The Insider

By John Liang
October 29, 2018 at 5:05 AM

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

1. Deputy Defense Secretary Pat Shanahan said Oct. 26 the Pentagon is building two budgets: one that accounts for total defense spending of $733 billion and one for $700 billion, the amount President Trump has said the he will "probably" seek in fiscal year 2020.

Full story: Shanahan: DOD is building two budgets and one is $33B less than planned

2. The Army's newest electronic warfare systems will include cyber capabilities as they are developed over the next couple of years, according to the EW and cyber project manager.

Full story: Army electronic warfare programs integrating cyber move forward

3. House lawmakers have denied half of the Army's request to transfer funds to purchase Optionally Manned Fighting Vehicle prototypes.

Full story: Congress approves $49M realignment for Bradley replacement prototypes

4. Following a science and technology review in September, the Army's network cross-functional team over the next few months will build recommendations for senior leaders regarding the service's five-year budget plan starting with fiscal year 2021, according to a service official.

Full story: Army network CFT narrowing down S&T investments for FY-21 POM

By Marjorie Censer
October 26, 2018 at 3:29 PM

CACI, buoyed by the success of relocating its back-office work to Oklahoma City, OK, is planning a classified agile software facility in Colorado Springs, CO, Ken Asbury, chief executive of CACI International, said today.

Speaking at an event hosted by Washington Technology, he said the company was seeking lower costs when it relocated back-office work to Oklahoma City.

"In two months, we hired 280 people that were incredibly talented, and they went to work and that center is up and operating," Asbury said.

Now, the company is considering how relocations might work out for work delivered directly to programs, he added.

"We're looking at putting a classified agile software facility in Colorado Springs," Asbury said. "Now, we've got to go find that talent."

Additionally, Asbury said he'd like to see CACI grow its fixed-price work, noting it produces higher profit levels for the company.

Today, he said, fixed-price work is about one-third of its business. "I'd like to take it to 50 percent, 60 percent," Asbury said.

Though CACI unsuccessfully sought to acquire CSRA -- which was purchased by General Dynamics -- Asbury said the company is not aggressively seeking a deal of a similar size.

"I would tell you that we'd be open to a deal like that, but it's not what's driving us," he said, adding that the company is more focused on getting back to organic growth and filling niche capability gaps.

By John Liang
October 26, 2018 at 1:55 PM

This Friday INSIDER Daily Digest has news on the Pentagon's efforts to heed the President's budgetary wishes, a recent SM-3 intercept, Air Mobility Command and more.

The Defense Department is striving to heed the president's budgetary wishes:

Shanahan: DOD is building two budgets and one is $33B less than planned

Deputy Defense Secretary Pat Shanahan said today the Pentagon is building two budgets: one that accounts for total defense spending of $733 billion and one for $700 billion, the amount President Trump has said the he will "probably" seek in fiscal year 2020.

After four attempts, the SM-3 Block IIA now has two intercept successes:

SM-3 Block IIA, a $1 billion development project, hits target on second attempt

The Navy's newest Aegis Ballistic Missile Defense interceptor -- Raytheon's Standard Missile-3 Block IIA -- notched a success during a high-stakes flight test over the Pacific Ocean today, intercepting a medium-range ballistic missile target in what was billed as a do-over event for a failed January test that is pivotal to plans for bolstering European defense and crucial for a pending production decision.

The head of Air Mobility Command spoke to the media this morning:

AMC chief: AMC could gain three new C-17s as part of 'Air Force We Need' campaign

The general in charge of the Air Force's mobility forces said today her command could gain three new C-17 squadrons as part of the service's campaign to add 74 new squadrons by 2030.

The Pentagon will use the General Services Administration's IT Schedule 70 indefinite-delivery, indefinite-quantity contract to award work under the Defense Enterprise Office Solutions program:

Pentagon partnering with GSA, considering multiple awards for enterprise cloud program

The Pentagon is using a General Services Administration contract to buy cloud services for enterprise collaboration and productivity tools like email and messaging, with the potential for multiple awards to be made as part of the “whole-of-government approach,” according to officials.

