The Insider

Huntington Ingalls names new CFO
By Marjorie Censer
October 30, 2015 at 10:00 AM

Huntington Ingalls said Friday its board has elected Christopher Kastner to succeed Barbara Niland as the company's chief financial officer, effective March 1.

Niland is set to retire.

Kastner currently serves as corporate vice president and general manager of corporate development. He has also previously served as CFO for HII's Ingalls Shipbuilding division and was CFO for Northrop Grumman Shipbuilding-Gulf Coast.

He started his career at Northrop -- which later spun off Huntington Ingalls -- working on the B-2 program, Huntington Ingalls said.

Budget deal headed to Obama for signature
By Tony Bertuca
October 30, 2015 at 9:57 AM

The Senate early this morning voted 64-35 to send the bipartisan two-year budget deal to the White House for President Obama's signature.

Lawmakers adjourned at 3:15 a.m. after approving the measure, which will raise the national debt limit and lift the 2011 Budget Control Act spending caps by $80 billion over the next two fiscal years.

Passage of the bill came after Sen. Rand Paul (R-KY), a presidential candidate, tried unsuccessfully to block the deal by raising a procedural point of order.

Analysts have told Inside Defense the bill is a significant victory for the Defense Department.

Obama, who worked with Republicans and Democrats to reach an accord on the spending, is expected to sign the proposed Bipartisan Budget Act of 2015 into law as soon as possible.

Oshkosh says M-ATV sales are up
By Marjorie Censer
October 29, 2015 at 4:22 PM

Oshkosh reported today its defense segment saw a 10 percent sales increase in its most recent quarter, spurred by higher M-ATV reset sales and international M-ATV sales.

The contractor's defense business reported $318 million in quarterly sales. Oshkosh noted the improved M-ATV sales were offset by “lower sales of legacy heavy and medium tactical wheeled vehicles to the U.S. government.”

“Our defense business is rebounding,” Charles Szews, Oshkosh's chief executive, said in a company announcement.

Oshkosh noted that it recently signed a contract with an international customer for 273 M-ATVs and expects to soon sign another for more than 1,000 M-ATVs.

Lockheed names new F-35 GM
By Marjorie Censer
October 29, 2015 at 3:14 PM

Lockheed Martin said today it has named Jeff Babione general manager of the F-35 program, taking over for Lorraine Martin.

Martin has been appointed deputy executive vice president of the contractor's mission systems and training business, a newly created position.

Babione has been with Lockheed for almost 23 years and has been the F-35 program's deputy general manager since 2013. He also previously was general manager of the F-16/F-22 integrated fighter group, the company said.

FVL time line mulled
By Jordana Mishory
October 29, 2015 at 2:58 PM

The Pentagon continues to discuss accelerating the acquisition time line for future vertical lift, though fiscal realities remain challenging, according to Ned Chase, the team lead for the FVL Science & Technology Integrated Product Team.

Speaking Thursday at a Center for Strategic and International Studies event on FVL, Chase said there is a “willingness” to try to shorten the process, but that the chances of doing so remain “hard to say” given current funding constraints.

With the first planned FVL variant still 20 years away, the defense industry has expressed concern that the industrial base may not be able to remain viable during that period.

Leidos reports sales, profit gains
By Marjorie Censer
October 29, 2015 at 2:39 PM

Leidos announced Thursday that sales in its most recent quarter rose 2 percent to hit $1.3 billion, while profit soared 44 percent to reach $49 million.

In particular, its national security solutions unit saw its profit rise, even though sales fell slightly.

Leidos attributed the sales drop to Overseas Contingency Operations work. OCO-designated work provided $44 million in revenue for the quarter, half the amount it provided during the same period the prior year.

The contractor attributed the profit boost to "improved execution and reduced indirect costs."

Jim Reagan, Leidos' chief financial officer, told analysts during a Thursday morning call the company believes "we have turned the corner to growth in NSS."

Inside the Pentagon Highlights
By Tony Bertuca
October 29, 2015 at 2:34 PM

Highlights from this week's edition of Inside the Pentagon:

1. The Defense Department ended fiscal year 2015 with a total of $93.8 billion in unobligated funds from prior years, a newly tallied figure likely of interest mostly to budget technocrats -- but a sum that could take on significant importance for weapon system programs should the newly minted FY-16 to -17 budget agreement somehow fail to be enacted.

Full story: DOD ended FY-15 with $93.8 billion in prior-year unobligated balances

2. The Missile Defense Agency is working to update its Ground-based Missile Defense system ahead of a pair of critical tests in the coming years.

Full story: MDA forges ahead with ground-based interceptor updates

3. Future unmanned aircraft missions include transporting cargo, refueling manned aircraft and swarming an enemy's defenses, the Pentagon's air warfare deputy director said Wednesday.

Full story: Wolski eyes UAS opportunities for transporting cargo, refueling

CACI reports profit boost
By Marjorie Censer
October 29, 2015 at 12:59 PM

CACI International late Wednesday reported flat sales and improved profit in its most recent quarter.

