The Insider

By Ashley Tressel
May 14, 2019 at 4:23 PM

The Army's Ground Vehicle Systems Center is holding a vehicle electrification forum May 30 in Troy, MI, to discuss industry ability to meet the service's requirements for combat and tactical vehicles.

The service is planning to award other transaction agreements in fiscal year 2020 on two alternative fuel projects that will leverage Next Generation Combat Vehicle platforms for experimentation, as Inside Defense reported last year.

The GVSC, then known as the Tank Automotive Research, Development and Engineering Center, held a forum last June at Warren, MI, to address product integration into Army tactical and combat systems for power generation, storage, distribution, charging and other functions.

This month's forum will focus on open architecture design, cybersecurity, battery safety, electric recharging and hydrogen refueling, according to a May 7 Federal Business Opportunities notice.

The notice states the service is forming a "Vehicle Electrification Strategy" and will use the upcoming forum to inform this document.

By John Liang
May 14, 2019 at 2:02 PM

This Tuesday INSIDER Daily Digest has coverage of a Navy business case analysis of racapitalizing the service's surge sealift fleet, along with stories on the House Appropriations Committee's draft FY-20 defense spending bill.

Inside Defense was able to review a Navy business case analysis of racapitalizing the service's surge sealift fleet:

Navy's options for surge sealift recap range from $22B to $38B through 2048

The Navy has assessed four potential options to recapitalize the surge sealift fleet through 2048 and estimates the costs will range between $22 billion and $38 billion, according to the service's business case analysis viewed by Inside Defense.

The House Appropriations Committee's draft FY-20 defense spending bill is now out, with the defense subcommittee due to mark up the legislation tomorrow:

House appropriators move to cut DOD transfer authority over border barrier 'abuse'

The Democrat-led House Appropriations defense subcommittee, still smarting from the Pentagon's recent unilateral budget transfers to build barriers on the U.S.-Mexico border, has drafted a bill that would reduce and restrict the Pentagon’s future ability to reprogram funds.

In case you missed it, here's our coverage of a recent Pentagon reprogramming action (requiring no congressional approval) that shifts more funds to build a border wall:

DOD to build border barriers with some excess weapon system funds

The Pentagon intends to transfer $1.5 billion from several areas, including weapons acquisition programs, to construct new barriers on the U.S.-Mexico border, according to a recent reprogramming notification sent to Congress.

Document: DOD's border funding reprogramming action

More news from the draft House spending bill:

House defense appropriators aim to cut $2 billion from Navy shipbuilding account

House defense appropriators will mark up a draft defense funding bill this week that trims the Navy's fiscal year 2020 shipbuilding request by more than $2 billion.

House appropriators want more details on Pentagon's space reorganization plans

The House Appropriations defense subcommittee's draft fiscal year 2020 defense spending bill proposes continued study and refinement of the Defense Department's plan to establish a Space Force and puts a hold on funding for a new Space Development Agency until the Air Force offers more details on the organization's mission.

Document: Draft FY-20 House defense spending bill

By Tony Bertuca
May 14, 2019 at 11:57 AM

The White House Office of Management and Budget has sent Congress a revised fiscal year 2020 budget, noting it omitted several defense items from the initial request submitted in February, including appropriations language for a $99 million Joint Urgent Operational Needs Fund.

Additionally, a letter from President Trump accompanying the revised budget states the administration does not need a special amendment to restore funding to refuel the aircraft carrier Harry S. Truman, despite earlier plans to retire it.

By Courtney Albon
May 14, 2019 at 11:43 AM

House appropriators are backing an Air Force plan to buy new fourth-generation fighters and are proposing adding 12 F-35s and four C-130Js to the Pentagon's fiscal year 2020 budget request, according to a draft spending bill released today.

In the House Appropriations defense subcommittee's draft legislation, lawmakers propose buying 90 F-35 Joint Strike Fighters and a total of 16 C-130J aircraft. The subcommittee would also fully fund the Air Force's request to buy eight F-15EX aircraft to recapitalize the F-15 fleet.

The draft bill language doesn't note how the extra JSF aircraft would be divided between the Air Force, Navy and Marine Corps.

The additional four C-130Js would go to the Air Force Reserve. A bipartisan group of 63 lawmakers sent House leadership a letter last week urging an increase of eight C-130Js for the Air National Guard and Reserve fleets and consistent future funding to continue the recapitalization as a program of record.