Finally today, China is going all in on the Internet of Things:

Report to U.S.-China panel: China's IoT threats increase need for new U.S. data protection law

The Chinese government's involvement in and manipulation of emerging Internet of Things technologies, both through investments and espionage, pose a risk to U.S. national security and economic interests, according to a new report for a congressionally mandated commission, which calls for a federal law on protecting data and privacy to counter these threats.

Document: USCC report on China's internet of things development

By Rachel Cohen
October 26, 2018 at 1:31 PM

Cuts to two Air Force munitions efforts are tucked into Congress' response to an "omnibus" reprogramming request the Defense Department sent this summer.

In each case, the Pentagon comptroller pulled funds from the programs to balance out congressionally approved spending elsewhere. Inside Defense obtained the response this week.

One change removes $20.5 million of a $51.5 million request to shift money to modify 1,000 Joint Direct Attack Munition tailkits that would support an urgent operational need for JDAMs with navigation systems that are harder to jam.

Another edit brings a $41.1 million new-start request to buy 1,000 500-pound penetrating warheads down to $3.8 million. The Air Force said it would run tests in the second half of fiscal year 2018 to decide whether to buy the Israeli-made MPR-500 or General Dynamics' BLU-129/B, which was awarded an $8 million production contract in January 2017.

The Air Force urgently needs a "very low collateral damage" bomb, the reprogramming document states.

"These weapons use a composite case warhead, which adds explosive force nearby but lowers collateral damage to address current operational concerns," according to the request.

Lawmakers did approve funding shifts for the Advanced Precision Kill Weapon System, modular rifle components and medium-caliber ammunition rounds, and disallowed a small spending cut to the nuclear B61-12 tailkit assembly program.

By Marjorie Censer
October 26, 2018 at 11:26 AM

Endeavor Robotics has signed a teaming agreement to work with Howe and Howe Technologies to pursue the Army's Robotic Combat Vehicle program, the companies have confirmed.

Endeavor said it would serve as the prime on the program, while Howe and Howe will provide its Ripsaw vehicle as a platform.

Geoff Howe, Howe and Howe's chief executive, told Inside Defense the Army appears to be beginning to "develop the new future style of robotic combat vehicle."

"It's exciting news for us because we really have the platforms," he said.

Mike Howe, the company's president, noted Howe and Howe years ago built the Ripsaw, a high-speed, lightweight tank. However, "the Army didn't need it when we invented it," he said.

"The Army's finally requesting what we built on day one," Mike Howe said.

Sean Bielat, Endeavor's chief executive, told Inside Defense the company saw the Ripsaw as a good platform because of its capabilities and price point.

"It's an ideal solution combined with our expertise in autonomous systems and robotic systems integration," he said.

Bielat said Endeavor has met with some Army officials to inform them of the teaming agreement.

Textron announced yesterday it plans to acquire Howe and Howe.

By Justin Katz
October 26, 2018 at 11:21 AM

A new report published by the Heritage Foundation today says the Navy needs a 400-ship fleet, significantly more than the service's stated goal of 355, to carry out two overlapping major regional conflicts.

"Although U.S. defense strategies have varied over the past 25 years, the need for America to conduct two nearly simultaneous major combat operations has been a consistent theme," states the report, which was authored by Thomas Callender, senior research fellow for defense programs at the Heritage Foundation.

Callender writes that industry has the capacity to build 22 amphibious warships, 20 frigates and 24 combat logistics force ships between fiscal year 2020 and FY-39. To do that, the Navy would require $4 billion to $6 billion more each year than the service projected in its 30-year shipbuilding plan.

The increase in ships also accounts for 20 percent additional fleet capacity, which Callender argues is needed because "training and maintenance requirements make it infeasible to deploy 100 percent of the force, and committing the entire force to combat operations would leave the nation without any resources to handle unexpected crises."

