The Insider

Competitive Guidelines
By Dan Dupont
August 26, 2014 at 1:01 PM

Yesterday we brought you word of a memo from Frank Kendall, the Pentagon's top acquisition official, on new plans to increase competition:

The Defense Department has announced a series of steps designed to bolster competition for contracts, a top acquisition official says in a new memorandum.

The memo, signed by Frank Kendall, the under secretary of defense for acquisition, technology and logistics, notes that the Pentagon has not been meeting its competition goals for four years. "In fact, we have experienced a declining competition rate, and we must take action to reverse this trend," it states.

The memo announces the creation of guidelines that address best practices for developmental programs, weapon system production, commodities contracts and service acquisitions.

"These guidelines are intended to provoke thought about the various approaches that may be used to competitively fulfill DOD requirements," the memo states. "The techniques and examples should be considered in developing acquisition strategies."

Turns out Kendall's office also released this yesterday, which goes along with the memo:

Pentagon Guidelines On Maintaining A 'Competitive Environment'

The August 2014 document, issued by the Pentagon acquisition directorate, outline new steps for "creating and maintaining a competitive environment for supplies and services in the Department of Defense."

Moody AFB Gets Nod
By James Drew
August 25, 2014 at 6:57 PM

The Air Force has selected Moody Air Force Base in Georgia to host an A-29 Super Tucano aircraft schoolhouse for Afghan Air Force personnel, the service said on Aug. 22.

The decision comes after a draft environmental analysis, published in July, found that light-attack aircraft training at Moody AFB would have no significant adverse impact.

The training beddown supports the Pentagon's $427 million acquisition of 20 Super Tucano light-attack aircraft for the Afghan Air Force.

Air Education and Training Command considered three possible locations -- Moody, Mountain Home in Idaho and South Carolina's Shaw base. In June, the service announced Moody as the preferred alternative because of airfield, airspace and facility availability.

“Additionally, the overall cost to complete the beddown in the time frame required to initiate the training program made Moody [AFB] the best choice,” Timothy Bridges, the Air Force's deputy assistant secretary for installations, said in an Aug. 22 statement.

With the selection process complete, the Air Force can begin preparing for the arrival of the first aircraft and Afghan students.

In July, service spokeswoman Ann Stefanek told InsideDefense.com that A-29 prime contractor Sierra Nevada Corp. was on track to deliver the first Afghan Super Tucano aircraft in September.

According to a summary of the July draft environmental assessment (EA) document, the schoolhouse would provide training for about30 Afghan pilots and 90 Afghan maintainers through 2018. Once that initial requirement is met, an organic training program will be established in Afghanistan and the training unit at Moody AFB will be inactivated.

Training is due to commence in February 2015. The schoolhouse is expected to eventually support up to 45 students at a time, the EA states. Training will involve simulator and flight training as well as the use of practice ordnance, rockets and .50-caliber practice rounds.

“The AAF needs the A-29 aircraft and trained pilots because the current fleet of AAF air-to-ground aircraft reaches the end of its service life in January 2016,” the document states, referring to the country's Russian Mi-35 helicopter gunships.

In July, the head of Air Force operations in Afghanistan and Afghan Minister-Counsellor Mirwais Nab, who handles military affairs at the Afghan Embassy in Washington, told InsideDefense.com that the Super Tucano program is important because it equips the AAF with a close-air-support capability as Operation Enduring Freedom ends.

BIW Lands LCS Deal
By Lara Seligman
August 25, 2014 at 6:31 PM

The Navy on Friday awarded Bath Iron Works a contract worth up to $100 million for modernization work on both variants of the Littoral Combat Ship.

The contract officially makes Bath Iron Works, owned by General Dynamics and headquartered in Bath, Maine, the single planning yard for LCS. Under the terms of the contract, Bath Iron Works will provide engineering, planning, ship configuration, material and logistics support to maintain and modernize both variants of the class.

The $9.8 million cost-plus-award-fee contract includes options that, if exercised, would bring the cumulative value of the contract to $100.4 million.

Work will be performed in Bath and is expected to be completed by August 2015.

