The Insider

This Tuesday INSIDER Daily Digest has news on lawmakers' increasing interest in deploying PAC-3 interceptors on Navy warships plus the possibility of bulking up the Air Force's aircraft fleet and more.

Three out of four congressional defense committees have signaled support in their respective fiscal year 2025 bills for a project Lockheed Martin has largely self-funded to integrate the Patriot Missile System Enhancement (MSE) with a vertical launch system used widely across the Navy’s surface fleet:

Three committees signal enthusiasm, including potentially $75M, for PAC-3 integration on ships

Congress is signaling interest in an industry-funded technology project that promises the ability to arm warships with Army guided-missile interceptors, as well as the potential for land-based versions of Aegis launchers to fire the most advanced version of the Patriot missile for its integrated air and missile defense and sea control missions.

Across the services, lawmakers would tack on $300.6 billion to support the sustainment of operations, weapons, training and other activities, an effort to strengthen military readiness, address inflation and promote innovation, among other areas:

Senate defense spending bill would make 500 more aircraft available in FY-25

The Senate Appropriations Committee wants to bulk up the Air Force's fleet by giving the service an additional $3.4 billion to make about 500 more aircraft available as lawmakers and the Pentagon weigh priorities to deter Russia and China, according to a report accompanying Senate appropriators' version of next year's defense spending bill.

The U.S. defense industrial base has had to adjust to the Pentagon's new munitions production requirements following a major increase in U.S. military aid to Ukraine following the ongoing Russian invasion, something that has caught the eye of congressional appropriators:

Lawmakers seek munitions 'surge capacity' requirements -- and costs -- from DOD

The Senate Appropriations Committee wants the Pentagon to provide Congress with future "surge capacity" costs for critical munitions as well as estimate how much industry cost-sharing or co-investment can be expected to support potential increases in production.

Senate appropriators are asserting DARPA has "routinely under-budgeted for indirect costs and anticipated program initiation cost":

DARPA under fire from Senate appropriators over alleged financial misrepresentation

Senate appropriators are calling for a quarterly audit of the Defense Advanced Research Projects Agency for its attempts at flexible budgeting, which lawmakers allege the agency has undertaken without congressional approval.

Senate appropriators want wants Congress' top auditor to look into whether the Defense Department skirted the law regarding rejiggering the Homeland Defense Radar-Hawaii for use on Guam:

Congress directs inquiry into whether DOD broke law by moving Hawaii radar to Guam

Congress is directing an investigation into whether the Pentagon broke the law by repurposing the Homeland Defense Radar-Hawaii for use on Guam, the latest twist in an ongoing battle of wills -- and funding -- between the executive and legislative branches over the sensor project.

Boeing on Friday delivered the first production MH-139 Grey Wolf helicopter to the Air Force, months after the program's per-unit costs grew enough to breach Nunn-McCurdy law, according to a company news release issued today.

“This aircraft will directly support ongoing U.S. Air Force modernization efforts,” Akeem Khan, Boeing’s MH-139 executive director and program manager, said in a statement. “Delivering this asset for the MH-139A fleet is critical to the future of national security as the Grey Wolf will play a crucial role in the U.S. nuclear triad for decades to come.”

The helo, which was delivered to Malmstrom Air Force Base, MT, is one of 13 aircraft in the 2023 low-rate initial production contract with the Air Force. The service in fiscal year 2024 awarded Boeing a $178 million contract to produce and sustain another seven MH-139s -- on top of six which are already being used for testing -- bringing the total number of aircraft Boeing is currently on the hook to deliver to 26.

The April Nunn-McCurdy breach is due to a planned reduction in the number of helicopters the service plans to buy, an Air Force spokesperson previously told Inside Defense. The FY-25 budget request only calls for a total of 42 aircraft by the end of the program in 2029 -- about half the 80 helos the service originally anticipated purchasing.

