The Insider

July 16, 2018 at 5:13 AM | Courtney Albon

Lockheed Martin and the F-35 joint program office have reached a handshake agreement on low-rate initial production Lot 11.

The JPO and Lockheed are in “the final stages” of negotiating the deal, program office spokesman Joe DellaVedova said in a July 15 statement. The contract will include 141 jets for the United States and its program partners and is expected to bring the program closer to its goal of reducing the F-35A unit cost to $80 million by 2020.

Reuters reported the unit cost dropped to $89 million in the Lot 11 deal, but neither the JPO nor Lockheed would confirm that figure.

“The total award value and per-variant unit prices for the contract will be released when the contract is finalized,” the company said in a July 15 statement.

The unit cost for an F-35A in LRIP Lot 10, awarded in February 2017, was $94.6 million.

July 16, 2018 at 5:00 AM | John Liang

Some must-reads from this week's edition of Inside the Army: 

1. The joint force is looking for institutional and operational reform in a new approach to information warfare, according to a draft joint concept obtained by Inside Defense.

Full story: Draft joint concept rethinking approach to information warfare

2. Army Secretary Mark Esper says the service will take a more decentralized and commercial approach to its acquisition strategy for network modernization going forward, eyeing "compatible and scalable" systems.

Full story: Esper eyes 'decentralized' approach to network acquisition

3. "Burden sharing" will be a key theme at the upcoming NATO summit in Brussels this week, though President Trump will not explicitly threaten to withdraw American troops if European nations fail to pledge to increase military spending, according to senior U.S. officials who briefed reporters July 5.

Full story: New NATO readiness 'hubs' signal cooperation amid spending debate

4. The Army now plans to announce its decision on the location of Futures Command in the next few weeks, as its previous end-of-June deadline has passed.

Full story: Army Futures Command HQ decision expected mid-July

July 16, 2018 at 12:01 AM | Marjorie Censer

Sales within the global aerospace and defense sector grew 2.7 percent to reach $686 billion in 2017, according to a new report released by Deloitte Global.

The "results highlight that while revenue growth for the industry as a whole continues to accelerate, it lagged in comparison to an estimated 3.1 percent in global gross domestic product (GDP) growth," Deloitte said in a press release.

According to the report, the defense sector saw particularly significant increases. While the commercial aerospace sector saw 1.2 percent growth, the defense industry generated 3.9 percent growth, according to Deloitte.

In its announcement, Deloitte noted that U.S. aerospace and defense expansion outpaced that of European counterparts.

"Higher defense spending in both regions led to growth, however, Europe's commercial aerospace sector recorded modest growth in comparison to the U.S.’s slower acceleration," Deloitte said.

Additionally, it noted that operating margins reached 10.8 percent, up from 10.2 percent in 2016.

July 13, 2018 at 3:17 PM | Maximilian Kwiatkowski

Five firms are developing prototypes for the Army's Next Generation Squad Automatic Rifle, according to a notice published Thursday.

Textron systems, FN America, General Dynamics, Si Bauer and PCP Tactical will be developing a prototype to replace the M249 Squad Automatic Weapon currently used. FN was given two contracts, according to a notice posted on Federal Business Opportunities.

These other transaction agreements were awarded on June 25 with a 12-month time frame. The companies are to produce a working prototype weapon with 2,000 rounds of ammunition, spare parts, tools, attachments and an operation manual.

The notice stated that the weapon "will combine the firepower and range of a machine gun with the precision and ergonomics of a rifle, yielding capability improvements in accuracy, range, and lethality. The weapon will be lightweight and fire lightweight ammunition, improving soldier mobility, survivability, and firing accuracy. Soldiers will employ the NGSAR against close and extended range targets in all terrains and conditions."

The NGSAR is the first part of the Army's Next Generation Squad Assault Weapon project.

July 13, 2018 at 2:14 PM | John Liang

Army Futures Command, Navy SLEP costs, defense industry news and more highlight this Friday INSIDER Daily Digest.