Global Hawk Test Update
By James Drew
August 22, 2014 at 8:23 PM

Air Combat Command has loaned a Block 40 RQ-4B Global Hawk to the 412th Test Wing at Edwards Air Force Base, CA, to support testing activities there.

According to an Aug. 22 Air Force statement, the aircraft will be incorporated into the Global Vigilance Combined Test Force's (CVCTF) Global Hawk group. The group already has Block 40 and Block 20 aircraft, and the addition of one Block 40 from ACC will support testing of a diminishing manufacturing source and INMARSAT satellite communications upgrades.

Both upgrades are vital to continued Global Hawk operations as the program moves from development and production to the sustainment phase.

One upgrade deals with parts obsolescence issues and the other supports changes to the INMARSAT system from the existing I-3 system to the more advanced I-4 Aero-M service. Existing INMARSAT users must make equipment and software changes to comply with the new system by late 2016.

“The importance of INMARSAT testing is that in the end of calendar year 2016, if we don't make these modifications across the fleet, our fleet faces potential grounding,” CVCTF Global Hawk Program Manager Teresa Bennett said in the Aug 22 statement.

The 412 Test Wing's existing Block 40 Global Hawk aircraft is supporting NATO's $1.7 billion Alliance Ground Surveillance (AGS) program. The United States is a member of the 13-nation group procuring the aircraft for surveillance and target-indication operations over Europe.

The group is buying five Global Hawk Block 40 aircraft and activities at Edwards AFB support testing of maritime modes on the Multi-Platform Radar Technology Insertion Program (MP-RTIP) sensor, a primary Block 40 payload.

Global Hawk program officials plan to conduct an initial operational test and evaluation of the Block 40 MP-RTIP system in early fiscal year 2015. That test was slated to occur in FY-14 but was pushed back due to development issues.

“There are a lot of projects using our current air vehicle; that's all the more reason why it's so valuable to have another air vehicle to allow deconfliction,” Bennett said.

According to the Air Force statement, the 412th Test Wing did have a Block 30 system but that asset was returned to Air Combat Command to support operational needs.

The Block 20 aircraft feature a Global Hawk RQ-4B airframe but carry a different sensor payload.

The Global Hawk produced by Northrop Grumman. Earlier this month the Air Force awarded Northrop a $241 million production contract for its last order of Block 30 aircraft, due for delivery between 2016 and 2017.

The Air Force has 11 Block 40 Global Hawks in its inventory, but service officials are considering retiring the fleet if there is no relief from sequestration in FY-16.

Unmanned Money
By John Liang
August 20, 2014 at 12:00 PM

The House Permanent Select Intelligence Committee has refused to grant permission to shift $16 million in RQ-7B unmanned aerial system funding from the Navy's aircraft procurement budget into the service's research and development account for small tactical UAS.

DOD wanted to shift the Military Intelligence Program (MIP) funds out of the Navy's aircraft procurement budget:

Funds are available because of a shift in focus to shipboard operations. The RQ-7B UAS is not shipboard compatible. The RQ-7B UAS will not upgrade 2 of the 13 RQ-7B Shadow Unmanned Air Systems with the Tactical Common Data Link.

The department wanted the funding in the "Small (Level 0) Tactical UAS" line in the Navy's research, development, test and evaluation budget:

Funds are required to integrate a heavy fuel engine onto RQ-21. force rebalancing and the Marine Corps focus on shipboard operations have prioritized the need to accelerate amphibious Intelligence, Surveillance, and Reconnaissance. Integration of a heavy fuel engine will be the first step in enabling the extension of the current RQ-21 range and will influence a significant area of the battle space and reduce ground control station requirements.

The refusal is highlighted in a two-page, May 30 Defense Department MIP reprogramming request, where the above text was crossed out.

Space Plane
By John Liang
August 19, 2014 at 8:26 PM

Northrop Grumman issued a press release today that it is developing, in conjunction with Scaled Composites and Virgin Galactic, a preliminary design and flight demonstration plan for the Defense Advanced Research Projects Agency's Experimental Spaceplane XS-1 competition.

