The Insider

By John Liang
April 27, 2011 at 3:08 PM

Despite an expected downturn in federal defense spending, the Wall Street analysis firm Credit Suisse is fairly bullish on Lockheed Martin's growth prospects, according to a research note issued this morning:

*      LMT Highlights Growth Lanes, but We Remain Sidelined on Macro: Unlike some defense companies who have capitulated to unrelenting spending pressure, LMT maintains confidence in its growth. If all goes well, we agree LMT is the premier growth story in large cap defense. As such, we review major growth programs inside, but note that ultimately we think defense stocks will continue to trade with the forest, instead of the trees for now. Consequently, we remain Neutral while the deficit battle unfolds.

*      F-35 Milestones Key for Program in 2011, but Not Highly Impactful on EPS [earnings per share]: After earning only 20% of potential award fees on F-35 in 2010 and forfeiting the remainder, mgmt is laser focused on meeting milestones to prove the program is on track. We estimate each milestone translates into a little over $0.01 in annual EPS, so see these as qualitatively important for program continuity, but quantitatively insignificant from an EPS perspective.

Check out's coverage of Lockheed's conference call with analysts yesterday:

Joint Strike Fighter Program Offers Lockheed $52.5 Million In Incentives in 2011

Lockheed Martin stands to earn as much as $52.5 million in 2011 if it can meet five key benchmarks associated with the Joint Strike Fighter's development schedule, the company's chief executive officer said today.

Lockheed Delivers Joint Strike Fighter Contract Proposal

Joint Strike Fighter lead contractor Lockheed Martin has submitted its contract proposal for the fifth production lot of the F-35, the first step in a contracting process likely to last through the summer and into the fall.

Boeing is conducting its conference call right now. Click here to view the company's earnings statement, and stay tuned for any news from the call.

By John Liang
April 26, 2011 at 9:38 PM

Retired Congressman and former House Armed Services Committee Chairman Ike Skelton (D-MO) has joined EADS North America's board of directors, the company announced in a statement released this afternoon:

The EADS North America Board of Directors has confirmed the board appointment of Ike Skelton, who most recently served for 34 years as a U.S. Representative from Missouri. Skelton's Congressional career culminated in the role of chairman of the House Armed Services Committee, in which capacity he served from 2007 to 2011.

"Ike Skelton has a distinguished record of service to our nation, especially in support of the men and women of our military," said Ralph Crosby, Chairman of EADS North America. "His patriotism and leadership will be tremendous assets for EADS North America as we continue seeking to bring innovative, best-value solutions to the U.S. military in support of its missions."

Prior to his seventeen terms in the U.S. House of Representatives, Skelton served for six years as a Missouri state senator, beginning in 1971. Having begun his career in the field of law, he served in private practice and as a prosecuting attorney in Lafayette County, Mo., followed by three years in the role of Special Assistant to the Missouri Attorney General.

A lifelong native of Lexington, Mo., Skelton earned an Associate of Arts degree from Wentworth Military Academy and College in 1951 and went on to earn a Bachelor of Arts and a Bachelor of Laws degree from the University of Missouri in 1953 and 1956, respectively. He is the recipient of 14 honorary master’s and doctorate degrees and more than 60 awards and tributes.

By Cid Standifer
April 26, 2011 at 8:54 PM

The Marines plan to sacrifice one of their Amphibious Assault Vehicles to be cannibalized by industry as an Amphibious Combat Vehicle technology demonstrator, according to responses to "industry day" questions posted on the Program Executive Office Land Systems website.

The document says the effort will be modeled on the Marine Personnel Carrier tech demonstrator, which bloomed in the Nevada Automotive Test Center desert as the Marines waited for a green light to officially start the program.

"The provision of AAVS loan to a selected Contractor may be considered as part of the acquisition strategy," the Q&A states. "Furthermore, the USMC is considering the value of providing fully or partially functional vehicles or vehicle hulls as a potential approach for both the development of a Technology Demonstrator and the design integration phase for the ACV."

Many of the requirements for the ACV have yet to be determined, although the program office says an initial capabilities document should be out this summer.

