The Insider

July 2, 2018 at 2:19 PM | John Liang

News on Army spending, the Air Force's B61-12 tailkit assembly program and naval aviation mishaps highlight this Monday INSIDER Daily Digest.

Inside Defense recently chatted with the Army secretary:

Esper: Army will continue to revise spending through FY-20

More "big changes" are coming to the Army's budget through next fiscal year to better align investments with the service's modernization priorities as it turns its focus to Russia and China, according to its top civilian official.

The Air Force's B61-12 tailkit assembly program will undergo an audit by the Pentagon inspector general's office:

DOD inspector general auditing B61-12 tailkit program

The Defense Department's inspector general last month launched an audit of the Air Force's B61-12 tailkit assembly program to check whether it is meeting its cost, schedule and performance requirements, the watchdog office announced this week.

Document: DOD IG memo on B61-12 tailkit program audit

Previous coverage of the B61 bomb:

Senators propose DOD, DOE draft new plan to align nuclear modernization programs

Senators are flagging potential schedule problems for two nuclear weapon modernization programs and want the Defense Department and National Nuclear Security Administration to better align their work.

B61-12 test program resolves risks as cost drops to $1.2 billion

The Air Force Nuclear Weapons Center says it resolved risks to the B61-12 life extension program's tailkit assembly effort that were noted in a recent Selected Acquisition Report obtained by Inside the Air Force.

Air Force shifts funds for B61-12 trainers amid delay to first tailkit delivery

The Air Force has repurposed $4.8 million from fiscal year 2016 to buy 30 B61-12 tailkit assembly trainers in FY-18, after a series of continuing resolutions threatened the program's progress earlier this year, a service spokeswoman recently confirmed.

B61-12 tailkit program sees funding shifts as two bombs stay in arsenal

A key nuclear modernization program, the B61-12 tailkit assembly life-extension program, requires about $52 million more for production in fiscal year 2019 than anticipated, according to the Air Force's latest budget request.

Senior Navy and Marine Corps officers were on Capitol Hill recently, testifying about what they were doing to lower the aviation mishap rate:

Navy to begin four-part initiative in FY-19 to tackle aviation mishaps

Following a year where the Navy and Marine Corps have both faced congressional scrutiny for aviation mishaps, the Navy is developing a four-part initiative to improve mishap reporting and better utilize data collected.

Previous coverage of Navy and Marine Corps aviation mishaps:

Navy, Marine Corps report more class C mishaps

Both the Navy and Marine Corps have recently experienced an uptick in class C mishaps, according to two top aviation officers.

Navy partners with Army Analytics Group to sift through aviation mishap data

The Naval Safety Center has partnered with the Army Analytics Group for data aggregation and complex analysis to better understand the uptick in aviation mishaps, according to a Navy official.

House lawmakers look to address 'crisis point' in aviation mishaps

House lawmakers are taking steps to shore up what they are calling a "crisis point" in military aviation, a plethora of accidents over the last few years, according to a summary of the House Armed Services Committee's chairman's mark of the fiscal year 2019 defense policy bill.

July 2, 2018 at 2:13 PM | Justin Doubleday

Defense Department Chief Information Officer Dana Deasy has been directed to establish a new Joint Artificial Intelligence Center to help coordinate the military's AI efforts.

Deputy Defense Secretary Patrick Shanahan directed Deasy to establish the JAIC late last month, according to DOD spokesman Col. Rob Manning.

"The center will enable teams from across DOD to swiftly deliver new AI-enabled capabilities and effectively experiment with new operating concepts," Manning told reporters at the Pentagon today.

Michael Griffin, the under secretary of defense for research and engineering, previously said the JAIC would also include elements of the intelligence community.

"The jointness will include elements of the intelligence community as well," Griffin said during an April 13 event at the Hudson Institute in Washington. "It will be cross-cutting, across services and the intelligence community."

The Defense Innovation Board had recommended DOD set up an "AI center of excellence" as part of a slate of recommendations delivered to DOD leadership last year.

Meanwhile, lawmakers want to add money to DOD's AI pathfinder, Project Maven, as the Pentagon grapples with Google's decision to drop out of the program due to thousands of its engineers opposing work on military drone programs.

