The Insider

The INSIDER Daily Digest
By John Liang
October 19, 2015 at 12:25 PM

Today's recap delivers news on the military services' counter-ISIL spending, electronic warfare, defense contractors' struggles with the oil and gas industry and more.

COUNTER-ISIL SPENDING.

The Pentagon's IG office will be auditing the services' counter-ISIL spending:

DOD inspector general to audit counter-ISIL mission spending

The Defense Department inspector general plans to review the military services' spending in support of Operation Inherent Resolve, the U.S. mission to combat the Islamic State of Iraq and the Levant, according to a statement from the IG's office.

ELECTRONIC WARFARE.

DOD is figuring out where to allocate its electronic warfare dollars:

New electronic warfare investment committee working DOD's FY-17 priorities

A high-level Pentagon committee is now prioritizing new electronic warfare investments for fiscal year 2017, though any proposals will have to compete for limited resources within the Defense Department's strained budget.

ENERGY SPENDING.

Declines in the prices of oil and gas have hit the defense industry hard:

Defense contractors not immune to struggles of oil and gas market

Defense contractors who have customers in the oil and gas industry say they're being hit hard by the declines in that market.

GRAB BAG.

From the front page of this week's Inside the Army:

Army eyes 'reachback' capabilities to hasten deployments

New insights from an internal Army analysis suggest prioritizing the deployment of smaller communications hubs to the front lines and leaving manpower-intensive analysis work to be done remotely from U.S. locations, according to a senior official.

Amid Russian threats, Army expects to update cyber strategy by year's end

As the Army gears up to release its cyber strategy before the end of the year, recent threats from Russia and elsewhere have changed the way the service looks at its cyber operations, according to the head of Army Cyber Command.

Army to weigh worldwide rides for new Mobile Protected Firepower vehicle

The Army will spend fiscal years 2017 and 2018 evaluating vehicle offerings from around the world that could meet the service's need for a mobile protected firepower vehicle, a key official said.

-- John Liang

Week Ahead
By Tony Bertuca
October 19, 2015 at 12:20 PM

The Washington defense community is watching the White House this week as Congress prepares to send President Obama a defense authorization bill he has threatened to veto. Several major defense contractors are also holding calls to discuss quarterly earnings.

Tuesday

Senate Armed Services Committee Chairman John McCain (R-AZ) and his House counterpart Mac Thornberry (R-TX) are scheduled to appear at the Brookings Institution to discuss the defense authorization bill headed to President Obama's desk next week. The White House has indicated Obama will veto the bill.

Link: http://brook.gs/1NN5wBh

Lockheed Martin and United Technologies will announce their latest quarterly earnings.

Wednesday

The House Armed Services tactical air and land forces subcommittee is scheduled to hold a hearing on the F-35 Joint Strike Fighter with Lt. Gen. Christopher Bogdan, who heads the program.

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

Former Defense Secretary Robert Gates is scheduled to testify before the Senate Armed Services Committee on the future of defense reform.

Link: http://www.armed-services.senate.gov/hearings/15-10-21-future-of-defense-reform

Boeing will issue its latest earnings report.

Thursday

Adm. Cecil Haney, chief of U.S. Strategic Command, is scheduled to speak at the Defense Writers Group breakfast in Washington.

Raytheon will announce its quarterly earnings.

Friday

Defense Secretary Ash Carter is scheduled to speak at the farewell ceremony for Army Secretary John McHugh at Ft. Meyer, VA.

Inside The Navy Highlights
By Lee Hudson
October 19, 2015 at 11:21 AM

Highlights from this week's Inside the Navy:

1. The Marine Corps recently submitted its test and evaluation master plan for the multibillion-dollar Ground/Air Task-Oriented Radar after a watchdog organization said the program was at risk of not having a proper plan before it enters the developmental phase of testing.

Full story: Marines submit G/ATOR test and evaluation master plan to Stackley

2. The Navy recently established a fleet introduction team for the Unmanned Carrier-Launched Airborne Surveillance and Strike program although a request for proposals has not been released.

Full Story: Navy establishes UCLASS fleet introduction team before RFP release

3. The official leading the effort to develop the first version of the Next Generation Jammer says the program has made progress in developing a powerful enough system that still falls within restrictive weight requirements.

Full story: Next Generation Jammer program working to reduce weight, power risks

Inside The Army Highlights
By Sebastian Sprenger
October 19, 2015 at 11:17 AM

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

1. New insights from an internal Army analysis suggest prioritizing the deployment of smaller communications hubs to the front lines and leaving manpower-intensive analysis work to be done remotely from U.S. locations, according to a senior official.

