in the sediment. White phosphorous had previously been used in smoke-generating munitions and was responsible for the deaths of numerous wild birds who ingested it. Firing is also only allowed if a certain level of ice thickness covers the water bodies in ERF.

In addition, under the settlement, the Army must conduct numerous other activities, including monitoring for migration of munitions constituents off-range, monitoring endangered beluga whales, analyzing environmental impacts of alternative training options upon remediation of the white phosphorous and before lifting any restrictions; documenting chemical constituents of munitions used, and applying for a Clean Water Act permit for the operational range.

But in the draft EIS notice, the Army says that it has undertaken cleanup of the white phosphorous under Superfund law, which will be completed this year, and that given ERF's importance as an environmental resource, it would adopt a set of new restrictions to protect valued resources under the expanded training plan (Defense Environment Alert, March 16). These would include following prohibitions against using munitions containing phosphorous in wetlands such as ERF, using environmentally-friendly training rounds when possible, and barring certain live-fire exercises during spring and fall waterfowl migration periods, among other measures.

BMD Details
By John Liang
August 2, 2010 at 8:21 PM

The House Appropriations Committee generally follows the practice of not making public the nitty-gritty details of its defense subcommittee mark-ups -- beyond some overall numbers -- until after the full committee has considered and passed the spending bill.

That, however, doesn't stop individual subcommittee members from releasing certain details on their own. A case in point is subpanel member Steve Rothman (D-NJ), who in a statement released today shed some light on fiscal year 2011 funding for U.S.-Israeli missile defense efforts:

On July 27, 2010, the Appropriations Defense Subcommittee of the U.S. House of Representatives sent a strong message – to our allies and enemies alike – by appropriating more funds than ever before toward joint U.S.-Israel and Israeli missile defense programs. This is only the latest example that when it comes to defense, military, and intelligence cooperation, the relationship between the U.S. and Israel has never been stronger.

Chairman Norm Dicks, myself and all the members of the Defense Subcommittee understand how important it is to be at the cutting edge of anti-missile technology, both to safeguard our own citizens and troops, but also those citizens and troops of our allies and friends such as the people of the Jewish state of Israel.

Given the concern and attention that we are focusing now on every dollar we are expending on behalf of the U.S. taxpayer for all purposes, including the defense of the United States and its allies, it is a mark of the importance of these projects that they were all funded so robustly and fully by our Subcommittee.

The Appropriations Defense Subcommittee has just appropriated $217.7 million in funding for essential joint U.S.-Israel missile defense programs, which is an increase of $95.7 million in funds over the original request. I am proud that since 2007, the Appropriations Defense Subcommittee has allocated more than $750 million in federal funding for the Arrow and David’s Sling anti-missile systems. Including this year’s allocation of $205 million toward Israel’s Iron Dome program, the Subcommittee has allocated nearly one billion dollars toward these three missile defense systems over the past three years.

I thank President Barack Obama, Chairman of the Defense Subcommittee, Norm Dicks, and all my colleagues on the Subcommittee for their leadership and vision in providing this life-saving support. The growing proliferation and increasing deadliness of missiles around the world pose a direct threat to the U.S. and our allies, making funding missile defense systems vitally important for America’s national security.

NORAD-Russia Vs. Terrorists
By Jason Sherman
August 2, 2010 at 7:46 PM

Using a scenario that reads like it was ripped from the pages of a thriller screenplay, the North American Aerospace Defense (NORAD) Command today announced plans for a first-ever cooperative air defense exercise with Russia's air force:

The basic premise is that a U.S.-flagged commercial air carrier on an international flight (Fencing 1220) has been taken over by terrorists.  The aircraft will not respond to communications.  The exercise scenario will create a situation that requires both the Russian Air Force and NORAD to launch or divert fighter aircraft to investigate and follow Fencing 1220.  The exercise will focus on shadowing and the cooperative hand-off of the monitored aircraft (Fencing 1220) between fighters of the participating nations.