July 2, 2018 at 9:45 AM | Marjorie Censer

The Aerospace Industries Association has named Timothy McClees vice president for legislative affairs.

He is "responsible for leading the Association's legislative policy and advocacy work with members of Congress and their staff," the organization said.

McClees most recently managed Air Force intelligence and data storage and dissemination programs at Peraton. He has also previously served as chief of staff at Laurel Strategies, overseeing long-term and crisis communications strategies, and as chief of staff to the deputy secretary of the Energy Department.

McClees also was deputy staff director (minority) for the House Armed Services Committee and spent a decade in the Army as an intelligence analyst.

July 2, 2018 at 5:15 AM | John Liang

Some must-reads from this week's issue of Inside the Navy:

1. Objections raised by the Pentagon, including a call from the Air Force secretary, played a large role in the House voting down an amendment that would have redirected $1 billion in defense spending to procure new Virginia-class submarines, according to House Appropriations defense subcommittee Chairwoman Kay Granger (R-TX).

Full story: Granger: DOD letter -- and SECAF's call -- sank $1B sub amendment

2. Senate appropriators in their version of the defense spending bill seek to prohibit the Navy from executing in fiscal year 2019 a block-buy strategy for the next two aircraft carriers and want a briefing on the submarine industrial base, according to the report accompanying the committee's bill.

Full story: Senators would stop carrier block buy, direct briefing on sub base

3. The Defense Department's recent $660 million award to Lockheed Martin to support an F-35 economic order quantity buy will yield less than half of what the program expected in cost savings, according to a letter obtained last week by Inside Defense.

Full story: Projected F-35 EOQ cost savings cut in half in CAPE estimate

4. House lawmakers are pushing the Defense Department to shore up its policies on contractor cybersecurity, as Congress weighs legislative options in the wake of a hack into a Navy contractor's sensitive undersea warfare data

Full story: Lawmakers push to fill gaps in contractor cybersecurity after Navy hack

July 2, 2018 at 5:00 AM | John Liang

Some must-reads from this week's edition of Inside the Army:

1. More "big changes" are coming to the Army's budget through next fiscal year to better align investments with the service's modernization priorities as it turns its focus to Russia and China, according to its top civilian official.

Full story: Esper: Army will continue to revise spending through FY-20

2. The Army's Maneuver Center of Excellence in Ft. Benning, GA, has hosted a number of companies that are developing algorithms for robot "swarming," or controlling many at once, according to a service official.

Full story: Army Maneuver Center looking to 'swarm' ground robots

3. An influential Army advisory panel is delving into the science and technological underpinnings needed to team soldiers with robots for combat operations, a sweeping study that aims to recommend options to synchronize research and development of needed sensors, communications and artificial intelligence technologies to produce game-changing capabilities for ground and air service components.

Full story: ASB working to recommend viable MUM-T technology roadmap

4. The Army has commissioned the Army Science Board to help service leaders wrestle with the doctrinal implications of bolstering conventional defense against near-peer adversaries such as China and Russia, directing the independent advisory panel to conduct a follow-on study to its 2017 Multi-Domain Battle assessment.

Full story: New study fleshing out Multi-Domain Battle concept, how to deal with 'gray zone'

June 29, 2018 at 1:40 PM | John Liang

House and Senate lawmakers' debates on the FY-19 defense policy and spending bills lead off this Friday INSIDER Daily Digest.

Continued coverage of the House and Senate FY-19 defense authorization and appropriations bills, which are inching toward completion:

Authorizers, appropriators pitch range of plus-ups for light-attack procurement

Lawmakers disagree over how strongly they should push the Air Force to buy light-attack aircraft in fiscal year 2019, as the appropriations and authorization committees vary widely on how much money to offer the service for a new fleet.

Senate appropriators would stop carrier block buy, direct briefing on sub base

Senate appropriators in their version of the defense spending bill seek to prohibit the Navy from executing in fiscal year 2019 a block-buy strategy for the next two aircraft carriers and want a briefing on the submarine industrial base, according to the report accompanying the committee's bill.

