The Insider

By Courtney Albon
November 15, 2018 at 3:30 PM

The Air Force expects it will take three to five years to repair damage to Tyndall Air Force Base, FL, caused by Hurricane Michael.

The storm, which hit the base in early October, caused damage to 95 percent of the base's buildings, Air Force Secretary Heather Wilson said at a Nov. 15 Defense One Summit. Wilson said the service is currently assessing which buildings to repair and which to destroy and rebuild.

A number of missions will return to the base over the next three months, including the Air Operations Center -- which should be operational by January 2019 -- and the simulator portion of the F-22 schoolhouse. Nearby Eglin Air Force Base, FL, will take Tyndall's F-22 flying training unit. Wilson noted that all F-22s that remained at the base to weather the storm have flown.

By Marjorie Censer
November 15, 2018 at 1:39 PM

Today's INSIDER Daily Digest includes news from the deputy defense secretary's meeting today with reporters and the latest on the Pentagon's new air-launched, anti-ship missile.

We begin with Deputy Defense Secretary Pat Shanahan's meeting with reporters today:

Shanahan says cost of Space Force could be in the 'single-digit' billions

Deputy Defense Secretary Pat Shanahan said today the Pentagon estimates the cost to establish a new and separate Space Force could be less than $5 billion, despite earlier predictions from the Air Force that it could cost $13 billion over five years.

Lockheed Martin's Long-Range Anti-Ship Missile is being considered for two Air Force bombers:

LRASM misses B-1 early capability goal as officials eye B-52 integration

The Defense Department's new air-launched, anti-ship missile failed to reach early operational capability on the Air Force's B-1 bomber in September as planned because of a “minor discrepancy” in the software, a Navy official tells Inside Defense.

Northrop Grumman plans to participate in the Lower Tier Air and Missile Defense Sensor program's demonstration next year -- even after it was not selected for the most recent set of contracts:

Northrop plans to participate in LTAMDS radar 'sense-off' after being dropped from program

Northrop Grumman, the U.S. radar-building powerhouse dropped last month by the Army from its Lower Tier Air and Missile Defense Sensor program, will jump back in the multibillion dollar competition to build a Patriot radar replacement by participating in a radar “sense-off” event next year, setting up at least a three-way contest next spring.

Last night, the Pentagon moved forward on the latest F-35 deal:

Pentagon sets $22.7 billion ceiling for 255 jets in F-35 Lot 12 UCA

The Pentagon today awarded Lockheed Martin a $22.7 billion undefinitized contract action for F-35 low-rate initial production Lot 12 -- a deal that secures early production work for 255 U.S. and international partner aircraft.

Meanwhile, Inside the Air Force recently interviewed Brig. Gen. Anthony Genatempo, the service's weapons program executive officer:

PEO Weapons: Flat FY-20 funding could bode well for steadier long-term production

Air Force weapons funding is expected to remain relatively flat in fiscal year 2020 -- and that's fine, according to the official who oversees the portfolio.

And finally, the Army has issued a new directive about its plans for an artificial intelligence task force:

Army standing up AI task force, but IOC is delayed

The Army is standing up an artificial intelligence task force in Pennsylvania under its new Futures Command to support the Defense Department's Joint Artificial Intelligence Center, according to a directive from the service secretary.

By Marjorie Censer
November 15, 2018 at 1:21 PM

Amazon's decision to locate part of its second headquarters in Northern Virginia “does put stress on the system,” the chief executive of Perspecta said last night.

Speaking to analysts, Mac Curtis acknowledged it could tighten the job market for the contractor. However, he said only one-quarter of the company's nearly 15,000 employees are based in the D.C. area.

He said much of that workforce has clearances and is driven by the company's mission -- but said the company is still thinking about how to hold onto its employees.

“We're looking at how you wrestle with that,” Curtis said. “It's probably the only time in my career I've said I'm glad I'm 30 miles outside of Crystal City, near Dulles, because commute does play a pretty big role in the work-life balance.”

