The Insider

Leidos and Microsoft announced today they have entered into a "strategic collaboration agreement" to work on government artificial intelligence efforts.

"A near-term priority for co-development is in the area of generative AI solutions to support organizational efficiency, enhanced productivity and cross domain applications," a Leidos statement reads.

Steve Hull, Leidos executive vice president for enterprise and cyber solutions, said: "This agreement will help enable co-innovation utilizing the latest cloud and AI technologies."

Leidos recently completed a successful migration of 20 critical support applications from an on-premise data center to Microsoft’s Azure Government cloud environment in support of the Navy. This migration was part of Leidos’ ongoing support of the Navy’s Next Generation Enterprise Network Service Management, Integration and Transport (SMIT) program, enabling the service to monitor, maintain and secure the Navy and Marine Corps Intranet (NMCI) "with increased efficiency and collaboration without compromising security," according to the Leidos statement.

"Our collaboration with Leidos will help accelerate adoption of cloud-driven solutions to improve our customers’ operations," said Angela Heise, corporate vice president of Microsoft's worldwide public sector business unit. “Leidos’ expertise in national security operations coupled with Microsoft’s advanced cloud, cyber, and AI technologies will enable our two organizations to develop innovative solutions to address a wide range of complex challenges faced by public sector organizations around the world.”

L3Harris Technologies announced today it has completed the acquisition of Aerojet Rocketdyne.

“With national security at the forefront, we’re combining our resources and expertise with Aerojet Rocketdyne’s propulsion and energetics capabilities to ensure that Department of Defense and civil space customers can address critical mission needs globally,” L3Harris Chairman and CEO Christopher Kubasik said in the announcement.

According to media reports, the deal was closed at $4.7 billion, forming L3Harris' fourth business segment.

The acquisition diversifies L3Harris' portfolio, adding a considerable long-cycle backlog and broad expertise to enable missile defense systems, hypersonic and advanced rocket engine opportunities, the company said.

L3Harris also announced Ross Niebergall as the new president of the Aerojet Rocketdyne segment, who said: “We will expand on the strong Aerojet Rocketdyne heritage to enhance production and deliver on [customer’s] expectations.”

L3Harris said it will update its financial guidance in October for five months and then in January 2024, which will remain consistent with the rest of the portfolio that will be disclosed in the third-quarter earnings call, company Senior Vice President and Chief Financial Officer Michelle Turner said during the second-quarter earnings call yesterday.

The Space Force has issued a request for information for a Commercial Augmentation Space Reserve Framework to identify potential sources and develop an acquisition strategy, according to a notice posted July 25.

The CASR is a similar model to the Air Force Civil Reserve Air Fleet program to carry out transport missions via commercial airlines during a conflict, according to the RFI.

“The Space Force is actively investigating the viability of implementing a similar model for space capabilities under the CASR construct,” the Space Systems Command Commercial Space Office noted.

The CASR framework focuses on ensuring the Space Force can enhance the capabilities of the commercial space industry to enhance the resilience, capacity and effectiveness of its national security architecture.

The operations under CASR are divided into three levels: Level 1 will include day-to-day operations; Level 2 will include priority operations driven by the Defense Department and other government agencies due to regional conflict or significant crisis along with Level 1 responsibilities; and Level 3 will be full CASR execution headed by the president or defense secretary caused by war, major conflict, national or international emergency along with Level 1 and Level 2 responsibilities.

Additionally, the framework will have nine elements that include developing the concept of operations; interoperability and integration; risk mitigation; budget integration; cost-effectiveness and speed; facilitating commercial partnerships; cybersecurity; reviewing established policy; regulatory and legal conditions; and reviewing contractual structures.

In February, the service hosted a reserve industry day to discuss CASR with the Defense Department and industry, the RFI document states.

The Senate passed the annual defense policy bill this evening by a vote of 86-11.

The bill authorizes $886 billion in total national defense spending and a 5.2% military pay increase.