We're not quite sure why it took so long for Northrop to release the statement; Inside the Air Force reported on the competition last month, when DARPA first announced the teaming arrangements:

"We chose performers who could prudently integrate existing and up-and-coming technologies and operations, while making XS-1 as reliable, easy-to-use and cost-effective as possible," DARPA XS-1 Program Manager Jess Sponable said in the July 15 statement. "We're eager to see how their initial designs envision making spaceflight commonplace -- with all the potential military, civilian and commercial benefits that capability would provide."

The program also has applications for military, civilian and commercial users, and will also further the development of hypersonic flight technologies. One of the technical goals of the program is to achieve a hypersonic speed of Mach 10 or greater at least once during the flight.

"These opportunities include both launching small payloads per the program goals as well as others, such as supporting future hypersonic testing and a future space-access aircraft," DARPA said.

Boeing and Northrop were awarded $4 million contracts and Masten will receive $3 million, according to the respective contracting announcements. Phase 2 contracts are due to be awarded in fiscal year 2015 and a demonstration is scheduled for FY-18, depending on the success of earlier phases, according to the BAA.

CRS On Okinawa
By John Liang
August 19, 2014 at 12:00 PM

A new Congressional Research Service report lays out a number of issues with the U.S. military's plans to decrease its numbers of personnel in Okinawa.

"Although the U.S.-Japan alliance is often labeled as 'the cornerstone' of security in the Asia Pacific region, local concerns about the U.S. military presence on the Japanese island of Okinawa have challenged the management of the alliance for decades," the Aug. 14 report -- originally obtained by Secrecy News -- notes, adding:

The Japanese archipelago serves as the most significant forward-operating platform for the U.S. military in the region; approximately 53,000 military personnel (39,000 onshore and 14,000 afloat in nearby waters), 43,000 dependents, and 5,000 Department of Defense civilian employees live in Japan. With the United States pledging to rebalance its defense posture towards Asia, the uncertainty surrounding the medium and long-term presence of American forces on Okinawa remains a critical concern for national security decision-makers.

In May, the chief of naval operations laid out the Navy's plan to increase its force presence in the Asia Pacific region over the next several years, noting that the service will increase the average number of ships in the area from 58 next year to 67 in 2020. But ships weren't the only assets that would be moved to the region, Inside the Navy reported that month:

In aviation, the Navy has already deployed its P-8A Poseidon maritime surveillance aircraft to the region, where it has made a "huge contribution" to the search for the lost Malaysian airliner, Greenert said. The service also plans to deploy its EA-18G Growler electronic attack aircraft this decade to the Western Pacific, he added. Finally, the Navy will deploy 17 MQ-4C Triton maritime unmanned aerial systems to Okinawa, Japan, Greenert said.

The recent CRS report also notes the opposition by Okinawans of a joint U.S.-Japanese plan to move Marines out of that service's base at Futenma to a new location:

Most Okinawans oppose the construction of a new U.S. base for a mix of political, environmental, and quality-of-life reasons. Okinawan anti-base civic groups may take extreme measures to prevent construction of the facility at Henoko. Any heavy-handed actions by Tokyo or Washington could lead to stridently anti-base politicians making gains in Okinawa, particularly in the gubernatorial election scheduled for November 2014. Meanwhile, the Futenma base remains in operation, raising fears that an accident might further inflame Okinawan opposition.

Members of the Senate Armed Services Committee have had problems with the Marine Corps' plans to realign itself to the Asia Pacific, specifically as they pertain to Okinawa. As ITN reported in June:

The committee claimed the Marine Corps' $12.1 billion estimate to realign the service in the Asia Pacific as "conservative and programmatic" and the estimate does not include potential costs for strategic lift or for the relocation of Marines to Australia. Therefore, Senate authorizers are withholding funds for construction activities to implement the realignment of the Marine Corps from Okinawa, Japan.

Senate authorizers are requesting "high-confidence estimates of construction costs and schedules" before initiating construction of new facilities in support of the realignment.

Court Ruling's Impact
By John Liang
August 18, 2014 at 8:50 PM

Inside U.S. Trade reported last week about a recent U.S. appellate court ruling in favor of a Chinese company suing the president and the Committee on Foreign Investment in the United States (CFIUS) because it was ordered to divest from an Oregon wind farm project that was near Navy airspace.

