The Insider

By Justin Doubleday
April 30, 2019 at 4:20 PM

The Senate today confirmed R. Clarke Cooper as the assistant secretary of state for political-military affairs, nearly 300 days after he was first nominated.

Cooper was confirmed by a vote of 90-8 today. As the head of the Bureau of Political-Military Affairs, Cooper will be the State Department's primary link to the Defense Department, overseeing foreign military sales, security assistance, military operations and defense trade. The bureau had been led by Deputy Assistant Secretary of State Mark String since he was appointed last July.

According to a White House biography, Cooper most recently served as the director of intelligence planning for Joint Special Operations Command’s Joint Inter-Agency Task Force in the National Capital Region. As a combat veteran and member of the U.S. Army Reserve, Cooper's active-duty assignments included tours with U.S. Africa Command, Special Operations Command Africa, Joint Special Operations Task Force Trans-Sahara, and Special Operations Command Central, according to the White House.

Cooper led the Log Cabin Republicans from 2010 to 2012. During the George W. Bush administration, he served in various State Department positions, including senior advisor in the Near Eastern Affairs Bureau from 2006 to 2007, and advisor at United States Embassy-Baghdad from 2005 to 2006.

Cooper's nomination was first received by the Senate early last July, but it was placed on hold in the Senate Foreign Relations Committee by Sen. Ed Markey (D-MA) over his objections to the Trump administration allowing organizations to post blueprints for 3D-printed guns online.

The Foreign Relations Committee advanced Cooper's nomination to the Senate floor in April. It was not immediately clear why Markey lifted his hold on the nomination.

By Thomas Duffy
April 30, 2019 at 2:51 PM

Today's INSIDER looks at how the Pentagon formulates defense strategy, an Army effort to boost multidomain muscle in Europe, Air Force science and technology, and the Air Force's newest tanker.

We lead off with a deep dive by Tony Bertuca on how Pentagon strategy gets made:

Pentagon calls for 'urgent change,' but lacks strategic analysis process to drive tough budget decisions

The new National Defense Strategy calls for “urgent change at a significant scale” to reposition the U.S. military for global competitions with China and Russia, but the Defense Department lacks a sound strategic analysis process to drive the tough budget decisions likely required for major transformation, according to the Government Accountability Office and former Pentagon officials who spent years crafting national security policy.

The Army secretary said the service is boosting its multidomain presence in Europe:

Army to send multidomain capabilities to Europe

Army Secretary Mark Esper today at Brookings Institution in Washington, discussing great power competition, offered the service’s multidomain task force as a tool for shaping the current picture of what the future force should look like.

Several analysts have taken a look at the Air Force's science and technology plans:

Analysts dissect Air Force S&T plans for industry partnerships

During the roll out of their long-awaited 2030 Science and Technology Strategy, Air Force leaders emphasized relations with the commercial sector as a means of driving innovation.

The service intends to “crank up” its partnership with industry, Air Force Research Lab Commander William Cooley said in an April 18 conference call with reporters.

And finally, more money is going to the Air Force's multibillion dollar tanker program:

Air Force awards Boeing KC-46 post-production contract worth up to $5.7B

The Air Force on Monday awarded Boeing a contract worth up to $5.7 billion for future KC-46 tanker upgrades.

The 10-year contract, dubbed Pegasus Combat Capability (PC2), would cover a slew of post-production efforts, including capability enhancements and Federal Aviation Administration-mandated upgrades. The service obligated an initial $9 million at the time of the award.

By Sara Sirota
April 30, 2019 at 12:12 PM

The Air Force has awarded Boeing a $128 million modification to a previous contract for the B61-12 gravity bomb life-extension program.

Bringing the contract's total cost to $132 million, the added funds will allow for the start of an undefinitized contract action for Lot 1 and Lot 2 long-lead items, according to an April 26 Defense Department news release.

At the time of the award, the service obligated $29 million with funds allocated for fiscal year 2018 and FY-19 procurement, as well as FY-19 research and development.

Work will be performed in Saint Charles, MO, and is expected to conclude in August 2020.

The goal of the program is to “integrate [Department of Energy] efforts to extend the service life of the warhead with DOD efforts to develop a guided tail kit assembly,” according to the Air Force's FY-20 budget justification books.

