The Insider

By Ashley Tressel
June 26, 2019 at 2:00 PM

The Army has issued a request for white papers for a new project to develop a "Multidomain User Sensor Architecture Prototype" for situational awareness and target acquisition.

"The goal of the MDUSA effort is to address the need for increased situational awareness and target acquisition range in very low size, weight and power consumption (SWaP) when compared to existing far-target location systems," according to a notice posted last week to Federal Business Opportunities.

The service is seeking a modular approach for the sensor architecture, which is to include a "handheld target location module" and augmented reality, among other technologies.

The Army expects to award up to two agreements for technology readiness level 6 prototypes as part of the three-year effort, according to a statement of objectives.

Interested vendors will complete several design reviews before building prototypes, followed by four rounds of testing and a technology transition readiness review.

This project will leverage existing efforts under the Army's Night Vision and Electronic Sensors Directorate and Program Manager for Soldier Sensors and Lasers.

By Marjorie Censer
June 26, 2019 at 10:03 AM

AeroVironment said this week it was not awarded spots on the Army’s Soldier Borne Sensor program or its Short Range Reconnaissance effort.

Speaking to analysts Tuesday, Wahid Nawabi, the company’s chief executive, confirmed the company did not win SBS and did not “secure a place among the initial candidates for the U.S. Army SRR program, conducted by the Defense Innovation Unit.”

However, Nawabi added, “that does not mean that we're not engaged with that customer.”

“We're actually very engaged with that customer,” he said. “We stand ready to compete in the future.”

Nawabi was upbeat on the company’s Pentagon work.

“Let's keep in mind that the overall DOD requirements and budget dollars for our types of solutions -- specifically in most cases calling out our product specifications or names even -- is quite robust for fiscal year 2020,” he said. “We are very pleased with those demand drivers.”

Meanwhile, AeroVironment said this week sales in its most recent quarter reached $88 million, down about 23% from the same three-month period a year earlier.

However, the company’s sales in its fiscal year 2019, which ended April 30, totaled $314 million, up 17% from the prior year.

AeroVironment said quarterly profit hit $5.7 million, down 66% from the prior year. Full-year profit reached $47.4 million, nearly triple the $17.9 million profit of 2018.

The company said its full-year profit benefited from a one-time gain related to a litigation settlement as well as income from transition services performed on behalf of the buyer of AeroVironment’s discontinued efficient energy systems business.

By Courtney Albon
June 25, 2019 at 3:29 PM

The Defense Department has named Derek Tournear to serve as acting director of the Space Development Agency, after the fledgling organization’s first director resigned last week amid reported disagreements with Under Secretary of Defense for Research and Engineering Mike Griffin.

Tournear is currently the assistant director for space within Griffin's office. Spokeswoman Heather Babb said in a June 25 statement that he would remain in that role while serving in an acting capacity at SDA.

Space News first reported last week that former SDA Director Fred Kennedy had abruptly resigned following disagreements with Griffin about how the agency should leverage commercial technology and what level of authority Kennedy should have as director.

The news came days after Chris Shank, director of the Strategic Capabilities Office, resigned his post -- also over differences with Griffin.

By Justin Katz
June 25, 2019 at 3:04 PM

The Navy plans to deliver its mine warfare plan to Congress by the end of the year, and the document will serve as certification to lawmakers that the service is prepared to retire legacy equipment, according to a top Navy official.

Lawmakers have included provisions in previous defense policy bills that the Navy may not retire certain mine countermeasures assets unless the Navy secretary certifies the service has adequate replacements available.

Vice Adm. William Merz, the service's top requirements officer, told attendees today at a Mine Warfare Association event it would be too complex to certify that a replacement exists for each individual capability. Therefore, the service aims to "tell the whole story" through the mine warfare plan.

Merz also said Adm. Bill Moran, the service's vice chief who will soon become the chief of naval operations, signed out a classified letter that directed a reorganization of the Navy's mine warfare programs.

By Marjorie Censer
June 25, 2019 at 2:35 PM

(This occasional feature highlights protests decided by the Government Accountability Office.)

Agency: Air Force

Awardee: Engility

Protester: Peraton

What GAO found: Peraton filed a protest of an award made to Engility by the Air Force for engineering, development, integration and sustainment services for Air Force Space Command satellite systems.

Though Engility had received better ratings on technical subfactors, its price was significantly higher. Peraton's evaluated price totaled nearly $54 million, while Engility's was almost $76 million.

