The Insider

By Mallory Shelbourne
February 4, 2020 at 5:28 PM

While the Navy acknowledged training issues for Arleigh Burke-class destroyers during the vessels' maintenance cycles, the service failed to fix those problems, according to a recent Defense Department inspector general's report.

"Navy fleet commanders, type commanders, and unit commanding officers identified training deficiencies during the Arleigh Burke-class destroyers' [Optimized Fleet Response Plan] cycles, but did not address the identified deficiencies," the Jan. 31 declassified and redacted report reads.

The IG report said it assessed both vessel readiness waivers and readiness evaluations from August 2013 through August 2018 "for the most recently completed OFRP cycles of 12 of 64 Arleigh Burke-class destroyers."

The results, according to the report, found that training problems for the destroyers continued "because the Navy did not always complete training requirements in accordance with" the Surface Force Readiness Manual.

The IG suggested commanders of U.S. Fleet Forces and U.S. Pacific Fleet find out if any of the destroyers that are "deployed or in the sustainment phase of the OFRP have outstanding training deficiencies" and have the ships finish "any outstanding training requirements immediately or as soon as the mission allows."

The fleets in a combined response neither agreed nor disagreed with the IG's suggestions and said both deployed vessels and ships in the OFRP sustainment period are "fully certified."

"Although the Deputy Commander neither agreed nor disagreed with the recommendations, [their] comments addressed all specifics of the recommendations; therefore, the recommendations are resolved but will remain open," the IG wrote.

"We will close these recommendations after the Deputy Commander provides the methodology and supporting documentation used, including ships assessed and applicable certifications, to conclude that all Arleigh Burke-class destroyers currently deployed or in the sustainment phase are fully certified," the report continued.

By Marjorie Censer
February 4, 2020 at 3:23 PM

TransDigm said it has been having positive interactions with the Pentagon and the Defense Logistics Agency, despite an ongoing inspector general investigation.

The company became a target of criticism last year after a Defense Department IG investigation found it in some cases earned profits of more than 4,000% on sole-source contracts for military aircraft parts. In July 2019, the IG announced an audit to investigate whether TransDigm's "business model affects the DOD's ability to pay fair and reasonable prices for spare parts."

During a call with analysts today, Kevin Stein, TransDigm's chief executive, was asked whether the company is seeing reduced DOD orders given the investigation.

"Initially, we saw some slowdown," Stein said. "We have been meeting frequently with DOD, DLA, IG and other important stakeholders in the process to continue to communicate and answer questions. Once we started doing that, I think some of the pent-up demand started to flow."

"We have seen that our interaction with the DOD, DLA has been positive," Stein added. "We're communicating, spending time going through the issues."

By Marjorie Censer
February 4, 2020 at 2:22 PM

The chief executive of L3Harris Technologies said the divestiture announced today is the largest the company is considering, but that more deals are coming.

Leidos and L3Harris announced this morning that Leidos has agreed to purchase L3Harris' airport security businesses for $1 billion.

In a call with analysts today, Bill Brown, L3Harris' CEO, said the company's "portfolio reshaping is ongoing."

Ultimately, he said, L3Harris could divest 8% to 10% of total company sales.

By John Liang
February 4, 2020 at 1:47 PM

This Tuesday INSIDER Daily Digest has coverage of the Space Force, the Navy's Knifefish UUV program, the Army's Chinook helicopter and a lot of defense business news.

The Air Force has submitted its Space Force organizational plan to lawmakers:

Space Force report details plans for agile, 'clean sheet' organizational structure, processes

The Air Force this week delivered to Congress its plan for the organizational structure of the Space Force, outlining "clean sheet" plans to stand up a lean, agile service.

Document: Air Force report to Congress on Space Force

The Pentagon's latest operational test and evaluation report looks at the Navy's Knifefish unmanned underwater vehicle program:

Weapons testers 'unable to assess' Knifefish viability because of test environment

Pentagon weapons evaluators in their latest annual report criticized the Navy's testing of an unmanned undersea vehicle designed for mine countermeasures, saying the environment was too comparable to the conditions the vessels' original creators used when developing classification algorithms.

(For full coverage of this year's DOT&E report, click here.)

Andy Builta, Boeing's vice president of cargo and utility helicopters and H-47 program manager, spoke with reporters during a media call yesterday:

Boeing to accelerate Chinook Block II flight testing with funding restored

Boeing will accelerate its CH-47 Block II flight testing after a second aircraft enters flight tests "as early as next week," according to a company official.

Some big mergers and acquisitions news within the defense contractor world:

Leidos to acquire L3Harris' airport security businesses

Leidos said today it has agreed to acquire L3Harris Technologies' security detection and automation businesses for $1 billion in cash.