By Ashley Tressel
May 14, 2019 at 11:36 AM

The House Appropriations defense subcommittee has added funding to the Army's fiscal year 2020 request for additional upgrades to the Stryker vehicle.

House Appropriations Committee Chairwoman Nita Lowey (D-NY) in a release announcing the bill notes the draft provides $249 million more than the Army requested to procure 86 Stryker weapon systems (30 mm cannons and weapon stations).

The 30 mm cannon is one of three lethality upgrades the Army is planning for the Stryker -- the others are a Common Remotely Operated Weapons System-Javelin Engineering Change Proposal and an Anti-Tank Guided Missile ECP.

The service began conducting market research for the 30 mm cannon with an industry day March 13 at Detroit Arsenal in Warren, MI, to "brief the draft Stryker [Medium-Caliber Weapon System] program plan," according to a Feb. 25 industry notice.

Following a pending request for information, the Army plans to select the vendors who will receive DVH A1 Strykers along with the Orbital ATK XM813 cannon and deliver production-ready bid samples.

The subcommittee tomorrow will mark up the draft spending bill, which includes in both the base and Overseas Contingency Operations accounts $59 billion for military personnel; $71.5 billion for operations and maintenance; $25.4 billion for procurement; and $12 billion for research, development, test and evaluation for the Army, consistent with the service's request.

By John Liang
May 13, 2019 at 1:53 PM

This Monday INSIDER Daily Digest has news on the Pentagon's latest reprogramming action to fund a border wall, basing Joint Strike Fighters at a hurricane-ravaged Air Force base and more.

Here's our coverage of a recent Pentagon reprogramming action (requiring no congressional approval) that shifts more funds to build a border wall:

DOD to build border barriers with some excess weapon system funds

The Pentagon intends to transfer $1.5 billion from several areas, including weapons acquisition programs, to construct new barriers on the U.S.-Mexico border, according to a recent reprogramming notification sent to Congress.

Document: DOD's border funding reprogramming action

The House Appropriations Committee wants the Air Force to provide a "detailed time line" on the service's plan to move three F-35 Joint Strike Fighter squadrons to hurricane-ravaged Tyndall Air Force Base in Florida:

House appropriators scrutinize effort to house F-35s at Tyndall AFB

The House Appropriations Committee is ratcheting up oversight of the Air Force's effort to house three F-35 Joint Strike Fighter squadrons at Tyndall Air Force Base, FL.

Document: House appropriators' FY-20 MILCON spending bill

The Precision Strike Munition will have a longer range:

Army ratchets up range requirement for PrSM to 400 kilometers

The Army has formally ratcheted up the range requirement from 300 kilometers to 400 kilometers for a next-generation ballistic missile called the Precision Strike Munition (PrSM), the focus of a $2.8 billion competition between Lockheed Martin and Raytheon to build thousands as part of a follow-on to the Army Tactical Missile System program.

DOD's lead acquisition official Ellen Lord explained during a recent press briefing that despite new developments, warfighters are not always aware of what systems are available:

DOD sharing information on C-UAS solutions with warfighter senior integration group

The Defense Department is looking to enhance information sharing on counter-unmanned aerial system solutions by holding monthly meetings between combatant commanders and service representatives in Pentagon headquarters, with a current emphasis on Afghanistan and Iraq.

By Marjorie Censer
May 13, 2019 at 9:23 AM

Huntington Ingalls Industries said earlier this month it has named James LaCroix, a former Naval Undersea Warfare Center official, corporate director of the company's advanced technologies office in Newport, RI.

“As the director of the Advanced Technologies Office, LaCroix is responsible for interaction and cooperation with the Naval Undersea Warfare Center, Newport Division, and with the Naval War College to strengthen HII’s ability to translate innovative ideas and technologies more quickly into operational capabilities for customers,” the contractor said. “This position also supports experimentation, exercises and analytic efforts through internal research and development across the company.”

LaCroix started at the Naval Undersea Warfare Center as an intern in 1980 and became a full-time employee in 1983. He “spent a majority of his career involved in all phases of the torpedo acquisition process, including developing acquisition and contractual documentation and the design, development and testing of torpedo programs,” according to HII.

By Tony Bertuca
May 13, 2019 at 5:00 AM

This week House appropriators mark up their version of the fiscal year 2020 defense spending bill, while senior Pentagon officials are scheduled to make a host of appearances around the Washington area.

Monday

Army Secretary Mark Esper speaks at the Meridian International Center.

Tuesday

Leidos hosts an investor day.

Wednesday

The House Appropriations defense subcommittee marks up the FY-20 defense spending bill in closed session.

