The Insider

School Time
By John Liang
July 19, 2012 at 6:50 PM

Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey tweeted today that he had issued a "Joint Education White Paper" that sets goals for educating the Joint Force. According to the document's introduction:

As we reflect on the conduct of Joint operations since the passage of the Goldwater-Nichols Defense Reorganization Act of 1986, the lessons of the last decade of war, and on the future it is clear that joint education is essential to the development of our military capabilities. Today's Joint Force is a highly experienced, battle-tested body of men and women, with a decade of practical, focused warfighting knowledge.Our colleagues and schools have not had so many seasoned combat leaders in their classrooms for at least two decades. Our education efforts provide a force multiplier in our effort to develop and advance the shared values, standards and attributes that define our Profession of Arms. However, much is changing in the security environment as well as the experience of our leaders that will challenge us to deliver high-quality Joint education as never before. The explosion of information technologies that provides global and regional actors nearly instant access to information means that the United States no longer enjoys clear operational and technological advantages in the competition to "observe, orient, decide and act" more effectively than adversaries. We must learn and properly place in context the key lessons of the last decade of war and in doing so, we will prepare our leaders for what is ahead -- not just what is behind us. This is why we must review our joint education objectives and institutions to ensure that we are developing agile and adaptive leaders with the requisite values, strategic vision and critical thinking skills necessary to keep pace with the changing strategic environment. If we get this right, and get it right now, we will excel well beyond 2020.

Some recent, military-education-related stories from InsideDefense.com:

Marine Corps Urged To Better Support Increasingly Key Small-Unit Leaders
(Inside the Pentagon - 06/21/2012)

OMB Memo: FY-14 S&T Priorities Include Manufacturing, Green Tech
(Inside the Pentagon - 06/14/2012)

Draft Pentagon Report Lays Out Key Lessons From 'Decade Of War'
(Inside the Navy - 06/11/2012)

Innovation Debate
By Christopher J. Castelli
July 19, 2012 at 4:45 PM

The Defense Department's Rapid Innovation Fund -- the subject of new guidance from DOD acquisition chief Frank Kendall -- sparked debate on the House floor Wednesday as Rep. Mike Pompeo (R-KS) sought unsuccessfully to cut $250 million for the effort from House's fiscal year 2013 defense appropriations bill. Pompeo's amendment failed by vote of 137 to 282.

"I urge my colleagues to reject this effort," Pompeo said of the proposed $250 million appropriation. "First of all, the Pentagon . . . never asked for this money. Four DOD agencies declined an invitation to even participate in the fund. There is clearly no one in the military clamoring for what is essentially a slush fund. With sequestration looming, now is the time to make tough choices, not to add $250 million of wasteful spending." Pompeo argued the fund is neither rapid, nor innovative. It was created by Congress because Congress ended earmarks, and some have wanted a way to have earmark-type projects continue to receive government money, he said.

Rep. Norm Dicks (D-WA), the ranking Democrat on the House Appropriations Committee, defended the account. "The Rapid Innovation Fund was authorized and appropriated by Congress in 2011 to allow innovative small businesses to compete for funding within the Department of Defense," he said. "It is a competitive, merit-based program designed to accelerate the fielding of innovative technologies into military systems." The account was created because small businesses have a lot to offer DOD, Dicks argued.

"Not all of the innovations come from Lockheed and Boeing and General Dynamics," Dicks added. Rep. Jack Kingston (R-GA) also defended account, arguing it enables small businesses to provide better, more affordable technology that can be incorporated into major weapons systems.

Inside the Pentagon has more on the fund in today's issue:

Kendall Issues Guidance On $200 Million Rapid Innovation Fund

Emphasizing energy security, materials and microelectronics, the Pentagon this month issued internal guidance to defense officials on how the department plans to use the Rapid Innovation Fund to spur investment and followed up with a related solicitation to industry.

