The Insider

By John Liang
April 25, 2024 at 2:35 PM

This Thursday INSIDER Daily Digest has coverage from this year's Army Aviation Association of America conference, plus unmanned systems news and more.

We start off with coverage from this year's Army Aviation Association of America conference:

After FARA cancellation, Sikorsky using prototype to do ground runs with engine

DENVER -- Two months after the Army announced it would be cancelling the Future Attack Reconnaissance Aircraft program as part of a larger aviation rebalance, Sikorsky is putting the engine in its prototype aircraft to use in preparation for modernizing the Black Hawk instead.

Army anticipates milestone C for Chinook Block II in fourth quarter of FY-25

DENVER -- The Chinook CH-47F Block II helicopter is expected to reach full-rate production in the fourth quarter of fiscal year 2025, an Army official said here at the annual Army Aviation Association of America conference. Prime contractor Boeing anticipates the first aircraft to be delivered to the Army within a matter of weeks.

Pentagon acquisition chief Bill LaPlante spoke this week at a panel hosted by the Center for Strategic and International Studies:

DOD testing counter-drone capabilities and next-gen fires but still searching for 'scale'

The two senior officials in charge of Pentagon acquisition and technology said today that they are working on several promising projects for countering drones and low-cost missiles, including everything from acoustic detection systems to directed-energy lasers and high-powered microwaves.

Anduril and General Atomics have been chosen to work on prototype designs for the Air Force's Collaborative Combat Aircraft program:

Air Force picks Anduril and General Atomics to build first CCA prototypes

The Air Force is moving ahead with Anduril Industries and General Atomics to advance their designs into the prototyping stage for the first Collaborative Combat Aircraft, the Air Force announced this week.

One of the recent APFIT funding awards was focused on supplying DOD with "rack-mounted optical clocks":

Vector Atomic will receive APFIT funding to supply rack-mounted optical clocks that run on domestically sourced elements

Vector Atomic, a small quantum precision company, told Inside Defense it will receive approximately $11 million in “APFIT” funding to help increase manufacturing of optical clocks that do not rely on vital materials from countries such as China and Russia, adding that the Defense Innovation Unit successfully integrated the system into an atomic gyroscope.

The Defense Department's fiscal year 2025 budget request includes a dramatic increase in planned spending for the Strategic Capabilities Office's advanced component and prototype development funding across the new five-year spending plan compared to the FY-24 budget request:

DOD eyes major upswing in prototype funding for office focused on countering China, Russia

The Pentagon plans to pump an additional $1.7 billion -- a 75% increase over last year's plan between fiscal years 2025 and 2028 -- into the secretive shop that prototypes new and surprising ways of using existing technology to bolster conventional deterrence against China and Russia.

Space Force Generation, or SPAFORGEN, cycles guardians through three phases -- prepare, ready and commit -- and is the service’s model for assigning and allocating forces to combatant commands:

Saltzman: SPAFORGEN 'drastic change' to Space Force readiness model

The Space Force is expanding across the service the readiness model it launched in 2022, which Chief of Space Operations Gen. Chance Saltzman called "the most drastic change accompanying the establishment of the Space Force" in a letter to guardians last week.

Document: CSO notice to guardians on SPAFORGEN

By Abby Shepherd
April 25, 2024 at 1:16 PM

The Navy plans to establish a new unmanned surface vessel squadron -- a new organization that will focus on tactics, techniques and procedures and the concept of operations for small USVs, according to a Navy official.

During a fiscal year 2025 budget hearing last week before the House Armed Services seapower and projection forces subcommittee, Nickolas Guertin -- assistant Navy secretary for research, development and acquisition -- included in his written statement that the service’s Surface Development Squadron One (SURFDEVRON) plans to establish a new unmanned squadron in FY-25.

USV Squadron 3 will be established May 17, a Navy spokesperson told Inside Defense. SURFDEVRON is being renamed Surface Development Group One, the spokesperson added.

By Georgina DiNardo
April 25, 2024 at 12:00 PM

Responses are due today for a request for information, posted by the office of the under secretary of defense for acquisition and sustainment, seeking outside help to bolster domestic rare earth element (REE) supply chains and decrease dependency on China.