Document: Senate appropriators' FY-19 defense spending bill, report

Granger says Pentagon letter -- and Air Force secretary's call -- sank $1B submarine amendment

Objections raised by the Pentagon, including a call from the Air Force secretary, played a large role in the House voting down an amendment that would have redirected $1 billion in defense spending to procure new Virginia-class submarines, according to House Appropriations defense subcommittee Chairwoman Kay Granger (R-TX).

Document: DOD correspondence with Congress on fast-attack sub amendment

The top DOD official who would be in charge of background investigations still hasn't been chosen yet:

Pentagon yet to task senior leader with overseeing background investigations transfer

The White House is proposing the Defense Department take over the background investigations mission for the entire federal government, but the Pentagon has yet to tap a senior leader for managing the impending transfer of military-specific investigations to DOD, according to a new Government Accountability Office report.

Document: GAO report on internal DOD collaboration

Analysts aren't quite sure what to make of Northrop Grumman's not bidding on several recent major defense contracts:

Analysts say Northrop's decision to no-bid four key competitions presents risks

Northrop Grumman over the last year has opted not to bid in four major competitions, raising questions among some analysts about the company's long-term strategy.

The Section 809 panel's latest report is out:

Section 809 panel recommends elevating PEOs to 'portfolio acquisition executives'

The Section 809 panel is recommending the Defense Department elevate the role program executive officers play in acquisition by giving them more power over program decisions and funding within their capability portfolios.

Document: Section 809 panel's volume two report

June 29, 2018 at 11:33 AM | Marjorie Censer

The Pentagon today issued a final rule amending defense acquisition regulations to "provide a more transparent means of documenting the impact of costs incurred during the undefinitized period of an undefinitized contract action (UCA), and to recognize when contractors demonstrate efficient management and internal cost control systems through the submittal of a timely, auditable proposal in furtherance of definitization of a UCA."

According to the notice, Pentagon contracting personnel in some cases "have not documented their consideration of the reduced risk to the contractor of costs incurred during the undefinitized period of a UCA.

"While such costs generally present very little risk to the contractor, the contracting officer should consider the reasons for any delays in definitization in making their determination of the appropriate assigned value for contract type risk," the notice adds.

June 29, 2018 at 11:10 AM | Marjorie Censer

The Pentagon today issued a final rule amending defense acquisition regulations to indicate that all indirect offset costs of a U.S. defense contractor related to a foreign military sale are deemed reasonable, provided the contractor presents documentation that the cost was a condition of the acquisition.

According to a Federal Register notice, the rule also implements a section of the Fiscal Year 2016 National Defense Authorization Act that was intended "to eliminate the need for an unnecessary and time-consuming review of offsets that are negotiated directly between the contractor and foreign customer."

"DOD recognizes the need to have offsets embedded in DOD FMS contracts," the document states. "However, the decision whether to engage in indirect offsets, and the responsibility for negotiating and implementing these offset arrangements, ultimately reside with the FMS customer and contractor(s) involved. Thus, the DOD contracting officer is not provided the information necessary to negotiate cost or price of the indirect offsets, particularly with respect to price reasonableness determinations."

"This rule provides that under these circumstances, when the provision of an indirect offset is a condition of the FMS acquisition and provided that the U.S. defense contractor submits to the contracting officer an offset agreement or other substantiating documentation, those indirect offset costs are deemed reasonable," it adds.

June 29, 2018 at 11:04 AM | Justin Katz

The Navy's use of accelerated acquisition programs has caught the eye of Senate appropriators who want to direct a handful of reports and certifications for such programs in their defense spending bill, according to a report accompanying the committee's bill.

The designation "accelerated acquisition" is given to a program by the chief of naval operations. By doing so, officials are given the authorities to quicken the traditional acquisition process. Former Navy Secretary Ray Mabus and CNO Adm. John Richardson each issued instructions in late 2016 and early 2017, respectively, about accelerating acquisition.

The Senate Appropriations Committee in the report accompanying its defense spending bill notes the Navy's $1.4 billion request to support such programs is "an increase of 150 percent over the amounts enacted in fiscal year 2018."

