The Insider

By John Liang
September 26, 2012 at 3:26 PM

The Pentagon recently issued its annual industrial capabilities report to Congress, in which it warns:

The loss or reduction in design teams and specialized engineering skills is a particular Department concern that cuts across multiple defense sectors -- most notably the aircraft, missile, space, Command, Control, Communications, Computers (C4) and Information Communications Technology (ICT), and munitions and missiles sectors. The demand for new design and development is at a historic low with significant skill and experience loss expected due to an aging and retiring workforce and a shortage in qualified design engineers. The loss in design expertise may jeopardize U.S. technological edge and increase the execution risks for future DoD programs. Preserving and developing unique and highly-creative talent, skills, and technology are vital to the industrial base's ability to design and produce world-class products.

Science, Technology, Engineering, and Mathematics (STEM) education is essential toward ensuring the nation maintains a workforce capable of understanding and satisfying the technical and advanced design requirements of future defense systems. After a temporary rise during the internet boom of the 1990s, enrollments in university STEM programs have reverted to previous historical levels. There is growing concern within the Department that there may be an insufficient supply of qualified graduates to meet rising defense C4/ICT and other design-unique program requirements.

The Department is addressing STEM education issues with the National Science Foundation and the President's Networking and Information Technology Research and Development Program. DASD(MIBP) is also monitoring potential design team shortages through continued S2T2 assessments.

View the full report.

Check out our coverage of the report:

New DOD Assessment Pinpoints At-Risk Defense Industrial Base Sectors (DefenseAlert, Sept. 25)

An "aggressive" Pentagon analytical effort to identify critical and fragile niches in the defense industrial base has turned up several areas of concern for senior military acquisition officials, who have developed plans to intervene if necessary, according to a new government report.

DOD: Industrial Edge To 'Shift Against' U.S. Without 'Near-Term' 6th-Gen Fighter (DefenseAlert, Sept. 24)

Without "near-term" plans to launch a sixth-generation fighter aircraft program before 2030, the Defense Department estimates the U.S. aerospace industry could forfeit what is believed by the U.S. government to be a five-year technological advantage over foreign combat aircraft makers, according to a previously unreported Pentagon assessment.

Stay tuned for more.

By John Liang
September 25, 2012 at 3:13 PM

The Pentagon recently issued an instruction memo that outlines the Defense Department's policies for setting up, operating and maintaining "DOD Internet services on unclassified networks to collect, disseminate, store, and otherwise process unclassified DOD information," as well as the "use of Internet-based capabilities (IbC) to collect, disseminate, store, and otherwise process unclassified DOD information."

More specifically:

4. It is DoD policy that:

a. Decisions to collaborate, participate, or to disseminate or gather information via DoD Internet services or IbC shall balance benefits and vulnerabilities. Internet infrastructure, services, and technologies provide versatile communication assets that must be managed to mitigate risks to national security; to the safety, security, and privacy of personnel; and to Federal agencies.

b. DoD Internet services and IbC used to collect, disseminate, store, or otherwise process DoD information shall be configured and operated in a manner that maximizes the protection (e.g., confidentiality, integrity, and availability) of the information, commensurate with the risk and magnitude of harm that could result from the loss, compromise, or corruption of the information.

(1) For use of DoD Internet services, paragraph 4.b. applies to both public and non-public DoD information.

(2) For use of IbC, this applies to the integrity and availability of public DoD information. IbC shall not be used to collect, disseminate, store, or otherwise process non-public DoD information, as IbC are not subject to Federal or DoD information assurance (IA) standards, controls, or enforcement, and therefore may not consistently provide confidentiality.

c. DoD information systems (ISs) hosting DoD Internet services shall be operated and configured to meet the requirements in DoDD 8500.01E (Reference (f)) and DoDI 8500.2 (Reference (g)), and certified and accredited in compliance with DoDI 8510.01 (Reference (h)).

d. Effective information review procedures for clearance and release authorization for DoD information to the public are conducted in compliance with DoDD 5230.09 and DoDI 5230.29 (References (i) and (j)). DoD information intended for non-public audiences requires similar review and consideration prior to dissemination. DoD employees shall be educated and trained to conduct both organizational and individual communication effectively to deny adversaries the opportunity to take advantage of information that may be inappropriately disseminated.