By Courtney Albon
April 30, 2019 at 9:59 AM

The Air Force on Monday awarded Boeing a contract worth up to $5.7 billion for future KC-46 tanker upgrades.

The 10-year contract, dubbed Pegasus Combat Capability (PC2), would cover a slew of post-production efforts, including capability enhancements and Federal Aviation Administration-mandated upgrades. The service obligated an initial $9 million at the time of the award.

It’s unclear which projects might be included as part of the contract, and the Air Force did not immediately provide details on that initial work. The service is considering a slew of capability upgrades as part of a long-term modernization plan and contracted with Boeing last summer to help develop a roadmap for future technology integration.

The service is also working with Boeing to incorporate changes to the tanker’s boom and remote vision system. The Air Force has said it will pay for the boom fix, and that funding may be included in the contract action. Boeing will cover the cost of the RVS upgrade.

By Thomas Duffy
April 29, 2019 at 2:37 PM

Today's INSIDER Daily Digest includes a new GAO report on the Joint Strike Fighter, news on the Navy's MQ-25 unmanned air vehicle, the latest on the Wideband Global Satellite Communications space vehicle as well as news on the Pentagon's effort to reduce Fourth Estate spending.

First up, the GAO takes a look at more issues surrounding the F-35 program:

GAO: F-35 JPO should close Block 4 business case before awarding contracts

The Government Accountability Office is recommending the Defense Department hold off on awarding additional F-35 Block 4 development contracts until an independent cost estimate is completed and the program office conducts a partial technology readiness assessment and has an approved test and evaluation master plan.

Boeing and the Navy think they can accelerate a key UAV effort:

Boeing: Pre-award test asset, embedded program office will help quicken MQ-25 IOC

Boeing believes 18 months of early testing and embedding Navy officials into its program office will play a big part in accelerating the MQ-25's initial operational capability ahead of the 2024 goal, according to a company official.

The Air Force has awarded Boeing an undefinitized contract action worth up to $605 million to deliver the 11th WGS satellite:

SMC: WGS-11 contract doubles capability, includes option for a second satellite

The Air Force Space and Missile Systems Center is working with Boeing to double the capability of the next Wideband Global Satellite Communications space vehicle -- a strategy that could give the service the option to buy one satellite instead of two.

Inside Defense traveled to the National Defense Industrial Association's Robotic Capabilities Conference in Columbus, GA:

Army preparing for Phase 2 of RCV experimentation

COLUMBUS, GA -- As the Army fine tunes its requirements for the Robotic Combat Vehicle, officials in charge of the technology demonstration project are relying on industry to help determine the final specifications.

The Pentagon is looking to cut spending:

Pentagon moving to reduce 'Fourth Estate' agencies, review contracts

The Pentagon has sent a strategy to Congress laying out an approach to reduce spending at civilian management agencies, also known as the Fourth Estate, by 25% over the coming years, acting Chief Management Officer Lisa Hershman told Inside Defense in an interview.

By Mallory Shelbourne
April 29, 2019 at 12:16 PM

The Navy expects to release its new force-structure assessment during the “late summer,” according to Chief of Naval Operations Adm. John Richardson.

“I think it’s probably late summer is what we’re looking at,” Richardson told reporters today.

The Navy released its last FSA, which evaluates both the number and types of battle-force ships for the service, in December 2016. This plan currently governs Navy shipbuilding and calls for the service to work toward a 355-vessel fleet.

The forthcoming FSA is the first analysis conducted since the release of the new National Defense Strategy, which seeks to prepare for a period of great power competition with nations like China and Russia.

Deputy Chief of Naval Operations for Warfare Systems Vice Adm. William Merz in March told the House Armed Services seapower subcommittee the updated FSA would feature “a pretty hard look at the mix of ships this year.”

Merz also said unmanned ships, which are not currently included in the number of battle-force vessels, are “very much a part of the calculus now in this upcoming FSA.”

By Tony Bertuca
April 29, 2019 at 5:00 AM

The week ahead is loaded with congressional hearings, including one featuring acting Defense Secretary Pat Shanahan testifying about the Pentagon's fiscal year 2020 budget request. Meanwhile, a host of defense companies hold quarterly earnings calls.

