The Insider

By Marjorie Censer
September 6, 2019 at 10:15 AM

Science Applications International Corp.’s partnership with Polaris to pursue the Army Infantry Squad Vehicle program demonstrates the company’s new “posture and position,” according to SAIC’s chief executive.

In a call with analysts Thursday evening, Nazzic Keene, who formally took the reins of the company last month, said SAIC has made a “pivot” and has “rethought about what made the most sense for us in these major programs of record and manufacturing of vehicles.”

SAIC recently pursued, but ultimately lost two major programs of record: the Marine Corps’ Amphibious Combat Vehicle program and the Army’s Mobile Protected Firepower competition.

In August, SAIC said it will help prepare Polaris’ DAGOR vehicle for the Army ISV effort.

During yesterday’s call, Keene cited that teaming as evidence that SAIC has “elected to take a very different posture and position.”

“This is a great example of that, where it’s a proven vehicle,” she added. “Our role is really to help engineer it, to strengthen the C4ISR and work with our partner in delivering a strong vehicle versus us owning the manufacturing of something along those lines.”

Meanwhile, SAIC said Thursday sales during its most recent quarter reached nearly $1.6 billion, up about 43% from the same three-month period a year earlier. The company attributed the growth to its acquisition of Engility and said that, adjusted for the acquisition, sales “were consistent” with the prior year’s quarterly revenue.

The company recorded quarterly profit of $57 million, up 16% from a year earlier.

By Justin Katz
September 5, 2019 at 2:35 PM

The Navy plans to request pricing for an unlimited warranty on its next-generation frigate prior to exercising the first ship option, according to a revised government watchdog report published today.

The Government Accountability Office last month published a report criticizing the service for using a guaranty rather than a warranty in the new shipbuilding program.

In the August report, Stacy Cummings, principal deputy assistant secretary of defense for acquisition enablers, concurred with GAO's recommendation to request pricing data from industry for a warranty, but ostensibly did not agree to implement a change.

The revised report published today includes an omitted page of Cummings' response, where she wrote: "To support the GAO recommendation to request pricing for unlimited warranty, the Navy will request pricing for [an] unlimited warranty before exercising the first ship option and evaluate the business case."GAO noted that warranties provide a greater level of coverage than guaranties. The Navy's current request for proposals would have the shipbuilder pay the costs to correct defects for which it is responsible up to $5 million per ship. After that payout is reached, the government would foot the remaining costs.

If the Navy used a warranty, then the shipbuilder would be monetarily responsible for any defects for which it is at fault.

By John Liang
September 5, 2019 at 2:18 PM

This Thursday INSIDER Daily Digest has coverage from the Defense News conference and Billington Cybersecurity Summit plus more.

Senior Air Force officials had a lot to say at this week's Defense News conference:

Air Force's FY-21 budget submission driven by zero-based review

The Air Force's fiscal year 2021 budget submission has been shaped by a vigorous planning and programming process -- similar to the Army's infamous "Night Court" -- aimed at assuring the service's proposed investments align with the National Defense Strategy.

Roper: Air Force open to teaming proposal, no position on right approach for GBSD contract

The Air Force is open to all kinds of proposals for the next Ground Based Strategic Deterrent contract, including a teaming approach between prime contractors Boeing and Northrop Grumman, according to the service's acquisition executive.

Roper: Air Force taking steps to institutionalize software innovation

The Air Force is taking steps to institutionalize the work of its software factories -- a process that acquisition executive Will Roper hopes will help the service quantify the value the work its coders are doing and better communicate that to Congress and other stakeholders.

Anne Neuberger, the incoming head of the National Security Agency's new cybersecurity directorate, spoke this week at the 10th Annual Billington Cybersecurity Summit:

New NSA cyber directorate will focus on defense industrial base

The National Security Agency's new cybersecurity directorate will prioritize collaboration to create threat intelligence products that provide more context in an unclassified setting, as well as feature a special focus on the Defense Department's industrial base, according to the director of the office.

More news from the Billington Cybersecurity Summit:

Pentagon seeks feedback on draft version of new contractor cybersecurity standards

The Pentagon is seeking feedback on a draft version of new cybersecurity standards defense contractors will have to start following next year.

Charles Verdon, deputy administrator for defense programs at the National Nuclear Security Administration, spoke this week about delays to the B61 nuclear gravity bomb program:

B61-12 first production unit delayed at least 16 months

The first production unit in the multibillion-dollar life extension program of the B61 nuclear gravity bomb will be delayed by about 16 to 18 months, according to a senior official at the National Nuclear Security Administration.

The Air Force's top intel officer spoke this week at the Intelligence and National Security Summit:

Air Force ISR team developing cyber warfare flight plan

Lt. Gen. VeraLinn Jamieson, the Air Force's top intelligence officer, is working on a cyber warfare flight plan to help execute the service's vision for multidomain operations.

