The Insider

By Briana Reilly
July 29, 2022 at 9:01 AM

Booz Allen Hamilton's defense business will see a new leader in the coming months, executives announced during the company’s earnings call today.

Karen Dahut, who’s served as president of the global defense sector over the last five years and has spent two decades at Booz Allen, including a stint as chief innovation officer, will retire effective Oct. 31, President and CEO Horacio Rozanski told analysts this morning.

Poised to succeed her is Judith Dotson, an executive vice president and head of the company’s national security sector. Dotson has spent more than 30 years at Booz Allen.

Replacing her will be Tom Pfeifer, currently an executive vice president who has expertise in position, navigation and timing technology and GPS.

By Michael Marrow
July 28, 2022 at 11:26 AM

Northrop Grumman is poised to compete for the Air Force's secretive Next Generation Air Dominance system, CEO Kathy Warden said today during the company's second quarter earnings call.

In response to a question about Northrop Grumman’s approach to NGAD, Warden said the company has gleaned valuable insights from its work on the B-21 Raider, initial delivery of which is scheduled for the end of this year.

“As we think about sixth-generation aircraft, we are in the process of building the first of those, the B-21, and that’s given us some fantastic experience and lessons that we believe we can apply to other sixth-generation aircraft,” Warden said.

“So, we’re positioned as a competitor,” she continued, referring to NGAD. “I think our government desires to have as broad [an] industrial base able to prime these large opportunities as possible, and we have been clear that we are investing and building our own capabilities and capacities to be able to be a contender.”

Speculation about prospective competitors for NGAD heightened after Air Force Secretary Frank Kendall stated the program entered the engineering and manufacturing development phase at a Heritage Foundation event last month. Contractors have so far been mum about their participation in the program.

The Air Force has offered few details about NGAD, except that it will include a “family of systems” approach that will incorporate crewed and uncrewed platforms and could require a new approach to acquisitions. Kendall has previously stated the platform will likely cost hundreds of millions of dollars per unit.

At the Heritage Foundation event, Kendall said the program is expected to field a new capability by the end of the decade.

By Michael Marrow
July 28, 2022 at 10:41 AM

President Biden has nominated Lt. Gen. B. Chance Saltzman to succeed Gen. John Raymond as chief of space operations, according to a list of nominees submitted to the Senate yesterday.

A former Minuteman III launch officer and satellite operator at the National Reconnaissance Office, Saltzman currently serves as deputy chief of space operations for operations, cyber and nuclear for the Space Force.

Saltzman’s appointment is prompted by Raymond’s planned retirement in the fall. As the first space operations chief who was selected to lead the organization in December 2019, Raymond has overseen the task of standing up a new service whose rapid expansion has often drawn congressional scrutiny.

If confirmed, Saltzman will take the reins of the new service as its consolidation of space responsibilities continues. In October, the Space Development Agency is slated to fully transition into the Space Force.

The Senate Armed Services Committee will take up Saltzman’s confirmation at a future date.

By Ethan Sterenfeld
July 27, 2022 at 4:20 PM

The U.S. Army's multibillion-dollar light tank program and expected growth in European defense spending should begin to lift revenues in General Dynamics' combat vehicle segment around 2024, according to a company executive.

“By 2024 and beyond, we ought to see a nice uptick trajectory in combat systems,” Jason Aiken, the company’s chief financial officer, said today on a quarterly earnings call. “We’re still talking low- to mid-single-digit growth, but we ought to see an inflection point.”

Until then, the combat vehicles division will focus on improving margins, he said.

General Dynamics won the competition last month to produce the Mobile Protected Firepower, the Army’s first light tank in decades. That program is expected to be worth up to $6 billion. Initial deliveries and testing are scheduled for 2024, after which production volumes could increase.

European opportunities extend beyond the sale of 250 Abrams tanks to Poland that was approved in February, Aiken said. Combat vehicle spending must make its way through governments, and that can happen slowly.

“It just takes time for interest to turn into budgets, to turn into appropriations, to turn into contracts, to turn into revenue,” he said. “The demand signals are there. We are having regular dialogue and ongoing conversation with those customers about that interest.”