The ruling will not have a meaningful impact on the outcome of the case and is likely do little to boost the transparency of the CFIUS review process, Inside U.S. Trade reports, adding:

One of the main arguments being pursued by the Ralls Corporation was that, under the constitutional right to due process, it should have access to the unclassified material CFIUS and the president considered before ordering Ralls to divest from an Oregon wind farm project that was near U.S. Navy airspace.

Ralls was not seeking to actually overturn the presidential decision, due to the fact that the Foreign Investment and National Security Act of 2007 expressly prohibits any judicial review of such orders.

The appellate court reversed the lower court's decision that Ralls did not have a right to this information, and in theory, Ralls could now at least try to rebut some of the facts presented. But experts familiar with CFIUS procedures doubted that any of the unclassified information given to Ralls -- or any other company put in a similar situation in the future -- would be substantive.

"There isn't a lot of non-deliberative information that's not classified or not derived from classified material that can be shared," said Nova Daly, former head of CFIUS at the Treasury Department. According to Daly, CFIUS conducts a threat assessment and, for mitigations, a risk assessment. The threat assessment is classified. The risk assessment identifies national security vulnerabilities, which can also be classified.

Scott Flicker, an attorney who handles CFIUS cases, also questioned the ability of a party to rebut a presidential order with limited information. "What are they going to do with unclassified information based on a partial record?" he said. "There might not be much that can be done."

Defense Priorities And Allocations
By John Liang
August 15, 2014 at 5:14 PM

The Commerce Department issued a new rule this week that "clarifies existing standards and procedures by which the Bureau of Industry and Security (BIS) may require that certain contracts or orders that promote the national defense be given priority over other contracts or orders."

The new rule, posted on the Aug. 14 issue of the Federal Register, "also sets new standards and procedures for such prioritization with respect to contracts or orders for emergency preparedness activities. Finally, this rule sets new standards and procedures by which BIS may allocate materials, services and facilities to promote the national defense."

Here's more detail on the new regulation:

This rule updates and expands the Defense Priorities and Allocations System (DPAS) regulations (15 CFR part 700). BIS relies upon and uses the DPAS regulations to implement priority and allocation actions involving industrial resources. The DPAS has two principal components -- priorities and allocations. Under the priorities component, contracts needed to support programs that have been approved for priorities support are required to be given priority over other contracts to facilitate expedited delivery in promotion of the U.S. national defense. Such contracts may be between the government and private parties or between private parties. Under the allocations component, materials, services, and facilities may be allocated to promote the national defense. For both components, the term "national defense" means programs for military and energy production or construction, homeland security, stockpiling, space, emergency preparedness, and critical infrastructure protection and restoration. The term also includes foreign military and critical infrastructure assistance.

CBO On Sequestration
By John Liang
August 14, 2014 at 9:02 PM

So long as Congress doesn't pass any supplemental spending bills before the end of the fiscal year, the government should be safe from sequestration, according to a new Congressional Budget Office report issued this afternoon.

By law, CBO must issue a report, by Aug. 15 of each year, giving its estimates of the caps on discretionary budget authority in place for each fiscal year through 2021, the report states.

In a related January report, CBO estimated that the appropriations for fiscal year 2014 "did not exceed the caps." As of now, the Aug. 14 report states, "CBO's assessment remains unchanged -- the discretionary appropriations provided for 2014 do not exceed the caps, and thus, by CBO's estimates, a further sequestration (or cancellation of budgetary resources) will not be required as a result of appropriation actions this year. The Administration's Office of Management and Budget (OMB) has sole authority to determine whether a further sequestration is required; its sequestration report issued in February 2014 also found that appropriations for 2014 were at or below the caps, and the only subsequent appropriation was designated an emergency requirement and thus could not cause a breach of the caps."

CBO further notes:

The Bipartisan Budget Act of 2013 (Public Law 113-67) modified the caps on defense and nondefense funding for fiscal year 2014 that were established by the Budget Control Act of 2011; P.L. 113-67 reset those caps to total $1,012 billion -- $520 billion for defense programs and $492 billion for nondefense programs. The annual limits on funding are adjusted when appropriations are provided for certain purposes. Specifically, budget authority designated as an emergency requirement or provided for overseas contingency operations, such as military activities in Afghanistan, leads to an increase in the caps, as does budget authority provided for some types of disaster relief (up to an amount based on historical spending for that purpose) or for certain "program integrity" initiatives.

