The Insider

October 22, 2008 at 5:00 AM

Is the economic downturn negatively affecting everyone? On Oct. 11 Oct. 8, at the National Defense Industrial Association's Air Armament Symposium in Ft. Walton Beach, FL, Brig. Gen. Genaro Dellarocco, the Army's program executive officer for missiles and space, told an audience of industry representatives that the financial crisis is actually driving up global arms sales.

"We've got an opportunity here. Let me explain in a couple of different ways. . . . No matter who gets elected -- irrelevant -- we're going to have an unstable world out there. And that is producing a lot of angst. The economy isn't well.

“So, what's happening? People are arming themselves to protect themselves, to protect their investments, to protect their people, to protect their borders,” he added. “We're getting a lot of business."

Dellarocco then highlighted high-profile pending foreign military sales to the United Arab Emirates.

"We're all ready to sign a $7 billion Patriot case with the United Arab Emirates,” he said. “And every one of my shops, except for ((Non-Line-of-Sight Cannon)), has a FMS case with UAE."

He also mentioned the three Terminal High Altitude Air Defense fire units, estimated to cost $ 6.95 billion, that the Army intends to sell to the UAE, as well as another "three dozen" foreign military sales in the works.

And . . .

Of those sales, he said, this is "investment that everyone in this room has contributed to at the gas pump. Our treasure went over to their treasure and the way we get it back -- we sell our technology and our weapon systems."

-- Kate Brannen

October 22, 2008 at 5:00 AM

At an industry conference today in Springfield, VA, a member of an industry panel charged with forecasting the space market over the next 10 years said the Transformational Satellite Communications System contract award will be pushed one year to the right.

Regarding "the TSAT program, which is the largest space communications programs during this period and is essential to the FCS, it was recently announced that the contract for this will likely slip 12 months," said Hughes Petteway, senior strategy analyst for the Boeing Space and Intelligence Systems Business Development Operations group. "While it is possible that the DOD has decided scale down the program . . . we have already projected that there will be additional program delays in this area."

Contrast that with a statement the Office of the Secretary of Defense released just two days ago in response to media reports on TSAT delays.

Stay tuned.

-- Jason Simpson

October 21, 2008 at 5:00 AM

Inside the Navy this week runs a story on how the service sees the next administration's National Security Strategy as key to its future course:

“In very real terms, the ways and means must align with the objective the nation wants to achieve,” Adm. Patrick Walsh, the vice chief of naval operations, said at a Marine Corps Association and Marine Corps Combat Development Command dinner here on Oct. 15.

“The overarching national guidance is impactful to a service,” Walsh added, calling the implications of the strategy “substantial” for the Navy.

The next administration faces key Navy policy decisions, such as the fate of the next-generation DDG-1000 destroyer program, the make-up of the Maritime Preposition Force (Future) and how to reach the service’s goal of a 313-ship fleet in the 2020 time frame. How the Navy proceeds will be largely based on the next administration’s broad national security strategy, the four-star admiral said.

Walsh expressed hope that the document would be completed within 180 days. However, the Bush administration, when first elected in 2000, did not release its national security strategy until the fall of 2002, “because of concerns that it would be out of date as soon as it was printed,” he said.

-- Dan Dupont

October 21, 2008 at 5:00 AM

While a status-of-forces agreement between Washington and Baghdad remains in abeyance, U.S. senior administration officials wrapped up a lesser-known, internal accord this summer that governs contractor activities in Iraq and Afghanistan.

The No. 2 officials from the Defense and State departments and the U.S. Agency for International Development inked a memorandum of understanding in early July, vowing to use a single database for keeping track of government contractors working in the two countries.

Defense officials began work on the database, called Synchronized Pre-deployment and Operational Tracker and managed by the Defense Department, some years ago with the idea of gaining a better understanding of how many contractors the military has working in war zones, where these workers are located, and what they are up to.

Pentagon acquisition chief John Young, since taking office last year, has encouraged increased of the system.

With State and USAID now also using the database, the quality of data about the large amount of government contractors in Iraq and Afghanistan should improve, Government Accountability Office auditors wrote in a report earlier this month.

