The Insider

By Justin Doubleday
March 14, 2019 at 1:43 PM

Top Defense Department leadership criticized Google today for an "unwillingness" to work with the U.S. military while still pursuing work in China that they say benefits the Chinese military.

During a Senate Armed Services Committee hearing on DOD’s budget posture, Acting Defense Secretary Pat Shanahan was asked about one line in his written testimony regarding how "some U.S. companies" have voiced ethical concerns about working with DOD while still working in China.

"I think we're talking about Google and their support to China and their lack of support for the Department of Defense," Shanahan said.

After thousands of employees protested the company working with DOD on Project Maven last year, Google decided not to renew its contract on the artificial intelligence program, which is aimed at helping the military identify objects and potential targets from unmanned aerial system ISR video and images.

Google subsequently released a set of AI principles, including pledges to not pursue work on AI applications in areas of technology "that cause or are likely to cause harm," including weapons and enabling warfighting systems, surveillance technologies that violate "widely accepted principles of international law and human rights."

"They've just said they're not going to do business with the Department of Defense on certain contracts," Shanahan said today.

Meanwhile, he and Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford said Google's ongoing work in China is benefitting the Chinese military.

"We watch with great concerns when industry partners work in China knowing that there is an indirect benefit," Dunford said. "Frankly, indirect may not be a full characterization of the way it really is. It's more of a direct benefit to the Chinese military."

Google has "effectively ended" a project to establish a Google search product in China, CEO Sundar Pichai told lawmakers earlier this year. The company had been criticized for designing the product to comply with Chinese Communist Party censorship rules.

But Google still has a presence in China, including the recent opening of a "Google AI Center" in Beijing.

Sen. Josh Hawley (R-MO) called Google's decision to not work fully with the U.S. military while still working in China "extraordinary."

Asked what DOD is doing to stay head of China in AI, Shanahan said the Pentagon's fiscal year 2020 budget request doubles the department’s investments in AI.

"We need to use the talent in this country," he continued. "The talent in this country needs to support our great power competition."

By Marjorie Censer
March 14, 2019 at 1:21 PM

Lockheed Martin said today it has named Roderick McLean vice president and general manager for the company's air mobility and maritime missions organization and Bridget Lauderdale vice president and general manager for the integrated fighter group organization.

Both appointments are effective April 15.

McLean succeeds George Shultz, who will retire later this year, Lockheed said. Lauderdale succeeds McLean.

In his new role, "McLean will be responsible for the C-130, LM-100J, C-5 and P-3 programs," the company said. "He will also serve as the leader for the Marietta, Georgia, facility, and oversee sub-assembly sites in Clarksburg, West Virginia, and Meridian, Mississippi."

He has worked for Lockheed for 25 years. Before leading the integrated fighter group, he was deputy of that organization and deputy for the F-16 program.

Lauderdale, in her new position, "will be responsible for the development, manufacture and sustainment of the F-16 and F-22 programs," the company said.

She has spent 30 years at the contractor and most recently was vice president for F-35 global sustainment. Lauderdale has also served as senior vice president of corporate strategy and business development and vice president for aeronautics operations.

By Jason Sherman
March 14, 2019 at 12:44 PM

The Pentagon's top weapons developer is hosting a two-day event with industry to brief interested parties on U.S. military efforts to develop offensive and defensive hypersonic weapons and to hear from defense contractors on their ideas for a new class of ultrafast weapons that are poised to change the nature of modern combat.

On March 28 and March 29, Mike White, the Pentagon's assistant director for hypersonics in the office of the under secretary of defense for research and engineering, will oversee the gathering.

"On the first day, industry will hear from DOD on enablers, programs, and service and OUSD R&E portfolios," states a March 14 notice in Federal Business Opportunities. "The Government welcomes feedback during the day from industry participants. On the second day, industry will have an opportunity to meet one-on-one with team members and the [assistant director for hypersonics] on several key topics and share their most innovative ideas."

White, who assumed his current post after nearly four decades at John Hopkins University Applied Physics Laboratory where he focused on hypersonic technologies and missile defense, spoke to reporters earlier this week about the Pentagon's new strategy for hypersonic weapons development, including a new roadmap that accelerates development through 2024 backed by plans to spend $10.5 billion.

By Justin Katz
March 14, 2019 at 10:49 AM

Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said today he is "not happy" with the Defense Department's decision to not refuel the aircraft carrier Harry Truman (CVN-75).

"I still am not happy with the results of that and my mental numbers don't agree with that,” Inhofe told Acting Defense Secretary Pat Shanahan during a hearing about the department's fiscal year 2020 budget request.