Currently, REEs are mined in the U.S. or allied nations, but are shipped to foreign countries like China, Estonia, Japan and Malaysia for “separation, processing and conversion into metals and alloys,” states the RFI, first posted April 11.

Manufacturers in the Defense Department and commercial supply chains then must buy the finished rare earth metals and compounds from those countries where they are processed.

“Rare earth metals and alloys are essential to the production of industrial permanent magnets, including neodymium iron boron (NdFeB) and samarium cobalt (SmCo) magnets,” the RFI said. “As the DOD and domestic commercial demand for these magnets increases, the need to secure the supply of rare earth metals and alloys within the US and reduce the US dependence on non-allied sources is a matter of national security.”

To address this concern, DOD has launched an REE Metallization Project that focuses on expanding the U.S.’s ability to convert heavy and light REE oxides and chemicals into metals and then convert those metals into alloys. The project also looks at bridging the two steps and finding ways to directly convert heavy and light rare earth oxides and compounds into alloys.

“The overall objective is to create a domestic source capable of producing sufficient capacity that supports the NdFeB & SmCo permanent magnet supply chain and have the capability to become a merchant supplier of metals and alloys for NdFeB & SmCo magnet manufacturers serving both the commercial and DOD industrial base,” the RFI said.

In response to the information gathered through this RFI, DOD said they may issue a solicitation that could have one or multiple awards.

By Shelley K. Mesch
April 25, 2024 at 11:49 AM

Northrop Grumman isn't looking to compete for non-survivable drone programs and will focus on drones for high-end threats, CEO Kathy Warden told investors today during the company's first-quarter earnings call.

“We are not looking to compete in a more commoditized part of the market at very low cost and not survivable systems,” Warden said. “That’s just not our business model, and we know that.”

The call comes the day after the Air Force passed up Northrop for the first increment of the Collaborative Combat Aircraft, instead choosing Anduril and General Atomics to make prototypes of the autonomous teaming drones. Boeing and Lockheed Martin were also cut.

The comments also come as the Defense Department moves forward with its Replicator program to field thousands of attritable, autonomous drones in the next year and a half.

Northrop continues to see opportunities to expand its autonomous business globally, Warden said, particularly with the MQ-4C Triton.

“We will remain disciplined in where we invest and what pieces of that market that we pursue,” she said, “but we think that what we provide is still highly relevant.”

During the call, Chief Financial Officer Dave Keffer also noted a slower-than-anticipated growth in the company’s space business with the cancellation of one contract and the loss of another.

The Air Force canceled a classified space program due to budget “concerns and prioritization,” Warden said. The requirement for the capability in the program still exists, she said, and the company will “see how that plays out over time.”

The Missile Defense Agency also picked Lockheed Martin over Northrop Grumman to build the Next Generation Interceptor -- a decision that was made a year early due to budget constraints imposed by Congress as well.

Northrop will offset some of the changes in the financial outlook with LGM-35A Sentinel and growth in the Space Development Agency portfolio, Keffer said.

By Dan Schere
April 25, 2024 at 9:25 AM

DENVER -- The Future Long Range Assault Aircraft program is anticipated to undergo a critical design review in the first quarter of fiscal year 2025, Army Under Secretary Gabe Camarillo said in a recorded address April 24 at the Army Aviation Association of America conference here.

Bell Textron was awarded the contract for FLRAA, the eventual replacement for the Black Hawk, in December 2022.

The program is scheduled to enter milestone B, engineering and manufacturing development, later in FY-24, Camarillo said. The critical design review occurs during this stage in order to determine a system’s ability to “meet stated performance requirements within cost, schedule and risk.”

The Army announced in February that it would be terminating the Future Attack Reconnaissance Aircraft program as part of an aviation rebalance. However, Army officials have said multiple times since then that they remain committed to FLRAA -- another major effort within the service’s Future Vertical Lift portfolio.

In his address to conference attendees, Camarillo said “critical innovation” from work that has been done on FARA “will benefit our entire aviation portfolio.”

“Particularly this will show up in the areas of model-based systems engineering, and modular open systems architectures. Additionally, a successful ground run of one of the prototype aircraft for FARA will reduce risks on future Improved Turbine Engine integration efforts on the other platforms,” he said.