Huntington Ingalls to acquire Hydroid

Huntington Ingalls Industries said today it has agreed to acquire Hydroid, which provides advanced marine robotics to the defense and maritime markets, in a $350 million deal.

AECOM's management services business becomes stand-alone company Amentum

The former management services unit within AECOM is now a stand-alone, private company called Amentum.

Lockheed Martin Ventures made nine new investments in 2019

Lockheed Martin Ventures, the venture capital arm of the world's largest defense contractor, last year invested in nine new companies and made more than 30 follow-on investments.

The Golden Horde swarming munitions vanguard program aims to introduce networking and autonomy to munitions the Air Force already has in its inventory:

'Collaborative' Small Diameter Bomb I, MALD to serve as initial Golden Horde demonstrators

The Air Force has selected variants of the Small Diameter Bomb I and Miniature Air Launched Decoy as the initial demonstration weapons for the Golden Horde swarming munitions vanguard program, according to a service spokeswoman.

By Jaspreet Gill
February 4, 2020 at 12:36 PM

The commanding general of Army Materiel Command says the service needs to work its readiness and modernization priorities together in fiscal year 2021 to succeed in the future fight.

"First the Army [needs to] be ready, but if we don't figure out what to modernize so we can move into the future, it might not matter how ready we are," Gen. Gus Perna said to reporters today at a Defense Writers Group breakfast.

His comments come after McCarthy earlier this month told reporters AMC will be an integral part of the service's readiness priority in FY-21.

Perna told reporters AMC is working to support Army Futures Command and its chief, Gen. Mike Murray, with modernization efforts but added it's important the service doesn't "over-engineer modernization."

"We're selective and hold ourselves accountable to putting things on the battlefield that are needed to beat the enemy with an understanding that they are every day trying to out-modernize us," he said. "They're not constrained by our rules and regulations and laws."

He listed his three priorities: Enabling readiness through Army installations, making sure power projection capabilities are integrated and synchronized and supporting Army Forces Command's Gen. Michael Garrett in ensuring all tactical capabilities for readiness are maintained.

"I think my guidance from [McCarthy] and [Army Chief of Staff Gen. James McConville] is clear," Perna said. "It's readiness, it's modernization, it's reform."

By Ashley Tressel
February 4, 2020 at 12:17 PM

The Army this week released a request for proposals for a lethality upgrade on the Stryker vehicle called the Stryker Medium Caliber Weapon System.

The Army began gathering industry input last March and selected five companies in May to start a design integration study for the effort following approval from the Army Requirements Oversight Council. The chosen companies were General Dynamics Land Systems, Kollsman, Leonardo DRS, Raytheon and Pratt & Miller.

The service intends to fill a capability gap in Stryker brigade combat teams with the new upgrade while increasing situational awareness.

The Feb. 3 notice says the AROC has approved the purchase of 269 total Stryker 30 mm Engineering Change Proposal vehicles, enough for three BCTs, with production and integration estimated to cost $695.2 million.

The need for any additional vehicles "will be revisited in future Program Objective Memorandum planning based on funding availability," according to the notice.

Responses to the RFP are due June 8.

By Justin Katz
February 4, 2020 at 9:31 AM

With eyes toward Russia and a directive from the 2018 Nuclear Posture Review, the Navy has fielded a low-yield submarine-launched ballistic missile warhead, according to a senior Defense Department official.

"In the 2018 Nuclear Posture Review, the [Pentagon] identified the requirement to 'modify a small number of submarine-launched ballistic missile warheads' to address the conclusion that potential adversaries, like Russia, believe that employment of low-yield nuclear weapons will give them an advantage over the United States and its allies and partners," Under Secretary of Defense for Policy John Rood said in a statement today.

The development of a low-yield warhead has been the subject of debate on Capitol Hill. Proponents argue a larger arsenal of nuclear weapons will help the country deter adversaries from employing similar weapons, an argument Rood cited in his statement.

"This supplemental capability strengthens deterrence and provides the United States a prompt, more survivable low-yield strategic weapon; supports our commitment to extended deterrence; and demonstrates to potential adversaries that there is no advantage to limited nuclear employment because the United States can credibly and decisively respond to any threat scenario," according to Rood.

Meanwhile, opponents, who have repeatedly attempted to add limitations to such a weapon's development in the annual defense policy bill, say it is unnecessary.

"[W]hen it comes to nuclear weapons, there is no such thing as a proportional response," House Armed Services Chairman Adam Smith (D-WA) said in a statement last year while his panel was crafting the defense policy bill.

"We all agree that the United States must maintain our military advantage over our near peer adversaries but adding more low-yield ballistic missile warheads to our arsenal will not help us achieve that goal or make our country safer," he said.

Rood first confirmed the weapon's fielding to The Associated Press.

