The Insider

Amos Pledges Action On F-35B
By Jason Sherman
January 12, 2011 at 6:33 PM

Marine Corps Commandant Gen. James Amos today pledged to use his position and prestige to independently monitor the development of the troubled F-35B, which Defense Secretary Robert Gates last week put on a two-year probation in a bid to ensure the service acquires the Joint Strike Fighter short-takeoff-and-landing variant.

In a statement issued today, Amos -- the first pilot to lead the Marines -- said:

I personally met with top leadership within the F35 program, to include our industry partner, and communicated that I intend to personally track the progress of our airplane over the next two years. I will track every pound of weight growth, required engineering fixes, and every test point completed.

This strikes a different chord than that of his predecessor, Gen. James Conway, who 13 months ago asserted that the word of Robert Stevens, chief executive officer of JSF prime contractor Lockheed Martin, was good enough for him.

On Dec. 15, 2009, Conway was asked during a Pentagon press conference whether -- in light an independent assessment panel's assertion that more time and money were required to develop the F-35B -- he was confident the Marine Corps would be able to fulfill its plan to field its first JSF unit in 2012.

I just saw Bob Stevens last week, you know, and we stood closer than you and I are, and I asked him that question, okay. So -- and he's not a BS kind of guy. You know, he tells me he's got his A team on it, he still thinks he can make 2012, and all, you know, focuses are in that direction. So I got to take the man at his word.

Days after Conway's statement, the Pentagon committed to the first installment of what now amounts to $7.4 billion in remedial funding to be pumped into the program over the next five years, a sum paid for by slashing 246 aircraft from the Defense Department's JSF production plans through FY-16.

Here's the full exchange from the late 2009 press briefing.

Q    Let me ask about the Joint Strike Fighter, too. There's a Senate Armed Services Committee hearing on this tomorrow. What's your level of concern these days, contrasted with earlier this year when you were fairly enthusiastic about the STOVL'S purported performance? You know, it hasn't flown yet, the full envelope, but we're still waiting, sir. What's your level of concern?

GEN. CONWAY:  Yeah. We have the first test aircraft at Pax [Patuxent] River. The second one, I think, is going to be there before the end of the year.

My focus . . . is on the promise that the contractor has made to us that we will have IOC [initial operational capability] of our first squadron -- and by the way, I think you know we're the first service to get an operational squadron -- in 2012. That is an important period to us because the British and the Italians, who are buying the same version that we are, are keenly interested in that. We have accepted risk now for a number of years not buying fourth-generation airplanes, such as the Navy has done, to await the arrival of this aircraft. We've got a small bathtub out there, a vulnerability with regard to attack and fighter aircraft.

So all of our planning is 2012 backwards. And when we ask that question, we get the same answer: We're going to make 2012 for you; it may be December of calendar year 2012, but we're going to make 2012 for you.

And what the contractors tell us, and in fact it's validated by the program manager, is that the ground test birds that we have used are going to be tremendously more impactful than they have been in the past, and that a lot of things that we're going -- that we could see when we start flying the experimental aircraft in the vertical takeoff mode will be less problematic for us.

I still fully expect to get an invitation in the spring of next year to go watch the first vertical flight at Pax River.

And if that happens, again, the contractors and the program manager tell me that we will be generally on the schedule that they think we need to follow.

Q     What does your BS meter tell you, though? I mean, you've heard this from the companies and the program manager before, that the thing is on schedule, it's going to do this, it's going to do that. I mean, are you getting more skeptical or are you --

GEN. CONWAY:  Well, I'm a -- I'm an unapologetic optimist, okay, I got to tell you that at the outset, I guess.  But, you know, I -- we are very concerned about it. We register that concern, okay. I just saw Bob Stevens last week, you know, and we stood closer than you and I are, and I asked him that question, okay.  So -- and he's not a BS kind of guy.  You know, he tells me he's got his A team on it, he still thinks he can make 2012, and all, you know, focuses are in that direction. So I got to take the man at his word. And so I think everybody understands how important it is and that we're not going to -- we're not going to let up.

Q     What are concerned about?  I don't -- this will be my last question.  What are you concerned about at this point, though?  That they may not make the '012 date, or that the program is just slipping too much?