Monday

New America hosts Future Security Forum 2019.

Tuesday

The Senate Armed Services Committee holds a nomination hearing for nominees selected to be Marine Corps commandant and chief of naval operations.

The House Appropriations defense subcommittee holds a hearing on the Navy and Marine Corps budgets.

Leidos and Oskhosh executives are slated to discuss quarterly earnings.

Army Secretary Mark Esper speaks at the Brookings Institution about great power competition.

Wednesday

The House Appropriations defense subcommittee holds a hearing on the Defense Department's fiscal year 2020 budget, featuring Shanahan and other senior Pentagon officials.

The Senate Armed Services strategic forces subcommittee holds a hearing on nuclear weapons policy.

The House Armed Services Committee holds a hearing on military challenges in North and South America.

The House Armed Services tactical air and land forces subcommittee holds a hearing on Army modernization.

The House Armed Services readiness subcommittee holds a hearing on military construction, energy and environmental programs.

Harris, KBR, L3 Technologies and ManTech International executives are set to discuss quarterly earnings.

Thursday

The Senate Armed Services Committee holds a nomination hearing for the nominee selected to be the next Army chief of staff.

The House Armed Services tactical air and land forces subcommittee holds a hearing on Air Force acquisition and modernization programs.

BWX Technologies, CACI International and Huntington Ingalls executives are scheduled to discuss quarterly earnings.

Friday

KBR will hold an investor conference.

By Marjorie Censer
April 26, 2019 at 12:33 PM

Today's INSIDER Daily Digest begins with a look into the details shared in the Defense Department inspector general's new report on the acting defense secretary.

First off, the ethics investigation conducted by the DOD IG offered new insight into recent Pentagon decisions:

Shanahan's ethics probe offers rare glimpse into Pentagon acquisition decisions

The focus of the Defense Department inspector general's latest report was whether acting Defense Secretary Pat Shanahan acted ethically, but the document also offered a rare behind-the-scenes look into acquisition decisions made by the Pentagon's most senior officials.

Meanwhile, Shanahan is slated to sign out in the next few weeks new security cooperation guidance for cyberspace:

Pentagon to soon issue new security cooperation guidance for cyberspace capabilities

The Pentagon will soon issue new guidance for facilitating cyberspace security cooperation, as officials aim to increase partnerships between U.S. cyber forces and those of allied nations.

And the National Nuclear Security Administration is stepping in to ensure the JASON program can complete its summer studies:

NNSA to issue new JASON contract after Pentagon breaks ties with group

The Energy Department's National Nuclear Security Administration plans to issue a new contract this year for JASON national security studies after the Pentagon discontinued its long- standing deal with the group of scientists.

Air Force Secretary Heather Wilson responded to concerns from House Armed Services Committee Chairman Adam Smith (D-WA) about the Air Force's Launch Services Procurement strategy:

Wilson: USAF committed to launch procurement strategy

Air Force Secretary Heather Wilson told the chairman of the House Armed Services Committee in a letter today that the service is committed to its strategy for launch procurement.

And a new Government Accountability Office report says “F-35 aircraft performance is not meeting warfighter requirements”:

GAO: Poor F-35 spare parts management, repair inhibiting warfighter requirements

A new Government Accountability Office report claims that the F-35 program's faulty planning and allocation of spare parts has contributed to an inability to meet warfighter requirements, and offers eight recommendations to improve the program's supply chain management.

In Navy news, we have the latest on the Sea Hunter's travels to Hawaii and back to San Diego, CA:

ONR: Sea Hunter experienced three problems during transit to Hawaii

The Office of Naval Research's Medium Displacement Unmanned Surface Vehicle experienced   three "mechanical or electrical" issues during a transit to Hawaii last fall, requiring a human to board the ship before it reached its destination.

Additionally, the Navy, realizing operators are looking at targets more frequently than firing their weapons, is considering the way laser technology could offer surveillance:

Navy eyeing laser technology as surveillance tool

During at-sea testing later this year, the Office of Naval Research plans to experiment with a high-energy laser's ability to conduct a secondary surveillance mission in addition to disabling small surface craft and unmanned aerial systems.

