The Insider

The INSIDER daily digest
By John Liang
May 5, 2016 at 3:33 PM

Readiness funding and THAAD's deployment to South Korea are some of the highlights in this Thursday INSIDER Daily Digest.

The Pentagon's readiness funding efforts aren't up to snuff, according to one House lawmaker:

Military readiness funding debated as Congress works defense policy bills

House Armed Services Committee Chairman Mac Thornberry (R-TX) is criticizing the White House and Defense Department for failing to properly fund military readiness in the fiscal year 2017 budget request, while simultaneously trying to advance a defense authorization bill that would shift billions from the DOD account that traditionally funds readiness in hopes the money will be added by an emergency supplemental from a new presidential administration.

Doesn't look like THAAD will be deployed to South Korea anytime soon:

State Dept. arms control official: THAAD deployment to Korea remains in limbo amid Chinese concerns

The United States remains in talks with South Korea over the potential deployment of a Terminal High Altitude Area Defense battery to counter North Korean ballistic missile threats, a discussion made complicated by China and its concerns that THAAD will become part of a larger "containment strategy" in the region, according to a State Department arms control official.

The head of Huntington Ingalls Industries spoke this morning about the Navy's newest aircraft carrier program:

HII CEO: Ford delivery delay due to complexity of lead ship testing

The Navy's multibillion-dollar megacarrier the Gerald R. Ford is experiencing a delivery delay due to the complexity of lead ship testing, according to Huntington Ingalls Industries chief executive officer.

Coverage of a couple recent Defense Business Board meetings:

Defense Business Board recommends another round of BRAC

An influential advisory panel is recommending another round of base realignments and closures to help the Defense Department reduce excess facilities and use the savings for readiness.

Document: DBB presentation on real property management

DBB: Pentagon needs to make it easier to attract top acquisition candidates

In order to attract and retain top acquisition talent, the Pentagon needs to loosen strict ethics regulations and make it simpler for potential officials to get through the confirmation process, an influential advisory panel found.

Document: DBB presentation on selecting senior acquisition officials

DARPA has space on its mind:

DARPA seeks industry input on controlled re-entry of LEO objects

The Pentagon's advanced research arm is seeking industry's input on the controlled re-entry of objects from low Earth orbit.

Statistical significance
By Jason Sherman
May 5, 2016 at 2:39 PM

The Pentagon's top weapons tester singled out three major programs -- the F-35, the Littoral Combat Ship and the Joint Light Tactical Vehicle -- in a keynote address last month on the importance of utilizing statistical analysis to support operational testing.

Director of Operational Test and Evaluation J. Micheal Gilmore presented this briefing -- on April 11, 2016 in Arlington, VA -- to a workshop organized by the Defense Department and NASA for professional testers from the military, NASA, national laboratories and across the federal government.

Army Maj. Roger Cabiness II, Gilmore's spokesman, provided additional background:

The briefing was the opening keynote for the Rigorous Test and Evaluation Workshop, which the DOD test and evaluation community planned collaboratively with the Statistical Engineering Group at NASA. The primary objective of the workshop was to provide a forum for the professional community to share and discuss statistical approaches to test design and evaluation, including the characterization of system capabilities. The workshop was a continuing part of the DOT&E and NASA Statistical Engineering Agreement, which we use to share best practices across organizations.

DOT&E has made it a top priority to ensure that operational tests are adequate, not only in terms of how much testing is conducted, but also under what conditions. Statistical thinking and the associated methods are an essential element in determining of test adequacy. DOT&E has advocated for the use of statistical methodologies, including Design of Experiments (DOE), reliability test planning, survey design, and rigorous statistical analyses. These methodologies not only provide a rigorous and defensible coverage of the operational space; they also allow us to quantify the trade-space between the amount of testing and the precision needed to answer the complex questions about system performance. They allow us to know, before conducting the test, which analyses we will be able to conduct with the data and therefore, what questions about system performance we will be able to answer. Finally, they provide the analytical tools to answer the question of how much testing is enough in the context of uncertainty.

