The Insider

By Christopher J. Castelli
August 6, 2013 at 6:03 PM

Defense Secretary Chuck Hagel announced today that the Defense Department would reduce the total numbers of furlough days for DOD civilian employees from 11 to six. Hagel noted in the same statement that management initiatives, reduced costs and a reprogramming approved by Congress have led DOD to conclude it can make some improvements in training and readiness and still meet the sequestration cuts.

"The Air Force has begun flying again in key squadrons, the Army has increased funding for organizational training at selected units, and the Navy has restarted some maintenance and ordered deployments that otherwise would not have happened," he said. "While we are still depending on furlough savings, we will be able to make up our budgetary shortfall in this fiscal year with fewer furlough days than initially announced."

Here is Hagel's complete statement:

When I announced my decision on May 14 to impose furloughs of up to 11 days on civilian employees to help close the budget gap caused by sequestration, I also said we would do everything possible to find the money to reduce furlough days for our people. With the end of the fiscal year next month, managers across the DoD are making final decisions necessary to ensure we make the $37 billion spending cuts mandated by sequestration, while also doing everything possible to limit damage to military readiness and our workforce. We are joined in this regard by managers in non-defense agencies who are also working to accommodate sequestration cuts while minimizing mission damage. As part of that effort at the Department of Defense, I am announcing today that, thanks to the DoD's efforts to identify savings and help from Congress, we will reduce the total numbers of furlough days for DoD civilian employees from 11 to six.

When sequestration took effect on March 1, DoD faced shortfalls of more than $30 billion in its budget for day-to-day operating costs because of sequestration and problems with wartime funding. At that point we faced the very real possibility of unpaid furloughs for civilian employees of up to 22 days.

As early as January, DoD leaders began making painful and far reaching changes to close this shortfall: civilian hiring freezes, layoffs of temporary workers, significant cuts in facilities maintenance, and more. We also sharply cut training and maintenance. The Air Force stopped flying in many squadrons, the Navy kept ships in port, and the Army cancelled training events. These actions have seriously reduced military readiness.

By early May, even after taking these steps, we still faced day-to-day budgetary shortfalls of $11 billion. At that point I decided that cutting any deeper into training and maintenance would jeopardize our core readiness mission and national security, which is why I announced furloughs of 11 days.

Hoping to be able to reduce furloughs, we submitted a large reprogramming proposal to Congress in May, asking them to let us move funds from acquisition accounts into day-to-day operating accounts. Congress approved most of this request in late July, and we are working with them to meet remaining needs. We are also experiencing less than expected costs in some areas, such as transportation of equipment out of Afghanistan. Where necessary, we have taken aggressive action to transfer funds among services and agencies. And the furloughs have saved us money.

As a result of these management initiatives, reduced costs, and reprogramming from Congress, we have determined that we can make some improvements in training and readiness and still meet the sequestration cuts. The Air Force has begun flying again in key squadrons, the Army has increased funding for organizational training at selected units, and the Navy has restarted some maintenance and ordered deployments that otherwise would not have happened. While we are still depending on furlough savings, we will be able to make up our budgetary shortfall in this fiscal year with fewer furlough days than initially announced.

This has been one of the most volatile and uncertain budget cycles the Department of Defense has ever experienced. Our fiscal planning has been conducted under a cloud of uncertainty with the imposition of sequestration and changing rules as Congress made adjustments to our spending authorities.

As we look ahead to fiscal year 2014, less than two months away, the Department of Defense still faces major fiscal challenges. If Congress does not change the Budget Control Act, DoD will be forced to cut an additional $52 billion in FY 2014, starting on October 1. This represents 40 percent more than this year's sequester-mandated cuts of $37 billion. Facing this uncertainty, I cannot be sure what will happen next year, but I want to assure our civilian employees that we will do everything possible to avoid more furloughs.

I want to thank our civilian workers for their patience and dedication during these extraordinarily tough times, and for their continued service and devotion to our department and our country. I know how difficult this has been for all of you and your families. Your contribution to national security is invaluable, and I look forward to one day putting this difficult period behind us. Thank you and God Bless you and your families.

By John Liang
August 6, 2013 at 5:44 PM

Adopting an open systems approach could provide "significant" cost and schedule savings for the Defense Department's unmanned systems programs, according to a recent Government Accountability Office report.