We now know where the Army will be stationing its Futures Command headquarters:

Austin snags Futures Command HQ

The Army has chosen to station its new Futures Command headquarters in downtown Austin, TX, senior service leaders announced today.

A recent Congressional Research Service report has unearthed previously unreported costs of proposed Navy ship service life extensions:

NAVSEA analysis: Ship service life extensions could cost Navy $203B through FY-47

A Navy analysis completed last year and sent to Congress in June states the total cost of extending nearly a dozen ship classes between five and 15 years could incur an estimated bill of $203 billion through fiscal year 2047, according to a Congressional Research Service report.

Some big defense contractor news:

Northrop CEO to depart; Warden to take over

Wes Bush, Northrop Grumman's chief executive, will step down Jan. 1, the company announced this week.

More defense business news:

GAO denies GDMS' protest of Army intelligence processing system contract

The Government Accountability Office has denied General Dynamics Mission Systems' protest of the rejection of its proposal for the Army's Distributed Common Ground System Increment 1, Capability Drop 1.

The Joint Strike Fighter is being compared to the A-10 Warthog:

F-35 test team conducts series of A-10 comparison flights

The F-35 Joint Operational Test Team conducted an eight-day run of F-35 and A-10 comparison tests this week -- a much-anticipated, congressionally directed test event meant to highlight the strengths and weaknesses of each aircraft in various scenarios.

Keep an eye out for more DOD testing of hypersonics technologies:

Tech chief says DOD will increase hypersonics testing, aims to deliver capability in 'early '20s'

The Pentagon's chief technologist says the Defense Department will conduct more hypersonics weapons tests in the coming years compared to the past decade in order to deliver initial capabilities in the early 2020s.

Multidomain networking is an area of focus for the Defense Advanced Research Projects Agency:

Lockheed, DARPA complete flight demonstrations in multidomain networking program

A Defense Advanced Research Projects Agency effort aimed at achieving seamless multidomain operations demonstrated its capabilities in a series of flight tests with Lockheed Martin over the past year, the company said this week.

July 13, 2018 at 1:44 PM | Ashley Tressel

Maj. Gen. Paul Pardew, head of Army Contracting Command, received his second star July 11 at Army Materiel Command headquarters, Redstone Arsenal, AL.

Pardew previously led Expeditionary Contracting Command and the 414th Contracting Support Brigade. He also served as the director of the forward operational contract support integration cell for U.S. Central Command in Qatar.

July 13, 2018 at 11:25 AM | Marjorie Censer

Maxar Technologies said this week it has hired Biggs Porter to serve as chief financial officer, effective Aug. 15.

Porter served as CFO at Fluor from 2012 to 2017. He has also been an executive at Tenet Healthcare, Raytheon and Northrop Grumman.

July 13, 2018 at 10:18 AM | Justin Katz

The Naval Reactors program has selected Fluor Marine Propulsion to be the contractor for the Naval Nuclear Laboratory, according to a July 13 Navy statement.

Fluor Marine Propulsion, a subsidiary of Fluor Corp., won a full and open competition to replace incumbent Bechtel Marine Propulsion Corp., the statement said. The incumbent's contract expires on Sept. 30 and the government commenced a transition period yesterday.

The Navy awarded Fluor a $1.2 billion cost-plus-fixed fee contract worth up to $13 billion, according to a July 12 Defense Department statement. No completion date or other additional information is provided on Naval Nuclear Propulsion Program contracts, that statement added.

The cumulative value of new NNL contracts that Fluor may be awarded is $30 billion, according to a July 13 Naval Sea Systems Command.

Naval Reactors is a joint program between the Navy and Energy Department.

"The NNL comprises the DOE-owned locations and personnel responsible for developing advanced naval nuclear propulsion technology, providing technical support to ensure the safety and reliability of our nation's naval nuclear reactors, and training the sailors who operate those reactors in the U.S. Navy's submarines and aircraft carriers," the statement said.