"The [source selection authority] recognized that Engility’s proposal 'demonstrated significant technical merit' and 'clear technical advantages' . . . and concluded that the lower prices of the other acceptable proposals were outweighed by the technical advantages of Engility’s higher-priced proposal," GAO wrote in its decision.

But Peraton argued Engility did not meet the solicitation's requirement for small business participation, making it ineligible for award.

GAO backed Peraton's concerns, calling the Air Force's evaluation of the small business element "unreasonable, inconsistent with the terms of the solicitation and undocumented."

"[B]ased on the plain language of Engility's proposal and a reasonable application of the solicitation's methodology for calculating the small business participation percentage, Engility's proposal failed to meet the minimum requirement of 25% small business participation and, therefore, was technically unacceptable and ineligible for award," GAO writes. "[I]t is a fundamental principle in a negotiated procurement that a proposal that fails to conform to a material solicitation requirement is technically unacceptable and cannot form the basis for award."

GAO recommends the Air Force review the solicitation and its small business participation requirement. If it maintains the requirement, it should terminate the contract awarded to Engility and reevaluate the proposals or obtain revised proposals. Alternatively, the Air Force may revise the terms of the solicitation and accept revised proposals, GAO notes.

Read the decision.

By John Liang
June 25, 2019 at 1:57 PM

This Tuesday INSIDER Daily Digest has news on Navy unmanned systems, a multimillion-dollar Air Force missile interceptor project and more.

We start off with a deep dive into Navy unmanned surface systems:

Seeking accelerated move into unmanned systems, Navy facing congressional, technological limits

The Navy, preparing for great power conflict, is sending its strongest indication to date that it predicts its future is in unmanned systems.

A multimillion-dollar Air Force missile interceptor project won't be going forward:

Air Force cancels $632M missile interceptor project after contract negotiations break down

The Air Force decided last month to terminate the Extended Range Weapon program -- a fiscal year 2019 new-start and rapid prototyping effort with a $632 million baseline cost -- following disagreements during contract negotiations, according to a service spokeswoman.

Last week's Air Force Life-Cycle Industry Day in Ohio had plenty of news. Here's more from that event:

Genatempo: Air Force abandoning Gray Wolf for new swarm technologies program

DAYTON, OH -- The Air Force is discontinuing development of the Gray Wolf cruise missile program in favor of a new, collaborative effort featuring swarming munitions called Golden Horde, according to the service's weapons portfolio chief.

AFRL identifies candidates for first wave of AETP technology integration

DAYTON, OH -- The Air Force Research Laboratory's propulsion directorate has identified three candidate programs that could become the first to benefit from technology being matured through the Adaptive Engine Transition Program.

The Pentagon has issued new guidance on dealing with defense contractor TransDigm:

DOD memo: Contracting officers must seek cost data from TransDigm and subsidiaries

The Pentagon is setting new requirements for the TransDigm Group after the Defense Department inspector general found the company was reaping excessive profits.

Document: DOD memo on TransDigm

By Justin Katz
June 25, 2019 at 11:41 AM

General Dynamics Bath Iron Works filed a bid protest with the Government Accountability Office last week over a shipyard services contract worth up to $931 million, becoming the second shipbuilder to do so.

The contract was a recompetition for Littoral Combat Ship planning yard services, which the Navy awarded to Huntington Ingalls Industries in April. BIW was the incumbent.

According to GAO's docket, the bid protest was filed June 20 and will be decided by Sept. 30.

Austal USA last month filed its own protest with GAO over the same contract award, Inside Defense reported.

An HII spokesman declined to comment on the protest, and representatives for Bath did not immediately respond to requests for comment.

In a May 1 statement, HII said the contract "will provide the LCS program with post-delivery life-cycle support, which includes fleet modernization program planning, design engineering and modeling, logistics support, long-lead-time material support, and preventative and planned maintenance system item development and scheduling."

By Tony Bertuca
June 25, 2019 at 11:28 AM

Senate Majority Leader Mitch McConnell (R-KY) said today he is planning to schedule a final vote for the fiscal year 2020 defense authorization bill this week.

McConnell is at odds with Democrats over his decision to close debate on the bill, which authorizes $750 billion in defense spending, without allowing votes on proposed amendments.

One such amendment that sparked disagreement between Republicans and Democrats would have constrained President Trump's powers to conduct military strikes on Iran.

Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said he worked with Democrats to successfully include a manager's package of 93 non-controversial amendments.

But Senate Minority Leader Chuck Schumer (D-NY) criticized McConnell for ending debate on the bill and not allowing votes on new standalone amendments.

"The leader should not run the [defense authorization bill] like he's run the Senate for much of this year as a legislative graveyard," Schumer said.