"Based on projections from several Navy UAS programs, for example, the Navy could avoid considerable repair and upgrade costs on individual programs, as well as improve performance, by incorporating an open systems approach on programs prior to the start of development," the July 31 GAO report states. "This is because multiple suppliers can compete to quickly replace key components on the UAS with more capable components."

The Pentagon has traditionally "acquired proprietary weapon systems that limit these opportunities and make these systems more costly to develop, procure, upgrade, and support," according to GAO. While the department "has cited a preference for acquiring open systems in its policy since 1994 and each of the services have since issued open systems policies," the congressional watchdog agency found that "the Army and Air Force have been slow to make their UAS open systems, particularly from the start of development. The Navy, on the other hand, has generally designed its UAS to be open from the start of development where it can reap the most benefits."

"Strong leadership" is needed "to overcome preferences for acquiring proprietary systems," according to GAO. "While DOD's Better Buying Power initiative requires programs to outline an approach for using open systems architectures at milestone B, [the Office of the Secretary of Defense] does not have adequate insight of the extent to which an open systems approach is being used by individual weapon acquisition programs.

"Further, OSD does not know if program offices have the systems engineering expertise required for effective implementation of an open systems approach or if additional expertise is needed. Without adequate knowledge of policy implementation and program office expertise, DOD cannot have reasonable assurance that an open systems approach is being implemented effectively by the services," the report continues. "Until DOD takes action to overcome these challenges, the department will likely continue to invest in costly proprietary systems. These steps should increase DOD's ability to promote more competition, save taxpayer dollars, and more quickly field new capabilities to the warfighter, particularly if an open systems approach is incorporated into program strategies prior to the start of development at milestone B."

Consequently, GAO gives four recommendations "to improve the department's implementation of an open systems approach for UAS and other weapon acquisition programs, as well as its visibility of open systems implementation and program office expertise." Among the recommendations:

* "We recommend that the Secretary of Defense direct the Secretaries of the Air Force and Army to implement their open systems policies by including an open systems approach in their acquisition strategies.

* "We recommend that the Secretary of Defense direct the Under Secretary of Defense for Acquisition, Technology and Logistics to define appropriate metrics to track programs’ implementation of an open systems approach."

GAO also calls on the defense secretary to "direct the Secretaries of the Air Force, Army, and Navy to take the following actions:

* "Require their acquisition programs to include open systems metrics developed by the Under Secretary of Defense for Acquisition, Technology and Logistics in their systems engineering plans, track progress in meeting these metrics, and report their progress to the Under Secretary of Defense for Acquisition, Technology and Logistics at key acquisition milestones; and

* "Assess their respective service-level and program office capabilities relating to an open systems approach and work with the Deputy Assistant Secretary of Defense for Systems Engineering to develop short-term and long-term strategies to address any capability gaps identified. Strategies could include the Navy’s cross-cutting approach where a team of a few technical experts within the Naval Air Systems Command could be available to work with program offices, as necessary, to help develop open systems plans."

By Christopher J. Castelli
August 6, 2013 at 2:56 PM

The Defense Department flew some, but not all, U.S. personnel out of Yemen's capital early this morning due to serious concerns about the threat an imminent terrorist attack. "In response to a request from the U.S. State Department, early this morning the U.S. Air Force transported personnel out of Sana'a, Yemen as part of a reduction in emergency personnel," Pentagon Press Secretary George Little said in a statement. DOD continues to have personnel on the ground in Yemen to support the State Department and to monitor the security situation, Little said.

In a separate statement this morning, State Department spokeswoman Jen Psaki said the department had ordered a reduction in the number of emergency U.S. government personnel in Yemen. "As we have said, we are concerned about a threat stream indicating the potential for terrorist attacks against U.S. persons or facilities overseas, especially emanating from the Arabian Peninsula," she said. "As such, the department is taking appropriate steps to protect our employees, including local employees and visitors to our facilities."