Curtis also said the company remains bullish despite reports the Pentagon may need to come up with a $700 billion, rather than $733 billion, budget next year.

He said Perspecta doesn't expect a “peanut butter spread” approach to cuts.

“I think it's going to be really on specific systems,” Curtis told analysts. “We're in the right markets, we do the right functions in cyber and data analytics. A $700 billion budget is still a lot.”

Meanwhile, Perspecta reported yesterday sales in its most recent quarter reached nearly $1.1 billion, up 51 percent from the same three-month period a year earlier.

However, the contractor recorded quarterly profit of $24 million, down 40 percent from the prior year.

Perspecta said its defense and intelligence business recorded an 8 percent sales boost during the quarter.

“Major drivers of the year-over-year increase include continued growth in intelligence community support and background investigations,” the company said. “The increase also included $13 million resulting from the successful completion a large, classified, fixed priced contract earlier than originally anticipated.”

By Rachel Cohen
November 15, 2018 at 1:12 PM
Highlights from this week's Inside the Pentagon:
 
1. Senate Armed Services Committee Chairman Jim Inhofe (R-OK) this week said $733 billion should be the "floor, not a ceiling," for defense-wide spending in fiscal year 2020 -- even as the White House pursues a $33 billion topline cut.
 
2. An independent bipartisan commission found properly executing the Trump administration's National Defense Strategy is only possible if the military's base budget reaches between $691 billion and $746 billion by fiscal year 2023. Without higher funding, the report warns, the United States "might struggle to win, or perhaps lose, a war against China or Russia."
 
3. Rep. Adam Smith (D-WA), the likely next House Armed Services Committee chairman, suggested he can find common ground with defense hawks by spending more on conventional assets rather than nuclear modernization.
By Tony Bertuca
November 15, 2018 at 12:51 PM

(Editor's note: This story has been updated to include additional information on the nature of the audit.)

The Pentagon, as long expected, has failed its first-ever audit, according to Deputy Defense Secretary Pat Shanahan, who said the department is still making steady progress in business reforms.

“We failed the audit,” he told reporters at the Pentagon today. “We never thought we were going to pass an audit. Everyone was betting against us that we would even do the audit. . . . It was an audit on a $2.7 trillion organization. The fact we did the audit is substantial.”

Though Shanahan put it in stark terms, the audit process is more nuanced than simply “pass/fail.”

“We did not receive an 'adverse' finding -- the lowest possible category -- in any area,” DOD spokesman Lt. Col. Joe Buccino said. “We did receive findings of ‘disclaimer’ in multiple areas. Clearly more work lies ahead of us.”

Full results of the audit are expected to be released later today by the Defense Department's inspector general, but Shanahan previewed several details.

“We count ships right,” he said.

But “some of the compliance issues are irritating to me,” he continued. “The point of the audit is to drive better discipline. Some of those things frustrated me because we have a job to do. It's like inventory accuracy. When they did the Navy audit, they found that some of the buildings they said were on the books weren't on the books. Does that impact cost or anything? No, it doesn't, but we should have that higher level of discipline. We need to develop the plans to address the findings and actually put corrective action in place.”

Shanahan also said he is concerned about gaps in cybersecurity discovered by auditors. He said the audit is a valuable signal to American taxpayers the Defense Department is working

“Audits should be fundamental to any effective organization,” he said. “If I'm a taxpayer, what I want to see is . . . you did the audit. You have all these findings. How long is it going to take to fix those. Then show me next year it takes less to audit and you have fewer findings.”

By Marjorie Censer
November 15, 2018 at 11:49 AM

In a letter sent yesterday to three companies, Sen. Elizabeth Warren (D-MA) seeks information on the firms' consulting services contracts with Saudi Arabia as well as the role of past and present Trump administration officials in negotiating those deals.

The letter, first reported by Bloomberg, was sent to the chief executives of Booz Allen Hamilton, Boston Consulting Group and Deloitte.

Warren says the firms must “be transparent about their services to the Saudi government” in the wake of the alleged government-directed murder of U.S. resident Jamal Khashoggi.