By Sara Sirota
April 25, 2019 at 5:06 PM

Tyndall Air Force Base, FL, will hold an industry day on May 2 to update industry partners on the base's progress with its installation development plan, discuss acquisition strategy and share ideas on innovation.

The 325th Fighter Wing and Tyndall Program Management Office will host the one-day event, according to a service media advisory.

High-level officials are scheduled to attend, including Tyndall PMO Executive Director Patrice Melancon, Assistant Secretary of the Air Force for Installations, Environment and Energy John Henderson and 325th Fighter Wing Commander Col. Brian Laidlaw.

The event marks the second Tyndall AFB industry day since Hurricane Michael caused serious damage to the installation in the fall. The first was held Jan. 31.

It also will come one day after the May 1 deadline by which Air Force Secretary Heather Wilson said she would halt the Tyndall AFB recovery effort if the service does not receive supplemental funding.

By John Liang
April 25, 2019 at 3:10 PM

This Thursday INSIDER Daily Digest has news on Navy and Army unmanned systems, the possible reason behind SpaceX's loss of a launch services competition bid and much more.

The Navy is preparing for a technical review of the Barracuda program to establish an acquisition baseline for hardware, software and system architecture:

Barracuda swims toward June preliminary design review

The Navy is readying the Barracuda mine neutralizer for a preliminary design review in June, advancing development of a next-generation capability that is slated to be part of a new unmanned and autonomous technology package to clear contested waters for aircraft carrier strike groups and other surface combatants, executing in hours tasks that now can take weeks.

The Army is considering a range of technologies for the Squad Multipurpose Equipment Transport unmanned vehicle:

Army testing SMET payloads at Ft. Benning this week

COLUMBUS, GA -- The Army is holding a demonstration this week to test multiple add-on systems for the Squad Multipurpose Equipment Transport unmanned vehicle.

SpaceX leadership has not publicly discussed the circumstances surrounding the company's loss of a launch services competition bid, and a recent Defense Department inspector general's report offers the first admission from the company that it may have submitted a flawed proposal:

SpaceX CEO Musk admits launch proposal 'missed the mark'

SpaceX CEO Elon Musk reportedly admitted to the Defense Department that the company's losing bid for launch vehicle development funding "missed the mark," according to a newly released DOD inspector general report.

The Distributed Information Services for Tactical Resilience in Contested Theaters program will create what's called an "information provisioning layer" to make applications across the envisioned network more resilient:

ACC launching $20M DISTRICT program for Combat Cloud concept

Air Combat Command is seeking research proposals to develop the core capability of its Combat Cloud, the Air Force's idea for enabling secure data flow across a battlespace using computing technology.

Inside Defense recently interviewed Boeing's B-52 program manager James Kroening and Director of Bomber Programs Scot Oathout:

Bomber mod contract will support AEHF, B-52 re-engine among other upgrades

The first task under a new $14.3 billion bomber modernization and sustainment contract awarded to Boeing earlier this month will study integration options for a new advanced extremely high frequency nuclear command-and-control channel.

Don't expect what used to be an annual aviation inventory and funding plan to come out anytime soon:

DOD shelves annual aviation inventory update that once provided 30-year view

The Pentagon has officially stopped producing an annual aviation inventory and funding plan which had been sent to Congress after delivery of the president's budget for nearly a decade, denying defense aviation wonks a key resource in scrutinizing the U.S. military's long-term investment about the approximately 14,000 aircraft flown and operated by the Army, Navy, Air Force and Marine Corps.

More news from a recent Pentagon reprogramming request obtained by Inside Defense:

DOD requests $12M in funding shift to purchase C-UAS

The Air Force is seeking congressional approval for a $12 million reprogramming to purchase counter-small unmanned aerial systems.

Last but by no means least, some defense business news:

Jacobs: KeyW acquisition will move company into high-end technical work

Jacobs will operate KeyW as a bolt-on acquisition for the first six months while it addresses redundant costs, but the company will then make decisions about how to further integrate the contractor, a top Jacobs executive told Inside Defense this week.

By Marjorie Censer
April 25, 2019 at 2:53 PM

Raytheon said today sales in its most recent quarter reached $6.7 billion, up about 7% from the same three-month period a year earlier.