The committee also noted the Navy's ongoing efforts to reorganize internal processes related to requirements, acquisition strategies and budgets for accelerated acquisition programs.

Lawmakers offered support for such programs and recommended $1.2 billion for the efforts, but are "concerned by repeated instances in which the designation as an accelerated acquisition program has apparently led to imprudent program management decisions affecting contracting actions and funding execution."

Therefore, the committee would direct the Navy's acquisition executive and comptroller to provide a report to Congress within 30 days of the bill's enactment that details the acquisition strategy management and fiscal controls in place to ensure appropriate management of accelerated programs, according to the report.

Alongside the president's FY-20 budget request, the acquisition executive would have to detail the acquisition strategy for each designated accelerated acquisition program. At that same time, the Navy comptroller would have to "certify that the [FY-20 budget] fully funds such acquisition strategies, to include the associated test requirements identified in the test plan for each program," the report said.

Lastly, the acquisition executive would be required to identify to congressional committees any additional training requirements levied on the acquisition workforce associated with the execution of accelerated acquisition programs, according to the report.

June 29, 2018 at 10:52 AM | Courtney Albon

Senate appropriators said in their mark of the fiscal year 2019 defense spending bill they are "dismayed" by the inaccuracy of the F-35 joint program office's initial estimates for potential savings from an economic order quantity contract, which lawmakers approved in the FY-18 Omnibus Appropriations Act.

Inside Defense reported this week the Pentagon's cost assessment and program evaluation office estimated potential EOQ savings at $595 million for the Defense Department international partners. That projection is less than half of the $1.2 billion in cost avoidance the F-35 JPO predicted in an October 2017 estimate.

In its version of the mark, released June 28, the Senate Appropriations Committee expressed its disappointment in the JPO's overly optimistic estimate and required a report from F-35 Program Executive Officer Vice Adm. Mat Winter updating Congress on its cost savings estimate and the EOQ procurement approach. The committee also wants an update on how the $660 million appropriated in FY-18 is being executed toward the strategy and an analysis of CAPE's estimate.

The program awarded Lockheed Martin $660 million in early June to support the EOQ buy, which will procure some parts in bulk for low-rate initial production lots 12, 13 and 14. The funds were part of a larger $735 million contract.

June 29, 2018 at 5:15 AM | John Liang

Some must-reads from this week's issue of Inside the Air Force:

1. The Air Force's recent announcement that its KC-46 delivery schedule was aligned with prime contractor Boeing's came after the two parties agreed on a slate of schedule mitigation efforts, Inside Defense has learned.

Full story: Newly aligned KC-46 schedule includes slate of risk-mitigation efforts

2. U.S. Special Operations Command is refining development plans for its AC-130J Ghostrider laser demonstration and expects to award two subsystem manufacturing contracts by the end of September, a command official told Inside Defense.

Full story: Full story: SOCOM to award two AC-130J laser subsystem contracts by end of FY-18

3. The Defense Department's recent $660 million award to Lockheed Martin to support an F-35 economic order quantity buy will yield less than half of what the program expected in cost savings, according to a letter obtained this week by Inside Defense.

Full story: Projected F-35 EOQ cost savings cut in half in CAPE estimate

4. The Air Force's light-attack experiment is suspended until further notice as service officials determine whether they gleaned enough data from flight tests to end the effort early, following a fatal A-29 crash last week at White Sands Missile Range, NM.

Full story: Air Force suspends light-attack experiment

June 28, 2018 at 3:03 PM | John Liang

The House and Senate FY-19 defense appropriations bills and a slew of Air Force news highlight this Thursday INSIDER Daily Digest.

The Senate Appropriations Committee has marked up its version of the fiscal year 2019 defense spending bill:

Senate appropriators rescind $3.8 billion in prior-year funds

The Senate Appropriations Committee has approved a fiscal year 2019 defense spending bill that rescinds $3.8 billion in prior-year funding for Pentagon programs lawmakers say are delayed or no longer needed, according to a summary provided by committee Democrats.

