The Insider

By John Liang
February 9, 2016 at 10:24 AM

Last week, Defense Secretary Ash Carter said the Navy would invest $2 billion to procure 4,000 Tomahawk missiles across the future years defense program starting in fiscal year 2017. Turns out, that number was way off the mark.

A defense official -- speaking on condition of anonymity because the budget had not yet been officially released -- clarified Carter's statement, saying the Navy would procure 100 Tomahawk missiles in FY-17 and none thereafter.

The official added that Carter meant to highlight how the FY-17 Tomahawk purchase will bring the Navy's inventory of the tactical cruise missile to above 4,000.

Read the updated story here.

By Sebastian Sprenger
February 8, 2016 at 4:11 PM

Lockheed Martin wants to make sure that a key record related to its protest of the Joint Light Tactical Vehicle contract award to Oshkosh by the Army remains permanently sealed.

At issue is the transcript of a Jan. 20 hearing before Court of Federal Claims judge Charles Lettow at which all parties involved argued their cases, presumably in great detail.

According to an order issued by Lettow and filed on Feb. 5, Lockheed's request to have the transcript sealed is legitimate because the proceedings that day included so much information about “nascent military technology and competitively sensitive data” that making a heavily redacted document available to the public wouldn't be “meaningful.”

There is a silver lining, however, for those who might bemoan the lack of public access to the full case record. Lettow ordered the beginning portion of the transcript -- 12 pages and 12 lines -- to be published. Ironically, that portion of the transcript contains only an exchange between a reporter and court officials in which the reporter unsuccessfully argues that most of the hearing should be conducted in the open.

By Courtney McBride
February 8, 2016 at 2:57 PM

Senate Judiciary Committee Chairman Chuck Grassley (R-IA), who repeatedly has raised concerns about spending by the defunct Task Force for Business and Stability Operations, now is seeking additional information from Defense Secretary Ash Carter.

In a Feb. 5 letter, Grassley asks “a number of questions as a follow up to the testimony provided by Principal Deputy Under Secretary of Defense for Policy, Brian McKeon” during a Jan. 20 Senate Armed Services readiness and management support subcommittee hearing on TFBSO.

The senator, who has asked the Special Inspector General for Afghanistan Reconstruction to perform a “top-to-bottom audit” of TFBSO, challenges McKeon's contention that an April 2015 report on task force activities constitutes a “financial audit,” citing its failure to comply with “generally accepted auditing standards.”

Noting that approximately $820 million was appropriated for TFBSO, with $759 million obligated and $638 million expended, Grassley requests documentation of the disposition of “$182 million in unexpended appropriations.”

The senator continues to press the issue of “possible whistleblower retaliation against” Army Col. John Hope, who served as TFBSO's director of operations in Afghanistan and “has been working with both SIGAR and my staff to help us better understand how TFBSO functioned.” Noting discrepancies between McKeon's testimony and historical records, Grassley seeks clarification of McKeon's knowledge of task force operations and his role in evaluating Hope's performance, questioning the accuracy of the official's account of the timeline of events.

By John Liang
February 8, 2016 at 2:53 PM

Kicking off this Budget Day Eve INSIDER Daily Digest with news on DOD strategic portfolio reviews and more.

The Defense Department has a new schedule for conducting strategic portfolio reviews:

Pentagon sets new agenda for FY-18 strategic portfolio reviews

The Pentagon has set a new agenda for strategic portfolio reviews meant to shape FY-18 budget resourcing, specifically focusing on seven key areas, according to an internal memo signed by Deputy Defense Secretary Bob Work.

Document: Work memo on strategic portfolio reviews

A preview of the Navy's FY-17 budget request:

Navy's FY-17 budget request to add additional Virginia Payload Module, SECDEF says

The Navy's fiscal year 2017 budget proposal will double down on future plans to boost the strike capability of its Virginia-class submarines by increasing the number of Virginia Payload Modules the service anticipates procuring in its five-year plan from one to two, according to Defense Secretary Ash Carter.

