The Insider

By Courtney Albon
July 29, 2016 at 5:09 PM

The Air Force today released requests for proposals for the two key nuclear modernization efforts -- the Long-Range Standoff Weapon and the Ground-Based Strategic Deterrent.

LRSO will replace the Air Force's Air-Launched Cruise Missile, which was fielded in the early 1980s. The new weapon is meant to have greater range, survivability and reliability and the service expects to field the missile by 2010.

According to a July 29 press release, the service expects to select up to two prime contractors for the program's development phase. The two companies will compete through preliminary design review, at which time one design will be chosen for production.

The service intends to buy 1,000 new cruise missiles and expects the LRSO program could cost about $17 billion for the missile and its nuclear-capable warhead.

Meanwhile, the service expects its plan to replace the current Minuteman III intercontinental ballistic missile with a new Ground-Based Strategic Deterrent will save nearly $20 billion in cost avoidance over five decades. Like for the LRSO, the service expects to award up to two engineering and manufacturing development contracts in the later part of fiscal year 2017.

The service expects to begin deploying the GBSD in the late 2020s and maintain the missiles through 2075.

The Defense Department's plans to modernize its nuclear enterprise have stirred some controversy on Capitol Hill, with some Democrats urging President Obama to rethink the current plan. The LRSO in particular has become a target by some, with five House Democrats noting in a recent letter to the administration that the program's funding be cut.

By Jordana Mishory
July 29, 2016 at 4:38 PM

The Pentagon publicly disavowed involvement in this month's attempted coup in Turkey during a press conference Friday.

Defense Department spokesman Peter Cook contended that any claims that senior defense officials were involved in the July 15 attempt are "absurd."

Cook's comments came shortly after U.S. Central Command chief Gen. Joseph Votel issued a statement saying that any reporting that he supported the coup attempt "is unfortunate and completely inaccurate."

Turkish government officials have speculated that the United States supported the failed attempt.

"The United States has repeatedly condemned the failed coup in Turkey, and we continue to convey our absolute support for Turkey's democratically elected civilian government and democratic institutions," Cook said, noting that Turkey is "a close NATO ally and a vital member" of the coalition working to defeat the Islamic State of Iraq and the Levant.

U.S. officials and their Turkish counterparts are in "regular communication," Cook added, noting that "any reports that suggest Gen. Votel expressed support in any fashion for the actions of Turkish military officers who undertook illegal military action against the Turkish government are factually inaccurate."

"Likewise," Cook continued, "as Secretary [Ash] Carter and Chairman [of the Joint Chiefs of Staff Gen. Joseph] Dunford have made clear previously, any suggestion anyone in the department supported the coup in any way would be absurd."

President Obama has also previously denied U.S. involvement in the coup.

Cook noted that Carter has received assurances that operations against ISIL will not be impacted, and that the Pentagon does not expect the coup attempt to have an impact on the relationship between the two countries. However, he added that in some instances a Turkish counterpart that a defense official previously worked with might no longer be in the same position.

By John Liang
July 29, 2016 at 3:31 PM

The Navy's "superior supplier" list tops off this Friday INSIDER Daily Digest.

Inside Defense's Jason Sherman took a look at the Navy's latest "superior supplier" list:

Eight Navy suppliers notch improved 'superior' ranking as service culls overall list

Five Navy suppliers improved their position -- and three made a new appearance -- in the service's annual "superior" rankings, a Defense Department program the service pioneered to identify exceptional cost, schedule, performance, quality and business relations by defense contractors.

A senior MDA official spoke this morning on Israeli missile defense funding:

MDA deputy director sees Israeli aid squeezing R&D resources

The deputy director of the Missile Defense Agency concurs with a recent report highlighting several budgetary trends squeezing MDA's research and development funds, including the politically sensitive push for increased aid to Israeli defense projects.

The Marine Corps wants a helicopter that has the option of being flown remotely:

Marines want 'optionally manned' Future Vertical Lift aircraft

The Marine Corps is pushing for the helicopter replacements being pursued under the Future Vertical Lift program to include "optionally manned" aircraft that can be flown by humans or operated remotely, depending on the mission.

(Want more military helicopter news? Check out our Notification Center, where you can sign up to receive email alerts on the defense topics that interest you.)

Inside Defense's Marjorie Censer sat down recently with the head of General Dynamics Mission Systems:

General Dynamics Mission Systems chief zeroes in on integration

Though General Dynamics Mission Systems was created a year and a half ago, the process required to fully integrate the company's many businesses continues, according to the unit's top executive.