e. Public DoD websites shall be operated in compliance with the laws and requirements cited in Reference (c). Detailed explanations, and implementation guidance are provided at the Web Manager’s Advisory Council Website.

f. DoD Internet services and the information disseminated via these services, where appropriate, shall be made available to Federal initiatives such as Data.gov, Recovery.gov, and USA.gov to reduce duplication and to foster greater participation, collaboration, and transparency with the public. Where feasible and appropriate, such DoD information shall be provided as datasets in raw (machine readable) format as defined in DepSecDef Memorandum (Reference (k)).

g. All unclassified DoD networks (e.g., Non-classified Internet Protocol Router Network (NIPRNET), the Defense Research and Engineering Network) shall be configured to provide access to IbC across all the DoD Components.

h. Authorized users of unclassified DoD networks shall comply with all laws, policies, regulations, and guidance concerning communication and the appropriate control of DoD information referenced throughout this Instruction regardless of the technology used. Furthermore, all personal use of IbC by means of Federal government resources shall comply with paragraph 2-301 of DoD 5500.7-R (Reference (l)).

Read the full memo.

By Jordana Mishory
September 24, 2012 at 6:46 PM

More military-to-military contacts might help to stabilize the Asia-Pacific region and diffuse the conflict between China and Japan over the Senkaku islands, according to Kathleen Hicks, the principal deputy under secretary of defense for policy.

Speaking today at a Center for Strategic and International Studies event, Hicks said increased military-to-military engagement can help not only with China but with other nations in the region as well.

Asked why China would listen to the United States on the latest standoff between China and Japan over the islands, Hicks said stability in the region is of interest to everyone, including China.

Her comments echo those of Defense Secretary Leon Panetta last week in Japan. Panetta told reporters it's in everyone's interest for Japan and China to maintain good relations, noting that the message he's been trying to convey to China about the stand-off is “to urge calm and restraint on all sides.”

“The United States, as a matter of policy, does not take a position with regards to competing sovereignty claims,” Panetta said. “Having said that, we expect that these issues will be resolved peacefully. And although, you know, we understand the differences here with regards to jurisdiction, it is extremely important that diplomatic means on both sides be used to try to constructively resolve these issues.”

By John Liang
September 24, 2012 at 3:44 PM

On Friday, InsideDefense.com reported that Army intelligence analysts looking deep into the next decade had issued a "strategic estimate" document that envisions potential operational environments and related missions against adversaries in Iran, China, Yemen, North Korea, Pakistan and Nigeria:

In the new estimate, Training and Doctrine Command's intelligence directorate anticipates operational environments through 2028 as part of an effort to identify future needs for all aspects of the Army -- including new weapons -- while thinking anew about land operations after more than a decade of war in Afghanistan and Iraq.

"This strategic estimate will serve as the foundation to build, train and educate the U.S. Army," Gen. Robert Cone, TRADOC commanding general, wrote in a foreword to the 100-page document, dated August 2012.

The volume is intended to inform decisions about future Army budgets, it states: "Currently, in the midst of a global recession, the Army finds itself at a strategically important crossroad as it tries to determine where to wisely invest its limited training, personnel, and materiel resources."

The document describes the need to be ready to confront a wide range of potential adversaries, from standing conventional forces to irregular militias and paramilitary forces to terrorist groups and criminal gangs.

"The strategic environment remains as it has always been: complex," the report notes.

We now have the document.

By Courtney Albon
September 24, 2012 at 3:21 PM

The Defense Department has awarded  a $394 million contract to General Electric Aviation for its Adaptive Engine Technology Development program, DOD announced late Friday.

Inside the Air Force reported late last week that the service was in final negotiations with GE-Aviation and Pratt & Whitney, expecting to award up to two contracts for the four-year development program. The goal behind AETD is to mature fuel-efficient component technologies for the Air Force's future combat aircraft.

A contract for Pratt & Whitney has not yet been announced.

The service estimates AETD and its Adaptive Versatile Engine Technologies work could cut Air Force fuel consumption by 1.4 billion gallons through 2040.

