The Insider

Army's Future: Missiles?
By Jen Judson
April 23, 2013 at 8:24 PM

Jim Thomas, the director of studies at the Center for Strategic and Budgetary Assessments, argues in a new essay -- published in the latest edition of Foreign Affairs -- that as the Defense Department shifts its attention to the Asia Pacific region, the Army can burnish its case for a greater role by focusing more on land-based missile systems and less on its ground expeditionary forces:

As the U.S. military's most labor-intensive force, the army is most affected by the rapid rise in personnel costs, which have shot up by nearly 50 percent over the past decade. Given these strategic and budgetary headwinds, the conventional wisdom holds that the army will bear the brunt of the defense cuts -- and that it will decline precipitously in relevance.

The conventional wisdom, however, will prevail only if the army fails to adapt to its changing circumstances. Since the 1990s, the United States' rivals have dramatically increased their capacity to deny Washington the ability to project military power into critical regions. To date, the air force and the navy have led the U.S. response. But the army should also contribute to this effort, most critically with land-based missile forces that can defend U.S. allies and hinder adversaries from projecting power themselves. The army should thus shift its focus away from traditional ground expeditionary forces -- mechanized armor, infantry, and short-range artillery -- and toward land-based missile systems stationed in critical regions. By doing so, it can retain its relevance in U.S. defense strategy.

Air Force Hire
By Maggie Ybarra
April 23, 2013 at 6:41 PM

The Air Force has hired a principal deputy assistant secretary for acquisition.

Air Force Secretary Michael Donley told reporters today that the service has chosen William LaPlante to fill a position that has been vacant since David Van Buren left the post in early 2012.

LaPlante brings with him a “broad range of experience” in intelligence, surveillance and reconnaissance, sensors and communications, Donley said. He also has Defense Science Board experience, Donley added.

LaPlante, who does missile defense work for MITRE Corporation, will start working for the Air Force on May 6, he said, adding,“We look forward to getting him on board."

Donley said he will retain service acquisition executive authority “for the time being.”

Export Control Hearing
By John Liang
April 23, 2013 at 4:32 PM

The House Foreign Affairs Committee will hold a hearing tomorrow on export control reform.

In a committee statement issued this morning, panel Chairman Ed Royce (R-CA) said:

The U.S. has long maintained a system of strategic export controls, restricting the commercial export of both arms and "dual-use" items in order to advance our national security, foreign policy, and economic interests. Over the years, the system has become out of step with our own national security requirements, the pace of technological innovation, and the nature of the global economy. There is widespread agreement that our export control system needs fundamental reform. This hearing will examine the agenda for advancing export control reform, including implementation of current Obama Administration proposals and prospects for additional reforms in the future. The Committee, with broad jurisdiction over U.S. export controls, will seek to strike the right balance among U.S. national security, American jobs and economic growth, and the health of the defense industrial base.

In August 2009, President Obama directed a broad-based interagency review of the U.S. export control system, resulting in the Export Control Reform Initiative, according to the committee statement, which adds:

That plan took shape in April 2010 with a proposal to fundamentally restructure the system by ultimately creating a single export licensing agency, a single list of controlled items, a single information technology system, and a single export enforcement coordination agency. The goal of the reform effort is to better tailor U.S. export controls to our national security interests, while helping industry compete in a global military marketplace.

Witnesses scheduled include:

Thomas Kelly
Acting Assistant Secretary
Bureau of Political-Military Affairs
U.S. Department of State

Kevin Wolf
Assistant Secretary of Commerce for Export Administration
Bureau of Industry and Security
U.S. Department of Commerce

James Hursch
Director
Defense Technology Security Administration
U.S. Department of Defense

Inside the Pentagon reported last week that the Defense Department wants to more than double the funding for a pilot program designed to better harmonize the need for protecting critical technologies in American weapons while enabling their export to foreign governments, according to a DOD budget document.