The fund, which DOD did not request funding for in fiscal year 2013, is supposed to support small, urgent projects to be developed by industry. The FY-12 funding for the program is $200 million.

Pentagon acquisition chief Frank Kendall's new guidance lays out detailed plans for the selection of proposals, the evaluation of the proposals, how the awards will be given and how the technology developed will be transitioned into other programs. The memo also says the effort will focus on enhancing energy security and independence, developing advanced materials and advancing microelectronics.

Carter In Hawaii
By John Liang
July 19, 2012 at 3:43 PM

Deputy Defense Secretary Ashton Carter yesterday spoke about the administration's strategic shift in focus to East Asia, now that the wars in Iraq and Afghanistan are winding down.

In a speech aboard the battleship Missouri in Pearl Harbor, HI, Carter said:

Iraq we have brought to an end, and in Afghanistan, we have a plan that is shared with all our coalition partners, to bring that down -- our activity in Afghanistan -- to an enduring presence starting in 2015. What the President and Secretary of Defense have told us is that they understand that as this era -- the era of Iraq and Afghanistan -- ends, we need to lift our heads up out of the foxhole we've been in, look up, look around, and see what the problems are, and the security opportunities there are, that will define our future -- your future. And those issues, those challenges and those opportunities are, very importantly, in the Asia-Pacific region, which you now serve. So this is where our future lies, and you, right here, right now, are a very important part of that transition, that great transition that this great military is embarked upon.

Secretary Panetta was out here not long ago, the President was out here, the Secretary of State was out here. And I'm out here in their wake, to show that when they talked about rebalancing our security effort to the Asia-Pacific theater, that we aren't just talking the talk, we're walking the walk. And so in all of the allies and partnerships where we have forces deployed or forces rotating and acting in partnership, I want to check on their status -- our own people. I want to check on the health of our alliances and relationships; make sure that we're doing all the things that we can do, all the things that we said we would do, all the things that we're planning to do, to rebalance our effort to this region.

We do this at a time of great strategic transition, as I've already said. We also do it at a time when the country is trying to rebalance its own fiscal situation. And the other thing I'd tell you is that we understand that, and we can do what we need to do here within the constraints of the amount of money that the country is able to give us -- in important measure because much of the capacity that we have been using in Iraq and Afghanistan we can now apply to this region. So we're going to do it, we can do it even within the budgetary circumstances that we find ourselves. And so, as I go on from here to Guam, and then to Japan, and then to Thailand, and then to India and finally to Korea, I'll be looking at our relationships with those countries and implicitly with all of the other countries in this area, and saying, "What is it that I need to go back to Washington and make sure we're doing on our end to hold up our bargain with you, out here, who are at the point of the spear on this effort?"

There are a number of different aspects to the rebalancing here. I'll just say that it really starts with the principles that we stand up for, that we uphold, and that we have stood for in this part of the world for 70 years now, since World War II ended aboard this vessel. I always try to summarize it in the following way: I say that this region of the world has enjoyed peace and prosperity for 70 years now.  It's a remarkable achievement. In that environment of peace and security, first Japan was able to rise; then Korea was able to rise; and now, yes, China, able to rise to develop their own people, to develop economically. And that's only possible in an environment of peace and security.

And that doesn't come automatically out here. It was the United States and our presence -- constant and strong -- in this region over a period of 70 years, that created that environment of peace and security. We think that's been a good thing.  It's been good for us, and it's been good for every other country in this region. We aim to keep that going. We aim to continue to be the pivotal factor for peace and security in the Asia-Pacific region.

See below for some of InsideDefense.com's recent coverage of the administration's new focus on Asia:

Forbes: Asia-Pacific Strategy Needs To Be Backed By Resources, Analysis
(Inside the Navy -- 07/02/2012)

Army Eyes Network Evaluation To Help Establish Relevance In Asia-Pacific Strategy
(DefenseAlert -- Thursday, 21 June 2012)

Locklear: Despite Shifting Focus In Pacific, Northeast Asia A 'Cornerstone'
(Inside the Navy -- 06/18/2012)

CRS On UCP, COCOMs
By John Liang
July 18, 2012 at 9:24 PM

The Congressional Research Service this week issued a report on the Unified Command Plan and the combatant commands.

