The Insider

By John Liang
August 3, 2012 at 12:00 PM

The Congressional Research Service issued a report this week that outlines potential oversight issues for lawmakers regarding China's naval modernization efforts.

The July 31 report -- originally obtained by Secrecy News -- notes the Pentagon's planned strategic policy shift toward the Asia Pacific region. Further:

Decisions that Congress and the executive branch make regarding U.S. Navy programs for countering improved Chinese maritime military capabilities could affect the likelihood or possible outcome of a potential U.S.-Chinese military conflict in the Pacific over Taiwan or some other issue. Some observers consider such a conflict to be very unlikely, in part because of significant U.S.-Chinese economic linkages and the tremendous damage that such a conflict could cause on both sides. In the absence of such a conflict, however, the U.S.-Chinese military balance in the Pacific could nevertheless influence day-to-day choices made by other Pacific countries, including choices on whether to align their policies more closely with China or the United States. In this sense, decisions that Congress and the executive branch make regarding U.S. Navy programs for countering improved Chinese maritime military forces could influence the political evolution of the Pacific, which in turn could affect the ability of the United States to pursue goals relating to various policy issues, both in the Pacific and elsewhere.

As Inside the Pentagon reported last week:

The United States should declare that mutual nuclear vulnerability with China is a "fact of life" for both countries rather than investing in strategic offensive and defensive capabilities designed to negate China's nuclear forces, according to a draft report prepared by a federal advisory panel led by former Defense Secretary William Perry.

Inside the Pentagon obtained a copy of the May 23 draft report, a product of the State Department's International Security Advisory Board. Last year, then-Under Secretary of State for Arms Control and International Security Ellen Tauscher commissioned the report on "maintaining U.S.-China strategic stability." The 2010 Nuclear Posture Review report called for pursuing "strategic stability" with China, but whether the U.S. government should declare mutual nuclear vulnerability has been a subject of debate.

The draft report states that China's efforts to build a "survivable second-generation sea-based and mobile land-based nuclear force" are advancing and will in time produce a "larger and less vulnerable force with more (from 25 to about 100) [intercontinental ballistic missiles] capable of striking the United States." Chinese perceptions of U.S. intentions, missile defenses and nuclear and precision conventional strike capabilities will likely steer decisions about China's nuclear force posture, the panel writes. Chinese leaders have "been determined to maintain a credible nuclear deterrent regardless of U.S. choices and will almost certainly have the necessary financial and technological resources to continue to do so," the draft report argues.

By Christopher J. Castelli
August 2, 2012 at 4:29 PM

Marine Corps Systems Command is acknowledging this morning the service recently dropped long-term plans to fund further technical and programmatic staff support for the Air Force's Three-Dimensional Expeditionary Long-Range Radar (3DELRR) program, a long-range, ground-based system designed to counter enemy aircraft and missiles in all types of weather and terrain.

Today's edition of Inside the Pentagon breaks news about the Marine Corps' fiscal year 2014 program objective memorandum proposal to cut the relatively few funds the service had planned to devote to the program in the coming years, making FY-13 the last year of Marine Corps technical and programmatic staff support for 3DELRR.

"Yes, there was a recent decision made to have the technical and programmatic staff support end in FY-13 rather than continuing it in FY-14 and beyond," command spokeswoman Lt. Nicole Fiedler said this morning.

View today's ITP story.

By John Liang
August 2, 2012 at 3:35 PM

The Government Accountability Office released a report yesterday that looks at whether the Pentagon, State Department and the U.S. Agency for International Development "have taken or planned actions that directly align with recommendations the [Commission on Wartime Contracting] made in its final and last two special reports."

According to GAO:

Over the past decade, the Department of Defense (DOD), Department of State (State), and U.S. Agency for International Development (USAID) have relied extensively on contractors to help carry out their missions in Iraq and Afghanistan. Between fiscal year 2002 and fiscal year 2011, these agencies reported combined obligations of approximately $159 billion for contracts with a principal place of performance in either country. Contractor personnel have provided a range of services related to supporting troops and civilian personnel and to overseeing and carrying out reconstruction efforts, such as interpretation, security, weapon systems maintenance, intelligence analysis, facility operations support, advice to Iraqi and Afghan ministries, and road and infrastructure construction. The use of contractors in contingency operations such as these is not new, but the number of contractors and the type of work they are performing in Iraq and Afghanistan represent an increased reliance on contractors to support agency missions.

Congress established the Commission on Wartime Contracting in Iraq and Afghanistan (CWC) in 2008 to assess contracting in Iraq and Afghanistan and provide recommendations to Congress to improve the contracting process.

