The Insider

By Courtney Albon
January 16, 2019 at 5:31 PM

The National Air and Space Intelligence Center released a report today detailing trends in the space domain and highlighting threats and challenges posed by foreign space capabilities.

The 15-page, unclassified report was directed by Air Force leadership as a "discussion tool for the public."

View the full report here.

By John Liang
January 16, 2019 at 2:53 PM

This Wednesday INSIDER Daily Digest has news on the prospects of the FY-20 defense budget being rolled out on time, a mandatory audit of major weapon system programs, an ongoing debate about intellectual property and much more.

Don't expect the FY-20 budget to be rolled out on time:

Pentagon preps for budget delay as historic shutdown drags on

The Pentagon is preparing to delay the Feb. 4 rollout of its fiscal year 2020 budget request because of the ongoing partial government shutdown, according to government officials with knowledge of the matter.

The office of the Pentagon's acquisition executive found the Army, Navy and Air Force all executed major weapon system development programs in FY-18 without triggering a tax that could be used to finance a rapid prototyping program:

Major weapon programs avoid cost-growth penalty tax, again; OSD establishes liability caps

A mandatory audit of major weapon system programs turned up no cost growth in fiscal year 2018, which means the Office of the Secretary of Defense did not impose a penalty tax -- for a fourth consecutive year -- on any of the military services as required by law.

While a congressionally mandated panel composed of government and industry personnel reached consensus on a host of topics, they identified three areas in which the debate over ownership and access to intellectual property remains unresolved:

Pentagon's intellectual property debate with industry poised to continue

The Defense Department has received final recommendations from a special advisory panel on intellectual property rights indicating the struggle between defense contractors and the Pentagon over ownership and access to technical data is far from over.

Congress fenced the Navy's procurement of new HELIOS units to only one, unless the service secretary submits a report addressing concerns that the program was at risk of breaching cost thresholds set for research and development programs:

Navy will buy one HELIOS unit in FY-19, yielding to congressional fence

The Navy will not procure two units of an experimental high-energy laser in fiscal year 2019 as planned, and will instead adhere to a congressional procurement fence that allows the service to buy only one unit, according to a spokesman for the Navy secretary.

The Army's top uniformed official spoke at an Association of the United States Army breakfast this morning:

Milley: 'We are just scratching the surface' in growing modern Army

At his first public appearance of the year, Army Chief of Staff Gen. Mark Milley today restated the recent improvements made in manning and training, while the service works toward reaching its readiness and modernization goals following the National Defense Strategy.

News on the Section 809 panel's latest report:

Acquisition reform panel urges Pentagon buyers to implement changes and adopt 'war footing'

An acquisition reform panel has finished its work with a series of "bold" recommendations its members say is needed for the Pentagon to adopt a "war footing" in the technological competition with China and Russia, but the path forward for implementing the suggested changes is unclear.

Brandon Valeriano and Benjamin Jensen of the Marine Corps University wrote a paper published by the Cato Institute this week:

Defense strategists urge 'restraint' in response to Trump's aggressive cyber posture

Scholars at the Marine Corps University are warning the Trump administration's repeal of Obama-era restrictions on military responses to a cyber incident could escalate a situation into a full-blown cyber war, while urging "restraint" as a more effective approach to countering and deterring cyberattacks.

Some defense business news:

After ACV, MPF losses, SAIC will continue to pursue integration work and will 'refine' strategy

Though Science Applications International Corp. fell short in pursuing two major military vehicle programs, the company's chief executive told Inside Defense he would not have changed the company's technical approach.

News from this week's annual Surface Navy Association Symposium:

Coffman: Navy still working on mine warfare plan

The Navy is still working on its mine warfare blueprint, pushing past a previous target date of early January for its completion, according to the Marine Corps general overseeing the effort.

Navy developing autonomy architecture requirements to be mandated in future solicitations

The Navy is developing specifications for how autonomous technology should behave within its unmanned systems, with the intention to eventually include them in solicitations, according to a Navy official.

