The Insider

By Sara Sirota
December 4, 2019 at 3:46 PM

The Air Force will hold an event with industry to discuss pre-engineering activities for a new command-and-control aircraft system that's intended to replace the aging E-4B National Airborne Operations Center.

The Survivable Airborne Operations Center will feature modern communications, networks and advanced C2 subsystems aboard a new, commercial derivative aircraft, according to a notice the service released today. The legacy E-4B fleet consists of four 1970s-era Boeing aircraft that are nearing the end of their service lives.

The SAOC program office will host the industry day next February at Hanscom Air Force Base, MA. Responses are due Dec. 20.

Meanwhile, the Air Force's fiscal year 2020 budget documents show the service anticipates needing more than $535 million in research and development funding over the next five years for the NAOC recapitalization effort. They describe SAOC as an optimized fleet that has the airborne command center capabilities provided by both the E-4B and Navy's E-6B.

By Marjorie Censer
December 4, 2019 at 2:15 PM

AeroVironment's chief executive said this week the company has submitted its proposal for a three-year, sole-source contract for the Army's Lethal Miniature Aerial Missile System.

"This hardware production contract to AeroVironment would cover government fiscal years 2020 through 2022," Wahid Nawabi said in a call with analysts. "We anticipate this award would be worth up to $160 million over that time period."

Nawabi said the award would be the "single largest sole-source, multiyear award ever for our innovative Switchblade solution."

Additionally, he told analysts the company has seen "significant progress" working with U.S. export authorities on exporting Switchblade.

"Multiple allies have expressed strong interest in Switchblade," Nawabi added.

Meanwhile, AeroVironment said sales in its most recent quarter totaled $83 million, up 14% from the same three-month period a year earlier. The company attributed the increase to product sales growth.

AeroVironment's quarterly profit reached $7.5 million, up 24% from the prior year.

By Marjorie Censer
December 4, 2019 at 1:57 PM

(Editor's Note: This story has been updated with a Justice Department statement.)

A newly unsealed court filing by a former Navistar Defense employee alleges the company undertook a "pervasive and long-running scheme to charge the U.S. Government wildly inflated prices for components of Mine-Resistant, Ambush-Protected vehicles."

The court filing alleges the company presented forged invoices and fabricated catalogue prices as supporting documentation for the commercial prices of components from the engines to the suspension systems.

"The forged and fraudulent documents presented to the Government served to mask that these components either had no commercial sales history at all, or when they did, that the true commercial price was as little as half the price that Defendants charged the Government," the complaint reads.

The whistleblower is Duquoin Burgess, identified in the court filing as contracts manager at Navistar Defense from 2009 to 2012 and director of contracts in 2012.

Additionally, the complaint alleges that Navistar Defense leadership, including its president and vice president, were aware of the fraud.

In a statement released today, the Justice Department said it has intervened in the suit. It said in 2009, the Marine Corps sought to upgrade MRAP vehicles purchased from Navistar Defense with a modified independent suspension system.

"During the course of negotiations for the ISS, the Marine Corps asked Navistar Defense to provide evidence of prior commercial sales of the various parts that made up the ISS to ensure that the prices paid were fair and reasonable," the Justice Department says. "The lawsuit alleges that Navistar Defense knowingly submitted fraudulent invoices that falsely purported to show prior, comparable commercial sales to conceal the inflated prices it was charging the Marine Corps. In reality, the lawsuit alleges, those sales never occurred."

The government, in a court document filed in September, said it would intervene in the part of the case that "alleges Navistar Defense inflated the government price for the Independent Suspension System, in part, through the submission of fraudulent sales history."

However, the government said it would not intervene in the part that alleges the government did not receive preferred customer volume discounts for Navistar Defense vehicles.

In the same filing, the government noted the "United States and Navistar are currently exploring settlement, which provides the possibility of avoiding litigation and conserving judicial resources."

In a statement, a Navistar spokeswoman said the company does "not believe the relator's unsealed complaint is well founded in fact or law. The company intends to defend itself as necessary and appropriate."

By John Liang
December 4, 2019 at 1:41 PM

This Wednesday INSIDER Daily Digest has news on the defense secretary's recusal from the Army's Lower Tier Air and Missile Defense Sensor contract award and more.

Defense Secretary Mark Esper wasn't involved in the decision to select Raytheon to build the Army's Lower Tier Air and Missile Defense Sensor:

Esper recused himself from selection of Raytheon as LTAMDS winner, DOD says

A Pentagon spokesman said Defense Secretary Mark Esper took no part in the Army's selection this fall of his former employer Raytheon to build the Lower Tier Air and Missile Defense Sensor, a project company officials expect will deliver a potential $20 billion line of new business.

