The Insider

By Marjorie Censer
March 16, 2010 at 5:00 AM

The Army's new capability portfolio review effort is intended to help the service take a holistic look at its programs and find potential efficiencies, Army Vice Chief of Staff Gen. Peter Chiarelli told the House Armed Services readiness subcommittee today.

Answering a question about the increasing price of systems, Chiarelli said an assessment of any individual item will typically show the system is needed. But examining "a portfolio of common systems" will probably reveal areas in which the Army has more of a specific capability than it needs or opportunities for improved efficiencies, he said.

He used the example of precision munitions, noting that a portfolio review might find that some munitions are precision that do not need to be -- significantly increasing the cost.

"It's time we think in the Army that we step back," Chiarelli said of the portfolio review approach. in early March reported on a Feb. 22 rule set signed by Joseph Westphal, under secretary of the Army, and Gen. Peter Chiarelli, Army vice chief of staff, that sets the guidelines for conducting the one-year, pilot capability portfolio review effort directed by Army Secretary John McHugh. The purpose is to conduct an “Army-wide, all-components revalidation of requirements.”

More here.

By John Liang
March 16, 2010 at 5:00 AM

With Congress preparing to consider the Obama administration's fiscal year 2011 missile defense budget request next month, the Missile Defense Agency next week will host its annual three-day conference in Washington. While the second and third days will cover classified areas of missile defense, the first day is open to the news media. Look to and Inside Missile Defense next week for coverage of the following speakers:

Deputy Defense Secretary William Lynn

Pentagon acquisition chief Ashton Carter

Joint Chiefs of Staff Vice Chairman Gen. James Cartwright

Principal Deputy Under Secretary of Defense for Policy James Miller

MDA Director Lt. Gen. Patrick O'Reilly

Reps. Howard "Buck" McKeon (R-CA) and Jim Langevin (D-RI)

Under Secretary of State for Arms Control and International Security Ellen Tauscher

Heidi Wood, managing director at Morgan Stanley

By John Liang
March 16, 2010 at 5:00 AM

The Senate has confirmed President Obama's picks to head environment programs for the Navy and Air Force. The action follows the lifting of holds Republicans had placed on the nominees over a battle to secure Navy funding for an environmental health study and the Air Force's aerial tanker program, Defense Environment Alert reports today. Specifically:

The Senate voted March 4 to confirm Jackalyne Pfannenstiel as assistant secretary of the Navy for installations and environment, and Terry Yonkers to be assistant secretary for the Air Force for installations, environment and logistics. Obama nominated Pfannenstiel Dec. 3, but Sen. Richard Burr (R-NC) had placed a hold on her nomination out of frustration over a dispute about funding a mortality study and health survey related to the effects of drinking water contamination at Marine Corps Base Camp Lejeune, NC.

Burr admonished the Navy for dragging its feet on funding the federal Agency for Toxic Substances & Disease Registry (ATSDR) studies. The Navy late last month agreed to fund the studies, and a Senate source at the time said Burr was waiting to see funding actually transferred to ATSDR before lifting the holds on Pfannenstiel and another Navy nominee (Defense Environment Alert, March 2).

Yonkers, who was nominated Aug. 3, had been caught in a hold that Sen. Richard Shelby (R-AL) had originally placed on over 70 of the administration’s nominees in an attempt to sway the Air Force on its next-generation aerial tanker program known as KC-X. While Shelby lifted his "blanket hold" on many nominees last month, Yonkers remained under it because his slot is directly related to the KC-X program. A spokesman for Shelby’s office did not respond to an inquiry on Yonkers' hold.

By Marjorie Censer
March 16, 2010 at 5:00 AM

Former Pentagon acquisition chief John Young has joined the Potomac Institute for Policy Studies, the research institute announced today.

Before serving as DOD's top acquisition official, Young served as director of defense research and engineering and Navy acquisition czar. He also worked for 10 years as a professional staff member of the Senate Appropriations defense subcommittee, according to the Potomac Institute's announcement.