The Center for Strategic and International Studies hosts a maritime security discussion.

The Air Force Association hosts a discussion with the Joint Staff director of strategy, plans, and policy.

Kratos Defense & Security Solutions executives are set to speak at Goldman Sachs' industrials and materials conference.

The Senate Foreign Relations Committee hosts a hearing about arms control post-Intermediate-Range Nuclear Forces Treaty.

Thursday

The House Armed Services Committee holds a hearing on the Defense Department audit.

Leidos, Lockheed Martin and Northrop Grumman executives are slated to present at the Goldman Sachs conference.

The National Defense Industrial Association hosts the U.S.-Sweden Defense Industry Conference.

Under Secretary of Defense for Policy John Rood speaks at an Air Force Association event about the Nuclear Posture Review.

Navy Secretary Richard Spencer speaks at the Center for Strategic and Budgetary Assessments about maritime logistics.

Friday

The National Defense Industrial Association hosts a discussion with the Army’s intellectual property chief.

Army Secretary Mark Esper speaks at the Atlantic Council about the future of the service.

By John Liang
May 10, 2019 at 2:05 PM

This Friday INSIDER Daily Digest has news on a briefing held by Pentagon acquisition chief Ellen Lord and more.

Pentagon acquisition chief Ellen Lord spoke with reporters today. Here's our coverage so far:

Pentagon wants to hook tech companies up with 'trusted' venture capitalists to block China

The Pentagon intends to launch a program next month to connect small, but promising technology companies with "trusted" venture capitalists, rather than risk the companies going into business with Chinese investors.

DOD sharing information on C-UAS solutions with warfighter senior integration group

The Defense Department is looking to enhance information sharing on counter-unmanned aerial system solutions by holding monthly meetings between combatant commanders and service representatives in Pentagon headquarters, with a current emphasis on Afghanistan and Iraq.

Lord says next F-35 deal could be done by July; negotiations with Turkey continue

Pentagon acquisition chief Ellen Lord said today the agreement to purchase Lot 12 of the F-35 Joint Strike Fighter from Lockheed Martin could be complete by July.

The Navy variant of the Osprey will include three major alternations from the Marine Corps' MV-22:

First CMV-22 slated for delivery in late 2019

The Navy anticipates delivery of its first CMV-22 Osprey in late calendar year 2019, according to the manager of the V-22 joint program office.

The Government Accountability Office warns the Navy's Gerald Ford-class aircraft carriers could have cost overruns:

GAO: Follow-on Ford-class carriers at risk of cost cap breach

A government watchdog is warning of future cost cap breaches in the Navy's Gerald Ford-class aircraft carriers despite the service's efforts to increase construction efficiencies and strike a multiship buy estimated to save $4 billion.

Document: GAO's 2019 weapon systems annual assessment

Upgrades to both Littoral Combat Ship variants, which have been collectively dubbed LCS Lethality and Survivability, are being planned in two phases:

Navy streamlining LCS upgrade installations starting in FY-23

The Navy is setting the groundwork this year to streamline the installation of several capability upgrades to both Littoral Combat Ship variants during the future years defense program.

Marine Corps Brig. Gen. Christian Wortman, who leads the service's Warfighting Lab, spoke with reporters this week:

USMC to experiment with 'large number' of unmanned systems in summer exercise

The Marine Corps is "actively experimenting" with unmanned systems, planning to utilize them in an exercise this summer on the East Coast.

By Tony Bertuca
May 10, 2019 at 2:01 PM

The Pentagon intends to reprogram another $1.5 billion to build barriers on the U.S.-Mexico border, according to a defense official.

The money would be transferred from Overseas Contingency Operations funds spent on training Afghan Security Forces; savings gained from a variety of Defense Department contracts; and underruns in munitions spending, the official said.

The Defense Department released a short statement saying the funds would go toward "fence replacement" on four projects around Tucson, AZ and El Centro, TX, totaling just over 78 miles.

The reprogramming would be done without the approval of Congress, which the department, up until recently, relied on to clear large funding transfers if they were happening outside a specific appropriations bill.

The Pentagon overturned decades of precedent in March when, without the approval of Congress, it reprogrammed $1 billion to build 57 miles of border barriers.

Pentagon officials acknowledge the upsetting of precedent, but have pointed out they are not legally required to obtain congressional approval for budgetary reprogrammings.

The department has since submitted several other reprogramming requests that seek lawmakers' approval, making the border barrier transfer unique occurrences.