However, the Q&A states the Marines are pondering a medium-caliber cannon with a secondary coaxial weapon for lethality, and it also mentions that the Naval Surface Warfare, Crane Division is currently working on an Improved Up-gunned Weapons Station.

The program also has the option of using technology harvested from the Marines' former favorite brainchild, the Expeditionary Fighting Vehicle, which met its demise under the budget ax earlier this year. The document notes, however, that the EFV "is not necessarily the baseline from which the ACV will be derived."

The AAV, ACV and MPC will all be under one programmatic roof, according to the Q&A. The Marine Corps has pinpointed 26 areas that are ripe for commonality and expect industry partners to exploit them.

The document hints that technology used on the trio of swimmers could have other applications as well.

"[W]e are certainly interested in the potential cost savings (either [research and development] or procurement) associated with commonality with other vehicles across the [Defense Department], such as the [Army's Ground Combat Vehicle]," the list states.

This didn't meet universal acceptance among industry day attendees, evidently.

"Competition is the enemy of commonality," one attendee wrote in as a question. "US [government]/USMC goals are a dichotomy. What will give?"

The program office replied that the Marines plan to develop common interfaces for "form, fit and function" wherever they can, and expected industry teams to work collaboratively.

"Industry should be looking at a new business model to support this approach," the office warned.

By Sebastian Sprenger
April 26, 2011 at 6:31 PM

While defense leaders have been giving the impression that a review of military missions, as mandated by President Obama, is just getting under way, the Joint Staff had begun work on such a thing shortly before the president's April 13 speech, we're told by several officials.

A classified tasker from the Chairman of the Joint Chiefs of Staff, handed down about a week before the POTUS address, asked military leaders to look for "options" in the face of the strategic and "domestic" -- read fiscal -- environment, one source said.

Of course, Adm. Mike Mullen has noted for some time that the nation's debt is a key threat to national security.

After the Obama speech, the Mullen tasker seems to have become something of a nucleus for the kind of review that the president mandated. A follow-on phase, with more detailed guidance on world regions and DOD capabilities, just got started, we're told.

The Joint Staff's J-8 directorate and the Cost Assessment and Program Evaluation office on the one side, and the J-5 and the Pentagon's policy shop on the other, are key players in the effort, with one team looking at resources and the other examining strategic options, according to sources.

By John Liang
April 26, 2011 at 4:28 PM

House Appropriations defense subcommittee Chairman Bill Young (R-FL) recently issued a "Dear Colleague" letter containing guidance for how panel members should submit their proposals for the fiscal year 2012 appropriations bill, and warning them that earmarks "will not be considered." Specifically, according to the April 20 letter:

Please consult the earmark disclosure statements included in prior appropriations Acts to assist in making a determination. If the activity was previously listed as a congressional earmark, the Committee will continue to treat it as such. In addition, corrections to past earmarks will also be considered earmarks. IF you have any questions, please consult the Subcommittee staff.

Please also be aware that any request for earmarks also invokes the Code of Official Conduct. Clause 17 of the Code prohibits Members from requesting a congressional earmark without disclosing certain information to the Chair of the Committee of jurisdiction. Members are advised to carefully consider their submissions to the Committee in light of this.

The above language on earmarks was also included in all the other appropriations subcommittee chairmen's letters to colleagues, and comes in the wake of the House Armed Services Committee's doing the same thing, as reported in March:

The chairman of the House Armed Services Committee has issued guidance banning all earmarks and requiring complete transparency in the process of amending future defense authorization bills.

Released by Rep. Buck McKeon (R-CA) today, the guidelines state that budgetary legislative proposals "must be offered as an amendment to the bill (not the committee report)" when the full committee meets to mark up the defense authorization legislation. McKeon notes that the proposals must be voted on by the full committee.

"Only HASC members will be able to propose amendments during mark-up," McKeon writes in the guidance, noting that House members who do not serve on the committee can add proposals when the full House considers the legislation. "Please be advised that the full committee chair and subcommittee chairs will not include any member budgetary legislative proposals in their respective marks."

