The Insider

By Christopher J. Castelli
September 19, 2012 at 12:40 PM

The Defense Department announced overnight that it had reached an agreement with the Japanese government that will permit the V-22 Osprey to commence flight operations in Japan.

“This agreement was the result of a deep partnership and thorough process that allowed both sides to reconfirm the safety of the aircraft. It is a testament to the strength and maturity of our alliance, which remains the cornerstone for peace and stability in the Asia-Pacific region,” Pentagon Press Secretary George Little said.

Defense Secretary Leon Panetta, he added, who "has placed a high priority on reaching this agreement," has "directed numerous senior officials at the Department of Defense to work on this issue over the past several months, and raised the issue in multiple discussions with Foreign Minister Gemba and Defense Minister Morimoto, including earlier this week."

By Christopher J. Castelli
September 19, 2012 at 12:38 PM

Defense Secretary Leon Panetta met today with China's Vice President and Vice Chairman of the Central Military Commission Xi Jinping, Pentagon Press Secretary George Little said in a statement released this morning. “In a session that lasted more than an hour, the two leaders held constructive and candid discussions on a broad range of bilateral issues, with a focus on the U.S-China military-to-military relationship,” Little said.

“The two leaders agreed to work together with a goal of building a stronger relationship capable of cooperatively addressing the security challenges of the 21st century,” Little added, noting Panetta and Xi also discussed the U.S. rebalance toward the Asia-Pacific region, the importance of the peaceful resolution of maritime territorial disputes as well as other matters of importance to regional security, including North Korea. “In addition, both leaders engaged in a dialogue about working cooperatively to address a number of other global issues and discussed future cooperation on cyber and space issues," Little said. A day earlier, Panetta met with and held a press conference with Chinese Defense Minister General Liang Guanglie.

By Christopher J. Castelli
September 18, 2012 at 7:00 PM

The Center for Strategic and International Studies today issued its annual report on contractor spending by the Defense Department. The 56-page report, "U.S. Department of Defense Contract Spending and the Supporting Industrial Base," seeks to provide an in-depth assessment of the trends driving more than half of all federal contract dollars, according to a summary, which notes the report also includes findings on the industrial base supporting DOD in its missions.

The time frame analyzed in the report extends from 1990 to 2011. The Federal Procurement Data System (FPDS) is the main source of data on government contract obligations in the CSIS report.

By Gabe Starosta
September 18, 2012 at 1:04 PM

Maj. Gen. Christopher Bogdan, the incoming program executive officer for the Joint Strike Fighter program, made some news (and raised some eyebrows) yesterday with what he termed "straight talk" on the history and state of the program. For one thing, he told an audience at the Air Force Association's annual conference in National Harbor, MD, that "the relationship between Lockheed Martin and the JPO and the stakeholders is the worst I have ever seen. The worst I’ve ever seen."

Lockheed Martin later issued a response to Bogdan's comments, via spokesman Mike Rein:

We agree with Maj. Gen. Bogdan that it takes everyone to be fully engaged to be successful. Lockheed Martin will continue to work with the F-35 Joint Program Office team to successfully deliver the F-35’s 5th Generation fighter capabilities to the war fighter. We remain committed to continuing our work to solve program challenges and build on the momentum and success we’ve achieved during the past couple of years.

Look for more about the F-35 and other topics discussed at the Air Force Association conference in this week's issue of Inside the Air Force.

By Jordana Mishory
September 17, 2012 at 9:01 PM

Former Defense Secretary Robert Gates chided lawmakers today for failing to set aside their differences to solve the federal debt crisis, noting that intense partisan rivalries are creating a "real threat to America's future."

Speaking today at a Center for Strategic and International Studies event on sequestration, Gates blasted lawmakers for being more focused on "winning elections and scoring ideological points" than reaching a compromise. He lamented the view that moderation is akin to lacking principles and seen as "selling out."

"My hope is that following the presidential election, whatever adults remain in the two political parties will make the compromises necessary to put this country back in order," Gates said via satellite.