According to the MOU, the three agencies will work quickly to close what sounds like a loophole in the existing regulations mandating the registration of data on hired security guards.

“The parties agree, as soon as practicable, to expand the common database to include information on those entities performing private security functions under major grants, including contracts under grants and cooperative agreements under which assistance is provided in Iraq and Afghanistan,” the document reads.

-- Sebastian Sprenger

October 20, 2008 at 5:00 AM

You may have seen a report today suggesting the Defense Department has decided to terminate the current competition for the Air Force's next-generation communications satellite constellation.

According to an Office of the Secretary of Defense spokesman, it's not accurate.

“We have seen the news reports about TSAT ((the Transformational Satellite Communications System)); however, as of right now, no final decision has been made on program status,” OSD spokesman Chris Isleib said in an e-mail today. “The department is still reviewing the requirements associated with the TSAT program, but DOD remains committed to fielding a TSAT solution by ((fiscal year 2019)).”

The  report, citing an industry source, stated the Pentagon's Deputy's Advisory Working Group decided to put off awarding the contract until the fourth quarter of fiscal year 2010.

In September, Inside the Air Force reported that Deputy Defense Secretary Gordon England was briefed on a study related to the investment strategy of TSAT in June. At that time, Air Force officials said a contract award was expected no earlier than Dec. 15.

England was briefed on the study at a DAWG meeting on June 10. England is the group's chairman.

The service originally anticipated an award date in May, but made the announcement contingent on the investment strategy study's findings. The Air Force has awarded the two companies vying for the multibillion-dollar contract award, Boeing and Lockheed Martin, three 180-day extensions to risk-reduction contracts since August 2007 in the midst of the production contract delays.

Both companies said in statements they were not notified of any recent action OSD or the Air Force were taking in regards to changing the competition structure of the program.

More to come, and we're checking into all of it.

-- Jason Simpson

October 20, 2008 at 5:00 AM

Joint Special Operations University officials, on behalf of U.S. Special Operations Command, recently released a catalog of research ideas they would like military schoolhouses to tackle in 2009.

Under the heading “getting beyond al Qaeda,” JSOU officials want a deeper look into the inner workings of terrorist organizations -- what drives them and how they differ from the group led by Osama bin Laden.

The idea, according to the document, is to explore “possible future terrorist activities.”

In another effort, officials want a thorough treatment of the relationship between military special operators and CIA operatives when it comes to clandestine and covert counterterrorism operations worldwide.

“Is this the purview of SOF or CIA or both, depending on the situation?” asks the document, adding: “Should a more robust partnership between SOF and CIA be built to conduct this type of activity?”

Whoever looks into these questions should consider past covert operations, assassinations, and sabotage missions to determine what worked, and what didn’t.

Those expecting a gripping James Bond-style read out of this had better get the requisite clearance. “This study will certainly be classified,” the document states.

-- Sebastian Sprenger

October 17, 2008 at 5:00 AM

A quick note today on a new Inside the Air Force story about the future of space -- that is, the U.S. military's dominance of space.

Retired Maj. Gen. James Armor -- former director of the National Security Space Office -- talked about what the next president should do during an Oct. 16 panel discussion -- dubbed “A Day Without Space” -- in Washington. A career space officer, the retired two-star also held the position of program manager of the NAVSTAR Global Positioning Systems Joint Program Office at the Space and Missile Systems Center at Los Angeles Air Force base between 1996 and 1999.

. . . Armor said a loss of the country’s space assets means “that we, the United States, have gotten to a point where we’re looking at a decade without U.S. preeminence in space, and that would be, I think, a terrible tragedy. I think space preeminence is essential to being a great power. Primarily, it is ensuring the physical security of the homeland. Without space, I’m not sure we could do it. It is absolutely essential to the security of the homeland. Furthermore, it also provides for the general welfare in the sense of peaceful use of space for all free nations, not just the United States. I’m not convinced that, if the United States doesn’t sustain its preeminence in space, that we can guarantee that peaceful use of space.”