The guidance calls for all legislative proposals to be submitted by noon on April 11.

In addition, all proposed amendments must include a brief description stating both the amendment's purpose and "military utility." The guidance also prevents lawmakers from directing federal agencies to "expend the funds with (or award a contract to) a specific entity or within a specific locality."

By John Liang
April 25, 2011 at 7:32 PM

The Defense Department has officially killed the Joint Strike Fighter F136 alternate engine program, according to a DOD statement issued today:

The Department of Defense today notified the General Electric/Rolls Royce Fighter Engine Team (FET) and the Congress that the F136 Joint Strike Fighter (JSF) engine contract has been terminated.

On March 24, 2011, Under Secretary of Defense for Acquisition, Technology and Logistics Ashton Carter directed the F-35 JSF contracting officer to issue an order to the FET to stop work on the F136 development contract.  The stop work order ended the expenditure of $1 million per day on an extra engine that the DoD has assessed as unneeded and wasteful.  The stop work order was put in place pending final resolution of the extra engine’s future in Congressional action on the fiscal 2011 budget.

Subsequently, H.R. 1473, the Department of Defense and Full-Year Continuing Appropriations Act for 2011 was passed by both houses of Congress and signed by the President on April 15, 2011.  H.R. 1473 contains no funding for the F136 engine.

Following this action, Carter directed the JSF Joint Program Office to cease all activity on the F136 development, and the JSF contracting officer determined to terminate the F136 contract.

The FET has been instructed to preserve and deliver government property. The Defense Contract Management Agency will assume responsibility for termination settlement.

As blogged this morning, however, GE isn't going down without a fight. And according to a company statement released in the wake of the DOD announcement:

While we are deeply disappointed by the DoD's "Notice of Termination," GE and Rolls-Royce remain committed to the F136 and the significant benefits it brings to the American taxpayer and our fighting men and women.

For 14 years, the F136 team has developed F136 technologies and engine prototypes at a cost of $3 billion to taxpayers.  They contain some of the world’s most advanced propulsion technologies. The intellectual property includes numerous patented technologies from both companies.

Over the coming weeks we will work with the US Government to comply with the Notice.  Throughout that process, GE and Rolls-Royce will take all necessary steps to ensure that the F136 assets and intellectual property are protected.

More than $200 million in F136 hardware is located in 17 facilities, including nine engines under various stages of assembly.

GE and Rolls-Royce will work closely with our Congressional supporters during the 2012 budget process in pursuit of incorporating the engine into the program, and preserving competition. We continue to be encouraged by the bi-partisan support for the engine on the merits of its performance and value. There is a significant willingness in Congress to revisit the F136 funding debate as the consequences of terminating the engine are being fully understood.

From a company personnel standpoint, the F136 termination notice has limited impact because of actions already underway at GE and Rolls-Royce.

Since the DoD “stop work” order in March, GE and Rolls-Royce has been in the process of realigning the GE Rolls-Royce Fighter Engine Team into a core technical team (about 100 people). The team is being sized in a manner consistent with overall JSF schedule slips.

The technical team seeks to protect, enhance, and advance the vital F136 propulsion technologies for JSF and future combat aircraft.

The F136 program has been called a “near model program” by the U.S. Senate.  The F136 engine has met or exceeded performance expectations and demonstrated significant advantages over the Pratt & Whitney engine.  The engine development has been under development since 1996 and is 80% complete with six development engines tested.

In addition to strong performance, the GE/RR F136 development program has been on or ahead of schedule.

By Gabe Starosta
April 25, 2011 at 6:41 PM

The Air Force will hold full and open competitions for the recapitalization of two helicopter fleets rather than obtain a large quantity of Sikorsky Blackhawk choppers through a sole-source deal, according to an Air Force press release issued today.

The service will hold full competitions for two different types of helicopters: the Common Vertical Lift Support Platform (CVLSP), which conducts airlift and transport-style missions, and a replacement for the HH-60, known as HH-60 Recap, which is used for combat search and rescue. Air Force officials indicated to Congress last month that the service would likely pursue a competitive acquisition strategy, but exactly what that entailed was unclear. The Air Force intends to procure non-developmental aircraft in both cases.