The contract announcement reads:

GE-Aviation, Cincinnati, Ohio (FA8650-09-D-2922), is being awarded a $394,747,900 indefinite delivery and indefinite quantity contract modification for the Adaptive Engine Technology Development program. The location of the performance is Cincinnati, Ohio. Work is expected to be completed by Sept. 30, 2016. The contracting activity is AFRL/RQKPB, Wright-Patterson Air Force Base, Ohio.

By Dan Dupont
September 21, 2012 at 5:40 PM

Rep. Mike Turner (R-OH), who chairs the House Armed Services strategic forces subcommittee, announced he has introduced a bill designed to better protect nuclear weapons and facilities, "legislation that would transfer responsibility for providing security at certain National Nuclear Safety Administration (NNSA) nuclear weapons facilities to the Department of Defense (DOD)."

From his statement:

Under the bill, the military would provide security for nuclear weapons and special nuclear material at NNSA's sites in the same manner as it does for nuclear weapons in military custody. In addition, responsibility for securing transportation of nuclear weapons would also shift to DOD.

"Last week my Subcommittee heard directly from NNSA officials and experts on the Y-12 incident and the alarming lapse of security. On a bipartisan basis we were stunned by the series of failures, at all levels, that enabled this incident to occur. We were also dismayed by the lack of accountability in responsible federal officials. It is clear that the NNSA is broken and we must take immediate action to ensure the security of the nation's nuclear materials," said Turner.

In May of this year, the House passed the National Defense Authorization Act for Fiscal Year 2013 (H.R.4310). The bill contained a series of reforms sponsored by Turner that would overhaul the governance, management, and oversight of the nuclear security enterprise. The bill would shift NNSA from focusing on paperwork and overly bureaucratic processes to ensuring NNSA's mission is performed safely, securely, and effectively.

"Shifting security to the military provides a number of advantages over the current system. Our military has the capabilities, training, and cultural mindset needed to secure the nation's most powerful weapons. NNSA was originally created by Congress because of major security and mismanagement problems at DOE. For 12 years DOE and NNSA have been saying they will get things right -- this latest incident proves once again that they haven't. I am not willing to risk having security for our nuclear weapons continue to reside inside this broken system," added Turner.

Cosponsors of Turner's bill include: Reps. Trent Franks (AZ-02), Mo Brooks (AL-05), Austin Scott (GA-08), Doug Lamborn (CO-05), Mike Rogers (AL-03), and Jon Fleming (LA-04).

By Christopher J. Castelli
September 20, 2012 at 2:26 PM

Echoing comments made yesterday on Capitol Hill by Pentagon acquisition chief Frank Kendall, Deputy Defense Secretary Ashton Carter said this morning that delaying sequestration would be preferable to permitting its implementation.

Kendall said Wednesday that he remains hopeful that Congress will be able to solve the nation's debt problems, not merely delay sequestration. But if all a lame-duck Congress can accomplish is a delay sequestration that gives the next Congress the ability to address the problem, that would clearly be better than allowing sequestration to be implemented, Kendall told lawmakers, contractors and reporters in remarks on Capitol Hill.

Speaking at the Newseum today, for an event organized by Politico, Carter agreed.

Carter also reiterated his concerns about export-control reform, which he voiced yesterday at an Air Force Association conference.

From our story on his Wednesday remarks:

"I think that starting with Secretary Gates, and really Secretary Clinton, President Obama, Secretary Panetta, all the senior leadership, myself also, are frustrated with the outdated nature, I guess you would say, of the export control system and with the way it is designed, which has so many hands in the pot that it takes an extraordinary collective and simultaneous act to get anything done," Carter said. "That is annoying and impairing, and we are under pretty clear instructions -- and have been for the last three years -- in the department to clean up our act."

Over that time, he added, DOD, State and Commerce have made progress in streamlining their approval processes and simplifying export control. But Carter made clear that improving the system in a larger way requires legislation from Congress.

"Where I cannot give you much optimism at the moment is elsewhere," Carter said. "I think we're all fine -- the Commerce Department, the State Department, and the Defense Department are aligned in our general reviews, but then there's the Congress, which has views of its own, so this is just something we have to keep handling.

"I'm dogged and Secretary Panetta is pretty dogged within the walls of the Department of Defense that we can do it and have done a lot there," he continued. "It's a lot harder when you get outside, and it turns into missionary work for us and not something we can direct and manage in the way that we can inside the building."

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.