General Dynamics reported $9.2 billion in revenue for the quarter that ended July 3, a decline of 0.3% from the same period a year earlier. Net earnings were $766 million, up 3.9%.

The combat systems segment, which builds combat vehicles, had $1.7 billion in revenue, down 12.3% from last year. Segment operating earnings fell 7.9%, to $245 million.

The marine systems segment, which builds Navy submarines and destroyers, made $2.7 billion in revenue, up 4.5% from a year earlier. Operating earnings for the segment were $211 million, up 0.5%.

By John Liang
July 27, 2022 at 2:10 PM

This Wednesday INSIDER Daily Digest has news on Army acquisition, Boeing's quarterly earnings and more.

Army acquisition chief Doug Bush spoke to reporters today about plans to replace the cannons it has sent to Ukraine:

Army has plan to replace howitzers sent to Ukraine

The Army has made an internal decision about how it will replace the 155 mm towed howitzers that have been sent to Ukraine, and it might include purchasing a different system, according to Doug Bush, the service's acquisition executive.

Bush also talked about the service's overall acquisition pathways:

Bush: Alternate acquisition pathways have been key enabler of modernization successes

The Army's top acquisition official on Wednesday said acquiring programs at speed was his top priority, a goal that has been helped along in part by the service's use of alternative acquisition pathways that it will continue to use.

Senior Boeing executives briefed Wall Street analysts this morning about the company's quarterly earnings:

Boeing logs further losses for fixed-price defense contracts

Boeing suffered further losses on several fixed-price defense contracts, with the largest charge for the company stemming from deliveries of the MQ-25 Stingray air refueling drone, the company announced in its second-quarter earnings call today.

Our colleagues at Inside Cybersecurity have the latest on the Pentagon's Cybersecurity Maturity Model Certification program:

CMMC accreditation body releases assessment process guide for public review ahead of formal rulemaking

The accreditation body behind the Pentagon's Cybersecurity Maturity Model Certification program has released the first "pre-decisional draft" of its CMMC assessment process guide, known as "the CAP," for public review and comment, going into detail on how organizations can obtain a certification from the planning phase to reporting results and addressing gaps.

The Senate Armed Services Committee, in its mark of the FY-23 defense policy bill, has added $50.8 million for a Cruise Missile Defense-Homeland Kill Chain Demonstration:

NORAD bid for FY-23 cruise missile defense demo finds support in Senate

A Senate panel has endorsed a proposed live-fire demonstration to explore a cruise missile defense architecture to protect high-priority domestic assets, authorizing $50 million in the Missile Defense Agency's fiscal year 2023 budget in support of North American Aerospace and Defense Command.

By Briana Reilly
July 27, 2022 at 1:27 PM

Senators signed off on a compromise version of a bipartisan plan today to boost funding of domestic microelectronics production, legislation that a top Pentagon official had previously said was key to addressing semiconductor supply issues.

The 64-33 vote on the highly anticipated language signals a near-end to the framework’s drawn-out path to becoming law, with the House poised to take up the measure as soon as this week.

Included as an amendment to a separate appropriations bill, the so-called “Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America” or “CHIPS-plus” proposal includes tens of billions of dollars to encourage facility and equipment investments, incentives for semiconductor manufacturing such as a four-year, 25% tax credit and $2 billion specifically for Defense Department microelectronics purposes.

The bill has trailed behind the Fiscal Year 2021 National Defense Authorization Act that created chips manufacturing and research programs that have gone unfunded. Though the Senate first passed its version of a semiconductor funding plan last June, the House didn’t follow suit with its own plan until February. Senators then approved the House’s version in March, setting up the legislation for conference committee negotiations and the slimmed-down package that hit the floor this week.

The current package resembles the broader legislation the Senate originally passed last summer, Majority Leader Chuck Schumer (D-NY), who offered the amendment, said Tuesday. Calling the language “one of the most consequential bipartisan achievements of this Congress,” Schumer, who referred to the proposal as the “Chips and Science” bill, added the approach would reverse the “chip crisis and America’s dwindling commitment to science and innovation.”