Inhofe is one of several lawmakers directly involved with writing the annual defense policy bill who have publicly stated they disagree with DOD's decision.

Shanahan said the decision to not refuel the Truman was "difficult" and was made in concert with the Navy's dual buy of the third and fourth Gerald Ford-class aircraft carriers. He defended the decision and said it represents a strategic choice made in the FY-20 budget.

"Our lethality of our carriers and capability increases with the new carriers," Shanahan said. "Until mid-20s, we maintain the level of 11 carriers. The third [reason] is . . . to maintain employment. In fact, with this decision we grow employment in the industrial base."

At that point in the hearing, Inhofe interjected and voiced his displeasure.

Shanahan's comments contradict remarks made by Chief of Naval Operations Adm. John Richardson yesterday at an industry gathering in Washington.

"I don't think they are connected," Richardson told reporters after Inside Defense asked about media reports speculating the dual-ship buy and the Truman decision were related.

The admiral said the dual-ship buy was a "statement about the aircraft carrier moving forward." However, the decision on the Truman's refueling is "connected to balancing capabilities between 25 years of the Nimitz-class aircraft carrier against the requirements."

"I don't see them as being tightly coupled," he said.

By Tony Bertuca
March 14, 2019 at 9:44 AM

Acting Defense Secretary Pat Shanahan today said the Pentagon needs a $718 billion budget in fiscal year 2020, partly to address new military investments being made by China.

"China's defense spending approaches that of the United States, when we take into account purchasing power and the portion of our budget going to military pay and benefits," he told the Senate Armed Services Committee in prepared testimony. "That, coupled with China's organized approach to steal foreign technology, has allowed China to modernize its missile, space, and cyber capabilities, as well as project power far beyond its borders."

Watch Inside Defense for further coverage.

By John Liang
March 14, 2019 at 9:42 AM

Here are the top four stories from this week's issue of Inside the Pentagon:

1. The Pentagon will name Fred Kennedy the director of the Space Development Agency, according to a March 12 memo from acting Defense Secretary Patrick Shanahan.

Full story: New memo names DARPA's Fred Kennedy as SDA director, outlines agency mission

2. Acting Defense Secretary Pat Shanahan is angling to become permanent Pentagon chief, with his closest supporters highlighting his role in key areas, like navigating internal politics to deliver a final Space Force proposal, helping to engineer billions in budget increases and working to pivot President Trump away from planned troop withdrawals in the Middle East that had initially alarmed military leaders.

Full story: Key policy moves put spotlight on Shanahan as potential SECDEF

3. The Pentagon wants to pour nearly $1 billion into artificial intelligence and machine learning efforts next year, including $268 million for the new Joint Artificial Intelligence Center to pursue AI tools that can be used across the department, as well as helping the military services fund their own developments.

Full story: Pentagon seeks nearly $1 billion for AI, machine learning

4. The Pentagon's fiscal year 2020 budget request includes a $9.2 billion "emergency fund" for military construction -- most of which is for a new wall on the southern border -- as well as funds to "backfill" projects being deferred to build the wall and funds for hurricane recovery.

Full story: DOD breaks down $9B 'emergency fund' that includes border wall

 

By Marjorie Censer
March 14, 2019 at 9:41 AM

FLIR Systems said this week it will open a new headquarters in Arlington, VA.

"Located in Pentagon Row at 1201 South Joyce Street in Arlington, the office will house 65 employees and serve as a conference center and gathering space to support the company’s largest customer, the United States Government, as well as investors and regulators located on the East Coast of the U.S.," FLIR said.

The 30,000-square-foot facility will be the home office for FLIR's government and defense business unit as well as for members of the senior executive team, including FLIR's chief executive and chief financial officer.

"FLIR employees currently located at the company’s Crystal City, Virginia facility will move to the new Arlington headquarters," the company said. "FLIR Systems remains incorporated in the state of Oregon and the company plans to begin a renovation project for its Wilsonville, Oregon headquarters in the second quarter of 2019."

FLIR last month said it has agreed to purchase Endeavor Robotics, the former iRobot defense business that was spun off in 2016.

By John Liang
March 13, 2019 at 2:41 PM

This Wednesday INSIDER Daily Digest has a scoop on who will run the nascent Space Development Agency, coverage of a Navy cyber review plus plenty of budget news.

Inside Defense's Courtney Albon has the scoop on who will be in charge of the Space Development Agency:

New memo names DARPA's Fred Kennedy as SDA director, outlines agency mission

The Pentagon will name Fred Kennedy the director of the Space Development Agency, according to a March 12 memo from Acting Defense Secretary Patrick Shanahan.