Some news from the front page of today's Inside the Air Force:

Red Flag highlights need for space, cyber range improvements

An ongoing Red Flag exercise at Nellis Air Force Base, NV, is placing a greater emphasis on space and cyber integration and is highlighting needed range improvements to better characterize threats and incorporate non-kinetic effects.

GAO report considers options for streamlining military space acquisition

Recent analysis from the Government Accountability Office presents options for improving military space acquisition, including a proposal to create a new military "space force" that would be responsible for all military space development and operations.

Document: GAO report on defense space acquisitions

 

Air Force secretary concerned about munitions levels under long-term CR

Although the Air Force has found its stride managing the pitfalls of operating under short-term continuing resolutions, the service's top civilian official said this week she's concerned about the impact a sustained stopgap spending measure could have on munitions levels.

By Courtney Albon
July 29, 2016 at 3:09 PM

Driven by a shortage of fighter pilots available to fly combat missions, the Air Force is actively discussing a proposal to hire contractors flying private jets to serve as aggressors in training exercises.

Secretary Deborah Lee James told reporters this week that depending "how the dollars and cents work out," the service may contract out for the aggressor role, which supports exercises like Red Flag by simulating enemy actions.

The service currently relies on its own T-38 trainer aircraft to serve as aggressors.

By Marjorie Censer
July 29, 2016 at 11:41 AM

Oshkosh Corp. said this week its defense segment saw sales in the most recent quarter jump 36 percent to reach $264 million.

"The increase in sales was primarily due to increased sales of Family of Heavy Tactical Vehicles," the company said. During the same quarter the prior year, Oshkosh "experienced a break in production under the FHTV program."

The segment reported quarterly profit of $19.1 million. In the same period a year earlier, Oshkosh's defense business lost $7.1 million.

By John Liang
July 29, 2016 at 10:00 AM

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

1. The Air Force expects to declare initial operational capability for its variant of the F-35 Joint Strike Fighter next Tuesday, Aug. 2, multiple sources confirmed to Inside Defense.

Full story: Air Force expects to declare F-35A IOC Aug. 2

2. More than a dozen business segments from major defense contractors muscled their way to a privileged Air Force supplier status in 2016 compared to 2015 in the service's third annual ranking of so-called "superior suppliers" -- a new positioning that also included downgrades, including eight business units that were dropped entirely.

Full story: Sixteen Air Force suppliers climb higher in 2016 'superior' rankings

3. An ongoing Red Flag exercise at Nellis Air Force Base, NV, is placing a greater emphasis on space and cyber integration and is highlighting needed range improvements to better characterize threats and incorporate non-kinetic effects.

Full story: Red Flag highlights need for space, cyber range improvements

4. Although the Air Force has found its stride managing the pitfalls of operating under short-term continuing resolutions, the service's top civilian official said this week she's concerned about the impact a sustained stopgap spending measure could have on munitions levels.

Full story: Air Force secretary concerned about munitions levels under long-term CR

By John Liang
July 28, 2016 at 5:05 PM

The Missile Defense Agency and the Army recently completed the installation of a ground-based communications terminal meant to transmit target updates to and receive data from in-flight Exo-atmospheric Kill Vehicles.

Brig. Gen. William T. Cooley, MDA program executive for programs and integration, said: "This state-of-the-art facility has enhanced our ability to deter or defeat the limited use of long-range ballistic missiles against our nation. It is a vital asset provided to U.S. Northern Command to execute their critically important homeland defense mission."

A ribbon-cutting ceremony was held July 21 at Ft. Drum, NY, where the In-Flight Interceptor Communications System (IFICS) data terminal is based.

MDA has five other such terminals in operation at Ft. Greely and Shemya, AK, as well as Vandenberg Air Force Base in California.

Construction on the data terminal began in August 2013, and U.S. Northern Command accepted the site for operational use last December.

By John Liang
July 28, 2016 at 2:59 PM

The services' POM plans and a possible Navy headquarters reduction highlight this Thursday INSIDER Daily Digest.

The Army, Navy, Air Force and Marine Corps have submitted their fiv-year budget plans to OSD:

Services submit POM-18 for internal review

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.

Document: Work memo on strategic portfolio reviews

The Navy could be reducing the size of its headquarters:

Navy may make decision on 25 percent headquarters reduction in August

The Navy could make a decision on a 25 percent management headquarters reduction as soon as late August, according to an information paper obtained by Inside Defense.

Some defense business news:

Raytheon executive credits adapted strategy with boosting international customers

The Raytheon executive leading the company's international business told Inside Defense a strategic change adopted in recent years has helped the company grow its number of customers abroad.