The contracting and production time line for both platforms is fairly rapid -- a request for proposals for the CVLSP competition is expected this fall with a contract award expected in 2012, and the Air Force hopes to declare initial operational capability in 2015. HH-60 Recap procurement is slated to take place one year later, with an RFP to be issued in 2012, according to the Air Force press release.

Senior service officials told Congress in March that they expected three or four vendors to compete for these projects, and helicopter manufacturer AgustaWestland told that the company will bid for both the CVLSP and HH-60 Recap contracts.

The Air Force is looking to acquire 205 total helicopters: 93 CVLSP aircraft and 112 choppers to replace the HH-60.

In its fiscal year 2012 budget request, the service called for $758 million for procurement of 22 CVLSP helicopters over the next five years. The HH-60 Recap program is not mentioned in the budget documents, but the Air Force does intend to purchase four HH-60 helicopters in FY-12 as part of its HH-60 Operational Loss Replacement Program at a cost of $144 million.

By John Liang
April 25, 2011 at 3:58 PM

Raytheon has delivered the first Standard Missile-6 production round to the Navy, the company announced this morning. According to a statement:

"Five years ago, Raytheon promised the U.S. Navy that SM-6 would be delivered in March 2011, and we delivered on that promise," said Frank Wyatt, vice president of Raytheon's Air and Missile Defense Systems product line. "Raytheon delivered the SM-6 to our customer and met cost expectations for system development and demonstration. Now the U.S. Navy has a missile that provides an umbrella of protection against the full spectrum of air threats."

SM-6 leverages the legacy Standard Missile airframe and propulsion elements while incorporating the advanced signal processing and guidance control capabilities of Raytheon's Advanced Medium-Range Air-to-Air Missile.

"SM-6 is a remarkable missile because it combines the reliability of time-tested systems with all the latest advancements in missile technology," said Wyatt. "This missile can use both active and semiactive modes, giving the warfighter an enhanced ability to reach remote targets."

According to a Raytheon executive, the company is under a three-year, low-rate initial production contract to provide the first lot  of 29 missiles using fiscal year 2009 funds, 11 in FY-10 and 59 in FY-11. Full-rate production will begin in FY-12, the executive added.

Producing the SM-6 has not gone without its share of hitches however, as reported in January:

The Navy has resumed at-sea testing of the Standard Missile 6 (SM-6) system in Hawaii, hoping to verify engineering changes made following failures last summer, according to Navy officials and Pentagon documents.

Success in the at-sea testing is seen as essential to avoid a delay in plans to field the first operational systems in fiscal year 2011.

“Testing is currently under way at Pacific Missile Range Facility,” Chris Johnson, a spokesman for Naval Sea Systems Command, told

Operational and developmental testing of the Raytheon-built SM-6 Extended Range Active Missile -- a $6.6 billion program that began low-rate production in August of 2009 -- was suspended last year following a series of mishaps, according to the Pentagon's top weapons tester. The testing being conducted includes missions at the range in Kauai, HI, that were put on hold after a series of firing attempts last summer were deemed deficient.

“The suspension of developmental/operational testing exhausted the schedule margins that existed in the SM-6 schedule,” Michael Gilmore, Pentagon director of operational test and evaluation, wrote in his office's recent assessment of the SM-6 program.

By Jason Sherman
April 25, 2011 at 2:03 PM

Jeff Immelt, General Electric's chief operating executive, said today that despite the Pentagon decision to stop work on the GE-built Joint Strike Fighter alternate engine program, the industrial giant will “keep the core technical team together” by financing near-term work out of pocket, and work with lawmakers to restore funding in the Defense Department's 2012 budget.

On March 25, the Defense Department issued a 90-day stop-work order for the F136 program, a first move in implementing Defense Secretary Robert Gates' goal of terminating the project, which he views as an example of wasteful military spending. With nearly $3 billion spent to develop the F136 engine, estimates for the amount saved by halting the program range from $1.8 billion and $2.9 billion.