The contractor said sales hit $822 million, up about 1 percent from the same three-month period a year earlier. Profit rose 8 percent to reach $34 million.

Ken Asbury, CACI’s chief executive, told Inside Defense in an interview Thursday the industry would be helped by both the budget deal moving through Congress as well as a slower withdrawal of troops in Afghanistan.

“Those two things I think are, in the near-term -- the next year, next two years -- they’ll provide a little bit of lift inside of the entire industry base,” Asbury said.

He also told Inside Defense CACI has seen some reduction in the use of the lowest-priced, technically acceptable contracting approach.

“Let’s be clear -- price is always going to be a concern,” Asbury said.

Kaine: Counter-ISIL operation lacks adequate legal authority
By Courtney McBride
October 29, 2015 at 12:39 PM

One member of the Senate Armed Services Committee believes the United States' counter-ISIL operations in Syria constitute “a war that does not have sufficient legal justification.”

During an Oct. 29 breakfast with reporters, Sen. Tim Kaine (D-VA) contended that the Obama administration has provided a “very tenuous rationale” for its actions in Syria. Citing the administration's use of post-Sept. 11 Authorizations for Use of Military Force to justify its counter-ISIL operations, Kaine noted that ISIL did not form until 2003, and thus could not be covered by the 2001 and 2002 AUMFs. He posited that “the administration knows they're on very, very thin ice on the legal authorization question.”

Kaine argued the “war on terror” has been the United States' core international doctrine since 2001, but said that doctrine is now insufficient, as it “doesn't fully encompass all the levers of American power -- diplomacy, trade, humanitarian aid, strength of our moral example.”

Repeating calls for the establishment of a humanitarian zone in northern Syria, Kaine said the Feb. 22, 2014 U.N. Security Council resolution, to which Russia agreed, has “never really been implemented. And the only way it could be implemented, frankly, is with a little bit of military muscle -- a no-fly zone and a willingness to protect citizens who came into that zone.”

Kaine said the “mission is much easier to define in Iraq,” while “it's pretty hard to answer” questions about the rationale for U.S. involvement in Syria. “If we had said in February 2014, 'the U.S. mission in Syria is this: we are going to enforce the U.N. Security Council resolution calling for delivery of humanitarian aid to people in the worst humanitarian crisis since World War II' … That would've been a strategy vis-à-vis Syria that I think people could have understood,” he continued. “And they could have even understood using military assets to make sure that we did provide that humanitarian aid.”

“It's a little painful to be lectured by Vladimir Putin” on the legal basis for intervention, Kaine said, noting that Russia is on firmer legal ground for its actions in Syria, having been invited by the Assad government and with the Russian president receiving an authorization from parliament.

While he concedes that “it would be wise to get congressional approval” for the use of military assets to protect a safe zone in Syria, Kaine argued, “there are now two U.N. Security Council resolutions that call for cross-border delivery of humanitarian aid inside Syria without the Syrian government's consent or permission,” providing sufficient legal cover for U.S. action in this area

The INSIDER Daily Digest
By John Liang
October 29, 2015 at 11:47 AM
Budget Busters.

DOD budget news:

DOD ended FY-15 with $93.8 billion in prior-year unobligated balances

The Defense Department ended fiscal year 2015 with a total of $93.8 billion in unobligated funds from prior years, a newly tallied figure likely of interest mostly to budget technocrats -- but a sum that could take on significant importance for weapon system programs should the newly minted FY-16 to -17 budget agreement somehow fail to be enacted.

Thornberry looking ahead to $5 billion budget cut, veto override

House Armed Services Committee Chairman Mac Thornberry (R-TX) supports the terms of the potential budget deal before Congress that would provide $5 billion less in national defense spending than requested by the Obama administration, but he wants it known that it won't be easy to find the savings.

Bomber Work.

Northrop Grumman's CEO spoke yesterday on his company's earnings and very little about a multibillion-dollar bomber contract:

Northrop 'ready to get to work' after LRS-B award

One day after Northrop Grumman snagged the highly coveted Long-Range Strike Bomber award, the company's chief executive said the contractor is "ready to get to work."

Acquisition Cycles.

News on House lawmakers' efforts to emphasize acquisition reform:

House authorizers focus on shortening acquisition cycles

As the House Armed Services Committee looks to continue emphasizing acquisition reform in the new fiscal year, lawmakers worked to bolster their case for shorter acquisition timetables during a Tuesday hearing.

'Hot Wire.'

Continued coverage of DOD's new Silicon Valley innovation unit:

New Silicon Valley innovation unit has mandate to 'hot-wire' defense acquisition

George Duchak, director of the new Defense Innovation Unit Experimental in Silicon Valley, said he and his team were given a mandate by Defense Secretary Ash Carter to "hot-wire" the Pentagon's infamously slow acquisition system to make it more friendly to technology sector companies reluctant to do business with the military.

Missile Defense.

The Missile Defense Agency wants more control over the GMD program:

MDA may exert greater control over GMD program technical data

The Missile Defense Agency is weighing a move that could expand its authority, and possibly assume greater control of technical data, over the multibillion-dollar Ground-based Midcourse Defense program for which Boeing has been the prime contractor since 2001.