Democrats in Congress, who oppose President Trump's border barrier strategy, have warned Pentagon officials that they plan to eliminate or restrict all of DOD's reprogramming authority in the future.

Former Pentagon Comptroller Bob Hale recently penned an op-ed warning about the consequences of DOD bucking congressional oversight and losing its authority to reprogram funds.

"I remain concerned that the transfer of funds to the wall will disrupt DOD's ability to reprogram funds even though reprogramming is critical to effective financial management at the department," he told Inside Defense.

Acting Defense Secretary Pat Shanahan, meanwhile, recently told Inside Defense he hopes Congress will not completely remove DOD's transfer authority.

"I trust that Congress will not hurt our commanders in the field or our warfighters [by removing reprogramming authority]," he said. "I trust that Congress will not hurt the readiness we worked so hard to rebuild. I trust that they will take their frustration out on me."

By Ashley Tressel
May 10, 2019 at 11:30 AM

Army Futures Command’s Applications Laboratory in Austin, TX, this month announced several research areas it plans to focus on.

"To capitalize on opportunities for breakthrough research and development in key civil-military technology areas relevant to the Army’s modernization priorities, AFC has established the Army Applications Lab (AAL) to capitalize on the extended marketplace of ideas in government, academia, industry, and civilian innovation ecosystems and lead the research and development of disruptive innovations, i.e. technology demonstrators and early-stage products that revolutionize Army capabilities and corresponding civilian industries and create a first-mover advantage for the Army across a full spectrum of missions," a May 3 industry notice states.

The lab is seeking industry’s help on "discovery of novel capability," "acceleration of disruptive applications" and "translation of breakthrough innovations" in multiple technology areas, including autonomous platforms, artificial intelligence, data visualization and space.

By Marjorie Censer
May 10, 2019 at 10:19 AM

Maxar Technologies this week said it "engaged in significant cost reductions" during the most recent quarter.

"We are reducing our cost structure, which should improve profitability over time and help us with our debt and leverage situations," Daniel Jablonsky, the company's chief executive, told analysts in a call Thursday evening. "This quarter, we engaged in significant cost reductions that, unfortunately, affected several hundred of our colleagues."

"This is never easy," he added, "but it was a necessary step as we try to right the ship."

Last quarter, Maxar said it had implemented an organizational restructuring to save $60 million to $70 million a year.

Meanwhile, Maxar said today sales in its most recent quarter reached $504 million, down almost 10% from the same three-month period a year earlier.

The company reported a quarterly loss of $59 million, down from $15 million in profit the prior year.

By Tony Bertuca
May 9, 2019 at 4:20 PM

President Trump intends to nominate acting Defense Secretary Pat Shanahan to run the Defense Department, according to White House Press Secretary Sarah Sanders.

"Based upon his outstanding service to the country and his demonstrated ability to lead, President Trump intends to nominate Patrick M. Shanahan to be the Secretary of Defense," Sanders tweeted.

Shanahan's nomination was in the offing several months ago, sources said, but an inspector general ethics investigation into his ties to Boeing, his former employer, was announced March 15 and halted the process.

The IG completed the investigation April 25, clearing Shanahan of any wrongdoing and re-opening the path to his nomination as defense secretary.

"I am honored by today's announcement of President Trump's intent to nominate," Shanahan said in a statement. "If confirmed by the Senate, I will continue the aggressive implementation of our National Defense Strategy. I remain committed to modernizing the force so our remarkable soldiers, sailors, airmen, and Marines have everything they need to keep our military lethal and our country safe."

Shanahan, confirmed as the Pentagon's No. 2 official in July 2017, is the longest-serving acting defense secretary in U.S. history, stepping in Jan. 1 for former Defense Secretary Jim Mattis, who abruptly resigned in December over foreign policy differences with Trump.

In that time, Shanahan has made several significant policy moves, such as working to sell Congress on a final Space Force proposal; helping to prepare a budget request that added billions in additional defense spending; and assisting other senior administration officials to pivot Trump away from precipitous troop withdrawals in the Middle East.

Shanahan has also been the target of criticism by Democrats who oppose the Pentagon’s new mission to the border.

Meanwhile, Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said in a statement he is “pleased” with the nomination, despite having previously voiced reservations about Shanahan.

 “We need a confirmed leader at the department and, after working with him closely over the last few months, I welcome his selection,” Inhofe said. “I look forward to talking with him at his confirmation hearing about how we can work together to implement the National Defense Strategy and care for our service members, veterans and military families.”