Immelt, in an e-mail to GE colleagues today, wrote:

I want to update you on the status of our F136 engine for the Joint Strike Fighter because many of you have supported our company on this issue. I am grateful to you for this support and to the GE Aviation team for their efforts under difficult circumstances to develop the engine and to champion the cause of defense acquisition reform.

The 2011 U.S. federal budget does not include funds to finish the F136, despite the fact that our engine is 80 percent complete. I can assure you we are not giving up.  We will fight to bring competition to the 2012 budget debate. Especially in a time of unprecedented deficits, we do not believe the government should forfeit the extraordinary savings (forecast at $20 billion by the U.S. Government Accountability Office) – not to mention the meaningful acquisition reform - that competing engines ensures.

During the recent “stop work” period imposed by the Secretary of Defense, GE and Rolls-Royce have self-funded F136 design work. Meanwhile, Congressional champions for acquisition reform from both parties are strongly encouraging us to continue the fight for the engine. I believe so strongly in our engine and the need for competition in defense procurement that we are discussing with our supporters in Congress how GE can help fund some of the remaining F136 development costs.

We also believe in greater contractor accountability by shifting cost overrun risk from taxpayers to contractors. As you know, we have been driving meaningful defense acquisition reform for years, including innovative "fixed-price" proposals for early-production F136 engines.

Our Congressional supporters recognize that eliminating our engine will saddle taxpayers with a $100 billion JSF engine monopoly. A monopoly for the largest defense program in the U.S. budget is bad policy. We believe that common sense will prevail and will preserve the $3 billion already invested in the F136.

I know that we will deliver the best engine for the JSF program.  Called a “near model program” by the U.S. Senate Appropriations Committee, the F136 engine has been on or ahead of schedule, while meeting or exceeding performance targets. With the development program nearly complete, we have no intention of abandoning this engine after more than a decade of outstanding work for taxpayers and our military. We will keep the core technical team together as we continue the fight and reassign the other highly skilled employees of the F136 team to other Aviation programs.

I am very proud of these GE employees. They are part of the world’s best aviation team.

By John Liang
April 22, 2011 at 3:16 PM

Members of the Missile Technology Control Regime (MTCR) held the pact's 25th Plenary Meeting in Buenos Aires this month "to review and evaluate its activities and to further intensify its efforts to prevent missile programmes and their proliferation," according to a State Department release issued this morning.

The 34-member MTCR includes the United States, Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Ireland, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Republic of Korea, the Russian Federation, South Africa, Spain, Sweden, Switzerland, Turkey, Ukraine and the United Kingdom.

Representatives met from April 11 to 15, according to the statement. Further:

MTCR partners discussed proliferation of weapons of mass destruction as well as their means of delivery that constitute a threat to international peace and security and reaffirmed the importance of addressing these challenges and the role the MTCR serves in this regard. MTCR guidelines and controls list constitute an international export control standard which is increasingly adhered to by non-members of the MTCR. Therefore, Partners agreed to redouble their efforts to encourage and assist, upon request, non-partners countries that are supportive of the objectives and purposes of the MTCR Regime, to contribute to the efforts of missile non proliferation.

Partners conducted extensive discussions on missile proliferation-related activities worldwide, to include developments in missile programs and their proliferation; procurement activities and techniques in support of such programs; rapid technological change; the role of intangible technology, brokering, and transshipment in facilitating proliferation; and key technology trends in proliferation missile programs. These discussions showed that additional export control efforts by MTCR countries could have an even greater impact. They also underlined the importance of addressing transit and transshipment issues and, in this context, the proliferation risk posed by countries with weak export controls.

Partners exchanged information on concerns about the ongoing missile programs in Middle East, Northeast Asia and South Asia, including Iran and North Korea, which could contribute to regional instability and supply missile proliferation activities elsewhere.

Partners noted the direct relevance of UN Security Council Resolutions, inter alia, 1874 and 1929, to MTCR export controls and expressed their determination to implement these resolutions and to exercise vigilance and prevent the transfer of any items, materials, goods and technology that could contribute to WMD missile programmes of proliferation concern, in accordance with their national legislation and consistent with international law.