In the FY-19 defense spending bill, the Navy received roughly $24 billion for shipbuilding. The Navy's fleet currently stands at 286 battle force ships.

Callender's report comes on the same day Deputy Defense Secretary Patrick Shanahan told reporters DOD is creating two potential FY-20 budgets: one that accounts for total defense spending of $733 billion and one for $700 billion, Inside Defense reported.

Last week, the Congressional Budget Office issued its analysis of the Navy's 30-year shipbuilding plan that concluded the service requires an annual shipbuilding budget of $28.9 billion in future years to achieve a 355-ship fleet. Based on CBO's projections, Callender's plan would call for the Navy to spend between $32.9 billion and $34.9 billion annually on shipbuilding.

By John Liang
October 26, 2018 at 5:00 AM

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

1. The Pentagon has approved an update to the F-35 Block 4 acquisition strategy nearly a year later than the joint program office anticipated, but officials do not plan to release cost and schedule details, citing proprietary concerns.

Full story: DOD OKs F-35 Block 4 strategy; cost, schedule estimates proprietary

2. NATIONAL HARBOR, MD -- Air Force staff in two theaters are preparing scenarios for how they could rapidly deploy and use temporary bases in case of war with Russia or China, a service official told Inside Defense Oct. 23.

Full story: Air Force exploring rapid-deployment options in European, Pacific theaters

3. Deputy Defense Secretary Patrick Shanahan told reporters Tuesday he does not expect the intelligence community will be integrated with the proposed Space Force until later in the organization's evolution, noting there is disagreement within the Pentagon on how quickly the new military department should grow.

Full story: Shanahan: Full integration of NRO in Space Force unlikely, at least to start

4. The Pentagon's top weapons technology official has commissioned a new study to envision how the U.S. military might make the most of its current advantage in select technologies as well as to look beyond guns and bombs to prevail in future fights, imagining how to win by also exploiting an adversary's values and dealing with an enemy's false narratives.

Full story: Griffin looking beyond guns and bombs in search to ensure future U.S. military superiority

By John Liang
October 25, 2018 at 2:39 PM

This Thursday INSIDER Daily Digest has news on a new Congressional Budget Office report on OCO funding, a Defense Science Board summer study on the "Future of U.S. Military Superiority," defense contractor earnings and much more.

The Congressional Budget Office looks at the Pentagon's Overseas Contingency Operations spending:

CBO says 70 percent of Pentagon's war contingency account not really for contingencies

About 70 percent of the Pentagon's $69 billion Overseas Contingency Operations account -- intended for warfighting costs -- will actually pay for "enduring" priorities that would likely continue in the absence of U.S. military operations in the Middle East, according to a new Congressional Budget Office report.

A new Defense Science Board summer study is underway:

Griffin looking beyond guns and bombs in search to ensure future U.S. military superiority

The Pentagon's top weapons technology official has commissioned a new study to envision how the U.S. military might make the most of its current advantage in select technologies as well as to look beyond guns and bombs to prevail in future fights, imagining how to win by also exploiting an adversary's values and dealing with an enemy's false narratives.

More earnings news this week from Leidos and Raytheon:

Leidos, Raytheon report sales, profit boosts

Leidos said today sales during its most recent quarter hit $2.6 billion, up nearly 3 percent from the same three-month period a year earlier.

Here is more of our coverage of congressional lawmakers' response to the Pentagon's omnibus reprogramming request:

Army gets approval to shift money for Close Combat Lethality Task Force priorities

Army programs key to Defense Secretary James Mattis' Close Combat Lethality Task Force will receive more money after Congress' approval of most of the Defense Department's omnibus reprogramming request.

Congress defers bulk of $126 million GBSD reprogramming request

Senate appropriators deferred the Air Force's request to shift nearly $87 million into the Ground-Based Strategic Deterrent program because the service no longer needs the money, a congressional source said this week.