Though Republicans have enough votes to potentially advance Shanahan's nomination to the full Senate, his confirmation process could prove bumpy.

Seven senators opposed Shanahan's confirmation as deputy defense secretary, some of whom have made strong statements questioning his experience and ties to the defense industry. Two of the "no" votes on the Senate Armed Services Committee have announced 2020 presidential campaigns and have been publicly critical of the Trump administration: Sens. Elizabeth Warren (D-MA) and Kirsten Gillibrand (D-NY).

Both were also among six senators who sent a letter to Shanahan last month saying they are "extraordinary distressed" about the Pentagon's border security mission and its potential to damage military readiness.

By John Liang
May 9, 2019 at 2:14 PM

This Thursday INSIDER Daily Digest has news on the Air Force's C-130J aircraft, the Navy's MQ-25 Stingray unmanned aerial vehicle, a potential third national missile defense site in the continental United States and much more.

A group of lawmakers is arguing that increasing the C-130J buy to support the Air National Guard and Reserve fleets would support two additional squadrons:

Lawmakers call on House defense leadership to add eight C-130Js in FY-20

A bipartisan group of lawmakers is urging the leaders of the House Armed Services Committee and the House Appropriations defense subcommittee to add eight C-130J aircraft above what the Air Force and Navy requested in fiscal year 2020.

Document: Lawmakers' letter on C-130Js

The MQ-25 Stingray's ground control station will have a "vehicle management command and control capability" developed using the Common Control System, according to executives at Raytheon, the company on contract to integrate the system onto Navy platforms:

Early part of Navy's Common Control System to work with MQ-25

The MQ-25 unmanned aerial tanker will incorporate an early version of the Navy's Common Control System, a first step in the service’s long-term effort to create software capable of operating surface, sub-surface and aerial unmanned platforms.

Document: Navy memo on CCS

Reps. Mike Turner (R-OH) and Elise Stefanik (R-NY), during a House Armed Services strategic forces subcommittee hearing, expressed exasperation with acting Defense Secretary Patrick Shanahan's recent public promises to name the location for a preferred third site for a ground-based interceptor field to bolster defenses against Iran and pressed the head of the Missile Defense Agency on the matter:

Lawmakers turn up heat on East Coast BMD site

Missile Defense Agency Director Lt. Gen. Samuel Greaves, facing frustration from lawmakers impatient with the Defense Department for continuing to withhold findings of a study completed in 2016 about a potential East Coast missile defense site, said a decision about identifying a location for a notional new missile field was not his call.

The Navy's adding a third Virginia-class submarine to its FY-20 budget request is one of the major changes compared to projections from previous years:

Additional Virginia sub in FY-20 meant to signal to industry Navy's commitment

The Navy's addition of a third Virginia-class submarine in the fiscal year 2020 budget request is intended to signal its commitment and give contractors time to prepare for an increased production cadence in future years, according to the program manager.

The Pentagon has submitted a legislative proposal to Congress asking to base price reasonableness determinations on "actual cost and pricing data for purchases of the same or similar products for the Department of Defense":

Pentagon wants Congress to ease pricing data pulls

The Pentagon is asking Congress to loosen restrictions on some large acquisition programs by reducing the amount of data required to make determinations of "price reasonableness."

The Congressional Budget Office this week released a Space Force cost estimate:

CBO: Pentagon's Space Force proposal could cost $820M to $1.3B annually

A new report from the Congressional Budget Office estimates the Pentagon's proposal to create a new Space Force could cost between $820 million and $1.3 billion annually to manage and operate and require $1.1 billion to $3 billion in one-time startup costs.

Document: CBO report on space organization personnel requirements, costs

By Sara Sirota
May 9, 2019 at 10:41 AM

Eglin Air Force Base, FL, will have a new $75 million, 53,000-square-foot munitions research center by 2021.

Capabilities developed at the Air Force Research Lab facility -- called the Advanced Munitions Technology Complex -- are intended to reduce the size of weapons, allowing aircraft like the F-22 and F-35 to carry more at a time, according to a news release published yesterday.

AFRL now creates ordnance systems as individual parts, but with the new complex, they will be developed simultaneously.

The release states this integration will help scientists and engineers understand how each technology improves the other, leading to better precision delivery while lessening risk to civilians.

"The Advanced Munitions Technology Complex is not just a series of buildings. It’s a center that brings minds together to conceive of next generation sophisticated ordnance technologies in an efficient way," Michael Lindsay, AFRL core technical competency lead for ordnance sciences, said.