The Defense Department is gradually figuring out how it will develop a Hypersonic Defense Weapon System:

MDA selects five Hypersonic Defense Weapon System concepts for further development

The Missile Defense Agency has selected five industry proposals for a Hypersonic Defense Weapon System for further development -- four concepts that rely on a kinetic interceptor to destroy an enemy hypersonic boost glide weapon and one project that envisions a "non-kinetic" solution to thwart an ultrafast, maneuvering threat.

Half of the defense funds earmarked for the president's proposed border wall will come from programs being deferred from outside the United States, while the other half will come from programs inside the United States:

Pentagon names military construction programs it will defer to pay for border wall

The Pentagon has sent Congress a list of military construction programs it intends to defer so $3.6 billion can be diverted to pay for barriers on the U.S.-Mexico border.

A White House anomalies request list, sent to Congress and obtained by Inside Defense, asks, among other things, that Congress allow new-start spending of $20 million to establish the new Space Development Agency:

White House seeks CR exemptions for SDA, hypersonics, background checks

The White House has sent a 21-page list of "anomalies" to Congress seeking exemptions for a variety of federal spending priorities -- including the establishment of a Space Development Agency, continued development of hypersonic weapons and new background investigations -- in the likely event lawmakers pass a stopgap continuing resolution.

By Tony Bertuca
September 5, 2019 at 1:14 PM

The Senate Armed Services Committee has scheduled a Sept. 12 hearing to consider the nominations of Ryan McCarthy to be Army secretary and Barbara Barrett to be Air Force secretary.

McCarthy is currently serving as acting Army secretary and Barrett is the former chairwoman of Aerospace Corp.

The committee has yet to confirm it has received the formal nominations from the White House.

But President Trump announced his intent to nominate McCarthy for the post in July after tapping then-Army Secretary Mark Esper to become defense secretary.

Trump first announced his intent to nominate Barrett in May.

By Mallory Shelbourne
September 5, 2019 at 1:11 PM

The Navy yesterday announced a $143.7 million contract modification to General Electric Aviation for engines that will power the Marine Corps' new heavy-lift helicopter.

The contract adjustment is so the service may purchase three engines for Lot 2 of the CH-53K King Stallion's low-rate initial production phase and 24 engines for Lot 3.

"In addition, this modification provides for associated engine and programmatic support, logistics support, peculiar support equipment and spares," the announcement reads. "Work will be performed in Lynn, Massachusetts, and is expected to be completed in December 2022."

The Navy will use aircraft procurement funding from fiscal years 2018 and 2019, according to the contract notice.

In May, the service awarded Lockheed Martin's Sikorsky a $1.1 billion contract modification for LRIP Lots 2 and 3.

By Marjorie Censer
September 5, 2019 at 12:30 PM

AeroVironment this week said sales in its most recent quarter reached $86.9 million, up 11% from the same three-month period a year earlier.

The company's quarterly profit hit $17.1 million, down 37% from the prior year. AeroVironment said the prior year's results benefited from a one-time gain related to a litigation settlement.

By Ashley Tressel
September 5, 2019 at 12:02 PM

The Army on Aug. 28 awarded Boeing a $34 million contract to integrate the Improved Turbine Engine into the AH-64E Apache helicopter.

The service in January released a notice stating its intent to issue a sole-source award to Boeing, which owns the technical data package for the Apache.

General Electric Aviation won the competition to develop the ITE to replace the engines in both the Apache and Black Hawk helicopters, followed by a protest by Advanced Turbine Engine Co., which the Government Accountability Office ultimately rejected.

The ITE is also slated for use in the Army's Future Attack Reconnaissance Aircraft, which the service wants to field by 2030.

By Marjorie Censer
September 5, 2019 at 11:58 AM

In a new filing, a PAE-Parsons team is pushing back against the U.S. government's effort to dismiss its case protesting the LOGCAP V awards.

The PAE-Parsons team last month filed in the U.S. Court of Federal Claims over the program. The U.S. government sought dismissal, arguing the federal court "lacks jurisdiction" over the complaint because it is barred by the Federal Acquisition Streamlining Act of 1994.

A redacted version of PAE and Parsons' response is dated Sept. 4. In the document, the contractors argue the government’s argument is "irrational on its face."

If the court backed the jurisdictional argument, the filing contends, it would "divest this Court not only of jurisdiction over [the PAE-Parsons] protest, but also of every other protest challenging the non-award of a LOGCAP IDIQ contract, because every IDIQ award was 'indistinguishable' from the set of task orders issued alongside it," the document adds. "The Government's argument would make LOGCAP V -- and the award of $82 billion in procurement contracts -- entirely unreviewable by this Court."