The CWC was directed by Congress to assess contracting in Iraq and Afghanistan for reconstruction, logistics, and security functions; examine the extent of waste, fraud, and abuse; and provide recommendations to Congress to improve various aspects of contingency contracting, including defining requirements and identifying, addressing, and providing accountability for waste, fraud, and abuse. . . .

In summary, DOD reported having taken or planned actions that directly align with about half of the CWC recommendations applicable to it, and State and USAID each reported having taken or planned actions that directly align with about one-third of the recommendations applicable to each of them. Officials from the three agencies explained that for the remaining recommendations no actions were taken or planned that directly aligned with the specific recommendation. This was because, for example, the agencies had determined that existing policies or practices already meet the intent of the recommendations or had disagreed with the recommendations.

Inside the Army reported last September that the service expected to formally resolve problems related to expeditionary contracting in 2014, seven years after the topic first showed up as a "material weakness" in annual service audits required by law:

The time line is included in the attachments to an annual certification memo, dated Aug. 29, from Army Secretary John McHugh to Defense Secretary Leon Panetta. Known as a "statement of assurance on internal controls" for fiscal year 2011, the memo was published in the same week that a congressional commission unveiled a much-publicized report estimating that the U.S. government lost between $31 billion and $60 billion to contracting waste and fraud during the Iraq and Afghanistan wars because of problems similar to those diagnosed by the Army.

The trail of service certification memos going back to the 2008 version, when expeditionary contracting was first flagged as a problem, provides a stark picture of a known deficiency that has persisted for years, with progress from one year to the next documented mostly in slight adjustments to the jargon in the report language.

The description of the problem has remained the same in all reports. "The Army's acquisition workforce is not adequately staffed, trained, structured or empowered to meet the Army needs of the 21st-century deployed warfighters," it reads. In addition, the contracting process -- including requirements definition, contract management and contract close-out -- is "not treated as a core competency," and internal controls to mitigate risk are "ineffective or nonexistent," the reports state.

By John Liang
August 1, 2012 at 9:53 PM

President Obama has nominated Eric Fanning to become the Air Force's next under secretary, according to a White House statement issued this afternoon.

Fanning is the Navy's deputy under secretary for business operations and transformation. He would replace Air Force Comptroller Jamie Morin, who has been serving as the service's acting under secretary since Erin Conaton was approved by the Senate last month to become the Defense Department's under secretary for personnel and readiness.

By John Liang
August 1, 2012 at 3:27 PM

Deputy Defense Secretary Ashton Carter is testifying this morning on Capitol Hill on the effects of sequestration on the Pentagon. In his prepared testimony, he focuses on the effects on the fiscal year 2013 budget:

In FY 2013 special rules govern the sequester and require an across-the-board application of the cuts that is designed to be inflexible. To determine the size of the sequester by project and account, a percentage will be calculated based on the prescribed dollar cut (almost $55 billion) and the total of the FY 2013 appropriation and unobligated balances from prior years. Obviously, that percentage cut cannot be estimated precisely until we know the level of FY 2013 appropriated funds and the level of prior-year unobligated funds.

Sequester would apply to all of the DoD budget, including the wartime or Overseas Contingency Operations (OCO) portions of the budget -- with only one potential exception that is significant. Under the 1985 Act, the President has the authority to exempt all or parts of military personnel funding from sequestration. If the President chooses to utilize this authority for FY 2013, he must notify the Congress by August 10, 2012, about the manner in which he will exercise the authority. If the President exempts military personnel funding from sequester in FY 2013, then other DoD budget accounts must be cut by larger amounts to offset the military personnel exemption. DoD estimates that the percentage reductions under sequester could range from 8 percent for all DoD accounts (if military personnel funding is fully sequestered) to 10 percent for accounts other than military personnel (if "milpers" funding is fully exempt from sequestration). These estimates assume that Congress provides funds for FY 2013 equal to the President’s request and reflects DoD’s best estimate of unobligated balances from prior years.

OMB will eventually calculate the sequester percentage and will use the percentage to calculate reductions in dollar terms for each budget account. How these reductions are applied in DoD varies between the operating and investment portions of the budget, as specified in law and applicable Congressional report language. Cuts to the operating portions of the DoD budget must be equal in percentage terms at the level of budget accounts. (Examples of budget accounts in the operating budget include Army active operation and maintenance, Navy reserve operation and maintenance, and Air Force Guard operation and maintenance.) Within each budget account in the operating portion of the budget, DoD can determine how best to allocate the reductions based on management judgments. For the investment portions of the budget, the dollar cuts must be allocated proportionally at a lower level of detail identified as "program, project, and activity (PPA)". More than 2,500 programs or projects are separately identified and must be reduced by the same percentage. Absent a reprogramming action, the inflexible nature of the sequester law means that DoD would have no authority to vary the amount of the reduction. Within a PPA, however, managers can decide how best to allocate the reductions.