GEN. CONWAY:  Our focus is 2012, okay.  And I think they're related. So long as that -- as that doesn't slip, then I -- I'm not going to be critical of the other things that they have in some of the areas of the program, okay. Cost rise and all that, that's someone else's concern, at least at this point, although we're watching it in a per-unit kind of consideration. But our focus is that we want to get those planes in and operational so we can start doing the same thing with the F-35 that we -- that we have done with Osprey.

Saudi Ships
By Cid Standifer
January 11, 2011 at 8:06 PM

Saudi Arabia has formalized its interest in buying eight Littoral Combat Ship-like medium surface combat ships (SCSs) and 30 Fast Patrol Vessels, according to officials with Lockheed Martin.

Company officials briefed reporters today at the Surface Navy Association symposium, and Paul Lemmo, vice president of business development, mission systems and sensors, said Saudi Arabia has submitted pricing and availability requests for the SCSs and FPVs.

However, Lemmo and other Lockheed officials said there had been no indication of whether Saudi Arabia is looking to purchase the Lockheed Martin version of the ship or the Austal USA variant.

The Saudis are not interested in the mission modules concept that is central to the American version of the ship and are asking instead for integrated air and missile defense capabilities, so all of vital equipment will have to be built in, according to Lemmo. Joe North, director of the LCS program for Lockheed, said the SCS will likely include a redesigned deck house, and the SCS will replace the LCS's radar system with Aegis-system SPY radar.

“Of course, changing radars to something of the SPY high-end changes structure up in the deck house,” North said, “so we would revise that kind of stuff, but it would be easy to just replace the deck house with a different design.”

EFV Lowdown
By Thomas Duffy
January 11, 2011 at 4:49 PM

Last evening the Marine Corps sent out an e-mail notifying reporters that the service's top combat development and integration officer would sit down Wednesday morning and talk about the recent cancellation of the Marines' Expeditionary Fighting Vehicle and what lies ahead for the service's amphibious warfare mission.

The subject line on the e-mail was "Signature Mission Intact, Marines Plot The Way Ahead For New Amphibious Vehicle." The message is as follows:

Please join Lt General George J. Flynn, Deputy Commandant for Combat Development and Integration, for a print media roundtable discussion (on the record) here at Marine Corps Base Quantico. The discussion will take place Wednesday January 12 at 9:00 AM. Topics will include the Expeditionary Fighting Vehicle's cancellation and the way ahead--to include both interim and long-term investment strategies and plans.

Last week, Defense Secretary Robert Gates announced that the EFV was being canceled. The program, kicked off during the Reagan administration, has eaten up $3 billion and would cost another $12 billion to field a fleet of slightly more than 500 vehicles.

Gates made the point that the cancellation does not call into question the Marine Corps amphibious assault mission. He noted the Defense Department will "develop a more affordable and sustainable amphibious tractor to provide the Marines a ship-to-shore capability into the future."

Flynn should provide some specifics on that plan tomorrow morning.

Turbulence For ABL
By John Liang
January 11, 2011 at 3:46 PM

An Airborne Laser Test Bed intercept attempt scheduled for last night did not take place, according to a Missile Defense Agency spokesman. "Weather was too turbulent at altitude," MDA's Rick Lehner told reporters in an e-mail.

"The turbulence and wind shear can impact the optics for the sighting equipment on the aircraft," Lehner explained.

The next opportunity for an intercept will be this weekend, either Saturday or Sunday, he added.

Price Tag
By John Liang
January 10, 2011 at 9:00 PM

With the Pentagon planning to implement a five-year, $78 billion cut imposed on military spending by the White House (while at the same time allowing the services to retain $100 billion in efficiencies garnered since June), Defense Secretary Robert Gates last month set a firm date for when Pentagon officials should begin including the price tag of any new program or initiative when it is formally proposed.

Last week, Gates announced the results of the efficiencies initiative he launched last year, as well as key elements of the Defense Department's fiscal year 2012 budget request. Part of Gates' efficiencies push involves a requirement that any new proposal or initiative, regardless of its size, come with a specific estimate of how much that new program would cost.

In a Dec. 27 memo, Gates wrote that guidance and support tools to help Pentagon officials calculate those costs were made available that month.