July 13, 2018 at 9:28 AM | Justin Katz

The potential foreign military sale of an Oliver Hazard Perry-class frigate to Bahrain would have an $80 million price tag, according to a new Congressional Budget Office report.

The July 12 report, which was mandated by the International Security Assistance Act of 2018, states the government has authority for three years to sell the frigate Robert Bradley (FFG-49) to Bahrain.

"CBO estimates that Bahrain would purchase the frigate in 2019 and pay roughly $80 million," the report said. "About $10 million of that amount would be deposited in the treasury, and the remainder would be paid directly to a shipyard located in the United States for refurbishing the frigate."

July 13, 2018 at 5:00 AM | John Liang

Some must-reads from this week's issue of Inside the Air Force:

1. Air Force operators will now receive the first EC-37B Compass Call in 2023, not 2022 as the service expected earlier this year, a BAE Systems spokesman said this week.

Full story: First Compass Call delivery to warfighters pushed into 2023, BAE says

2. The Air Force has approved a new service cost position for the B-2 Defensive Management System Modernization effort, projecting a $300 million increase to the program's cost.

Full story: Air Force projects $300M cost growth after B-2 DMS-M design change

3. Some Air Force units are latching onto an experiment run by Air Education and Training Command aimed at tailoring and accelerating the pilot-education process, as squadrons start to adapt the software and hardware to their own needs.

Full story: Hardware investments, more experiments stem from 'Pilot Training Next'

4. The Air Force Association's Mitchell Institute this week proposed the service consider pulling Lockheed Martin F-16 jets from the boneyard to repurpose them as autonomous aircraft that can fight in tandem with other platforms like the B-21 and F-35, arguing fleets of autonomous aircraft are a cost-effective way to bolster combat capacity.

Full story: Mitchell Institute suggests using old F-16s as autonomous teammates

July 12, 2018 at 3:01 PM | Tony Bertuca

The Senate confirmed Paul Ney today as the Defense Department's next general counsel by a 70-23 vote, making him the first Trump administration official to serve in the post.

President Trump nominated Ney in January.

Ney most recently served as chief deputy attorney general in the Tennessee attorney general's office. He previously worked as acting general counsel of the Navy, as principal deputy general counsel of the Navy and as deputy general counsel for legal counsel at the Pentagon.

July 12, 2018 at 2:28 PM | Maximilian Kwiatkowski

Army Contracting Command-Redstone has proposed an acquisition of potentially hundreds of UH/HH-60 Black Hawk helicopters.

On July 10, the Army posted a presolicitation notice for the procurement of up to 510 aircraft between 2022 and 2026.

That number is currently a maximum estimate, as the specific quantities needed are still unknown. The notice states 255 would be for the Army as the base need with an additional 255 for other Defense Department requirements, other government agency requirements and possibly foreign sales.

"ACC-R anticipates this acquisition will be sole sourced to Sikorsky Aircraft Corporation," the notice states.

While the Army has not requested approval from Congress for multiyear authority, it is potentially seeking a multiyear procurement contract, according to Paul Stevenson, a spokesman for the program executive office for aviation.

"The Army prefers multiyear procurements over single-year contracts because of the time and cost savings, program stability and quantity flexibility they provide compared to single-year contracts, but the determination as to whether this contract will be awarded as a multiyear or single-year contract will be made at a later date," he said.

A single-year contract may be an option as well, according to the notice.

The Army foresees release of a request for proposals sometime before the end of calendar year 2018.

July 12, 2018 at 2:19 PM | Maximilian Kwiatkowski

Cole Engineering Services has been awarded an other transaction agreement by the Army to produce an Air Defense Artillery Long-Term Evolution Orientation Device for use in Army training.

The $501,900 contract, which seeks "a device to support air defense simulated engagements during live force-on-force training exercises," was awarded June 27, according to a notice posted online.