Document: MDA request for information on the DOPS program

The Unmanned.

DOD is looking at future unmanned aircraft missions:

Wolski eyes UAS opportunities for transporting cargo, refueling

Future unmanned aircraft missions include transporting cargo, refueling manned aircraft and swarming an enemy's defenses, according to the Pentagon's air warfare deputy director.

Ryan elected House speaker
By Tony Bertuca
October 29, 2015 at 11:14 AM

Rep. Paul Ryan (R-WI) was elected today to succeed Rep. John Boehner (R-OH) as House speaker.

Ryan received 236 votes, House Minority Leader Nacy Pelosi (D-CA) garnered 184 and Rep. Daneil Webster (R-FL) received nine.

It will be Ryan's job to unite a divided GOP as Congress prepares to pass a bipartisan two-year budget deal. The House approved the measure yesterday and a Senate cloture vote is expected later today.

Throwback Thursday -- JLENS
By Marjorie Censer
October 29, 2015 at 8:00 AM

Welcome to Throwback Thursday, Inside Defense's weekly look back at what was happening on or around this day in years past.

In late October 2014, military officials were touting the safety features of the Army surveillance blimp known as the Joint Land Attack Cruise Missile Elevated Netted Sensor System, or JLENS.

A U.S. Northern Command spokeswoman told Inside the Army at the time that the military did not expect to fly JLENS during severe weather and had "reinforced" the aerostat with stronger ground tackle.

Yet, on Wednesday, the JLENS program made national news after one aerostat "detached from its mooring station" at Aberdeen Proving Ground and traveled to Pennsylvania.

Full story: Officials unworried about safety ahead of blimp flight near Washington

House backs two-year budget deal
By Courtney McBride
October 28, 2015 at 5:38 PM

A proposed bipartisan budget agreement passed the House today by a vote of 226-167.

Seventy-nine Republicans and 187 Democrats voted in support of the measure, while 167 Republicans opposed it.

Both outgoing Speaker John Boehner (R-OH) and Ways and Means Committee Chairman Paul Ryan (R-WI), the GOP's nominee for speaker, voted in favor of the agreement.

NCI reports sales boost
By Marjorie Censer
October 28, 2015 at 4:51 PM

Defense contractor NCI said Wednesday sales in its most recent quarter hit $82.3 million, up nearly 9 percent from the same three-month period a year earlier.

Quarterly profit grew to $3.2 million, up about 34 percent from the prior year.

NCI attributed much of the boost to sales added by contracts from Computech, which NCI acquired less than a year ago.

The contractor noted that revenue related to a Program Executive Office Soldier contract accounted for about 9 percent of revenue, down from 11 percent in the same period last year.

NCI said it has been awarded a new PEO Soldier program contract.

"The new award is a consolidation of two legacy contracts, one of which was held by NCI," the company said. "As such, once fully staffed, the new contract is expected to generate higher revenues than NCI's legacy PEO Soldier contract."

Army missile defense blimp breaks loose
By Ellen Mitchell
October 28, 2015 at 2:29 PM

One of the Army's massive missile-tracking aerostats pulled free of its mooring Wednesday in Maryland and is now being tracked by F-16 fighter jets as it floats west.

The aerostat, one of two that make up the Joint Land Attack Cruise Missile Defense Elevated Netted Sensor System, "detached from its mooring station" at Aberdeen Proving Ground, MD, at approximately 12:20 p.m. and was located northeast of Washington over Pennsylvania in the early afternoon, according to a North American Aerospace Defense Command statement.

"Two F-16 fighter jets from Atlantic City Air National Guard Base [NJ] are monitoring the JLENS aerostat, which is holding at approximately 16,000 feet," the statement read. "NORAD officials are working closely with the FAA to ensure air traffic safety, as well as with our other interagency partners to address the safe recovery of the aerostat."

A separate statement from Aberdeen Proving Ground said the aerostat became untethered at 11:54 a.m. and approximately 6,700 feet of its tether was still attached.

JLENS -- consisting of two tethered aerostats -- is part of a once-major program touted by the Army and contractor Raytheon as a breakthrough in air-defense technology. The system is advertised as being capable of detecting cruise missiles and other threats within a radius of hundreds of miles.

The Army cut the program several years ago and said earlier this year it plans to shed the system once a demonstration of the system is completed in 2017, according to service's latest "Equipment Modernization Strategy," released in March.

The Army owns two JLENS systems, or "orbits." An orbit consists of two tethered, 250-foot-long aerostats, one carrying a long-distance surveillance radar -- which has detached -- and the other holding a fire-control radar. Lifted to heights of 10,000 feet when operational, the aerostats can watch over an area roughly the size of Texas.

The Pentagon has spent $2.8 billion developing and acquiring two JLENS orbits, according to the Government Accountability Office. The Army initially planned to buy 16 systems at a cost of $5.4 billion, but the program was restructured in 2012 after a series of schedule delays, cost overruns, and the loss of one aerostat in a 2010 crash.