By Nick Wilson
April 24, 2024 at 3:19 PM

The Navy views live, virtual and constructive training as an increasingly valuable capability because it allows the fleet to experiment and practice with new weapon systems and tactics without exposing them to adversaries, according to Vice Chief of Naval Operations Adm. James Kilby.

“We want to be able to train our strike groups and our amphibious ready groups at sea, not attached to a range on the United States, where we can maintain currency and proficiency, where we don’t have to divulge our tactics, where we don’t have to divulge our systems,” Kilby said today during an event held by the Center for Strategic and International Studies.

“Up until recently, we’ve had to kind of retract back and reset our force because we didn’t want people to watch our tactics,” Kilby continued during the panel discussion with other service branch vice chiefs.

LVC technology is used to simulate battle scenarios and virtually connect forces located in separate geographic areas, allowing ships on opposite sides of the globe to train together.

The technology is being used in various training events, including large-scale exercise 2023, which brought together six carrier strike groups, three amphibious ready groups and over 25 live and 50 virtual ships for joint exercises last July.

By allowing the Navy to covertly establish proficiency with new capabilities and then choose when and where to reveal them to adversaries, LVC enhances strategic deterrence, Kilby said today.

By John Liang
April 24, 2024 at 2:13 PM

This Wednesday INSIDER Daily Digest has news from Lockheed Martin's, Boeing's and General Dynamics' quarterly earnings calls and more.

We start off with defense contractor executives talking about their quarterly earnings:

After long wait, Lockheed to resume F-35 deliveries between July and September

Deliveries of F-35 Joint Strike Fighter aircraft are on track to resume this summer, albeit with a truncated version of Technology Refresh-3 software upgrades, top Lockheed Martin executives told shareholders during a call to discuss the company's first-quarter earnings.

Boeing's fixed-price contracts with the Air Force are still burning cash

Boeing's defense unit has logged $222 million in losses since January on two major firm fixed-price contracts with the Air Force, the KC-46A and T-7A, Chief Financial Officer Brian West told investors during a first-quarter earnings call.

GD execs: Submarine supply chain needs funding for second Virginia shipset in FY-25

With the Navy requesting only one Virginia-class submarine in fiscal year 2025, it is important that the sea service also fund a second, full shipset of Virginia materials to sustain the submarine supply chain, according to General Dynamics executives.

. . . Followed by some Navy ship news:

Navy to advance amphibious warship block buy in the coming weeks

The Navy is planning to use multiship procurement to buy four amphibious warships and aims to put the vessels on contracts within a matter of weeks, according to Navy Secretary Carlos Del Toro.

Navy wants to delay ADG system installation on DDG-51s until next generation

The Navy wants to delay the addition of an advanced degaussing system on Arleigh Burke-class destroyers and install it on the next generation of destroyers -- a move it says would provide the service flexibility to balance warfighting capabilities with the expense and schedule constraints of future destroyer procurement.

The Senate voted 79-18 late last night to pass the supplemental spending package:

Senate set to approve $95B security supplemental as defense industrial base awaits boost

Senate leaders, following the House's weekend passage of a massive national security supplemental poised to inject $50 billion into the U.S. defense sector, is taking up the spending package and hopes to pass it late tonight amid the objections of some lawmakers.

By Tony Bertuca
April 24, 2024 at 11:38 AM

The Defense Department has announced $1 billion in military aid for Ukraine following the passage of a $95 billion security supplemental spending package that President Biden signed into law today.

“This package will surge munitions, weapons and equipment forward to support Ukraine’s ability to defend its frontlines, protect its cities and counter Russia’s continued attacks,” DOD said. “With the bipartisan support of Congress, Ukraine can count on strong and resolute U.S. leadership to provide consistent security assistance support -- together with some 50 Allies and partners -- to ensure its brave defenders receive the critical capabilities needed to fight Russian aggression.”

