The Insider

Missile Defense Agency Director Vice Adm. James Syring, during a presentation last week at the annual Space and Missile Defense Symposium in Huntsville, AL, touched on the deployment of a second AN/TPY-2 radar to Japan.

According to the presentation slides he used, a second radar system in that country "enhances [the] defense of Japan, U.S. forward deployed forces, and the U.S. homeland from North Korean ballistic missiles" and "bolsters regional security allowing flexibility in deploying Aegis [Ballistic Missile Defense] ships."

A "Technical Capability Declaration" (TCD) is expected within one year after the U.S. is granted access to the proposed site, discussions between the two countries on which "are ongoing," according to the slides.

MDA spokesman Rick Lehner told Inside Missile Defense this week that TCD "is declared by MDA and is system-focused." It differs from the initial operational capability designation in that "IOC is declared by the warfighter and is broader in scope than TCD, i.e. it includes the warfighting organization's ability to employ and maintain the system."

The United States has five forward-based AN/TPY-2 radars that are operational. Four are being used in Northern Japan, Israel, Turkey and within the U.S. Central Command area of operation and one is used for testing. Once the fifth radar is deployed to Japan, a forward-based radar would not be available for testing purposes. The fifth radar was available for MDA's large-scale test in the Kwajalein Atoll in October 2012. Another MDA test of a similar caliber is scheduled for later this year.

According to Syring's briefing slides, that test -- designated FTO-01 -- is "on track" for the fourth quarter of fiscal year 2013. Its purpose is to "demonstrate regional-theater [Ballistic Missile Defense System] ability to defeat, in a layered architecture, a raid of two threat-representative medium range ballistic missiles, each flying challenging and realistic attack profiles."

The Aegis BMD system will attempt to intercept the first MRBM, while the Terminal High-Altitude Area Defense system will try to shoot down the second MRBM, and could engage the first target if needed, according to the presentation.

Inside the Army reported in July that in order to have a forward-based AN/TPY-2 radar available for future tests once a fifth radar deploys to Japan, the Army plans to borrow a radar from an existing THAAD battery or grab a radar intended for THAAD as it comes off of Raytheon's production line, according to Lehner.

"We will have a TPY-2 available for future tests after Japan deployment, with either a radar coming off the production line prior to deployment to a future THAAD battery, or a radar from an existing THAAD battery will be requested," Lehner told ITA in a July 17 statement.

The Army intends to procure a total of 12 AN/TPY-2 radars -- six forward-based radars and six radars for THAAD batteries, ITA reported, adding:

Because building an AN/TPY-2 radar takes around 30 months, the next forward-based version would not roll off the production line for at least 36 months. According to Raytheon's missile defense and space programs' director, Jim Bedingfield, the 12th AN/TPY-2 radar the company will build -- intended to be forward-based -- is not on contract yet. The contract is expected to be cemented in September or October this year, he said.

Radars meant for THAAD batteries will be completed before that time. Raytheon and the Army signed contracts for the ninth and 10th radars in December 2011. The 11th radar's contract was finalized in December 2012 and is also in production.

The Army deployed its first THAAD battery to Guam in April, has a second battery standing by at Ft. Bliss, TX, and is working to stand up a third. Radars nine, 10 and 11 will go to THAAD batteries four, five and six.

While Raytheon supports the need to deploy a second radar to Japan, Bedingfield told ITA in a July 15 interview, "testing is extremely important to us on many levels both as a nation from our national security strategy down to proving our system works and down to the operating level where you must have proper tactics, techniques and procedures. The question is not whether the agency will continue a robust testing regimen, they will and they have told us they will and we stand ready to test with them. We want to test, we like to test, nobody does everything perfectly, we have to learn from our tests both when we succeed and when we fail."

Bedingfield said the real question is "how much will testing without some sort of dedicated asset to test in a very robust testing scheme, how will that affect our nation's ability to deploy, for example, a THAAD battery to Guam. These are obviously weighted questions that the government wrestles with in a tough budget time."

A pair of House lawmakers are urging the Navy to maintain its fleet of 11 nuclear-powered aircraft carriers, regardless of the budget sequester, the just-completed Strategic Choices and Management Review, and the upcoming Quadrennial Defense Review.

That said, House Armed Services seapower and projection forces subcommittee Chairman Randy Forbes (R-VA) and Ranking Member Mike McIntyre (D-NC) in an Aug. 12 letter to Navy Secretary Ray Mabus call on the service to "articulate the impact to the current defense strategy (Defense Strategic Guidance, 2012) if the nation were to only retain eight or nine CVNs."

InsideDefense.com reported last week that Defense Secretary Chuck Hagel's recent announcement that the Pentagon might slash the number of carrier strike groups from the 11 required by law to eight or nine had begun raising questions about how the Navy and industry would handle such a change:

Huntington Ingalls Industries President and Chief Executive Officer Mike Petters today advocated maintaining 11 carriers, but added, "If you hypothetically went and tried to say, 'We’re going to change the number to something else,' the real question is how are you going to do that?"