A look at the Air Force's directed-energy efforts:

Air Force issues RFI for directed-energy experiment to counter cruise missiles

Airborne directed-energy weapons could soon be used to take out surface-to-air or air-to-air missiles as well as ground targets, as the Air Force plans a field experiment campaign to explore those options in fiscal year 2020.

Don't expect to get any cost and schedule details from the Pentagon on the F-35 Block 4 acquisition strategy:

Pentagon approves F-35 Block 4 strategy, but says cost and schedule estimates are proprietary

The Pentagon has approved an update to the F-35 Block 4 acquisition strategy nearly a year later than the joint program office anticipated, but officials do not plan to release cost and schedule details, citing proprietary concerns.

Navy Under Secretary Thomas Modly spoke recently on his service's latest business operations plan:

Modly: Navy's FY-19 to FY-21 business ops plan will free up money for the warfighter

The Navy's fiscal year 2019 to FY-21 business operations plan, published today, is projected to reap savings that will eventually be invested into the warfighter, according to the service's No. 2 civilian.

The "next leg" of the defense industrial base assessment released last month is "the issue of infrastructure," according to Peter Navarro, director of the White House Office of Trade and Manufacturing Policy:

White House trade policy shop moves to conduct U.S. infrastructure assessment with defense slant

NATIONAL HARBOR, MD -- The White House's trade policy office, on the heels of a sweeping defense industrial base assessment, next wants to hone in on the U.S. infrastructure sector and how it can be shored up against potential Chinese intrusions, according to the head of the office.

By Marjorie Censer
October 25, 2018 at 12:34 PM

Textron said today it has agreed to buy Howe and Howe Technologies and make it part of the Textron Systems business unit.

"The combined portfolio of Textron Systems and Howe & Howe Technologies will position Textron Systems as a global leader in autonomy across the air, land and sea domains," Textron said.

Howe and Howe specializes in advanced robotic land vehicles, including the Ripsaw Super Tank. Textron said the addition would ensure it's positioned to provide unmanned capabilities across all three domains.

"We are clear on the U.S. military's vision and their future technology needs for autonomy, robotics and unmanned systems," Lisa Atherton, the chief executive of Textron Systems, said in a statement. "This planned acquisition demonstrates our commitment to our U.S. military customers and an understanding of their critical work."

The deal is slated to close in mid-December. Terms of the agreement were not disclosed.

By John Liang
October 25, 2018 at 5:00 AM

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

1. Defense lawmakers have approved the lion's share of the Pentagon's request to shift billions of dollars in existing funds toward new and emerging priorities, according to a recently filed congressional response to a July "omnibus" reprogramming document.

Full story: Congress backs nearly $4B in DOD funding transfers, including new starts

2. About 70 percent of the Pentagon's $69 billion Overseas Contingency Operations account -- intended for warfighting costs -- will actually pay for "enduring" priorities that would likely continue in the absence of U.S. military operations in the Middle East, according to a new Congressional Budget Office report.

Full story: CBO says 70 percent of DOD's OCO account not really for contingencies

3. Government lawyers have sustained the Navy's decision to boot Raytheon from the Next Generation Jammer Increment 2 technology demonstration program, denying the prime contractor for the NGJ Increment 1 program a lock on the service's electronic attack business and giving Northrop Grumman and L3 a leg up in the multibillion-dollar competition.

Full story: GAO rejects Raytheon's protest, denying company a lock in NGJ program

4. Had Lockheed Martin matched the winning prices in three major programs it lost in recent months, it would have incurred losses of more than $5 billion, according to the contractor's chief executive.

Full story: Lockheed Martin: Winning prices in three programs would have generated $5B loss

By Maximilian Kwiatkowski
October 24, 2018 at 3:47 PM

The Army's UH-60V Black Hawk prototype will receive the requested additional funding, dashing the service's fears of fielding delays due to a lack of money.

Congress approved most of the Defense Department's fiscal year 2018 omnibus reprogramming request, including money for the UH-60V, which will bring the fiscal year 2018 total to $48 million, according to a recently filed congressional response.

