The Insider

By Justin Katz
February 26, 2020 at 10:01 AM

Defense Secretary Mark Esper today announced he's started a "war game and analysis process" to scrutinize the results of the Navy's force structure assessment.

Deputy Defense Secretary David Norquist will lead the evaluation, according to written testimony Esper submitted to the House Armed Services Committee. The defense secretary and Joint Chiefs of Staff Chairman Gen. Mark Milley are testifying to lawmakers today about the Pentagon's fiscal year 2021 budget request.

"One of my top priorities is ensuring that the department has a robust, data-driven review of the future integrated naval force," according to the testimony.

Norquist will "evaluate proposals from across the DOD, to possibly include experts from the Naval War College, Naval Postgraduate School, and Marine Corps University," Esper's testimony continued.

The Integrated Naval Force Structure Assessment, an overarching assessment of what ships should comprise the future fleet, has been a dominant topic of discussion for Navy leadership appearing in public for the past year.

The 2016 FSA provided the 355-ship figure the service has made a prominent part of its annual pitch to Congress for a larger shipbuilding budget. President Trump also campaigned in 2016 on a promise to build a larger Navy.

Acting Navy Secretary Thomas Modly wrote in a December memo he expected the INFSA "to be published no later than January 15, 2020."

In public appearances and media interviews following Jan. 15, Modly said that date was an "internal" deadline for when the service must report the assessment's results to him. He also said the service had always planned to present the FSA to the defense secretary prior to publishing the results.

Modly told Inside Defense in a January interview he hopes to discuss the FSA with lawmakers while testifying about the Navy's FY-21 budget request.

"You know, we've been doing the [FY]-21 [program objective memorandum] for the last year and we just started work on the [integrated naval force structure assessment] this past fall. So like I said, I really want the INFSA to inform [FY]-22 and beyond," he added.

By John Liang
February 25, 2020 at 1:22 PM

This Tuesday INSIDER Daily Digest has coverage of the Air Force's airborne refueling tanker funding, a recent Air Force 3DELRR radar industry day and more.

U.S. European Command chief Gen. Tod Wolters and U.S. Transportation Command chief Gen. Stephen Lyons testified before the Senate Armed Services Committee this morning on their organizations' fiscal year 2021 budget requests:

Senators press TRANSCOM chief on aerial refueling concerns

The head of U.S. Transportation Command said today the Air Force's budget request should be revised to allow for retention of aerial refueling aircraft slated for divestiture because of ongoing delays to the Boeing-made KC-46 tanker.

Document: Senate hearing on EUCOM, TRANSCOM

Approximately 30 companies attended a recent industry day to hear details on the Air Force's plan to quickly field Three-Dimensional Expeditionary Long-Range Radar initial production units to replace the legacy TPS-75 radar beginning in fiscal year 2022:

Air Force considering up to three 3DELRR OTA prototype awards this year

The Air Force could award up to three other transaction agreements this year as part of its new Three-Dimensional Expeditionary Long-Range Radar acquisition strategy, according to briefing slides from a recent industry day.

Defense Secretary Mark Esper signed off on five overarching principles to guide DOD's development and use of AI this week:

Pentagon to distill broad AI principles into guidance, including new contracting language

Pentagon officials concede the Defense Department's first-ever artificial intelligence principles are broad and somewhat vague, but say they are committed to the "hard work" of applying them into concrete actions, including through new contracting language and testing measures.

The Navy is working with industry to develop a design for the Large Displacement Unmanned Undersea Vehicle that will be competed for a production contract later this year:

Navy planning to buy two LDUUVs in FY-25 using other procurement funds

The Navy expects to purchase two large unmanned undersea vehicles in fiscal year 2025 using other procurement funding, according to the service's FY-21 budget request.

The House Armed Services strategic forces subcommittee is scheduled to host a hearing Thursday on "Strategic Forces Posture" with Vice Adm. Charles Richard, the head of U.S. Strategic Command, and other DOD officials:

Ahead of hearings, DOD officials claim 'sensible' approach to nuclear modernization

Pentagon officials are touting what they call the Trump administration's "sensible, reasonable and affordable" approach to nuclear modernization as the Defense Department prepares to potentially clash again with House Democrats over nuclear weapons plans.

By Marjorie Censer
February 25, 2020 at 11:08 AM

Kratos Defense & Security Solutions said this week sales in its most recent quarter totaled $185 million, up almost 13% from the same three-month period a year earlier.

Sales were boosted by the company's 2019 acquisition of Florida Turbine Technologies; Kratos said sales grew almost 4% when excluding the acquisition.

