The Insider

The National Geospatial-Intelligence Agency is getting a $123 million funding boost. The money was shifted over from the Military Intelligence Transfer Fund.

The details are classified, but the Pentagon released a reprogramming memo signed by Comptroller Robert Hale and dated June 8 announcing the funding switch.

In related news, Inside the Pentagon reported in April that the Defense Department had asked Congress for new authority to permit NGA to provide imagery intelligence and geospatial information support to regional organizations with defense or security components and security alliances of which the United States is a member. ITP further reported:

The initiative, one of several Defense Department legislative proposals submitted to Congress this month, would be an expansion of existing authority that lets the agency, called NGA for short, share mapping, charting and geodetic data support.

"Under current law, the NGA may only provide mapping, charting and geodetic data to security alliances and regional organizations such as the North Atlantic Treaty Organization (NATO) and the European Union (EU)," the proposal states. "As a result of the War on Terrorism, piracy and other recent national security issues, there are increasing requests for NGA to support these alliances and organizations and their forces with a broad range of geospatial intelligence (GEOINT)."

The proposal states the agency "has been able to find alternative legal basis for the requests to date but requires statutory changes to address the full range of anticipated requirements from these alliances and organizations." The agency can now provide foreign countries with imagery intelligence and geospatial information support. But increasingly the agency has been asked to provide "certain GEOINT support to military operations conducted by NATO in Afghanistan and security and peacekeeping operations conducted by the EU in the Balkans and Africa," DOD writes.

The agency has handled these requests by providing support to the individual countries involved or to a coalition of countries; by supporting the GEOINT needs of the State Department and other U.S. departments; by heeding a pact with NATO that permits the purchase of limited-distribution maps as foreign military sales; and by using other specific, limited and mostly temporary authorities.

The White House will likely not be able to complete its export-control reform initiative by the end of the year, Inside U.S. Trade reported on Friday. According to Commerce Under Secretary for Industry and Security Eric Hirschhorn, the Obama administration still plans to make as much progress as possible in finalizing category revisions of the U.S. Munitions List (USML) and beginning to formally notify Congress of its intent to move items to the less stringent controls of the Commerce Control List (CCL). Inside U.S. Trade further reported:

"I don't think we can complete the whole thing in this calendar year, but I think we can get a lot more done in terms of Section 38(f) notices [required to move items off the USML], putting some regs into final form, and publishing them," Hirschhorn told the President's Export Council Subcommittee on Export Administration (PECSEA) on June 4. "Certainly if the president is re-elected, we're going to see it through."

His statement was the most definitive one so far that the administration will not meet its goal of completing the category revisions and congressional notifications by the end of the year (Inside U.S. Trade, Dec. 9, 2011 & March 2).

Assistant Secretary for Export Administration Kevin Wolf told the group that the earliest a congressional notification could take place under Section 38(f) of the Arms Export Control Act would be August or September of this year.

Once formally notified, Congress has 30 days to pass a resolution of disapproval through both chambers to stop a USML transfer. That timeline has been expanded considerably in the past through an informal process of consultations prior to submitting formal notifications.

But Hirschhorn and Wolf said at a PECSEA lunch meeting they did not see much more need for such an informal process in advance of a formal notification for the export control reform initiative transfers because of the extensive consultations the administration has already held with Congress over more than a year.

"We have done a great deal [of consultation]; it is getting to be time to get moving," Hirschhorn said. Asked if he sees the next step for the administration in the fall as a formal notification, Hirschhorn said "correct."

He said that the administration is trying very hard not to "jam anybody" in Congress, and has done dozens of meetings and briefings for Congress, and invited further consultations at any time. "But at some point, we are going to have to go forward," he said.

The details of the Section 38(f) process remain shrouded in controversy because the House is demanding more detailed information on the items to be transferred than the administration considers appropriate or possible to provide. The House approved these demands as part of the 2013 National Defense Authorization Act (NDAA), and Hirschhorn blasted that legislation as at a minimum substantially delaying the export control reform drive or potentially crippling it altogether.

The House-passed bill would require the administration to include in its Section 38(f) notice an "enumeration" of the items to be transferred "to the extent practicable." According to critics, the term "enumeration" can be read as requiring an item-by-item list for transfers, which the administration argues would be impossible to provide.

Hirschhorn said Commerce was working with Congress to find language for the final version of the bill that would be more acceptable to the administration. He noted that the administration has been "kicking around" a long list of words as alternatives to "enumeration" that it hopes might end up in the legislation and "could work a lot better."