At the Arlington, VA-based Potomac Institute, Young will serve as a senior fellow and member of the Board of Regents, the announcement added.

"I was honored to be asked to join the distinguished current members of the Board of Regents," Young said in a statement posted on the Potomac Institute's Web site. "I look forward to working with the capable Potomac team as the Institute seeks to aid policy makers by providing balanced perspectives on the challenging issues that our nation faces today and in the future.”

On his last day on the job at the Pentagon nearly a year ago, Young said he was leaving “an unemployed individual” with “no idea” what he’d do next.

By Marjorie Censer
March 15, 2010 at 5:00 AM

Nearly 100 individuals representing more than 50 companies attended a pre-proposal conference in Dearborn, MI, today on the Army's Ground Combat Vehicle.

The GCV is set to replace the terminated Future Combat Systems manned ground vehicles.

According to program executive office integration spokesman Paul Mehney, the pre-proposal event provided overviews of evaluation factors including program design, integrated design, program plans, cost, past performance and small business participation.

"GCV will continue to receive additional questions up to proposal submittal," Mehney added, noting that all questions and answers will be posted on the program Web site.

Responses to the GCV request for proposals are due April 26. The Army is seeking three contractors to participate in the 27-month technology development phase of the program and plans to award technology-development contracts in September.

By Marjorie Censer
March 15, 2010 at 5:00 AM

Maj. Gen. Daniel Bolger has been nominated for a third star and assignment as deputy chief of staff for operations, plans and policy (G-3/5/7), the Army announced today. Bolger is currently commanding general of the 1st Cavalry Division and Multi-National Division-Baghdad in Iraq.

Bolger would replace Lt. Gen. James Thurman, who last month was nominated for a fourth star and assignment to head Army Forces Command at Ft. McPherson, GA.

Bolger, a graduate of The Citadel in Charleston, SC, previously commanded the Joint Readiness Training Center at Ft. Polk, LA.

By Sebastian Sprenger
March 12, 2010 at 5:00 AM

As much as the idea of social network analysis is en vogue in defense circles, officials at the Joint Improvised Explosive Device Defeat Organization still have a lot to learn in that department, according to the outfit's new boss.

Familial and tribal relationships in Afghanistan, for example, are “very, very foreign to most of us Westerners,” Army Lt. Gen. Michael Oates told defense bloggers today. “Fundamentally, our challenge with social networking in Afghanistan and in Iraq is still driven by significant cultural ignorance,” he said. “We have a long way to go.”

The assessment comes as U.S. coalition forces a face sharp increase in the number of IEDs planted on the roads of Afghanistan, Oates said. For JIEDDO, the point of using social network analysis techniques is to identify, track and neutralize individuals who are key in insurgent bomb emplacement operations.

By John Liang
March 12, 2010 at 5:00 AM

The Senate Armed Services Committee has some new members, panel Chairman Carl Levin (D-MI) and Ranking Member John McCain (R-AZ) announced today in a statement.

Sen. Paul Kirk (D-MA) is out, and Sens. Scott Brown (R-MA), Jeff Bingaman (D-NM) and Edward Kaufman (D-DE) are in, according to the committee statement.

Brown will serve on the airland, emerging threats and strategic forces subcommittees. Bingaman will be on the personnel and strategic forces subpanels. Kaufman has been appointed to the emerging threats and seapower subcommittees.

By Marcus Weisgerber
March 11, 2010 at 5:00 AM

Pentagon acquisition chief Ashton Carter just told the Senate Armed Services Committee that the F-35 Joint Strike Fighter will breach critical Nunn-McCurdy spending caps.

Defense Department Director of Cost Assessment and Program Evaluation Christine Fox said in prepared testimony that officials Nunn-McCurdy notification is expected by April 1 and certification should be complete by June.

Fox also just told lawmakers that F-35s will cost between $80 million and $95 million per copy using 2002 dollars. Back in 2002, the planes were expected to cost $50 million per copy.