Also, section 7 of the Consolidated Appropriations Act, 2014 (P.L. 113-76) authorized OMB to increase the caps for 2014 to reflect estimating differences between that agency and CBO. To date, such adjustments to the caps on discretionary budget authority for 2014 have totaled $98.9 billion, CBO estimates (see Table 1). Most of that amount, $85.4 billion, is an increase in the defense cap to account for budget authority provided for overseas contingency operations. An additional $0.2 billion of funding -- provided in P.L. 113-145 for Israel's Iron Dome defense system -- was designated as an emergency requirement, and OMB has increased the defense cap by another $0.2 billion to account for differences between its estimates and those of CBO. Adjustments to the nondefense cap this year include $6.5 billion for overseas contingency operations, $5.6 billion for disaster relief, and $0.9 billion for program integrity initiatives.

With those adjustments, the caps on budget authority for 2014 total $606.3 billion for defense programs and $504.8 billion for nondefense programs -- about $1.1 trillion in all, CBO estimates. By OMB's estimation, as reported in February, the total appropriations provided for this year are at or below those caps; therefore, CBO expects that no additional sequestration will be required.

The caps could still be breached, however, if lawmakers were to provide supplemental appropriations by the end of September -- unless the additional funding fell into one of the categories that result in an adjustment to the caps or unless it was offset by reductions in funding for other programs, such as rescissions of unobligated budget authority. If the caps for 2014 were breached late in the fiscal year, the caps for 2015 would be reduced to compensate for any excess funding provided this year.

China's Latest ASAT Test
By John Liang
August 14, 2014 at 5:05 PM

The Chinese military last month conducted a non-intercept test of an anti-satellite missile system, according to the State Department's head of arms control, verification and compliance.

"Despite China's claims that this was not an ASAT test, let me assure you the United States has high confidence in its assessment, that the event was indeed an ASAT test," Frank Rose told attendees yesterday at the U.S. Strategic Command Deterrence Symposium in Omaha, NE.

Rose noted that China isn't the only country pursuing these capabilities, citing Director of National Intelligence James Clapper's testimony from a February congressional hearing (which was closed to the public, by the way) that Russia openly acknowledges it conducts ASAT research.

Rose added:

The United States believes that these activities, which include the continued development and testing of destructive anti-satellite systems, are both destabilizing and threaten the long-term security and sustainability of the outer space environment. A previous destructive test of the Chinese system in 2007 created thousands of pieces of debris, which continue to present an ongoing danger to the space systems -- as well as astronauts -- of all nations, including China.

Debris-generating ASAT weapons present a host of threats to the space environment that threaten all who benefit from outer space: the civil, commercial, military and scientific space endeavors of all nations. On the security side, ASAT weapons directly threaten individual satellites and the strategic and tactical information they provide, and their use could be escalatory in a crisis. They also present a threat to key assets used in arms control monitoring, command and control and attack warning. The destructive nature of debris-generating weapons has decades-long consequences as well: they can increase the potential for further collisions in the future, which only create more debris. A debris forming test or attack may only be minutes in duration, but the consequences can last decades threatening all space systems. It is for these reasons that the United States believes testing debris-generating ASAT systems threaten the security, economic well-being, and civil endeavors of all nations.

East Coast BMD
By John Liang
August 13, 2014 at 9:24 PM

The Missile Defense Agency's briefings to the communities near East Coast bases that might house Ground-Based Interceptors are underway.

MDA in late January decided to pass on one site, the Camp Ethan Allen Training Site near Jericho, VT, and announced it would conduct environmental impact studies of Ft. Drum, NY; Naval Air Station Portsmouth SERE Training Area, ME; Camp Ravenna Joint Training Center, OH; and Ft. Custer Training Center, MI.