"Are you going to continue to use the ships that you have until their service life is expended?" he said during an earnings conference call. "Are you going to take them offline and tie them up at piers and have them be dead assets sitting at the pier? There's a whole host of decisions that would have to be made . . . that really then drive the way that the industry would support it."

The Navy has not yet publicly discussed that decision process. "The proposal to bring down the number of aircraft carriers is really still being evaluated," Rear Adm. Timothy Matthews, the Navy's director of fleet readiness, said during an Aug. 1 House Armed Services subcommittee hearing. "Obviously, one of the cost savings would be in personnel because there are, you know, roughly 5,000 folks that are assigned to the airwing and the aircraft carrier. So that's a large cost that we would be looking to reduce. But you can't just park an aircraft carrier, because it's got a nuclear reactor on it. So you would have to maintain some sort of a minimum crew or decommission the ship entirely."

If the Navy were directed to reduce the size of the carrier force from 11 to some smaller number, and if Congress amended the law to permit the reduction, the service would have three basic alternatives for implementing the directive, according to Congressional Research Service analyst Ron O'Rourke.

The first option -- canceling the procurement of one or more new carriers -- might be the least likely, O'Rourke told InsideDefense.com. Under this approach, the force would not shrink for years -- until the dates when the canceled carriers would have entered service. And the Navy would face a challenge preserving carrier-unique construction skills at Huntington Ingalls Industries' shipyard in Newport News, VA, "which in turn could increase, possibly quite substantially, the time, costs, and technical risks for building the next carrier, once construction of carriers resumed," he said.

Petters cast this option in even more dire terms. "Keep the construction process and capability alive," he said. "I think if we ever stop building the carriers we’ll never really start building them back again."

Specifically, Forbes and McIntyre in their letter this week want the following questions answered:

* What is the risk to the current defense strategy with a fleet of just eight or nine CVNs?

* At this reduced level, how many CVNs could the Navy provide our combatant commanders, both for deployment and surge?

* What is the impact of this reduced force structure on the ability of the combatant commanders to execute their current Operational Plans?

* Given the range of options the Navy would have for reducing its CVN fleet to this level, how would you assess the impact to both the carrier shipbuilding and ship-maintenance industrial base?

* Assuming a path in which the Navy attempts to maximize the operational availability of the 8 or 9 carrier fleet discussed, what would be the impact on the estimated service life of the carriers retained?

* What are the estimated annual costs of retaining a CVN in a reduced operational status?

* What are the estimated costs to bring a CVN from a reduced operational status to fully operational?

The Forbes-McIntyre letter calls on the Navy to provide as much information as possible in unclassified form, "and then we would be happy to receive any of the remaining explanations to this query in classified form."

The Pentagon yesterday evening announced $15 million "preliminary design review assessment" contract awards to Northrop Grumman, Lockheed Martin, Boeing and General Atomics for the Navy's Unmanned Carrier Launched Airborne Surveillance and Strike (UCLASS) Air Vehicle.

"The objective of the UCLASS system is to enhance aircraft carrier/air wing operations by providing a responsive, world-wide presence via an organic, sea-based Unmanned Aerial System, with persistent intelligence, surveillance, reconnaissance, and targeting, and strike capabilities," according to a Defense Department contract announcement.

Inside the Navy reported last week that the UCLASS program had cleared a major hurdle when lawmakers released the remaining funds -- nearly $600 million -- needed to launch the effort. This puts the Navy on track to release a request for proposals for the program before the end of the fiscal year, ITN reported:

The service plans to invest $2.3 billion in the program from fiscal years 2013 to 2017, Congress has restricted some early funding due to concerns over the Navy's acquisition plans. In the FY-12 and FY-13 defense authorization bills, lawmakers directed that not more than 75 percent of the funds appropriated for the program be obligated until the Navy submitted a report on the threshold and objective key performance requirements for the program, a certification that these requirements are achievable and a description of system requirements.

These reports and certifications were received by Congress on June 10. Following a 60-day waiting period, the Navy has gotten word from Capitol Hill that the program will receive the funds today, Navy spokeswoman Capt. Cate Mueller confirmed to ITN on Aug. 8. The funds will be obligated shortly, she said, and "the RFP is still on track timing wise and expected before the end of the fiscal year."  This would be the draft request for proposals for the program ahead of the final version in fiscal year 2014.

Essentially, the Navy, the Joint Staff and the under secretary of defense for acquisition, technology and logistics "sufficiently met the reporting requirements specifically outlined in the legislation and further expounded on information that the Congress previously considered lacking in detail," allowing lawmakers to move forward with releasing the $575 million -- or 25 percent -- of the appropriated funds for the program, a congressional aide told ITN Aug. 9.

The Pentagon's acquisition directorate recently issued a guidebook for how to structure programs that feature open systems.