By John Liang
August 5, 2013 at 4:43 PM

Late last week, InsideDefense.com reported that the service was poised to purchase 337 Stryker vehicles that have been converted from standard flat-bottoms to more protected double-V hull configurations, while also making the DVH a fleet-wide requirement:

Heidi Shyu, the Army's acquisition executive, signed off on the purchase last week, and also set requirements to put DVHs on every Stryker in the service -- currently nine brigades' worth. At present, the Army has two Stryker brigades outfitted with DVHs and the purchase of 337 will be the third. The cost of the buy was not reported.

General Dynamics Land Systems, the contractor for the Stryker, is expected to carry out the DVH conversion work at Anniston Army Depot, AL, and the Joint Systems Manufacturing Center in Lima, OH.

One defense official said the new, fleet-wide requirement for DVH should be viewed as a coup for GDLS, which has lobbied the government for more than a year to buy more vehicles. "The money isn't there to put a DVH on every Stryker right now, but it is a now a requirement," the official said.

A second defense official noted that at a time when the Army's premier vehicle modernization program -- the Ground Combat Vehicle -- has become endangered by ongoing budget uncertainty, the Stryker DVH could be viewed as a positive developmental effort that yielded real results in the field.

We now have a copy of the acquisition decision memo signed by Shyu.

While on the subject of documents, we also have a searchable version of the Senate Appropriations Committee's fiscal year 2014 defense spending report.

By John Liang
August 2, 2013 at 8:11 PM

President Obama has nominated retired Air Force Lt. Gen. Frank Klotz to be the next head of the National Nuclear Security Administration, according to a White House statement issued today:

Lieutenant General Frank G. Klotz, USAF (Ret) is the Senior Fellow for Strategic Studies and Arms Control at the Council on Foreign Relations, a role he has held since 2011.  Lieutenant General Klotz has also worked as an independent consultant since 2011.  He is the former Commander of Air Force Global Strike Command, a position he held from 2009 to 2011.  From 2007 to 2009, Lieutenant General Klotz was the Assistant Vice Chief of Staff and Director of the Air Staff.  He served as the Vice Commander of Air Force Space Command from 2005 to 2007 and was the Commander of the Twentieth Air Force from 2003 to 2005.  Lieutenant General Klotz served at the White House from 2001 to 2003 as the Director for Nuclear Policy and Arms Control on the National Security Council.  He served as the Defense Attaché at the U.S. Embassy Moscow from 1999 to 2001.  Lieutenant General Klotz received a B.S. from the Air Force Academy and an MPhil and DPhil from Oxford University.

By Christopher J. Castelli
August 2, 2013 at 1:57 PM

President Obama has announced his intent to nominate Deborah Lee James as Air Force secretary. She is president of the technology and engineering sector at Science Applications International Corp.

“Deborah’s strong record of public service and leadership in the private sector makes her uniquely qualified to be my nominee for Secretary of the Air Force," Obama said in a statement Thursday evening. "I look forward to working with her to keep our Air Force the very best in the world and to keep faith with our extraordinary Air Force personnel and their families.”

InsideDefense.com first reported April 26 that James was the frontrunner for the job. James' resume includes a decade of experience working as a staffer on the House Armed Services Committee -- where she focused on military personnel and NATO issues -- and a five-year stint as assistant secretary of defense for Reserve affairs. She would succeed Michael Donley, who retired in June. Her nomination is subject to Senate confirmation.

In an Aug. 1 statement, Defense Secretary Chuck Hagel voiced his support for James' nomination. "Deborah is an outstanding leader with deep experience in the Department of Defense, the private sector, and non-profit organizations that support the men and women of our armed services," Hagel said. "If confirmed, Deborah will lead the Air Force during a time of great consequence for our airmen and their families. I appreciate her willingness to serve her country once again."

By Christopher J. Castelli
August 1, 2013 at 6:37 PM

The Air Force's next-generation bomber program could be delayed depending how the department responds if faced with a new round of major budget cuts, Vice Chairman of the Joint Chiefs of Staff Adm. James Winnefeld told lawmakers today.

During a House Armed Services Committee hearing on the Defense Department's Strategic Choices and Management Review, the admiral said the assessment showed cuts on the order of full sequestration -- $500 billion over a decade -- could potentially delay the program, despite DOD's commitment to developing the new bomber.

"As far as the SCMR goes . . . the deeper you go, the tougher some of this gets, and at the [Budget Control Act] levels . . . [budget cuts] could impact that program in terms of timing or what have you," he said.