Partners agreed to continue exchanging views on missile program developments.

Partners reaffirmed the critical importance of the MTCR’s ongoing technical work. They noted the rapid evolution of relevant technologies and the related need to take forward looking action to address these developments. They expressed their appreciation for the work of the Licensing and Enforcement Expert Meeting (LEEM), the Information Exchange Meeting (IEM) and the Technical Expert Meeting (TEM) in particular the decision adopted on amendments to the Equipment, Software and Technology Annex.

Over the past year, the outgoing MTCR Chair (Brazil) conducted outreach with Belarus, China, India, Kazakhstan, and Thailand. The incoming MTCR Chair (Argentina) intends to conduct further outreach, including with additional countries, in order to increase transparency about the Regime and promote its objectives. Partners expressed their willingness to continue extensive outreach by individual MTCR Partners to a wide range of countries. Non Partners activities in support of the objectives and purposes of the MTCR would also be welcome.

Partners agreed to continue their individual and collective efforts to assist interested countries in implementing the missile-related export controls mandated under UN Security Council Resolution 1540, and to work with the 1540 Committee.

Partners also reviewed a number of key aspects of the internal functioning of the Regime, including issues related to future membership. Partners exchanged views on their overall approaches, interalia, membership evaluation. Individual applications for membership also were thoroughly discussed, with no consensus being reached on the admission of new members at this time. The membership issue will continue to be discussed.

By Thomas Duffy
April 21, 2011 at 7:19 PM

Defense Secretary Robert Gates is meeting with the press right now and he has spoken for the first time about the sweeping national security review President Obama called for last week in a speech on deficit reduction.

Gates said the "worst possibility" would be "to give all of DOD a haircut."

The review has to be driven by analysis about the risk management of future national security challenges, Gates said. He later added that the review cannot be "a math exercise."

"The easy thing would be a broad percentage cut," he said.

In his speech, Obama said he is looking to cut $400 billion from the nation's national security spending. Gates said today that that figure is "a target."

By Christopher J. Castelli
April 21, 2011 at 5:21 PM

Tired of reading lengthy, uninformative program strategies and systems engineering plans, Frank Kendall, the Pentagon's No. 2 acquisition official, has just issued new guidance that streamlines the templates for these key documents.

"The revised documents are intended to be shorter while providing the information necessary to support effective program planning and management decisions," he writes in an April 20 memo to the military departments and the defense agencies. The Defense Department has completely revamped the document formats to emphasize data and minimize descriptions, he notes. DOD also plans to issue new guidance on the format for life-cycle sustainment plans, which are now being separated from acquisition strategies. Further, the memo delegates to the services approval authority for other key documents such as corrosion prevention control plans.

By John Liang
April 20, 2011 at 8:10 PM

The Army plans to inactivate the service's Accessions Command by the end of fiscal year 2012 "as part of the Department of Defense and Army efficiency reviews," according to a Pentagon statement released this afternoon. Further:

The decision is a result of a comprehensive study to develop appropriate options for the alignment of Accessions Command and other commands that fulfill human resource functions. The decision will streamline the Army’s accessioning process and produce savings by de-layering the command structure without increasing the risk to the Army.

In his memorandum to Secretary of Defense Robert Gates, Secretary of the Army John McHugh outlined five decisions which include inactivating Army Accessions Command, realigning Army Recruiting Command and Cadet Command under the Army Training and Doctrine Command, and continuing to align Human Resources Command under the deputy chief of staff, G-1.

Over the next year to 18 months this inactivation is expected to create economic savings through manpower reductions, including the elimination of two general officer and 65 other military positions, approximately 130 civilian positions, and 290 contractor man-years.

This action is not related to the 2005 Base Realignment and Closure reduction-in-force notices being given to the residual U.S. Army Armor Center and School civilian employees at Fort Knox, Ky.