Kratos reported quarterly profit of $3 million, down 36% from the prior year.

The company reported 2019 sales of $717 million, up about 16% from 2018. Kratos said sales were up almost 8% when excluding the FTT acquisition.

In 2019, Kratos recorded profit of $12.5 million, up from a loss of $3.5 million in 2018.

By Sara Sirota
February 25, 2020 at 10:27 AM

Northrop Grumman has added Bechtel and Kratos to its team that will develop the military's next-generation intercontinental ballistic missile system -- the Ground Based Strategic Deterrent.

"As part of the Northrop Grumman GBSD nationwide team, Bechtel will provide launch system design, construction and integration, and Kratos will provide other vehicle transporters including the missile transporters and payload transporter," the company said in a statement today.

Northrop was the only bidder on the prime contract for GBSD's engineering and manufacturing development phase, making it the likely winner when the Air Force announces an award this summer.

In September, Northrop unveiled its initial team, which included Aerojet Rocketdyne, General Dynamics, Honeywell, Lockheed Martin and hundreds of other companies.

If it receives the prime contract, Northrop will have more than 10,000 people working on the GBSD program across the country, according to today's statement.

By Marjorie Censer
February 25, 2020 at 10:17 AM

BWX Technologies said today sales in its nuclear operations group, which includes its naval work, during the most recent quarter totaled $371 million, up 6% from the same three-month period a year earlier.

The growth, the company said, was driven by "higher long-lead material purchases."

Quarterly profit in the unit totaled nearly $72 million, down 21%.

For the year, the nuclear operations group's sales reached $1.4 billion, up 8% from 2018. The unit's 2019 profit hit $298 million, up 10% from 2018, "driven by the absence of missile tube charges and higher long-lead material purchases."

In a call with analysts this morning, Rex Geveden, BWXT's chief executive, said the company is making progress on missile tube repairs.

He said 80% of repair welds "are now complete or in process."

By John Liang
February 24, 2020 at 2:07 PM

This Monday INSIDER Daily Digest looks forward to senior Pentagon officials' testimony on Capitol Hill, new Air Force acquisition programs and more.

Defense Secretary Mark Esper and Chairman of the Joint Chiefs of Staff Gen. Mark Milley are scheduled to discuss DOD's fiscal year 2021 budget request before the House Armed Services Committee on Wednesday:

DOD leaders to defend budget before Congress this week

House lawmakers on Wednesday will hear from Defense Secretary Mark Esper and Chairman of the Joint Chiefs of Staff Gen. Mark Milley, who will attempt to justify their fiscal year 2021 budget request amid political opposition to the Pentagon's bankrolling of President Trump's border wall.

Meanwhile, the House Armed Services strategic forces subcommittee is scheduled to host a hearing Thursday on "Strategic Forces Posture" with Vice Adm. Charles Richard, the head of U.S. Strategic Command, and other DOD officials:

Ahead of hearings, DOD officials claim 'sensible' approach to nuclear modernization

Pentagon officials are touting what they call the Trump administration's "sensible, reasonable and affordable" approach to nuclear modernization as the Defense Department prepares to potentially clash again with House Democrats over nuclear weapons plans.

At a media roundtable late last week, Air Force acquisition chief Will Roper touted the new directions that the Advanced Battle Management System, Air Force Ventures and Agility Prime programs are taking the service in this year:

Roper touts new programs' potential to shake up defense industrial base

Air Force acquisition chief Will Roper is eyeing the service's new approach to shared network testing, commercial start-ups and even the flying car industry as potential game-changers to the Pentagon's traditional relationship with contractors and the global technology market.

The Army's fiscal year 2021 network modernization request is $2.2 billion -- $1.8 million in procurement funding and $394 million in research, test and evaluation funding, higher than the previous year's request:

Army wants to spend $3B on radios through FY-25, increase network spending

The Army is requesting a slight increase in tactical network modernization funding for fiscal year 2021 and is planning to spend more than $3 billion on radios in its future years defense program.

Last, but certainly not least, some cyber defense news from our colleagues at Inside Cybersecurity:

NIST releases final update to standards central to DOD cyber certification program

The National Institute of Standards and Technology has issued final revisions to its cybersecurity standards for protecting "controlled unclassified information" by defense and other federal contractors.

By Justin Doubleday
February 24, 2020 at 1:38 PM

The Pentagon today announced the adoption of ethical principles for artificial intelligence first recommended by technology advisers last fall.

Defense Secretary Mark Esper approved the principles recommended by the Defense Innovation Board. The board, which is largely comprised of private sector technology executives, spent more than a year gathering feedback from a wide range of industry, academia and the general public before settling on the recommendations in late October.