"It also would depend a little bit on whether you emphasized capacity or capability, in terms of how many you might buy or whether you would do the program," he added.

But Winnefeld said the Long-Range Strike bomber program is "very important" to DOD. "It's a vital leg of our strategic deterrent of the triad and second, it's a very important element of potential future warfighting concepts that we would need from a standoff capability and also, a penetrating capability," he added. "So we are certainly committed to that program." He said the program appears to be on track.

By Christopher J. Castelli
July 31, 2013 at 11:26 PM

Deputy Defense Secretary Ashton Carter today issued further guidance on implementing Defense Secretary Chuck Hagel's call for a 20 percent cut in management headquarters spending throughout the Defense Department.

"The cuts, which will take place regardless of the budget levels approved by Congress, are designed to streamline DOD's management through efficiencies and elimination of lower-priority activities," Carter writes in a memo that "defines the nature of these important reductions more specifically."

The headquarters cuts will apply to all higher headquarters staffs including Office of the Secretary of Defense principal staff assistants (PSAs) and their associated defense agency staffs, Joint Staff, service secretary staffs, service chief staffs, service four-star major commands and service component commands, lower-level service staffs (down to the appropriate level determined by the service secretaries and chiefs), and combatant command staffs, Carter writes.

Intelligence staffs will also be affected (primarily military intelligence program-funded intelligence centers and -- with the concurrence of the White House's intelligence director -- national intelligence program-funded centers), the memo adds.

"Service secretaries and chiefs will decide the allocation of cuts among various organizations within their headquarters staffs," Carter writes, noting the chairman of the Joint Chiefs will make the same allocation for the Joint Staff. Each PSA and defense agency should achieve a 20 percent reduction. "If necessary, I will consider reallocations during program review," Carter adds.

The 20 percent cut applies to the total headquarters budgets. Total headquarters budgets include government civilian personnel who work at headquarters and associated costs including contract services, facilities, information technology, and others that support headquarters functions. Budgets are those specified in the future years defense program supporting the president's budget for fiscal year 2014, extended to FY-19 assuming growth for inflation, the memo states.

The 20 percent cut applies to budget dollars, Carter writes. "However, organizations will strive for a goal of 20 percent reductions in authorized government civilian staff at their headquarters," he adds. "Similarly, while military personnel are not part of headquarters budgets, organizations will strive for a goal of 20 percent reductions in military personnel billets on headquarters staffs." Subordinate headquarters should not grow as a result of reductions in higher headquarters, the memo states. "I will be reviewing proposals to ensure that these various goals are met," Carter adds.

The memo acknowledges that the FY-14 budget reflects past efficiency decisions, some of which affected headquarters. This 20 percent reduction represents an additional cut, "which I know will be challenging," Carter writes. "However, in this period of additional downward pressure on defense spending, we must continue to reduce our headquarters budgets and staffing. Components are encouraged to suggest changes in policies and workload that would help them accommodate these dollar and staff reductions."

The memo urges senior managers to ensure that cuts are made aggressively and as soon as possible, "both to eliminate uncertainty for our employees and contractors and to maximize savings."

Generally, cuts should be roughly proportional by year -- with about one fifth of the cut in FY-15, another fifth in FY-16, and so on, Carter writes, noting components are free to implement reductions more rapidly. To the extent feasible, some cuts should begin in FY-14 to increase savings and reduce the cuts required in later years, he adds.

Reduction plans should be submitted along with the program objective memorandum submissions, which are due Sept. 23, the memo states.

In a press conference today, Hagel noted the Pentagon's Strategic Choices and Management Review considered potential consolidations of regional combatant commands and defense agency mission cuts, but he did not discuss the details.

By John Liang
July 31, 2013 at 7:48 PM

The Senate Armed Services Committee has approved the renominations of Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey and Vice Chairman Adm. James Winnefeld and reported them to the full chamber.

The committee also approved the nominations of Adm. Cecil Haney to be head of U.S. Strategic Command and Lt. Gen. Curtis Scaparrotti to be head of U.S. forces in Korea, according to a panel statement.