She notes there are reports Booz Allen advises the Saudi army, while BCG won a contract to overhaul procurement systems for the country. Deloitte, Warren writes, appears to be participating in the Saudi government's Vision 2030 effort.

“The government of Saudi Arabia brutally silences critics, including Jamal Khashoggi, and continues to engage in a bombing campaign in Yemen that has killed thousands of civilians, brought millions to the brink of starvation, and sparked near-worldwide condemnation,” she continues. “Given the Kingdom's recent actions, your firms' continued business relationships with this government appear to be inconsistent not only with American values but with your stated principles.”

Warren asks the three companies to detail their consulting services contracts with the Saudi government and the payments they've received; to provide all reports produced under those contracts; to describe whether any past or present Trump administration officials were involved in those contracts; to explain whether they expect to continue working with the Saudi government; to detail how they decide which governments to accept as clients; and to explain company risk management processes.

She sets Nov. 30 as a deadline for responses.

A Booz Allen spokeswoman told Inside Defense the company has received the letter and is “reviewing it.” BCG and Deloitte did not immediately respond to requests for comment.

By Thomas Duffy
November 15, 2018 at 11:39 AM

The White House is resisting a Senate resolution that would oppose a planned $300 million foreign weapons sale to Bahrain.

Sen. Rand Paul (R-KY) is behind the resolution, arguing Bahrain is “a member of the Saudi-led coalition waging a devastating war in Yemen that has killed thousands of innocent civilians and left millions of Yemenis on the edge of famine.”

According to Paul's office, the Senate will vote on the resolution this afternoon.

In a statement of administration policy released this morning, The White House said this morning the sale involves 120 Guided Multiple Launch Rocket System pods and 110 Army Tactical Missile System pods.

“Apart from negatively impacting our bilateral relationship with the Kingdom of Bahrain, the joint resolution would hamper our ability to build and maintain security cooperation relationships, and sustain our pressure campaign against al Qaeda and ISIS. Bahrain also plays a critical role in countering and exposing harmful Iranian activities and proxies in the region,” the White House said.

Bahrain is home to U.S. Naval Forces Central Command, the U.S. Navy’s Fifth Fleet, forward-deployed U.S. Marine Central Command and the Combined Maritime Force.

By Maximilian Kwiatkowski
November 14, 2018 at 4:33 PM

The Army is seeking white papers from industry on current technologies and research as part of its upcoming Digital Soldier initiative industry day.

Digital Soldier, formerly known as the Asymmetric Vision/Decide Faster initiative, aims to procure new wearable or handheld systems from non-traditional contractors.

The meeting will be hosted at Ft. Belvoir, VA, on Jan. 16 and 17.

For this meeting, the service intends to focus on sensors, automatic target recognition, augmented reality, GPS-denied soldier positioning navigation and timing and autonomy for small unmanned aircraft systems, according to a Nov. 7 Federal Business opportunities notice.

The Army is mainly interested in sensors that are small, affordable, low-power and soldier-borne thermal/low light or those that track human performance.

The service is also looking at how it can apply UAS autonomy to “complex, congested/contested, communication degraded/denied environments while enabling the mounted and/or dismounted small unit to maintain situational awareness and understanding,” according to the notice.

One of the other goals of this meeting is to provide updates to both government and industry on what both have achieved since the previous Digital Soldier industry days in March.

The deadline for vendors to submit white papers is Dec. 12.

By Marjorie Censer
November 14, 2018 at 2:37 PM

Today's INSIDER Daily Digest has the latest on the Pentagon's use of lowest priced, technically acceptable contracting, a new deal between DOD and DHS, a possible congressional deal on defense spending, and a new report on the National Defense Strategy.

In a new Government Accountability Office report, the Defense Department said it's addressing how LPTA contracts should be used:

Pentagon revising LPTA guidance

The Pentagon is revising its guidance to program managers on the use of lowest priced, technically acceptable contracts, according to information it provided to the Government Accountability Office.