"The United States, together with our allies and partners, must accelerate the adoption of AI and lead in its national security applications to maintain our strategic position, prevail on future battlefields, and safeguard the rules-based international order," Esper said in a statement. "AI technology will change much about the battlefield of the future, but nothing will change America's steadfast commitment to responsible and lawful behavior. The adoption of AI ethical principles will enhance the department's commitment to upholding the highest ethical standards as outlined in the DOD AI Strategy, while embracing the U.S. military's strong history of applying rigorous testing and fielding standards for technology innovations."

The adoption of the principles come as the Pentagon has already invested heavily in AI developments over the past several years and is now asking Congress for a funding increase for AI in fiscal year 2021 as it prioritizes using AI technologies for "warfighting operations."

Defense Innovation Board Chairman Erich Schmidt, the former chief executive at Google who remains a technical adviser at parent company Alphabet, lauded the adoption of the principles in a quote included in DOD's announcement.

"Secretary Esper's leadership on AI and his decision to issue AI Principles for the department demonstrates not only to DOD, but to countries around the world, that the U.S. and DOD are committed to ethics, and will play a leadership role in ensuring democracies adopt emerging technology responsibly," Schmidt said.

The "focal point" for implementing the DOD principles will be the department's Joint Artificial Intelligence Center, according to today’s announcement. The JAIC is currently led by Lt. Gen. Jack Shanahan and reports to DOD Chief Information Officer Dana Deasy.

According to the announcement, the five overarching principles adopted by the Pentagon are:

  • "Responsible. DOD personnel will exercise appropriate levels of judgment and care, while remaining responsible for the development, deployment, and use of AI capabilities."
  • "Equitable. The department will take deliberate steps to minimize unintended bias in AI capabilities."
  • "Traceable. The Department's AI capabilities will be developed and deployed such that relevant personnel possess an appropriate understanding of the technology, development processes, and operational methods applicable to AI capabilities, including with transparent and auditable methodologies, data sources, and design procedure and documentation."
  • "Reliable. The Department's AI capabilities will have explicit, well-defined uses, and the safety, security, and effectiveness of such capabilities will be subject to testing and assurance within those defined uses across their entire life-cycles."
  • "Governable. The Department will design and engineer AI capabilities to fulfill their intended functions while possessing the ability to detect and avoid unintended consequences, and the ability to disengage or deactivate deployed systems that demonstrate unintended behavior."
By Justin Katz
February 24, 2020 at 12:00 PM

The Defense Advanced Research Projects Agency last week awarded Lockheed Martin a $12 million contract to begin developing a new class of unmanned undersea vehicles for the first phase of a program dubbed Manta Ray.

The program's goal, according to a DARPA solicitation published last year, is to develop technologies that enable UUVs to operate for longer durations and independent from other manned ships.

"Today's payload capable UUV operations are generally limited to shorter duration missions due to propeller-driven propulsion powering requirements and a fixed battery capacity," the June 2019 broad agency announcement said.

"Energy capacity limitations typically couple existing UUVs to manned host platforms, larger UUVs, or ports for periodic recharging," the document continued.

The exception to that limitation is to use a "sea glider design," which is traditionally employed for scientific data collection. However, according to the BAA, current iterations of those designs are not able to use naval payloads operational commanders would need.

DARPA, in the June BAA, anticipated multiple awards for the program's first phase of contracts. However, the contract announcement last week only included Lockheed Martin.

The fiscal year 2021 budget request includes $22 million for the Manta Ray program, and shows the DARPA received $11 million for work in FY-20.

"The FY 2021 increase reflects transition from initial concept development to systems development," according to the budget justification documents. "The anticipated transition partner is the Navy."

By Tony Bertuca
February 24, 2020 at 5:00 AM

Defense Secretary Mark Esper and Chairman of the Joint Chiefs of Staff Gen. Mark Milley are slated to appear before Congress to justify the fiscal year 2021 budget request.

Monday

Kratos Defense & Security Solutions executives are set to discuss quarterly earnings.

Tuesday

The Senate Armed Services Committee holds a hearing with the chiefs of U.S. European Command and U.S. Transportation Command.

BWX Technologies executives are slated to discuss quarterly earnings.

Wednesday

The House Armed Services Committee holds a hearing on the FY-21 defense budget request with Esper and Milley.

Thursday

The House Armed Services Committee holds a hearing on the Navy’s budget request.

The House Armed Services strategic forces subcommittee holds a hearing with senior defense officials.

The House Armed Services seapower and projection forces subcommittee holds a hearing on Air Force aviation programs.