Making space a national priority and assigning “commensurate resources” is an “urgent, compelling priority,” Armor said, adding that space is still a “secondary thought” in the Air Force and needs to be a “principal priority.” . . .

After the next president makes securing the space domain a national priority, he needs to assign “accountable leadership” to ensure the United States keeps its superiority in the area beyond the atmosphere, Armor asserted.

“I know the Air Force and the ((Defense)) Department has put maybe tens of hundreds of millions of additional dollars into space situational awareness; I think it should be hundreds of billions of dollars, because, without rapid attribution . . . we put ourselves at a disadvantage, we put ourselves in a position to be surprised, which could lead to bad behavior or a military escalation where you don’t really want it,” the retired two-star added.

-- Dan Dupont

October 17, 2008 at 5:00 AM

Defense Department officials are moving ahead with plans to leave a flurry of policy documents for the next Pentagon leadership team covering every mission area outside traditional, force-on-force warfare.

Among the final deliverables set by outgoing Pentagon leaders are a directive on the military’s approach to irregular warfare, plus five companion instructions covering associate disciplines. Namely, those are counterterrorism, unconventional warfare, foreign internal defense, counterinsurgency and stability operations.

The latter area, in late 2005, received its own directive -- number 3000.05 -- hailed by Pentagon officials as something of a revolution at the time.

The paragraph that stuck the most with defense observers and journalists was this one:

“((Stability operations)) shall be given priority comparable to combat operations and shall be explicitly addressed and integrated across all DOD activities, including doctrine, organizations, training, education, exercises, materiel, leadership, personnel, facilities and planning.”

In fact, looking at past news stories referencing the directive, the “priority comparable to combat operations” phrase for many was perhaps the most defining piece of the document.

A draft of the upcoming stability operations instruction, provided to us recently, no longer contains this language.

Judging by the style and completeness of the document, it still has a long ways to go, so there are plenty of things that could still get added or removed.

But the omission in the draft is noteworthy.

One officer told us it could mean either that the mission area of stability operations no longer ranges as high on the priority list of defense leaders as it did in 2005. Alternatively, it could mean that the concept of equal treatment of stability ops and combat ops has become so widely understood that it no longer needs explicit language.

-- Sebastian Sprenger

October 16, 2008 at 5:00 AM

Both presidential candidates in last night’s debate said a new energy policy will be a top priority should they be elected.

It will be interesting to see how prominently an Obama or McCain administration treats energy issues at the Pentagon -- the federal government’s largest energy consumer.

On Tuesday, President Bush announced he plans to effectively ignore a provision of a law he enacted requiring the Pentagon to create a new post to champion energy policy issues.

In a signing statement, a device he has routinely -- and controversially -- used to modify the meaning of laws, the president pointed to four provisions of the Fiscal Year 2009 Defense Authorization Act that he believes he has the constitutional authority to ignore:

Sec. 902: A provision that would establish a director for operational energy plans and programs within the Office of the Secretary of Defense and senior operational energy officials within each of the military services.

Sec. 851: A provision that ensures federal retirees working on the Commission on Wartime Contracting in Iraq and Afghanistan be paid without forfeiting retired pay.

Sec. 1211: a provision that would prohibit the use of funds to establish permanent U.S. bases in Iraq or to control Iraqi oil resources. 

Sec. 1508: A provision that calls for the U.S. to initiate negotiations with Iraq on a cost-sharing agreement on resources required to support  Iraqi Security Forces and U.S. forces in Iraq. 

--Jason Sherman

October 16, 2008 at 5:00 AM

Before becoming defense secretary, Robert Gates was in Baghdad in September of 2006 as part of the Iraq Study Group. Being a member of that distinguished group, he told an audience last night, was not enough to win the type of VIP treatment from U.S. troops that he surely now receives everywhere he goes.