A top Pentagon cyber official spoke yesterday about a new yet-to-be-released memorandum of understanding with the Department of Homeland Security:

Senior DOD cyber official says new agreement with DHS includes incident-response planning

The Defense Department's leading cyber policy official says the Pentagon is taking an expanded role in incident-response planning for a cyber attack, under a recently signed agreement with the Department of Homeland Security intended to boost strategic deterrence and protection for privately owned critical infrastructure.

Mike Griffin, under secretary of defense for research and engineering, yesterday said DOD is keenly focused on laser scaling programs:

Pentagon tech chief signals funding increases for military's laser scaling programs

The Pentagon's chief technologist says the Defense Department will increase funding for laser scaling programs in its forthcoming budget request, as he believes directed-energy weapons are just a few years from being useful in battle.

Speaking at an event today, Air Force Vice Chief of Staff Gen. Stephen Wilson said the service is “refining” where it will find money to pay for readiness objectives.

Air Force eyes FY-19 reprogramming to meet Mattis' 80 percent fighter readiness mandate

Air Force Vice Chief of Staff Gen. Stephen Wilson said today the service will need to reprogram funds in fiscal year 2019 to meet near-term readiness goals.

Rep. Adam Smith (D-WA), possibly the next House Armed Services Committee chairman, said today that he will seek a defense spending deal, while Sen. Jim Inhofe, who heads the Senate Armed Services Committee, said separately he backs a $733 billion defense budget:

Smith eyes plan to trade boosts in conventional capability for nuke cuts

Rep. Adam Smith (D-WA), expected to become the next chairman of the House Armed Services Committee, said today he is considering negotiations with GOP defense hawks that could increase defense spending on conventional capabilities in exchange for cuts to the U.S. nuclear arsenal.

Inhofe backs $733B defense budget, despite White House call for $700B

Senate Armed Services Committee Chairman Jim Inhofe (R-OK) today came out in favor of a $733 billion total defense topline, putting him at odds with the White House, which has directed the Pentagon to plan for a $700 billion topline.

Finally, we have the latest on a new, 116-page report from the bipartisan National Defense Strategy Commission:

Independent commission: dramatic spending increase required for Trump defense strategy

The Defense Department's base budget requires sustained real growth of at least 3 to 5 percent annually over the next five years to execute the Trump administration's National Defense Strategy, according to an independent bipartisan commission. The finding implies military spending, excluding war costs, should reach between $691 billion and $746 billion by fiscal year 2023.

By Justin Doubleday
November 14, 2018 at 1:25 PM

The Government Accountability Office has dismissed Oracle America's protest against the Pentagon's Joint Enterprise Defense Infrastructure cloud services solicitation.

GAO concluded the Defense Department's plan to make a single award for the JEDI cloud program follows applicable statutes and regulations “because the agency reasonably determined that a single-award approach is in the government’s best interests for various reasons, including national security concerns, as the statute allows,” according to a statement released today by Ralph White, GAO's managing associate general counsel for procurement law.

“GAO’s decision also concludes that the Defense Department provided reasonable support for all of the solicitation provisions that Oracle contended exceeded the agency’s needs,” White wrote. “Finally, GAO’s decision concludes that the allegations regarding conflicts of interest do not provide a basis for sustaining Oracle’s protest.”

While Oracle's protest was dismissed, IBM has also filed a protest against JEDI. White said the protests “could not be resolved concurrently.” A decision on IBM's protest is due Jan. 18.

Meanwhile, the window for bidding on the JEDI contract closed on Oct. 12. The Pentagon plans to make the award in April 2019.

Oracle filed its protest shortly after the Pentagon released the JEDI request for proposals. In an Aug. 6 protest filing, Oracle argued the Pentagon had not sufficiently justified making a single award for the potentially 10-year, $10 billion, indefinite-delivery, indefinite-quantity contract.

Earlier this year, Oracle successfully protested DOD's award of an other transaction agreement for cloud services migration. The company has received some criticism for slowing down DOD's IT modernization plans.