The Senate had already signaled last week the latest iteration of the legislation had requisite support to pass the chamber, when lawmakers voted 64-34 to move forward on the package. While lawmakers initially planned a cloture vote on the package Monday night, the timeline was pushed to early Tuesday due to area thunderstorms that disrupted members’ travel plans.

Pentagon officials have repeatedly touted the importance of onshoring microelectronics processing. With the microelectronics supply chain centralized in the Asia-Pacific region, Deputy Defense Secretary Kathleen Hicks last month said DOD and other agencies “would be substantially advantaged by such a move.”

“DOD has to be a fast follower in this area,” she said. “We don’t acquire enough chips given the vast amount of chips that are purchased in the United States to really drive that industry. What we need and what that [bill] would help us get is a national security approach, an enclave approach, that helps us go after the kinds of higher-end capabilities that we need with a secure, assured supply chain.”

The Pentagon’s fiscal year 2023 budget request includes $3.3 billion for microelectronics technologies -- investments that Hicks has said will focus on developing “the kinds of more high-processing and specialized chips that we need uniquely.”

There are a number of DOD applications, such as strategic radiation-hardened microelectronics, that have specific military uses and aren’t viable for commercial investment, according to one expert who spoke with the Government Accountability Office for a newly released report covering policy pathways to reduce supply chain risks and stave off future shortages.

“The official stated that it is critical that DOD invest in microelectronics [research and development] to maintain technical superiority of weapons systems,” GAO’s review stated.

Hicks was among the officials and industry executives who participated in a meeting with President Biden this week on the importance of the CHIPS legislation’s passage, during which she highlighted the “dependency that we have on the defense side” on microelectronics access, ranging from the F-35 Joint Strike Fighter to emerging technologies such as quantum, hypersonics, 5G and more.

By John Liang
July 26, 2022 at 3:59 PM

The Senate Armed Services Committee today announced it has voted to promote to general and confirm Army Lt. Gen. Bryan Fenton to take charge of U.S. Special Operations Command and Marine Corps Lt. Gen. Michael Langley to lead U.S. Africa Command.

The confirmations were approved "by voice en bloc," along with 12 other promotions, according to a committee statement.

The full Senate will now consider the nominations.

By John Liang
July 26, 2022 at 2:52 PM

This Tuesday INSIDER Daily Digest has news on cruise missile defense, the Joint Strike Fighter's engine and more.

The Senate Armed Services Committee, in its mark of the FY-23 defense policy bill, added $50.8 million for a Cruise Missile Defense-Homeland Kill Chain Demonstration:

NORAD bid for FY-23 cruise missile defense demo finds support in Senate

A Senate panel has endorsed a proposed live-fire demonstration to explore a cruise missile defense architecture to protect high-priority domestic assets, authorizing $50 million in the Missile Defense Agency's fiscal year 2023 budget in support of North American Aerospace and Defense Command.

The committee also recommends a provision that could inform deliberations about whether to triple the size of the Next Generation Interceptor acquisition:

Draft legislation would require funding plan for 64 Next Generation Interceptor fleet

The Pentagon would be required to draft a plan to pay for a fleet-wide replacement of the homeland defense ballistic missile inventory, according to legislation proposed by a Senate panel that would identify the price tag associated with expanding the program of record for the Next Generation Interceptor beyond 20 guided missiles to a total of 64.

The Air Force's top civilian spoke this week about the engine for the F-35 Joint Strike Fighter:

Kendall: Air Force F-35 engine modernization decision planned for FY-24 budget

The Air Force plans to decide whether to field a new engine for the service's F-35 fleet or upgrade the aircraft's existing propulsion system by the time it files its fiscal year 2024 budget request, according to service Secretary Frank Kendall.

On-orbit servicing of the Global Positioning System has begun:

Lockheed Martin begins GPS on-orbit servicing

After winning a 10-year, $581.6 million Global Positioning System on-orbit servicing contract in June, Lockheed Martin was recently awarded $147.7 million by Space Systems Command for the first five-year period of performance, according to an SSC press release.

