The Insider

Defense contractor ArmorSource has agreed to pay $3 million to settle False Claims Act allegations, the Justice Department said Monday.

The Army in 2006 contracted with ArmorSource, which designs, develops and manufactures ballistic helmets, to build the Advanced Combat Helmet, DOJ said. The Justice Department alleged that from 2006 to 2009, ArmorSource delivered ACH helmets that "did not conform to contract requirements and that failed to meet contract performance standards.

"In May 2010, the Army began recalling the helmets after several lots failed ballistic safety tests," the Justice Department continued.

The settlement resolves a lawsuit filed by employees of Federal Prison Industries, the company to which ArmorSource subcontracted the manufacturing. The two employees are set to each receive $450,000, according to DOJ.

The claims resolved by the settlement remain allegations, and there was no determination of liability.

ArmorSource did not immediately respond to a request for comment.

A discussion of the military services' “wish lists” starts off our Monday INSIDER:

Top OSD officials find services' 'wish lists' unhelpful to FY-17 budget process

Top officials from the Office of the Secretary of Defense, asked to weigh in on the military services' practice of sending unfunded priorities lists to Congress outside the normal budget submission, remarked that the fiscal year 2017 lists, which have been leaked to Congress prior to review by Defense Secretary Ash Carter, are unhelpful in the current political climate.

Several House members are pushing to use the Army's Black Hawk helicopter to patrol the Air Force's ICBM fields:

Lawmakers push for Black Hawk buy in Huey replacement program

A bipartisan cadre in the House is pushing the Air Force to purchase UH-60M Black Hawk helicopters from the Army's block buy in an effort to speed up the UH-1N Huey replacement program.

An examination of the Army's top warfighter network shows the service has work to do in determining quantities:

Auditors: Army erred in calculating $9.1 billion WIN-T procurement

The Army needs to modify its metric for determining procurement quantities for the Warfighter Information Network-Tactical Increment 2 to reflect changes in the service's force structure, according to the Defense Department inspector general.

Top Navy leaders are vexed over how to pay for the service's No. 1 acquisition program, the Ohio-class replacement submarine, as Inside the Navy reported:

Navy leaders indicate little progress in plan to finance both ORP, rest of fleet

Navy leaders, who this summer plan to seek permission to formally launch their top-priority Ohio Replacement submarine program, do not yet have a plan for how to finance both it as well as the service's conventional fleet modernization needs -- a decision with enormous budgetary consequences.

Harris is looking for new ideas for its space and intelligence business:

As Pentagon stresses innovation, Harris' space business seeks new ideas

Facing increasingly fast-paced technological change, Harris' space and intelligence systems business last year opened an innovation center meant to explore new ideas.

Inside the Navy tells us there is another review ongoing for the Littoral Combat Ship:

Navy to review LCS mission modules, crewing and maintenance

The Littoral Combat Ship program is under review yet again, with its unique constructs for swappable mission modules, dual crewing and contracted maintenance now all under examination.

Highlights from the front page of this week's Inside the Navy:

1. Navy leaders, who this summer plan to seek permission to formally launch their top-priority Ohio Replacement submarine program, do not yet have a plan for how to finance both it as well as the service's conventional fleet modernization needs -- a decision with enormous budgetary consequences.

Full Story: Navy leaders indicate little progress in plan to finance both ORP, rest of fleet

2. The Navy's advanced anti-ship missile and its recently restructured carrier-launched unmanned aerial system are the first two programs to fall under the service's new Maritime Accelerated Capabilities Office.

Full Story: Anti-ship missile, carrier-launched UAS first in fast-track acquisition office

3. The Navy has identified the F/A-18E/F program as a candidate for additional funding in fiscal year 2017 in the event Congress were to increase the amount of money available for defense, resources the service would use to buy an additional 14 aircraft as a hedge to keep the Boeing production line open in the event planned foreign F-18 orders do not materialize.

Full Story: Navy will seek additional F-18s in case foreign sales do not go through

Deputy Defense Secretary Bob Work sent lawmakers a memo this week assuring them that the Air Force's recent rocket propulsion systems awards comply with the law as established in fiscal year 2015 and 2016 authorizing legislation.

The awards are meant to fund innovative propulsion system efforts that do not rely on Russian rockets.