The new military aid package, funded via Presidential Drawdown Authority, includes:

  • RIM-7 and AIM-9M missiles for air defense;
  • Stinger anti-aircraft missiles;
  • Small arms and additional rounds of small arms ammunition, including .50 caliber rounds to counter Unmanned Aerial Systems (UAS);
  • Additional ammunition for High Mobility Artillery Rocket Systems (HIMARS);
  • 155mm artillery rounds, including High Explosive and Dual Purpose Improved Conventional Munitions rounds;
  • 105mm artillery rounds;
  • 60mm mortar rounds;
  • Bradley Infantry Fighting Vehicles;
  • Mine Resistant Ambush Protected Vehicles;
  • Humvees
  • Logistics support vehicles;
  • Tactical vehicles to tow and haul equipment;
  • Tube-Launched, Optically Tracked, Wire-Guided missiles;
  • Javelin and AT-4 anti-armor systems;
  • Precision aerial munitions;
  • Airfield support equipment;
  • Anti-armor mines;
  • Claymore anti-personnel munitions;
  • Demolitions munitions for obstacle clearing; and
  • Night vision devices; and
  • Spare parts, field equipment, training munitions, maintenance, and other ancillary equipment.

In a speech at the White House, Biden said the weapons will begin being transferred from U.S. stocks to Ukraine immediately.

"I'm making sure the shipments start right away,” he said. “In the next few hours -- literally in a few hours -- we are going to begin sending equipment to Ukraine for air defense munitions, artillery for rocket systems, and armored vehicles.”

A PDA action of this kind for Ukraine has not occurred since December 2023 and follows months of partisan gridlock in Congress. The Pentagon did announce a $300 million weapons transfer to Ukraine in March but it was tapping unexpected savings from various Army contracts to do so.

The United States, according to a new DOD fact sheet, has committed more than $44.9 billion in security assistance to Ukraine since the beginning of the Biden administration.

By Tony Bertuca
April 24, 2024 at 10:57 AM

Air Force Vice Chief of Staff Gen. James Slife said today that the service intends to award Collaborative Combat Aircraft contracts to two vendors.

“This afternoon the Air Force will be announcing two option awards to vendors that have been part of our CCA increment 1 acquisition program that has been underway now for some time,” he said at an event hosted by the Center for Strategic and International Studies.

The five companies vying for the contract are: Anduril, Boeing, General Atomics, Lockheed Martin, and Northrop Grumman.

Watch Inside Defense for further reporting on this developing story.

By Tony Bertuca
April 24, 2024 at 8:38 AM

The Senate voted 79-18 last night in support of a $95 billion defense supplemental package that would aid Ukraine, Israel and Taiwan, while also directing about $50 billion into the U.S. defense industrial base.

Defense Secretary Lloyd Austin has said $50 billion of the supplemental funds will flow through more than 30 states.

The Pentagon, meanwhile, is standing by to restart its transfers of U.S. weapons to Ukraine, where military officials say the battle against an ongoing Russian invasion has become dire.

President Biden has said he will sign the bill once it reaches his desk.

By Jason Sherman
April 23, 2024 at 5:44 PM

The Defense Department is placing a bet on new laser-cooling technology for missile defense capabilities that carries such promise that the Pentagon will not disclose the company associated with the $11 million contract award.

Still, Under Secretary of Defense for Research and Engineering Heidi Shyu last week touted the project during public remarks at a missile defense conference sponsored by the National Defense Industrial Association as an illustration of a new initiative under the Accelerate the Procurement and Fielding of Innovative Technologies (AFPIT) program.

“One of the companies that is receiving [AFPIT funding] is a small company that is building a phase modulator that will decrease the amount of cooling required for fiber lasers by 50%,” Shyu said on April 17. “Think about that.”

In general, cooling is essential for solid-state lasers to ensure stable and efficient operation and is critical to enhance the durability and reliability of the directed energy system.

The AFPIT award was made on behalf of the Missile Defense Agency, according to DOD.

Pentagon spokesman Lt. Cmdr. Tim Gorman told Inside Defense on April 23 that further details about the $11 million contract, including the scope of the project and vendor is designated “controlled unclassified information” and unavailable for public release.

By John Liang
April 23, 2024 at 1:55 PM

This Tuesday INSIDER Daily Digest has news on defense against space attacks, the Army's Project Linchpin and more.

Rather than requiring the commander of U.S. Space Command to provide Congress notice of attempts to "disrupt, degrade or destroy" any such national security space capabilities, a new Defense Department legislative proposal says SPACECOM would only need to tell Congress if the capability is deemed "critical":

DOD seeks changes to reporting on space attacks, space domain awareness sharing

The Defense Department would only need to report foreign attacks on "critical" national security space capabilities under a legislative proposal submitted to Congress last week.