The head of defense contractor Kratos spoke with Inside Defense recently about the company's future plans:

Seeking growth, Kratos chief says company is investing in new technology

Focused on expanding its product sales in the United States and abroad, Kratos Defense & Security is using its own dollars to research new technology, according to the company's chief executive.

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The United States and South Korea are studying the possibility of deploying a THAAD missile-defense system on the peninsula:

U.S., South Korea eye new antimissile system after North Korea's satellite launch

On the heels of a satellite launch by North Korea that drew international condemnation, the United States and South Korea announced that the two countries would study the possibility of deploying a new missile-defense system on the peninsula.

The way DOD classifies its space programs could be up for some changes:

DOD reconsidering policy, logic around space system classification

The Defense Department is beginning to analyze its policy around space program classification levels, and is considering where it might make sense to make some protected program information available publicly or at lower classification levels.

Keep an eye out for Lockheed Martin delivering F-16 SLEP kits soon:

Lockheed to begin early F-16 SLEP kit-proof deliveries this summer

After completing durability tests last July for a key F-16 service-life extension program, prime contractor Lockheed Martin and the Air Force are on track to complete the teardown of the aircraft next month, and will begin delivering upgrade kits this June.

The Navy's Multi-Stage Supersonic Target (MSST) program is no more:

Navy terminates advanced anti-ship cruise missile target program

The Navy has canceled a program to develop target vehicles representing advanced anti-ship cruise missiles used by countries like China and Russia due to soaring cost overruns and test failures, the Pentagon's top weapons tester revealed in his latest annual report.

By Tony Bertuca
February 8, 2016 at 10:50 AM

It is budget week in Washington and the Defense Department is expected to roll out its official fiscal year 2017 request on Tuesday, followed by an array of Capitol Hill hearings to debate the budget and assess how it stacks up against the global security environment.

Tuesday

Pentagon officials are scheduled to begin briefing its official FY-17 budget request at 1:30 p.m. And finish at 6 p.m.

The Senate Armed Services Committee will hear testimony on worldwide threats facing the United States.

Link: http://1.usa.gov/1TO6qyL

The ComDef 2016 Research and Development conference kicks off. Speakers include Dale Ormond, principal director for research at the Office of the Assistant Secretary of Defense for Research and Engineering; Col. Charles Ormsby, military deputy to the deputy assistant secretary of the Air Force for science, technology and engineering; Steven Walker, the deputy director of DARPA; and Richard Hale, DOD's deputy chief information officer for cybersecurity.

The Senate Armed Services strategic forces subcommittee will hear testimony on nuclear acquisition programs and doctrine.

Link: http://1.usa.gov/23SKeYP

The Senate Armed Services Committee will hear from a panel from the National Commission on the Future of the Army.

Link: http://1.usa.gov/23SKeYP

Wednesday

The House Armed Services Committee will hear from a panel of experts on "understanding and deterring Russia" at the Rayburn Building in room 2118 at 10 a.m.

The House Armed Services tactical air and land forces subcommittee will hear from members of the National Commission on the Future of the Army at the Rayburn Building in room 2118 at 2 p.m.

The House Armed Services emerging threats subcommittee will hold a hearing on countering weapons of mass destruction at the Rayburn Building in room 2212 at 3:30 p.m.

The ComDef 2016 Research and Development conference continues, with appearances by Christopher Thomas, administrator of the Defense Technical Information Center, and Col. Scott Wallace, director of DOD's Comparative Technology Office.

CSRA and NCI are set to announce quarterly earnings.

Thursday

The House Armed Services strategic forces subcommittee will hold a hearing on the FY-17 request for atomic energy defense activities at the Rayburn Building in room 2118 at 2 p.m.

The House Armed Services seapower and force projection subcommittee will hear testimony from a panel of experts on carrier air power and the future of naval aviation at the Rayburn Building in room 2212 at 3:30 p.m.

Friday

The House Armed Services readiness subcommittee will hold a hearing on the Air Force FY-17 budget request at the Rayburn Building in room 2118 at 8 a.m.

The House Armed Services oversight and investigations subcommittee will hold a hearing assessing the development of the Afghan National Security Forces at the Rayburn Building in room 2118 at 10:30 a.m.