"Oracle believes that both the warfighter and the taxpayer benefit most from a rigorous and truly competitive process," Oracle spokeswoman Deborah Hellinger wrote in a statement. "We remain undeterred in our commitment to bring tremendous value and flexibility to our customers, including the Department of Defense. Oracle’s JEDI bid represents a forward-thinking, next generation cloud focused on security, performance, and autonomy and a move away from the legacy cloud infrastructure that seems to be favored in the RFP.”  

IBM joined Oracle in protesting JEDI on Oct. 10. While IBM still submitted a bid for the contract, the company criticized the single-award strategy and accused the Pentagon of tailoring the JEDI program to a “specific vendor.”

Amazon Web Services has been considered the front runner for the JEDI contract, in large part due to its previous work providing cloud services to the CIA, which provided AWS with a head start on gaining government security certifications. AWS is also the largest commercial cloud services provider on the market.

The JEDI program was born out of a “cloud executive steering group” set up last September by Deputy Defense Secretary Patrick Shanahan to accelerate the department's adoption of cloud technologies. "While technological modernization has many dimensions, I believe accelerating DOD's adoption of cloud computing technologies is critical to maintaining our military's technological advantage," Shanahan wrote in a memo establishing the group.

After first signaling the JEDI winner may be the sole cloud services provider for the entire department, DOD officials have since stressed the department will maintain multiple providers. But some officials have argued awarding the JEDI contract to more than one company would increase the complexity of sharing data and integrating applications across different cloud environments.

JEDI will give DOD a “general-purpose” cloud, while the military will also have multiple “fit-for-purpose” clouds, as well as internal cloud infrastructure, according to a strategy approved by DOD Chief Information Officer Dana Deasy this summer.

Meanwhile, lawmakers have fenced in funding for the JEDI cloud program, as they want DOD to provide them with the department's acquisition strategies and spending plans for cloud services. Two Republican lawmakers recently sent a letter to DOD's inspector general requesting an investigation into the JEDI program and Pentagon officials' previous work on behalf of AWS.

By Tony Bertuca
November 14, 2018 at 11:46 AM

House Armed Services Committee Chairman Mac Thornberry (R-TX) and Rep. Adam Smith (D-WA), the panel's ranking Democrat, made new appointments today to the National Security Commission on Artificial Intelligence.

Thornberry has appointed former Google CEO Eric Schmidt, who now serves as chairman of the Defense Innovation Board and a technical advisor to the board of Alphabet.

Smith, meanwhile, has appointed Eric Horvitz, a technical fellow and director of Microsoft Research Labs, who previously served as president of the Association for the Advancement of AI.

The AI commission, established by the Fiscal Year 2019 National Defense Authorization Act, “is intended to review advances in artificial intelligence, machine learning, and associated technologies with national security implications, including the competitiveness of U.S. efforts, international trends and cooperation, workforce and education incentives, data standards, and ethical considerations for future application,” according to a statement from the committee.

By Ashley Tressel
November 14, 2018 at 11:30 AM

The Army is forming an acquisition strategy to procure more than 2,000 new lightweight, air-transportable Infantry Squad Vehicles to follow fielding of the Ground Mobility Vehicle to select units.

The ISV is planned to be “a larger competitive program of record” than the GMV, according to the program executive office for combat support and combat service support.

The Army in May leveraged a U.S. Special Operations Command contract with General Dynamics to quickly deliver a limited number of modified GMVs to airborne infantry units. GD is now filling a production order for 118 vehicles to equip three airborne brigade combat teams by the end of 2019, the Army PEO said this month.

After those units are equipped with the GMV, the service will deliver the ISV, giving a long-term capability to the active, Guard and Reserve components.

The ISV would have many of the same requirements as the GMV, including nine-soldier capacity, a 3,200-pound payload and the ability to be transported by fixed- and rotary-wing aircraft.