The lawmakers shifted more than $15 million in research, development, test and evaluation funding to speed up developmental flight testing of the prototype, as well as fielding and development of training support.

Without the realignment, the service would have had to keep relying on the current UH-60L model's analog cockpit system, which "reduces situational awareness, increases pilot workload and decreases mission readiness," according to the request.

By Justin Doubleday
October 24, 2018 at 2:35 PM

The Defense Department's inspector general is reviewing two Republican lawmakers' request to investigate the development of the Pentagon's Joint Enterprise Defense Infrastructure cloud program.

In an Oct. 22 letter, Reps. Steve Womack (R-AR) and Tom Cole (R-OK) ask the DOD IG to investigate the development of the requirements and the request for proposal process for the JEDI cloud program. The program, which closed for bids earlier this month, has generated controversy because of the Pentagon's decision to make a single award for the commercial cloud services contract, worth up to $10 billion over 10 years. IBM and Oracle have both filed pre-award protests challenging the single-award strategy.

In particular, Womack and Cole want the IG to focus on how and why the program included certain "gating" restrictions to limit the competition to contractors who meet certain requirements, such as Defense Information Systems Agency requirements for handling classified data. Womack and Cole, both members of the House Appropriations defense subcommitee, say the gates "seem to be tailored to one specific contractor."

They also highlight how recent legislation has pressed the Pentagon to include opportunities for multiple providers as part of its enterprise cloud computing strategy and expressed concerns about DOD's acquisition strategy for JEDI.

"The department has not provided any adequate explanation as to why they continue to insist on a contract structure that has been widely criticized by Congress and industry," the lawmakers write.

They also cite "media reports" that allege "individuals who held, or hold, high ranking positions in the department have significant connects to the specific contractor," which is not named. Multiple media reports in recent months have suggested senior aides to Defense Secretary Jim Mattis have helped steer the JEDI contract toward Amazon Web Services after consulting on behalf of AWS prior to joining the Pentagon.

"Our current understanding is that these individuals, in direct contrast with the Federal Acquisition Regulation and DOD Ethics Policy, had involvement in the development of the JEDI program," Womack and Cole write.

The offices of both lawmakers declined to provide further information to Inside Defense when asked about the letter and their assertions about the unnamed individuals.

Meanwhile, the DOD IG's office confirmed to Inside Defense it received the letter and said it is "reviewing the request."

By John Liang
October 24, 2018 at 2:28 PM

This Wednesday INSIDER Daily Digest looks at Raytheon's chances of getting further work on the Navy's Next Generation Jammer program, lawmakers' responses to the Pentagon's most recent "omnibus" reprogramming request plus defense contractor earnings reports and much more.

Looks like Raytheon won't get a chance to continue working on the Navy's Next Generation Jammer program:

GAO rejects Raytheon's protest, denying company a lock in Next Generation Jammer program

Government lawyers have sustained the Navy's decision to boot Raytheon from the Next Generation Jammer Increment 2 technology demonstration program, denying the prime contractor for the NGJ Increment 1 program a lock on the service's electronic attack business and giving Northrop Grumman and L3 a leg up in the multibillion-dollar competition.

We also have news on the congressional response to DOD's "omnibus" reprogramming request submitted in July:

Congress backs nearly $4B in Pentagon funding transfers, including new-start programs

Defense lawmakers have approved the lion's share of the Pentagon's request to shift billions of dollars in existing funds toward new and emerging priorities, according to a recently filed congressional response to a July "omnibus" reprogramming document.

Congress approves $49M realignment for Bradley replacement prototypes

House lawmakers have denied half of the Army's request to transfer funds to purchase Optionally Manned Fighting Vehicle prototypes.

Congress rejects Navy HELIOS, PE investigation effort reprogramming requests

Defense lawmakers rejected several Navy reprogramming requests that would have funded a consulting group for surface warfare reforms, supported developing a high-energy laser and financed an effort related to investigating physiological episodes occurring within the F/A-18 and E/A-18 fleets.

