The Insider

June 28, 2018 at 1:02 PM | Tony Bertuca

The House voted 359-49 today to pass the fiscal year 2019 defense spending bill.

The bill provides funding levels consistent with a bipartisan budget agreement passed earlier this year, appropriating $606.5 billion for the Defense Department's base budget and $68 billion for the Overseas Contingency Operations account. The total represents a $17 billion increase above FY-18.

Meanwhile, the Senate Appropriations Committee voted today to send its version of the bill to the full Senate for final vote. The committee's bill also adheres to funding levels mandated by the bipartisan budget deal, providing $607 billion for the DOD base budget and $68 billion for the OCO account.

June 28, 2018 at 11:37 AM | Tony Bertuca

The Senate Appropriations Committee voted 30-1 today to advance the fiscal year 2019 defense spending bill to the full Senate.

Meanwhile, the House is scheduled to pass its version of the bill today.

June 28, 2018 at 10:50 AM | John Liang

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

1. Congressional appropriators want to increase funding for the military's artificial intelligence pathfinder, even as Pentagon officials debate how to move forward after Google announced it would drop out of the project once its contract ends.

Full story: Appropriators add money to military AI pathfinder as Pentagon grapples with Google spurn

2. The White House strongly objects to several provisions in the Senate's fiscal year 2019 defense authorization bill, especially a section that would ban the Defense Department from doing business with Chinese telecommunications company ZTE, but the administration is not threatening to veto the legislation, according to a statement of administration policy from the Office of Management and Budget.

Full story: Trump withholds veto threat on Senate defense bill, but opposes ZTE, missile defense provisions

3. Senate appropriators seek to direct nearly $4 billion in additional funding to key areas of weapon system innovation including hypersonics, artificial intelligence, cyber, space, microelectronics and directed energy.

Full story: Senate appropriators tap nearly $4B for additional weapon system innovation

4. A recent boost in the defense budget means the Pentagon should be able to make new investments in cutting-edge capabilities to regain technological momentum from China amid Beijing's military spending binge, according to Vice Chairman of the Joint Chiefs of Staff Gen. Paul Selva.

Full story: 'Enough money to go around' to offset China's rise, DOD's No. 2 military officer says

June 27, 2018 at 3:49 PM | Tony Bertuca

The House voted today by unanimous consent to enter conference committee negotiations with the Senate on the fiscal year 2019 defense authorization bill.

House Armed Services Committee Chairman Mac Thornberry (R-TX) has said House and Senate lawmakers want to finish the bill by the end of July.

The White House, meanwhile, has voiced opposition to several policy provisions in both bills.

The House Armed Services Committee has released a list of House conferees:

•    Rep. Mac Thornberry (R-TX), Chairman 
•    Rep. Joe Wilson (R-SC)
•    Rep. Frank LoBiondo (R-NJ)
•    Rep. Rob Bishop (R-UT)
•    Rep. Mike Turner (R-OH)
•    Rep. Mike Rogers (R-AL)
•    Rep. Bill Shuster (R-PA)
•    Rep. Mike Conaway (R-TX)
•    Rep. Doug Lamborn (R-CO)
•    Rep. Rob Wittman (R-VA)
•    Rep. Mike Coffman (R-CO)
•    Rep. Vicky Hartzler (R-MO)
•    Rep. Austin Scott (R-GA)
•    Rep. Paul Cook (R-CA)
•    Rep. Bradley Byrne (R-LA)
•    Rep. Elise Stefanik (R-NY)
•    Rep. Don Bacon (R-NE)
•    Rep. Jim Banks (R-IN)
•    Rep. Adam Smith (D-WA), Ranking Member
•    Rep. Susan Davis (D-CA)
•    Rep. James Langevin (D-RI)
•    Rep. Jim Cooper (D-TN)
•    Rep. Madeleine Bordallo (D-GU)
•    Rep. Joe Courtney (D-CT)
•    Rep. Niki Tsongas (D-MA)
•    Rep. John Garamendi (D-CA)
•    Rep. Jackie Speier (D-CA)
•    Rep. Marc Veasey (D-TX)
•    Rep. Tulsi Gabbard (D-HI)
•    Rep. Beto O'Rourke (D-TX)
•    Rep. Stephanie Murphy (D-FL)

June 27, 2018 at 2:39 PM | John Liang

The FY-19 defense spending bills dominate this Wednesday INSIDER Daily Digest.

House and Senate appropriators like the military's artificial intelligence pathfinder program:

Appropriators add money to military AI pathfinder as Pentagon grapples with Google spurn

Congressional appropriators want to increase funding for the military's artificial intelligence pathfinder, even as Pentagon officials debate how to move forward after Google announced it would drop out of the project once its contract ends.