It is important to note that reprogramming -- a method used by DoD to shift funding from lower to higher-priority projects during the year when funds are being executed -- would at most offer a limited ability to modify the effects of sequester. Under current law, the amount of funds that can be transferred is limited. Moreover, any reprogramming that adds funds to a program or project must be offset by a cut to another program or project, which may be difficult because, as a matter of policy, we seek Congressional approval of reprogramming actions. Reprogramming might be used to offset some effects of sequester but, realistically, it would not offer a means for making wholesale revisions.

To close this description of sequestration, let me say what sequestration would NOT do. Sequestration would generally not affect funds already obligated as of the date the sequester cuts are calculated.

To view Carter's full testimony as well as that of acting Office of Management and Budget Director Jeffrey Zients, click here.

By John Liang
July 31, 2012 at 3:19 PM

The Senate Appropriations defense subcommittee this morning marked up the fiscal year 2013 military spending bill.

The subcommittee proposes allocating $511 billion for the base budget and $93.3 billion for Overseas Contingency Operations, panel Chairman Daniel Inouye (D-HI) said in a statement. "The allocation is equivalent to the Department of Defense's fiscal year 2013 budget request, and is consistent with the defense caps set in the Budget Control Act. It is nearly $29 billion less than what Congress enacted in fiscal year 2012, primarily due to the drawdown of forces in Afghanistan," he added.

Other highlights include:

The bill funds key programs to strengthen our military readiness, and provides additional funding for unanticipated costs that surfaced after the budget submission, such as: $150 million for repairs on the USS Miami, which was damaged in a fire; $293 million for the Navy's increased presence in the Persian Gulf; and nearly $1 billion to mitigate projected shortfalls for fuel and second destination transportation costs.

The recommendation restores or provides additional force structure to ensure that our military can meet its commitments around the world.  Let me highlight a few examples:

For the Department of the Army, the bill adds over $700 million for Army aircraft, primarily to modernize, replace combat losses, or procure new helicopters.  It adds funds to continue Abrams upgrades and procure additional Hercules vehicles and Patriot interceptors.

For the Department of the Navy, the recommendation ensures a healthy force as we shift our focus to the Pacific.  It includes nearly $2.4 billion to reverse the Navy's proposal to prematurely retire nine ships that have over 100 years of service life remaining.  This funding is adequate to man, operate, equip, and modernize these ships in order to minimize future costs which the Navy has not budgeted for.  In addition, the recommendation provides $1 billion to fully fund an additional Destroyer and $777 million for advance procurement of an additional Virginia-class submarine.

For the Department of the Air Force, the bill provides over $800 million to comply with the Senate Armed Services Committee's direction to pause Air Force-proposed force structure adjustments until a national commission reports to the Congress.

For the Missile Defense Agency, the bill provides additional funds for a missile warning radar and Standard Missile-3 interceptors that were removed from the budget request.

To view the full statement, click here.

(UPDATE 12:50 p.m.: The full committee is scheduled to mark up the bill on Thursday at 10:30 a.m.)

By John Liang
July 30, 2012 at 7:57 PM

InsideDefense.com reports this afternoon that the Pentagon has set aside a proposal to further expand its small fleet of Air Force EC-130H Compass Call aircraft as part of the fiscal year 2014 spending proposal, citing the planned drawdown of forces from Afghanistan, budget constrains and the time needed to convert a cargo plane into an electronic warfare platform:

While finalizing the Defense Department's fiscal year 2013 budget proposal, the Office of the Secretary of Defense directed the Air Force to lead a study this spring exploring the possibility of expanding the 15-aircraft Compass Call fleet by a single aircraft, according to DOD sources.

"Yes, recently the Department of Defense and the Air Force considered adding a sixteenth operational EC-130H aircraft," Col. Joseph M. Skaja, head of Air Combat Command's combat enabler division's requirements directorate, wrote in response to questions from InsideDefense.com. The proposal for an additional Compass Call aircraft was crafted to meet an operational gap stemming from delays in fielding another system, according to Skaja.

The Air Force was directed to deliver the findings of its Compass Call analysis to the office of cost assessment and program evaluation by the end of June.