Orbital ATK reports reduced sales in defense group
By Marjorie Censer
May 5, 2016 at 12:57 PM

Orbital ATK said today sales in its most recent quarter declined slightly, when adjusted for last year's merger between Orbital Sciences and ATK's aerospace and defense groups.

"From a financial standpoint, Orbital ATK reported somewhat mixed results for the first quarter," Dave Thompson, the contractor's chief executive, said during a morning call with analysts.

Total adjusted quarterly revenues were just shy of $1.1 billion, down nearly 5 percent from the same three-month period a year earlier. That decline was driven by a $65 million reduction in defense systems sales, the company said.

Quarterly adjusted profit rose to about $77 million, up from $67 million the prior year. The company said it was buoyed by improved profit in its flight systems and space systems groups, but the defense systems unit reported an $11.9 million decrease in profit.

Kratos reports quarterly loss
By Marjorie Censer
May 5, 2016 at 10:00 AM

Kratos Defense & Security Solutions said this week sales in its most recent quarter declined slightly to hit $153 million.

The contractor reported a loss of $22.2 million for the quarter, a larger amount than the $16.2 million it lost in the same three-month period a year earlier.

Kratos said in its earnings announcement that it "executed a significant restructuring, facility consolidation and cost reduction" during the quarter. As part of this effort, Kratos closed its Charleston Marine Container manufacturing plant and reduced its headcount by more than 120 people.

Huntington Ingalls reports sales, profit boosts
By
May 5, 2016 at 9:52 AM

Huntington Ingalls said today sales in its most recent quarter hit nearly $1.8 billion, up about 12 percent from the same three-month period the prior year.

Profit reached $136 million, up 56 percent from the prior year.

The company attributed much of the growth to its Ingalls Shipbuilding unit, which saw quarterly revenue increase about 25 percent from the same period in 2015 “due to higher revenues in Surface Combatants and Amphibious Assault Ships.”

Those improvements were partly offset by reduced sales in the Legend-class National Security Cutter program, HII said.

Inside the Pentagon highlights
By Tony Bertuca
May 5, 2016 at 9:00 AM

A few must-reads from the latest edition of Inside the Pentagon:

1. In order to attract and retain top acquisition talent, the Pentagon needs to loosen strict ethics regulations and make it simpler for potential officials to get through the confirmation process, an influential advisory panel found.

Full story: DBB: Pentagon needs to make it easier to attract top acquisition candidates

2. House Armed Services Committee Chairman Mac Thornberry (R-TX) is criticizing the White House and Defense Department for failing to properly fund military readiness in the fiscal year 2017 budget request, while simultaneously trying to advance a defense authorization bill that would shift billions from the DOD account that traditionally funds readiness in hopes the money will be added by an emergency supplemental from a new presidential administration.

Full story: Military readiness funding debated as Congress works defense policy bills

3. An influential advisory panel is recommending another round of base realignments and closures to help the Defense Department reduce excess facilities and use the savings for readiness.

Full story: Defense Business Board recommends another round of BRAC

The INSIDER daily digest
By John Liang
May 4, 2016 at 4:22 PM

A new Defense Science Board study and a chat with the head of Leidos highlight this Wednesday INSIDER Daily Digest.

A new DSB study is underway:

New DSB panel to evaluate military research and development enterprise

The Pentagon's acquisition executive has commissioned a new assessment of the defense research enterprise, a study launched in accordance with a statutory mandate to review the sprawling government complex that supports military research and development.

Document: DSB terms of reference memo on the defense research enterprise

Inside Defense sat down this week with the head of Leidos:

As Lockheed deal advances, Leidos prepares for new business units, larger corporate office

Leidos is laying the groundwork for its merger with Lockheed Martin's information systems and global solutions unit, readying for additional business units and a more sizeable corporate office.

(Want more defense business news? Check out our Notification Center, where you can sign up to receive alerts whenever a related story is posted.)

An RFI for the future SBIRS program is out:

Air Force reveals architecture options for future SBIRS

The Air Force is considering options for a six- or eight-satellite constellation for the future Space-Based Infrared System program of record and anticipates the follow-on system could feature a mix of hosted payloads with disaggregated missions.

