The Insider

The Air Force Research Laboratory released a call for proposals Monday inviting companies to participate in a new low-cost attritable aircraft program focused on reducing life-cycle and maintenance needs.

AFRL already showed the ability to achieve affordability and swift production in this class of air vehicles under the low-cost attritable strike demonstration program, according to a statement of objectives. That effort informed the Skyborg manned-unmanned teaming experiments the Air Force is planning with prototypes from Boeing, General Atomics and Kratos.

AFRL now wants to flight test an "off board sensing station" (OBSS) attritable aircraft variant that's "designed for limited life in terms of years, not decades, with no depot maintenance and limited field maintenance considerations," according to the notice.

"The design and manufacturing of OBSS will incorporate scalable and responsive manufacturing technologies," the notice states. "This program will continue to validate low-cost design and manufacturing approaches for the attritable class of aircraft through flight demonstration."

AFRL expects to award $18 million contracts in August to two companies for a one-year base effort, according to the solicitation. Both deals will include a $31.5 million, 15-month option effort, but the lab only plans to exercise this additional work on one of the contracts.

Meanwhile, the Air Force imagines future variants deriving from a common, government-owned system architecture, enabling the service to quickly evolve in response to changing requirements. This vision demands an efficient acquisition model that allows different aircraft to use the same hardware and software components, which AFRL already explored under the low-cost attritable platform sharing program.

Leidos said today it has agreed to pay $380 million to acquire naval engineering and design firm Gibbs & Cox.

The Arlington, VA-based Gibbs & Cox has 525 employees and is meant to add new capabilities and deepen customer relationships, Leidos said.

In a call with analysts this morning, Roger Krone, Leidos' chief executive, said the deal could help Leidos pursue autonomous maritime programs. He noted, for instance, Leidos did not win the Navy's Medium Unmanned Surface Vehicle program.

"There were things that we learned in naval architecture and ship design," he said. "We're very excited about how Gibbs & Cox brings their capability around the design of the ship and the ship systems and we bring, if you will, the mission equipment. And we're really excited about how that will fuel growth for our maritime business going forward."

In a statement, the company said the deal extends it "into an attractive maritime market where Leidos is under-penetrated today, and adds valuable engineering talent (naval architects and digital engineers) to the team."

"It further positions Leidos for long-term growth in the maritime unmanned market -- a market requiring tight integration of ship design and autonomy systems," Leidos added.

The acquisition is just the latest for the contractor, which has made a number of deals in recent years, including picking up Dynetics and L3Harris Technologies' security detection and automation business in 2020.

The transaction is expected to close by the end of June.

Meanwhile, Leidos said today sales in the most recent quarter in its defense solutions business totaled $1.9 billion, up almost 17% from the same three-month period a year earlier. The company attributed the growth to its acquisition of Dynetics as well as program wins.

Quarterly profit in the unit totaled $147 million, flat from the prior year.

For the year, the defense solutions group reported sales of $7.3 billion, up about 17% from 2019. This growth, Leidos said, was primarily attributable to Dynetics, program wins and an increase in volume on certain programs.

The group recorded 2020 profit of $506 million, up 7% from 2019.

This Monday INSIDER Daily Digest has news on China's challenge to NATO, defense contractor cash flow, the Navy's shipbuilding budget and more.

Defense Secretary Lloyd Austin recently held his first press briefing as SECDEF:

Austin makes clear to NATO allies that China is the 'pacing challenge' for U.S.

Defense Secretary Lloyd Austin said today he discussed challenges posed by "an increasingly aggressive China" during recent meetings with NATO officials.

The COVID-19 pandemic has moved the Defense Department in the direction of freeing up greater cash flow to defense contractors:

DOD launches new contractor cash flow and pricing study rooted in controversy

The Pentagon has entered arrangements with three universities to study key areas related to contract finance and pricing that could impact the way defense contractors are paid.

House Armed Services seapower and projection forces subcommittee Chairman Joe Courtney (D-CT) and Ranking Member Rob Wittman (R-VA) both spoke at a recent event hosted by the Hudson Institute:

Courtney, Wittman call on Biden's first budget to prioritize Navy

Congressional seapower leaders are calling on the Biden administration's first budget to prioritize the Navy and shipbuilding to counter the growing threat posed by China.

A senior Lockheed Martin executive late last week talked about the Air Force embarking on a portfolio review of its tactical fighter force that will, in part, consider options to replace the F-16 and inform force structure decisions in the fiscal year 2023 budget request:

Lockheed emphasizes integrated fighter capabilities as USAF considers F-16 replacement

The new executive vice president of Lockheed Martin's aeronautics business told reporters today that as the Air Force evaluates the makeup of its tactical aircraft portfolio -- and considers a clean-sheet 4.5-generation fighter to replace the F-16 -- he thinks the three fighter aircraft the company already builds for the service provide a holistic, family-of-systems approach to meet a spectrum of capability needs.

Last but by no means least, the latest cyber defense news from our colleagues at Inside Cybersecurity:

Pentagon plans to conduct 'gap analysis' between FedRAMP and CMMC for reciprocity

The Defense Department is working with the General Services Administration's Federal Risk and Authorization Management Program team to develop a "gap analysis" that will compare the cloud services effort with the Pentagon's Cybersecurity Maturity Model Certification initiative, according to DOD's Stacy Bostjanick.

The Army has partnered with the Air Force Research Laboratory on its Tactical High Power Operational Responder in an effort to counter threats posed by enemy drones, the Air Force announced last week.