Gates, who stepped down as head of the Pentagon last summer after serving under Presidents George W. Bush and Barack Obama, said leaders must make decisions that may be unpopular in the short term, but will help in the long run.

During his speech, Gates enumerated reasons why compromise is a challenge:  gerrymandered congressional districts create safe havens for incumbents that strap them to the most hardcore ideological base; "wave elections" that sweep parties in and out of power make it hard to sustain policies and programs; and the decline of the classic congressional powerbroker. In addition, he said, a 24/7 digital media environment has lead to a "dumbing down" of political discourse because it provides a forum to spread extreme opinion.

“American politics has always been a shrill and ugly business,” Gates said. "We have now lost the ability to execute even the most basic functions of government, much less solve the most difficult . . . problems facing this country."

Former Chairman of the Joint Chiefs of Staff retired Adm. Michael Mullen, speaking at the same event, contended that "solutions that require compromise seem but a figment of the imagination."
Mullen also said he is not as optimistic as others that the "fiscal cliff" will be averted. "My intent today is not to point a finger for I don't have enough fingers to point. Nor to affix blame for there's plenty of that to go around," Mullen said. "My urgent appeal is to get to the higher ground and to do so sooner rather than later together. There will come a time when we try to kick the can but we will find the can will not budge."

By John Liang
September 17, 2012 at 5:53 PM

A single information technology system allowing officials from the Defense, Commerce and State departments to process export licenses using the same platform will go online in a matter of weeks, Inside U.S. Trade reports this morning.

Assistant Commerce Secretary for Export Administration Kevin Wolf told a Sept. 11 meeting of the Regulations and Procedures Technical Advisory Committee (RPTAC) that the system will go into effect in its "initial operating capability" in the next month or so.

Commerce's Bureau of Industry and Security (BIS) and the State Department will all be using DOD's USXPorts system, which has been modified to allow all agencies to access it, Wolf said.

He said the State Department agencies that will participate will be the Directorate of Defense Trade (DDTC), which administers the United States Munitions List (USML) and the Bureau of International Security and Nonproliferation (ISN), which has authority over dual-use items. For example, ISN includes the Office of Conventional Arms Threat Reduction that guards against proliferation of advanced conventional weapons and related dual-use items, according to the ISN website.

Wolf said he expected "some growing pains" as agencies begin to use the system, but argued that it will create new efficiencies because it will greatly facilitate the electronic sharing of data that was not possible under the previous arrangement when DOD, State and Commerce used three different systems. He said the system will have a more robust, modern server and allows the addition of modules as export control licensing processes evolve.

Wolf said officials in DDTC's aircraft group told him the new system will let them shave off a week from their license reviews. He said any efficiencies may not be apparent in individual licensing decisions, but represent a small victory for the export control initiative.

A single IT system for processing export licenses is one of four key elements of the Obama administration's export control reform effort, which also proposes a single enforcement agency, a single export control list and a single agency in charge of export controls.

Wolf said the enforcement coordination agency, known as the Export Enforcement Coordination Center, has greatly expanded efficiency on enforcement issues due to the information sharing it promotes among agencies. The enforcement center was officially opened in March, and officials were spending the past months to work out exactly how to implement the center's mandates for enhancing and coordinating export control enforcement among 18 agencies in eight departments (Inside U.S. Trade, May 18).

He said the single list and the single agency remains the "ultimate objective" of the export control reform initiative, but noted that the creation of the single agency depends on legislation and on the outcome of the presidential election.

Wolf drove home the point that the current review of the export control lists, which involves a revision of USML categories to determine which items can be moved to the less-stringent Commerce Control List (CCL), provides the preparation for these ultimate goals.

The cooperation required by the five export control agencies working together daily in one room in developing reform-relevant regulations and reviewing USML categories has “culturally” led them to see themselves as part of the same administration, Wolf said. This cooperation has let each agency learn more about the other agencies' export control rules and about the positions of industry, he said.

Wolf said he sees this increased cooperation as one of the reasons that there have not been many disputed commodity jurisdiction (CJ) cases or license disputes that have to be elevated to the assistant secretary level for resolution.