The Joint Strike Fighter program office is in the midst of a 180-day sprint to deliver major improvements to its software development environment:

F-35 JPO to sole-source DevSecOps support to Amazon provider

The F-35 joint program office is preparing to award Amazon a sole-source contract to support its "digital transformation" and incorporate a more agile, secure and rapid software development approach.

General Dynamics this week nabbed a multibillion-dollar Virginia-class submarine contract:

Navy awards GD Electric Boat $22 billion modification for Virginia Block V multiyear contract

The Navy this week announced a $22.2 billion contract modification to General Dynamics Electric Boat for Block V of the Virginia-class submarine program.

And in case you missed it, here is some defense budget news, specifically the ongoing continuing resolution:

Inhofe says GOP and Dem leaders must break defense policy bill 'logjam'

Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said today the fiscal year 2020 defense authorization bill is being "held hostage" by legislative disagreements beyond his committee's jurisdiction and can only be finalized by Republican and Democratic party leaders.

Budget impasse delays DOD progress payments study

Congress' inability to pass a fiscal year 2020 budget is delaying the start of a Pentagon study that could change the way defense contractors have been paid for years.

Army official: Extended continuing resolution would impact STE efforts

An extended continuing resolution would impact the Army’s Synthetic Training Environment efforts, according to a service official.

By Justin Katz
December 4, 2019 at 11:41 AM

Chief of Naval Operations Adm. Michael Gilday has published his first strategic guidance to the fleet.

The document, titled "Frago 01/2019: A Design For Maintaining Maritime Superiority," aims to "simplify, prioritize, and build on the foundation” of Gilday's predecessor, Adm. John Richardson, who published a new maritime strategy in December 2018.

"Our Navy's strategic direction, focused on great power competition, is sound," Gilday writes.

The document outlines roughly a dozen goals ranging from quickening ship depot-level maintenance and modernization to improving the service's cybersecurity capabilities.

Marine Corps Commandant Gen. David Berger this summer published his own guidance.

Both four-star officers focused on improving the integration between the two services.

"Together, we will build Navy-Marine Corps integration by aligning concepts, capabilities, programming, planning, budgeting, and operations to provide integrated American naval power to the joint force," Gilday writes.

By Tony Bertuca
December 4, 2019 at 10:39 AM

The senior Pentagon official who certified in May that Ukraine should receive $250 million in U.S. military aid because it had made sufficient progress combating corruption said today he never got a "very clear explanation" from the White House as to why the funds were delayed over the summer.

"In the weeks after signing the certification I did become aware that the aid had been held," John Rood, the under secretary of defense for policy, told reporters this morning.

"I never received a very clear explanation other than there were concerns about corruption in Ukraine," he continued.

The delayed aid is at the center of an impeachment investigation into President Trump. Democrats, backed by testimony from current and former government officials, allege Trump sought to leverage the funds to pressure the Ukrainian government into announcing an investigation into former Vice President Joe Biden and his son. Biden is a leading Democratic candidate for the 2020 presidential nomination and the investigation could have benefited Trump politically.

Trump says he did nothing wrong and he his being defended by many Republicans who say his concerns about corruption in Ukraine were well-founded.

Rood said he learned of the White House hold on the aid, which was part of a larger $400 million assistance package, "significantly after May," when he certified that Ukraine had made sufficient anti-corruption progress to receive the aid.

"It was a requirement under the law that we certify that and I was the person that certified it," he said.

Democrats have pointed out that Rood’s letter undercuts the Trump administration's continued assertion that the president ordered the aid withheld because of concerns about corruption.

Rood also said he cannot recall from memory which defense secretary knew of the delayed aid and when because there were three different acting Pentagon chiefs during that period -- Pat Shanahan, Richard Spencer and Mark Esper.

Esper was eventually confirmed as defense secretary July 23. The hold on the aid was released in September.

Rood said "the people serving in the role of the secretary of defense were aware of the situation," but could not provide an exact answer as to which ones were briefed about it.

"Certainly, the secretary of defense was kept apprised of those things," he said.

The Pentagon, along with other executive branch agencies, has refused to comply with House subpoenas related to the aid and the impeachment investigation.

Esper and other defense officials have sought to distance the Pentagon from the situation, though one senior official, Laura Cooper, agreed to testify privately and publicly, saying she pushed to have the aid released and became worried when it was not distributed.