Some Army AI news:

Army focusing on AI 'risk framework' is it embarks on Project Linchpin

The Army is developing a "risk framework" for artificial intelligence as a key priority as the service looks to build out Project Linchpin -- the service's first pipeline for AI and machine learning.

The Defense Department's strategy of ceding intellectual property rights to Lockheed Martin for the F-35 program has so far resulted in poor performance, lawmakers in the House and Senate have said this month, with limited spares and depot capacity being available for repairs, significant delays pushing back deliveries of modernized capabilities and dramatic cost overruns:

Lessons learned from F-35: Air Force will now purchase IP rights of its weapon systems

When the Air Force began buying the F-35 Joint Strike Fighter about 20 years ago, it took a total system approach, meaning prime contractor Lockheed Martin earned the rights to total control of the program, including the intellectual property of its technologies and mechanical parts.

Don't expect major funding for an Army high-energy laser project anytime soon:

Army guts $4.8 billion from IFPC-HEL in new five-year plan, focuses on 'try' before 'buy'

The Army has cut $4.8 billion from planned future spending on the Indirect Fire Protection Capability-High Energy Laser in the service's new five-year spending plan, a dramatic reduction that removes future funding stability for a cruise-missile-killer-and-more project that a key service official says remains a priority.

The Defense Innovation Board's next meeting will take place in July:

DIB discusses studies on partnerships and technology adoption at meeting

The Defense Innovation Board held a meeting yesterday in which guest speakers presented their opinions on two ongoing studies surrounding innovation with allies and accelerating technology adoption, with final recommendations on the studies set to be provided at the board’s July meeting.

By Shelley K. Mesch
April 23, 2024 at 10:16 AM

RTX won't seek many prime contracts for space products and will instead focus on component supply to other primes, Chief Operating Officer Chris Calio said today during the company's first-quarter earnings call.

Despite “historical strength” as a prime in some of the “exquisite” space areas, the company's current strengths lend better to supplying key space components to other primes, said Calio, who will step up as CEO next month.

“When you look at our strengths in that portfolio, I think that pivot is the right one,” Calio said.

RTX also completed the sale of its Cybersecurity, Intelligence and Services business during the first quarter for $1.3 billion, according to the earnings report. Reuters previously named private equity firm Blackstone as the buyer.

The cybersecurity business is now called Nightwing, RTX spokeswoman Alyssa Schaffer said, and is not affiliated with RTX. John DeSimone, who had been president of the business unit at RTX, is the CEO of Nightwing.

In its Collins Aerospace business, RTX reported a $175 million charge to secure alternative titanium supply lines. As Russia has been a top producer of titanium, Collins signed agreements with two new suppliers in the first quarter, Calio said.

The new agreements came about from Canada’s imposition of new sanctions in February of U.S.- and Germany-based but Russian-owned businesses that Collins had previously bought titanium from.

“As we’ve talked about since 2022 [when Russia launched a full-scale invasion of Ukraine], we’ve been evaluating our global sourcing strategies to mitigate the potential impact of sanctions and other restrictions,” Calio said. “Frankly, we’ve de-risked that in many areas, and I think this is an important step in putting this issue behind us.”

By Georgina DiNardo
April 23, 2024 at 10:09 AM

Senior defense officials will speak at two closed meetings of the Defense Business Board on May 7 and 8, leading discussions on a variety of Defense Department challenges like adapting technology in line with the National Defense Strategy, global security issues and ways to become a better industry partner.

After welcome remarks from Board Chair Deborah James, the first meeting on May 7 will kick off with a discussion led by Jay Dryer, director of the Strategic Capabilities Office, focused on creating operational strategic effects through implementing emerging technologies, according to a Federal Register notice.

“This discussion will focus on using existing DOD tools and processes to adapt developing technology to key operational challenges in the National Defense Strategy (NDS),” the notice said.

Then, Defense Secretary Lloyd Austin will lead a discussion on DOD current affairs.

“This session is expected to focus on the state of the current global security environment and its implications for current and future business operations,” the notice said.

Additionally, the board will hear a briefing on Naval Research Lab operations, followed by a tour. The briefing and tour will cover management constructs, workforce development and talent management.