Naval Sea Systems Command announced this morning that it "intends to award FY13-14 STANDARD Missile-6 (SM-6) Block I and STANDARD Missile-2 (SM-2) Block IIIA/IIIB requirements on a sole source basis to Raytheon," according to a Federal Business Opportunities notice. The SM-6 is seen as the cornerstone to the land-based portion of the Obama administration's proposed phased adaptive approach to regional missile defense. The announcement further states:

The requirement consists of SM-6 Block I and SM-2 Block IIIA/IIIB missiles, spare components and sections, telemeters/installation kits, replenishment spares, and shipping containers, as well as SM-6 Block I instrumentation kits. Foreign Military Sale (FMS) items include SM-2 Block IIIA/IIIB missiles, shipping containers, and spare components and sections. The Government intends to procure the missiles as AURs, which include all major SM-6 Block I components (guidance section, power control and telemetry section, steering control section, rocket motor, fuze booster, fin set, target detecting device, and thrust vector assembly) and SM-2 Block IIIA/IIIB components (safe and arm device, warhead, rocket motor, fuze booster, and target detecting device) required for AUR missile configuration.

Additionally, this procurement will include level-of-effort (LOE) design agent engineering and technical services. Raytheon is the only company with the requisite expertise, knowledge, experience and facilities necessary to meet requirements for the STANDARD Missile program. Companies interested in subcontracting opportunities should contact Raytheon Company directly.

The proposed contract action is for supplies or services for which the Government intends to solicit and negotiate with only one source under authority of FAR 6.302. Interested persons may identify their interest and capability to respond to the requirement or submit proposals. This notice of intent is not a request for competitive proposals.

However, all proposals received within forty-five days (thirty days if award is issued under an existing basic ordering agreement) after date of publication of this synopsis will be considered by the government. A determination by the Government not to compete this proposed contract based upon responses to this notice is solely within the discretion of the government. Information received will normally be considered solely for the purpose of determining whether to conduct a competitive procurement.

House Armed Services strategic forces subcommittee Chairman Mike Turner (R-OH) is calling on President Obama to follow through on the promises the president made to the Senate during the ratification of the follow-on Strategic Arms Reduction Treaty in 2010.

"Without the [nuclear weapons] modernization program and the President's promises to fund and implement it, concerns in the Senate about the treaty would have prevented it from being modified," according to a statement accompanying a June 5 letter Turner released today.

"For the first time, the U.S. has signed a treaty that required it to undertake unilateral reductions," Turner's letter states, adding: "There is a growing concern, including by your former Secretary of Defense, about the safety, security, reliability, and credibility of the U.S. nuclear deterrent."

The congressman's letter notes that Obama in December 2012 had stated about the nuclear weapons modernization plan "[t]hat is my commitment to the Congress-that my administration will pursue these programs and capabilities for as long as I am President."

In his letter, Turner complains that the administration's fiscal year 2013 nuclear weapons modernization budget request "was significantly below what you promised in November 2010 and as much as $4 billion below what is projected for just the next five years in the section 1251 plan."

Additionally, the lawmaker cites a May 18 Office of Management and Budget memo which states that "overall agency request for 2014 should be five percent below . . . the 2013 budget."

InsideDefense.com reported yesterday that OMB is exempting the Pentagon from that guidance, according to a government spokesman. Further:

"All agencies are being asked to identify efficiencies and ways to get the most from taxpayer dollars," OMB spokesman Kenneth Baer said in a statement to InsideDefense.com today. "The Department of Defense, however, is in a unique situation as it already has put together a detailed spending plan -- consistent with the Budget Control Act -- for the next five, and even 10, years.

"So, while DOD will have to identify areas of savings and efficiency, they are not being asked to submit a 5-percent-cut scenario," he added.

Specifically, the Pentagon is relieved from budget guidance issued by OMB acting director Jeffrey Zients on May 18, in a three-page memo to department and agency heads instructing them to assume smaller FY-14 budgets than those laid out by the administration in its FY-13 budget proposal sent to Congress in February.

The government "will need to make hard choices," Zients wrote. Discretionary spending levels -- enacted last summer as part of a deal between the White House and House Republican leaders to raise the debt ceiling -- will "continue to sharply constrain discretionary spending," his memo adds. "Unless your agency has received different guidance from OMB, your overall agency request for 2014 should be 5 percent below the net discretionary total provided for your agency for 2014 in the 2013 budget."

Accordingly, the Pentagon is expected to build an FY-14 budget in line with spending levels outlined in February -- a topline of $533.6 billion in the base budget, a sum that allows for no real growth, or increases above the rate of inflation.

Pentagon leaders last fall revised the military's long-term spending plans in accordance with spending levels required by the Budget Control Act, cutting $486.7 billion from planned spending through 2021. DOD's FY-13 base budget proposal, $525.4 billion, marked a $45.3 billion reduction from earlier plans. In total, the Pentagon trimmed $259.4 billion from its five-year spending plan to comply with discretionary spending levels enacted last summer.