By Thomas Duffy
September 17, 2012 at 5:17 PM

Ever since North Korea tested the two-stage Taepo Dong 2 ballistic missile in 1996, the country has been held up by the Bush and Obama administrations as a significant potential threat to the United States. The missile is often cited by ballistic missile defense proponents as one of the reasons the United States needs to invest in a robust BMD program

But a recent study committee formed by the National Academy of Sciences isn't buying the threat. "While some view the Taepo Dong 2 as a potential threat to the United States, the committee thinks this is unlikely," the committee's report states. The report, issued last Tuesday, examines the investment the United States is making in missile defense programs.

When the Obama administration issued its 2010 Ballistic Missile Defense Review, it pointed to the TD-2 as a serious threat to the U.S. mainland. "Although the test launches of the TD-2 in 2006 and 2009 were deemed unsuccessful, we must assume that sooner or later North Korea will have a successful test of its TD-2 and, if there are no major changes in its national security strategy in the next decade, it will be able to mate a nuclear warhead to a proven delivery system," the review stated.

The Heritage Foundation, which is a big proponent of missile defense, notes in a recent policy briefing for 2012 election candidates that the TD-2 "has the capability to deliver a nuclear warhead to Hawaii. A third stage could boost the weapon's range to include the continental United States. The best way to contain the threat from North Korea is through missile defense."

During a Sept. 11 telephone conference call with reporters, David Montague, one of the NAS committee's two co-chairs, succinctly summed up the committee's opinion of the TD-2: "It's ugly."

Montague added that the TD-2 is incapable of carrying a large enough payload to be a significant threat.

"It's a baby satellite launcher and not a very good one at that. If you look at the way it has to be erected prior to launch, it is a sitting duck for 'first intelligence' and what I call pre-launch defense," he said.

The TD-2 is a liquid-fueled missile and has to be fueled as it sits on the launch pad prior to liftoff.

The NAS committee thinks another North Korean missile program should draw greater scrutiny than the TD-2.

"A more immediate threat is a new 3,200[-kilometer intermediate ballistic missile] North Korea is developing that can threaten Japan, Guam, Okinawa -- all staging areas for a U.S. response to aggressive behavior by North Korea," the report states.

By John Liang
September 17, 2012 at 3:29 PM

The National Defense Industrial Association last week sent a letter to Deputy Defense Secretary Ashton Carter asking new questions about the effects of sequestration on the defense industry:

We have welcomed the open and productive dialogue we have had with you and Secretary Panetta on these issues and in that spirit would appreciate your guidance and clarification on a further matter. An important question, that directly impacts individual company decisions on how and when to move forward with possible sequestration-related layoffs or site closures, involves whether the costs incurred as result of WARN Act compliance will be determined allowable by the Department of Defense. For instance, if a particular company decides to wait for the January 2 sequestration implementation date specified in law to begin the required WARN Act notice process, will the Department determine that the costs resulting from retaining the affected work force through the applicable WARN Act period to be allowable and be willing to use advance agreements or a similar device to effect this policy position? This matter has been consistently raised by a number of our member companies and identified as s critical to their planning efforts.

We understand the question of sequestration WARN Act applicability is complex and reaches beyond the purview of the Department of Defense. However, further clarity and assurances on how the Department will handle associated cost allowability issues would be of significant help as our industry further reviews and begins to establish options for managing the significant impacts of budget sequestration.

And to view a slew of defense contractors' letters sent to Congress in the past month regarding sequestration, click here.