The story further reports:

"According to a fleet viability assessment completed in 2010, the current size of the fleet is insufficient to meet combatant commander taskings for Compass Call," the Government Accountability Office noted in a March report, "Airborne Electronic Attack: Achieving Mission Objectives Depends on Overcoming Acquisition Objectives."

To view the GAO report, click here.

By John Liang
July 30, 2012 at 3:33 PM

The Pentagon last week released an instruction memo that "establishes policy and assigns responsibilities concerning the integrity of scientific and engineering activities that the [Defense Department] conducts, and science and engineering information it uses to support public policy and management decisions."

According to the July 26 memo:

It is DoD policy to support a culture of scientific and engineering integrity. Science and engineering play a vital role in the DoD’s mission, providing one of several critical inputs to policy and systems acquisition decision making. The DoD recognizes the importance of scientific and engineering information, and science and engineering as methods for maintaining and enhancing its effectiveness and its credibility with the public. The DoD is dedicated to preserving the integrity of the scientific and engineering activities it conducts.

By Christopher J. Castelli
July 27, 2012 at 4:08 PM

Sen. Carl Levin (D-MI), chairman of the Senate Armed Services Committee; Sen. John McCain, (R-AZ), the panel's ranking Republican; and committee member Sen. Jim Webb (D-VA) today released a new independent assessment of the U.S. defense posture in the U.S. Pacific Command area of responsibility, noting in a statement that the report -- prepared for the Pentagon and Congress by the Center for Strategic and International Studies -- examines key issues.

“While we are still reviewing this 110-page report and its classified annex, we note that CSIS raises a number of issues that are worthy of further consideration,” according to the statement from Levin, McCain and Webb. “For example, CSIS concluded that 'DOD has not adequately articulated the strategy behind its force posture planning nor aligned the strategy with resources in a way that reflects current budget realities.' This is particularly important as support for the resourcing of major overseas initiatives, in the current fiscal environment, will depend to a significant extent on a clear articulation of U.S. strategic imperatives and the manner in which the investments address them.”

Levin, McCain and Webb agree with CSIS’s emphasis on the need for DOD to articulate the strategy behind its force-posture planning more clearly. “Congress must also be confident that the DOD force planning and realignment proposals are realistic, workable, and affordable,” the senators note. “The report helps to frame the many issues associated with the reposturing of U.S. forces in the Asia-Pacific.”

In his comments on the report, included in the document, Defense Secretary Leon Panetta stresses the importance of U.S. efforts to bolster alliances and partnerships in the region to advance a common security vision for the future. “We agree,” the senators state. “Our military’s forward presence is a strong guarantor for peace and stability, and our bilateral security agreements are the foundation for our nation’s security posture in Asia. The current and future U.S. military force posture in the Asia-Pacific region is a complex and critically important element of our overall global security strategy as well as a tangible sign of the strong and unwavering support for our allies in the region.” The report and Panetta’s comments will inform the committee's consideration of these complex issues and the progress of plans to reposture U.S. forces in the Asia-Pacific region, according to the senators.

By John Liang
July 27, 2012 at 2:52 PM

The last of the four main congressional fiscal year 2013 defense bills is scheduled to be marked up next week.

The Senate committee schedule shows the Senate Appropriations defense subcommittee plans to address its FY-13 defense-spending bill Tuesday morning at 10:30, room SD-192.

So far, the committee has not said the session will be closed.

On May 17, the House Appropriations Committee marked up its version of the FY-13 spending bill. On May 21, the full House approved its version of the FY-13 defense authorization bill, and on June 6, the Senate Armed Services Committee released a report accompanying its version of the bill.

By Thomas Duffy
July 27, 2012 at 2:25 PM

The Obama administration generally agrees with a new Senate cybersecurity bill, taking issue only with its call for a new interagency group and warning against any amendments to the bill that would weaken critical infrastructure measures, according to a statement of administration policy issued by the White House.

Sen. Joseph Lieberman (I-CT) and four cosponsors introduced the Cybersecurity Act of 2012 last week. Yesterday the Senate agreed to end debate and move to a vote on the bill.

In its statement, the White House the bill supports most of the administration's own legislative proposal on the issue. The statement adds:

S. 3414 would create an interagency National Cybersecurity Council to coordinate the identification of voluntary cybersecurity practices for critical cyber infrastructure. As currently drafted, the structure of the National Cybersecurity Council raises constitutional concerns and should be amended to employ an administrative structure similar to that of other recently established councils.

By John Liang
July 26, 2012 at 5:08 PM

The Senate Armed Services Committee yesterday approved the president's nomination of Air Force Gen. Mark Welsh to become the service's next chief of staff.