Friday

The Brookings Institute hosts a discussion with acting Navy Secretary Thomas Modly on competing with China and Russia.

By Jason Sherman
February 21, 2020 at 3:55 PM

The Defense Department's top brass have identified a collective $18 billion in "priority" projects not funded in the Trump administration's $705 billion fiscal year 2021 budget request, a set of wish lists prepared at Congress' direction nearly each year since the mid-1990s that circumvent the Pentagon's budget formulation process.

Inside Defense obtained lists prepared by all the service chiefs and select combatant commanders. The Army and the Navy proffered lists with the largest price tags, $7.2 billion and $5.4 billion, respectively.

The Air Force's list weighs in at $3.2 billion and the fledgling Space Force identified $1 billion in unfunded requirements.

The Marine Corps' list is $770 million.

The Missile Defense Agency provided Congress a $1.1 billion wish list.

U.S. Central Command tallied a $370 million wish list, U.S. Northern Command identified $180 million in projects it could use more money for, and U.S. Cyber Command sent a letter saying it could use another $106 million. U.S. Transportation Command pointed to areas of the defense budget it would prefer Congress add money to support its mission rather than directly identifying how it could execute funds.

By Justin Katz
February 21, 2020 at 2:51 PM

The Pentagon is soliciting industry and academia for surveillance technology that will enable high-speed watercraft to detect and avoid obstacles at or near the water's surface, according to a notice published today by the Defense Department.

In conjunction with the Army and the assistant secretary of defense for research and engineering, the Navy is interested in conducting capability demonstrations through the Stiletto Maritime Demonstration Program.

"The objective of this CD is to evaluate mounted surveillance systems and their ability to detect objects fully and partially submerged to include mines, debris . . . and moving objects ranging in size, at high speeds in shallow waters, and provide near-real time data," according to the notice.

The demonstrations are scheduled to take place between July 27 and Aug. 7 in and around the Chesapeake Bay.

Technology demos will be conducted through the program’s "high speed Stiletto craft" which has a "Command Information Center, Launch and Recovery for an 11M Rigid Inflatable Boat, arch space for sensors, flight deck for Unmanned Aerial Vehicle L&R, and electronic network infrastructure with wide band SATCOM," the solicitation says.

The Naval Surface Warfare Center, Carderock division will manage the program. The assistant secretary of defense for research and engineering's Rapid Reaction Technology Office is the demonstration's sponsor.

By Ashley Tressel
February 21, 2020 at 2:20 PM

The Army wants to start a "research, development, test and evaluation appropriation pilot program" in fiscal year 2021 for select Defensive Cyber Operations programs to support network modernization.

The service's FY-21 request includes $46.4 million in RDT&E funding to develop defensive cyber software prototypes, $16.6 million of which was realigned from the Defensive Cyber Operations procurement program.

The Army estimates the program will cost a total of $469.8 million.

DCO "consists of platform and software programs which are key elements of the DCO Maneuver Baseline infrastructure, platform, and tools," according to the budget justification documents. "The employment of defensive capabilities creates specific effects in cyberspace through actions that allow commanders to achieve the following objectives: deter, destroy, and defeat enemy offensive cyberspace operations; gain time; economy of force; control key terrain; protect tasked critical assets and infrastructure; and develop intelligence."

The RDT&E pilot program also includes funding for Tactical DCO Infrastructure, a software capability for cyber network defenders and cyber protection teams, and "rapid cyber prototyping" for Army Cyber Command, which provides "software-based capabilities that can quickly respond to emerging cyber threats and keep up with threat technology."

The Army's request says the DCO funding supports the network cross-functional team's "unified network" line of effort.

By John Liang
February 21, 2020 at 2:10 PM

Our coverage of the unfunded priorities lists from the services, Missile Defense Agency and combatant commands leads off this Friday INSIDER Daily Digest.

We start off with the Pentagon's various fiscal year 2021 unfunded priorities lists:

Army unfunded priorities list tops $7 billion

The Army is asking Congress for $7 billion in its fiscal year 2021 unfunded priorities list, including $985.4 million for the service’s modernization priorities.

Navy FY-21 unfunded priorities list totals $5.4 billion, includes Virginia-class sub

The Navy's annual wish list for fiscal year 2021 is $5.4 billion and features one Virginia-class submarine.

Marine Corps FY-21 unfunded priorities total $769.8 million

The Marine Corps' wish list for fiscal year 2021 comes to $769.8 million, which includes a ground-based anti-ship missile the service hopes to purchase.