The focus of the aid is to help Ukraine deter Russian military aggression, partly with anti-tank weapons.

Rood today sought to frame the issue as one of "execution" in which DOD has now sent all but $8.5 million of the aid to Ukraine and will distribute the rest in the coming months.

"Our desire has been to work with our Ukrainian colleagues to provide security assistance as envisioned," he said.

By Justin Katz
December 4, 2019 at 10:26 AM

After already delaying two ship maintenance contracts in November, Navy officials today told Congress the current continuing resolution could delay five additional contract awards.

Navy acquisition executive Hondo Geurts and Naval Sea Systems Command chief Vice Adm. Thomas Moore said in joint written testimony today those contract awards "may be adversely impacted by the second CR," which expires Dec. 20.

Geurts and Moore appeared before the Senate Armed Services seapower and readiness subcommittees.

Geurts last month confirmed he already postponed awarding two maintenance contracts, one for the Arleigh Burke-class destroyer Gonzalez (DDG-66) and another for the Bainbridge (DDG-96).

Also testifying alongside Geurts and Moore is Diana Maurer, director of defense capabilities and management at the Government Accountability Office. Her agency last week published a report analyzing the Navy's $21 billion, 20-year plan to optimize the four public shipyards.

The government watchdog concluded the service's plans created "risks that together could add billions to the ultimate cost" of the plan, according to the report.

"Navy officials stated that they wanted to provide Navy leadership and congressional decision makers with a rough order-of-magnitude estimate, not a budget-ready cost estimate," GAO's report stated.

Geurts and Moore said the Navy is working to implement the watchdog’s recommendations to improve the cost estimate.

By Sara Sirota
December 3, 2019 at 3:18 PM

The Air Force Research Lab is setting up a rapid contracting opportunity -- worth up to $490 million -- for the development and transition of capabilities that can defend military personnel and equipment against commercial off-the-shelf small unmanned aerial systems.

The service anticipates awarding a single indefinite-delivery, indefinite-quantity research and development contract with cost-plus-fixed-fee completion task orders over a 72-month period, according to a presolicitation notice released today. It states the Air Force is open to establishing a small business set-aside.

AFRL will place emphasis on prototypes that can undergo evaluation in the user’s operational environment and a mechanism to buy "limited product quantities required for operational introduction of technologies," the notice states.

The Air Force will not use Federal Acquisition Regulation Part 12 to acquire commercial items but interested contractors can inform the contracting officer of their ability to supply such products within the next 30 days, according to the notice.

Meanwhile, the service will hold an industry day Dec. 16 at the Griffiss Institute in Rome, NY, and expects to release a draft request for proposals in the first quarter of calendar year 2020.

AFRL originally published a request for information and statement of work for the contracting opportunity in December 2018 that described the threat of small commercial drones.

"The challenge of detecting, locating, and countering COTS sUAS and related technologies has become a dynamic and growing endeavor -- it represents a global threat to U.S. and allied forces. Of note, ISIS has successfully deployed these systems for both [intelligence, surveillance and reconnaissance] and kinetic attacks via UAS-carried improvised explosive devices," the SOW stated.

"Moreover, advanced militaries are testing the use of swarms of unmanned aerial vehicles (UAVs) which are autonomous, distributed, collaborative systems made up of many small, cheap, unmanned aircraft," it added.

The presolicitation notice published today does not indicate whether AFRL is looking for solutions that can counter individual or swarms of drones.

By Ashley Tressel
December 3, 2019 at 2:15 PM

Army Secretary Ryan McCarthy said today the service has identified the programs for which it may eventually seek waivers from Congress under the ongoing continuing resolution.

"We have a list of anomalies; I'm pretty sure we have not released it yet," McCarthy told reporters after a Senate hearing on military housing this morning. "Because when you release a list of anomalies, it takes the pressure off getting a deal done. We need an appropriations bill."

Congress has already extended a stopgap spending measure through Dec. 20 to avoid shutting down the government before reaching an agreement on fiscal year 2020 spending.

McCarthy today restated that senior leaders told commands in October to cut their spending by "north of 2%," affecting training time, and said the service is getting ready for another reduction before Christmas.

The Army previously announced the potential effects of both a six-month and a yearlong CR, pointing out that all of the service's modernization priorities would stall and upgrades to current systems would be delayed.

The Synthetic Training Environment cross-functional team in particular would consider seeking an anomaly to enable several projects: One World Terrain, the Reconfigurable Virtual Collective Trainers and the Common Synthetic Environment, its director said this week.