Lt. Gen. Kevin Kennedy, the new head of the 16th Air Force, spoke to the media recently:

New 16th Air Force commander sees collaboration as key in fight against cyberattacks

The new commander of the 16th Air Force, Lt. Gen. Kevin Kennedy, said collaboration and partnerships across the service, joint forces and with industry will be key focuses of his tenure.

By Jason Sherman
July 26, 2022 at 2:25 PM

The Defense Department would be required to draft a report on the feasibility of fashioning a multinational, integrated air and missile defense system to counter Iran with the aim of connecting the capabilities of at least 10 nations across the Middle East into a cohesive architecture.

The Senate Armed Services Committee, in its mark of the fiscal year 2023 defense policy bill, includes a provision that would require a Pentagon study that aimed to foster a unified regional missile defense capability.

“The committee recommends a provision that would require the secretary of defense to undertake a strategy for improved integrated air and missile defense cooperation between the United States, countries of the Gulf Cooperation Council, Iraq, Israel, Jordan, and other Middle Eastern allies and partners as needed to counter threats from Iran and Iranian-linked groups,” states a report accompanying the bill. “The provision would also direct the secretary of defense to undertake a cost feasibility study for such purposes.”

If adopted, the provision would require the study be provided to Congress 180 days after enactment.

Member states of the GCC are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

By Evan Ochsner
July 26, 2022 at 11:05 AM

The Army has awarded BAE Systems a five-year contract extension to continue operating its ammunition plant in Virginia through 2026, the company announced Tuesday.

The $1.3 billion contract covers management, production maintenance, sustainment and modernization of the Radford Army Ammunition Plant, the company said. It has operated the plant since 2012.

The contract award will fund the production of propellants, according to a July 15 Pentagon contract announcement, which the company says can be used for direct fire, indirect fire and rocket applications.

Top Army leaders and the House Armed Services Committee have expressed concerns about the munitions industrial base and its ability to meet surge capacity.

Last week, Army Under Secretary Gabe Camarillo said the munitions industrial base was a “top concern across the Department of Defense.”

By Briana Reilly
July 25, 2022 at 2:59 PM

As the Pentagon continues weighing its propulsion modernization options for the F-35 Joint Strike Fighter, three-dozen lawmakers have banded together to oppose a potential complete engine replacement for the program.

In a letter to the Defense Department’s acquisition chief, the members of Congress instead rallied behind an engine upgrade plan floated by F135 maker Pratt & Whitney that would incrementally roll out updates across the entire fleet.

“The F-35 program is already the most complex and expensive program ever undertaken by the Department,” lawmakers wrote in the July 22 letter. “As the program begins to shift from development and production to long-term sustainment, we believe that now is not the time to initiate a complete engine replacement program.”

Already two decades into the program, DOD officials are facing a need for enhanced F-35 power and cooling tied to forthcoming capabilities, with those upgrades expected to result in more bleed air extraction than the level that was originally planned.

While Pratt supports upgrading the current propulsion system, the company is also one of two engine makers developing solutions for the Air Force’s Adaptive Engine Transition Program. Through that push, both Pratt and General Electric are maturing prototypes compatible with an F-35A conventional takeoff and landing variant. GE has advocated for a follow-on engine to the F-35.

In the letter, lawmakers raised concern over what they characterized as Air Force Secretary Frank Kendall’s plans for the service to pursue “a costly, risky, and unproven [AETP] engine as a replacement for the existing” one.

The Air Force has not announced its engine modernization plans, as officials are continuing to await the results of analyses to help determine their path forward. The F-35 Joint Program Office is poised to wrap up its business case assessment, which will review proposed engine and power and thermal management system solutions, and brief the Joint Executive Steering Board on the results in September.

Meanwhile, the Air Force is doing its own operational analysis of its engine modernization options, including a look at the costs and affordability of leveraging an adaptive engine for the F-35A, officials noted in past testimony submitted to Congress.