The White House has chimed in on House and Senate authorizers' and appropriators' defense bills:

White House withholds veto threat on Senate defense bill, but opposes ZTE, missile defense provisions

The White House strongly objects to several provisions in the Senate's fiscal year 2019 defense authorization bill, especially a section that would ban the Defense Department from doing business with Chinese telecommunications company ZTE, but the administration is not threatening to veto the legislation, according to a statement of administration policy from the Office of Management and Budget.

Document: Statement of administration policy on the Senate's FY-19 defense policy bill

White House opposes House appropriators' fence around cloud computing funds

The White House opposes several provisions in the House's fiscal year 2019 defense appropriations bill, including one that blocks all funding for the Pentagon's planned shift toward cloud computing until the defense secretary provides Congress with a written strategy.

Document: Statement of administration policy on the House's FY-19 defense spending bill

Inside Defense recently obtained a letter on the F-35 Joint Strike Fighter:

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

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.

Document: DOD letter to Congress on F-35 EOQ

The nominee to become the next head of U.S. Transportation Command was on Capitol Hill this week:

TRANSCOM nominee backs surge sealift recap plan

The president's nominee to lead U.S. Transportation Command today said he agrees with the Navy and the current command chief's plan to recapitalize the surge sealift fleet.

Document: Senate hearing on TRANSCOM nominee

A senior DIUx executive said this week there "was some confusion about the timing" of the production other transaction agreement given to REAN Cloud in February:

Military tech incubator updating OTA playbook after production snafu

The Defense Innovation Unit Experimental is updating its guidebook for using other transaction agreements after the Government Accountability Office upheld a protest against one of the organization’s production agreements.

June 27, 2018 at 12:53 PM | Marjorie Censer

Christine Wormuth, who served as under secretary of defense for policy during the Obama administration, has been named director of RAND Corp.'s International Security and Defense Policy Center.

Wormuth also previously was deputy under secretary of defense for strategy, plans and forces, special assistant to the president and senior director for defense at the National Security Council and principal deputy assistant secretary for homeland defense, all during the Obama administration.

She joins RAND from the Atlantic Council. She has also previously worked at the Center for Strategic and International Studies.

June 27, 2018 at 12:50 PM | Marjorie Censer

CACI International said today it has named Mike Hale to lead its national and cyber solutions group, which oversees its intelligence systems and support, cybersecurity and space operations and resiliency market areas.

Hale came to CACI last year as vice president and intelligence community client executive. He joined the contractor after a career in the Air Force and at the National Reconnaissance Office. He was director of the NRO's ground enterprise directorate and deputy program executive officer for services at the Air Force, among other roles.

June 27, 2018 at 12:32 PM | Marjorie Censer

KBR said today it has named Todd May, the director of NASA's Marshall Space Flight Center, to serve as vice president of space strategy within KBRwyle, the company's government services business.

"May will support enterprise space initiatives and oversee a systems engineering division supporting a variety of defense and civilian agency customers," the company said.

May was named director of the Marshall Space Flight Center in February 2016. He had previously served in numerous NASA positions, including deputy director, acting director and manager of the Space Launch System program.

Earlier this year, KBR acquired space services company Stinger Ghaffarian Technologies, or SGT, to expand its space offerings.

June 27, 2018 at 11:33 AM | Ashley Tressel

The Army has awarded a total of $327.2 million in contract modifications to General Dynamics Land Systems to upgrade 146 flat-bottom Strykers with the Double-V Hull, scheduled for completion March 31, 2020.

GDLS will upgrade 116 Strykers using $258.6 million in fiscal year 2018 funds, awarded this month, and 30 Strykers using $68.6 million in FY-17 funds, awarded in March.

The Army intends to upgrade all of its Strykers with the Double-V Hull, but House and Senate lawmakers have questioned the feasibility of that plan. In their version of the FY-19 spending bill, House appropriators grant the Army an increase in addition to the requested FY-19 realignments, but ask the secretary for a clear funding strategy.

June 27, 2018 at 10:29 AM | Marjorie Censer

AeroVironment said this week sales in its fiscal year 2018 reached $271 million, up 18 percent from the prior year.

The company attributed the majority of the boost to increased product sales.

AeroVironment said its profit during the fiscal year, which ended April 30, hit $20.1 million, up from $12.5 million a year earlier.

During a call with analysts Tuesday, Wahid Nawabi, AeroVironment's chief executive, said the company is reshaping to focus "on solutions based on robotics, sensors, software analytics and connectivity to serve promising large global markets, consisting of defense, telecommunications and commercial information solutions."

AeroVironment announced earlier this month it has entered into an agreement to sell the assets of its efficient energy systems business segment to Webasto Charging Systems. Nawabi said this week he expects the divestiture to be complete in the company's first fiscal quarter, which concludes at the end of next month.

June 27, 2018 at 10:20 AM | Justin Katz

Pentagon Comptroller David Norquist has approved a $201 million reprogramming action to support a variety of maintenance activities accounted for in the National Defense Sealift Fund.

The June 25 reprogramming memo removed funds from the fiscal year 2018 Navy operation and maintenance appropriation.