"Many of the Air Defense Artillery (ADA) engagements (such as missiles) can be stimulated if both the target location and a reasonable weapon orientation at the time of engagement is known," the notice stated. "The LTE network will allow the integration of commercial items, such as devices that provide orientation. This project will develop (if possible and reasonable) a prototype providing a weapon orientation device that will communicate across the existing CTC LTE network. This device will enhance pilot, ADA and Suppression of Enemy Air Defense (SEAD) training at the CTCs."

OTAs are not subject to the Federal Acquisition Regulation. Their use was expanded by the Fiscal Year 2016 National Defense Authorization Act.

July 12, 2018 at 2:06 PM | John Liang

The Pentagon's plans for a clean audit, the Air Force's Compass Call aircraft replacement program and more highlight this Thursday INSIDER Daily Digest.

Senate lawmakers are asking: "Why has DOD, which routinely fields history's most technologically advanced weapons, been unable to develop or acquire modern financial IT systems?"

Senators want GAO to review Pentagon plans for a clean audit that could take 10 years

Senior members of the Senate Budget Committee, concerned it may take the Defense Department 10 years to achieve a clean financial audit, are asking the Government Accountability office to review the matter, with a special focus on whether DOD is acquiring the proper information technology systems to do the job.

The first EC-37B Compass Call aircraft will be delivered a year later than planned:

First Compass Call delivery to warfighters pushed into 2023, BAE says

Air Force operators will now receive the first EC-37B Compass Call in 2023, not 2022 as the service expected earlier this year, a BAE Systems spokesman said this week.

Kratos' chief executive tells Inside Defense the company expects its target drone business to grow significantly this year:

Focused on drone business, Kratos hires retired four-star, partners with another contractor

Kratos Defense & Security Solutions, readying to grow its tactical and target drone businesses, has opened a new facility, teamed with another contractor to bolster its capacity and hired a former four-star Air Force general as a consultant.

The Defense Innovation Board held a meeting this week at DIUx headquarters in Mountain View, CA:

Military's new AI center aims to accelerate fielding, attract 'world-class' talent

The U.S. military's Joint Artificial Intelligence Center will be crucial to scaling AI and machine learning across the department and into operations, as well as attracting talented engineers to work with the Defense Department, according to DOD officials.

The B-2 Defensive Management System Modernization effort is going to cost more than originally planned:

Air Force projects $300M cost growth after B-2 DMS-M design change

The Air Force has approved a new service cost position for the B-2 Defensive Management System Modernization effort, projecting a $300 million increase to the program's cost.

An Army program that picks up civilian-trained tech experts to join as officers to work on cybersecurity saw its first two recruits sworn in recently:

First direct-commissioned Army Cyber Command Officers graduate

The first two direct-commissioned officers for the Army's Cyber command have taken the oath of office at Ft. Benning, GA, and up to five more may be joining their ranks through the service's pilot program.

News on the status of the FY-19 defense authorization bill:

Defense authorizers aim for rapid completion of final bill, despite differences

The "Big Four" House and Senate defense authorizers agree that a conference committee should be able to finalize a compromise version of the fiscal year 2019 defense authorization bill by the end of this month, despite several differences between them.

Some of the concepts from "Pilot Training Next" are beginning to filter into pilot training and will be baked in over time:

Hardware investments, more experiments stem from 'Pilot Training Next'

Some Air Force units are latching onto an experiment run by Air Education and Training Command aimed at tailoring and accelerating the pilot-education process, as squadrons start to adapt the software and hardware to their own needs.

July 12, 2018 at 1:19 PM | Marjorie Censer

Accenture said today it has named George Batsakis to head Accenture Federal Services' defense and intelligence practice.

"Batsakis will be responsible for developing and delivering innovative solutions for the Department of Defense, the intelligence community, military health providers, the Department of Veterans Affairs and other U.S. federal clients," the company said.

He joins Accenture from CSRA, where he spent more than seven years, including serving as chief growth officer.

Batsakis previously led SRA's national security group and was an executive at Northrop Grumman. He began his career as an Army infantry officer, Accenture said.