He adds:

I urge you to begin using these tools now. I am directing that, effective February 1, 2011, all of these tools be used to calculate costs associated with the aforementioned business activities in the department. After this date, every new proposal or initiative shall come with a cost estimate, and every report or study shall include the cost of that study on the front cover.

All DOD components are required to comply with this directive and are expected to fully support and cooperate with the guidance to ensure that costs are routinely considered in decision-making throughout the Department.

Righting LPD-17
By Cid Standifer
January 10, 2011 at 7:59 PM

A fatal accident on the San Antonio (LPD-17) in 2009 and a subsequent court martial trial is prompting Naval Sea Systems Command to take a second look at its small-boat-launching procedures for the ship class, as well as life jacket design, according to the Navy's program executive office for ships.

“We are reviewing the boat handling and recovery procedures for the ship,” Rear Adm. David Lewis told Inside the Navy in a Jan. 7 interview. “There's multiple ways of doing that off of both sides of the ship, and I'm working with the pre-commissioning crews to do a review of the procedures. It hasn't resulted in any design changes at this point that I'm aware of.”

A sailor drowned in February 2009 in the Gulf of Aden when he was tipped out of a rigid-hulled inflatable boat as it was being launched. After a Navy investigation, the executive officer of the ship, Lt. Cdr Sean Kearns, was accused of negligence. However, a military jury last year found him not guilty after his defense team successfully argued that the accident was the result of issues related to the ship's design and contradictory instructions on RHIB operations.

Lewis said NAVSEA is also reexamining life jacket designs because Petty Officer 1st Class Theophilus Ansong, the sailor who was lost at sea, slipped out of his jacket when he was thrown overboard.

The LPD-17 class has been plagued by technical problems, including engine trouble that took the first ships in the class temporarily out of commission. Lewis said engineering change proposals have been issued on the ships still under construction to make sure the same problems don't show up on the remaining vessels in the class. Solutions are also being backfitted onto the existing ships.

“In the new construction world, we have implemented pretty much everything, I think,” Lewis said. “In the backfit world, I can't speak with clarity, but I believe that they have also implemented every fix that we know of.”

Missile Defense, Simulated
By John Liang
January 10, 2011 at 5:06 PM

The Missile Defense Agency this morning released a request for proposals for an effort to upgrade the agency's modeling and simulation efforts. According to a Federal Business Opportunities notice on the proposed "Objective Simulation Framework":

The current frameworks (the Digital Simulation Framework [DSA] and the Single Stimulation Framework [SSF]) integrate models from each of the Ballistic Missile Defense System (BMDS) program elements into a system that accurately represents the performance of fielded BMDS equipment against a variety of threats in realistic environments. The desired framework, hereafter called the Objective Simulation Framework (OSF), will leverage existing or mature capabilities, develop common interfaces, or propose a combination of both, to join digital and hardware-in-the-loop (HWIL) representations into a modular, scalable, reconfigurable, and compose-able system.

The MDA OSF contract includes: the development, deployment and sustainment of an OSF Modeling & Simulation (M&S) framework that will replace the existing digital (DSA) and hardware-in-the-loop (SSF) systems; the sustainment of the legacy framework/architecture as required until OSF is deployed, and; other requirements as detailed within the Request for Proposal (RFP) package.

MDA anticipates the award of a single OSF Indefinite-Delivery Indefinite-Quantity (IDIQ) contract with Cost-Plus-Incentive-Fee, Cost-Plus-Fixed-Fee, Fixed-Priced-Incentive (Firm Target) and Firm-Fixed-Price pricing arrangements to occur by July 2011. The contract is expected to have a five (5) year period of performance without any option periods.

Northrop Grumman and Boeing announced last September that they intended to compete together for the contract, according to a statement the two companies released at the time:

"The MDA has an essential need to more efficiently validate Ballistic Missile Defense System (BMDS) performance through the increased use of modeling and simulation," said Karen Williams, vice president of Air and Missile Defense Systems for Northrop Grumman's Information Systems sector. "This partnership will provide the MDA with the best value and lowest risk approach to successfully develop and apply a comprehensive simulation framework toward that objective.

"Our team brings unsurpassed expertise across the full-spectrum of modeling and simulation domains, a comprehensive knowledge of the BMDS and experience in applying modeling and simulation tools across all the OSF use cases. The strategic partnership will allow us to bring our combined strengths, synergies and focus to this critical MDA program," added Williams.

