The Insider

By Marjorie Censer
August 8, 2016 at 10:26 AM

Leidos said its shareholders today "overwhelmingly approved" the next step in the deal to merge Leidos with Lockheed Martin's information systems and global solutions business through a Reverse Morris Trust transaction.

The merger is slated to close Aug. 16.

By Tony Bertuca
August 8, 2016 at 10:15 AM

The week ahead features public appearances by the top leaders of the Marine Corps, Army and Air Force.

Tuesday

The Center for Strategic and International Studies will host Marine Corps Commandant Gen. Robert Neller for a discussion on the future of expeditionary warfare.

Army Chief of Staff Gen. Mark Milley will participate in an Army Training and Doctrine Command "Mad Scientist" event at Georgetown University.

BWX Technologies executives will hold a call to discuss quarterly earnings.

Engility, General Dynamics and Rockwell Collins executives are slated to speak at a Jefferies conference in New York, NY.

Wednesday

Air Force Secretary Deborah Lee James and Air Force Chief of Staff Gen. David Goldfein will brief the press at the Pentagon on the state of the service.

CSRA and Orbital ATK are set to hold calls to discuss quarterly earnings.

Boeing and Kratos executives will speak at the Jefferies conference.

By Courtney McBride
August 8, 2016 at 10:05 AM

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

1. The Army has moved to quash a Silicon Valley company's challenge to the service's procurement strategy for the next phase of its intelligence software package.

Full story: Army faults Palantir's reasoning in DCGS-A lawsuit, outlines risks

2. The Army has "justified" the low-rate initial production plan for the Paladin Integrated Management program, but has failed to address two "performance deficiencies identified by the test community during the system development phase," according to a government audit.

Full story: DOD IG: Army 'could endanger crews' with flawed PIM vehicles

3. The Army is considering including optional manning requirements for some of the capabilities envisioned under the Future Vertical Lift effort to eventually replace the military's rotorcraft systems.

Full story: Army considering optionally manned capabilities for Future Vertical Lift

4. BAE Systems continues its push to resurrect a lightweight armored vehicle first pitched to the Army in the 1990s, in an effort to satisfy the service's forthcoming requirement for a Mobile Protected Firepower ride.

Full story: Bradley maker showcases possible MPF vehicle

By Lee Hudson
August 8, 2016 at 10:00 AM

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

1. The Marine Corps has finished revising Expeditionary Force 21, its capstone operating concept, and the document is now awaiting Commandant Gen. Robert Neller's signature, according to a top general.

Full Story: Marine Corps completes refresh of capstone operating concept

2. The Navy has determined after a detailed analysis that advance planning for the overhaul of the George Washington (CVN-73) can be shortened from 36 to 30 months by reusuing planning products.

Full Story: Navy determines advance planning for CVN-73 overhaul can be shortened

3. ABOARD THE AIRCRAFT CARRIER CARL VINSON -- The Navy has begun experimenting with how to integrate the V-22 Osprey into an aircraft carrier's cyclic operations, as the service moves toward using the tiltrotor plane as its new carrier onboard delivery aircraft.

Full Story: Fleet battle experiment begins integrating V-22 into carrier air wing

By John Liang
August 5, 2016 at 3:58 PM

Aircraft carriers and combat vehicles lead off this Friday INSIDER Daily Digest.

The Navy is thinking about procuring two new aircraft carriers at the same time:

Navy formally exploring two-aircraft carrier block buy for CVN-80 and CVN-81

The Navy is formally investigating the possibility of a two-aircraft carrier block buy -- lashing procurement of CVN-80 and CVN-81 together across more than a decade -- as part of an effort to identify potential options for reducing the total price tag for new Ford-class mega warships, according to the service.

A new DOD IG report looks at the Army's Paladin Integrated Management program:

DOD IG: Army 'could endanger crews' with flawed PIM vehicles

The Army has "justified" the low-rate initial production plan for the Paladin Integrated Management program, but has failed to address two "performance deficiencies identified by the test community during the system development phase," according to a government audit.

Document: DOD IG report on the PIM program

Don't expect the White House to submit an OCO supplemental budget request without matching funds for domestic programs:

White House not planning for OCO supplemental without non-defense increase

The White House is working with the Defense Department on funding President Obama's newly announced strategy to retain additional troops in Afghanistan, but the Office of Management Budget has no plans at this point to submit a supplemental spending request to Congress without seeking matching funds for domestic priorities.

Some Air Force news:

Air Force anticipates funding for follow-on AEHF, SBIRS in FY-18 budget

The Air Force expects that the fiscal year 2018 budget will include funding to begin development of follow-on systems for its missile warning and protected satellite communications constellations after several years of working to make sure the potential solutions are resilient and adaptable to new and future threats in space.

SBSS FO re-phased; new schedule should not impact 2021 launch plans

A slight delay in the Air Force's plans to award a contract for a follow-on to the Space-Based Space Surveillance satellite program won't impact plans to launch the first satellite in 2021.