By Justin Katz
January 16, 2019 at 1:35 PM

A House lawmaker likely to lead oversight of Navy shipbuilding singled out the service's next-generation frigate program as one of his big concerns going into the new year.

Rep. Joe Courtney (D-CT), who was the ranking member on the House Armed Services seapower and projection forces subcommittee last year, spoke about the frigate program, known as FFG(X), Jan. 16 at the Surface Navy Association symposium in Arlington, VA.

"I think there's frustration about the fact that it sort of keeps getting pushed back and delayed," he said. "And how we handle that if there is going to be another request for another delay is going to be, frankly, a headache for us this year."

Courtney's comments came in response to an audience member's question about what Navy programs gave him cause for concern. The subcommittee chairmanships for the House Armed Services Committee have not been finalized yet, but given Courtney’s 12-year history on the panel and his previous status as ranking member, he is a likely candidate to lead the subcommittee.

The service had previously intended to publish a request for proposals in 2017, but delayed its schedule after determining the capabilities originally planned for FFG(X) were insufficient, Inside the Navy reported in July 2017.

"What motivated this frankly [is that] the CNO's staff went through a force-structure assessment and took a look at the future world, the world that we will be operating in, and determined that while the frigate that came out of the 2014 study, its multimission capabilities are right, we need more," then acting Navy Secretary Sean Stackley said during the U.S. Naval Institute's annual meeting in Washington in 2017. "We need more in terms of capabilities."

That RFP is now scheduled for the end of this fiscal year with a construction contract expected in FY-20.

By Marjorie Censer
January 16, 2019 at 10:42 AM

Following the recent close of the Science Applications International Corp.-Engility deal, SAIC has "been very active this week going through really understanding the pipeline" of business opportunities, according to a top executive.

Nazzic Keene, SAIC's chief operating officer, told Inside Defense in an interview today that being able to "really go into detail on the pipeline and the opportunities" has been the biggest change following the deal's approval.

The company had hired a third party to evaluate the potential opportunities before the deal was official.

"We don't have to start from scratch," Keene said. "The analysis has been done."

Keene said she expects SAIC to be able to quickly decide which part of the company should pursue an opportunity if both SAIC and Engility groups were planning to bid on it and to rapidly move on programs they might now pursue that weren't previously on either company's radar.

Meanwhile, Tony Moraco, SAIC's chief executive, said during the same call that about 1,000 of the company's 23,000 employees are affected by the partial government shutdown.

"Generally, we can navigate it," he said, noting again that it's costing the contractor about $10 million in revenue per week.

By Mallory Shelbourne
January 16, 2019 at 10:12 AM

Rep. Joe Courtney (D-CT), who is expected to serve as the House Armed Services seapower subcommittee chairman in the new Congress, said Wednesday he expects budget caps on defense spending to be lifted for fiscal years 2020 and 2021.

"It was intended to be an incentive, not to be a policy," Courtney told the annual Surface Navy Association symposium, referring to the 2011 Budget Control Act, which restricts defense spending.

Courtney praised House Budget Committee Chairman John Yarmuth (D-KY) as "pragmatic," adding he believes Yarmuth will lift the caps as he assumes his new gavel.

"His approach is going to be to recognize that there's going to have to be a lifting of the caps," Courtney said.

But the Connecticut congressman noted Democrats' recent takeover of the lower chamber means "discretionary domestic spending has to be part of that process."

Courtney said whether the caps will be lifted in "a timely fashion" remains to be seen, citing the ongoing partial government shutdown.

By Justin Katz
January 16, 2019 at 9:51 AM

The Navy has programmed all of the necessary funding into its future years defense program to move forward on its 111 surface warfare reforms, and has implemented 87 of those changes to date, according to the service's second most senior officer.

Vice Chief of Naval Operations Adm. Bill Moran told reporters yesterday at the Surface Navy Association symposium that he anticipates the service will implement all 111 recommendations by the end of the fiscal year.

Moran differentiated between implementing and completing recommendations, noting that completion would indicate the service has had enough time to observe the change's effect and determine whether it was the correct action, Moran said.