In leading the Northrop Grumman-Boeing team, Northrop Grumman will draw on its experience as a leader of the modeling and simulation community for the MDA since 1995. As the prime contractor of the Joint National Integration Center Research and Development Contract (JRDC), Northrop Grumman has led a world-class team to conduct BMDS-level modeling and simulation, ground and flight tests, wargames, exercises, analysis and operational training in Colorado Springs, Co., Huntsville, Ala., and other locations. Boeing brings decades of experience in developing modular, scalable, maintainable and reconfigurable missile defense modeling and simulation products that focus on satisfying the full range of MDA and warfighter requirements.

"This partnership builds on our well-established relationship successfully executing the Groundbased Midcourse Defense program over the past 12 years as well as our years of experience in modeling and simulation development and execution," said Greg Hyslop, vice president and general manager of Boeing Strategic Missile and Defense Systems. "We look forward to working side by side with Northrop Grumman to deliver this important capability to our MDA customer."

JFCOM Chief Speaks
By John Liang
January 7, 2011 at 8:48 PM

Army Gen. Ray Odierno, the head of the soon-to-be-disestablished U.S. Joint Forces Command, issued a statement this afternoon regarding the impact of the Obama administration's decision:

On Jan. 6, the President approved the disestablishment of USJFCOM on a date determined by the Secretary of Defense, and directed that action to be reflected in the 2010 Unified Command Plan.

Earlier that day, the Secretary of Defense announced while details are still being refined, a number of USJFCOM missions will be retained in the Norfolk/Suffolk, Va. area and that 'roughly 50 percent of the capabilities under JFCOM will be kept and assigned to other organizations.'

We continue to work closely with the Pentagon, the Virginia delegation and the governor's office in our detailed planning effort.  The input and involvement of the Virginia delegation and the governor's office have been very valuable to me, and we will continue to work together towards a final plan in the near future.

U.S. Joint Forces Command has an exceptionally skilled and capable work force that will continue to make contributions to the joint warfighter. We will do everything we can to assist the work force going forward.

Inside the Pentagon reported in November that officials serving on the command's transition team had been sworn to silence:

The Defense Department has barred staffers serving on the command's transition planning team from sharing information, first through non-disclosure agreements and then through a standard guidance memo.

DOD issued non-disclosure agreements that were signed by the 15 JFCOM employees serving on the transition planning team, but subsequently withdrew those agreements and replaced them with standard guidance in a memo, Assistant Secretary of Defense for Legislative Affairs Elizabeth King told Rep. Randy Forbes (R-VA) in an Oct. 21 letter.

"The agreement was patterned after non-disclosures designed to protect classified or highly sensitive information," King writes. "As such, it was determined to be inappropriate for the intended use of the command's transition planning team. Thus, the agreement has been withdrawn and replaced with standard guidance that is applicable for the pre-decisional planning necessary for the disestablishment of JFCOM."

Striking News
By Dan Taylor
January 7, 2011 at 5:52 PM

A day after Defense Secretary Robert Gates promised to cancel the Marine Corps F-35 Joint Strike Fighter short-take-off, vertical-landing variant in two years if problems with the program aren't resolved, Lockheed Martin released a bit of good news: Test aircraft BF-2 accomplished its first vertical landing yesterday, the first time that an aircraft other than BF-1 had done so.

John Kent, a Lockheed spokesman, said today that BF-2 performed one flight and four sorties for one hour, including a vertical landing at Naval Air Station Patuxent River, MD. The aircraft performed one conventional takeoff, three short takeoffs, three slow landings, two hovers and one vertical landing, and it performed similarly to BF-1, according to Kent.

BF-1's problems have largely been the reason the program has been behind, as it has been relied upon to expand the flight envelope before the other aircraft -- BF-2, BF-3 and BF-4 -- can follow suit.

Wall Street View
By John Liang
January 7, 2011 at 4:16 PM

Defense Secretary Robert Gates' budget and efficiencies proposals revealed yesterday are a sign the secretary "wanted to dialogue with the new Congress as quickly as possible, which is highly unusual a month before the budget's due date," according to an analysis by Wall Street firm Credit Suisse, which adds: "This provides rare visibility and opportunity to buy defense names with lower near-term risk in our view." Further, Raytheon and General Dynamics "all received good news today relative to expectations, and are our favorite names for a defense rally."