In addition to Carter and Fox, Pentagon Director of Operational Test and Evaluation Michael Gilmore and DOD Acting Program Executive Officer for the Joint Strike Fighter Program Air Force Maj. Gen. Clyde Moore and Michael Sullivan from the Government Accountability Office are all testifying this morning.

By John Liang
March 10, 2010 at 5:00 AM

The head of United States Division-Center in Iraq today gave a window on some of the irregular warfare lessons learned -- particularly working with the State Department -- over the past several years' operations in that country.

"We're doing a fair bit out here working with the State Department and these provincial reconstruction teams doing civil capacity operations," Maj. Gen. Terry Wolff told reporters this morning in a teleconference call. Additionally:

And so we kind of consider that a supporting line of effort of ours. Security and helping the ISF deal with the security is mission number one, but we also have a strong and vibrant effort working with our State Department and other interagency brethren who partner with us on -- every single day.

So it's not unusual to have a session, either out on the ground or back in headquarters planning, where we have Provincial Reconstruction Team members, State Department folks working side by side with USAID with a small American element, be it a platoon or a small company, that's out there doing business with Iraq tribal sheikhs, provincial leadership and Iraqi security forces all together. That's much different than what we experienced in 2003 or even 2004, and we've gotten a lot better at doing that. And that's what you're seeing play out both in Iraq and in Afghanistan.

By John Liang
March 10, 2010 at 5:00 AM

An "interim" version of the Pentagon's 2010 Space Posture Review was signed today by a senior Defense Department official, according to Air Force space programs chief Gary Payton.

Payton told the Senate Armed Services strategic forces subcommittee this afternoon that officials from the office of the director of national intelligence have not yet approved the report. Once that is done, a copy will be made available to Congress, he added.

As Inside the Air Force reported in January, the service is conducting its own soup-to-nuts review of its space policies, programs and operations with plans to have a final slate of recommendations ready for review by Air Force Secretary Michael Donley by the end of the year.

Donley outlined the parameters and prime objectives of the review in a service-wide memo issued on Dec. 9, 2010, ITAF reported, adding:

Service officials have conferred with DOD regarding the ongoing Air Force review, according to the service official, who declined to comment on what kind of impact the DOD-led review would have on the service assessment, or how the service review would be incorporated into the Pentagon’s work.

“It has been a positive discussion, and I’ll just leave it at that,” the official said.

While the review is on pace to meet the mid-2010 deadline set by Donley in the Dec. 9 memo, the official said no preliminary versions of the report’s recommendations have been issued. “I do not think it is going to work like that,” the source said. “I think it is going to be more of an iterative process.”

By Marjorie Censer
March 10, 2010 at 5:00 AM

Malcolm O'Neill was sworn in today as the Army's new acquisition chief, according to Lt. Gen. William Phillips, the military deputy to O'Neill. Phillips appeared at a hearing of the House Armed Services air and land forces subcommittee.

O'Neill, a retired three-star Army general, was nominated in late 2009, but his confirmation was held up until last week, when Senate Armed Services Committee Chairman Carl Levin (D-MI) obtained “a unanimous consent agreement on the Senate floor . . . to approve six Department of Defense nominees,” his office announced.

O’Neill served as head of the Ballistic Missile Defense Organization -- the precursor to the Missile Defense Agency -- in the 1990s. Before assuming his post as Army acquisition chief, he was working as a consultant and the chairman of the Army science and technology board of the National Academies. He succeeds Dean Popps, who became the acting assistant secretary of the Army for acquisition, logistics and technology in January 2008.

By Dan Dupont
March 9, 2010 at 5:00 AM

Two analysts with Oppenheimer's Equity Research department weigh in on Northrop Grumman's decision not to bid on the tanker competition:

Northrop Grumman decided not to pursue the US Air Force's large aerial refueling contract, which they had won during the last competition. However, that was then and this is now and a new CEO at NOC is facing a different leadership team at the Pentagon, a different RFP (request for proposal) and contract structure. In the end, we think the decision came down to economics that left NOC with the choice to submit a token bid in the name of competition or try to compete on price with a more expensive (but more capable) aircraft, and potentially, end up with a fixed price contract that could dramatically increase the risk profile of NOC's future earnings/cash flows.