The recommendations stemmed from Navy-wide reviews done by the CNO and Navy secretary in the wake of high-profile surface fleet collisions that killed more than a dozen sailors in 2017. Several changes also were generated by the Government Accountability Office.

By Jason Sherman
January 15, 2019 at 4:24 PM

The Defense Department today published a new China Military Power report that finds the Asian country is on the cusp of fielding some of the most modern weapons in the world.

The 140-page volume is part of a new series of unclassified country assessments by the Defense Intelligence Agency.

Confusingly, the report is separate from the annual report on China's military the Pentagon prepares annually in response to a statutory requirement, which is formally titled "Military and Security Developments Involving the People's Republic of China" but informally titled the same as the new DIA volume. 

On Jan. 15, a senior Pentagon official summarized the new report's findings:

As we look at China, we see a country whose leaders describe it as "moving closer to center stage in the world," while they strive to achieve what they call "the great rejuvenation of the Chinese nation."  This ambition permeates China['s] national security strategy and guides the development of the People's Liberation Army, the PLA, which actually is not a national institution, but rather the military arm of the Chinese Communist Party.

Party leaders have identified the initial decades of the 21st century as a period of strategic opportunity in the international environment that would allow China to focus on building what they call "comprehensive national power." A key component of this, of course, is military power.

The strategic objectives of the Chinese Communist Party include securing China's status as a great power. Chinese leaders characterized their long-term military modernization program as essential to achieving this great power status. Indeed, China is rapidly building a robust lethal force with capabilities spanning the ground, air, maritime, space and information domains, designed to enable China to impose its will in the region and beyond.

During the past decade alone, from counter-piracy operations in the Gulf of Aden, to an expanded military presence in the East and South China Seas, China has demonstrated a willingness to use the PLA as an instrument of national power in the execution of what they call their "historic mission in the new century."

Improvements in PLA equipment and capabilities that have focused on generating combat power across the PLA services present Beijing with additional response options as China faces increasing global security concerns.

Expected future advances in areas such as nuclear deterrence, power projection, cyberspace, space and electromagnetic spectrum operations will continue to be critical components of the PLA's developing capabilities.

China also continues to develop capabilities for what they term "non-war missions," such as humanitarian assistance, disaster relief, counter-piracy, peacekeeping, things of that nature.

In the coming years, the PLA is likely to grow even more technologically advanced and proficient with equipment comparable to that of other modern militaries. The PLA will acquire advanced fighter aircraft, modern naval vessels, missile systems, and space and cyberspace assets as it reorganizes and trains to address 21st century threats further from China's shores.

DIA will continue to closely monitor China's growing military capabilities, and we will provide foundational assessments such as this China Military Power Report to support decision advantage in the defense of the nation.

By John Liang
January 15, 2019 at 2:20 PM

This Tuesday INSIDER Daily Digest features news on the Missile Defense Agency's SM-3 Block IIA program as well as coverage of the Section 809 panel's latest report.

Raytheon can now begin delivering SM-3 Block IIA interceptors to the Missile Defense Agency:

MDA lifts stop-work order on SM-3 Block IIA deliveries following intercept success

The Missile Defense Agency has lifted a stop-work order for Standard Missile-3 Block IIA guided missiles imposed on manufacturer Raytheon after the new Aegis ballistic missile interceptor failed in a key flight test a year ago.

The Section 809 panel has completed its third and final volume on streamlining the defense acquisition system:

Section 809 panel recommends DOD ditch commercial buying processes for 'readily available' procedures

The Section 809 panel has concluded its review of potential defense acquisition reforms, recommending in its final report that the Pentagon replace its commercial buying processes with simplified procedures for purchasing "readily available" products on the marketplace, in part by ditching requests for proposals.

In case you missed it, some news from yesterday on the Army's Next Generation Combat Vehicle as well as an interview with the head of Booz Allen Hamilton's defense business:

Army forced to reconsider NGCV sensor requirements

The Army is seeking "a compromise" with industry on its expectations for intelligent vehicle sensors and the costly proposals that were initially submitted, according to a service official.