Still, McConnell said the bill would proceed with a vote this week and he hopes it will have "wide, bipartisan support."

Meanwhile, the House Rules Committee is currently accepting proposed amendments to the House Armed Services Committee’s version of the bill, which funds defense spending at $733 billion.

By Justin Doubleday
June 25, 2019 at 11:01 AM

The Pentagon expects to award the potential 10-year, $10 billion Joint Enterprise Defense Infrastructure contract to either Amazon Web Services or Microsoft within the next two months, according to the Defense Department's chief information officer, as a lawsuit challenging the JEDI solicitation appears close to a resolution.

DOD expects to complete the source selection process for JEDI by the end of August, DOD CIO Dana Deasy told reporters today at a Defense Writers Group breakfast in Washington. He said Oracle America's lawsuit in the Court of Federal Claims is not impeding the ongoing source selection process.

Oracle is seeking an injunction against DOD proceeding with the award, as it argues the Pentagon's gate criteria are unfair and its single-source determination flawed. The company also alleges multiple DOD employees worked to tailor the program’s requirements in a way favorable to AWS and then left the government to work for Amazon, according to the lawsuit.

Deasy did not comment on the details of the case, but noted the court has a potentially decisive hearing scheduled for July. In recent weeks, Oracle has filed a motion for judgement on the case, while DOD and AWS have asked the judge to throw out the lawsuit.

Meanwhile, Deasy said his office has led "cloud awareness sessions" over the past six months with several of the combatant commands and representatives from the military services to prepare them for migrating to the "general purpose" JEDI cloud.

"Now that we're getting closer, it's the logical time to sit down with the various services, start to describe what we believe a general purpose cloud environment will start to look like, and more importantly for them to start thinking about what activity sets they have coming up this fall and going into next year that might be good candidates [for transition]," Deasy said.

AWS and Microsoft are the only two contractors in the running for the award, after DOD determined they are the only companies who could meet the requirements for the massive cloud project.

Deasy said the services and COCOMs will have a better understanding of how to migrate and design applications for the cloud environment once the Pentagon decides between AWS and Microsoft.

"Until we complete the selection of who that partner will be, that then leads to starting to understand what that general-purpose cloud will look like," he said. "And then how do we start to train people on how to leverage and take advantage of that."

By Marjorie Censer
June 25, 2019 at 9:25 AM

Cubic said this week its board of directors has approved the appointment of David Melcher as lead independent director.

He succeeds Edwin Guiles, who died on June 7.

Melcher previously was chief executive of the Aerospace Industries Association. He also has served as CEO of Exelis and spent 32 years in the Army, retiring as a lieutenant general.

By Tony Bertuca
June 24, 2019 at 3:57 PM

Acting Defense Secretary Mark Esper, who began running the Pentagon today, says the Defense Department's priorities "remain unchanged."

In a department-wide memo issued today, Esper said he is committed to the National Defense Strategy's three lines of effort: increasing lethality, strengthening alliances and instituting reform. The three "LOEs" have become a mantra at the Defense Department since they were first established by former Defense Secretary Jim Mattis.

"Stay focused on your mission, remain steadfast in your pursuit of excellence, and always do the right thing," Esper wrote in the short memo.

Esper, who is still technically Army secretary, comes to the job amid heightened tension with Iran. He is headed to Brussels this week for a NATO defense meeting.

President Trump said last week he will nominate Esper to become permanent defense secretary after former acting Defense Secretary Pat Shanahan withdrew from consideration following media reports of violent past incidents involving his son and ex-wife.

In a statement released late last week, Senate Armed Services Committee Chairman Jim Inhofe (R-OK) called Esper a "wise choice" for defense secretary.

"This position is far too important to our national security to continue being filled on an acting basis," he said.

Trump has also said he intends to nominate acting Deputy Defense Secretary David Norquist to fill the post permanently. Meanwhile, Army Under Secretary Ryan McCarthy will be nominated to take Esper's place as service secretary, and Army General Counsel Jim McPherson will be acting under secretary.

Inhofe also praised Norquist and McCarthy and said he supports their nominations.

"I am glad we're moving closer to having confirmed senior leadership at the Pentagon -- though more work remains -- and I look forward to bringing all three nominees in before the Armed Services Committee as soon as possible," he said.

By Jaspreet Gill
June 24, 2019 at 2:36 PM

The Army has posted a final request for solutions for the Synthetic Training Environment's Live Training Environment.

The STE LTE will enable units and leaders to conduct live force-on-force training in support of multidomain operations, according to the RFS.