Kendall during a hearing before the House Armed Services Committee in April pushed back on concerns the service was looking to fund a second F-35 engine through the program, saying the effort was “a completely new and much-improved F-35 engine, potentially.” In that same hearing, he said AETP has more than $6 billion in costs tied with development and the transition into production -- a figure legislators cited in their letter.

The document also stressed the potential lack of a shared engine solution, maintenance and supply pipeline that would come if the Air Force were to go it alone with a replacement option, as well as the challenges of retrofitting an AETP onto an F-35B variant. GE has previously said it has a “compelling offering for the F-35C" carrier variant, and DOD is currently assessing the “tri-variant viability” of adaptive engines for the fleet.

"The cornerstone of the JSF program has been, and remains, commonality,” lawmakers wrote. “To enable global common maintenance, training, and supply chains, the JSF program relies on a common airframe platform featuring different variants capable of a service’s unique mission and powered by a common engine across our Military Services and international partners. This commonality would optimize joint operational effectiveness while creating economies of scale to control sustainment costs.”

In addition, the letter raised concerns about the possible risk to pilot safety if an engine replacement is pursued, as well as “how a major change to the F-35 program, such as a replacement engine, will impact the industrial base.”

Led by Rep. John Larson (D-CT), the letter asks William LaPlante, the under secretary of defense for acquisition and sustainment, about the timeline for requirements surrounding propulsion modernization, and whether DOD plans “to conduct an independent comparative analysis and cost assessment of the F135 engine modernization options” or review the potential impacts on the industrial base. Pratt’s headquarters is in East Hartford, CT.

By John Liang
July 25, 2022 at 2:06 PM

This Monday INSIDER Daily Digest has news from head of the Air Force's 16th Air Force, missile defense and more.

Lt. Gen. Kevin Kennedy, the new head of the 16th Air Force, spoke to the media recently:

New 16th Air Force commander sees collaboration as key in fight against cyberattacks

The new commander of the 16th Air Force, Lt. Gen. Kevin Kennedy, said collaboration and partnerships across the service, joint forces and with industry will be key focuses of his tenure.

The Senate Armed Services Committee, in its mark of the fiscal year 2023 defense policy bill, recommends a provision that could inform deliberations about whether to triple the size of the Next Generation Interceptor acquisition:

Draft legislation would require funding plan for 64 Next Generation Interceptor fleet

The Pentagon would be required to draft a plan to pay for a fleet-wide replacement of the homeland defense ballistic missile inventory, according to legislation proposed by a Senate panel that would identify the price tag associated with expanding the program of record for the Next Generation Interceptor beyond 20 guided missiles to a total of 64.

More missile defense news from the defense policy bill:

Senate authorizers add funds to accelerate GPI, countermand USD research and engineering

Senate lawmakers are proposing a dramatic increase in spending for the Glide Phase Interceptor in fiscal year 2023 -- a nearly $300 million boost the Pentagon's top technology shop last fall determined would not necessarily accelerate plans for fielding a hypersonic defense.

In Southern California, U.S. and Australian navies are working together to deploy unmanned underwater vehicles from an amphibious ship during the 2022 Rim of the Pacific exercise:

U.S., allied nations deploying UUVs from amphib during RIMPAC

Partner nations of the United States are putting unmanned underwater vehicles to the test in the world's largest maritime exercise this summer.

Our colleagues at Inside Cybersecurity have details on the Pentagon's Cybersecurity Maturity Model Certification program in the Senate version of the fiscal year 2023 defense policy bill:

Senate defense policy bill directs GAO to produce report on CMMC reciprocity

Senate Armed Services Committee leadership is asking the Government Accountability Office to "conduct an assessment on the incorporation of reciprocity" into the Pentagon's Cybersecurity Maturity Model Certification program, in the chamber's latest version of the fiscal year 2023 defense authorization bill.

By Evan Ochsner
July 25, 2022 at 1:56 PM

The Army has agreed to collaborate with the Netherlands on developing the next generation of rotorcraft, the nations announced July 21.