By John Liang
September 14, 2012 at 3:42 PM

Inside the Air Force reports this morning that NASA officials who conducted an independent analysis of the F-22 Raptor's life support systems this summer have concluded that the Air Force's proposed corrective actions to a series of hypoxia-like incidents are positive and worthwhile improvements to the aircraft, but have warned the service against continuing to accept a "normalization of deviance" in the F-22's performance. Further:

NASA's Engineering Safety Center (NESC) performed an independent assessment of the F-22 beginning in late April, and that group's final report was submitted to Air Combat Command (ACC) on Aug. 31, according to Clinton Cragg, the center's principal engineer and the lead on the study group. The NESC final report agreed with the Air Force on the likely causes of breathing problems in the Raptor cockpit -- namely a flaw with the F-22's upper pressure garment and several contributors related to high concentrations of oxygen at low altitudes -- but urged the Air Force to consider a number of more wide-ranging, systemic issues with the F-22 program.

Cragg, along with ACC Director of Operations Maj. Gen. Charlie Lyon and Gregory Martin, a retired Air Force general and the chair of the Air Force Scientific Advisory Board's aircraft oxygen generation study, testified before the House Armed Services tactical air and land subcommittee on Sept. 13.

In his prepared testimony, Cragg wrote that the Air Force, like many organizations before it, has come to accept a handful of mild irritants associated with the F-22 as "normal," when in fact they should have been addressed early on. He cited an issue with a particular part on the space shuttle as an example of NASA going through the same process, and the NESC expressed satisfaction that as part of its oxygen generation study, the Air Force is now paying more attention to these issues.

"The F-22 pilot community has come to expect a number of physiological phenomena as a 'normal' part of flying the Raptor," Cragg wrote. "These include the difficulty in breathing, the 'Raptor cough,' excessive fatigue, headaches, and delayed ear block. Differences in pilot breathing in the F-22 from other platforms was widely known and accepted as a normal part of flying the advanced aircraft. The acceptance of these phenomena as 'normal' could be seen as 'normalization of deviance.'"

One member of Congress who has a good understanding of science is committee member Roscoe Bartlett (R-MD), who chairs the tactical air and land forces subcommittee. In his prepared statement yesterday, he said:

I know from personal experience as a scientist working these issues before I came to Congress that the Air Force faced a difficult problem in determining the root cause of these F-22 pilot hypoxia-like events because in either the case of insufficient oxygen quantity or poor oxygen quality, the symptoms to the pilot are largely the same. Hypoxia, or lack of oxygen, produces the same symptoms in humans that would result from toxic exposure, or hypocapnia, also known as hyperventilation.

Click here to read the full ITAF story, and here to view the testimony from the hearing.

By John Liang
September 13, 2012 at 6:59 PM

House Armed Services strategic forces subcommittee Chairman Mike Turner (R-OH) didn't mince words during his opening statement at today's hearing on the failure of the nuclear weapons complex in Oak Ridge, TN, to prevent an 82-year-old nun and two other antiwar activists from infiltrating the facility:

Let me be clear: I rank this failure alongside the Air Force's unauthorized shipments of nuclear weapons to Barksdale Air Force Base in 2007 and nuclear weapons components to Taiwan, which was reported in 2008.

From our oversight of those incidents, this subcommittee is intimately familiar with how systemic failures -- coupled with a lack of leadership attention -- can lead to massive failures in a business with room for none.

The 2007 Air Force incident revealed deep and systemic flaws throughout the Air Force enterprise that allowed that incident to occur. It also revealed that both on-the-ground personnel and senior leaders in the Air Force had taken their eyes off the ball when it came to nuclear weapons. Tellingly, we saw Secretary of Defense Gates take strong action to hold these people accountable and fix the system.

By Jen Judson
September 13, 2012 at 5:15 PM

A Patriot Advanced Capability-3 missile intercepted and destroyed an aerodynamic tactical ballistic missile target at White Sands Missile Range, NM, today, according to a Lockheed Martin statement.

Lockheed Martin's test involved a ripple fire engagement using two PAC-3 Cost-Reduction Initiative missiles against a "Juno target" -- a long-range missile -- that was fired from Ft. Wingate, NM, Richard McDaniel, vice president of PAC-3 missile programs within Lockheed Martin's Missiles and Fire Control business, said in a statement sent through a spokesman today. Ft. Wingate is about 300 miles from White Sands.

"The first interceptor destroyed the target and the second PAC-3 missile self-destructed as planned," the statement reads.