The circumstances in Baghdad were pretty ugly back then, but in retrospect there was one lighter moment during the visit. We were quartered in rooms next to the swimming pool behind the palace where our embassy is located. And about two in the morning, the electricity failed – and, along with it, the air conditioning. It was about a hundred degrees, even after dark. After lying in bed for awhile, feeling the temperature in the room rising steadily, I went out in shorts and a tee shirt to find someone to whom I could report the problem and get it fixed. And I encountered several of our soldiers, whose indifference to my discomfort was monumental.

It was too dark to see nametags but, looking back, I can tell you those soldiers missed one hell of an opportunity for quick promotion three months later.

-- Jason Sherman

October 16, 2008 at 5:00 AM

Gen. James Cartwright, vice chairman of the Joint Chiefs of Staff, told students at Johns Hopkins’ Carey Business School today that the current financial crisis -- particularly the intricate economic interdependence among nations with major militaries -- creates a powerful deterrence against conflict.

Moscow’s military adventure in August against Georgia exacted a toll on Russia’s economy.

“In this market turmoil, Russia and China could have chosen a different path that would have been incredibly difficult for us to survive,” Cartwright told the audience in Baltimore, according to the Armed Forces Press Service.

The interdependence of the world’s economy influenced “a conscious choice by their governments” to think twice about aggression, the Marine general speculated.

Cartwright said that interdependence is reflected in an “as they go, we go and as we go, they go” mentality, which is something that is easier to deal with than the Russian-U.S. strategy during the 1950s to 1980s.

“Much as nuclear weapons in the Cold War tended to be able to tell each other when we were uncomfortable, it’s far more comfortable in my mind to use the economy to tell each other when we’re uncomfortable,” he said.

The 2008 National Defense Strategy, signed by Defense Secretary Robert Gates earlier this summer, directs Pentagon planners to try to account for the consequences of globalization and possible economic shocks.

Globalization and growing economic interdependence, while creating new levels of wealth and opportunity, also create a web of interrelated vulnerabilities and spread risks even further, increasing sensitivity to crises and shocks around the globe and generating more uncertainty regarding their speed and effect. Current defense policy must account for these areas of uncertainty.

-- Jason Sherman

October 15, 2008 at 5:00 AM

Foreign Affairs has released its latest issue early, and in it is a good look at what an Obama administration might do on nuclear policy -- written by two Obama advisers:

What is also needed is a strategic logic that explains how the world can get there from here. It involves four major steps, each difficult but feasible. First, Washington must establish as official policy the limited purpose of U.S. nuclear forces: to prevent the use of nuclear weapons by others. Other purposes are no longer realistic or necessary for the United States. Second, given this limited purpose of its nuclear weapons, the United States should reduce its nuclear arsenal to no more than 1,000 total weapons. This would be more than enough to convince anyone that the United States possesses the capacity to respond to any use of nuclear weapons with devastating effect. Third, the United States must work to put in place a comprehensive international nuclear-control regime that goes well beyond the present nonproliferation regime's accounting and monitoring of nuclear materials. It must include all fissile materials and provide an airtight verification system to enable the world to move from thousands of nuclear weapons to hundreds, to tens, and ultimately to zero.

Finally, Washington must launch a vigorous diplomatic effort to convince the world of the logic of zero -- and of the benefits of taking the difficult steps necessary to get there. This effort should start with its closest and most important allies, then include other nonnuclear states who have long called for such an initiative, and ultimately encompass all nuclear states. U.S. leadership of this international effort will be crucial. And a willingness to act boldly to reduce its own reliance on nuclear weapons and drastically cut its own arsenal can give Washington the credibility necessary to succeed.

-- Dan Dupont 

October 15, 2008 at 5:00 AM

With Congress threatening to assert itself in Round Three of the Pentagon’s aerial refueling competition set to begin early next year, EADS North America -- whose Airbus tanker the Air Force selected before Defense Secretary Robert Gates scrapped the award -- today announced the appointment of a seasoned Capitol Hill hand to its board of directors: Trent Lott.

The Republican Mississippi lawmaker served 19 years in the House, including a stint as minority whip, and 16 years in the Senate, where he worked his way up to Senate Majority Leader before resigning last December and setting up a shop with John Breaux, a former Democratic senator from Louisiana.

