The Insider

Inside the Air Force highlights
By Courtney Albon
January 8, 2016 at 11:28 AM

Some must-reads from the first 2016 issue of Inside the Air Force:

1. Lt. Gen. Robert Otto offered some insight on fiscal year 2017 investments in intelligence, surveillance and Reconnaissance platforms in an interview with ITAF this week.

Full story: Lt. Gen. Otto offers vision for fiscal year 2017 Air Force ISR budget

2. Aerojet Rocketdyne told ITAF this week that it is still on pace certify and integrate its AR1 rocket engine by 2019.

Full story: Aerojet Rocketdyne still on track to deliver 'ready-to-fly' engine by 2019

3. House lawmakers blasted the Air Force this week for its alleged mismanagement of the Defense Meteorological Satellite Program, which left the last of the legacy weather satellites permanently grounded.

Full story: Lombardi calls DMSP-20 failure to launch an 'unfortunate example'

Budget submission scheduled for Feb. 9
By Tony Bertuca
January 7, 2016 at 5:20 PM

The White House Office of Management and Budget has scheduled the formal rollout of the fiscal year 2017 federal budget request for Feb. 9.

Emily Cain, a spokeswoman for OMB, confirmed the date for Inside Defense after OMB Director Shaun Donovan announced the information on his personal Twitter account.

Northrop names Davis VP of communications
By Marjorie Censer
January 7, 2016 at 4:46 PM

Northrop Grumman said today its board has named Lisa Davis corporate vice president of communications, effective Feb. 29.

Davis will succeed Darryl Fraser, who will retire on April 1, according to the contractor.

She joined Northrop in 2014 and currently is vice president of communications in the company's mission systems sector. She previously was vice president of corporate affairs at MedImmune and has also worked at the American Association of Retired Persons and the Democratic Leadership Council.

USAF cuts civilian force
By Courtney Albon
January 7, 2016 at 3:22 PM

The Air Force has announced a plan to reduce 1,000 civilian positions as part of an effort to save money and "rebalance" its civilian workforce.

The service conducted a needs assessment in early August, identifying more than 1,000 workforce "overages" across 48 installations, according to a Jan. 7 press release. Individual installations will have the opportunity to utilize reduction-in-force authority, which means they could move some of the affected employees into new positions. However, replacement is not guaranteed.

"The remaining employees will be offered registration in the DOD Priority Placement Program and receive consideration for future vacancies according to their registration," the release continues.

In a separate Jan. 7 press release, the American Federation of Government Employees called the Air Force's plan "an ill-conceived action."

"The Air Force says it's laying off employees to meet congressionally required cuts in the size of the civilian workforce," the release states. "However, it appears that none of the work currently performed by these employees is going away."

The INSIDER daily digest
By John Liang
January 7, 2016 at 2:00 PM

We kick off this Thursday INSIDER Daily Digest with news on Better Buying Power and more.

Keep an eye out for an informal GAO report on Better Buying Power:

Capitol Hill asks GAO to examine Kendall's Better Buying Power assertions

The Government Accountability Office has been asked by congressional defense committee staffers to "informally" evaluate data-based assertions made by Frank Kendall, the Pentagon's acquisition chief, that the Defense Department's Better Buying Power initiative has controlled weapon system contract costs.

(For more Better Buying Power news, check out our Notification Center, where you can sign up to receive email alerts whenever a related story is posted.)

The Joint Chiefs chairman will soon be completing a review of DOD's unified command plan:

Dunford examining DOD's command-and-control structure

The chairman of the Joint Chiefs of Staff is evaluating the Defense Department's unified command plan as part of an overall review of U.S. command-and-control posture.

The DOD IG wants the Pentagon's CIO shop to establish a standard, department-wide cloud computing definition:

DOD IG: Pentagon cannot measure effectiveness of cloud computing efforts

The Pentagon's lack of an effective process to identify cloud computing service contracts makes it challenging to determine whether these efforts are saving money, the Defense Department inspector general found in a new report.

Document: DOD IG report on cloud computing

U.S. Special Operations Command wants industry to submit white papers by next month on a soft-body armor technology:

SOCOM eyes soft-body armor technology that can withstand projectiles

U.S. Special Operations Command is seeking industry input for a soft-body armor technology that can withstand different projectiles as part of an effort to "accelerate the delivery of innovative capabilities" to the warfighter, according to a recent notice.

Document: BAA for SOCOM soft armor

DOD will begin sending status reports to lawmakers on its workforce efficiency efforts:

GAO: DOD failed to provide details to Congress on workforce efficiency efforts

The Pentagon has failed to provide the necessary information to Congress to determine if the department is achieving civilian and contractor workforce efficiencies, the Government Accountability Office found in a new report.