PAC-3 is designed to defeat tactical ballistic missiles, cruise missiles and fixed- and rotary-wing aircraft, according to the statement. PAC-3 increases the Patriot system's firepower as 16 PAC-3 missiles can be loaded in place of four legacy Patriot PAC-2 missiles on a single launcher, the statement notes.

This test follows an Aug. 29 Army Test and Evaluation Command operational test of both Raytheon's Patriot and Lockheed's PAC-3 interceptors against ballistic missile targets. The August limited user test was performed at White Sands; the goal was to "validate the Patriot System Post-Development Build to meet design requirements," Army spokesman Dan O'Boyle said in an Aug. 30 statement.

Lockheed Martin expects three more flight tests involving PAC-3 by the end of the year, McDaniel said in his statement. The first is the large, integrated Missile Defense Agency test that will also include the Terminal High Altitude Area Defense weapon system and Aegis. The second involves the Medium Extended Air Defense system; that test will employ use the PAC-3 Missile Segment Enhanced  system. The third is another PAC-3 MSE flight test, he added.

By John Liang
September 13, 2012 at 4:11 PM

The Congressional Research Service recently issued a report on using unmanned aerial vehicles in the National Airspace System.

The Sept. 10 report -- originally obtained by Secrecy News -- states:

Growing interest in the use of unmanned aerial vehicles (UAVs), particularly for homeland security and law enforcement applications, has spurred considerable debate over how to accommodate these unmanned aircraft and keep them safely separated from other air traffic. Additionally, the use of these pilotless aircraft, popularly referred to as drones, for aerial surveillance and law enforcement purposes has raised specific concerns regarding privacy and Fourth Amendment rights and potential intrusiveness. These issues have come to the forefront in policy debate in response to provisions in the FAA Modernization and Reform Act of 2012 (P.L. 112-95) that require the Federal Aviation Administration (FAA) to begin integrating unmanned aircraft into the national airspace system by the end of FY2015.

While drones have been used extensively by the military and small radio-controlled model aircraft have been around for more than 50 years, advances in more complex vehicle controls and imaging sensor capabilities are spurring public sector and commercial interest in unmanned aircraft for a variety of purposes, including law enforcement, homeland security, aerial imaging, and scientific research. FAA currently approves public entities (such as federal agencies, public universities, and local police departments) to operate UAVs on a case-by-case basis, but growing interest is making this approach increasingly untenable. Moreover, commercial users are seeking authorization to fly drones, but so far FAA has only allowed test and demonstration flights by manufacturers. FAA faces a number of challenges to address anticipated growth in demand for civilian UAV operations and develop regulations governing the certification and operation of unmanned aircraft systems in domestic airspace.

View the report.

And check out InsideDefense.com's recent coverage of the UAVs-in-the-NAS issue:

Navy Awaits FAA Approval To Fly Drones Without Visual Observers
Inside the Pentagon - 08/23/2012

Successful Demo Could Enable More Drone Flights In U.S. Airspace
Inside the Pentagon - 06/28/2012

Forbes: Process Used To Fly Drones In U.S. Airspace Too Burdensome
Inside the Pentagon - 06/21/2012

Kendall: Air Force Needs Greater Airspace Access For Unmanned Aircraft
Inside the Pentagon - 06/14/2012

DOD To Demo New Airborne Sense-And-Avoid Requirements For Drones
Inside the Pentagon - 06/14/2012

Senate Panel Wants Annual Reports On UAS Airspace Integration Efforts
Inside the Pentagon - 06/07/2012

Report Details Integration Of UAS Into the National Airspace System
Inside the Air Force - 06/01/2012

By John Liang
September 12, 2012 at 7:09 PM

Rep. John Tierney (D-MA) is worried the federal government isn't doing enough to ensure U.S. unmanned systems technology doesn't fall into the wrong hands.