The contractor reported quarterly profit of $781 million, up about 23%.

Raytheon's intelligence, information and services and Forcepoint businesses recorded the largest sales growth at 12% for each.

The company attributed the sales growth in IIS to "higher net sales on classified programs in both cyber and space." The unit reported quarterly profit of $187 million, up 60 percent from the prior year.

"The increase in operating income for the quarter was primarily driven by a change in mix and other performance, which included $21 million of gains related to the consolidation, as planned, of an entity that was previously an equity investment, and $13 million of gains from asset sales," Raytheon said.

Though Forcepoint also reported a 12% increase in quarterly sales, it announced a loss of $9 million, more than the $7 million it lost during the same period last year.

The company's missile systems business reported quarterly sales of $2 billion, up 9% from the prior year, but its quarterly profit dipped 10% to hit $190 million.

Raytheon attributed the decline in profit to "lower net program efficiencies and a change in program mix."

Asked by an analyst during a call this morning why the unit's backlog declined, Toby O'Brien, Raytheon's chief financial officer, said "it's all timing related."

"We expect two multiyear production awards in the back half of this year," he said. "I wouldn't read anything into the change in the backlog."

Tom Kennedy, Raytheon's chief executive, said during the same call that the company's Standard Missile-3 Block 1B multiyear and the SM-6 multiyear will be worth roughly $4 billion.

By Marjorie Censer
April 25, 2019 at 1:32 PM

SOS International said today it has named Helle Huxley vice president for strategic communications and Gregory Hayken associate general counsel and vice president for contracts.

Huxley was previously chief marketing officer at Cadmus. She has also worked at Aquilent and Deltek GovWin.

Hayken spent 16 years as senior counsel in the intelligence and security sector of BAE Systems.

By Tony Bertuca
April 25, 2019 at 10:15 AM

The Defense Department inspector general has completed an ethics investigation into acting Defense Secretary Pat Shanahan, concluding that he did not improperly favor Boeing, his former employer.

"During our investigation, we interviewed Mr. Shanahan and 33 witnesses," according to an IG report released today. "We did not substantiate any of the allegations. We determined that Mr. Shanahan fully complied with his ethics agreements and his ethical obligations regarding Boeing and its competitors."

The IG states that investigators interviewed the "most senior officials in the DoD; witnesses who had frequent interaction with Mr. Shanahan; and witnesses who were involved in the review, consideration, or decisions to purchase or budget for Boeing and Lockheed Martin systems related to the allegations."

Investigators also reviewed more than 5,600 pages of unclassified documents and approximately 1,700 pages of classified documents related to the allegations and the "relevant major defense acquisition systems."

The IG investigation, which began March 15, stemmed from a complaint filed against Shanahan by the Citizens for Responsibility and Ethics in Washington, which cited media reports alleging he made "numerous statements" promoting his former employer Boeing and disparaging the company's competitors, specifically Lockheed Martin, in the presence of subordinates.

The report states that three anonymous allegations were also forwarded to the IG by Sen. Elizabeth Warren (D-MA). An additional anomymous allegation was also forwarded to the IG by the Senate Armed Services Committee.

"Secretary Shanahan has at all times complied with his ethics agreement, which screens Boeing matters to another DoD official and ensures no potential for a conflict of interest with Boeing on any matter," said Lt. Col. Joe Buccino, Shanahan's spokesman. "Secretary Shanahan remains focused on retooling the military for great power competition, executing the National Defense Strategy, and providing the highest quality care for our servicemembers and their families.”

Meanwhile, government officials say Shanahan's team is preparing for President Trump to nominate him as permanent defense secretary in the coming days.

The officials have said the investigation was the final obstacle between Shanahan and the nomination.

Shanahan, confirmed as the Pentagon's No. 2 official in July 2017, is the longest-serving acting defense secretary in U.S. history, stepping in Jan. 1 for former Defense Secretary Jim Mattis, who abruptly resigned in December over foreign policy differences with Trump.

In that time, Shanahan has made several significant policy moves, such as working to sell Congress on a final Space Force proposal; helping to prepare a budget request that added billions in additional defense spending; and assisting other senior administration officials to pivot Trump away from precipitous troop withdrawals in the Middle East.