Air Force, Space Force unfunded priorities total $4.2B

The Air Force this week sent Congress a $4.2 billion fiscal year 2021 unfunded priorities list, which includes $1 billion for the Space Force, $1.1 billion to buy 12 F-35 Joint Strike Fighter aircraft and about $736 million for facility sustainment efforts.

MDA would use additional $1.1B for more SM-3 Block IIAs, THAAD, hypersonic defense

The Missile Defense Agency has provided Congress a $1.1 billion wish list to finance nine projects above and beyond the agency's $9.2 billion fiscal year 2021 budget request, additional undertakings that -- if funded -- would increase Standard Missile-3 Block IIA interceptor procurement, hypersonic defense funding and buy an additional Terminal High Altitude Area Defense battery.

NORTHCOM lists unfunded needs for Arctic communications, counter-drone

The chief of U.S. Northern Command has submitted a list of unfunded priorities to Congress seeking additional funds for Arctic communications and radar to counter cruise missiles and drones, according to documents obtained by Inside Defense.

CENTCOM says it could use MQ-9 drones that were cut for Trump's wall

U.S. Central Command is asking Congress for $371 million for "unfunded priorities," most of which would go to purchase MQ-9 unmanned aerial vehicles, which were recently cut to pay for President Trump's wall on the U.S.-Mexico border, according to documents obtained by Inside Defense.

Cyber Command seeks additional $106M for three unfunded priorities

U.S. Cyber Command is requesting an extra $106 million in fiscal year 2021 for three programs: "hunt forward" capabilities, access operations and Defense Department information network security.

TRANSCOM sees unfunded gaps in aerial refueling, military sealift

U.S. Transportation Command says its top unfunded priority is aerial refueling and recommends Congress provide additional funds beyond its regular budget request for the KC-135 and KC-10 aircraft, according to documents obtained by Inside Defense.

Some cyber defense news:

DOD looks to 'zero trust' as cloud security concerns persist

The Defense Department's cloud computing applications face approximately 10,000 "serious cyberattacks" on a weekly basis, according to a DOD official, who said the department needs the commercial sector's help in shifting to a better cloud security model.

Pentagon budget includes industry-based 'pathfinders' to guide cyber certification program

The Defense Department's fiscal year 2021 budget request includes nearly $13 million for developing its landmark cybersecurity certification program, with an emphasis on "pathfinders" selected from the defense industrial base to guide requirements and services for countering cyber threats.

One of the proposed aircraft in the running to become the Army's next-generation helicopter was flown publicly for the first time this week:

Sikorsky, Boeing fly SB-1 Defiant in first public demo

West Palm Beach, FL -- Boeing and Sikorsky today flew their proposal for the Army's Future Long Range Assault Aircraft program, the SB-1 Defiant, for the first time publicly.

The Maritime Administration will be publishing a new strategy soon:

Buzby: National maritime strategy to be published soon

Mark Buzby, the Maritime Administration chief, said today his agency would soon publish a national maritime strategy.

By Justin Katz
February 21, 2020 at 12:14 PM

The Navy said yesterday it completed the first installation of a laser weapon system designed to counter unmanned surveillance drones onboard a destroyer.

The service has spent the past several years experimenting with a variety of directed energy weapons, but the Arleigh Burke-class destroyer Dewey (DDG-105) was equipped with an Optical Dazzling Interdictor during a recent dry-docking selected restricted availability, according to the Navy statement.

The installation on the Dewey is the first of at least eight planned installations, according to the service's fiscal year 2021 budget justification documents.

"Going from an approved idea to installation in two and a half years, ODIN's install on Dewey will be the first operational employment of the stand-alone system that functions as a dazzler," according to the Navy statement.

The service's FY-21 budget request includes $34 million for ODIN and will be used to continue procuring and installing several units throughout the fleet.

ODIN's installation on Dewey will also inform the Navy's efforts for the Surface Navy Laser Weapon System, another directed energy weapon system that the service plans to install onboard destroyers.

By Marjorie Censer
February 20, 2020 at 2:11 PM

Aerojet Rocketdyne said this week sales in its most recent quarter reached $523 million, up 19% from the same three-month period a year earlier.

The company attributed the boost to growth in the Patriot Advanced Capability-3, Guided Multiple Launch Rocket System and hypersonic booster programs as well as an increase in space programs.

Aerojet Rocketdyne reported quarterly profit of $25 million, up almost 8% from the prior year.

The company said 2019 sales were just shy of $2 billion, up close to 5% from 2018. Aerojet Rocketdyne's 2019 profit hit $141 million, up about 3% from 2018.

Aerojet Rocketdyne said its annual profit benefited from a one-time gain of $43 million related to "reaching a determination with the U.S. government that certain environmental expenditures are reimbursable."