Booz Allen defense chief says company has moved into more technology-centric work

The head of Booz Allen Hamilton's defense business said the company has shifted its business into deeper technology work and now is seeking to position itself as a "solutions" provider.

One last look at a free story posted late last week on former Boeing executive and acting Defense Secretary Pat Shanahan:

Pentagon fires back on allegations Shanahan is favoring Boeing

The Pentagon says allegations that acting Defense Secretary Pat Shanahan, a 31-year executive at Boeing, has acted improperly to benefit his former employer or is biased in favor of the company are unfounded and untrue.

By Mallory Shelbourne
January 15, 2019 at 1:41 PM

A recently reported hack of Navy contractors did not affect Lockheed Martin's Aegis Common Source Library, according to a company executive.

Lockheed's Naval Combat & Missile Defense Systems Vice President Jim Sheridan made the remark during a media briefing with reporters Tuesday at the Surface Navy Association's annual symposium.

Lockheed bills its Aegis Common Source Library as a combat system that supports "software reuse and commonality across all modernized and new Aegis systems."

The Wall Street Journal reported in December that hackers believed to be associated with China’s government infiltrated U.S. Navy contractors.

The Navy initiated a review of its cyber security practices, according to the report, which cited American officials attributing the breaches to China.

Sheridan emphasized that combatting cyber security threats is "a continuous journey in evolution."

"The requirements continue to raise the bar on what we do and defensive posture to fend off cyberattacks," he said.

By Courtney Albon
January 15, 2019 at 12:01 PM

As part of the Air Force's work to rebuild Tyndall Air Force Base, FL, after Hurricane Michael severely damaged the base in October, the service plans to award a sole-source communications infrastructure contract -- a key step in enabling command-and-control operations at the base.

In a Jan. 4 notice, the service justifies its decision to use a "fair opportunities exception," which allows it to bypass standard market research and competition requirements, due to the urgency of standing up an information technology system at Tyndall. The service is calling the program "Project Phoenix" and plans to use an existing NetOps indefinite delivery, indefinite quantity contract to make an award to AT&T.

"Tyndall Air Force Base was recently devastated by Hurricane Michael. The base communications and infrastructure and information technology services were substantially impacted," the notice states. "The purpose of this acquisition is to reconstitute and engineer a permanent network delivery solution for Tyndall AFB while operating in an environment devastated by Hurricane Michael."

Because of the damage at Tyndall, it makes more sense to modernize the IT infrastructure rather than repair existing systems, according to the notice.

"The events at Tyndall provide an opportunity to install top of the line, industry-provided technology and services," the notice states. "To meet this end, the Air Force intends to improve IT user experience through commercial services in order to increase mission effectiveness. . . . The managed network services to be ordered will provide overall reconstitution and management of Tyndall AFB's IT infrastructure, including real-time proactive network monitoring, rapid troubleshooting and service restoration."

The document doesn't include a cost estimate for the effort, but notes that Air Combat Command has established a requirement for Tyndall to be able to perform C2 operations by March 1.

By Ashley Tressel
January 15, 2019 at 11:06 AM

The Army is requesting information from industry on radios to support manned-unmanned teaming of air and ground platforms, according to a recent notice.

The service desires systems that would work on ground vehicles and while being transported by soldiers. The radios "must not rely on existing [radio frequency] infrastructure (i.e. cellular networks, Wi-Fi networks, etc.) but can leverage commercial technologies in an ad-hoc manner through modification [or] enhancement," a Jan. 4 market survey states.

Manned-unmanned teaming in this circumstance is "loosely defined as controlling a robotic platform from a mounted or dismounted position, as well as the ability to collaborate between multiple air and ground platforms."

The service's Next Generation Combat Vehicle cross-functional team, along with the Tank Automotive Research, Development and Engineering Command and the Space and Terrestrial Communications Directorate, will hold an experiment in June at Joint Base McGuire Dix Lakehurst, NJ, in which select vendors may have the chance to participate.

By John Liang
January 14, 2019 at 2:54 PM

The Defense Department recently issued a report to Congress that assesses "China's global expansion by military and nonmilitary means, implications of China's activities, and the U.S. response."