By Justin Katz
February 3, 2020 at 2:43 PM

The Navy last year opted to field the latest version of a torpedo prior to finishing early testing and leaving a "primary modification" to the upgraded weapon untested, according to a new report by the director of operational test and evaluation.

"In May 2019, the Navy fielded the Advanced Processor Build 5 (APB 5) for the MK 48 Mod 7 Common Broadband Advanced Sonar System (CBASS) torpedo prior to the completion of" initial operational test and evaluation, Robert Behler's office wrote in its annual report.

The MK 48 is an anti-submarine and anti-surface ship torpedo used by the Navy's submarine fleet. The CBASS variant is being developed jointly by the U.S. and the Royal Australian navies.

DOT&E submitted a classified early fielding report in September, but noted in its new public assessment that a "primary modification" in the latest version of the CBASS torpedo is untested.

Weapons testers also said APB 5, referring to the new CBASS torpedo, has "no apparent degradation from the preceding variant, APB 4, in its ability to acquire and close submarines and surface ships."

"APB 5 demonstrates improvement in some tactically relevant scenarios," DOT&E added.

Weapons testers plan to evaluate the torpedo's operational effectiveness and suitability after the Navy finishes IOT&E in 2020, the report added.

By Jaspreet Gill
February 3, 2020 at 2:33 PM

Congress has partially approved the Army's request to reprogram funding for the Limited Interim Missile Warning System Quick Reaction Capability, granting the service a $60 million total increase for the program.

The Army on Oct. 23 asked to realign $34 million of research, development, test and evaluation funding in the Overseas Contingency Operations account to detect enemy man-portable air defense systems and $30 million in procurement funding to facilitate fielding of LIMWS QRC A-Kits and B-Kits.

Lawmakers approved only $29.6 million of the $34 million request, as the Senate Armed Services Committee denied a $4.5 million transfer from another RDT&E project in the base budget called "Environmental Quality Technology."

The rest of the funding was made available from night vision systems; air defense command, control and intelligence; Army tactical command and control hardware and software; and management support, all in the base budget, according to the request.

The service plans to use the additional $30 million in procurement funding to install LIMWS A-Kits for the first unit equipped in fiscal year 2020 and for production of 100 B-Kits to complete fielding to the 1st Air Cavalry Brigade as part of a directed requirement approved on March 26, 2017, the request says.

Congress is allowing the Army to transfer the money from the Common Missile Warning System program, as a Nov. 16, 2018 directed requirement transitioned a part of that program to LIMWS "for improved threat detection capabilities for rotary wing platforms."

By John Liang
February 3, 2020 at 1:58 PM

This Monday INSIDER Daily Digest has more coverage of the Pentagon's annual operational test and evaluation report plus news on a polar satellite system, the KC-46 tanker program and more.

The DOT&E report looks at the Army's Armored Multi-Purpose Vehicle and Navy ISR programs:

First AMPV LRIP delivery expected in March

The Army expects BAE Systems' delivery of the first low-rate initial production Armored Multi-Purpose Vehicle in March, which reflects a two-month delay that "will have a significant effect on the remaining test schedule," according to the Pentagon's top weapons tester.

DOT&E: Navy canceled fielding, testing plans for ISR systems after poor performance

Poor performance last year led the Navy to cancel fielding and testing plans for its part of a joint family of systems intended to let the services share intelligence, surveillance and reconnaissance data, according to a new report.

(Check out our complete coverage of the DOT&E report here.)

A Selected Acquisition Report, sent to Congress in October, looks at the cost of the Enhanced Polar System-Recapitalization program:

Air Force estimates new satellite project to link naval forces in polar north will cost $2.6 billion

The Air Force has tallied a $2.6 billion tab for its Enhanced Polar System-Recapitalization program, an extremely high frequency satellite system that when combined with an associated ground component is designed to provide naval forces operating in north polar regions -- such as nuclear-armed submarines -- secure, anti-jam communications that are difficult for an adversary to detect.

The Boeing-built KC-46 airborne refueling tanker is behind schedule and continues to face development and testing delays:

Boeing reports $148M in tanker charges for 2019

Boeing late last week reported it incurred $148 million in KC-46 tanker charges in 2019, which the company attributes to "higher manufacturing costs."

Some cyber defense news from our colleagues at Inside Cybersecurity:

HITRUST emerges as key player in DOD cyber certification program

The cybersecurity certification firm HITRUST has emerged as a prominent player in the Defense Department's efforts to establish a landmark program to certify the data-security practices of the entire defense industrial base.

By Tony Bertuca
February 3, 2020 at 5:00 AM

The president is scheduled to make his State of the Union address this week, while Defense Secretary Mark Esper is slated to speak about the National Defense Strategy.

Tuesday

The Center for Strategic and International Studies hosts a discussion with the commander of the U.S. Second Fleet.