A group of subject-matter experts recently reviewed the Navy's cybersecurity posture:

Navy cyber review calls for service to create full-time chief information officer

The Navy should create a full-time chief information officer to dedicate proper resources to cybersecurity and act on department suggestions to improve the service’s cyber practices, according to a recent service review.

Check out this smorgasbord of defense budget news:

Smith backs $733 billion topline vs. Trump's $750 billion

House Armed Services Committee Chairman Adam Smith (D-WA) said today he favors a $733 billion topline for defense spending, less than the $750 billion requested by the White House this week.

DOD accelerates hypersonics development with $10.5B in FYDP

The Pentagon's fiscal year 2020 five-year spending plan includes $10.5 billion to accelerate development and prototyping of hypersonic capabilities, a "significant" increase over prior plans. The move reflects a new policy goal of establishing U.S. military battlefield dominance by 2028, achieved in part by fielding a family of land-, sea-, and air-launched hypersonic weapons.

Pentagon seeks nearly $1 billion for AI, machine learning

The Pentagon wants to pour nearly $1 billion into artificial intelligence and machine learning efforts next year, including $268 million for the new Joint Artificial Intelligence Center to pursue AI tools that can be used across the department, as well as helping the military services fund their own developments.

DOD breaks down $9B 'emergency fund' that includes border wall

The Pentagon's fiscal year 2020 budget request includes a $9.2 billion "emergency fund" for military construction -- most of which is for a new wall on the southern border -- as well as funds to "backfill" projects being deferred to build the wall and funds for hurricane recovery.

New DOD budget redistributes $7.7B through weapons divestment

The Pentagon's fiscal year 2020 budget request assumes the Defense Department will shift $7.7 billion saved through various reform efforts, including divesting legacy weapon systems, with the money going toward high-priority "lethality" investments.

MDA delays RKV, eyes 80s-era space-based laser in FY-20 request

In a major setback to Pentagon plans to accelerate development of a new ballistic missile defense interceptor to protect against North Korean and potential Iranian threats, the Missile Defense Agency is delaying development and fielding of the Redesigned Kill Vehicle by up to two years because the warhead blueprint is not ready for prototype manufacturing.

Air Force programs $400M in FYDP to buy light-attack aircraft

The Air Force's fiscal year 2020 future years defense program proposes about $400 million for light-attack aircraft procurement between FY-22 and FY-24, and the service plans to buy a small number of aircraft this year to continue its testing and experimentation plan.

Air Force F-35 buy sustained at 48 jets per year across the FYDP in FY-20 request

The Air Force's fiscal year 2020 budget proposes a flat F-35 procurement rate that would buy 48 jets per year across the future years defense program -- a reduction the service plans to offset by purchasing 80 Boeing-made F-15EX aircraft over that same period.

Navy requests $454M in FY-20 for shipyard optimization plan, $2.7B through FYDP

The Navy's new fiscal year 2020 budget request incorporates $454 million for improvements to the service's public shipyards, and $2.7 billion programmed throughout the future years defense program for those purposes, according to a top Navy budget official.

Navy official: Forthcoming FSA will 'validate' Nimitz-class carrier retirement

The Navy's new force-structure assessment, slated for release later this year, will "validate" the service's decision to retire a Nimitz-class nuclear-powered aircraft carrier early, according to the Navy's deputy assistant secretary for budget.

Army Futures Command's CFTs request R&D boost to $5.4B

The Army's cross-functional teams in charge of managing the service's modernization priorities under Futures Command would get a total of $5.4 billion in research, development, test and evaluation funding the service has requested for fiscal year 2020, with some programs gaining significant boosts over what the service projected last year.

Army's FY-20 budget request shows major R&D investments for modernization

The Army's $182.3 billion fiscal year 2020 budget request would advance key service priorities through new research and development projects, including funding for contract awards supporting the Next Generation Combat Vehicle program and completion of the initial design phase for a major helicopter replacement program.

By Tony Bertuca
March 13, 2019 at 1:54 PM

House Armed Services Committee Republicans have sent a "views and estimates" letter to the Democrat-led House Budget Committee backing the White House's request for a $750 billion defense budget, arguing it is in line with increases previously supported by former Defense Secretary Jim Mattis and Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford.

"Several times before our committee, Secretary Mattis and General Dunford testified that after Fiscal Year 2019, a minimum of 3 to 5 percent real growth in the defense budget would be required to continue to restore our readiness and to make progress in meeting the threats posed by near-peer competitors, such as Russia and China," the letter states. "Therefore, we support defense budgets that meet this minimum threshold."