The March 2 memo, which was sent to House Armed Services Committee leadership, states that based on a Defense Department review of the law, the four RPS other transaction authority awards appear to comply.

"The Air Force has also indicated that the OTAs were briefed to all relevant committee staff before they were awarded," the memo states.

Since last December, the service has awarded contracts to SpaceX, Orbital ATK, United Launch Alliance and Aerojet Rocketdyne to develop prototype propulsion systems to replace the Russian-made RD-180 rocket engine. As Inside Defense reported this week, the service had placed a hold on additional OTAs until it had responded to congressional inquiry into the legality of the awards.

Air Force Secretary Deborah Lee James said this week she will provide Congress with a list of potential F-35 Joint Strike Fighter foreign military sales customers.

James was pressed by Sen. Richard Blumenthal (D-CT) on the service's confidence that its plan to defer procurement of 45 aircraft to future years will not impact the JSF unit cost. The service has said F-35 unit costs will remain stable due to finalized and pending FMS deals.

"How can you testify, with all due respect, that you are confident the per-unit cost won't rise when you can't tell us what countries will be buying more of the aircraft?" Blumenthal asked during a March 3 Senate Armed Services Committee hearing.

The Defense Advanced Research Projects Agency has awarded Aurora Flight Sciences an $89.4 million contract for the second and third phases of an air dominance program that seeks to develop an experimental vertical-takeoff-and-landing plane with enhanced hover craft efficiency and a more favorable lift-to-drag rate.

This cost-plus-fixed-fee contract is for the next two phases of the Vertical Takeoff and Landing Experimental Plane (VTOL X-Plane) program. 

The goals for the VTOL X-Plane include the ability to achieve a top flight speed between 300 and 400 knots; raise aircraft hover efficiency from 60 percent to at least 75 percent; present a cruise lift-to-drag ration of at least 10; and carry a useful load of at least 40 percent of the vehicle's projected gross weight of 10,000 to 12,000 pounds.

Aurora seeks to conduct the first flight test of the technology demonstrator in the 2018 time frame, provided that it successfully achieves key program milestones, according to a company statement.

In a DARPA statement, the agency notes that Aurora's flight design “envisions an aircraft that could fly fast and far, hover when needed and accomplish diverse missions without the need for prepared landing areas.”

"While the technology demonstrator would be unmanned, the technologies that VTOL X-Plane intends to develop could apply equally well to manned aircraft," according to the DARPA statement.

Past efforts to increase top speeds of VTOL planes have faced challenges related to "sacrificing range, efficiency or the ability to do useful work," DARPA wrote, noting that this program seeks to overcome this issue "through innovative cross-pollination between fixed-wing and rotary-wing technologies and by developing and integrating novel subsystems to enable radical improvements in vertical and cruising flight capabilities."

The winning unmanned plane design, named LightningStrike, "seeks to provide an approximately 50-percent increase in speed over existing VTOL aircraft designed for comparable mission applications," according to the Aurora statement.

"If successful, VTOL X-Plane's radically improved flight capabilities could lead to revolutionary advancement of the U.S. military's future mission capabilities," John Langford, the chairman and CEO of Aurora, said in the company statement.

Rolls-Royce and Honeywell International Inc. are subcontractors on the flight demonstrator.

Navy Secretary Ray Mabus recently authored a memo establishing policy for managing the service's cybersecurity workforce.

According to the Feb. 16 memo:

"All authorized users of DON Information Systems (IS) must complete approved CS awareness training annually as a condition of access prior to accessing DON information and IS. Per this instruction, commanders of DON organizations may prescribe additional command-level access requirements and may add to the standardized baseline training."

That training will likely come in handy, as Defense Secretary Ash Carter, during his latest West Coast trip intended to strengthen ties between the Pentagon and America's high-technology sector, touted the Defense Department's plans to invest $35 billion in cyber capabilities over the next five years. As Inside Defense reported:

"Defending our networks and weapon systems is job one for DOD in cyberspace -- they're no good if they've been hacked," according to a transcript of a speech he made Tuesday at the Commonwealth Club in San Francisco.

"DOD's second mission in cyberspace is to help other agencies defend the nation against cyberattacks from abroad, especially if they would cause loss of life, property destruction, or significant foreign policy and economic consequences," he continued. "And the third mission is to provide offensive cyber options that can be used in a conflict -- as we’re doing now against [the Islamic State of Iraq and the Levant]."