Patricia Bielling, director of communication for the STE cross-functional team, told Inside Defense in April, "Our initial efforts are focused on improving our ability to replicate our indirect fire capabilities in the live environment and determine if we can accelerate efforts to replace our legacy laser based Multiple Integrated Laser Engagement System (MILES)."

The LTE will eventually integrate real weapon systems, mission command information systems and the Common Synthetic Environment, the RFS states.

The first prototype competition focuses on filling "gaps" in simulated [force-on-force] engagements during light infantry platoons' home station training. The Army expects a series of additional prototyping efforts "to address the scope and breadth of the full LTE requirements to include the area of force-on-target training."

The RFS notes the service is looking for proposals "ranging from key enabling technologies to comprehensive solutions."

The Army seeks to accelerate development of the LTE by awarding other transaction agreements to develop prototypes that will "help inform requirements for the STE LTE, provide a quantified evaluation of the technology readiness levels of critical enabling technologies and provide key foundational aspects of establishing the roadmap for the future of STE LTE.”

Technical assessments are expected to begin in the first quarter of fiscal year 2020, followed by soldier assessments starting in the fourth quarter of FY-20.

The service plans to conduct a “final prototype assessment” at the end of the OTA development process, between August 2020 and October 2020, at Ft. Benning, GA.

By John Liang
June 24, 2019 at 2:17 PM

This Monday INSIDER Daily Digest has news on the Missile Defense Agency's Redesigned Kill Vehicle, F-35A sustainment costs, the Joint Light Tactical Vehicle, possible foreign military sales for the Chinook helicopter and more.

The Government Accountability Office looks at cost growth for the Redesigned Kill Vehicle program:

New homeland defense ballistic missile kill vehicle was on path to 60% cost growth

The Redesigned Kill Vehicle program was on a trajectory toward 60% cost growth -- a death knell for most weapon projects -- when the Pentagon's chief technology official directed the Missile Defense Agency to halt work on the effort, according to government auditors.

Document: GAO report on missile defense

Some folks don't think the Air Force will be able to keep F-35A sustainment costs at $25,000 per flying hour:

McMahon committed to $25K F-35A cost target despite conflicting data

DAYTON, OH -- The Pentagon is holding to its F-35A sustainment target cost of $25,000 per flying hour by fiscal year 2025, despite multiple internal assessments that argue the goal is not achievable.

The Joint Light Tactical Vehicle has hit a major milestone:

JLTV moves into full-rate production

The Joint Light Tactical Vehicle is set to move into full-rate production, the Army announced today.

The CH-47F Chinook could be sold to Great Britain and the United Arab Emirates:

McCarthy: Army trying to help Boeing keep Chinook line open

Army Under Secretary Ryan McCarthy told reporters this week the service is in "very firm talks" with the United Kingdom and United Arab Emirates to purchase additional Boeing-made CH-47F Block II aircraft.

The Defense Department's use of fixed-price contracts could come under review:

House, Senate lawmakers call for review of DOD's fixed-price contracts

The House and Senate Armed Services committees have approved legislation that would require a review of the Pentagon's use of fixed-price contracts.

By Ashley Tressel
June 24, 2019 at 11:31 AM

Starting today, Army Under Secretary Ryan McCarthy will be acting Army secretary, while Army General Counsel Jim McPherson will be acting under secretary, the service announced this morning.

Technically, McCarthy and McPherson will be "senior officials performing the duties of" their respective positions.

The White House announced Friday that President Trump intends to formally nominate Army Secretary Mark Esper to become the next defense secretary and that McCarthy will be nominated to take Esper's place as service secretary.

By Tony Bertuca
June 24, 2019 at 5:00 AM

The Senate will debate the fiscal year 2020 defense authorization bill this week, while the Pentagon gets a new acting defense secretary.

Monday

Army Secretary Mark Esper becomes acting defense secretary.

The Senate is expected to take up the FY-20 defense authorization bill.

Tuesday

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

Wednesday

Air Force Chief of Staff Gen. David Goldfein speaks at an Air Force Association breakfast.

Esper travels to Brussels for a meeting of NATO defense officials.

The assistant secretary of defense for Indo-Pacific security affairs speaks at the Heritage Foundation.

The Hudson Institute hosts a discussion on maritime irregular warfare.

The Center for Strategic and International Studies hosts a conversation on defending the Arctic with Sen. Dan Sullivan (R-AK).

Thursday

Senior defense officials speak at the DefenseOne Tech Summit.

Friday

The Brookings Institute hosts a conversation with Vice Chairman of the Joint Chiefs Gen. Paul Selva.