New Air Force energy assurance office seeks to align cost, efficiency, and resilience

The Air Force's new office of energy assurance is working to align efforts to maintain a cleaner, cheaper and more resilient energy supply at its installations, a movement service leaders say is growing increasingly more important as adversaries threaten the security of key energy sources.

By Lee Hudson
August 5, 2016 at 1:40 PM

Rear Adm. Mat Winter will be assigned as Joint Strike Fighter deputy director, according to a flag officer announcement.

Winter is currently serving as the chief of naval research. His previous assignments include executive assistant to the JSF program director, chief engineer for JSF integrated flight and propulsion control and the program executive officer for unmanned aviation and strike weapons.

The Air Force JSF variant was officially given the initial operational capability designation this week. The Marine Corps declared IOC for its B variant last summer and the Navy's F-35C is expected to be operational in 2018.

By Courtney Albon
August 5, 2016 at 12:54 PM

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

1. Next year's budget may include funding for two key follow-on programs in the missile warning and protected satellite communications missions areas.

Full story: Air Force anticipates funding for follow-on AEHF, SBIRS in FY-18 budget

2. The Air Force's new solicitation for the Three Dimensional Expeditionary Long-Range Radar will include options for full-rate production.

Full story: New 3DELRR contract to include full-rate production options

3. The Air Force is slightly delaying the expected contract award dates for its Ground-Based Strategic Deterrent and Long-Range Standoff Weapon programs.

Full story: Air Force tweaks schedules for GBSD, LRSO contract awards

By Tony Bertuca
August 5, 2016 at 12:15 PM

The federal government has issued a third in a series of information technology policies intended to reduce duplicative spending on mobile device services contracts, according to a recent memo from the White House Office of Management and Budget.

The Aug. 4 memo notes that "each year, the federal government spends approximately $1 billion on mobile devices and service contracts," with nearly all of that spending going to four carriers. "Yet the federal government manages over 1,200 separate agreements and buys more than 200 unique service plans for voice, data, and text capability," the memo continues.

The new policy being pursued by OMB aims to reduce that spending and consolidate those contracts.

"It uses an enterprise-wide model that leverages economies of scale and builds on already existing practices within the federal government to maximize efficiencies and realize greater savings," according to a joint OMB blog post made Thursday by Anne Rung, the government's chief acquisition officer and Tony Scott, the chief information officer.

Category management tools managed by the Government Services Agency are key to the new policy.

"For instance, federal agencies, such as the Department of Energy, have realized nearly $14 million in savings this year alone and seen prices drop by an average of 30 percent for mobile services by awarding new contracts for mobile devices and services through GSA's government-wide mobile strategic sourcing solution," according to Run and Scott.

The new policy, which designates GSA as the procurement broker for mobile devices and services, will also require government CIOs to submit transition plans for adoption o a government-wide mobile services acquisition strategy by Nov. 30.

The federal government wants the government-wide acquisition policy in place by September 2018.

By Tony Bertuca
August 4, 2016 at 9:15 PM

President Obama met with his National Security Council at the Pentagon Thursday afternoon to receive an update on the military campaign to defeat the Islamic State of Iraq and the Levant.

"We're going to keep going after ISIL aggressively across every front of this campaign," he told reporters at the Pentagon.

Obama said ISIL has not had a single military victory in recent months, but warned that the United States will see the group continue to carry out and inspire acts of terror around the globe.

"In the meantime, though, you're seeing ISIL carry out external terrorist acts and they've adapted from al-Qaeda," he said.

The president's visit to the Pentagon comes as a new round of airstrikes has begun on ISIL targets in Libya at the request of the local government. Three strikes have been conducted since Monday.

Obama also said the United States was going to coordinate with Russia to stem violence in Syria and continue to build on gains made against ISIL.

The president, however, said he remained skeptical of Russia's motives.

"Given the deteriorating situation, it is time for Russia to show it is serious about pursuing these objectives," he said. "We go into this without any blinders on. We're going to test and see if we can get something that sticks. And if not, then Russia will have shown itself very clearly to be an irresponsible actor around the world stage that is supporting a murderous regime."

By Marjorie Censer
August 4, 2016 at 4:46 PM

Kratos Defense & Security Solutions said today sales in its most recent quarter reached $168 million, up from nearly $161 million in the same three-month period a year earlier.

The contractor reported a quarterly loss of about $10 million, an improvement from a $15 million loss the prior year.

Kratos credited its satellite, technology and training division with boosting revenue. The unit, which is Kratos' largest, reported quarterly sales of $70 million, up 21 percent from the prior year, according to the company.

By John Liang
August 4, 2016 at 4:08 PM

Coverage of a new GAO report on the next generation of Arleigh Burke-class destroyers leads off this Thursday INSIDER Daily Digest.

DOD should delay buying the next generation of DDG-51 destroyers, according to GAO:

GAO recommends delaying procurement of Flight III destroyers

Government auditors are recommending the Defense Department delay procurement of the Navy's Flight III Arleigh Burke-class destroyers until more is known about the upgraded ship's design and cost.