The fiscal year 2014 budget request, submitted to Congress earlier this month, requests $3.8 million for the program that helps prepare warfighting systems for non-U.S. use, with nearly $19 million requested over the future years defense plan. ITP further reported:

More money is needed in FY-14 to expand the number of systems to be included in the Defense Exportability Features (DEF) pilot program, according to DOD. Defense officials will use the systems to "define and implement DEF 'best practice' program management, system engineering and program protection measures in the DOD acquisition process," according to the budget document.

The Pentagon is slated to determine later this fiscal year what programs to add to the pilot, DOD spokeswoman Maureen Schumann said.

The Pentagon had designated seven major defense acquisition programs in FY-12 and another eight programs in FY-13 to participate in the pilot, according to the budget documents.

"Early results of the DEF studies indicate there could be a significant return on [research, development, test and evaluation] investment from DEF through the economies of scale in production and sustainment from foreign sales," the Pentagon's budget overview states. "Increasing the sample size of MDAPs in the pilot program will provide us greater confidence in DEF prior to implementing DEF into acquisition policy."

Funds will be "replenished" through non-recurring cost recoupment in future foreign military sales cases, as well as cooperative programs memorandums of understanding or direct commercial sales contracts, the budget justification materials state.

Read the full story.

Developmental Testing
By John Liang
April 22, 2013 at 6:33 PM

InsideDefense.com reported on Friday that the Pentagon remains far short of its goal of assigning senior leaders to oversee developmental testing for all big-ticket weapons and information-technology programs, according to a new report to Congress:

Key leadership positions (KLPs) for testing are assigned to "less than 50 percent" of major defense acquisition programs and major automated information systems, states the March report signed by acting Deputy Assistant Secretary of Defense for Developmental Test and Evaluation Steven Hutchinson.

Three years ago, Pentagon acquisition chief Frank Kendall dubbed numerous acquisition posts -- including the testing chiefs for all major weapons and information-technology programs -- "key leadership positions" to be filled by military officials of a certain rank.

DOD has made progress in this effort since last year, when the department told lawmakers that test-related KLPs had been assigned for less than 30 percent of major programs, the report states. Notably, the Navy increased the number of test-related KLPs assigned from 28 to 39 during fiscal year 2012, the assessment adds.

Request Denied
By Maggie Ybarra
April 19, 2013 at 8:54 PM

The U.S. Court of Federal Claims today upheld an Air Force decision to proceed with the production of 20 light-attack aircraft for the Afghan military following a brief court battle with a spurned contractor.

Air Force spokesman Ed Gulick said in an April 19 statement that the court chose not to grant Beechcraft Defense Co. a stop-production order on the batch of planes, the production of which have been delayed by more than a year due to a previous dispute between Beechraft and its competitor, a team of Sierra Nevada Corp. (SNC) and Brazil's Embraer. Beechcraft filed its lawsuit against the Air Force last month after the service awarded SNC and Embraer a $427.5 million contract to build the aircraft. The lawsuit was an effort by Beechraft to halt the aircraft build until the Government Accountability Office weighed in on a bid protest that the company filed earlier this year.

Beechcraft spokeswoman Nicole Alexander said in an April 19 company statement that Beechcraft had “reluctantly” accepted the court's opinion and planned to continue to contest the contract award through GAO.

Gulick said that the Air Force has a “critical and time-sensitive commitment to provide air support capability to the Afghan Air Force” and must therefore proceed with production. “The Court of Federal claims heard arguments today on Beechcraft Defense Company, LLC's challenge to the Air Force's decision to override the automatic stay of Light Air Support (LAS) contract performance,” he said. “The court granted the Government's motion for judgment on the administrative record and denied the motion for declaratory relief filed by Beechcraft. Sierra Nevada Corp. will continue work on the LAS contract while Beechcraft's bid protest proceeds at the Government Accountability Office, which will decide the merits of the protest.”

GAO has until June 17 to decide on the protest.

Breedlove Confirmed
By John Liang
April 19, 2013 at 6:57 PM

The Senate has confirmed Air Force Gen. Philip Breedlove as the next head of U.S. European Command and NATO's Supreme Allied Commander Europe (SACEUR), according to a EUCOM statement issued today.

Breedlove will replace current EUCOM chief Adm. James Stavridis in the middle of next month, according to the statement.