The July 17 report -- originally obtained by Secrecy News -- lists several topics for congressional introspection:

Potential issues for Congress include the implications of a strategic shift to the Asia-Pacific region. Another issue is whether there is a need for greater interagency involvement in the UCP development process. A possible area for congressional concern is if Geographical COCOMs have made U.S. foreign policy "too militarized." Some have also suggested there might be a need for separate COCOMs apart from the current nine to better address emerging regional and ethnic alignments as well as emerging threats such as cyber warfare. Finally, if Congress believes the current COCOM construct does not meet contemporary or future security requirements, there are proposals for alternative organizational structures that might prove more effective.

Here is some of InsideDefense.com's recent coverage of the COCOMS and the UCP:

Proposal To Elevate SOCOM's Clout Among COCOMs Still Under Review
(Inside the Army - 04/16/2012)

DOD To Review Unified Command Plan In Light Of New Defense Strategy
(Inside the Army - 01/16/2012)

UAVs And The Homeland
By John Liang
July 18, 2012 at 8:10 PM

The House Homeland Security oversight, investigations and management subcommittee is scheduled to hold a hearing tomorrow on using unmanned systems within the United States. According to the subcommittee's website, witnesses include:

Panel I

Mr. Todd E. Humphreys, Ph.D.

Assistant Professor, Cockrell School of Engineering, The University of Texas at Austin

Panel II

Mr. Gerald Dillingham, Ph.D.

Director, Physical Infrastructure Issues, Government Accountability Office

Chief Deputy Randy McDaniel

Montgomery County (TX) Sheriff’s Office

Ms. Amie Stepanovich

Litigation Counsel, Electronic Privacy Information Center

Even though he isn't on the witness list, Michael Toscano, president and CEO of the Association for Unmanned Vehicle Systems International, released prepared testimony for tomorrow's hearing, which in part states:

In addition to safe operations, the industry is committed to building safeguards into UAS technology, such as "sense and avoid" systems and other innovations, which will enable a safe and orderly integration. For example, the U.S. Army recently completed a two-week evaluation of a Ground Based Sense and Avoid (GBSAA) system at Dugway Proving Ground in Utah. The system uses 3-D radar and software algorithms to detect other aircraft flying in the vicinity of UAS, and safely steer UAS away from other aircraft. In both live and simulated tests, the system successfully recognized conflicts and navigated UAS away from other aircraft.

The GBSAA system provides a window into the type of "sense and avoid" technologies available for the U.S. domestic airspace. Meanwhile, the development of this particular system is ahead of schedule. The Army has said the GBSAA could be deployed as early as March 2014, one full year ahead of the Army's initial estimate of 2015.

Here's some related coverage from InsideDefense.com:

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)

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

Kendall: Air Force Needs Greater Airspace Access For Unmanned Aircraft
(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)

And for InsideDefense.com's complete coverage of unmanned issues, click here.

Sequestration Hearing
By John Liang
July 18, 2012 at 3:41 PM

The House Armed Services Committee is holding a hearing today to solicit defense industry perspectives on the effects of sequestration. Lockheed Martin CEO Robert Stevens, EADS North America CEO Sean O'Keefe, Pratt & Whitney CEO David Hess and Williams-Pyro CEO Della Williams are testifying.

In his opening statement, committee Chairman Buck McKeon (R-CA) said:

Barring a new agreement between Congress and the White House on deficit reduction, over a trillion dollars in automatic cuts -- known as sequestration -- will take effect. Although the House has passed a measure that would achieve the necessary deficit reduction to avoid sequestration for a year -- the Senate has yet to consider legislation. And the President's Budget submission, which sought $1.2 trillion in alternative deficit reduction through increased tax revenue, was defeated in a bi-partisan, bi-cameral manner.