When the Air Force released its budget request in March, officials said they decided to shrink the number of aircraft in the program to stay within financial limits imposed by the 2023 Fiscal Responsibility Act. Still, the service is asking for $333.5 million to buy eight helicopters in FY-25 as part of LRIP, and two per year after that through 2029.

The Grey Wolf will primarily be used to patrol U.S. Global Strike Command nuclear silos, replacing the Vietnam War-era UH-1N Huey. Other operations may include shuttling high-ranking officials around the National Capital Region and providing the joint force some tactical airlift capabilities.

The Marine Corps is interested in procuring a commercially available, ground-based, long-range cruise missile system to fill operational capability gaps, according to a recent request for information.

The Marine Corps and its Marine Air Ground Task Force may need a new long-range fires capability to meet current and future operational demands, including supporting sea control and countering seaborne fast-attack vessels, the July 31 notice states.

“Accordingly, the Marine Corps is interested in readily available ground-based, long-range cruise missile systems that can attack land and maritime targets designed to provide precision kinetic fires employing the Tomahawk Land Attack Missile (TLAM) and using its Tactical Tomahawk Weapons Control System (TTWCS) for fire control,” the notice states.

The service prefers systems that can be integrated into its remotely operated ground unmanned expeditionary (ROGUE) vehicle, the notice continues, and systems that can load Tomahawk missiles without non-organic support and operate alongside other weapon and surveillance systems currently in use.

“A complete system would be composed of fire and weapons control, kinetic launch, and reload and resupply system,” the RFI adds.

The notice asks respondents to provide information on their system’s range, size, weight, launch platform requirements and procurement and sustainment costs. Responses to the RFI are requested by Aug. 12.

Aside from the Air Force's B-52 radar modernization program nearing a major cost growth breach, the bulk of this Friday INSIDER Daily Digest deals with the Senate Appropriations Committee's fiscal year 2025 defense spending bill.

The estimated cost for the B-52 Radar Modernization Program jumped from $2.3 billion in 2021 to about $3.3 billion in March, B-52 Deputy Senior Materiel Leader Brian Knight told reporters at the Life Cycle Industry Days conference, toeing the line of acceptable cost growth without yet requiring a notification to Congress for additional oversight:

B-52 radar modernization nears Nunn-McCurdy cost growth breach

DAYTON, OH -- The two programs designed to keep the B-52 Stratofortress bomber flying for the next few decades are facing serious headwinds, including new prices for the Radar Modernization Program nearing the Nunn-McCurdy Act cost growth thresholds, officials said this week.

The rest of our coverage looks at the Senate's FY-25 defense spending bill:

Senate appropriators would give NGAP another $280 million as Air Force calls it a priority program

The Senate Appropriations Committee approved a defense spending bill that would inject the Air Force's Next Generation Adaptive Propulsion efforts with $280 million above the service's fiscal year 2025 request, according to legislative documents.

Senate appropriations bill excludes second Virginia sub but funds shipset

The Senate Appropriations Committee's draft defense spending bill would increase shipbuilding spending by $3.4 billion but fund only one Virginia-class submarine in fiscal year 2025, teeing up a showdown between appropriators and authorizers over the future of the Virginia program.

Lawmakers look to redirect RDER toward second Replicator tranche

Senate appropriators say they want to slow the growth of the Pentagon's Rapid Defense Experimentation Reserve in favor of the Replicator program which aims to field thousands of attritable, autonomous drones by August 2025 to counter China.

Senate appropriators slash MQ-25 procurement, allotting funding solely for industrial base

Senate appropriators are proposing a major cut to the Navy's MQ-25 Stingray uncrewed aircraft program, slashing over $450 million from the service's fiscal year 2025 budget request.

Senate appropriators adding flexibility for counter UAS spending

The Senate Appropriations Committee, in its fiscal year 2025 defense spending bill, wants to give the Army more flexibility for funding counter unmanned aerial systems and is urging the service to eliminate bureaucratic red tape.