Document: GAO report on Flight III Arleigh Burke-class destroyers

Raytheon has been awarded a multimillion-dollar contract for SM-3 Block IB missiles:

Pentagon places $524M order for 47 Standard Missile-3 Block IB guided missile interceptors

The Pentagon has ordered 47 additional Standard Missile-3 Block IB guided missile interceptors from Raytheon, which is 90 percent of the 52-per-year production cap set by Defense Department executives and two fewer than the 49 Congress provided funding for in fiscal year 2016.

Don't expect the Air Force to ever go for a mobile basing option when the service replaces its current ICBM fleet:

Air Force official: 'GBSD is silo-based. Period.'

The Air Force's deputy chief of staff for strategic deterrence and nuclear integration has attempted to close the door on the discussion of whether the Air Force will eventually pursue a mobile basing option for its replacement intercontinental ballistic missile, the Ground-Based Strategic Deterrent.

SIGAR has a new report out:

SIGAR: DOD should review Afghan vehicle contract to prevent future issues

The Special Inspector General for Afghanistan Reconstruction is calling on the defense secretary to closely review the Pentagon's contract designed to help the Afghan National Army grow its vehicle fleet, citing deficiencies and mistakes that will most likely lead to a new contract that is expected to cost more than $1 billion.

Document: SIGAR report on Afghan military's vehicle fleet

Looks like the Pentagon's acquisition workforce development fund will be getting more money:

DOD aims to transfer $400M to acquisition workforce development fund

The Pentagon intends to transfer $400 million from the Army's operation and maintenance account to a development fund designed to help boost the Defense Department's acquisition workforce, according to a recent reprogramming action.

Document: DOD reprogramming action on the DAWDF

Keep an eye out for DOD's new innovation board, which starts work this coming autumn:

Pentagon's new innovation board to hold first public meeting Oct. 5

The Pentagon has amended the charter for the new Defense Innovation Board to include more members and non-voting advisers and plans to host the group's first meeting on Oct. 5.

By Marjorie Censer
August 4, 2016 at 3:13 PM

Lockheed Martin said today it will rename its Mission Systems and Training business Rotary and Mission Systems, effective Sept. 5, to reflect the addition of Sikorsky Aircraft as well as work relocated from other parts of the company.

"The Rotary and Mission Systems (RMS) portfolio features more than 1,000 programs, including helicopters, integrated air and missile defense, littoral warfare, undersea warfare, radar, electronic warfare, cyber solutions, C4ISR, and training and logistics systems," Lockheed said.

Late last year, Lockheed acquired Sikorsky, which it included in the MST business. The unit also added work previously housed in Lockheed's Information Systems & Global Solutions and Missiles and Fire Control businesses, including government cybersecurity work and mission support services, Lockheed said.

The Washington, DC-based Rotary and Mission Systems unit has five lines of work: C4ISR and undersea systems; integrated warfare systems and sensors; ship and aviation systems; Sikorsky; and training and logistics solutions. It has more than 35,000 employees, according to Lockheed.

By Tony Bertuca
August 4, 2016 at 10:40 AM

Here are a few must-reads from this week's edition of Inside the Pentagon:

1. The military services have submitted their respective program objective memoranda for fiscal years 2018 through 2022 for review by the Office of the Secretary of Defense, a Pentagon spokesman has told Inside Defense.

Full story: Services submit POM-18 for internal review

2. The Pentagon has amended the charter for the new Defense Innovation Board to include more members and non-voting advisers and plans to host the group's first meeting on Oct. 5.

Full story: Pentagon's new innovation board to hold first public meeting Oct. 5

3. The Pentagon intends to transfer $400 million from the Army's operation and maintenance account to a development fund designed to help boost the Defense Department's acquisition workforce, according to a recent reprogramming action.

Full story: DOD aims to transfer $400M to acquisition workforce development fund

By Marjorie Censer
August 4, 2016 at 10:28 AM

Mission Essential, which specializes in translation and interpretation services for the Pentagon and intelligence agencies, said today it has acquired Information Management Technology Corp., a system integrator and software engineering business.

Terms of the deal were not disclosed.

The Fairfax, VA-based IMT specializes in time-critical information management and global communications, and will continue to be led by founder and president Rob Kelly. Mission Essential said the acquisition is part of its growth and diversification strategy.

By Marjorie Censer
August 4, 2016 at 10:16 AM

Mike Petters, chief executive of Huntington Ingalls Industries, said today the company is concerned that an anticipated continuing resolution this year could last into next year.

"We're starting to rely on continuing resolutions way too much," he said during a morning call with analysts. "The continuing resolution may actually be longer than December."

Huntington Ingalls reported today that sales in its most recent quarter hit $1.7 billion, down about 3 percent from the same three-month period the prior year. Quarterly profit reached $133 million, down nearly 15 percent from the prior year.