The new guidebook "contains the basic elements to capture the benefits of an open architecture and an open business model." Further:

The essence of Open Systems Architecture (OSA) is organized decomposition, using carefully defined execution boundaries, layered onto a framework of software and hardware shared services and a vibrant business model that facilitates competition. OSA is composed of five fundamental principles:

1. Modular designs based on standards, with loose coupling and high cohesion, that allow for independent acquisition of system components:

2. Enterprise investment strategies, based on collaboration and trust, that maximize reuse of proven hardware system designs and ensure we spend the least to get the best;

3. Transformation of the life cycle sustainment strategies for software intensive systems through proven technology insertion and software product upgrade techniques;

4. Dramatically lower development risk through transparency of system designs, continuous design disclosure, and Government, academia, and industry peer reviews;

5. Strategic use of data rights to ensure a level competitive playing field and access to alternative solutions and sources, across the life cycle.

Defense Secretary Chuck Hagel and Russian Defense Minister Sergey Shoygu agreed today on the need for more bilateral military cooperation and directed their respective staffs to draw up plans to make it happen, Pentagon Press Secretary George Little said in a statement.

Before the start of today's formal "2+2" sessions -- which include Secretary of State John Kerry and Russian Foreign Minister Sergey Lavrov -- Hagel and Shoygu held their first meeting as defense counterparts, Little said, noting Hagel began by stating it is "the responsibility of major powers to find a way forward on the key issues facing our nations and the world."

"Secretary Hagel and Minister Shoygu agreed that it is time to build a more robust agenda for military cooperation and directed their staffs to put together a plan for more regular and frequent engagement," Little said. "Secretary Hagel stated that the Department of Defense is determined to overcome impediments to deeper cooperation by concluding necessary enabling agreements that will allow for improved information sharing, exchanges, joint exercises, and training. Secretary Hagel discussed the United States and NATO approach to supporting security and stability in Afghanistan post 2014. The leaders also exchanged views on Syria and the importance of supporting a political process to end the violence."

Pentagon acquisition chief Frank Kendall has issued a memo on should-cost management that "refines and clarifies [Better Buying Power] guidance to ensure managers at every level implement should-cost management in the acquisition of products, services, and programs."

Kendall calls on component acquisition executives and program executive officers to ensure that program managers "implement should cost management in all Acquisition Category I, IA, II, and III programs, including related services, regardless of life-cycle phase. CAEs and PEOs will review and approve should cost targets, monitor progress, and direct or recommend allocation of realized cost savings as appropriate."

All acquisition managers should routinely analyze all cost elements and consider reasonable measures to reduce them, with prudent, cost-benefit based considerations of associated risks. Immediate short-term savings should not come at the expense of long-term degradation of effectiveness or suitability; investments that result in long-term returns in production or sustainment efficiency should be considered and are appropriate uses of should cost related savings. Managers should also apprise their leadership of opportunities for life-cycle cost savings that are outside their span of control.

Components will continue to baseline acquisition budgets using will cost estimates and CAPE Independent Cost Estimates when available, consistent with reference (b). However, successful should cost initiatives should drive down future program budgets once the savings have been demonstrated and realized. Components have the latitude to apply savings to their most pressing unfunded requirements, or may reinvest this funding within the same programs to accelerate the acquisition, fund cost-reduction initiatives, or cover critical unfunded requirements.

CAEs will determine their own reporting requirements for effective should cost management oversight, but PMs and PEOs of Major Defense Acquisition Programs and Major Automated Information System programs will report should cost targets and progress in achieving them at Defense Acquisition Executive Summary (DAES) and Defense Acquisition Board (DAB) reviews. PMs will include in their presentations Plans of Action and Milestones for major should cost initiatives, along with annual savings projected and realized. PEOs will provide, via the DAES briefings, quantitative metrics addressing how should cost has been implemented within their portfolios, incentive and recognition mechanisms in place, and lessons learned. PEOs will also provide case studies of should cost initiatives to the Defense Acquisition University for use in its training materials and BBP repository established to collect and share best practices. Per reference (a), Defense Procurement and Acquisition Policy is developing policy for services acquisition Requirements Review Boards, for release by October 1, 2013, that will incorporate should cost reviews and reporting processes.

Inside the Pentagon reported last week that Defense Department officials expect all major defense programs to have should-cost targets in place by this month:

The Office of the Secretary of Defense is working closely with acquisition leaders on implementation to enable all acquisition programs in categories I through III to have these should-cost targets in place, Defense Department spokeswoman Maureen Schumann told Inside the Pentagon. DOD acquisition chief Frank Kendall's Better Buying Power 2.0 implementation guidance required these should-cost targets be in place by Aug. 1.

The should-cost approach is designed to help with cost control throughout a program's life cycle.

"Our expectation is that every acquisition program manager is applying should-cost principles to their programs to reduce costs wherever possible," Schumann said.

In fiscal year 2012, nearly one-third of all acquisition category I, II and III programs had implemented should-cost, according to Kendall's first annual report on the performance of the defense acquisition system.

"Reporting on program should-cost execution savings in FY2012 showed roughly 2 percent to 3 percent savings realized in FY2012 in these programs, as compared to budget levels," Kendall wrote in the June 28 report. "These savings typically have been plowed back into the programs to gain higher productivity."

DOD does not have a count of programs using should-cost, Schumann said. "However, every program that comes forward for a milestone decision includes a detailed discussion on how should-cost principles are applied," she said.

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.