This Thursday INSIDER Daily Digest has news on the Senate's version of the FY-25 defense spending bill, plus industry news from HII, Boeing and more.

The Senate Appropriations Committee today released its version of the report accompanying the fiscal year 2025 defense spending bill:

Senate appropriators advance bill to increase defense budget above spending cap

Senate appropriators are highlighting some of the key investments in their fiscal year 2025 defense spending bill, which would increase the Defense Department's budget by 3.3%, or more than $27 billion above what Congress enacted in FY-24.

Document: Senate appropriators' FY-25 defense spending bill report

HII executives discussed their company's quarterly earnings this morning:

HII claims record second-quarter revenues, SSN-798's delivery timeline shifts

Shipbuilder HII experienced record second-quarter revenues of $3 billion -- up 6.8% compared to last year’s second quarter -- and a recent boost in hiring to keep the company on track to achieve its goal of 6,000 new hires by the end of the year, according to CEO Chris Kastner on today’s earnings call.

Boeing's KC-47 tanker program continues to suffer setbacks:

Boeing's KC-46A records new Category 1 deficiency, $391 million loss in second quarter

DAYTON, OH -- The embattled KC-46A Pegasus tanker is now dealing with seven issues that could result in significant damage to the air vehicle or death of an operator, Kevin Stamey, the Air Force's program executive officer for mobility and training aircraft, told reporters Tuesday.

The new Guam Defense System Joint Program Office doesn't have the funds needed to hire personnel and pay for software development associated with integrating elements of the system:

Fledgling JPO Guam Defense System is 'coalition of the willing,' eight-person shop

The new Joint Program Office in support of the Guam Defense System is hamstrung by a lack of funding, relying on a "coalition of the willing" and eight staff members to execute one of the U.S. military's most pressing engineering and software challenges while waiting for lawmakers to approve funding to hire staff and tackle the project in earnest.

The Air Force's top civilian spoke this week at the Life Cycle Industry Days conference:

Kendall: The next Air Force tanker could be part of an FY-25 quick-start

DAYTON, OH -- The Air Force's next-generation refueling fleet may come down the line sooner than previously expected, and with greater capability, after a potential injection from the service's quick-start authority in fiscal year 2025, according to service Secretary Frank Kendall.

BAE Systems will build additional self-propelled howitzers for the Army after receiving a $274.4 million contract, the Defense Department announced Wednesday.

The Pennsylvania-based company will produce the M109A7 Paladin self-propelled howitzers and M992A3 ammunition carrier vehicles by an estimated completion date of Jul. 31, 2026, with work being completed in York, PA, according to the July 31 announcement.

“Fiscal [year] 2023 procurement of weapons and tracked combat vehicles, Army funds in the amount of $274,426,742 were obligated at the time of the award,” the announcement adds.

Each Paladin is paired with the M992A3 Carrier Ammunition Tracked vehicle, which stores and transports the artillery rounds.

Wednesday’s announcement follows a $579 million July 3 contract in which BAE would produce the M109A7 and M992A3 at their facilities in York, PA; Sterling Heights, MI; Aiken, SC; Elgin, OK; and Anniston, AL.

For FY-25, the Army plans to procure 20 Paladin systems for $417 million and 155 systems for $2.7 billion by FY-29, according to service budget documents.

The Army initially intended to replace a portion of the Paladins with the Extended-Range Cannon Artillery (ERCA) howitzer a modified M109 with a longer gun tube but cancelled the program in March after prototyping revealed technical issues.

Following the ERCA cancellation, the Army opted to use the remaining funds to assess existing howitzers and plans to hold capability demonstrations with industry manufacturers beginning in August 2024 at the Yuma Proving Ground in Yuma, AZ.

During a May 2 round table with reporters, Army acquisition chief Doug Bush said “around eight or nine” contractors are “interested in some form or fashion” in participating in the capability demonstrations.