This impasse, and lack of a clear way forward, has created a chaotic and uncertain budget environment for industry and defense planners. While the cuts are scheduled for implementation January 2nd, companies are required to assess and plan according to the law -- and sequestration is the law right now.

. . . And here's an excerpt from the opening statement of Ranking Member Adam Smith (D-WA):

I voted against the Budget Control Act, which put us on the excruciating path to sequestration.  We need a long-term plan for curbing our debt and for getting our deficits under control, but I disagreed with the BCA’s approach.  Deficit-reduction goals cannot be achieved through spending cuts alone, especially if those cuts are exclusive to non-defense programs.  Everything needs to be carefully considered in devising a balanced approach.  Revenues need to be increased, mandatory programs need to be brought in line with what we can afford over the long term, and domestic spending should be carefully examined to find real and substantial savings over time.  Unfortunately, instead of working seriously to find such a balanced solution, the majority in Congress has refused to consider revenue increases and focused instead on measures to kick the threat of sequester slightly down the road.  That is just not good enough.

With national security, the economy, and our future at stake, it is my hope that reason will prevail.  The solution to this problem is simple. Let’s put realistic revenue options on the table and find the $1.2 trillion in savings mandated by the Budget Control Act.  I stand ready to work with each of my colleagues in reaching a timely and sensible compromise.

Click here to view the CEOs' prepared testimony.

More Sequestration
By Thomas Duffy
July 17, 2012 at 7:55 PM

Pentagon press secretary George Little today got more questions regarding sequestration and its possible effects on the defense budget during a scheduled news conference. The exchange went like this:

Q: For the record. AIA put out a new statement, a new study today on jobs losses. I want you to be clear on sequestration. What impact will sequestration have on contracts funded with obligated 2012 dollars, in layman's language, contracts that were signed up until September 30th of this year, funded with dollars approved by Congress for this fiscal year. Will they be terminated, whacked, reduced, affected in any way?

MR. LITTLE: I'm not sure if "whacked" is a technical budget term, but let me try to put this into English that's perhaps a little less plain than that. Sequestration cuts would not affect current contracts funded with FY '12 dollars, that is, obligated funds. Anything put on contract between now and September 30th, the end of the fiscal year, would also not be affected or be subject to sequestration. All FY '13 dollars would, however, be subject to sequestration. And FY '13, as you know, begins August 1st -- excuse me, October 1st.

Q: Even if those FY '13 dollars were obligated, put on contract, in layman's language, between October 1st and January 1st when sequestration, you know, could take effect, those dollars would be affected? Those contracts would be affected?

MR. LITTLE: FY '13 dollars would be effected by sequestration, period. That's right.

Q: Obligated and unobligated?

MR. LITTLE: All funds.

Sequestration Warnings
By Jordana Mishory
July 17, 2012 at 4:08 PM

The Aerospace Industries Association is out with a report today claiming that if Congress does not reach a compromise to halt sequestration cuts, 2.14 million jobs will be lost and the fragile U.S. economy will be pushed into a recession.

This report is the latest effort in AIA's campaign to stop sequestration. AIA President and Chief Executive Officer Marion Blakey called the study the "most comprehensive" one out yet.

At AIA's report release event, Sen. Kelly Ayotte (R-NH) said she hopes the document will serve as an "eye-opener" for members of Congress on both sides of the aisle, reminding them that they need to find a solution now to a year's worth of sequestration cuts "in a responsible way."

At the same event, Sen. Jeanne Shaheen (D-NH) said Congress must find a long-term solution to deal with the debt and deficit. Otherwise, she said, lawmakers will find themselves in the same predicament again. And, she added, the solution must involve at all aspects of the budget, including mandatory and domestic spending as well as revenue increases.