The agreement, signed by Army acquisition executive Doug Bush and a Dutch military official, is intended to promote opportunities to ensure interoperability and information sharing on rotorcraft, including Future Vertical Lift, according to the Army announcement.

“Technological cooperation through arrangements like this improves our ability to collectively modernize and increase interoperability, ensuring we can train and fight alongside our allies and partners more effectively and efficiently,” Bush said in the announcement.

According to the announcement of the Future Rotorcraft Concept Analysis Project Arrangement the nations intend to develop “plans for cooperation in future phases” of the FVL project.

The announcement says both countries will bring to the table new concepts for coalition air power, but it specifically says the nations will “assess collaboration opportunities” in the full suite of FVL activities. That includes the Future Long-Range Assault Aircraft, Future Attack Reconnaissance Aircraft and Air Launched Effects, among others, according to the announcement.

The agreement leaves open the possibility for collaborating on research, development, test and evaluation efforts and calls for collaboration on Army aviation modernization priorities. The Dutch military previously agreed to deals with the U.S. to upgrade its fleet of AH-64 Apaches and fly the upgraded CH-47F variant of the Chinook.

Last week’s agreement is similar to an interoperability pact the Army agreed to with the United Kingdom earlier this year. That agreement called on the U.S. and U.K. to share information about their future rotorcraft programs and enable integration between the two armed forces.

Industry analysts have said they anticipate FLRAA will have strong demand overseas. The Army says that aircraft will replace the UH-60 Black Hawk, which is flown by 28 countries outside the U.S.

By Briana Reilly
July 25, 2022 at 12:24 PM

The Defense Advanced Research Projects Agency is looking to kick-start a program to generate enhanced imaging capabilities that could scan entire buildings from the outside or map underground tunnels beneath Earth’s surface.

The examples were included in a recent agency press release announcing a forthcoming proposers day, intended to get officials from academia, government and industry familiar with the Muons for Science and Security effort, called MuS2.

The program aims to develop a new source of muons -- subatomic particles similar to electrons that “can travel easily through dozens to hundreds of meters of water, solid rock, or soil” at high energy, according to DARPA’s release. Officials hope to see between 1 million and 100 million muons created through the undertaking, a notice posted to SAM.gov late last week shows.

“MuS2 will lay the groundwork needed to examine the feasibility of developing compact and transportable muon sources,” Mark Wrobel, MuS2 program manager in DARPA’s Defense Sciences Office, said in the release.

Only two main avenues for producing or harnessing muons currently exist, according to DARPA, and adding to those options is challenging because of the need for a high-energy, giga-electronvolt (GeV) particle source.

Given those requirements, large physics research facilities are the primary source of terrestrially developed muons, per the release.

“Our goal is to develop a new, terrestrial muon source that doesn’t require large accelerators and allows us to create directional beams of muons at relevant energies, from 10s to 100s of GeVs -- to either image or characterize materials,” Wrobel added.

The proposers day, slated for Aug. 5, would follow the release of an anticipated broad agency announcement, according to the SAM.gov notice. Registration will close July 29 or when all the available slots are filled.

The SAM.gov notice indicated that a BAA could be released as soon as this month. As the four-year program progresses, officials anticipate it’ll be divided into two equal phases: one focused on experimentation, modeling and scaling studies in support of the production of 10 GeV muons; and a second focused on scalable accelerator design generation for at least 100 GeV, the release states.

By Tony Bertuca
July 25, 2022 at 5:00 AM

Nominees for several senior defense positions are slated to testify on Capitol Hill this week, while think tankers ponder the Pentagon's Nuclear Posture Review.

Tuesday

The Atlantic Council hosts a discussion with former Defense Secretary Mark Esper.

The Center for Strategic and International Studies holds its annual South China Seas Conference.

Wednesday

The National Defense Industrial Association holds its 2022 CBRN Defense Conference and Exhibition, which runs through Thursday.

Thursday

The Senate Armed Services Committee will hold a hearing to consider nominees for several senior Pentagon positions.

Friday

CSIS hosts a discussion on the Pentagon’s Nuclear Posture Review.