Document: GAO report on civilian, contractor workforces

Iraq could soon begin receiving millions of dollars' worth of Hellfire missiles:

Proposed $800M missile sale to Iraq approved

The State Department has approved a potential foreign military sale of $800 million for missiles and related equipment and services to the Iraqi government to aid in the battle against the Islamic State of Iraq and the Levant, according to the Defense Security Cooperation Agency.

Document: DSCA statement on proposed Hellfire missile sale to Iraq

Inside the Pentagon highlights
By Tony Bertuca
January 7, 2016 at 11:09 AM

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

1. The Government Accountability Office has been asked by congressional defense committee staffers to "informally" evaluate data-based assertions made by Frank Kendall, the Pentagon's acquisition chief, that the Defense Department's Better Buying Power initiative has controlled weapon system contract costs.

Full story: Capitol Hill asks GAO to examine Kendall's Better Buying Power assertions

2. The Pentagon's lack of an effective process to identify cloud computing service contracts makes it challenging to determine whether these efforts are saving money, the Defense Department inspector general found in a new report.

Full story: DOD IG: Pentagon cannot measure effectiveness of cloud computing efforts

3. The omnibus spending bill signed by the president last month requires federal agencies to put in place an enhanced program that will consider publicly available electronic information and social media when examining security-cleared workers.

Full story: Omnibus bill expands security clearance review scope

Oshkosh Defense president to retire
By Marjorie Censer
January 6, 2016 at 3:29 PM

Oshkosh Corp. said today that John Urias, president of Oshkosh Defense, will retire Feb. 6 to "attend to matters regarding the health of his family."

Urias, a retired Army major general, has led the unit since 2011. Wilson Jones, chief executive of Oshkosh, will oversee the defense segment until a replacement is named, the company said.

During his Army career, Urias was commanding general of Joint Contracting Command and program executive officer for the Army's Air, Space and Missile Defense programs. Before joining Oshkosh, he was vice president of programs for Raytheon Integrated Defense Systems.

The INSIDER daily digest
By John Liang
January 6, 2016 at 2:27 PM

This Wednesday INSIDER Daily Digest features news on the FY-17 budget and more.

Keep an eye out for a SECDEF preview of the FY-17 budget soon:

Carter expected to preview FY-17 budget in 'coming days'

Defense Secretary Ash Carter is expected to preview the Pentagon's fiscal year 2017 budget request "in the coming days," though the target date for submission to Congress remains Feb. 1, according to officials and sources.

(For more budget news, check out our Notification Center, where you can sign up to receive email alerts whenever a related story is posted.)

Federal agencies will need to start checking employees' social media accounts when doing security clearance reviews:

Omnibus bill expands security clearance review scope

The omnibus spending bill signed by the president last month requires federal agencies to put in place an enhanced program that will consider publicly available electronic information and social media when examining security-cleared workers.

An RFI for the second of several NGEN re-compete efforts is out:

Navy releases second RFI on Next-Generation Enterprise Network re-compete

The Navy recently released its second request for information on the upcoming re-compete for Next-Generation Enterprise Network services, this time focusing on the market for end-user hardware.

The rollout of the JTRS airborne radio should be coming out soon, following a delay:

Army delays draft request for proposals for airborne radio

The Army has pushed back the release of the draft solicitation for the Joint Tactical Radio System's airborne radio, delaying the rollout until after the start of the new year, according to a Federal Business Opportunities notice.

A primer on the Marine Corps' plans to overhaul the service's CH-53E Super Stallion helos:

Marines preparing to ramp up CH-53E Super Stallion reset effort

The Marine Corps plans to accelerate the reset of its heavy-lift helicopters over the next year, with the service planning to overhaul a total of 17 helicopters during fiscal year 2016.

The Army's AMPV program will undergo a DOD inspector general review:

DOD inspector general to audit Armored Multi-Purpose Vehicle acquisition

The Defense Department inspector general's office plans to conduct an audit of the acquisition process for the Army's Armored Multi-Purpose Vehicle Program, according to the office's fiscal year 2016 oversight plan.

Thornberry: Deploy more BMD systems to South Korea
By John Liang
January 6, 2016 at 11:31 AM

North Korea's alleged nuclear weapons test this week has sparked a call from a leading House Republican for deploying more missile defense systems to the Korean peninsula.

House Armed Services Committee Chairman Mac Thornberry (R-TX) said in a statement that "it may take some time to know exactly what was detonated in North Korea. But what is clear is that the world is rapidly growing more dangerous, and the United States cannot afford to focus only on ISIS or Iran or Russia. We must be prepared to protect our national security against many threats. Unfortunately, the view around the world is that U.S. leadership is in decline while the administration's inaction only fuels those concerns." He continued:

"The U.S. must work with our South Korean allies to deploy missile defense systems, including THAAD, on the peninsula and work at home to strengthen our homeland missile defenses.  We must also take immediate steps to strengthen our own nuclear deterrent, which is the foundation for our other defense capabilities."