Document: Air Force RFI for SBIRS architecture options

The No. 2 officer at U.S. Pacific Command spoke at last week's "Quad-A" conference:

PACOM deputy chief touts need for rotary wing upgrade

Future rotary platforms are essential if the joint force is to tackle potential conflicts in the "expansive maritime environment" of the Pacific theater, according to the deputy commanding general for U.S. Pacific Command.

Keep an eye out for an upcoming industry day on CAC25:

Marines will host an industry day in May for the second phase of CAC2S

The Marine Corps plans to host an industry day in May for the second phase of the common aviation command and control system for full-rate production, according to the program manager.

House lawmakers want more info on unmanned combat vehicles:

House bill pushes for expansion of unmanned combat vehicles

Lawmakers are seeking an update on the Defense Department's progress toward further integration of unmanned ground and aerial vehicles into the joint force, according to the House Armed Services Committee's fiscal year 2017 defense policy bill.

Air Force One recap EIS planned
By John Liang
May 4, 2016 at 1:21 PM

The Air Force plans to prepare an environmental impact assessment on basing the Presidential Aircraft Recapitalization program at Joint Base Andrews near Washington, DC.

According to a Federal Register notice issued this morning:

The EIS will assess the potential environmental consequences of the proposal to beddown versions of the Boeing 747-8 passenger aircraft at JBA as replacements to the two existing VC-25A aircraft currently used to transport the President of the United States (POTUS).

The Air Force plans to hold a pair of "public scoping" meetings on May 23 and May 24, according to the notice.

In February, the Air Force awarded Boeing a $25.7 million contract to perform risk reduction for the program. As Inside Defense reported at the time:

While the initial contract is for risk-reduction activities, the Air Force will later issue modifications for the future purchase of the three jets, as well as to design, modify and test the aircraft to meet the mission, according to a Jan. 29 Air Force statement.

"These activities will include the definition of detailed requirements and design trade-offs required to support informed decisions that will lead to a lower risk engineering and manufacturing development program and lower life cycle costs," Col. Amy McCain, the Presidential Aircraft Recapitalization program manager, said in the statement.

Authorization bills
By Lee Hudson
May 4, 2016 at 10:57 AM

The fiscal year 2017 defense policy bill will be brought to the House floor the week of May 16, the House Armed Services Committee confirmed to Inside Defense May 4.

The Senate Armed Services Committee will begin to mark up its version of the FY-17 defense policy bill May 9. The full committee will meet to review the bill May 11, which is closed to the public.

Flynn joins Drone Aviation board
By Marjorie Censer
May 4, 2016 at 9:43 AM

Drone Aviation said today retired Lt. Gen. Michael Flynn, the former director of the Defense Intelligence Agency, has joined the company's board as vice chairman.

He has also been named to the company's strategic advisory board.

Drone Aviation has increasingly been seeking a foothold in the military market, as Inside Defense reported earlier this year:

To win more military work despite tight budgets, Drone Aviation has sought to participate in demonstrations, trying to break into the market by proving the system's worth to soldiers.

In an interview with Inside Defense last week, Dan Erdberg, Drone Aviation's president, said the company is convinced there's a need for this technology -- but has to get it in the hands of the right people.

"We just decided our best strategy was, we're going to support the warfighter," he said. "The further it gets . . . the use cases get proven, and it just continues to really excel at what it's designed to do. Eventually, people will see it."

The INSIDER daily digest
By John Liang
May 3, 2016 at 3:37 PM

Defense contractor news and missile defense are among the highlights of this Tuesday INSIDER Daily Digest.

The COO of Janus Global Operations spoke with Inside Defense this week:

Rebranded and expanded, Janus Global Operations seeks to boost sales

Following multiple acquisitions, stability operations contractor Sterling Global Operations has rebranded itself as Janus Global Operations and is seeking growth.

Keep an eye out for an upcoming SM-3 flight test later this month:

Late May flight tests to assess redesigned rocket motor that has bedeviled SM-3 Block IB

The Missile Defense Agency aims to flight test a redesigned component of the Standard Missile-3 Block IB interceptor later this month in a bid to evaluate the efficacy of recent third-stage rocket motor engineering changes, a prerequisite to advancing long-delayed plans to transition the Raytheon program to full-rate production.