Ayotte emphasized that lawmakers need to find at least a short-term solution before the election. This, she said, would give lawmakers more time to create a more comprehensive and lasting way to fix the deficit.

A bipartisan working group should be formed to deal with the issue, Ayotte added, noting that some in the Senate already are discussing the idea. And Ayotte conceded that ways to boost revenues must be included in order to reach a bipartisan compromise.

Unclassified Nukes
By John Liang
July 17, 2012 at 4:00 PM

The Defense Department last week released an instruction memo that "updates policies, assigns responsibilities and prescribes procedures for . . . controlling unclassified information on the physical protection of DOD special nuclear material (SNM), SNM equipment, and SNM facilities."

According to the July 12, 2012, instruction:

a. Unauthorized dissemination of unclassified information pertaining to security measures, including security plans, procedures, and equipment, for the physical protection of DoD SNM, SNM equipment, SNM facilities, or nuclear weapons in DoD custody is prohibited.

b. Unclassified information shall be protected as DoD UCNI based on a determination that the unauthorized dissemination of such information could reasonably be expected to have a significant adverse effect on the health and safety of the public or the common defense and security by significantly increasing the likelihood of the illegal production of nuclear weapons or the theft, diversion, or sabotage of DoD SNM, SNM equipment, SNM facilities, or nuclear weapons in DoD custody.

c. Unclassified information regarding physical protection of DoD SNM and nuclear weapons in DoD custody shall be made publicly available to the fullest extent possible by applying the minimum restrictions, consistent with the requirements of Reference (c), necessary to protect the health and safety of the public or the common defense and security.

d. This Instruction and part 1017 of title 10 of the Code of Federal Regulations (Reference (g)) shall be used as guidance for handling DOE UCNI that is under DoD control.

e. This Instruction does not prevent a determination that information previously determined to be DoD UCNI is classified information in accordance with DoD Manual (DoDM) 5200.01-V1 (Reference (h)) and other applicable standards of classification.

Sen. Murray on Sequestration
By Jordana Mishory
July 16, 2012 at 7:18 PM

Democrats will only agree to a sequestration-replacement plan that includes revenue increases, Sen. Patty Murray (D-WA) said today.

During a speech at the Brookings Institution, Murray said Democrats were not willing to accept “wildly imbalanced” plans during supercommittee deliberations, and are not willing to do the same now. Without a plan in place, the Pentagon is facing hundreds of billions of additional cuts in spending slated to kick in next year. “Anyone that tells you sequestration will disappear because both sides want to avoid it is either fooling themselves . . . [or fooling] you,” said Murray, who chaired the supercommittee whose failure to achieve a $1.2 trillion deficit reduction plan triggered sequestration. Murray is a member of the Senate Appropriations defense subcommittee.

Murray said lawmakers have to deal with the planned cuts to both defense and domestic spending. She pointed to her efforts with Sen. John McCain (R-AZ), the ranking member of the Senate Armed Services Committee, to call for an analysis of the impacts of sequestration across the defense and non-defense sectors as a way to help lawmakers on both sides to move forward.

Throughout much of the speech, Murray pointed the finger at Republicans unwilling to raise revenues, or increase taxes for the rich, as the major roadblock to solving the crisis. Unless the Republicans end their commitment to preventing tax increases, she contended, “our country will face the consequence of Republican intransigence.”

Murray said she's willing to talk anyone on either side of the aisle who is ready to compromise, and noted some glimmers of hope: Republicans, in backrooms and small numbers, are growing more willing to discuss the possibility of raising revenues, she said, noting that some are eager to engage in such discussions to protect the Pentagon.

Naval Incident
By Christopher J. Castelli
July 16, 2012 at 4:54 PM

The Navy oiler Rappahannock (T-AO 204) today fired a machine gun at a small boat after the vessel ignored warnings to stay away, U.S. Naval Forces Central Command said in a statement. The incident is under investigation.