View Breedlove's responses to advance questions submitted at his April 11 nomination hearing.

Ship Shape
By John Liang
April 18, 2013 at 10:29 PM

House Armed Services seapower and projection forces subcommittee Chairman Randy Forbes (R-VA) and Ranking Member Mike McIntyre (D-NC) have sent a letter to Defense Secretary Chuck Hagel regarding the release of the Navy's required ship construction plan.

"The Navy Department's statutorily required Annual Naval Vessel Construction Plan is an essential tool in understanding the Navy's future force posture and determining whether our Combatant Commanders will receive the resources they need to protect U.S. interests," Forbes said in a statement, adding: "Given the accelerated consideration of this year's defense budget, Congressman McIntyre and I urge Secretary Hagel to release the Plan prior to the Seapower Subcommittee's April 24 hearing where we plan to discuss the Navy FY14 budget submission."

Korea Klatsch
By John Liang
April 18, 2013 at 5:01 PM

Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey and his South Korean counterpart, Gen. Jung Seung Jo, today convened the 37th Republic of Korea-United States Military Committee Meeting, according to a joint communique issued by the Pentagon.

"Both chairmen reaffirmed that the Republic of Korea-United States alliance is stronger than ever," the communique reads, adding:

On the basis of the mutual defense treaty, the two chairmen reaffirmed not only the commitment to enhancing mutual security, but also the commitment to the enduring mission of the alliance, which is to defend the Republic of Korea through a robust combined defense posture. They also reaffirmed that both countries will respond firmly to any provocation by North Korea, in accordance with the Republic of Korea-United States Bilateral Counter-Provocation Plan.

Gen. Dempsey reiterated the firm and unwavering commitment of the United States to defend the Republic of Korea, using all available military capabilities, including forces postured on the Korean Peninsula, its nuclear umbrella, conventional strike and missile defense capabilities.

Gen. Jung echoed the Republic of Korea's commitment to strengthen the level of its capabilities and enhance the level of military cooperation in the region, in response to North Korea's ongoing pattern of defiance and provocative actions, which pose a serious threat to the Korean Peninsula, Northeast Asia, and international peace and security.

Both chairmen also reaffirmed their commitment to further enhance the alliance's deterrence capabilities and highlighted the bilateral decision to prepare sufficient capabilities for the defense of the Republic of Korea.

In addition, the Republic of Korea-United States Military Committee reaffirmed that preparations for wartime operational control transition are on-track with the Strategic Alliance 2015 implementation plan. To ensure a resolute and enduring combined defense posture, the military committee shared perspectives on the future command structure and agreed to refine the specifics and make a recommendation and seek approval at the security consultative meeting this October.

Both chairmen assessed that the discussions at the 37th MCM have made a significant contribution to enhancing the Republic of Korea-United States alliance and strengthening the military relations between the two countries. Both chairmen expect to hold the next military committee meeting at a mutually convenient time in 2013.

Inside the Pentagon reports this morning that Rep. Doug Lamborn's (R-CO) disclosure of a military intelligence assessment of North Korean nuclear missile capabilities made headlines last week, an episode that may be most noteworthy for the prominent role unnamed Capitol Hill staffers played in funneling the information to the congressman and shaping the ensuing media buzz. Further:

At issue is a two-line fragment from a Defense Intelligence Agency report, which Lamborn read to Defense Secretary Chuck Hagel and Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey during an April 11 House Armed Services Committee hearing. According to Lamborn, the otherwise classified report included an unclassified section that states: "DIA assesses with moderate confidence the North currently has nuclear weapons capable of delivery by ballistic missiles. However, the reliability will be low."

Dempsey, who was asked whether he agreed with the assessment, declined to comment out of fear of discussing sensitive information publicly and because he had not seen the report.

News stories about the exchange began popping up quickly after the hearing, highlighting the potential of the new DIA finding to be a game-changer for U.S. policy regarding an already tense situation on the Korean peninsula. Common to many stories was a reference to one or more House Armed Services Committee aides, who were quoted anonymously. The Wall Street Journal, for example, quoted a staffer describing the assessment as "more forward-leaning about the threat than they've previously said." In addition, the staffer told the paper, "Clearly, they are very alarmed, and the information they are seeing shows a great deal of alarm -- and now more information is coming out for the American people to see."