“This portion of the meeting will cover how NRL partners with industry to fulfill their mandate and demonstrates capabilities made possible by NRL's organizational constructs and authorities,” the notice said.

James and Deputy Defense Secretary Kathleen Hicks will then provide remarks, although it’s unspecified what they will discuss.

Next, Lt. Gen. Robert Skinner, director of the Defense Information Systems Agency and commander of the joint force headquarters-DOD information network, will update the board on industry partnerships with DISA and explain specific challenges that come with managing a DOD agency.

“The director will offer an overview of DISA's partnerships with various stakeholders to bolster warfighter capabilities, including how DISA is developing global situational awareness and assessing the threat against DISA operations and assets,” the notice said.

Finally, Skinner will also supply recommendations found in the DBB IT User Experience Study conducted in February.

To start the second meeting on May 8, Erin Simpson, director of the joint production accelerator cell in the office of the Pentagon acquisition chief, will lead a discussion on growing production capacity during crises and hurdles impeding DOD’s creation of resilient supply chains.

“The conversation is expected to delve into actions the DOD is taking to prioritize resources and to create a modern, resilient defense industrial ecosystem designed to deter United States adversaries and meet the production demands posed by evolving threats,” the notice said.

Then, Maj. Gen. Joseph McGee, Army director for strategy, plans and policy, J5, will lead a discussion on emerging global threats facing supply chains and the possible outcomes these threats could have.

“This discussion will focus on strategic proactiveness to ensure adaptability, resilience, and continued effectiveness in an ever-evolving security landscape and on how the DOD can partner with industry before and during crises,” the notice said.

Hicks will lead the final discussion on transforming DOD into a more attractive partner for non-traditional companies.

“The Deputy Secretary will share successes the DOD has realized in becoming a better partner for non-traditional defense companies, along with how combinations of traditional and non-traditional companies are working together to accelerate capability development and delivery,” the notice said.

By John Liang
April 22, 2024 at 2:13 PM

This Monday INSIDER Daily Digest has news on the Air Force buying back the intellectual property rights to the F-35 Joint Strike Fighter program and more.

Don't expect the Pentagon to ever again allow prime contractors to own the intellectual property rights of major weapon systems:

Lessons learned from F-35: Air Force will now purchase IP rights of its weapon systems

When the Air Force began buying the F-35 Joint Strike Fighter about 20 years ago, it took a total system approach, meaning prime contractor Lockheed Martin earned the rights to total control of the program, including the intellectual property of its technologies and mechanical parts.

The five-year plan for an Army high-energy laser system has been cut by billions of dollars:

Army guts $4.8 billion from IFPC-HEL in new five-year plan, focuses on 'try' before 'buy'

The Army has cut $4.8 billion from planned future spending on the Indirect Fire Protection Capability-High Energy Laser in the service's new five-year spending plan, a dramatic reduction that removes future funding stability for a cruise-missile-killer-and-more project that a key service official says remains a priority.

The Defense Innovation Board's next meeting will showcase final recommendations regarding studies on accelerating technology adoption:

DIB discusses studies on partnerships and technology adoption at meeting

The Defense Innovation Board held a meeting yesterday in which guest speakers presented their opinions on two ongoing studies surrounding innovation with allies and accelerating technology adoption, with final recommendations on the studies set to be provided at the board’s July meeting.

If DOD wants to win the artificial intelligence battle, working with partners to advance AI capabilities through data is crucial, according to Jinyoung Englund, chief strategy officer for algorithmic warfare in the chief digital artificial intelligence office:

CDAO official says secure data sharing is key to winning AI battle

A Defense Department senior artificial intelligence officer emphasized today the vital role that sharing quality and secure data amongst DOD, allies and partners plays in order to combat adversaries in the AI battle.

Pentagon spokesman Chris Sherwood said last week that DOD "continues to support the ending of statutory requirements for annual unfunded priorities lists":

OSD still wants Congress to repeal law requiring unfunded priorities lists, despite $30B military request

U.S. military officials have sent Congress more than $30 billion in “unfunded priorities lists” separate from their regular budget request, but civilian leaders at the Pentagon support repealing the law requiring that the annual lists be sent to lawmakers, who often use them as a blueprint for increasing the defense budget.