L-3 has 'kicked up the intensity' in acquisition hunt

L-3 Communications is increasing its focus on acquisitions, company executives said Thursday.

(Want more defense business news? Check out our Notification Center, where you can sign up to receive email alerts on the defense topics that interest you.)

The Defense Business Board met this week:

Defense Business Board mulling deeper dive on supply chain resiliency

The Defense Business Board is considering whether it should conduct a deeper examination of supply chain resiliency to complement its ongoing study on logistics as a competitive warfighting advantage.

Document: DBB presentations on future issues facing DOD, etc

DARPA will be holding a spectrum access challenge industry event next month:

DARPA to hold industry event for spectrum access challenge

Registration is due next week for a set of proposers' days next month that lays out details for an upcoming competition sponsored by the Pentagon's advanced research arm designed to ensure access to an ever-crowded electromagnetic spectrum.

Document: DARPA notices on spectrum collaboration challenge

By Tony Bertuca
July 28, 2016 at 10:32 AM

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

1. The Defense Business Board is considering whether it should conduct a deeper examination of supply chain resiliency to complement its ongoing study on logistics as a competitive warfighting advantage.

Full story: Defense Business Board mulling deeper dive on supply chain resiliency

2. Earlier this year the Defense Department refuted charges that it spent $43 million building a single gas station in Afghanistan, but now an influential senator alleges DOD "opened a real can of worms" while defending itself and is demanding additional information.

Full story: Pentagon still haunted by '$43 million gas station

3. Five House Democrats, citing ongoing fiscal constraints and concerns about nuclear war, have sent a letter to the White House urging President Obama to "reshape" his current plan to modernize the U.S. nuclear arsenal.

Full story: House Democrats urge Obama to rein in nuclear modernization plans

By Marjorie Censer
July 28, 2016 at 9:49 AM

The deal to merge Leidos with Lockheed Martin’s IT business is moving forward and is set to close in mid-August, Leidos’ chief executive said today.

During a call with analysts, Roger Krone said the planned transaction has received “all regulatory approvals, both domestically and internationally.”

Leidos also reported today sales in its most recent quarter reached $1.3 billion, up 2 percent from the same three-month period a year earlier. Profit hit $41 million, up about 11 percent from the prior year.

The company said its national security solutions business recorded a 4 percent boost in sales because of “revenues associated with our new United Kingdom Ministry of Defense logistics program.”

However, the unit’s profit margin dropped, “primarily due to lower program fees and contract mix.”

By John Liang
July 27, 2016 at 8:40 PM

Looks like PokemonGo could be getting into more trouble.

The massively popular mobile game has prompted the Defense Information Systems Agency to warn users of DOD-owned mobile devices not to load the app onto those devices:

By Marjorie Censer
July 27, 2016 at 5:33 PM

ManTech International said today sales in its most recent quarter hit $401 million, up from $384 million in the same three-month period a year earlier.

Quarterly profit rose as well, reaching $14.8 million. That figure represents a nearly 19 percent increase over the prior year.

Kevin Phillips, ManTech's chief financial officer, said during a call with analysts that the company is seeing the government move away from awarding bids based solely on price.

"They still are very price-sensitive, but they also want to get the right solution," he said.

By Marjorie Censer
July 27, 2016 at 4:42 PM

NCI said today sales in its most recent quarter fell nearly 5 percent to hit about $82 million.

"This decrease was principally due to completed contracts and reductions in staffing and scope of work on certain contracts," the company said.

However, NCI saw higher sales through the expanded PEO Soldier program, which accounted for nearly 17 percent of the contractor's quarterly sales. NCI's Cyber Network Operations and Security Support program provided 11.4 percent of sales, up from 6.6 percent in the same period a year earlier.

Quarterly profit hit $3.2 million, an increase of about 6 percent from the previous year.

By John Liang
July 27, 2016 at 3:35 PM

Air Force news -- including an IOC date for that service's variant of the F-35 -- leads off this Wednesday INSIDER Daily Digest.

Inside Defense has the scoop on the IOC date for the Air Force's F-35 Joint Strike Fighter variant:

Air Force expects to declare F-35 IOC Aug. 2

The Air Force expects to declare initial operational capability for its variant of the F-35 Joint Strike Fighter next Tuesday, Aug. 2, multiple sources confirmed to Inside Defense.

Related JSF news:

Navy will begin the third phase of JSF developmental testing in August

The Navy will begin the third and final phase of Joint Strike Fighter aircraft carrier taking off and landing tests aboard the George Washington (CVN-73) in August.