Similarly, a Defense News article leaned heavily on an anonymous committee staff source who said the White House had tried to suppress the information Lamborn cited. (That story also said the congressman had sent "ripple waves around the world.")

Meanwhile, Lamborn has not read the DIA report in its entirety, spokeswoman Catherine Mortensen told Inside the Pentagon this week. "The only portion he has seen is the unclassified quote," she said, adding that one of the committee's senior staffers with the requisite security clearance had read the whole DIA document.

Read the full story.

Foreign Sales
By John Liang
April 18, 2013 at 4:48 PM

The Defense Security Cooperation Agency this week announced it had notified Congress of $3.6 billion worth of proposed weapon sales to foreign countries, including:

* a possible $2.7 billion Foreign Military Sale to Israel for 864 million gallons of petroleum based products;

* a possible $170 million Foreign Military Sale to the United Kingdom for follow-on support for the Tomahawk Weapon System (TWS);

* a possible $300 million Foreign Military Sale to a NATO consortium for follow-on contractor logistics support for NATO Airlift Management Program C-17 aircraft;

* a possible $95 million Foreign Military Sale to the United Kingdom for 500 AGM-114-N4/P4 Hellfire missiles; and

* a possible $371 million Foreign Military Sale to Kuwait for one C-17 Globemaster III cargo aircraft.

Inside the Pentagon reports this morning that the Defense Department wants to more than double the funding for a pilot program designed to better harmonize the need for protecting critical technologies in American weapons while enabling their export to foreign governments:

The fiscal year 2014 budget request, submitted to Congress last week, requests $3.8 million for the program that helps prepare warfighting systems for non-U.S. use, with nearly $19 million requested over the future years defense plan.

More money is needed in FY-14 to expand the number of systems to be included in the Defense Exportability Features (DEF) pilot program, according to DOD. Defense officials will use the systems to "define and implement DEF 'best practice' program management, system engineering and program protection measures in the DOD acquisition process," according to the budget document.

The Pentagon is slated to determine later this fiscal year what programs to add to the pilot, DOD spokeswoman Maureen Schumann said.

The Pentagon had designated seven major defense acquisition programs in FY-12 and another eight programs in FY-13 to participate in the pilot, according to the budget documents.

"Early results of the DEF studies indicate there could be a significant return on [research, development, test and evaluation] investment from DEF through the economies of scale in production and sustainment from foreign sales," the Pentagon's budget overview states. "Increasing the sample size of MDAPs in the pilot program will provide us greater confidence in DEF prior to implementing DEF into acquisition policy."

Read the full story

ICBM Away
By Gabe Starosta
April 17, 2013 at 8:22 PM

The Defense Department plans to move ahead with a scheduled ballistic missile test launch in late May, Assistant Secretary of Defense for Global Strategic Affairs Madelyn Creedon told Congress today. Her comments come about 10 days after DOD canceled a similar test launch out of Vandenberg Air Force Base, CA, because of concerns the test would lead to a reaction from North Korea.

DOD performs about three Air Force-run Minuteman III intercontinental ballistic missile test launches per year, with those events scheduled for April, May and September of 2013. The April launch was scrapped after a series of provocative incidents occurred in quick succession, among them a North Korean nuclear test and a B-2 stealth bomber flight over South Korea. But for now, DOD intends to keep the May test on the calendar.

"We thought it was wise to postpone for a while the last launch because of the situation on the Korean Peninsula," Creedon said. "Right now, it is the plan of the department and the plan for the Air Force to do the next launch. We have a window of May 21-23. That is the current schedule. What we’ve actually done is the system that was going to be launched, this particular launch is going to just move to the right, so we’ll move everything to the right a little bit."