Now the bill advances to conference committee negotiations with the House, which only narrowly passed its version of the bill earlier this month and contained controversial rollbacks of the Pentagon’s abortion, diversity and climate-related policies sought by conservative Republicans.

The strong bipartisan Senate vote signals the coming clash with the House GOP. President Biden has not yet said whether he would veto the defense authorization bill if it contained the policy rollbacks sought by House Republicans.

The defense authorization measure isn't a spending bill, however, and doesn't actually allocate funding, which still requires the passage of a separate appropriations bill.

Meanwhile, Senate appropriators passed their version of the defense spending bill today.

This Wednesday INSIDER Daily Digest has news from various defense contractors' quarterly earnings and more.

We start off with coverage of Boeing's, General Dynamics' and RTX's quarterly earnings calls:

Boeing looking at positive defense margins in 2025/2026

Boeing is "wrestling through" its fixed-price defense and space contracts and expects to begin turning an operating profit in its defense business in 2025, CEO David Calhoun said Wednesday.

General Dynamics adjusting to 'new normal' across supply chains

General Dynamics is adjusting to a "new normal" for its supply chains, according to company executives, who said despite persistent challenges, its shipbuilding business experienced continued growth with record revenue during the second quarter of 2023.

RTX discloses engine defect from a rare condition

Despite a strong second-quarter earnings record, RTX this morning disclosed its Pratt & Whitney business unit found a rare condition in the powdered metal used to manufacture certain engines that would require an accelerated fleet inspection.

The Army is striving to create a simulated Synthetic Training Environment capability in response to multidomain operations:

Army wants to expand capabilities with new virtual training system

The Army plans to begin its initial fielding of the Reconfigurable Virtual Collective Trainer (RVCT) in fiscal year 2024 at three bases and is also aiming to soon expand the requirements for the system to include both legacy and new air and ground systems, officials told reporters Monday.

More cyber defense news from our colleagues at Inside Cybersecurity:

CMMC program rulemaking enters formal interagency review process at OIRA

The Pentagon's Cybersecurity Maturity Model Certification program is entering a new stage with the submission of the rulemaking to implement the program now under review at the White House Office of Management and Budget's information and regulatory affairs office.

Space technology company Maxar Technologies announced it has completed the first critical design review of the Maxar 300 series for the Space Force's Tranche 1 Tracking Layer.

In collaboration with L3Harris Technologies, the Maxar 300 series is designed to carry a minimum of eight space vehicles per launch with low jitter demand and high power required for the missile defense mission, the company said.

“We designed the Maxar 300 series platform to be quickly scalable,” Chris Johnson, Maxar Space senior vice president and general manager, said in the announcement July 24.

Johnson noted the series' critical design review was completed within 10 months of the contract award and is scheduled to begin production of the series later this year, with initial deliveries in early 2024.

Maxar is responsible for building 16 platforms for the Space Development Agency’s T1TRK program, each about the width of a conventional oven. According to the announcement, unlike traditional missile tracking systems, these new dimensions will assist SDA to accomplish its goals to “reduce the size, weight, power and cost.”

The agency also plans to adapt and extend Maxar’s deep commercial communications satellite experience for new uses, the announcement reads.

The Defense Department in July 2022 said the T1TRK would build upon the Tranche 0 Tracking Layer capabilities, featuring enhanced targeted technologies, expanded coverage, increased integration, calibration processes and greater production efficiencies.

The Biden administration has nominated Gen. David Allvin to be the next Air Force chief of staff, according to a Tuesday announcement.

Allvin would succeed Gen. Charles Brown, who has been nominated for chairman of the Joint Chiefs of Staff.

Allvin has served as the Air Force vice chief of staff since 2020 and has served as director of strategy, concepts and assessments for the Air Force deputy chief of staff; director of strategy and policy at U.S. European Command, and director of strategy, plans and policy for the joint staff.

Military nominations have been held up by a blockade from Sen. Tommy Tuberville (R-AL) as a protest to Defense Department policies for leave and travel reimbursement for servicemembers seeking abortion services.