Tony Moraco, the chief executive of Science Applications International Corp., is set to speak at a breakfast hosted by the Northern Virginia Technology Council.

By Marjorie Censer
February 8, 2016 at 9:41 AM

Stan Soloway, the former chief executive of the Professional Services Council and a former deputy under secretary of defense, has established Celero Strategies, a consulting firm meant to help companies enter the federal market and improve their positions.

Celero is named for the Latin word for accelerate. Soloway left PSC last year after 15 years at the helm.

He told Inside Defense today that the federal market has undergone significant change, from the way the government is buying to the evolving technology market.

"I want to focus on helping companies that are adapting to those changes," he said.

Soloway said he will "be hiring some staff over the next several months."

By John Liang
February 8, 2016 at 9:05 AM

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

1. The Pentagon's top weapons tester found that the Army's Joint Tactical Radio System's vehicular and handheld radios both struggled with cybersecurity problems during recent tests, though the service insists it is already in the process of fixing these vulnerabilities.

Full story: Pentagon finds cyber vulnerabilities in Army vehicular, handheld radios

2. Defense Secretary Ash Carter said the military will invest fiscal year 2017 dollars into a gun-based missile defense system that will utilize the Army's Paladin self-propelled howitzers, thus giving an official mandate to an idea floated by former defense chief Chuck Hagel some years ago.

Full story: Carter teases project to use Army Paladin projectiles in gun-based defense

3. The Army and Lockheed Martin are continuing their judicial haggling over the Joint Light Tactical Vehicle contract protest, with newly published documents showing their respective arguments over a proposed $16 million "security" that the government wants the company to put up if its request for a preliminary injunction is granted.

Full story: Army, Lockheed haggle over $16 million 'security' in JLTV protest case

By Lee Hudson
February 8, 2016 at 9:00 AM

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

1. The Navy has canceled a program to develop target vehicles representing advanced anti-ship cruise missiles used by countries like China and Russia due to soaring cost overruns and test failures, the Pentagon's top weapons tester revealed in his latest annual report.

Full Story: Navy terminates advanced anti-ship cruise missile target program

2. A House lawmaker continues to have concerns about the on-board oxygen generating system of the F/A-18 and E/A-18G jets because pilots have experienced numerous problems and the fixes are not working.

Full Story: House lawmaker continues to have concerns F-18, E-18 oxygen system

3. The Navy is defending the first phase of its multistatic acoustic sensor for the multibillion-dollar P-8A maritime patrol and reconnaissance aircraft after the Pentagon's top weapons tester criticized the system in a recent report.

Full Story: Navy defends P-8A sensor system after operational tester criticizes effort

By John Liang
February 5, 2016 at 2:19 PM

This Friday INSIDER Daily Digest includes news on a previously classified Navy SM-6 project and more.

The Standard Missile-6 will have a new capability soon:

Carter reveals secret Navy project to give SM-6 offensive, anti-ship capability

Defense Secretary Ash Carter has unveiled a previously classified Navy project to double the punch of the Standard Missile-6 by giving the defensive weapon -- designed to protect the fleet from enemy cruise missiles and ballistic missiles -- a new, previously undisclosed offensive capability: the means to attack far-away adversary ships.

Electronic warfare will be a topic of congressional debate in the coming months:

Senators introduce bill to speed acquisition of EW capabilities

A bipartisan pair of senators have introduced a bill to help the Pentagon develop electronic-warfare technology as other nations are enhancing their capabilities in ways that narrow the United States' competitive edge.

Keep an eye out for the findings of a Navy study group looking into problems with the F-18 oxygen system:

Navy establishes team to determine F-18 physiological episode root cause

Since 2009, the Navy has noticed an increase in hazard reports due to physiological episodes in the Super Hornet and Growler aircraft and established a Physiological Episode Team to determine the root cause, the Navy revealed this week.

Spare parts will be a big problem for the Marine Corps' Joint Strike Fighter:

Spare parts inventory is Marine Corps' greatest concern for sustaining F-35s

The greatest concern for the Marine Corps' aviation chief is the lack of spare parts to sustain the Joint Strike Fighter.