House Foreign Affairs Committee Chairman Ed Royce (R-CA) said:

"Dictators like Kim Jong Un don't take time outs, they take advantage when the U.S. looks away. As Iran prepares to gain billions in sanctions relief, North Korea surely thinks it can intimidate the Obama administration into the same.

"The answer to North Korea's threats is more pressure, not less. This rogue regime has no interest in being a responsible state. It continues to starve its people while it works to advance nuclear, missile and cyber weapons that pose a direct threat to the U.S. and our allies. The administration's North Korea policy has proven a dramatic failure, and we urgently need a new approach."

International Atomic Energy Agency Director General Yukiya Amano released a statement on YouTube:

"The DPRK's nuclear test, if confirmed, is in clear violation of UN Security Council resolutions and is deeply regrettable. I strongly urge the DPRK to implement fully all relevant resolutions of the UN Security Council and the IAEA. The IAEA remains ready to contribute to the peaceful resolution of the DPRK nuclear issue by resuming its nuclear verification activities in the DPRK once a political agreement is reached among countries concerned."

Pratt & Whitney Canada to pay nearly $1B to settle contractual obligations
By Marjorie Censer
January 6, 2016 at 10:10 AM

Pratt & Whitney Canada, a subsidiary of United Technologies, said today it will pay about $965 million in total to Canadian federal and provincial government agencies to "settle and terminate" the company's contractual obligations.

In a filing with the Securities and Exchange Commission, the company said Pratt & Whitney Canada late last month entered into "a series of amendments to certain research and development support arrangements previously entered into with Canadian federal and provincial government agencies."

As a result, the business unit recorded a pre-tax charge of about $870 million in the fourth quarter of 2015. The amendments require Pratt & Whitney Canada to make four annual payments, beginning this month, "to fully settle and terminate PWC's contractual obligations to pay royalties to these agencies contingent upon future engine deliveries and company sales."

The payments, the company added, will total about $965 million in total.

"PWC has also agreed to maintain its commitments to perform certain assembly, test and manufacturing operations in Canada and Quebec; and to spend approximately USD $8 million per year in support of innovation and research and development through initiatives with post-secondary institutions and key industry associations in Canada and Quebec over a fourteen year period," the company added in its SEC filing.

Northrop wins Tern UAV deal
By John Liang
January 5, 2016 at 4:27 PM

The Defense Advanced Research Projects Agency and the Office of Naval Research have awarded Northrop Grumman a contract for the third phase of the Tern unmanned systems program, according to a Jan. 5 company statement.

"Phase three plans to include final design, fabrication and a full-scale, at-sea demonstration of the system," the statement reads.

Tern seeks to develop an autonomous, unmanned, long-range, global, persistent intelligence, surveillance, reconnaissance and strike system intended to safely and dependably deploy and recover from small-deck naval vessels with minimal ship modifications, according to Northrop. The system is designed to operate in harsh maritime environments and aims to enable greater mission capability and flexibility for surface combat vessels without the need for establishing fixed land bases or requiring scarce aircraft carrier resources.

"We intend to highly leverage our Unmanned Systems Center of Excellence to develop and demonstrate this type of demanding unmanned systems capability to advance the Navy's mission," Chris Hernandez, vice president for research, technology and advanced design at Northrop Grumman Aerospace Systems, said in the statement. "We believe our unique ship-based unmanned systems experience, expertise, and lessons learned from programs including our MQ-8B/C Fire Scout, MQ-4C Triton, X-47A Pegasus and X-47B UCAS, is critical to the success of the Tern."

The Northrop Grumman Tern team includes its wholly owned subsidiary Scaled Composites, as well as General Electric (GE) Aviation, AVX Aircraft Co. and Moog.

The INSIDER daily digest
By John Liang
January 5, 2016 at 3:53 PM

We start off this Tuesday INSIDER Daily Digest with some big services acquisition policy news.

The Defense Department now has a new roadmap for acquiring services:

Pentagon releases landmark services acquisition policy

The Pentagon has unveiled a new oversight and review structure for the acquisition of services in an effort to better manage the $100 billion-plus it spends annually on such contracts.

Document: DOD instruction on 'defense acquisition of services'

The Navy has released a new strategic guidance document:

CNO: Navy is at risk of falling behind future adversaries, must develop concepts with Marine Corps

The Navy is at risk of falling behind potential adversaries and must develop concepts and capabilities with the Marine Corps to provide more options to national leaders, according to new guidance released by the chief of naval operations.