Additionally, the committee approved four civilian nominations, according to the statement:

Honorable Stephen W. Preston to be General Counsel of the Department of Defense

Honorable Jon T. Rymer to be Inspector General of the Department of Defense

Dr. Susan J. Rabern to be Assistant Secretary of the Navy for Financial Management and Comptroller

Mr. Dennis V. McGinn to be Assistant Secretary of the Navy for Energy, Installations, and Environment

By Christopher J. Castelli
July 31, 2013 at 3:07 PM

Defense Secretary Chuck Hagel and Vice Chairman of the Joint Chiefs of Staff Adm. James Winnefeld will conduct a press briefing to discuss the recent Strategic Choices and Management Review (SCMR) at 2:30 p.m. today in the Pentagon Briefing Room. Immediately thereafter, unnamed senior officials from the Office of the Secretary of Defense and the Joint Staff will provide reporters further details in a background briefing.

The SCMR examined the potential impact of further sequestration on the Pentagon's ability to execute the priorities of the president's Defense Strategic Guidance. It also informed the Defense Department's internal fiscal guidance for the FY-15 budget process, issued July 1, and is intended to guide the upcoming Quadrennial Defense Review.

By John Liang
July 30, 2013 at 5:08 PM

The Defense Advanced Research Projects Agency's Tactical Technology Office said this month it would conduct a "Proposers' Day" on Aug. 5 to provide information to industry on the objectives of the Hydra unmanned system program in advance of a planned broad agency announcement.

"The Hydra program will develop and demonstrate an unmanned undersea system, providing a novel delivery mechanism for insertion of unmanned air and underwater vehicles into operational environments," DARPA's July 16 proposers' day announcement states. "Situated underwater, Hydra will use modular payloads within a standardized enclosure to enable scalable, cost-effective deployment of rapid response assets."

The proposed program "will integrate existing and emerging technologies in new ways to create an alternate means of delivering a variety of payloads close to the point of use. The Hydra program seeks to develop and demonstrate initial examples of these payloads," according to DARPA, which adds:

The rising number of ungoverned states, piracy, and proliferation of sophisticated defenses severely stretches current resources and impacts the nation's ability to conduct special operations and contingency missions. The Hydra program represents a cost effective way to add undersea capacity that can be tailored to support each mission. Technologies are intended to be adaptable to multiple delivery options, including airborne, surface, and subsurface. The Hydra program could enable other new capabilities not currently performed from undersea.

By Christopher J. Castelli
July 29, 2013 at 3:12 PM

Deputy Defense Secretary Ashton Carter and Vice Chairman of the Joint Chiefs of Staff Adm. James Winnefeld are slated to testify Thursday before the House Armed Services Committee about the initial conclusions of the Pentagon's Strategic Choices and Management Review (SCMR).

The SCMR, through which the Pentagon is examining the potential impact of further sequestration on its ability to execute the priorities of the president's Defense Strategic Guidance, informed the Pentagon's internal fiscal guidance for the FY-15 budget process, and is intended to guide the upcoming Quadrennial Defense Review. The SCMR involved DOD's uniformed and civilian leaders and was managed by Carter, working with Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey.

Unlike the congressionally mandated QDR, the Pentagon considers the SCMR an internal assessment, without any statutory requirement to disclose the details to Congress. When Defense Secretary Chuck Hagel chartered the review, he described it as "confidential." Last month, Hagel threw cold water on the idea that the Pentagon might publicly detail the SCMR's findings. "There will be no roll-out of any grand plan on this," Hagel told reporters.

By John Liang
July 26, 2013 at 8:33 PM

The Defense Security Cooperation Agency announced this week it had notified Congress of a trio of proposed foreign military sales to Iraq for helicopters, Stryker vehicles and "Multi-Platform Maintenance" worth nearly $2 billion.

On the proposed $300 million sale of 12 Bell 412 EP helicopters and associated equipment, DSCA said:

This proposed sale will contribute to the foreign policy and national security of the United States by helping to improve the security of a strategic partner. This proposed sale directly supports the Iraq government and serves the interests of the Iraqi people and the U.S.

This proposed sale will contribute to Iraq’s stability and sovereignty by providing a critical component to building its Air Force and achieving air sovereignty. This equipment will provide the Iraqi Air Force with a search and rescue capability critical to developing a mature Air Force.