Creedon, responding to questions from Sen. Mark Udall (D-CO), was testifying before the Senate Armed Services strategic forces subcommittee. Udall is the subcommittee's chairman. Other witness at the unclassified portion of the hearing included Lt. Gen. James Kowalski, the head of Air Force Global Strike Command; Maj. Gen. Garrett Harencak, the Air Force's assistant chief of staff for strategic deterrence and nuclear integration; Rear Adm. Terry Benedict, the director of strategic programs for the Navy; and Andrew Weber, the assistant secretary of defense for nuclear, chemical, and biological defense programs.

Following the open portion of the hearing, Senators broke into a classified session where they met with the program manager for the Air Force's secretive Long-Range Strike Bomber, Col. Timothy Woods.

Clipped STEM
By John Liang
April 17, 2013 at 7:30 PM

Back in February, the Defense Department published in the Federal Register a proposed rule calling on contractors to develop science, technology, engineering and mathematics (STEM) programs.

DOD seems to have changed its mind, though. In a notice in this morning's Federal Register, the Pentagon announces it is canceling the proposed rule "without further action," adding:

DOD has determined that the proposed amendment to the Defense Federal Acquisition Regulation Supplement (DFARS) is not a necessary part of the Department's plan to implement a section of the National Defense Authorization Act for Fiscal Year 2012, that requires DOD to encourage contractors to develop science, technology, engineering, and mathematics (STEM) programs.

The notice adds:

At this time, DOD is in the process of reassessing the most effective and efficient methods by which it can encourage contractors to develop science, technology, engineering, and mathematics (STEM) programs.

Last October, Inside the Pentagon reported on a study by the National Academy of Sciences which found that offering higher salaries and a more creative workplace culture could help the Defense Department combat predicted shortages of workers in cybersecurity and intelligence.

Prepared at the request of Assistant Secretary of Defense for Research and Engineering Zachary Lemnios, the report discussed the challenges and expectations facing DOD's science, technology, engineering and mathematics workforce. According to the report, the fast pace of STEM developments means that predicting the exact skills that will be needed in the STEM workforce is virtually impossible. ITP further reported:

With much of DOD's STEM workforce reaching retirement age in the near future, shortages of cybersecurity and intelligence professionals are likely, though other areas may not see a shortage, according to the report. To draw in the needed workers, DOD should offer higher salaries that are more competitive with STEM salaries outside of the defense sector, the report recommends.

"As a means of addressing any future shortages, experience has shown that students will respond to the demand signal of higher salaries in a STEM field, suggesting a mechanism by which DOD can stimulate supply in a critical area," the report says.

The report also urges DOD to emulate Lockheed Martin's Skunk Works division, which works on theoretical problems and has an unconventional structure. A more inviting culture could convince STEM workers to chose the defense industry rather than other sectors, according to the report.

Overseas Spending
By John Liang
April 17, 2013 at 3:41 PM

A new Senate Armed Services Committee report on the Pentagon's annual $10 billion overseas spending "has found construction projects lacking congressional or Pentagon oversight, and allied contributions failing to keep up with rapidly rising U.S. costs," according to a panel statement:

The year-long review of spending in Japan, South Korea and Germany, where nearly 70 percent of spending to support our permanent overseas facilities takes place, suggests that changes to the management of such spending are necessary and that closer scrutiny is warranted to avoid future commitments that may be inefficient or unaffordable.

"Japan, South Korea and Germany are critical allies.  In order to better sustain our presence in these important locations, we need to understand and control our costs.  Federal dollars should always be spent with utmost care, but at a time when the Pentagon and the entire federal government face enormous fiscal challenges, the questionable projects and lack of oversight identified in this review are simply unacceptable," said Sen. Carl Levin, D-Mich., the committee chairman. "Every dollar spent on unnecessary or unsustainable projects is a dollar unavailable to care for our troops and their families, to maintain and modernize equipment, and to pay for necessary investments in base infrastructure."

"This report reaffirms the committee's commitment to ensure that the resources we provide to the armed forces, as well as contributions provided by our allies, are directed towards the most critical core defense requirements of our U.S. Military stationed overseas," said Sen. James Inhofe, R-Okla., the committee's ranking member. "In an unprecedented era of rapidly decreasing defense funds, we will continue to extend oversight to each and every taxpayer dollar spent for our national defense."