President Trump is slated to give his State of the Union address.

L3Harris Technologies and TransDigm executives are set to discuss quarterly earnings.

Wednesday

The House Armed Services Committee's Future of Defense Task Force holds a hearing on "supercharging the innovation base."

The House Armed Services seapower and projection forces subcommittee holds a hearing on Navy and Marine Corps readiness in the Pacific in the aftermath of "recent mishaps."

Thursday

The Senate Armed Services Committee holds a hearing with the chiefs of U.S. Special Operations Command and U.S. Cyber Command.

Defense Secretary Mark Esper speaks at the Johns Hopkins School of Advanced International Studies about the National Defense Strategy.

Friday

Washington Technology hosts a breakfast on mergers and acquisitions.

The Brookings Institution hosts a discussion on modernizing the Air Force.

By Tony Bertuca
January 31, 2020 at 5:12 PM

The Trump administration's decision to lift a ban on using anti-personnel landmines outside the Korean Peninsula will protect U.S. forces, according to Defense Secretary Mark Esper.

"Ultimately, they serve as a force multiplier, helping U.S. forces to fight effectively against enemy threats, which may be numerically superior or capable of exploiting operational or tactical advantages over U.S. forces," he wrote in a Pentagon memo issued today.

Esper said the military, in keeping with U.S. obligations under international law, will use remotely delivered anti-personnel landmines "only if they have compliant self-destruction mechanisms and self-deactivation features, and they are detectable by commonly available technical mine detection equipment."

The U.S. government also pledges to "take feasible precautions to protect civilians from the use of landmines" and address their presence in specific areas "after the cessation of active hostilities."

"For example, all activated landmines, regardless of whether they are remotely delivered or not, will be designed and constructed to self-destruct in 30 days or less after emplacement and will possess a back-up self-deactivation feature," the memo said. "Some landmines, regardless of whether they are remotely delivered or not, will be designed and constructed to self-destruct in shorter periods of time, such as two hours or [48] hours."

Esper said he is confident U.S. military leaders will be able to properly determine whether it will be necessary to use landmines.

The removal of the ban, which the Obama administration put in place in 2014, was met with criticism among Democrats on Capitol Hill.

"The president's decision to roll back the policy on anti-personnel landmines is as perplexing as it is disappointing, and reflexive, and unwise," Sen. Patrick Leahy (D-VT) said in a statement. "As far as I know, Congress was not consulted about this decision, despite requests to be consulted."

Leahy said the decision to limit the use of such an "inherently indiscriminate weapon" to the Korean Peninsula was based on decades of analysis and incremental policy by both Democratic and Republican administrations.

"In fact, the U.S. military has not used this weapon since 1991 in any of the protracted wars in which it has been deployed," he said. "One of the reasons is that landmines threaten the safety and impede the mobility of our own troops on a rapidly changing battlefield. This is so even for mines that are designed to self-destruct or deactivate but are no more able to distinguish a civilian or U.S. soldier from an enemy combatant."

By Marjorie Censer
January 31, 2020 at 4:56 PM

The new chief executive of Govini says the company has tripled its employee count in the past year and that she will remain focused on recruiting talent.

In an interview with Inside Defense, Tara Murphy Dougherty said the company is focusing on artificial intelligence, machine learning and data analytics.

Govini in December won a $400 million, five-year Pentagon contract to provide its platform and data to all of the department's components, she said. The privately held company doesn't disclose its annual sales or total headcount.

About a year ago, Govini opened a technology office in Pittsburgh, PA, that is now home to the company's engineering, product and data science teams, Dougherty said.

That office, she added, is a "tremendous asset for us" that has helped Govini draw needed talent. The company's headquarters remains in the Washington region.

By Marjorie Censer
January 31, 2020 at 3:54 PM

Growth in Booz Allen Hamilton's intelligence business has been "constrained by the need for cleared talent and a couple of recompete losses," according to the company's chief executive.

However, Horacio Rozanski said the company's defense and civil markets, which make up three-quarters of its portfolio, "are delivering double-digit revenue growth through the first nine months."

Rozanski, in a call with analysts this morning, said the company is "proactively addressing those challenges."

Meanwhile, Booz Allen today reported sales in its most recent quarter of $1.9 billion, up 11% from the same three-month period a year earlier.

By Marjorie Censer
January 31, 2020 at 3:29 PM

Northrop Grumman said today it has begun building a 100,000-square-foot addition to its satellite manufacturing facility in Gilbert, AZ, as well as a new 120,000-square-foot administrative and engineering building.

"These facilities enable the site to meet projected business growth and increased customer demand for high-quality, flight-proven satellites for NASA and the Department of Defense, as well as commercial and international customers," the contractor said.

According to Northrop, the expansion will double the facility's production capacity.