Document: CNO's guidance on 'a design for maintaining maritime superiority'

Lockheed will be building more THAAD missiles:

Lockheed is tapped to make $528 million worth of THAAD interceptors

Lockheed Martin announced this week a $528 million contract award by the Missile Defense Agency for the production of interceptors for the Terminal High Altitude Area Defense antimissile system.

(For more THAAD news, check out our Notification Center, where you can sign up to receive email alerts whenever a related story is posted.)

Keep an eye on the Army's effort to replace its Patriot missile defense radar:

Decision on replacing Patriot radar is high on to-do list for 2016

The Army enters the new year with a series of key investment decisions looming about the way ahead for replacing parts of the aging Patriot system or maintaining the technology at an acceptable level.

The Defense Department wants industry input on an upcoming procurement agreement with Japan:

DOD preparing reciprocal defense procurement pact with Japan, seeks industry feedback

The Pentagon is seeking input from U.S. industry on its experience in public defense procurements executed by Japan's armed forces, feedback that will inform negotiations over a planned "reciprocal defense procurement" pact between the Defense Department and Japan's Ministry of Defense.

The government has changed its mind about a proposed whistleblower rule:

OSC withdraws proposal to allow contractors to file whistleblower disclosures

Citing "substantive issues raised by commenters," the federal Office of Special Counsel has withdrawn a proposed rule that would have allowed government contractors, rather than just government employees, to file whistleblower disclosures with the office.

The week ahead: Keep an eye out for our coverage of the House Armed Services Committee's Thursday hearing on acquisition reform, featuring the Army, Navy and Air Force procurement chiefs.

CSBA welcomes new defense budget analyst
By Tony Bertuca
January 5, 2016 at 10:16 AM

The Center for Strategic and Budgetary Assessments announced today it has a new defense budget analyst.

Katherine Blakeley has joined CSBA as a research fellow focused on defense budgeting and resourcing.

The announcement comes six months after Todd Harrison, a prominent defense budget analyst, left CSBA for the Center for Strategic and International Studies.

“Katherine could not have joined CSBA at a better time,” Jim Thomas, CSBA's vice president and director of studies, said in the announcement. “One of our core competencies is evaluating the Department of Defense’s current and future programming decisions for this country’s policy makers. Katherine’s experience and expertise will ensure our appraisals during the upcoming 2017 federal budget season are relevant and well-timed.”

Prior to joining CSBA, Blakeley worked as a defense policy analyst at the Congressional Research Service and the Center for American Progress. She is completing her Ph.D. in political science from the University of California, Santa Cruz, where she also received her M.A, according to CSBA.

Finmeccanica reorganizes
By Marjorie Censer
January 5, 2016 at 10:03 AM

Finmeccanica announced late last month it has reorganized into a single entity with four sectors and seven divisions.

The new structure replaces the previous model of a holding company with separately controlled businesses, the company announced.

The four sectors are helicopters; aeronautics; electronics, defence & security systems; and space. The seven divisions are helicopters; aircraft; aero-structures; airborne & space systems; land & naval defence electronics; defence systems; and security & information systems.

“The change in governance involves the centralisation of the management and control systems, while the divisions will be responsible for business delivery and will be given the powers to ensure complete end-to-end management of its scope of activity, with full responsibility for financial performance,” the company said. “The sectors will be responsible for strategic coordination.”

The company now operates only in aerospace, defense and security, Finmeccanica said, after completing the divestiture of unrelated businesses in 2015.

Deloitte report forecasts 2016 rebound
By Marjorie Censer
January 5, 2016 at 9:00 AM

A new Deloitte report says 2016 will likely be a year of growth for global aerospace and defense revenues.

The document, slated for release Tuesday morning, notes there have been several years of revenue expansion for the sector, but that the growth rate has been shrinking.

In 2016, "stable growth in global gross domestic product (GDP), lower commodity prices especially crude oil, and strong passenger travel demand portend continued growth in the commercial aerospace subsector," the report states. "Moreover, the resurgence of global security threats and growth in defense budgets in many countries are all likely to promote global defense subsector revenue growth over the next few years."

The Deloitte report forecasts total global A&D sector revenue growth of 3 percent in 2016.

The assessment contends that defense spending has bottomed out and will "enter a new growth cycle starting in 2016."

"International demand for defense and military products is increasing as uncertainties brought on by regional tensions in the Middle East, Eastern Europe, North Korea, and the East and South China Seas may lead to increases in defense budgets," the report adds. "Specifically, the United Arab Emirates (UAE), Saudi Arabia, India, South Korea, Japan, India, China, Russia, and other affected governments are already starting to increase purchases of next generation military equipment."