It's earnings week, so up on today's docket is Boeing, General Dynamics and Northrop Grumman:

Boeing makes case for investments in key programs; argues wins will pay off for decades

Boeing executives today defended the company's efforts to win recent programs, just one day after the chief executive of Lockheed Martin hinted the prices they bid might result in losses.

General Dynamics, Northrop Grumman report sales improvements

Buoyed by acquisitions, both General Dynamics and Northrop Grumman said they saw sales and profit boosts during their most recent quarter.

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Some unmanned systems news:

Air Force considers rapidly prototyping MQ-9, RQ-4 sense-and-avoid software

An effort to outfit the Air Force's large remotely piloted aircraft with autonomous sense-and-avoid software will rely on agile development and could use rapid-acquisition authorities offered by Congress.

The Pentagon's No. 2 civilian official spoke to reporters this week on the heels of a National Space Council meeting:

Shanahan: Full integration of NRO in Space Force unlikely, at least to start

Deputy Defense Secretary Patrick Shanahan told reporters Tuesday he does not expect the intelligence community will be integrated with the proposed Space Force until later in the organization's evolution, noting there is disagreement within the Pentagon on how quickly the new military department should grow.

Lt. Gen. Warren Berry, the Air Force's deputy chief of staff for logistics, engineering and force protection, spoke this week at a National Defense Transportation Association conference:

Air Force exploring rapid-deployment options in European, Pacific theaters

NATIONAL HARBOR, MD -- Air Force staff in two theaters are preparing scenarios for how they could rapidly deploy and use temporary bases in case of war with Russia or China, according to a service official.

The Army intends to use the rapid prototyping authority known as Section 804 to award contracts for multichannel radios:

Army using section 804 to procure new air-to-ground radios

The Army is seeking industry input on developing multichannel radios that would meet the service's air-to-ground communications requirements for aviation platforms.

By Justin Doubleday
October 24, 2018 at 1:56 PM

The Pentagon today announced the expansion of its crowdsourced, vulnerability disclosure program, "Hack the Pentagon," to begin testing more of the Defense Department's sensitive, internal systems.

DOD awarded a new contract to crowdsourced security firms Bugcrowd, HackerOne and Synack, respectively, to “expand the program scope and capacity for bounties targeting private DOD assets which include the tailored and bespoke products and systems for meeting defense mission needs,” according to a Pentagon statement.

"New features of the enhanced program will enable DOD components to run continuous, year-long assessments of high-value assets," DOD states. "Through this model, DOD can maintain an open dialogue with vetted hacker participants throughout the development life cycle of a system, which is particularly valuable as software and other assets are regularly updated. The expanded program will also allow the DOD to run assessments on a broader range of assets such as hardware and physical systems."

The statement did not name any specific programs or systems. The Pentagon said the contract would allow "vetted hackers to simulate real and insider threats to certain systems, bringing in valuable new security perspectives to emulate combat adversaries and mitigate risk."

The announcement comes after the Government Accountability Office recently revealed an "entire generation" of DOD's recent weapon systems has been developed without adequately considering cyber risks.

The Defense Digital Service runs the Hack the Pentagon program. Launched in 2016 as the federal government's first bug bounty program, the project has paid "ethical hackers" cash to discover and disclose bugs, enabling DOD to identify and remedy "thousands of security vulnerabilities," according to the statement.

In addition to the now expanded contract vehicle for DOD's internal systems, DDS also runs a bug-bounty contract to find vulnerabilities in the department's public-facing websites.

By Tony Bertuca
October 24, 2018 at 1:00 PM

Robert Karem, currently the assistant secretary of defense for international security affairs, will be leaving his Senate-confirmed Pentagon post to serve as a staffer for Senate Majority Leader Mitch McConnell (R-KY), according to an announcement from McConnell's office.

Karem, who will be advising McConnell on national security matters, was confirmed to his current job by the Senate in May 2017. He previously served as acting under secretary of defense for policy from June 2017 to November 2017, and has prior experience working for McConnell as a legislative assistant.