"So, we are feeling the effects in readiness, modernization, and as you heard for the last two and a half hours here in the housing [area], there's about $1.1 billion sitting idle that's in the request also," McCarthy said. "So, we need a bill done before Christmas."

By John Liang
December 3, 2019 at 2:02 PM

This Tuesday INSIDER Daily Digest has news on the ongoing effects of the continuing resolution on defense spending, plus coverage of the Joint Strike Fighter program and more.

We start off with defense budget news, specifically the ongoing continuing resolution:

Inhofe says GOP and Dem leaders must break defense policy bill 'logjam'

Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said today the fiscal year 2020 defense authorization bill is being "held hostage" by legislative disagreements beyond his committee's jurisdiction and can only be finalized by Republican and Democratic party leaders.

Budget impasse delays DOD progress payments study

Congress' inability to pass a fiscal year 2020 budget is delaying the start of a Pentagon study that could change the way defense contractors have been paid for years.

Army official: Extended continuing resolution would impact STE efforts

An extended continuing resolution would impact the Army's Synthetic Training Environment efforts, according to a service official.

The Joint Strike Fighter program office is in the midst of a 180-day sprint to deliver major improvements to its software development environment:

F-35 JPO to sole-source DevSecOps support to Amazon provider

The F-35 joint program office is preparing to award Amazon a sole-source contract to support its "digital transformation" and incorporate a more agile, secure and rapid software development approach.

General Dynamics has been awarded a multibillion-dollar Virginia-class submarine contract:

Navy awards GD Electric Boat $22 billion modification for Virginia Block V multiyear contract

The Navy today announced a $22.2 billion contract modification to General Dynamics Electric Boat for Block V of the Virginia-class submarine program.

The National Spectrum Consortium this week released two draft "request for prototype proposals," or RPPs, for DOD's "5G-Next G" program:

Pentagon issues draft 5G proposal requests for smart warehouses, dynamic spectrum sharing

The Defense Department through an industry consortium today issued the first two draft solicitations for fifth-generation telecommunications technology development, formally kicking off a new effort to determine how the military can best make use of high-speed wireless networks and interconnected devices.

By Sara Sirota
December 3, 2019 at 10:53 AM

The Air Force has awarded Lockheed Martin a $989 million contract for the Air-Launched Rapid Response Weapon critical design review, test and production readiness support, according to a Dec. 2 Defense Department contract notice.

ARRW is one of two hypersonic prototypes the company is providing to the service. The other, called the Hypersonic Conventional Strike Weapon, is also progressing toward a CDR.

Both reviews will occur in the second quarter of fiscal year 2020, Jasmine Porterfield, an Air Force spokeswoman, confirmed in an email Monday.

Lockheed will perform the CDR contract work for ARRW in Orlando, FL, through December 2022. The service obligated $23 million in research and development funds at the time of the award.

Meanwhile, the Air Force has not released information on a CDR contract for HCSW.

By John Liang
December 2, 2019 at 1:45 PM

This Monday INSIDER Daily Digest has news on the Pentagon's new intellectual property chief, a nascent Defense Science Board study on homeland air defense, a longstanding intelligence sharing alliance between Australia, Canada, New Zealand, the United Kingdom and the United States, and more.

We start off with a story on the first steps of the Defense Department's new intellectual property director:

Pentagon's new intellectual property chief gets to work

The Pentagon's new director of intellectual property began work last week focused on standing up a "cadre" of experts who can advise and train defense acquisition teams.

On Oct. 31, Mike Griffin, the Pentagon's top weapons technology official, tapped the Defense Science Board to form a task force on homeland air defense to assess the issue and recommend potential new technologies and a blueprint for how the military might best protect American air space in 2025, 2030 and 2035:

With 'domestic sanctuary' era ending, DOD preparing for homeland air defense

The growing proliferation of weapons with global reach is prompting Pentagon leaders to launch a study on the need for a robust domestic air defense capability to protect the entire nation -- which, since the advent of flight more than a century ago, has relied in part on two vast oceans as a buffer against adversaries attacking American citizens and soil with low-flying aircraft and missiles.

Document: DSB terms of reference memo for homeland air defense study

At a recent meeting of the "Five Eyes" military chief information officers in Canberra, Australia, officials discussed supply-chain concerns and potential industrial base cooperation:

DOD looks to collaborate on technology supply chain with 'Five Eyes' allies

The Defense Department and its fellow "Five Eyes" partners are discussing how they can work as a collective industrial base to manage supply chain security risks for emerging technologies, such as fifth-generation telecommunications systems.