MDA is circulating a presentation that outlines the environmental impact assessment that needs to be done on each base. That assessment, according to the briefing slides, will evaluate the impact of:

* Construction

– Up to 60 Ground-based Interceptors and silos

– Mission Facilities (i.e., interceptor fields)

– Mission Support Facilities (i.e., missile assembly building, interceptor storage)

– Non-Mission Facilities (i.e., offices, warehousing)

– Living quarters, dining, schools, etc… if not available in immediate area

– Off-site utilities and infrastructure

* Transportation routes

* Relocation or removal of on-base facilities, if necessary

* Decommissioning and disposal of components at end of life cycle

* Temporary housing and other facilities for construction workers

* CIS [Continental United States Interceptor Site] day-to-day operations

* No Action Alternative: no deployment of CIS

As Inside Missile Defense reported last month:

The MDA-led study was required by Congress, which wanted a probe of at least three U.S. locations where interceptors might help defend against North Korean and Iranian ballistic missiles. At least two had to be on the East Coast. The agency emphasizes in the notice that no decision has been made to deploy interceptors on the East Coast.

The Defense Department, which maintains GBIs at Ft. Greely, AK, and Vandenberg Air Force Base, CA, has no plans to build an East Coast site. The DOD study was conducted to comply with the fiscal year 2013 Defense Authorization Act, which required a siting study to be completed by Dec. 31, officials said.

"While the administration has not made a decision to build another missile defense facility in the U.S. for homeland defense, if a decision were to be made in the future to construct a new site, completing the required site study and environmental impact statement would shorten the time line required to build such a site," MDA Director Vice Adm. James Syring said in a Sept. 12, 2013, statement.

The impetus for the study comes largely from influential House Republicans and was bolstered by a 2012 National Academy of Sciences report that recommended a third missile defense site, possibly in New York or Maine.

UAS Center Of Excellence
By John Liang
August 12, 2014 at 4:41 PM

The Federal Aviation Administration plans to set up an unmanned aircraft systems center of excellence that would involve various government agencies -- including the Defense Department.

According to a solicitation posted this morning on the Federal Business Opportunities website, the goal "is to create a cost sharing relationship between academia, industry, and government that will focus on research areas of primary interest to the FAA and the U.S. unmanned aircraft systems community."

Our purpose is to forge a union of public sector (FAA, National Aeronautics and Space Administration, Department of Defense, state/local governments, etc.), private sector, and academic institutions to create a world-class consortium that will identify solutions for existing and anticipated UAS related issues. The FAA expects the COE to perform short- and long-term basic and applied research through a variety of analyses, development, and prototyping activities.

To this end, the FAA Centers of Excellence Program Office, ANG-E4, is soliciting proposals from accredited institutions of higher education with their partners and affiliates. The FAA intends to enter into cooperative agreements with core university members, and will award matching grants for public benefit. Initially, grants will be awarded to university members to establish the COE, define the research agenda, and begin UAS research, education, training and related activities.

As a result of this competitive process, the FAA also plans to award indefinite delivery indefinite quantity (IDIQ) contracts to the selected COE team members for the benefit of the government. Thereafter, the COE team will be positioned to receive delivery order tasks on a cost reimbursement, cost sharing, and/or fixed price basis.

Universities must notify FAA of their interest by Aug. 22, according to the notice.

New DBB Members
By John Liang
August 11, 2014 at 7:32 PM

The Defense Business Board has gained eight new members, according to a Pentagon statement issued this afternoon.

The new appointees will join the 15 members already serving on the board, led by Robert Stein, the Defense Department statement reads, adding:

These men and women were chosen based on their proven track record of sound judgment in leading or governing large, complex private sector corporations or entities, and have a wealth of top-level, global business experience in the areas of executive management, corporate governance, audit and finance, human resources and compensation, economics, technology and healthcare.

The new members include:

- Taylor Glover, president and CEO, Turner Enterprises, Inc.

- Nancy Killefer, former senior partner, McKinsey & Company, Inc.

- Kenneth Klepper, former president and CEO, Medco Health Solutions

- Shelly Lazarus, chairman emeritus, Ogilvy & Mather

- Emil Michael, senior vice president of business, Uber Technologies, Inc.

- Hon. Thomas Nides, managing director and vice chairman, Morgan Stanley

- Nicholas Pinchuk, chairman and CEO, Snap-on Inc.