"Reclassification is required to execute funds properly in accordance with congressional intent," the document said.

The funds will support maintenance for 10 Large Medium-Speed Roll-on/Roll-off ships, five legacy Maritime Prepositioning Ships, one Enhanced MPS, two Dry Cargo/Ammunition ships, one Offshore Petroleum Discharge System vessel and two Mobile Landing Platform ships in FY-18, according to the document.

Further, the funds will be used to maintain and operate two Hospital ships, eight Expeditionary Medical Support Facilities, four Expeditionary Medical Units and four Forward Deployable Preventive Medicine Units in FY-18, the document said.

June 26, 2018 at 4:59 PM | Justin Doubleday

The State Department has given the green light to a potential $860 million sale of Aegis combat systems to Spain.

The approved sale involves five Aegis combat systems and associated equipment for installation on Spanish frigates, according to an announcement released today from the Defense Security Cooperation Agency.

Spain's navy already operates five Aegis-equipped frigates, DSCA states.

Adding Aegis to five new frigates in Spain's fleet "will afford more flexibility and capability to counter regional threats and continue to enhance stability in the region," according to DSCA.

"Spain has demonstrated the capability, flexibility, and responsibility necessary to acquire this Aegis system into its fleet and will continue to operate it as required to ensure interoperability as a highly valued NATO partner," the agency continues.

Principal contractors on the proposed sale would include Lockheed Martin, Raytheon and General Dynamics.

June 26, 2018 at 2:39 PM | Ashley Tressel

Chicago-based Uptake, an industrial artificial intelligence company, said today it has received a $1 million prototype award from the Defense Innovation Unit Experimental to build software for the Bradley fighting vehicle.

The company began work on the yearlong contract June 15 to deploy an application that will "predict component failures, decrease the frequency of unscheduled maintenance and improve the productivity of repair operations," according to the company.

June 26, 2018 at 1:54 PM | Ashley Tressel

Sen. Claire McCaskill (D-MO) today sent a letter to the Defense Contract Audit Agency director criticizing the oversight of the Logistics Civil Augmentation Program, or LOGCAP, in Afghanistan.

The Army established LOGCAP in 1992 to provide logistics support such as transportation, maintenance, engineering and construction, emergency and other services to deployed forces. Previous LOGCAP awards supported operations in Africa, South America, Europe and the Middle East.

McCaskill, the ranking member on the Senate Homeland Security and Governmental Affairs Committee, in her letter referenced a May 11 Defense Department inspector general report looking into the issue. The report found "at least $536 million of the $2.4 billion billed on vouchers [submitted from 2015 to 2017] that were supported by questionable documentation," according to DOD IG.

Such expenses included "$74,022 for one employee's Afghanistan visa application, $7,128 for Ruth's Chris Steakhouse in the United States, $2,713 for convenience store purchases in the United States, and $715 for a carwash," she wrote.

DCAA in response to the report told DOD IG it “did not find any significant unallowable costs during its review of the $422,825” IG identified, but the IG will consider its recommendation closed when it verifies the review is complete. 

McCaskill is requesting documents addressing DCAA's review of those costs and the implementation of "a new process for improved communications between the DCAA and" Army Contracting Command that is scheduled to start in fiscal year 2019.

June 26, 2018 at 1:46 PM | John Liang

Senate appropriators' FY-19 defense spending bill, the Army Science Board and more highlight this Tuesday INSIDER Daily Digest.

The Senate Appropriations defense subcommittee this morning marked up its version of the fiscal year 2019 military spending bill:

Senate appropriators tap nearly $4B for additional weapon system innovation

Senate appropriators seek to direct nearly $4 billion in additional funding to key areas of weapon system innovation including hypersonics, artificial intelligence, cyber, space, microelectronics and directed energy.

Document: Senate appropriators' FY-19 defense spending bill summary

The Army Science Board is working on a pair of studies:

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

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.

Army advisory panel working to recommend viable MUM-T technology roadmap

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.

The Missile Defense Agency's director spoke about the president's proposed Space Force at a breakfast today on Capitol Hill:

MDA director supports president's Space Force vision

The head of the Missile Defense Agency said today the focus and streamlined decision-making that would likely come with the creation of a Space Force would assist his agency's mission.

Recent Space Force news, in case you missed it:

Trump's 'Space Force' order raises questions, could bolster ongoing congressional debate (Free to read)

President Trump's announcement last week that he would direct the Pentagon to create a new military service -- dubbed a Space Force -- injected new energy into an ongoing debate about who should manage the military space mission.

Rogers: Trump's call for Space Force has support in Congress, but legislation not likely until FY-20

The lawmaker leading efforts within Congress to reorganize the military space enterprise under a separate service told Inside Defense this week that while President Trump's direction to establish a Space Force will give momentum to ongoing efforts, the fiscal year 2019 defense policy bill will not likely authorize the creation of a new military service.