Rep. Mac Thornberry (R-TX), the committee's ranking member, told reporters yesterday the president's $750 billion defense budget request for fiscal year 2020 is actually less than 3 percent in real growth, but is supported by every Republican on the committee.

"The topline is a good number," Thornberry said. "Let's get a negotiation going right now to last through the last two years of the Budget Control Act . . . and get it done so we can all move forward."

Meanwhile, the views and estimates letter argues there is a "direct correlation" between past aviation mishaps and "inadequate resourcing."

"The trend lines are clear: reduced funding for maintenance and training clearly impacts safety," the letter states.

Meanwhile, House Armed Services Committee Chairman Adam Smith (D-WA) said today he favors a $733 billion topline for defense spending.

"The House Budget Committee, the number that they've talked about for defense is $733 [billion]," he said. "It's [not an] insubstantial number."

The Pentagon had been planning on a $733 billion topline until December, when President Trump authorized $750 billion, which one senior administration official said came as a "pleasant surprise."

By Justin Doubleday
March 13, 2019 at 12:58 PM

The National Security Commission on Artificial Intelligence hosted its inaugural meeting earlier this week to receive briefings from the Defense Department, the Commerce Department, the intelligence community and members of Congress.

The commission met for the first time March 11 in Washington, according to a Pentagon press release.

"In close collaboration with the White House, interagency, and Congress, the commission intends to conduct plenary sessions with the commissioners throughout the year with subordinate working groups meeting more often," the release states.

The 15-member commission includes representatives from leading technology companies, as well current and former national security officials. The panel is co-chaired by former Google CEO Eric Schmidt and former Deputy Defense Secretary Bob Work.

By Tony Bertuca
March 13, 2019 at 12:25 PM

A Washington watchdog group has filed a complaint against Acting Defense Secretary Pat Shanahan, requesting the Defense Department's inspector general investigate allegations he has improperly favored his former employer Boeing in the awarding of defense contracts.

"According to news reports, during his tenure at the Department of Defense ('DOD') Acting Defense Secretary Patrick Shanahan has made numerous statements promoting his former employer Boeing and has disparaged the company's competitors before subordinates at the agency," according to a letter sent to the IG's office by the Citizens for Responsibility and Ethics in Washington, which "respectfully requests that the Office of Inspector General investigate these allegations to determine whether Acting Secretary Shanahan violated ethics rules, including the Standards of Ethical Conduct for Employees of the Executive Branch ('Standards of Conduct') and the Ethics Pledge he signed as a condition of his appointment."

Asked whether it would pursue an investigation into Shanahan, the IG's office did not immediately respond.

"Secretary Shanahan has at all times remained committed to complying [with] his Ethics Agreement, which screens Boeing matters to another DOD official and ensures no potential for a conflict of interest with Boeing on any matter,” Pentagon spokesman Lt. Col. Joe Buccino said in a statement. “Secretary Shanahan remains focused on increasing lethality across the military and aligning the Department along the National Defense Strategy.”

The CREW complaint, first reported by Military Times, cites various media reports about concerns over Shanahan's ties to Boeing.

The complaint, meanwhile, comes as President Trump considers whether he will nominate Shanahan as defense secretary.

"Mr. Shanahan reportedly praised Boeing in discussions about government contracts, said that Boeing would have done much better than its competitor Lockheed Martin had it been awarded a fighter jet contract, and repeatedly 'dumped on' the jet Lockheed produced," the complaint states. "News reports also asserted Mr. Shanahan prodded DOD to include funding for more Boeing-produced fighter jets in next year’s budget. His conduct and comments reportedly were perceived by DOD employees as 'boosting' Boeing."

The Pentagon has staunchly denied allegations Shanahan is unfairly biased toward Boeing and has said the decision to buy more Boeing F-15s over Lockheed-made F-35s in fiscal year 2020 was made by former Defense Secretary Jim Mattis and cost assessment and program evaluation officials.

Shanahan, meanwhile, is scheduled to testify before the Senate Armed Services Committee tomorrow on the fiscal year 2020 budget request.

By Tony Bertuca
March 12, 2019 at 3:37 PM

Acting Defense Secretary Pat Shanahan is angling to become permanent Pentagon chief, with his closest supporters highlighting his role in key areas, like navigating internal politics to deliver a final Space Force proposal, helping to engineer billions in budget increases and working to pivot President Trump away from planned troop withdrawals in the Middle East that had initially alarmed military leaders.