As for what the Pentagon's fiscal year 2012 budget request will look like, the Jan. 6 analysis states:

With today's unprecedentedly early confirmation of key budget details, we think the mkt continues to buy defense stocks ahead of Feb's budget release b/c headline risk is largely neutralized and defense valuations look attractive in a lofty market with the S&P 500 nearing 1300. With today's unveiling of FY12 DoD baseline at $553B (in-line w/ most recent expectations) and anticipated cuts for Expeditionary Fighting Vehicle (GD) and a one-year development delay on F-35 (LMT), investors shld now be much less concerned about negative news flow, at least between now and the budget release in mid-February, and that they have been looking for an entry point simply because they want to rotate out of more expensive sectors that now appear full. See Ex. 2 and 3 inside for positives and negatives with contractor implications.

Budget Specifics: Secretary Gates reiterated his initial efficiency plan, which targets $101B in savings (mostly from overhead accounts) and redirects these funds within DoD (to the weapons accounts) over a five year period (GFY12-16). He also confirmed $78B in separate cuts (also over the five year period), which had been anticipated since mid-December. The first tranche of the $78B cut is $13B and is reflected in the trimming of the upcoming FY12 baseline budget request from the previously planned $566B to the $553B noted above. Secretary Gates further stated that FY13 and FY14 would see modest growth before the baseline turns flat in FY15 and FY16. We expect the specific figures for this long-term plan (FY13-16) to accompany the FY12 budget request in the FYDP, and we have established our own FYDP forecast inside in Ex. 1.

Remain Cautious Long-Term as Future Cuts Cannot be Ruled Out: All of that said, we believe the new Gates plan may only last as long as he stays in his post, which should be until sometime this year based on his previous statements. Because we believe deficit pressure will continue to mount, and that Gates’ replacement will likely be a traditional Democrat, we see further downside to the long-term plan discussed above, and that negative newsflow will return at some point later this year. Ultimately, we expect the baseline budget to decline, starting with next year’s FY13 request. This is why we see a limited window of upside opportunity now for most defense names.

R&D and the Navy
By Cid Standifer
January 6, 2011 at 9:52 PM

The Navy is about to revive the long-dormant position of deputy assistant secretary for research and development as a result of a recent Naval Research Advisory Committee study, according to the head of the Office of Naval Research.

Rear Adm. Nevin Carr told reporters this morning that he's heard “that person will probably be announced in the near future.”

“I'd say less than months,” he added.

The September 2010 NRAC study, done at the behest of the Sean Stackley, assistant secretary of the Navy for research, development and acquisition, was a wide-ranging critique that recommended consolidating control of the naval research community, bringing more science and technology in-house rather than contracting it out, and cultivating the kind of pie-in-the-sky science projects that dreams are made of even if they don't have any immediate application.

Carr said that he wouldn't speak for the secretary's office on how those recommendations might be implemented, but he said he's received thorough funding support for basic research even as efficiencies squeeze the rest of the Defense Department.

“It's the hardest portion of my budget to protect because you can't see what it does,” he said, “and that's why the strong support at high levels in the Navy and at [Office of the Secretary of Defense] have been very helpful.”

He said there have been cutbacks in contractors and administrative support at ONR, but those efficiencies have been “internally driven.”

GD on the EFV
By Dan Dupont
January 6, 2011 at 8:59 PM

Expeditionary Fighting Vehicle maker General Dynamics has issued a statement on Defense Secretary Robert Gates' proposed termination of the program, making the argument that things are going well enough to continue -- and suggesting that the savings Gates expects won't materialize as such.

We understand the U.S. Department of Defense has decided to cancel the EFV program. This decision is disappointing, particularly now when prototype vehicles are performing exceptionally well in ongoing testing and the program is ready to deliver the capabilities that meet the U.S. Marine Corps’ requirements.

By cancelling the program the Defense Department is abandoning the $3.3 billion it has invested to date in developing the vehicle. Cost to terminate versus the cost to complete the development and the value associated with that course of action are essentially the same. With the cancellation comes the prospect of requiring additional new investments in another new program to meet the Marine’s requirements, where is the savings?