A U.S. AWACS E-3B and a Russian A-50 along with fighter-interceptor and refueling aircraft will participate in the exercise, which is designed around two international flights that will follow the same route: one originating in Alaska and traveling to the Far East followed by one originating in the Far East and traveling to Alaska.

Dubbed "Vigilant Eagle," the four-day exercise will take place "on or about" Aug. 8 to 11 and involve U.S., Russian and Canadian officials participating in both the United States and Russia. Along with the military, U.S. and Russian civilian air control agencies will also take part.

The impetus for this exercise, a NORAD spokesman told InsideDefense.com, is a Sept. 2003 agreement between then-U.S. President Bush and then-Russian President Putin for their nations' militaries to increase cooperation in three areas: counterterrorism, missile defense, and peacekeeping.

Wagons East
By Marcus Weisgerber
August 2, 2010 at 7:05 PM

Boeing announced this afternoon that it is moving its C-130 Avionics Modernization Program and B-1B bomber program from Long Beach, CA, to Oklahoma City, according to company officials.

About 550 of the approximately 800 positions in California will relocate to Oklahoma, according to a Boeing statement. "The remaining positions will be reduced from the programs over the next two years as contracts are fulfilled," the statement reads.

Boeing Vice President and General Manager of Maintenance, Modifications & Upgrades Mark Bass said relocating the programs will help the company "provide a more competitive cost structure for customers."

"Making a decision like this is never easy, but as we reviewed our anticipated operating costs for the next several years, it became clear that Boeing needs to take major actions on these programs in order to remain affordable for our customers," Bass said in the statement. "We remain committed to maintaining the excellent record of performance that our employees deliver for our U.S. Air Force B-1 and C-130 AMP customers during this transition."

Boeing is building a new avionics kit for legacy C-130H aircraft and is the B-1B prime contractor.

POM Proposition
By Jason Sherman
August 2, 2010 at 6:41 PM

The military services and defense agencies by last Friday, July 30, all delivered to the Office of the Secretary of Defense summaries of their proposed fiscal year 2012 spending plans, along with an outline that projects investments through FY-16, according to Pentagon officials.

Transferring details of these program objective memoranda (POMs) into the computer systems managed by OSD will take another few days, these officials say. The comptroller's shop is responsible for all FY-12 budget proposals and the office of cost assessment and program evaluation takes receipt of all FY-12 to FY-16 spending plans.

In August, service leaders will formally present their POM proposals to the Deputy's Advisory Working Group, co-chaired by Deputy Defense Secretary William Lynn and Vice Chairman of the Joint Chiefs of Staff Gen. James Cartwright.

In mid-September, according to Pentagon sources, the Office of the Secretary of Defense -- in concert with the White House Office of Management and Budget -- will proceed with a review of these spending plans that will continue until Christmas, when the Pentagon traditionally locks in its new budget proposal.

Upcoming Hearing
By John Liang
August 2, 2010 at 4:27 PM

The Senate Armed Services Committee this week is scheduled to hear testimony on the report of the congressionally mandated Independent Panel on the 2009 Quadrennial Defense Review.

As they did in the House Armed Services Committee last week, panel Co-Chairs William Perry and Stephen Hadley will brief the Senate Armed Services committee tomorrow at 9:30 a.m.

InsideDefense.com last week reported on the panel's conclusions -- increasing the size of the Navy to a 346-ship fleet and bolstering the U.S. military's posture in the Western Pacific to counter China's growing influence in the region -- before they were made public.

As Inside the Army reports this morning, House Armed Services Committee Chairman Ike Skelton (D-MO) last week questioned the panel's findings of sufficiency in Army force structure, given the stress placed on the service by two wars:

"I was very surprised to see the report indicate that you thought the current end strength of our active duty ground forces, Army and Marines, is sufficient," Skelton said at the July 29 hearing, adding: "I respect your opinion, but I find that difficult to understand, watching the toll these wars have placed on our forces," Skelton explained. "I would caution against being too optimistic about the demand for these forces in the future."