Several senior administration officials talked to Inside Defense about Shanahan's journey to a possible nomination as defense secretary.

Get the free story here.

By John Liang
March 12, 2019 at 1:47 PM

This Tuesday INSIDER Daily Digest has lots of news on the Pentagon's fiscal year 2020 budget request, plus a story on the possibility of acting Defense Secretary Pat Shanahan being nominated to become defense secretary.

Could the president nominate acting Defense Secretary Pat Shanahan to become the next defense secretary? Inside Defense's Tony Bertuca takes a deep dive into that question:

Key policy moves put spotlight on Shanahan as potential Pentagon chief

Acting Defense Secretary Pat Shanahan is angling to become permanent Pentagon chief, with his closest supporters highlighting his role in key areas, like navigating internal politics to deliver a final Space Force proposal, helping to engineer billions in budget increases and working to pivot President Trump away from planned troop withdrawals in the Middle East that had initially alarmed military leaders.

Here's our coverage so far of the Pentagon's fiscal year 2020 defense budget request:

DOD requests $247B mod budget with R&D boost, procurement cuts

The Pentagon is submitting a fiscal year 2020 budget requesting a $9 billion increase in research, development, test and evaluation dollars for new weapon systems, while procurement funding would decrease by $4.2 billion primarily because of planned cuts to the F-35 Joint Strike Fighter program, according to budget documents released today.

. . . and by service:

Navy:

Navy 2020 budget: $205.6B topline, 20-year high shipbuilding budget request

The Navy plans to request a $205.6 billion topline, including what is projected to be the largest requested shipbuilding budget in 20 years, according to fiscal year 2020 budget briefing slides obtained by Inside Defense.

Navy to retire Nimitz-class carrier Truman

The Navy plans to retire one of its Nimitz-class nuclear-powered aircraft carriers, according to the service's new $205.6 billion fiscal year 2020 budget request.

Air Force:

USAF's budget requests new F-15EX, boosts R&D, Space Force HQ

The Air Force's $165.5 billion fiscal year 2020 budget request -- a $10 billion increase over FY-19 -- would buy 48 F-35s, procure eight new F-15EX fighters, boost research and development efforts by more than $4 billion and fund the creation of a Space Force headquarters.

Army:

Army's FY-20 topline almost $183B; Pentagon adds $9B for construction

The Army is requesting about $183 billion in fiscal year 2020, and the Defense Department is adding to that request $9 billion in military construction funding that could potentially finance construction of a southern border wall, according to a service official.

The Pentagon and the services have released overviews of their FY-20 budget requests. Check them out here:

DOD's FY-20 budget books

On March 12, 2019 the Defense Department released its fiscal year 2020 procurement and research, development, test and evaluation, operations and maintenance, military personnel, procurement programs reserve components and military construction as well as the procurement acquisition cost by weapon system budget books.

Army's FY-20 budget overview

Air Force's FY-20 budget overview

Navy's FY-20 budget briefing slides, overview

MDA's FY-20 budget overview

By John Liang
March 12, 2019 at 1:01 PM

The Pentagon and the services have released overviews of their fiscal year 2020 budget requests.

Check them out here:

DOD's FY-20 budget books

On March 12, 2019 the Defense Department released its fiscal year 2020 procurement and research, development, test and evaluation, operations and maintenance, military personnel, procurement programs reserve components and military construction as well as the procurement acquisition cost by weapon system budget books.

Army's FY-20 budget overview

Air Force's FY-20 budget overview

Navy's FY-20 budget briefing slides, overview

MDA's FY-20 budget overview

By Marjorie Censer
March 12, 2019 at 10:33 AM

KeyW today reported sales in its most recent quarter reached $126.3 million, roughly flat from the same three-month period a year earlier.

The contractor reported a quarterly loss of $5.5 million, after recording $15.6 million in quarterly profit the prior year.

KeyW said its sales in 2018 totaled $506.8 million, up about 15 percent from 2017. The company reported a loss for the year of $22.3 million, more than the $13.4 million lost in 2017.

KeyW said its revenue growth was primarily attributable to business acquired through its purchase of Sotera Defense Solutions. The increased net loss was “attributable to a non-cash tax benefit recognized in the prior year associated with the revaluation of deferred tax assets and liabilities from the enactment of the Tax Cuts and Jobs Act as well as other one-time non-cash expenses recognized in the current year.”

In a call with analysts this morning, Bill Weber, KeyW's chief executive, said the company has exited its flight services work.

As a result, it will be able to “emphasize our core mission,” he said.