Full Story: Army eyes 'reachback' capabilities to hasten deployments

2. As the Army gears up to release its cyber strategy before the end of the year, recent threats from Russia and elsewhere have changed the way the service looks at its cyber operations, according to the head of Army Cyber Command.

Full Story: Amid Russian threats, Army expects to update cyber strategy by year's end

3. An Army official said problems diagnosed in a new command-and-control system can be addressed in time to avert a congressionally imposed spending limit on the program.

Full Story: Army official upbeat about fixes to Joint Battle Command-Platform

4. The Army wants to upgrade its fleets of aerial drones with electronic jamming capabilities and more weapons, but whether it will have a budget to do so anytime soon remains to be seen, service officials said last week.

Full Story: Army wants unmanned aerial systems to jam signals, carry more weapons

Inside the Air Force Highlights
By Courtney Albon
October 16, 2015 at 6:04 PM

Highlights from this week's Inside the Air Force:

1. DARPA is set to make an official decision about whether to move ahead with the XS-1 spaceplane experiment next spring, after evaluating the program's progress this fall and winter.

Full story: DARPA Officials Considering Fate of Experimental Spaceplane Program

2. The Air Force is justifying its decision to award Boeing a sole-source contract to upgrade the bunker-busting Massive Ordnance Penetrator by emphasizing the urgent operational need for the capability enhancements.

Full story: Urgent Need Spurs $38M Air Force MOP Contract To Boeing

3. An Air Force Scientific Advisory Board study will consider the feasibility of a laser-equipped AC-130J gunship, and is one of four studies the board will take on in fiscal year 2016.

Full story: Air Force Scientific Advisory Board Takes Fast Track on Laser Study

Follow ITAF on Twitter -- @InsidetheAF -- for more highlights throughout the week.

Snyder Named CEO Of Bell Helicopter
By Marjorie Censer
October 15, 2015 at 5:10 PM

Textron said today it has named Mitch Snyder president and chief executive of Bell Helicopter.

Snyder replaces John Garrison, who is becoming CEO of Terex Corp. Snyder joined Bell in 2004 and most recently served as executive vice president of military business. He also previously worked at Lockheed Martin.

Inside the Pentagon Highlights
By Tony Bertuca
October 15, 2015 at 3:55 PM

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

1. As the United States adjusts to a changed security environment in Europe, the Army's top commander in the region says he wishes his budgetary resources matched the stated U.S. strategy to reassure NATO allies and contain a revanchist Russia.

Full story: U.S. Army Europe Commander Wants Resources To Match Strategy

2. The United States and Australia have signed a new bilateral security statement seeking, among other things, increased opportunities for defense industry engagement.

Full story: New U.S.-Australia Security Statement Targets Industry Engagement

3. Now that the annual Association of the U.S. Army conference has concluded in Washington, the Army's acquisition chief will participate in a secret meeting with service intelligence officials and program managers to assess looming foreign threats and the budgets needed to address them.

Full story: Army Leaders To Assess Threats, Dollars Needed In 'Top Secret' Meeting

Northrop Begins Construction In Grand Forks
By Marjorie Censer
October 15, 2015 at 3:11 PM

Northrop Grumman announced today it has begun building a new 36,000-square-foot facility at the Grand Sky Unmanned Aerial Systems Business and Aviation Park in Grand Forks, ND.

The company said it has leased 10 acres of land and committed about $10 million to the project.

Northrop said its facility would serve as the anchor tenant of the park, creating a hub for its UAS work in the region related to research, training, analysis and maintenance. The contractor also said it is "exploring additional construction in the future."

Harris' Exelis Buy Still 'A Work In Progress'
By Marjorie Censer
October 15, 2015 at 2:39 PM

Though Harris' purchase of Exelis is complete, the integration process will like take one to two years, Dana Mehnert, chief global business development officer, told InsideDefense.com at the annual Association of the United States Army conference in Washington, DC, this week.

Harris tapped Sheldon Fox, who joined Harris in 1984, to oversee the integration process. That's an "open-ended assignment," Mehnert said this week.

Already, however, he said Harris is seeing benefits from the deal. The purchase allows Harris to "be taken more seriously in more places," Mehnert said.

Harris has already announced plans to close Exelis' Fort Wayne, IN, tactical radio manufacturing facility, but Mehnert told InsideDefense.com it's too early to discuss other potential future cuts.

Throwback Thursday -- AUSA
By Marjorie Censer
October 15, 2015 at 2:32 PM

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

At 2013's Association of the United States Army conference in Washington, DC, officials were striking an optimistic tone about the progress of the Joint Light Tactical Vehicle program -- even in the face of sequestration and a government shutdown.

Army Col. John Cavedo told reporters the Army still had "the train on the tracks," while Kevin Fahey, the Army's program executive officer for combat support and combat service support, called the JLTV "a wonderful program" that had "basically been executing to plan."