A look at the Air Force's "superior supplier" rankings:

Sixteen defense contractor business units climb higher in 2016 Air Force 'superior' supplier rankings

More than a dozen business segments from major defense contractors muscled their way to a privileged Air Force supplier status in 2016 compared to 2015 in the service's third annual ranking of so-called "superior suppliers" -- a new positioning that also included downgrades, including eight business units that were dropped entirely.

Document: Air Force 2016 Superior Supplier Ratings - Systems

Defense contractor earnings news:

Northrop CEO says company is 'tuning' technology services business

Northrop Grumman is considering the best way to reshape its technology services business, seeking to move it away from providing commodity services, according to the contractor's chief executive.

Defense contractors report boosts in profit

Some of the largest defense contractors said Wednesday that profits grew in their most recent quarter.

The Army has revamped its five-year business strategy:

Army revamps business strategy for near term

The Army has updated its approach to business, codifying the changes in a new document to govern the next five years.

Document: Army Business Strategy 2017-2021

More Army news:

Army to detail GMV plans at August industry day

The Army plans to host an industry day next month to outline its plans for procurement of the Ground Mobility Vehicle. The Army is slated to make its first budget outlays for GMV in fiscal year 2017. Army Under Secretary Patrick Murphy highlighted GMV as one of the service's top priorities during a speech this month at the New America Foundation.

News from this week's Inside the Navy:

Navy seeks outside input on implementing cloud-based services

The Navy is seeking advice on how to best transition network services to the cloud, as the service continues to mull an acquisition strategy for the follow-on contract for its Next-Generation Enterprise Network.

NAVSEA will host an industry day in August on vertical launch payloads

Naval Sea Systems Command will host an industry day in early August for vertical launch payloads that will help the service to understand the integration of the systems on submarines, according to a special notice.

By Tony Bertuca
July 27, 2016 at 3:11 PM

The Defense Logistics Agency has released its list of defense industry “superior suppliers.”

The list, compiled by DLA, the military services and other contract authorities in the Defense Department is based on performance in fiscal year 2015 and “is an extension of the Department’s Better Buying Power initiative and is designed to incentivize contractor performance by identifying suppliers with the highest rankings in areas such as performance, quality, and business relations,” according to a July 27 DLA statement.

The agency chose 42 superior suppliers from 150 parts and commodity suppliers it has done business with over the past two years with established ratings in the federal Contractor Performance Assessment Reporting System.

“Of those considered, 42 companies were selected as DLA’s superior suppliers based on the last three years of CPARS ratings, with the most emphasis placed on recent performance,” according to the statement. “The selected companies represent all of DLA’s major supply chains, include nine small businesses, and collectively account for nearly $16.7 billion in DLA contract expenditures annually. Suppliers were categorized into three levels based on their performance and CPARS ratings: Gold, Silver and Bronze.”

The Air Force recently released its list of superior suppliers as well.

Matthew Beebe, head of DLA’s acquisition directorate, said chosen companies should be proud of the superior supplier distinction.

“We also hope it serves as a reminder to both industry and government personnel of the importance of having ongoing, open and honest dialogue about contractor performance."

DLA’s superior suppliers for 2015 are listed in alphabetical order by performance level:

Gold:

AmeriQual Group, LLC
AmerisourceBergen Drug Corporation
Burlington Industries, LLC
Cardinal Health, Inc.
DMS Pharmaceutical Group, Inc.
Herndon Products, Inc.
McRae Industries, Inc.
Northrop Grumman Systems Corporation
Peckham Vocational Industries, Inc.
Science Applications International Corporation
Source One Distributors, Inc.
Sterlingwear of Boston, Inc.
Tennier Industries, Inc.
US Foods, Inc.
The Wornick Company

Silver:

AM General, LLC
American Apparel, Inc.
Bell Boeing Joint Project Office
Bethel Industries, Inc.
Federal Resources Supply Company
Graybar Electric Company, Inc.
Lockheed Martin Corporation
McKesson Corporation
Propper International, Inc.
Supplycore, Inc.
Theodor Wille Intertrade AG
Triumph Structures, Inc.
Veyance Technologies, Inc.

Bronze:

The Boeing Company
CPD Alaska, LLC
Foster Fuels, Inc.
General Electric Company
Meggitt, Inc.
Michelin North America, Inc.
National Industries for the Blind
PPG Industries, Inc.
Raytheon Company
Rockwell Collins, Inc.
Sysco Corporation
Textron, Inc.
USFI, Inc.
Y. Hata and Company, Limited