The committee also approved the nominations of Marine Corps Gen. John Kelly to become the head of U.S. Southern Command and Army National Guard Lt. Gen. Frank Grass to become head of the National Guard Bureau.

Click here to view the officers' answers to advance policy questions at their July 19 nomination hearing.

We also have this from last Friday's Inside the Air Force:

Welsh, Nominated As Service Chief, Promises More Open Budget Process

The general likely to become the Air Force's next chief of staff told Senators this week that the service's fiscal year 2013 budget was put together using a flawed process and that future budget submissions will solicit more input from state officials and the reserve components.

By John Liang
July 26, 2012 at 11:03 AM

Sen. Jim Inhofe (R-OK) is openly doubting that the Navy's plan to use biofuels will help the service save money in the long term. In a July 24 letter to Navy Secretary Ray Mabus, Inhofe requests a detailed report on the total cost of a recent event highlighting the Navy's great "Green Fleet" and expressed concern for the cost of "greening" the U.S. military at a time of drastic budget cuts:

While I continue to support the development and use of all alternative fuels, I have grave concerns about the cost of "greening" our military and the overall impact on our readiness.

It has been reported that the Navy spent $12 Million for 450,000 gallons of biofuel which equals approximately $27 a gallon. When added to an additional 450,000 gallons of traditional fuel, the cost per gallon is reduced to $15 a gallon, still over three times the cost of traditional fuel. Over the last three years we have seen the budget of the Navy drastically reduced, but yet the Navy can spend $13.5 Million on fuel that should have cost only $4.5 Million.

Consequently, Inhofe wants the Navy to submit a report on how much it cost the service to transport and use biofuels during the most recent Rim of the Pacific multinational naval exercise.

"I have long been a proponent of an all-of-the-above strategy on energy development," the senator writes, adding: "This strategy not only requires harvesting our resources from above the ground but below it as well. Requiring the Navy to spend exorbitant amounts of an already stretched budget on alternative fuels is impacting out near- and long-term readiness. It is our duty top efficiently and wisely use the limited resources at our disposal to provide for the defense of this great nation."

By John Liang
July 25, 2012 at 9:49 PM

The Missile Defense Agency has awarded a $925 million sole-source contract to Raytheon Missile Systems Co. to continue work on the Standard Missile-3 Block IIA system.

According to a Pentagon statement issued late this afternoon:

Under this modification, the contractor will perform Standard Missile-3 Block IIA all up round development and integration through critical design review and flight test support.  The work will be performed in Tucson, Ariz.  The performance period is from July 27, 2012, through Feb. 28, 2017.  Fiscal 2012 Research, Development, Test and Evaluation funds will be used to incrementally fund this effort.  Contract funds will not expire at the end of the current fiscal year.  The Missile Defense Agency, Dahlgren, Va., is the contracting activity.

The Block IIA missile is a co-development effort between the United States and Japan, a Raytheon statement issued not long after the Defense Department's announcement reads, adding:

"As the threat continues to evolve, so does our ability to counter that threat," said Dr. Taylor W. Lawrence, president of Raytheon Missile Systems. "We're honored to work with our Japanese allies to bring this next-generation defensive capability to the world."

Used by the U.S. and Japanese navies to destroy short- to intermediate-range ballistic missiles, the SM-3 is the only defensive weapon of its kind. The SM-3 Block IIA will have a 21-inch 2nd and 3rd stage rocket motor and a larger, more capable kinetic warhead.

On track for a 2018 deployment date, the missile is the third evolution of the SM-3 family of missiles and builds on the successful legacy of the first two variants: SM-3 Block IA and SM-3 Block IB. The SM-3 program has achieved 21 successful intercepts.

"The SM-3 IIA's larger rocket motors will allow for a greater defended area, which is an important factor when it comes to protecting both the U.S. and our NATO allies," said Wes Kremer, vice president of the Air and Missile Defense Systems product line for Raytheon Missile Systems.

SM-3 Block IA missiles are currently employed on Japan's Kongo-class ships.

By John Liang
July 25, 2012 at 7:18 PM

The Senate Intelligence Committee today approved the fiscal year 2013 intelligence authorization bill by a 14-1 vote, according to a panel statement.

According to the committee statement:

The legislation authorizes intelligence funding to counter terrorist threats, prevent proliferation of weapons of mass destruction, enhance counterintelligence, conduct covert actions and collect and analyze intelligence around the globe.

Consistent with the Administration's budget request, the Intelligence Committee reduced spending from fiscal year 2012 without harming national security.