Within 60 days of the April 19, 2011, directive, the Assistant Secretary of the Army for Manpower & Reserve Affairs (ASA M&RA), Thomas Lamont, will present McHugh a phased implementation plan addressing issues associated with the inactivation of Accessions Command. The realignment calls for the establishment of an Army Marketing and Research Group (for national and corporate marketing and research) as a field operating agency to ASA M&RA in the Military District of Washington.

Additionally, the Accessions Support Brigade will be retained and aligned to the Army Marketing and Research Group as a direct reporting unit. It will remain at Fort Knox.

Accessions Command was activated at Fort Monroe, Va., on Feb. 15, 2002. It was originally chartered to better align accessioning and initial entry training by subordinating Recruiting Command, Cadet Command and initial entry training (IET) organizations under a single headquarters. The IET organizations were removed from Accessions Command after a few years.

By John Liang
April 19, 2011 at 9:42 PM

It's official. The old website for DOD's industrial policy office has been changed to reflect its new status as the manufacturing and industrial base policy office (

As Inside the Pentagon reported in January:

The Pentagon is facing a slew of new reporting and planning requirements and a call to renew its focus on acquiring services and building up its workforce as part of a recently signed law designed to reform the Defense Department's acquisition system.

Dubbed the "IMPROVE Acquisition Act," the new law calls on the department to periodically assess the performance of the elements of its acquisition systems, strengthen its IT acquisition workforce and review internal acquisition guidelines and federal acquisition regulations. . . .

The law also creates a deputy assistant secretary of defense for manufacturing and industrial base policy to serve as the principal adviser on industrial base issues under the department's acquisition chief, and provides the position with a fund. The congressional source noted that historically there has been an official performing these duties, but the law creates the deputy assistant secretary of defense post.

And a message on the renamed website states:

To encourage industry's innovative response to the needs of our Service members, the 2011 National Defense Authorization Act (NDAA) has recommended a number of changes that will impact how the Department of Defense’s (DoD) Office of Industrial Policy is organized and funded.

First, the NDAA establishes the position of Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy to reflect the expanded duties of the Industrial Policy office. The inclusion of "manufacturing" in the title ensures the linkage between "industry" and "manufacturing" is firmly established and effectively coordinated.

Reporting to the Under Secretary of Defense for Acquisition, Technology, and Logistics, the Office of Manufacturing and Industrial Base Policy will expand its current mission to include managing a new Industrial Base Fund used to:

*   support the monitoring and assessment of the industrial base

*   address critical issues in the industrial base related to urgent operational needs

*   support efforts to expand the industrial base

*   address supply chain vulnerabilities

Responsibility for the Defense Manufacturing Technology Program (ManTech) is also being moved into our new office. ManTech, whose mission is to develop technologies and processes that ensure the affordable and timely production and sustainment of defense systems, is currently overseen by the Directorate of Research in the office of the Director, Defense Research and Engineering.

To increase the Department's access to innovation and the benefits of competition, the 2011 NDAA also requires the Department to establish a program to expand the industrial base by identifying firms that are non-traditional suppliers. The program will include outreach regarding opportunities to obtain contracts and subcontracts to firms of all sizes in the vicinity of DoD installations. The program will also include an ongoing review of the industrial base, including the identification of markets of importance to the DoD in which firms that are not traditional suppliers can make a significant contribution.

It will be the Manufacturing and Industrial Base Policy Office’s mission to inject a new spirit of innovation into the Department to ensure our Service members are the beneficiaries of the best American industry can provide.

By Christopher J. Castelli
April 19, 2011 at 8:19 PM

James Thomson, the president and CEO of the nonprofit RAND Corp. for more than two decades, announced today he will step down this fall.

Thomson, 66, was named RAND’s fourth president in 1989 and became the organization's longest-serving chief. Since the start of his tenure, RAND's annual budget has grown from $91 million to more than $250 million and its staff has grown from 1,050 to more than 1,700 people in offices across the world, according to the organization.

In the nonprofit's statement on the change, former Pentagon acquisition executive Paul Kaminski, chairman of the RAND board of trustees, praised Thomson's leadership and legacy. Kaminski is slated to lead a committee to search for Thomson’s successor.