The filing argues that FASA "was intended to limit this Court's jurisdiction related to task orders issued under existing IDIQ contracts, not eliminate jurisdiction over protests of IDIQ contracts entirely."

The document asks the court to deny the motion to dismiss.

By Ashley Tressel
September 5, 2019 at 11:45 AM

The Army has chosen General Dynamics Ordnance and Tactical Systems, Textron Systems and Sig Sauer Inc. to each develop prototypes of the two Next Generation Squad Weapon variants.

The service on Aug. 29 awarded the three vendors other transaction agreements for the effort, consisting of the NGSW-Rifle, the NGSW-Automatic Rifle and common 6.8 mm ammunition, according to a Federal Business Opportunities notice.

The Army is planning to equip the first unit with the NGSW-AR in the fourth quarter of fiscal year 2022, but the service in a June reprogramming request expressed concern the schedule would slip if Congress did not approve a $14.9 million funding shift for the effort.

The prototype OTA spans up to eight years, with delivery expected within 27 months.

Textron in an Aug. 30 press release said the company would deliver 53 NGSW-Rs and 43 NGSW-ARs along with 845,000 rounds of the common ammunition under the OTA.

"Textron Systems has successfully demonstrated its high capability and low-risk 6.8 mm [cased telescoped] system that provides significant performance enhancements over current Army systems," the release says. "The design features improved accuracy and greater muzzle velocity for increased performance, as well as weight savings of both weapon and ammunition over current Army systems. It also incorporates advanced suppressor technology to reduce the firing signature and improve controllability."

Sig Sauer’s Sept. 3 press release says, "The U.S. Army challenged the industry to bring forward significant improvements to the legacy weapons. The Sig Sauer NGSW-AR is lighter in weight, with dramatically less recoil than that currently in service, while our carbine for the NGSW-Rifle submission is built on the foundation of Sig Sauer weapons in service with the premier fighting forces across the globe. Both weapons are designed with features that will increase the capabilities of the soldier."

GD OTS has not issued a press release on its selection.

By Justin Katz
September 5, 2019 at 9:20 AM

Utilities company Exelon announced this week it has appointed former Chief of Naval Operations Adm. John Richardson to its board of directors.

The retired four-star will join Exelon’s finance and risk and generation oversight committees, according to a company statement.

Richardson handed over his command as the Navy’s top admiral late last month to Adm. Michael Gilday.

By Justin Doubleday
September 5, 2019 at 9:18 AM

The Defense Department has brought on a former Defense Advanced Research Projects Agency official to oversee DOD’s research and development of fifth-generation wireless technologies.

Under Secretary of Defense for Research and Engineering Mike Griffin announced yesterday the appointment of Joe Evans as technical director for 5G within Griffin’s research and engineering directorate.

“It ranks extremely high in our priorities,” Griffin said of 5G during a Defense News conference in Arlington, VA. “It ranks right behind microelectronics, I would say.”

He noted his deputy, Lisa Porter, has been named DOD’s “cognizant,” or lead official, for 5G.

“We’re working with all the services on developments in 5G on and around our various bases and installations,” Griffin said. “This is an area where DOD can help, but frankly, commercial industry and the telecom’s arena dwarfs even the heaviest possible DOD instantiation of telecomm. So our goal is to be at the frontier with our telecoms industry and to do so in a way that of course meets DOD’s needs securely and with assurance that they’ll be there.”

Until he joined Griffin’s shop this month, Evans had served as a program manager in DARPA’s Strategic Technology Office, according to his biography on DARPA’s website. He joined the defense agency on leave from his post as the Deane E. Ackers Distinguished Professor of Electrical Engineering & Computer Science at the University of Kansas.

Earlier in his career, Evans helped develop the Tactical Ground Reporting System for DARPA and the Army as chief scientist at Ascend INtelligence, according to the biography. He also served as program director in the Division of Computer and Network Systems at the National Science Foundation between 2003 and 2005.

DOD’s developments related to 5G technologies has picked up pace in recent months. Earlier this summer, Congress granted DOD’s request to reprogram $34 million to jump-start a 5G technology development program. Lawmakers are also boosting DOD funding to install 5G testbeds at certain Air Force installations within the United States.

By Ashley Tressel
September 4, 2019 at 5:06 PM

The Army's Futures and Concepts Center is planning to publish next month its "annual mission guidance" to accompany the service's 10-year modernization strategy.

FCC director Lt. Gen. Eric Wesley told reporters at the Defense News conference today the guiding document will allow Army Futures Command chief Gen. Mike Murray "to hold the future force enterprise to account for the tasks they have to accomplish on that annual basis in order to get to a future destination," i.e. the battlefield of 2028.

"If I describe what the Army will be in the future in the Army operating concept, or 'Multidomain Operations in 2028,' there has got to be a pathway to get there," he said.