Additionally:

The report concurs with the QDR, released in February, that the Army force structure should remain at four corps headquarters, 18 division headquarters, 73 total brigade combat teams (45 active component and 28 reserve component), 21 combat aviation brigades, 15 Patriot battalions and seven Terminal High Altitude Area Defense batteries.

The report acknowledges that the panel had neither the time nor the resources to conduct a detailed force-structure analysis, but recommends that the Army and Marine Corps remain at the size they are today.

The Fiscal Year 2007 National Defense Authorization Act required the formation of the new, bipartisan panel to assess the QDR for Congress.

When questioned in the HASC hearing on force structure, QDR independent panel co-chairman Stephen Hadley said, "We were not in a position to do the kind of force planning that the Department of Defense would do . . . in the case of the Army and the Marine Corps, we endorsed the fact that it's actually a larger, slightly larger force; and we think that's appropriate."

Dutch Deal
By Christopher J. Castelli
July 30, 2010 at 8:52 PM

Politicians in the Netherlands reached an informal deal today to form a right-wing government, which is "good news" for Dutch defense initiatives and the F-35 Joint Strike Fighter program, according to Lt. Col. Marcel de Haas, a Dutch military officer and a senior research fellow at the Netherlands Institute of International Relations Clingendael in The Hague.

Successful informal talks between the Conservative Liberals (VVD), Christian Democrats (CDA) and the anti-Islam Party for Freedom (PPV) will now lead to formal negotiations, De Haas told Inside the Pentagon. "This is intended to lead to a minority government of CDA and VVD, with support from PVV to gain a majority for the policy plans as agreed," he said. Though the parties are still "far away" from  forming a new government, the deal likely means there will be fewer defense cuts and greater commitment to Dutch participation in the F-35 program than if a left-leaning coalition had successfully emerged, according to De Haas.

He said the VVD has not advocated defense cuts, while the CDA has advocated half a billion euros ($651 million) in defense cuts.  The PVV has advocated 1 billion euros ($1.3 billion) in defense cuts, but in the support role the PPV would not be in government, De Haas said. CDA and VVD are in favor of the Joint Strike Fighter, whereas PVV is against, he said. De Haas is also a defense adviser for the Dutch Reformed Party (SGP). Dutch military personnel are allowed to be active in politics, to include running for parliament.

Plugging The Leaks
By John Liang
July 30, 2010 at 6:07 PM

Senate Armed Services Committee Chairman Carl Levin (D-MI) this week sent a letter to Defense Secretary Robert Gates regarding the Wikileaks.org website's release of thousands of classified documents on the war in Afghanistan.

"Since classified information is, by definition, material that reasonably could be expected to cause damage to the national security if made publicly available, I am concerned about the nature and extent of the damage caused by the release of these documents and the steps that the Department of Defense is taking to address the problem," Levin wrote July 28.

Specifically, the senator wants to know the following:

1. What is the Department's assessment of the extent to which the documents disclosed on Sunday contain information that was not previously available in the public domain? In the Department's judgment, what are the most significant new disclosures resulting from the release of these documents?

2. What is the Department's assessment of the extent to which sources and methods were divulged as a result of the release of these documents?

3. Has the Department conducted a damage assessment to determine the extent to which individuals may have been put at risk, the enemy may have learned about our tactics and techniques, our allies may be less cooperative in the future, or we may have suffered other specific damage as a result of the release of these documents?  If so, what are the conclusions of that assessment?

4. What steps is the Department taking to identify the individual or individuals who released these documents and to prevent future leaks of this kind?

In a Pentagon briefing yesterday, Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, said:

The sheer size and scope of the collection now demands a careful review to determine the degree to which future tactical operations may be impacted, and the degree to which the lives of our troops and Afghan partners may be at risk. And I think we always need to be mindful of the unknown potential for damage in any particular document that we handle.