Document: House hearing on Navy fighter aircraft

More F-35 news from the Pentagon's latest OT&E report:

Gilmore: F-35 suitability, availability improving, but not fast enough

Although the F-35 Joint Strike Fighter's operational suitability is lower than desired by its users -- and though it still has a long way to go in achieving the program's availability goals -- the platform has shown improvement in almost all suitability measures over the last year, according to the Pentagon's top weapons tester.

A primer on what to expect from the Air Force's Space Fence in 2016:

Space Fence radar team heading into challenging year on solid footing

With key software development and radar production on the near-term slate for the Air Force's Space Fence program, 2016 is likely to be its busiest and most challenging year, according to program manager Dana Whalley.

The Air Force's MQ-9 Reaper unmanned aircraft will see delays in testing:

Thermal and power management issues persist on MQ-9 Reaper

Competing test priorities have tied up resources for MQ-9 Block 5 testing, allowing stubborn thermal and power management problems to persist on the MQ-9 Reaper, according to the Pentagon's director of operational test and evaluation.

By Courtney Albon
February 5, 2016 at 10:31 AM

The Air Force on Feb. 4 awarded Lockheed Martin a $96 million contract to make crucial modifications to the existing Global Positioning System ground station that will allow it to operate next-generation satellites despite the expected late delivery of follow-on ground infrastructure.

The service announced in December that the new ground station -- dubbed GPS OCX and built by Raytheon -- will be at least two years late. Inside Defense reported last week that key software needed to support initial operations of new GPS III satellites will not be online until September 2017, nearly a year after Lockheed's first GPS III satellite is planned to be ready for launch.

The service has been working on a mitigation strategy for this, and this week's contract announcement should help address concerns about early GPS III launch and operations.

"[The] contractor will provide Global Positioning System III contingency operations services and supplies to modify the current GPS control segment to operate all GPS III satellites that are launched prior to the transition to the Next-Generation Operational Control System," the contract announcement states. "Furthermore, this action will buy GPS III satellite vehicle simulation modules, GPS simulator, and updates to the GPS positional training emulator."

The service awarded the funds as a modification to an existing contract.

In other GPS news, the service launched its 12th -- and final -- GPS IIF satellite Friday from Cape Canaveral Air Force Station, FL, at 8:38 a.m. The Boeing-built satellite rounds out the GPS II constellation, which has included 72 space vehicles since 1978.

By John Liang
February 5, 2016 at 9:00 AM

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

1. With key software development and radar production on the near-term slate for the Air Force's Space Fence program, 2016 is likely to be its busiest and most challenging year, according to program manager Dana Whalley.

Full story: Space Fence radar team heading into challenging year on solid footing

2. Competing test priorities have tied up resources for MQ-9 Block 5 testing, allowing stubborn thermal and power management problems to persist on the MQ-9 Reaper, according to the Pentagon's director of operational test and evaluation.

Full story: Thermal and power management issues persist on MQ-9 Reaper

3. Although the F-35 Joint Strike Fighter's operational suitability is lower than desired by its users -- and though it still has a long way to go in achieving the program's availability goals -- the platform has shown improvement in almost all suitability measures over the last year, according to the Pentagon's top weapons tester.

Full story: Gilmore: F-35 suitability, availability improving, but not fast enough

By Marjorie Censer
February 4, 2016 at 3:34 PM

Roger Krone, the chief executive of Leidos, said today the company is already starting to plan the integration of his company with the IT services business of Lockheed Martin.

Under the deal, announced late last month, Leidos will merge with a reshaped version of Lockheed's information systems and global solutions business to create a $10 billion services contractor. Speaking at the Cowen & Co. conference in New York today, Krone said he's hoping to complete the transaction on Sept. 30.

"With this transaction, we're actually able to fill in some of the capabilities we lost in the split [from Science Applications International Corp. in 2013] and, frankly, other capabilities that we think we need to be a broad services provider," Krone said.

Jim Reagan, Leidos' chief financial officer, promised that the deal is not "scale for scale's sake."