Document: Senate appropriators' FY-19 defense spending bill, report

Our coverage of the House version of the FY-19 defense spending bill:

Facing Pentagon, appropriator opposition, $1B House sub amendment voted down

Following a last-minute intervention by a top Pentagon official and strong opposition from an influential Republican lawmaker, an amendment to the House defense spending bill that would procure additional Virginia-class submarines has been defeated.

Related:

DOD voices last-minute opposition to $1B House submarine amendment, prompting clash with lawmakers

An amendment sponsored by nearly two dozen lawmakers to the House defense spending bill that would provide funding for advanced procurement of fast-attack submarines in fiscal years 2022 and 2023 has run up against unforeseen, last-minute opposition from the Defense Department.

Document: DOD correspondence with Congress on fast-attack sub amendment

An early look at some of the stories in this week's Inside the Air Force:

DARPA to select single testbed vendor this fall for space BMC2 demo effort

The Defense Advanced Research Projects Agency this fall plans to choose a single vendor for its Hallmark program -- an effort to mature a space battle management command and control testbed to  verify new software and tactics and improve joint space operations.

MQ-9 capability study expected to move forward this summer as ACC mulls fleet balance

A team analyzing the future of the MQ-9 Reaper will present its final results to the Air Force Capability Development Working Group in July, a service spokeswoman told Inside Defense this week.

SOCOM plans to award two contracts for AC-130J laser subsystems by end of FY-18

U.S. Special Operations Command is refining development plans for its AC-130J Ghostrider laser demonstration and expects to award two subsystem manufacturing contracts by the end of September, a command official told Inside Defense.

ACC chief doesn't see broader implications for A-29 after Air Force suspends light-attack experiment

The Air Force's light-attack experiment is suspended until further notice as service officials determine whether they gleaned enough data from flight tests to end the effort early, following a fatal A-29 crash last week at White Sands Missile Range, NM.

Newly aligned KC-46 schedule includes slate of risk-mitigation efforts

The Air Force's recent announcement that its KC-46 delivery schedule was aligned with prime contractor Boeing's came after the two parties agreed on a slate of schedule mitigation efforts, Inside Defense has learned.

Robot "swarming" technology will be the next "large return on investment" for Army robotics:

Army Maneuver Center looking to 'swarm' ground robots

The Army's Maneuver Center of Excellence in Ft. Benning, GA, has hosted a number of companies that are developing algorithms for robot "swarming," or controlling many at once, according to a service official.

June 28, 2018 at 2:51 PM | John Liang

Inside Defense has a copy of the Senate Appropriations Committee's fiscal year 2019 defense spending bill and accompanying report.

Read the document here.

June 28, 2018 at 1:55 PM | Ashley Tressel

The Army has selected Leonardo DRS to provide the mission equipment package for the service’s accelerated Initial Maneuver-Short-Range Air Defense effort and will begin negotiations for an award, the company announced today.

The system will serve as an interim solution to defend against unmanned aircraft, helicopter and fixed-wing threats and includes technologies from other industry partners, such as Moog’s Reconfigurable Integrated-weapons Platform, Raytheon’s Stinger missiles and RADA’s Multi-Mission Hemispheric Radar.

General Dynamics was selected to integrate the equipment onto the upgraded Stryker A1 vehicle, according to Leonardo.

Leonardo said it expects an award in August. The Army plans to deliver IM-SHORAD prototypes in 2019.

Army Vice Chief of Staff Gen. James McConville approved a total requirement of 144 IM-SHORAD systems. The first two battalions would receive 36 systems each by fiscal year 2021 and the third and fourth battalions by FY-22.

June 28, 2018 at 1:25 PM | Marjorie Censer

Investment firm the Carlyle Group said today Larry Prior, the former chief executive of CSRA, has been retained as an operating executive consultant for its aerospace, defense and government services team.

Prior “will provide investment guidance, from sourcing to acquisition, to Carlyle professionals in the Global Aerospace, Defense and Government Services Group and advise portfolio company executives on management, operations and growth strategies,” the company said.

In April, General Dynamics purchased CSRA.

Before leading CSRA, Prior was general manager of the defense and intelligence group within CSC's North American Public Sector business. He also was an executive at BAE Systems, ManTech International and Science Applications International Corp.