THOR is a prototype directed-energy weapon that can disable electronics in drones and is specifically engineered to engage multiple threats at once, such as drone swarms, the Feb. 19 press release says.

"The Army's directed-energy capabilities will need to provide a layered defense with multiple ways to defeat incoming threats," Lt. Gen. Neil Thurgood, director of hypersonics, directed energy, space and rapid acquisition, said in the press release. "High-energy lasers kill one target at a time, and high-powered microwaves can kill groups or swarms, which is why we are pursuing a combination of both technologies for our Indirect Fire Protection Capability rapid prototyping effort."

Thurgood on Feb. 11 met with THOR developers at Kirtland Air Force Base, NM, where the system is going through a series of risk-reduction and characterization efforts prior to being deployed overseas.

"During and after THOR deployment, the [Army Rapid Capabilities and Critical Technologies Office] will continue to partner with the Air Force on the THOR program in support of the U.S. Army's effort to provide a prototype Indirect Fire Protection Capability-High Power Microwave system to a platoon by fiscal year 2024," according to the release.

Senior Pentagon officials are scheduled to speak on Capitol Hill this week, while several defense companies discuss quarterly earnings.

Monday

KBR executives are slated to discuss quarterly earnings.

Tuesday

Vice Chairman of the Joint Chiefs of Staff Gen. John Hyten speaks at a Center for Strategic and International Studies event on "Missile Defense and Defeat."

The House Armed Services cyber, innovative technologies and information systems subcommittee holds a hearing on defense innovation opportunities.

The House Armed Services strategic forces subcommittee holds a hearing on “near-peer advancements in space and nuclear weapons.”

The Senate Armed Services Committee holds a hearing on emerging technologies and national security.

BWX Technologies and Leidos executives are scheduled to review quarterly earnings.

Wednesday

The House Appropriations defense subcommittee holds a hearing on future defense spending.

The Business Executives for National Security hosts a virtual forum featuring former Defense Secretaries Ash Carter, Mark Esper, and Leon Panetta.

Maxar executives are set to discuss quarterly earnings.

Thursday

The Senate Armed Services Committee holds a hearing on the Pentagon’s response to the COVID-19 pandemic.

Kratos Defense & Security Solutions executives are slated to review quarterly earnings.

A Lockheed Martin official said today the company expects the Air Force to issue a request for proposals this spring for an F-35 performance-based logistics sustainment contract.

Greg Ulmer, who recently transitioned from his role as Lockheed's F-35 program lead to executive vice president for the company's aeronautics business, told reporters today the company continues to work with the Defense Department on a possible PBL construct, which officials have said is key to reducing long-term sustainment costs.

"In our sustainment business, we are currently delivering F-35s that are below the cost of less-capable fourth-generation aircraft while also lowering Lockheed Martin's portion of sustainment . . . by 40% over the last five years, and we expect to reduce another 50% over the next five," Ulmer said.

Lockheed announced in 2019 that it had pitched a plan to the Pentagon for a five-year PBL that it says could save $1 billion and help achieve the program's target to reduce the F-35's cost-per-flying-hour to $25,000 by 2025. In early January, DOD awarded the company a $1.28 billion undefinitized contract action for sustainment work that extends through June.

Ulmer said today the company is seeing progress on sustainment costs and believes the $25,000 CPFH goal is still "doable."

As for production efficiency and air system affordability, Ulmer said there's pressure in the current negotiations for low-rate initial production lots 15, 16 and 17 to keep costs down. He noted that the three-year block buy includes about 100 fewer aircraft than the previous three lots combined and will incorporate a key technology refresh, TR3.

"We're working to keep a cost-neutral position for the cost of the F-35 production system," he said.

The company is also awaiting Pentagon approval of a full-rate production decision that was originally expected in December of 2019 and likely won't occur until later this year due to initial operational test and evaluation delays. Asked whether the FRP delay has a tangible negative impact on the company, Ulmer said the wait hasn't been detrimental to Lockheed but it has stalled the program's transition to longer-term, multiyear contracts.

"The benefit from a full-rate production decision would be our ability to go to a longer period of performance -- think five-year, maybe seven-year . . . which will then allow industry to make a bigger investment or get a bigger economic order quantity value," he said.

Two HH-60W Combat Rescue Helicopters have arrived at Edwards Air Force Base, CA, from Eglin AFB, FL, to undergo flight test operations, the service announced in a press release earlier this week.

The Sikorsky-built CRHs -- dubbed Jolly Green II -- will replace the legacy HH-60G Pave Hawks as the Air Force's primary search-and-rescue helicopter. The program is nearing the end of development testing and expects to shift to initial operational test and evaluation this summer. Sikorsky, meanwhile, is working on the service's initial production order of 10 HH-60Ws and is slated to begin deliveries in the coming months.

The Air Force release doesn't specify what kind of flight activities are occurring now at Edwards AFB, but an executive with Sikorsky owner Lockheed Martin told reporters earlier this week that aircraft were traveling to Naval Air Weapons Station China Lake, CA for radar warner receiver testing.

Dana Fiatarone, Lockheed's vice president of Army and Air Force systems, said he anticipates this evaluation, as well as final weapon system tests, will be completed in the next month, marking the end of DT requirements.

This will allow Sikorsky to concentrate efforts on production. In addition to the first lot that the company is currently working on, Sikorsky has already received a contract for the second production order and Fiatarone said he expects a third award for 19 helicopters over the summer.