"Our challenges really have been nothing to do with the program; it's everything to do with the budget," he continued. "The hardest part about what we're going through is not knowing."

At this year's AUSA, which wrapped up yesterday, winning bidder Oshkosh Defense, which received the contract award in August, displayed its wares from a booth on the upstairs show floor. Losing bidders AM General and Lockheed Martin, which has a protest on the program pending, had displays on the downstairs floor.

Story link: OSD To Let Market Forces Determine Fate Of Helicopter Industrial Base

Northrop Grumman Reorganizes
By Marjorie Censer
October 14, 2015 at 5:47 PM

Northrop Grumman announced today it will consolidate its business sectors from four to three and appoint a new chief operating officer, effective Jan. 1.

Northrop said it will merge its electronics systems, information systems and technical services sectors to create two new sectors. A sector known as mission systems will be formed by combining the electronic systems business with the information systems work focused on developing new capabilities for military and intelligence agencies. Kathy Warden, current head of the information systems business, will lead mission systems, which will be based in Maryland.

The information systems' services work will be combined with the technical services business to create a new unit known as technology services. Chris Jones, who heads technical services, will lead that division.

The military and civil space hardware business now under electronic systems will be shifted to the aerospace systems sector, while the electronic attack business in aerospace systems will move to the mission systems business.

Gloria Flach, the head of the electronic systems unit, will become Northrop's COO.

Boeing Settles False Claims Allegations
By Marjorie Censer
October 14, 2015 at 5:42 PM

Boeing has paid the U.S. government $18 million to settle allegations the contractor submitted false claims for labor charges on Air Force maintenance contracts for the C-17 Globemaster, the Justice Department announced today.

The government alleged Boeing knowingly charged the government for time mechanics spent on breaks and lunch hours at the company's Long Beach Depot Center in Long Beach, CA.

"Boeing took prompt corrective action immediately after it became aware of the site's irregular billing practice, and the company cooperated fully with the government investigation," Boeing said in a statement provided to InsideDefense.com.

The allegations were originally brought by a former Boeing employee under whistleblower provisions. His share of the settlement has not yet been determined, the Justice Department said.

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

Troops To Cameroon
By Tony Bertuca
October 14, 2015 at 5:15 PM

President Obama notified Congress today that the United States plans to send 300 troops to Cameroon to help the local government combat insurgents affiliated with the extremist group Boko Haram.

On Oct. 12, the United States sent approximately 90 military personnel to Cameroon "to conduct airborne intelligence, surveillance, and reconnaissance operations in the region" in advance of additional personnel, according to an Oct. 14 letter Obama sent to Congress.

"These forces are equipped with weapons for the purpose of providing their own force protection and security, and they will remain in Cameroon until their support is no longer needed," Obama wrote. "I directed the deployment of U.S. forces in furtherance of U.S. national security and foreign policy interests, and pursuant to my constitutional authority to conduct U.S. foreign relations and as Commander in Chief and Chief Executive."

White House Press Secretary Josh Earnest told reporters the troops will be "part of a broader regional effort to stop the spread of Boko Haram and other violent extremist organizations in West Africa."

The United States recently awarded a contract to Insitu to provide Cameroon with unmanned aerial systems.

Exiting Bankruptcy
By Marjorie Censer
October 14, 2015 at 3:24 PM

Colt Defense said late last week it is edging closer to exiting Chapter 11 bankruptcy protection.

In June, the firearms maker announced it had voluntarily filed for Chapter 11 to "allow for an accelerated sale of Colt's business operations in the U.S. and Canada." The company said sponsor Sciens Capital Management would act as a stalking horse bidder.

In a press release issued Friday, the company said it has filed a reorganization plan and a disclosure statement with the U.S. Bankruptcy Court for the District of Delaware.

"Under the Plan, Colt will receive $50 million in new capital from certain of the Supporting Noteholders and Sciens Capital, which will allow the Company to execute its business plan and emerge from Chapter 11," according to the company statement. "The Plan secures options for the Company to continue operations in West Hartford, Connecticut on a long-term basis."

However, the plan is subject to a vote of the company's creditors and the court's approval, Colt added.

"The Company's goal is to emerge from its Chapter 11 restructuring before year end," Colt added.

L-3 Acquires ForceX
By Marjorie Censer
October 14, 2015 at 1:27 PM

L-3 Communications announced this week it has purchased ForceX and renamed it L-3 ForceX.

The acquired business, which specializes in ISR mission management software and geospatial application technology programs, will be incorporated into L-3's integrated sensor systems business, which is part of its electronic systems unit.

L-3 did not disclose the cost of the acquisition, but the buy is expected to add about $30 million in annual sales in 2016, according to the company.