“The estimated total requirement is for 2,065 vehicles,” with production scheduled to start in fiscal year 2020 at “less than 100 vehicles per year,” according to a Sept. 24 market survey posted to Federal Business Opportunities.

The Army notes in the survey it may use an other transaction agreement to procure those vehicles.

By Marjorie Censer
November 13, 2018 at 2:14 PM

Today's INSIDER Daily Digest includes the latest on an Army audit, an update on the Pentagon's vision for hypersonics and one expert's view of what to expect from divided government.

In a letter sent in September, an Army official warned that its independent auditor was “unable to obtain sufficient, appropriate audit evidence to provide a basis for an audit opinion on the financial statements and related notes”:

Army notifies Congress of 'disclaimer of opinion' on financial audit

The Army's independent auditor, KPMG, has notified the Pentagon's inspector general it intends to issue this year a disclaimer of opinion on the service's fiscal year 2018 general fund and working capital fund financial statements, a service official told Congress earlier this year.

Pentagon official Mike Griffin today appeared at the Center for Strategic and International Studies and discussed hypersonics:

Griffin: DOD contemplating low-cost hypersonic weapon for new cost-imposing strategy

Pentagon policy makers are envisioning a potential future in which the U.S. military possesses stockpiles of relatively low-cost, hypersonic boost-glide weapons that can be used to hold high-priority adversary targets at risk, giving Washington a new cost-imposing tool in the great power competition against Russia and China.

Arnold Punaro, who spent decades as a staff member on Capitol Hill, has a new report on what divided government might mean for national security:

Punaro: Divided government 'is the norm in recent history, not the exception'

Divided government has been commonplace in recent decades and has not prevented signed defense bills and significant legislative accomplishments, Arnold Punaro argues in a new paper.

Read the report here.

Inside the Air Force interviewed multiple experts about the way adding air-to-air missiles to MQ-9 Reapers could significantly change the battlespace:

Air-to-air missiles can expand MQ-9's role in high-end conflicts, experts say

Arming MQ-9 Reapers with air-to-air missiles can prepare the remotely piloted aircraft for a future filled with enemy unmanned systems and for new roles in contested airspace, defense experts tell Inside Defense.

By Tony Bertuca
November 13, 2018 at 1:05 PM

Defense Secretary Jim Mattis will travel to Texas tomorrow to meet with troops deployed along the southwest border, according to a statement from the Pentagon.

The Pentagon has plans to send to the border 7,000 troops, which President Trump ordered deployed shortly before the midterm elections to help stop a migrant “caravan” that was weeks away from reaching the United States. Trump, who called the situation an “invasion,” has indicated he would send as many as 15,000 troops.

On Wednesday, Mattis will embark on a one-day trip that includes stops in McAllen, TX, and F.E. Warren Air Force Base, WY.

“In Texas, Secretary Mattis will meet with service members currently deployed in support of the southwest border mission,” according to the Pentagon.The controversial order has drawn skepticism, opposition and even condemnation, with many critics dismissing the action as a political stunt intended to bolster GOP turnout on election day.

“We don't do stunts in this department,” Mattis told reporters Oct. 31.

The Pentagon has said the troops will provide logistical, operational, engineering and medical support to U.S. Customs and Border Patrol forces, such as rapid transportation via C-130 and C-17 aircraft and the use of military-grade sensor equipment to spot unidentified groups of people crossing the border.

The Pentagon has not yet announced the cost of the operation, which was initially called “Operation Faithful Patriot,” but is now referred to as a “support” mission. 

For comparison, Operation Jump Start, which lasted from May 2006 to July 2008 under former President George W. Bush, cost $1.2 billion and involved approximately 6,000 Guard troops, according to the Government Accountability Office.

By Marjorie Censer
November 13, 2018 at 9:28 AM

Novetta said today it has acquired Berico Technologies, which specializes in cloud engineering, data analytics and IT modernization for intelligence agencies.

Berico's customers include the Defense Intelligence Agency, the National Media Exploitation Center and the National Geospatial-Intelligence Agency, Novetta said.

The deal closed Nov. 7.