The FCC, activated in December, is tasked with shaping the planned iterations of the multidomain operations concept and describing the future operational environment, involving near-peer adversaries, to a force that has been focused on counterterrorism and counterinsurgency operations.

The new guidance will dictate how the force is to implement the Army's modernization strategy, which the service published in May 2018.

By Jaspreet Gill
September 4, 2019 at 4:58 PM

The Army, by way of an Aviation and Missile Technology Consortium Other Transaction Authority, recently issued a request for proposals for the Future Long Range Assault Aircraft Competitive Demonstration and Risk Reduction effort.

The FLRAA, a part of the Army's third modernization priority, Future Vertical Lift, is a multiservice effort to replace the Black Hawk helicopter. According to a recent Army release, Col. David Phillips, the program executive office for aviation's project manager for FLRAA, said the solicitation will "inform the program of record" as the service meets the aviation modernization priority.

Brig. Gen. Walter Rugen said at a Sept. 4 Defense News conference that the solicitation was the "tip of the hat towards our commitment in the Army for multiyear acceleration" and that the service expects the first unit equipped by 2030.

"We've seen the great work the entire [Joint Multi-Role Technology Demonstrator] program has done and we'll leverage that momentum on the success that the industry has achieved across both the [technology] demonstrators and the folks that have done work on the mission system architecture," Rugen said.

By John Liang
September 4, 2019 at 2:06 PM

This Wednesday INSIDER Daily Digest has coverage of the Defense News conference plus SpaceX's challenge of the Air Force's Launch Services Agreement award decision, DOD funding for the president's proposed border wall and more.

Vice Adm. Stuart Munsch, the deputy chief of naval operations for operations, plans and strategy, told attendees today at the Defense News conference the service is currently working to stand up a new warfighting directorate:

Navy to officially stand up new warfighting directorate in October

The Navy in October will officially establish its new warfighting directorate within the office of the chief of naval operations.

More from today's Defense News conference:

Pentagon delays work on space-based neutral particle beam 'indefinitely'

The Defense Department is delaying work on a space-based neutral particle beam "indefinitely," just months after revealing its plans to pursue the project, as DOD's research chief says the technology is not mature enough.

SpaceX's challenge of the Air Force's Launch Services Agreement award decision didn't go well with the U.S. Court of Federal Claims:

Federal Claims Court dismisses SpaceX LSA challenge on lack of jurisdiction

The U.S. Court of Federal Claims has dismissed SpaceX's challenge of the Air Force's Launch Services Agreement award decision, finding the company's complaint does not fall within its jurisdiction and directing the case to be transferred to a California District Court.

Document: Federal Claims Court's decision on SpaceX LSA challenge

Defense Secretary Mark Esper has told lawmakers how much money the Pentagon will shift to fund President Trump's proposed border wall:

Esper will defer $3.6B in military construction projects to build border wall

Defense Secretary Mark Esper will order the Pentagon to defer military construction projects so $3.6 billion can be diverted to build barriers along the U.S.-Mexico border, according to a letter he sent Tuesday to the House Armed Services Committee.

The Air Force is still figuring out what its next steps will be for the Robotic Pilot Unmanned Conversion program:

ROBOpilot mishap leaves fate of future testing uncertain

An investigation into a mishap last month will determine whether the Air Force Research Lab will continue with planned testing of the Robotic Pilot Unmanned Conversion program -- a system that transitions a general aircraft into an autonomous, unmanned aerial vehicle.

A new Government Accountability Office report on DOD's business reform efforts is out:

GAO: Pentagon claims it cut $18.4B in waste, but can't prove it

The Defense Department says its ongoing reform efforts have saved or are expected to save $18.4 billion between fiscal years 2017 and 2020, but the Government Accountability Office says DOD can't prove it.

Document: GAO report on DOD's business reform efforts and plan

By Courtney Albon
September 4, 2019 at 1:08 PM

The Air Force is considering "bold and likely controversial changes" to future budgets in response to the defense secretary's call for more investment in critical capabilities, according to acting Air Force Secretary Matt Donovan.

Donovan told an audience today at the Defense News conference the service is considering major budget shifts that could result in divesting legacy fleets or systems in order to invest in higher value programs.

"The Air Force is leading the way with bold and likely controversial changes to our future budgets," Donovan said. "We need to shift funding -- and allegiance -- from legacy programs we can no longer afford due to their incompatibility with future battlefields and into the capabilities and systems the nation requires for victory."

Maj. Gen. Michael Fantini, director of the Air Force Warfighting Integration Capability, said during a panel at the conference that although he wouldn't discuss details of the fiscal year 2021 budget submission, the service is working to determine what "tough choices" it will need to make in order to shift to the future force.

"Everybody loves the future force," Fantini said. "The challenge is what are you going to stop doing to pivot to the future."