The Insider

You may have seen a report today suggesting the Defense Department has decided to terminate the current competition for the Air Force's next-generation communications satellite constellation.

According to an Office of the Secretary of Defense spokesman, it's not accurate.

“We have seen the news reports about TSAT ((the Transformational Satellite Communications System)); however, as of right now, no final decision has been made on program status,” OSD spokesman Chris Isleib said in an e-mail today. “The department is still reviewing the requirements associated with the TSAT program, but DOD remains committed to fielding a TSAT solution by ((fiscal year 2019)).”

The report, citing an industry source, stated the Pentagon's Deputy's Advisory Working Group decided to put off awarding the contract until the fourth quarter of fiscal year 2010.

In September, Inside the Air Force reported that Deputy Defense Secretary Gordon England was briefed on a study related to the investment strategy of TSAT in June. At that time, Air Force officials said a contract award was expected no earlier than Dec. 15.

England was briefed on the study at a DAWG meeting on June 10. England is the group's chairman.

The service originally anticipated an award date in May, but made the announcement contingent on the investment strategy study's findings. The Air Force has awarded the two companies vying for the multibillion-dollar contract award, Boeing and Lockheed Martin, three 180-day extensions to risk-reduction contracts since August 2007 in the midst of the production contract delays.

Both companies said in statements they were not notified of any recent action OSD or the Air Force were taking in regards to changing the competition structure of the program.

More to come, and we're checking into all of it.

A quick note today on a new Inside the Air Force story about the future of space -- that is, the U.S. military's dominance of space.

Retired Maj. Gen. James Armor -- former director of the National Security Space Office -- talked about what the next president should do during an Oct. 16 panel discussion -- dubbed “A Day Without Space” -- in Washington. A career space officer, the retired two-star also held the position of program manager of the NAVSTAR Global Positioning Systems Joint Program Office at the Space and Missile Systems Center at Los Angeles Air Force base between 1996 and 1999.

. . . Armor said a loss of the country’s space assets means “that we, the United States, have gotten to a point where we’re looking at a decade without U.S. preeminence in space, and that would be, I think, a terrible tragedy. I think space preeminence is essential to being a great power. Primarily, it is ensuring the physical security of the homeland. Without space, I’m not sure we could do it. It is absolutely essential to the security of the homeland. Furthermore, it also provides for the general welfare in the sense of peaceful use of space for all free nations, not just the United States. I’m not convinced that, if the United States doesn’t sustain its preeminence in space, that we can guarantee that peaceful use of space.”

Making space a national priority and assigning “commensurate resources” is an “urgent, compelling priority,” Armor said, adding that space is still a “secondary thought” in the Air Force and needs to be a “principal priority.” . . .

After the next president makes securing the space domain a national priority, he needs to assign “accountable leadership” to ensure the United States keeps its superiority in the area beyond the atmosphere, Armor asserted.

“I know the Air Force and the ((Defense)) Department has put maybe tens of hundreds of millions of additional dollars into space situational awareness; I think it should be hundreds of billions of dollars, because, without rapid attribution . . . we put ourselves at a disadvantage, we put ourselves in a position to be surprised, which could lead to bad behavior or a military escalation where you don’t really want it,” the retired two-star added.

Both presidential candidates in last night’s debate said a new energy policy will be a top priority should they be elected.

It will be interesting to see how prominently an Obama or McCain administration treats energy issues at the Pentagon -- the federal government’s largest energy consumer.

On Tuesday, President Bush announced he plans to effectively ignore a provision of a law he enacted requiring the Pentagon to create a new post to champion energy policy issues.

In a signing statement, a device he has routinely -- and controversially -- used to modify the meaning of laws, the president pointed to four provisions of the Fiscal Year 2009 Defense Authorization Act that he believes he has the constitutional authority to ignore:

Sec. 902: A provision that would establish a director for operational energy plans and programs within the Office of the Secretary of Defense and senior operational energy officials within each of the military services.

Sec. 851: A provision that ensures federal retirees working on the Commission on Wartime Contracting in Iraq and Afghanistan be paid without forfeiting retired pay.

Sec. 1211: a provision that would prohibit the use of funds to establish permanent U.S. bases in Iraq or to control Iraqi oil resources.

Sec. 1508: A provision that calls for the U.S. to initiate negotiations with Iraq on a cost-sharing agreement on resources required to support Iraqi Security Forces and U.S. forces in Iraq.

Gen. James Cartwright, vice chairman of the Joint Chiefs of Staff, told students at Johns Hopkins’ Carey Business School today that the current financial crisis -- particularly the intricate economic interdependence among nations with major militaries -- creates a powerful deterrence against conflict.

Moscow’s military adventure in August against Georgia exacted a toll on Russia’s economy.

“In this market turmoil, Russia and China could have chosen a different path that would have been incredibly difficult for us to survive,” Cartwright told the audience in Baltimore, according to the Armed Forces Press Service.

The interdependence of the world’s economy influenced “a conscious choice by their governments” to think twice about aggression, the Marine general speculated.

Cartwright said that interdependence is reflected in an “as they go, we go and as we go, they go” mentality, which is something that is easier to deal with than the Russian-U.S. strategy during the 1950s to 1980s.