The next presidential administration could have a hypervelocity gun in its arsenal:

Work: New hypervelocity gun could displace rail gun in next administration

Deputy Defense Secretary Bob Work said Monday that current Pentagon leaders have made investments intended to position the next presidential administration to offset expected Russian and Chinese technological advancements, specifically in lessons learned about a new hypervelocity gun.

Also keep an eye out for a GAO ruling on Palntir's Army intel software contract protest:

Ruling due this month on Palantir's protest over Army's intelligence software

The Government Accountability Office is expected to issue a ruling by May 26 about Palantir's concerns over the Army's plans to develop the service's next version of the Distributed Common Ground System.

News on the future of the Navy's unmanned airborne tanker:

Navy reveals follow-on increments for unmanned tanker program

The Navy recently revealed that the future unmanned tanker that will operate from an aircraft carrier will have follow-on increments to include precision weapons targeting, a radar and will be able to receive aerial refueling.

The Army isn't quite ready:

Army makes readiness gains, but still falls short

The Army is making strides in rebuilding readiness, but currently only one-third of the service is prepared to engage in full-spectrum conflict, according to the director of operations, readiness and mobilization in the Army's G-3/5/7 office.

Miller moves from Army to AT&L
By Tony Bertuca
May 3, 2016 at 3:15 PM

Mary Miller has been named the new principal deputy assistant secretary of defense for research and engineering at the office of the Pentagon acquisition chief, according to a Defense Department announcement.

Miller previously served as the deputy assistant secretary of the Army for research and technology.

Her new job comes at a time when DOD has increased its focus on investments in new, innovative technologies.

LRDR environmental assessment released
By John Liang
May 3, 2016 at 12:20 PM

The Missile Defense Agency and Air Force Space Command on May 2 released an environmental assessment regarding the proposed basing of the Long-Range Discrimination Radar at Clear Air Force Station, AK.

MDA and AFSPC found "no significant impacts from construction or operation" of the LRDR, according to the draft document:

The purpose of the action is to provide a properly situated US-based radar site with sufficient capability for midcourse BMDS discrimination and hit/kill assessment in support of enhanced homeland defense. The need is to deploy a LRDR against long-range ballistic missile threats from North Korea as directed in the National Defense Authorization Act for 2014. When complete, this radar would function as part of the BMDS and be functionally capable through the MDA Command and Control, Battle Management, and Communications (C2BMC) system. This EA considers and evaluates the construction and operation of the LRDR.

The LRDR would replace a Ballistic Missile Early Warning System (BMEWS) radar that was deactivated in 2001.

If a decision were made to proceed with building the LRDR, "the proposed construction activities would begin in Fiscal Year (FY) 2016 and continue through FY2021, with the site being operational by mid FY 2020," according to the document.

BWX Technologies reports sales, profit boosts
By Marjorie Censer
May 3, 2016 at 9:36 AM

BWX Technologies said today that sales in its most recent quarter hit $365 million, up from just shy of $336 million in the same three-month period a year earlier.

The company's quarterly profit rose to $49 million, up from $45 million the prior year.

BWX said higher sales were driven by increased manufacturing in its nuclear operations segment as well as "higher activity at our Naval Reactor decommissioning and decontamination project."

The company also saw more nuclear services work in the United States and Canada.

Harris reduces anticipated 2016 sales
By Marjorie Censer
May 3, 2016 at 9:29 AM

Harris said today that sales in its most recent quarter reached $1.9 billion, up from $1.2 billion in the same three-month period a year earlier.

Quarterly profit hit $168 million, up from $126 million the prior year. Those figures include the addition of Exelis, which Harris acquired in May of last year.

Harris said today it now expects fiscal 2016 revenue to reach $7.5 billion. The company last quarter had adjusted its guidance for fiscal 2016 revenue to fall within a range of $7.6 billion to $7.68 billion, down from a previous range of $7.67 billion to $7.83 billion.

Bill Brown, Harris' chief executive, said during a Tuesday morning call with analysts that the company is seeing lower tactical radio revenue from the Middle East.

"We believe the slow pace in the Middle East is temporary," he added.