On the proposed $900 million sale of 50 M1135 Stryker Nuclear, Biological, and Chemical Reconnaissance Vehicles and associated equipment, DSCA said:

This proposed sale will contribute to the foreign policy and national security of the United States by helping to improve the security of a strategic partner. This proposed sale will contribute to Iraq’s stability and sovereignty by increasing its situational awareness and ability to identify potential Chemical, Biological, Radiological and Nuclear (CBRN) agents. This proposed sale directly supports the Iraqi government and serves the interests of the Iraqi people and the United States.

This equipment provides the Iraqi Army CBRN reconnaissance units with reliable capabilities for early warning of contamination by radiological, biological, and chemical material. Overall, these systems meet the requirements of providing the Iraqi Army with the ability to conduct CBRN reconnaissance techniques of search, survey, surveillance, and sampling to reduce the effects of exposure to these hazardous agents.

And here's what DSCA said about the proposed $750 million "Multi-Platform Maintenance" sale:

The Government of Iraq has requested a possible sale to provide for a five year follow-on maintenance support for the M88A1 Recovery Vehicle, M88A2 Hercules, M113 Family of Vehicles, M109A5 Howitzers, M198 Howitzers, M1070 Heavy Equipment Trailer and Truck (HETT), M977 Heavy Expanded Mobility Tactical Truck (HEMTT), High Mobility Multipurpose Wheeled Vehicle (HMMWV), and the Tactical Floating River Bridge System (TFRBS) Including, spare and repair parts, support equipment, publications and technical data, personnel training and training equipment, site surveys, Quality Assurance Teams, U.S. Government and contractor technical assistance, and other related elements of program and logistics support.

By Sebastian Sprenger
July 26, 2013 at 6:56 PM

Defense Secretary Chuck Hagel is slated to get a new military adviser in Army Maj. Gen. Robert Abrams. His nomination for the job, which would come with a promotion to lieutenant general, was announced by the Defense Department today. Online Senate records carry a date of July 24 for the nomination.

Abrams is serving as commanding general of the 3rd Infantry Division, Fort Stewart, GA.

If approved by the Senate, Abrams would replace Marine Corps Lt. Gen. Thomas Waldhauser, who is at the center of several news stories that broke yesterday, July 25. According to reports by CNN and the Marine Corps Times, Waldhauser has recently alleged to military authorities that Marine Commandant Gen. James Amos pressured him to “crush” four Marines depicted urinating on insurgent corpses in Afghanistan in 2011. Amos wanted the Marines kicked out of the service, which Waldhauser, the convening authority for the case at the time, said would be unlikely, according to the reports. Amos then proceeded to relieve Waldhauser from the job of overseeing the investigation.

On the same day of the Abrams nomination, Waldhauser was nominated to serve as the director for operations plans and joint force development, J-7, on the Joint Staff.

By John Liang
July 25, 2013 at 8:14 PM

A Government Accountability Office report issued today finds fault with the Defense Department's response to a Fiscal Year 2013 Defense Authorization Act requirement for documentation on the Precision Tracking Space System.

The act called on the Pentagon to submit to the congressional defense committees a report on a 2012 cost assessment and program evaluation office review of PTSS, but that report "did not provide for or include an evaluation of PTSS alternatives," as required, GAO states.

Additionally, the terms of reference for the PTSS review "were approved by the Missile Defense Executive Board but not in coordination with the Defense Space Council as required by the act," according to the GAO report.

InsideDefense.com reported on PTSS last week:

The Precision Tracking Space System program was terminated in April after a statutorily mandated independent cost estimate calculated the ballistic missile-tracking satellite constellation would cost as much as $17.5 billion and carry a near-term price tag nearly 40 percent more than the Missile Defense Agency estimated, according to Defense Department officials.

The Pentagon's office of cost assessment and program evaluation (CAPE), in response to questions from InsideDefense.com, revealed key findings of its audit of the PTSS program -- which influenced a decision by the Office of the Secretary of Defense to cancel the program, citing higher-than-expected costs, as part of the fiscal year 2014 budget proposal. MDA was leading the effort to develop and build the space-based infrared sensor satellite program.

The CAPE independent cost estimate figured the total life-cycle cost of the program, including development, procurement and all operating and support costs, could range from $14.6 billion to $17.5 billion, according to figures provided by CAPE.