Krone, who touted his experience with past acquisitions, including the General Dynamics purchase of the M1 Abrams tank from Chrysler Defense and the Boeing acquisition of Hughes Space & Communications, said Leidos has already stood up an integration team.

Lockheed has two teams, a separation management team based at its corporate headquarters and an IS&GS team led by Sondra Barbour, the unit's chief.

"We will be aggressive in taking out cost and combining the two organizations," Krone said.

By John Liang
February 4, 2016 at 1:06 PM

This Thursday INSIDER Daily Digest features news on the Navy's FY-17 budget, defense acquisition reform and more.

Defense Secretary Ash Carter gave a preview of what the Navy will be asking for in FY-17:

Carter: Navy will invest $2 billion in Tomahawk missiles, maintain production line

In a massive win for contractor Raytheon, the Navy is reversing plans to terminate production of the company's trademark Tomahawk missile, as the fiscal year 2017 budget will instead project an investment of $2 billion to buy 4,000 Tomahawks over the future years defense program, Defense Secretary Ash Carter said this week.

Keep an eye out for new acquisition reform legislation coming out soon:

House authorizers prep next round of acquisition reforms

The House Armed Services Committee, which last year worked with its Senate counterpart to secure landmark reforms to the Defense Department acquisition process, plans to build on those efforts with new legislation next month.

The Pentagon's inspector general has begun a new investigation:

DOD IG starts study on whether components are fixing cyber readiness issues

The Pentagon's inspector general is launching a study this month on whether the Defense Department is fixing problems found during cyber readiness inspections.

Document: DOD IG memo on 'audit of corrective actions on command cyber readiness inspection deficiencies'

The Defense Business Board will be working on a new study:

Work tasks DBB with studying test and evaluation best practices

The Defense Department's No. 2 official has tasked an influential advisory panel with looking into the best practices for test and evaluation in an aim to ensure they are being used most effectively.

Document: DBB terms of reference memo for 'best practices for the business of test and evaluation'

A look at defense contractor Serco's future strategy:

With hire of Dacquino, Serco zeroes in on customer 'intimacy'

With the appointment of contracting veteran David Dacquino to a newly created position, Serco has adjusted its structure to ensure it remains close to its customer.

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More coverage of the latest DOT&E report:

Gilmore: enhanced statistical analytic techniques, survey design needed

The Defense Department's top weapons tester is calling for enhanced statistical analytic techniques, better survey design and analysis, and improved modeling and simulation in an aim to make sure the information provided to decision makers is the best possible.

Gilmore calls for overarching Joint Information Environment test strategy

The Pentagon's top weapons tester is calling for defense officials to continue to develop an overarching test strategy for the department's information technology operating network, the Joint Information Environment.

By Marjorie Censer
February 4, 2016 at 12:44 PM

iRobot said today it has agreed to sell its defense and security business to private-equity firm Arlington Capital Partners for as much as $45 million.

The agreement includes a payment that requires hitting certain milestones.

The deal, iRobot said, will allow it to "focus on technologies for the connected home" and is expected to close in the next few months.

By Marjorie Censer
February 4, 2016 at 12:30 PM

Ken Asbury, chief executive of CACI International, told Inside Defense today the contractor is comfortable with its size -- even as other contractors in the market continue to bulk up. Leidos, for instance, last month announced it would combine with Lockheed Martin's IT services unit to create a $10 billion contractor.

CACI this week completed its $550 million purchase of L-3 Communications' services business, bringing its annual sales to about $4.4 billion.

Asbury said the integration process is underway. CACI will retain the "same number of business groups, but they're going to be quite a bit larger," he said, calling the deal a "dream acquisition."

"It filled a big strategic need for us," Asbury said. "It makes us a very big player in enterprise IT, largely inside the intelligence community."

He said CACI may consider smaller deals, but is likely to "spend some time really getting the value out of" its newest acquisition.

"We're trying to figure out strategically, where do you need to be," Asbury told Inside Defense. "I don't know how much more competitive we would be if we were $10 billion."

CACI late Wednesday announced that sales in its most recent quarter hit $830 million, up nearly 2 percent from the same period the prior year. Quarterly profit reached $30.3 million, up 23 percent from the previous year.