Mullen then had a few choice words for Julian Assange, the editor of Wikileaks:

Mr. Assange can say whatever he likes about the greater good he thinks he and his source are doing, but the truth is they might already have on their hands the blood of some young soldier or that of an Afghan family. Disagree with the war all you want, take issue with the policy, challenge me or our ground commanders on the decisions we make to accomplish the mission we've been given, but don't put those who willingly go into harm's way even further in harm's way just to satisfy your need to make a point.

In an interview this morning on NBC's Today show, White House spokesman Robert Gibbs admitted the administration doesn't have much leverage with Wikileaks in stopping the organization from releasing another batch of classified documents:

Well, we can do nothing but implore the person that has those classified top-secret documents not to post any more. As you mentioned, what Admiral Mullen said -- and I talked to him about that yesterday when we had our meeting about Afghanistan and Pakistan -- and, look, you have Taliban spokesmen in the region today saying they're combing through those documents to find people that are cooperating with American and international forces to bring peace to Afghanistan. They're looking through those for names. And they said they know how to punish those people.

Stamp Of Approval
By John Liang
July 29, 2010 at 7:16 PM

The Senate Intelligence Committee today approved the nomination of Lt. Gen. James Clapper to become the next director of national intelligence by a 15-0 vote. His nomination will subsequently be taken up for consideration by the full Senate.

In a statement, committee Chairwoman Dianne Feinstein (D-CA) said she "initially had reservations" about Clapper, "but those have been overcome by his experience and leadership ability. He has described for me and the Senate Intelligence Committee how he will be a strong DNI, independent of the influence of the Department of Defense, and he has promised to work in concert with the CIA and all the agencies of the Intelligence Community."

Feinstein said Clapper would "bring stability to an office that has had three leaders in just five years, and he will put the Office of the Director of National Intelligence on solid footing for the future. He has the support of President Obama, Secretary Gates and Director Panetta, and today he has my strong support."

Committee Vice Chairman Kit Bond (R-MO) had his own statement:

General Clapper has served our nation honorably for 46 years and I admire him, he has assured me that he does not intend to be a hood ornament but judging from recent history my yea vote is really a triumph of hope over experience.

Empire Challenge
By John Liang
July 29, 2010 at 2:34 PM

U.S. Joint Forces Command this week kicked off an annual intelligence, surveillance and reconnaissance interoperability exercise "that showcases emerging ISR capabilities, and provides vital lessons learned to improve joint and combined ISR interoperability to support warfighters at the tactical edge," according to a command statement.

Empire Challenge 10 runs from July 26 to Aug. 13, and "focuses on near-term capabilities that can be delivered rapidly to Afghanistan," the statement reads. "Requirements from Afghanistan will drive the event schedule, venues and scenarios, which are conducted through a combination of modeling and simulation, laboratory and live events."

The event itself is not limited to one location, according to a command fact sheet:

USJFCOM will host EC10 at Fort Huachuca, Ariz., and Naval Air Weapons Station China Lake, Calif., with locations at the Joint Intelligence Lab and Joint Systems Integration Center in Suffolk, Va.; the Combined Air Operations Center-X at Langley Air Force Base, Va.; service Distributed Common Ground/Surface System (DCGS) labs; coalition sites in the United Kingdom, Canada and Australia; and the NATO Consultation, Command and Control Agency in the Netherlands.

The fact sheet also lists the exercise's purpose and objectives:

EC10 Purpose

* Demonstrate and assess interoperability of the DCGS enterprise

* Evaluate sensor developers on data intake into DCGS and coalition ground station/enterprise

* Demonstrate and assess coalition interoperability

* Demonstrate and evaluate multinational data sharing

* Explore emerging ISR capabilities that can address warfighter requirements

* Explore joint and coalition ISR interoperability with command and control from national operations centers to deployed warfighters

EC10 Objectives

* Provide assessments of the DCGS enterprise, the capability-based interoperability of multinational systems, and the quality of intelligence support to command and control

* Enable a quick reaction capability and optimize the live-fly phase of EC