The report "describes China's expansion by a range of means, including military access and engagement; the One Belt, One Road (OBOR) and Digital Silk Road initiatives; technology acquisition; and a growing economic footprint; with a focus on areas of military expertise."

The DOD report notes that the Chinese People's Liberation Army is establishing its first overseas military base in Djibouti in East Africa "and probable follow-on bases will increase China's ability to deter use of conventional military force, sustain operations abroad, and hold strategic economic corridors at risk," adding that the PLA's "expanding global capabilities provide military options to observe or complicate adversary activities in the event of a conflict."

Check out the full report here.

By John Liang
January 14, 2019 at 2:06 PM

This Monday INSIDER Daily Digest has news from an interview with the head of Booz Allen Hamilton's defense business, the Army's efforts to work with industry to build the sensors that will go on the service's Optionally Manned Fighting Vehicle and more.

Inside Defense recently interviewed the head of Booz Allen Hamilton's defense business:

Booz Allen defense chief says company has moved into more technology-centric work

The head of Booz Allen Hamilton's defense business said the company has shifted its business into deeper technology work and now is seeking to position itself as a "solutions" provider.

The Army is reworking its request for proposals for the sensors that will go on the Optionally Manned Fighting Vehicle:

Army forced to reconsider NGCV sensor requirements

The Army is seeking "a compromise" with industry on its expectations for intelligent vehicle sensors and the costly proposals that were initially submitted, according to a service official.

In case you missed it, here's a free version of a story on the Pentagon's response to allegations about former longtime Boeing executive and current acting Defense Secretary Pat Shanahan:

Pentagon fires back on allegations Shanahan is favoring Boeing

The Pentagon says allegations that acting Defense Secretary Pat Shanahan, a 31-year executive at Boeing, has acted improperly to benefit his former employer or is biased in favor of the company are unfounded and untrue.

More news from last week that you can catch up with on this snowed-in Monday:

Navy sets MQ-25 price tag at $15.2 billion, nearly $2 billion higher than service cost position

The Navy estimates the MQ-25 Stingray unmanned aircraft system -- the service's first operational unmanned aircraft for the aircraft carrier fleet -- will cost $15.2 billion to acquire, up nearly $2 billion from a $13.3 billion price tag the service tallied last year.

Pentagon re-opens debate with defense industry over performance payments, contract financing

The Pentagon is seeking ideas for how it can incentivize better performance from defense contractors after a controversial proposal to reduce customary progress payments was quashed last year.

Air Force to house displaced F-22 training unit at Eglin prior to formal beddown approval

The Council on Environmental Quality has approved an Air Force request for an interim beddown of its F-22 Formal Training Unit at Eglin Air Force Base, FL -- a move the service said was necessary after damage from Hurricane Michael displaced the unit.

By Marjorie Censer
January 14, 2019 at 9:53 AM

Maxar Technologies said today it has named Daniel Jablonsky chief executive, effective immediately.

Jablonsky most recently served as president of Maxar company DigitalGlobe. He succeeds Howard Lance, who has resigned, the company said.

Jablonsky has led Digital Globe since October 2017, when Maxar acquired it. He was previously general manager of DigitalGlobe's U.S. and international defense and intelligence businesses.

By Tony Bertuca
January 14, 2019 at 5:10 AM

The federal government remains on a partial shutdown this week, while senior Pentagon officials are scheduled to speak around the Washington area.

Monday

The Brookings Institute holds a discussion on the future of U.S. policy in Afghanistan.

Tuesday

The Surface Navy Association's annual symposium begins at the Crystal City Hyatt Regency hotel in Arlington, VA, featuring senior service officials and runs through Thursday.

The Cato Institute hosts a discussion on the return of "great power competition."

Wednesday

Army Chief of Staff Gen. Mark Milley, who has been nominated to be the next chairman of the Joint Chiefs, is scheduled to speak at an Association of the United States Army breakfast.

The Brookings Institute holds a discussion on securing maritime commerce.

Friday

Air Force Under Secretary Matt Donovan speaks at an Air Force Association breakfast.