Lott will find at least one very familiar face at EADS North America: the company’s senior vice president for government relations, Sam Adcock. Adcock joined Lott’s staff full time in 1990 after a one-year stint as a military liaison and worked on national security issues for the Mississippi senator for the next seven years, winning his boss’ praise for securing funding for Ingalls Shipyard in Pascagoula, MS.

Other retired senior U.S. government officials on the board of EADS North America include:
William Schneider, head of the Defense Science Board who has held senior posts in the State Department and the Office of Management and Budget; former acting Army Secretary Les Brownlee; retired Navy Adm. Joseph Lopez; and retired Air Force Gen. James McCarthy.

--Jason Sherman

October 15, 2008 at 5:00 AM

A former Defense Department program analysis and evaluation official said today that congressional intervention in Pentagon programs would be improved by more military experience in the legislature -- but he expressed doubt that Congress will be peopled with more knowledgeable lawmakers anytime soon.

Barry Watts, now a senior fellow with the Center for Strategic and Budgetary Assessments and the author of a new report on the defense industrial base, said at a briefing with reporters that he doesn't expect congressional intervention in Defense Department programs to end.

“I'm not even sure I would argue that it ought to, but it would be better if it was informed intervention,” Watts said during the morning briefing at CSBA's Washington office. “It would be better if it was intervention with a longer-term view about the industrial base as opposed to, 'I hate that particular contract, I dislike that particular program,' . . . or, 'I love it and I'm going to give it more money.'”

Asked how he would go about creating more informed intervention, Watts, who also previously directed the Northrop Grumman Analysis Center, cited the lack of military experience in the halls of Congress.

“The only way you're going to fix that is to hopefully elect people to the House of Representatives and to the Senate who bring more knowledge and understanding to all this,” he told reporters. “I don't exactly see that as a trend so it's hard not to be depressed.”

 -- Marjorie Censer

October 14, 2008 at 5:00 AM

Whether the economic downturn will hit defense spending remains a theme out there, with a couple of new stories of note to tell you about.

The first is from The Washington Post, which sent someone to the Association of the U.S. Army's convention last week to ask around:

"There's a lot of uncertainty out there," said Kevin G. Kroger, president of Pura Dyn, a small Boynton Beach, Fla., company, who came to the trade show to pitch the Army on buying more of its oil filters for armored trucks. "We're not sure where the budgets are going and what's going to get funded. It leaves us nervous."

Indeed, in his report on the show, Ron Epstein, an analyst at Merrill Lynch, said vendors acknowledged their worries about the rescue plan. "We expect the bailout plan will put downward pressure on defense spending," Epstein had written a week earlier in a research note to clients.

Although no one is expecting a dramatic drop in next year's Pentagon budget, there is a widespread expectation that spending will begin to level off. Many contractors have begun to prepare.

With nearly 60 percent of its $42 billion in annual sales coming from the Defense Department, Lockheed Martin is pursuing other areas of business to compensate for any slowdown in defense spending. For the past eight years, the Bethesda company has tried to expand its information technology services business. Already, it expects double-digit sales growth in that unit this year compared with last year.

And then we have a look from late last week penned by Cox News Service, which uses the financial meltdown as a springboard to examine the specifics on the Obama and McCain plans for defense:

"It's likely to have some negative impact on defense spending, but it's hard to say how much," said Steven Kosiak, vice president for budget studies with the Center for Strategic and Budgetary Assessments, a non-partisan Washington think tank.

Neither Sen. John McCain, the Republican presidential candidate, nor his Democratic rival, Sen. Barack Obama, has provided a basic defense spending blueprint, never mind a list of options for adjusting to the government's deteriorating fiscal outlook.

"There's not a lot of detail in terms of what they're thinking about overall defense spending levels," said Kosiak. Beyond that, "things can change pretty quickly if the international environment changes."

Finally, The Los Angeles Times recently ran a piece titled "Pentagon divided over John McCain" that's worth a read, though it's not likely to surprise any of our readers.

-- Dan Dupont