As to affordability, the Marines could purchase fewer vehicles and still capture the value of the investment made to date. Purchasing 200 vehicles – two Marine Expeditionary Brigades’ worth – would give the Marines the new capability and still save approximately $4.6 billion from the current estimated program cost.

The Pushback (updated)
By John Liang
January 6, 2011 at 8:23 PM

Defense Secretary Robert Gates' proposed budget cut of $75 billion over the next five years is already meeting congressional resistance. House Armed Services Committee Chairman Buck McKeon (R-CA) just released a statement to express his unhappiness over the cuts:

I'm not happy.  We went into today's meeting trying to ensure the $100 billion in targeted savings were reinvested back into our national security priorities. We didn't expect to hear that before these efficiencies can be realized, the White House and OMB have demanded that the Pentagon cut an additional $78 billion from defense over the next five years.

These cuts are being made without any commitment to restore modest future growth, which is the only way to prevent deep reductions in force structure that will leave our military less capable and less ready to fight.  This is a dramatic shift for a nation at war and a dangerous signal from the Commander in Chief.

Today's meeting was the first step in a longer process that now involves the U.S. Congress.  We will closely scrutinize Secretary Gates' proposal in the coming months as we craft the defense budget for Fiscal Year 2012.  At first glance, I’m particularly concerned about the proposed cuts to the U.S. Marine Corps.

Members of the House Armed Services Committee remain committed to the Marine Corps as an expeditionary fighting force ‘in ready’, which includes the capability to conduct amphibious landings.  This mission could be jeopardized by the cancellation of the Expeditionary Fighting Vehicle, a capability re-validated by the Secretary just last year, and delays in the Joint Strike Fighter and amphibious ship construction.

I remain committed to applying more fiscal responsibility and accountability to the Department of Defense, but I will not stand idly by and watch the White House gut defense when Americans are deployed in harm's way.

UPDATED -- 4:05 p.m.:

Rep. Randy Forbes (R-VA), chairman of the House Armed Services readiness subcommittee, weighs in:

“In the last month, increasingly concerning reports regarding China’s military buildup have surfaced. These include news of China’s development of the DF-21D, a second missile system that is capable of taking out our aircraft carriers, rumors of Chinese plans for double-digit expansion of its defense spending, and reports that China is moving closer to having an operational carrier at some point this year. In 2009, shortly after the Pentagon announced it would discontinue the F-22 program, Secretary Gates predicted that China would not have a stealth fighter by 2020. Yet, this week photos have surfaced of a Chinese stealth fighter participating in high speed taxi tests, a precursor to initial test flights, that according to some, rivals the F-22 and is decisively superior to the F-35.

“How disturbing is it, then, that within the very same week, our own Administration under the leadership of President Obama and Secretary Gates has announced the continued dismantling of the greatest military the world has ever known. If Secretary Gates’ plans and predictions with these defense cuts are as accurate as his Chinese stealth fighter forecasts, Americans ought to be concerned for our national security.

“Even more appalling, though, is the fact that the Administration is not being honest with the threat we face with China or where our defense dollars are going. Last August when Secretary Gates announced his plans to cut $100 billion of the defense budget, he said, ‘Unlike budget cutting efforts of the past, the services will be able to keep the savings they generate to reinvest in higher-priority warfighting and modernization programs.’ At best, this was naivety; at worst, dishonesty.”

FY-12 Topline: $553B
By Jason Sherman
January 6, 2011 at 7:37 PM

Gates says the DOD base budget request will be $553B, $13B lower than expected. Over the next five years the defense secretary said the Pentagon will also see $78 billion in cuts. Despite the reductions, the military services will retain their respective efficiency savings because the defense-wide agencies shouldered $54 billion in cuts -- nearly three times the original target.

BMD Efficiencies
By John Liang
January 6, 2011 at 7:29 PM

Defense Secretary Robert Gates plans to use some of the billions of dollars in savings from his proposed efficiencies initiatives to invest in more long-range ballistic missile defense interceptors that would support the phased adaptive approach in Europe. Additionally, Gates wants to buy more advanced theater missile defense radar systems.

Gates also proposed cutting 360 contractors currently working for MDA.