By Justin Doubleday
April 25, 2019 at 8:17 AM

President Trump on Wednesday signed an executive order transferring responsibility to the Defense Department for conducting background investigations, a long-awaited move that also renames the Defense Security Service the “Defense Counterintelligence and Security Agency.”

The Fiscal Year 2018 National Defense Authorization Act already authorized DOD to conduct background investigations on its own personnel and contractors. The EO signed this week shifts the entire federal background investigations mission from the Office of Personnel Management to the Pentagon.

Trump’s directive states keeping the entire mission under one agency will “[retain] the benefit of economies of scale in addressing the Federal Government's background investigations workload, [avoid] unnecessary risk, promot[e] the ongoing alignment of efforts with respect to vetting federal employees and contractors, and facilitat[e] needed reforms in this critical area.”

The transfer will involve shifting personnel from OPM’s National Background Investigations Bureau to the newly branded DCSA, according to the executive order.

By June 24, Trump directs the Pentagon and OPM to execute a plan “setting forth expectations for the transition period, including for detailing personnel, funding background investigations, using and safeguarding information technology, managing facilities and property, contracting, administrative support, records access, and addressing any claims."

Also by June 24, DCSA should serve as the “primary entity” for conducting background investigations for the federal government, the order directs. NBIB will be allowed to conduct background investigations on behalf of DOD up until Sept. 30, after which full responsibility officially rests on DCSA, according to the EO.

The Pentagon had already been planning to take on some NBIB personnel as a result of the FY-18 NDAA, and officials began planning for the full transfer after the Trump administration proposed the shift as part of a government reorganization plan released in June.

The plan to rebrand DSS was first discussed during a government and industry meeting in November. The Pentagon is currently seeking candidates to serve as the next director of the revamped agency.

Earlier this year, DOD initiated the shift of its Consolidated Adjudications Facility and the National Background Investigative Service’s program executive office to DSS to ready for the mission’s transfer.

Even as officials mulled the transfer, NBIB has been working to reduce a backlog of background investigation cases that peaked at 725,000 last spring. As of March, the backlog was down to

542,000 cases, but the Government Accountability Office has warned the backlog could increase again as the transfer to the Defense Department occurs.

The Pentagon wants to streamline and modernize the process by using “continuous evaluation to monitor potential red flags like adverse credit reports and criminal activity. The process would use automated record checks and other technologies to replace much of the fieldwork currently done by human investigators and negate the need for periodic reinvestigations of cleared individuals.

Meanwhile, OPM and the Office of the Director of National Intelligence recently unveiled a new “personnel vetting framework” to revamp how security clearances and background investigations will work across government.

By Ashley Tressel
April 24, 2019 at 5:01 PM

COLUMBUS, GA -- Army Futures Command deputy chief Lt. Gen. Eric Wesley says robotics and artificial intelligence will play a key role in the service's multidomain operations concept for competing against near-peer adversaries.

"In future warfare, the [ability] to bring all sensors, all shooters, with access to integrate both at any headquarters is going to be fundamental," Wesley told industry leaders at the NDIA Robotics Capabilities Conference here today.

"The need to conduct multidomain command and control across the services is going to be answered by the idea of artificial intelligence and machine learning," he said. "The very first place we want to invest in artificial intelligence is not a robot that fights another robot, it's helping us make decisions faster in a more efficient and effective way."

Wesley said combined with lethality and extended range, robots can help close the gap with potential adversaries in multidomain operations, which demand a high level of synchronization between disparate battlespaces.

"The advantage you get by stacking domains . . . you can bring multiple domains into one space -- the total is greater than the sum of the parts, and you create overmatch," he said. "But you can imagine the complexity of aligning cyber, which happens in milliseconds; [electronic warfare], which you can't see; air, which moves at about 500 miles an hour; sea which moves about 30 knots and ground, which moves around between 2 miles an hour and 30 kilometers an hour. How do you synchronize all that? That gets really complex. It gets more complex when you add the fact that different services at different echelons are responsible for those domains."

Wesley added the Army should act quickly to capitalize on the heavy investment already made by industry in research and development of these technologies, before the United States' adversaries beat it to the battlefield.