“Much as nuclear weapons in the Cold War tended to be able to tell each other when we were uncomfortable, it’s far more comfortable in my mind to use the economy to tell each other when we’re uncomfortable,” he said.

The 2008 National Defense Strategy, signed by Defense Secretary Robert Gates earlier this summer, directs Pentagon planners to try to account for the consequences of globalization and possible economic shocks.

Globalization and growing economic interdependence, while creating new levels of wealth and opportunity, also create a web of interrelated vulnerabilities and spread risks even further, increasing sensitivity to crises and shocks around the globe and generating more uncertainty regarding their speed and effect. Current defense policy must account for these areas of uncertainty.

With Congress threatening to assert itself in Round Three of the Pentagon’s aerial refueling competition set to begin early next year, EADS North America -- whose Airbus tanker the Air Force selected before Defense Secretary Robert Gates scrapped the award -- today announced the appointment of a seasoned Capitol Hill hand to its board of directors: Trent Lott.

The Republican Mississippi lawmaker served 19 years in the House, including a stint as minority whip, and 16 years in the Senate, where he worked his way up to Senate Majority Leader before resigning last December and setting up a shop with John Breaux, a former Democratic senator from Louisiana.

Lott will find at least one very familiar face at EADS North America: the company’s senior vice president for government relations, Sam Adcock. Adcock joined Lott’s staff full time in 1990 after a one-year stint as a military liaison and worked on national security issues for the Mississippi senator for the next seven years, winning his boss’ praise for securing funding for Ingalls Shipyard in Pascagoula, MS.

Other retired senior U.S. government officials on the board of EADS North America include:
William Schneider, head of the Defense Science Board who has held senior posts in the State Department and the Office of Management and Budget; former acting Army Secretary Les Brownlee; retired Navy Adm. Joseph Lopez; and retired Air Force Gen. James McCarthy.

Whether the economic downturn will hit defense spending remains a theme out there, with a couple of new stories of note to tell you about.

The first is from The Washington Post, which sent someone to the Association of the U.S. Army's convention last week to ask around:

"There's a lot of uncertainty out there," said Kevin G. Kroger, president of Pura Dyn, a small Boynton Beach, Fla., company, who came to the trade show to pitch the Army on buying more of its oil filters for armored trucks. "We're not sure where the budgets are going and what's going to get funded. It leaves us nervous."

Indeed, in his report on the show, Ron Epstein, an analyst at Merrill Lynch, said vendors acknowledged their worries about the rescue plan. "We expect the bailout plan will put downward pressure on defense spending," Epstein had written a week earlier in a research note to clients.

Although no one is expecting a dramatic drop in next year's Pentagon budget, there is a widespread expectation that spending will begin to level off. Many contractors have begun to prepare.

With nearly 60 percent of its $42 billion in annual sales coming from the Defense Department, Lockheed Martin is pursuing other areas of business to compensate for any slowdown in defense spending. For the past eight years, the Bethesda company has tried to expand its information technology services business. Already, it expects double-digit sales growth in that unit this year compared with last year.

And then we have a look from late last week penned by Cox News Service, which uses the financial meltdown as a springboard to examine the specifics on the Obama and McCain plans for defense:

"It's likely to have some negative impact on defense spending, but it's hard to say how much," said Steven Kosiak, vice president for budget studies with the Center for Strategic and Budgetary Assessments, a non-partisan Washington think tank.

Neither Sen. John McCain, the Republican presidential candidate, nor his Democratic rival, Sen. Barack Obama, has provided a basic defense spending blueprint, never mind a list of options for adjusting to the government's deteriorating fiscal outlook.

"There's not a lot of detail in terms of what they're thinking about overall defense spending levels," said Kosiak. Beyond that, "things can change pretty quickly if the international environment changes."

Finally, The Los Angeles Times recently ran a piece titled "Pentagon divided over John McCain" that's worth a read, though it's not likely to surprise any of our readers.

Inside the Air Force today runs a story that should be of interest to all, taking a look at the likely impacts of the congressional races on national security.

The Air Force’s legislative chief is expecting a shake up of Republican leadership on key congressional defense committees propelled by retirements, legal difficulties and major Democratic gains in both the House and Senate in next month’s general election.

In all, 35 Senate seats -- 23 currently held by Republicans -- are up for grabs, while the entire House is up for reelection in 2008. The latest estimates show the Democrats increasing their majority in both chambers, according to Maj. Gen. Herbert Carlisle -- director of the Air Force’s Legislative Liaison division. Carlisle spoke at a weapons conference in Ft. Walton Beach, FL, this week. The two-star said his predictions are based on “conventional wisdom and polls inside the Beltway.”

“Worst case for the GOP on the Senate side is nine seats would change,” he said on Oct. 8. “That would give the Democrats a 61 ((seat advantage)). Best case, best guess is five to seven seats will go democratic and Democrats will maintain control of the Senate.”

On the house side, Republicans will likely lose 12-15 seats, although that number could go as high as 20, Carlisle said.

“Best guess for everybody is that the Democrats maintain control of both the House and Senate,” he said. “They’ll increase their majority by a slight number.”

Much more detail in the full story.