- Daniel Werfel, director of public sector practice, The Boston Consulting Group

The board's most recent meeting took place on July 24, where it unanimously approved a series of recommendations put forward by a task force designed to find ways to enhance innovation by attracting and retaining the best of the private sector. The task group also recommended emphasizing an open-architecture approach and ensuring that industry gets compensated for its intellectual property, according to the report approved by the board. As Inside the Pentagon reported that day:

The major "game changer" to help foster innovation would be a new acquisition model for the Pentagon, task force chairman David Langstaff told the board. DOD, he said, "needs to stop stuffing all acquisition in a process designed for a different time."

The defense secretary should issue a memorandum establishing Federal Acquisition Regulation Part 12 "Acquisition of Commercial Items" as the default acquisition method for non-platform procurement, according to the task force recommendations. DOD should also shift its focus from "exquisite" systems to those that are "good enough" as part of a push to open up a closed system, according to the report.

If enacted, these steps also demonstrate that the department is open to commercial involvement, the report states. The recommended steps are essential because the Pentagon is losing its more innovative suppliers as companies choose to focus elsewhere, Langstaff said. The report cites a "hollowing out" of the defense industrial base, adding that "without talent and investment there will be little innovation."

None of the recommendations made in response to the study -- called for by then-Deputy Defense Secretary Ashton Carter in May 2013 -- would require legislative input. The task group set out to make recommendations that could be implemented quickly and internally, Langstaff said.

The board's next meeting is scheduled for Oct. 23, where it will discuss a study on science and technology. As ITP reported last month:

In a terms of reference memo signed out last month, Deputy Defense Secretary Robert Work tasked the Defense Business Board with conducting a study to look at how innovative industry leaders manage science and technology and make "decisions to optimize their S&T investments and the processes they use to forecast and plan for future" research and development.

"Given the anticipated government spending reductions and increased investment from [the] private sector, the DOD needs a portfolio management strategy and the right tools to ensure its R&D funds are directed to achieve maximum benefits for the department," Work wrote.

Work's June 17 memo notes that DOD spends about $12 billion annually on S&T, and this money is "essential for building the knowledge and technology base for future DOD capabilities and is the source for critical 'leap-ahead' technologies that advance DOD's warfighting capabilities."

Hagel In Australia
By John Liang
August 11, 2014 at 4:50 PM

Defense Secretary Chuck Hagel is in Australia today, where he spoke about the U.S. shift to the Asia Pacific:

Recently, for the first time, we have Marines on a rotational basis here in Australia; 1,200, I think, is what we currently have. We have LCS ship in, and we'll have more on a rotational basis in Singapore, which is -- is new.

We have just concluded new arrangements and agreements with the country the Philippines on a rotational basis to use bases there.

And I could go on, but I think it gives you some tangible answer to your question, "Are we committed or not?" Yes, we're committed. We will continue to stay committed.

But I might also add that it does not mean that the U.S. rebalance to the Asia Pacific -- and this is a dynamic process that the United States certainly has used over the years as geo-political interests shift in the world. And I think by any measurement, any metric applied to Asia Pacific -- Secretary Pritzker, Secretary Kerry were quite clear on this when they were in India about a week ago -- that the economic development and the emergence of an astounding number of middle class that -- and all the economic development productive parts of a society of a country that are emerging in this part of the world are pretty clear.

We have an interest here, the United States. We'll continue to have an interest here. We are a Pacific power. We've been a Pacific power. So we're not going anywhere, and our partnerships are here. Our treaty obligations here are important to us. The president has made that case.

This is my sixth trip to the Asia Pacific areas since I've been secretary of defense the last year and a half. I'll do four this calendar year. Secretary Kerry, Secretary Pritzker were just in India. As you know, Secretary Kerry was just in Myanmar yesterday.

So I think by any measurement of commitment, it's pretty clear that the U.S. is committed to this part of the world, but also does not mean a retreat from any other part of the world. We have interests all over the world. We'll continue to work with our partners and strengthen those partnerships and the alliances we have in every part of the world and here as well.

On missile defense cooperation with Australia, Hagel said:

We are going to talk tomorrow, as I noted, in our discussions with the Australians, regarding ballistic missile defense. These are conversations that we started prior. We talked a little bit in our meeting today, the two of us, about this issue. And we think there's great opportunity and possibilities as we go forward and develop some options.