View the full report.

Early Earnings
By John Liang
April 16, 2013 at 3:14 PM

Military contractors will probably say that defense orders are "likely" to be "soft" in the near future when they hold their quarterly earnings conference calls later on this month, according to a preview published this morning by Wall Street analysis firm Credit Suisse:

We expect March's triggering of Sequester to have dramatically slowed order flow towards the end of the quarter. At our Pentagon conference in March, several DOD officials said order flow had slowed considerably since Sequester's trigger, adding that in some departments order activity had stopped completely. Thus, while EPS numbers for long-cycle defense contractors should be in-line or above consensus on previously booked business and margins, an order shortfall could drive some volatility. For some companies, such as [Huntington Ingalls Industries], the Continuing Resolution was a bigger overhang in 2013 than was Sequester. Now that the CR is resolved, we would look for an update from such companies on visibility into year-end.

Huntington Ingalls plans to hold its earnings conference call on May 8. As for the traditional "big five," Lockheed Martin plans to hold its earnings conference call on April 23; Boeing, Northrop Grumman and General Dynamics on April 24; and Raytheon on April 25.

Security Clearances
By John Liang
April 15, 2013 at 5:21 PM

The total number of security clearances held by federal government employees and contractors at the end of fiscal year 2012 was 4.92 million, compared to 4.86 million in FY-11, according to a report to Congress submitted by the office of the director for national intelligence late last week.

The April 12 report states:

Although agencies are making significant progress to improve the timeliness of security clearance determinations, the ODNI will continue to stress the need for improvements in the investigative and adjudicative clearance processes. The IC faces challenges in clearing individuals with unique or critical skills -- such as highly desirable language abilities -- who often have significant foreign associations that may take additional time to investigate and adjudicate. Further, compartmentalization and variations in information technology platforms within the IC are impediments to the implementation of automated systems that have the potential to improve the timeliness of processing non-issue cases and allow security specialists to concentrate on issue cases.

Charter Flight
By Maggie Ybarra
April 12, 2013 at 7:47 PM

The Defense Department has approved a charter for a panel that will examine the structure of the Air Force and report its findings to Congress by February 2014.

The charter, dated April 11, shows that in considering the structure of the Air Force, the panel should give particular consideration to evaluating a structure that meets current and anticipated requirements of the combatant commands as well as "maximizes and appropriately balances affordability, efficiency, effectiveness, capability and readiness." Per DOD, the panel should also achieve an appropriate balance between the active and reserve components of the Air Force, taking advantage of the unique strengths and capabilities of each and ensuring that the service has the capacity needed “to support current and anticipated homeland defense and disaster assistance missions in the United States,” according to the document, obtained by InsideDefense.com.

The charter also shows that DOD wants to see the panel take into consideration that there is a need for sufficient numbers of trained personnel "from which the personnel of the reserve components of the Air Force could be recruited." Also, it would be preferable if the panel maintain "a peacetime rotation force to support operational tempo goals of 1:2" for the active-duty Air Force and "1:5 for members of the reserve components of the Air Force," the charter states.

Panel members are expected to deliver their report to lawmakers by Feb. 1, 2014. Those members will serve on what is known as the "National Commission on the Structure of the Air Force" -- a panel that was established in the Fiscal Year 2013 Defense Authorization Act.

The names of those members were announced this month.

The panel consists of Lt. Gen. Bud Wyatt, a former Air National Guard Director; Whit Peters, a former Air Force secretary; Erin Conaton, a former Air Force under secretary; Les Brownlee, a former Army under secretary; and retired Gen. Raymond Johns, Air Mobility Command's former commander who left the service a few months ago. Additionally, Janine Davidson, a former deputy assistant secretary of defense for plans; retired Marine Corps Lt. Gen. Dennis McCarthy, a former assistant secretary of defense for reserve affairs; and Margaret Harrell, the director of the RAND Corporation's Army health program have been nominated as panel members.

Despite a DOD-wide freeze on traveling expenses in light of recent budget cuts, panel members shall be allowed travel expenses including per diem while on out-of-town business, according to the charter.