Tierney, the ranking member of the House Oversight and Government Reform national security, homeland defense and foreign operations subcommittee, says in a statement issued today that a July Government Accountability Office report "has found that a lack of information sharing among federal agencies has hindered our ability to keep drone technology out of the hands of our enemies." Further:

"The fact that the U.S. Government has allowed drone technology to fall into the hands of our enemies is extremely troubling for our country and our military. The Administration must take immediate steps to increase efforts to curb the spread of drones and reduce this threat to our national security," Congressman Tierney said. "I call on the Departments of Defense and State to take swift action on the recommendations in this report."

Most notably, the GAO report released today finds that countries with drones or Unmanned Aerial Vehicles (UAVs) nearly doubled in seven years and many of the countries that have acquired UAVs could put U.S. military assets at risk. Due to inadequate information sharing, U.S. drone technology has made its way into the hands of so-called "countries of concern" and terrorist organizations.

According to the GAO report itself:

GAO recommends that [the] State [Department] improve its export licensing database to better identify authorized UAV exports, that relevant agencies improve mechanisms for sharing information relevant to the export licensing process, and that State and DOD harmonize their UAV end-use monitoring approaches. The agencies generally agreed with the recommendations.

View the GAO report.

By Gabe Starosta
September 12, 2012 at 6:46 PM

European defense giants BAE Systems and EADS appear close to completing a corporate merger, and Boeing Chief Executive Officer Jim McNerney -- speaking at the Council on Foreign Relations today -- was asked for his view on how that joint company would impact Boeing. His response:

I just caught those rumors this morning myself. I think from my perspective, and I'm thinking about it quickly here, I have a pretty deep and abiding faith in our company's faith, OK, so I don't see this as something that is going to threaten us fundamentally. It does reflect a global consolidation that is beginning to happen. I think this may be a matter of, from an EADS standpoint, maybe some increased U.S. market access because of BAE's entity here, and the entity, when it is put together, does look a little bit more like us. That's been a steady them in EADS' development over the years.

BAE issued a statement to the London Stock Exchange this morning confirming rumors about the merger, and EADS has posted a similar statement on its own website which notes that EADS would own 60 percent of the proposed new company. The BAE statement reads:

BAE Systems and EADS have a long history of collaboration, and are currently partners in a number of important projects, including the Eurofighter and MBDA joint ventures. The two companies confirm that they are now in discussions about a possible combination of the businesses. The potential combination would create a world leading international aerospace, defence and security group with substantial centres of manufacturing and technology excellence in the UK, USA, France, Germany and Spain as well as in Australia, India and Saudi Arabia.

BAE Systems and EADS believe that the potential combination of the two businesses offers significant benefits for all stakeholders, over and above their individual business strategies, which both businesses continue to execute strongly. In particular, they believe that the combination of the two complementary businesses offers the opportunity of greater innovation, long term financial stability, and an extended market presence, which will enable them to compete even more effectively on the world stage.

Any agreement on the terms of a potential combination will require approval by the Boards of both BAE Systems and EADS, and would be subject to, amongst other things, a number of governmental, regulatory and shareholder approvals. There is no certainty at this stage that the discussions will ultimately lead to a transaction.

BAE Systems is a strong, well-run company, successfully implementing our strategy. During the process of the discussions with EADS, BAE Systems will continue to focus in meeting all of their current commitments.

By John Liang
September 12, 2012 at 4:57 PM

EADS today released a statement confirming speculation that talks about a possible merger with BAE Systems are under way:

This potential combination would be implemented through the creation of a dual listed company structure, under which both companies would operate as one group by means of equalisation and other agreements but would be separately listed on their existing exchanges.

The discussions between the parties envisage that BAE Systems shareholders would own 40% and EADS shareholders 60% respectively of the enlarged group. It is contemplated that there would be a unified board and management structure with identical boards and executive committees at each of BAE Systems and EADS.

BAE Systems and EADS have a long history of collaboration and are currently partners in a number of important projects, including the Eurofighter and MBDA joint ventures. The potential combination would create a world class international aerospace, defence and security group with substantial centres of manufacturing and technology excellence in France, Germany, Spain, the UK and the USA.

View the full statement.