Listening to NOC management over the past few months, and seeing the changes in leadership and incentives, we weren't entirely surprised by the move not to bid. This contract has always been a must-win for Boeing and nice-to-have for NOC. The change to fixed price (vs. prior cost-plus) further softened the risk/reward for NOC.

We expect the DoD/AF will now enter into sole-source discussions with BA over a desirable tanker. Under those discussions, we do expect the DoD to obtain better pricing, cost discovery data, which will likely get over the hurdle of a blown competition in the end.

Other alternatives include: Congress demands loosening the RFP to balance the field, the DoD deciding to GFE (government furnished equipment) commercial 767s from Boeing and compete the integration (after clearly favoring the size/performance of the 767), or a very outside chance for EADS to take a shot at the contract on their own.

We're sure that some in Washington will both cheer and jeer at the decision; however, we're of the mind that the company made its goals clear in advance (even in laying out the incentives by which they are governing themselves), stated opposition early, fully evaluated the risk/reward and got to, what we'd agree is the right answer, "No."

By Pat Host
March 9, 2010 at 5:00 AM

Pentagon acquisition chief Ashton Carter is going to have a busy Thursday.

As has been well-publicized, Carter is scheduled to appear that morning -- with Defense Department Director of Cost Assessment and Program Evaluation Christine Fox -- for a hearing of the Senate Armed Services Committee on the Joint Strike Fighter program.

But that's not all. At 3 p.m., Carter and DOD Comptroller Robert Hale, Acting Deputy Chief Management Officer Elizabeth McGrath and Acting Deputy Under Secretary of Defense for Acquisition and Technology Shay Assad are scheduled to testify in front of the House Armed Services panel on defense acquisition reform.

The topic? Pentagon perspectives on managing the defense acquisition system and the workforce.

On that note, as reported right here last week, the panel has released a report with interim findings and recommendations that could have lasting implications. And one item that could come up in Thursday’s hearing is the Pentagon’s efforts to “reach out” to a larger segment of private industry.

The panel believes the Pentagon should be more proactive in its outreach for business opportunities, especially when it comes to small businesses, because “a small investment in additional outreach to industry could demonstrate a large return in increased competition, lower prices, and innovation,” the report concluded.

“The Department should work the Department of Commerce, Small Business Administration, General Services Administration, and the private sector to proactively notify relevant firms, especially small businesses, of contract solicitations rather than only relying on firms to find those notifications on (Federal Business Opportunities)," it states.

By John Liang
March 9, 2010 at 5:00 AM

President Obama has officially nominated Elizabeth McGrath, the Pentagon's assistant deputy chief management officer, for a promotion to deputy CMO. According to her White House bio, issued Tuesday:

Elizabeth McGrath has served in the Department of Defense (DoD) for over 20 years; her experience spans a variety of business areas including systems acquisition, supply chain, financial and program management. Ms. McGrath currently serves as the Assistant Deputy Chief Management Officer for the DoD where she provides leadership for enterprise-level DoD business transformation and is focused on achieving increased efficiency, greater effectiveness, and improved performance in the Department's business enterprise policies, processes and systems. Ms. McGrath ensures the establishment of performance goals and measures for DoD business functions, is responsible for implementing DoD's Continuous Process Improvement/Lean Six Sigma efforts. She also performs acquisition oversight for large scale business Information Technology systems and oversees the development and implementation of the Business Enterprise Architecture. Ms. McGrath previously held numerous other financial, acquisition and program management positions within DoD and the Department of the Navy. Ms. McGrath holds a B.S. degree in Economics from George Mason University.

On Thursday, McGrath is scheduled to testify alongside Pentagon acquisition chief Ashton Carter, DOD Comptroller Robert Hale and Deputy Under Secretary of Defense for Acquisition and Technology Shay Assad in front of a House Armed Services Committee panel on defense acquisition reform.