Some Air Force news from last week, in case you missed it:

Air Force holds more tests, gears up for hypersonic weapon design reviews

The Air Force's armament directorate is planning more tests of the Air-Launched Rapid Response Weapon and Hypersonic Conventional Strike Weapon and expects to conduct system-level critical design reviews of the two Lockheed Martin platforms during the first half of calendar year 2020.

Air Force on track for Space Fence RAA next month

The Air Force expects its new Space Fence radar will meet the required assets available milestone next month, after completing operational tests Nov. 7.

Air Force to release final RFP for Combat Rescue Helicopter upgrades in May

The Air Force intends to begin soliciting proposals to upgrade its new personnel recovery aircraft next May and plans to award a contract in September 2021, according to a recent presentation to industry.

By Tony Bertuca
December 2, 2019 at 5:05 AM

Pentagon officials are scheduled to speak around the Washington area this week, while several defense companies are slated to participate in conferences and earnings calls.

Monday

The Hudson Institute hosts a discussion on U.S. nuclear policy toward China.

The Center for Strategic and International Studies hosts a discussion on Russian defense spending and military modernization.

Tuesday

Under Secretary of Defense for Research and Engineering Mike Griffin and Air Force Space Command Vice Commander Lt. Gen. David Thompson speak at a U.S. Chamber of Commerce event on the Space Economy.

The Senate Armed Services Committee will discuss the findings of a Government Accountability Office investigation into military housing.

AeroVironment executives are set to discuss the company's quarterly earnings.

Wednesday

The Senate Armed Services seapower subcommittee holds a hearing on Navy ship and submarine maintenance.

The Senate Armed Services personnel subcommittee holds a hearing on military suicide prevention.

Leidos is scheduled to present at a Credit Suisse conference.

Maxar Technologies will participate in a Bank of America Merrill Lynch conference.

Thursday

The Senate Armed Services Committee holds a hearing with Under Secretary of Defense for Policy John Rood on implementation of the National Defense Strategy.

Lockheed Martin and Maxar are set to participate in the Credit Suisse conference.

Science Applications International Corp. executives will discuss quarterly earnings.

By Sara Sirota
November 29, 2019 at 10:05 AM

The Air Force Test Center officially activated a new detachment within the 47th Cyberspace Test Squadron at Edwards Air Force Base, CA, on Nov. 19.

"The detachment provides the Air Force with a secure avionics cyber test laboratory and fields cyber test capabilities to evaluate the Air Force's premiere weapons systems," a news release published on the service's website states.

Lt. Col. Ever Zavala is commanding the new unit, which had its start as Operating Location Bravo before transitioning to Detachment 1 in May 2019.

Operating Location Bravo was originally with the 46th Test Squadron, the 47th CTS' predecessor that tested command-and-control systems. It conducted developmental test and evaluation of aircraft and supported cyber vulnerability assessments.

By Marjorie Censer
November 29, 2019 at 5:00 AM

Dedrone has acquired a counter-drone technology and hired its lead developer in an effort to expand its portfolio.

In October, Dedrone said it had acquired DroneDefender, a non-kinetic, radio frequency small unmanned aircraft system countermeasure, from Battelle. This month, it said it has also hired Alex Morrow, who worked on DroneDefender and was director of counter-unmanned aircraft systems at Battelle.

Dedrone already offered its DroneTracker software, which analyzes the activity of small UAS. With its acquisition of DroneDefender, Dedrone has established a new consultancy called Dedrone Defense.

In an interview with Inside Defense earlier this month, Phil Pitsky, vice president of U.S. federal operations at Dedrone, said Dedrone got to know DroneDefender by using it in a 2018 technology competition hosted at Nellis Air Force Base, NV. Dedrone won the competition.

Now, "we have grand visions of how the technology can be used in a platform," Pitsky said. "Some are fairly obvious, and I believe some are fairly nuanced."

Morrow said joining Dedrone provides an opportunity to continue to build on the technology.

"The biggest Achilles heel of the product was there’s no cueing system," he said. "Now, partnering with Dedrone and the DroneTracker system . . . provide[s] the operator with that intelligence."

Because DroneDefender is a jamming system, it is regulated and authorized for sale to specific U.S. federal agencies. But Morrow said he expects policy changes and technology adjustments that could expand the list of potential customers.

Pitsky said Dedrone is preparing to enlarge its staff.

"We have a fairly aggressive hiring and staffing plan slated for next year," he told Inside Defense. "One of the things we do recognize is speed to market is critical here."

Pitsky added that Dedrone is setting up a new facility in Columbus, OH, to work on the DroneDefender technology.