From the statement:

FIFTH FLEET AREA OF OPERATIONS - An embarked security team aboard a U.S. Navy vessel fired upon a small motor vessel after it disregarded warnings and rapidly approached the U.S. ship near Jebel Ali, United Arab Emirates today.

In accordance with Navy force protection procedures, the sailors on the USNS Rappahannock (T-AO 204) used a series of non-lethal, preplanned responses to warn the vessel before resorting to lethal force.

The U.S. crew repeatedly attempted to warn the vessel's operators to turn away from their deliberate approach. When those efforts failed to deter the approaching vessel, the security team on the Rappahannock fired rounds from a .50-caliber machine gun.

Carter Abroad
By Christopher J. Castelli
July 16, 2012 at 3:33 PM

Deputy Defense Secretary Ashton Carter starts a 10-day trip to the Asia-Pacific region tomorrow, Pentagon Press Secretary George Little told reporters today.

Little said the trip, Carter's first to the region as the Pentagon's No. 2 leader, will involve a visit to U.S. Pacific Command in Hawaii, as well as stops in Guam, Japan, Thailand, India and South Korea. He did not provide further details on the agenda.

Earnings Outlook
By John Liang
July 16, 2012 at 3:14 PM

With defense contractors set to announce their second-quarter earnings later on this month, Wall Street investment firm Credit Suisse this morning released its own outlook for the defense and aerospace industry. Some excerpts:

*      Q2 earnings looks safe; but tone will be key: Despite mixed economic data and deteriorating broad market sentiment, Aerospace & Defense results generally should meet or beat expectations given the longer, later cycle nature of the sector.  Thus, we do not expect many negative surprises, with the exception of a possible guidance downgrade from COL. But, we think stocks will react to tone from management, particularly from defense contractors turning up the volume on the risks from sequestration. . . .

*      Sequestration overhang in defense:  EPS should meet expectations, likely with high margins once again offsetting soft sales.  But stocks will generally be held back by light bookings as acquisition officials stall new contracts in the face of uncertainty, especially in O&M accounts.  Lastly, we expect a rise in the rhetoric on the mounting threat to industrial stability and jobs.

*      Stocks: Into results we prefer BA and PCP in comm'l OE. In aftermarket, we favor TDG, although its recent resiliency (+39% YTD) could limit share upside from earnings. In Defense, we favor RTN (OP) on int'l and electronics long-term, but note LMT's & NOC's higher relative Air Force and lower Army exposure should benefit their order intake in Q2.

Carrier Move
By Christopher J. Castelli
July 16, 2012 at 3:12 PM

Defense Secretary Leon Panetta has accelerated by four months, to late summer, the deployment of the aircraft carrier John C. Stennis (CVN-74) and its strike group to the U.S. Central Command area of operations, Pentagon Press Secretary George Little told reporters today.

The decision, which will maintain a two-carrier presence in the region, was made in response to CENTCOM requirements, Little said.

He added that the move would not temporarily boost the presence there to three carriers. Asked whether concerns about Iran drove the decision, he said no single country or threat sparked the move.

Up and Away
By Dan Taylor
July 13, 2012 at 8:35 PM

A Marine pilot made the first non-test flight in an F-35B short-takeoff, vertical-landing variant of the Joint Strike Fighter this week.

Lt. Col. David Berke, the commanding officer of training squadron VMFAT-501, conducted the flight on July 10 at Eglin Air Force Base in Florida. It is the first of several flights lined up to certify him and other members of the squadron as F-35 instructors for the first batch of Marine Corps pilots that will arrive later this year.

“This flight represents the increasing maturity of the Joint Strike Fighter air vehicle system and logistical support required to commence the operational training flights to be conducted by Marine Corps pilots in the fifth generation aircraft,” reads a July 13 Marine Corps statement.