The Missile Defense Agency has awarded a $2 billion "sole-source letter" contract to Lockheed Martin Space Systems for 42 Terminal High-Altitude Area Defense system interceptors, according to a Pentagon statement released late yesterday afternoon:

The government intends to combine this procurement with the Foreign Military Sales for the United Arab Emirates procurement of 96 interceptors, previously synopsized as an [undefinitized contract action] under basic ordering agreement HQ0147-12-G-9000, in order to gain synergy cost savings. This UCA covers the combined procurement of a minimum of 138 interceptors.  This work will be managed in Sunnyvale, Calif., with final assembly performed in Troy, Ala.  The performance period extends from June 4, 2012 through July 31, 2018. . . . Definitization of the UCA is anticipated no later than Nov. 30, 2012.

Inside the Army reported last month that Senate defense authorizers had added $100 million for THAAD interceptors on top of the administration's $461 million fiscal year 2013 request.

In authorizing a total of $561 million for THAAD interceptor procurement, Senate authorizers followed the lead of the House Armed Services Committee, which in April added $127 million for the program to buy 12 more interceptors than defense officials had requested in the budget. ITA further reported:

Senators authorized $1.5 billion for Army and "related" missile defense programs as part of an overall $9.7 billion missile-defense package requested by the administration, according to the committee's statement on the markup of the FY-13 bill.

Meanwhile, the THAAD program was mentioned briefly in an interim report from NATO defense contractors in preparation for the alliance's NATO summit in Chicago earlier this month. The study fleshes out how NATO's stated goal of increasing the sharing of defense assets among member nations would work in a notional ballistic missile defense framework that would include Russia.

"If THAAD were procured by a NATO country, it would be a candidate for pooling and sharing interceptor missiles," the document reads.

Lockheed Martin is part of the NATO Industrial Advisory Group, which prepared the report.

Acting Pentagon acquisition chief Frank Kendall recently signed a memo giving the Army full milestone decision authority over the Stryker family of vehicles, which Army and industry sources say will be used to launch a pilot program to reset flat-bottomed variants with double-V hulls.

As Inside the Army reports this week:

"I delegate MDA for the Stryker FoV to the Secretary of the Army," [Kendall] wrote. "Nine of the ten variants in the Stryker FoV are in full-rate production and the remaining variant, the Mobile Gun System, is in low-rate initial production. The program has submitted a final Selected Acquisition Report since it is more than 90 percent expended."

Officials from the Army and General Dynamics Land Systems, the contractor for the Stryker program, said they believed the new authority would allow the Army to begin a planned $60 million pilot program to reset 50 flat-bottomed Strykers with DVHs. ITA first broke news of the planned DVH reset program in April.

"The Army still intends to move forward with the flat bottom/DVH pilot program," according to an Army official not authorized to speak on the record. "It meets a requirement in theater and it saves money."

The Stryker DVH was developed to make the vehicle more survivable against underbody blasts from improvised explosive devices. The DVH reset program would include 47 standard Strykers and two battle-damaged Strykers at approximately $1.2 million apiece, a GD official close to the issue told ITA in April.

"We expect the Army will issue its own directive on the number of vehicles (49) that will be included in a flat-bottom-double-V hull exchange pilot program," according to a May 29 statement from GD.

View the memo.

The Pentagon last month issued an updated instruction memo that "establishes policies, assigns responsibilities and prescribes procedures for accounting, procuring, and distributing items of new and combat-serviceable equipment for the Reserve Components (RCs) of the military services." According to the May 16 instruction memo:

a. The RCs of each Military Department shall be equipped to provide the operational capabilities and strategic depth required of an operational force in accordance with DoDD 1200.17 ["Managing the Reserve Components as an Operational Force," October 29, 2008]. To fulfill assigned missions, the RCs of each Military Department shall be consistently and predictably equipped. The RCs must have the right equipment, available in the right quantities, at the right time, and at the right place to support a "Train, Mobilize, and Deploy" construct for the Total Force.

b. Equipment procurement programs and distribution plans shall be responsive to homeland defense (HD) and defense support of civil authorities (DSCA) requirements and the combatant commanders' mission requirements to meet the requirements in [Deputy Secretary of Defense Memorandum, “Final Plan for Commission on the National Guard and Reserves Recommendations #42/43," September 18, 2009 (hereby cancelled)] and DoDD 3025.18 ["Defense Support to Civil Authorities (DSCA)," December 29, 2010]. The DoD's goal is to fill the mission equipment requirements of the RCs consistent with Total Force requirements and priorities. The priority for the distribution of new and combat-serviceable equipment, with associated support and test equipment, shall be given to units scheduled for mission deployment or employment first, regardless of component. Equipment distribution and modernization priorities for RC units shall be established by applying the same methodology as used for Active Component (AC) units having the same mission requirements.

c. Equipment priorities shall be established regardless of component for the reconstitution and resetting of force capabilities after contingency operations and transformation of the force into a revised force structure to meet future mission requirements. Accountability of RC equipment inducted into and distributed out of maintenance facilities will ensure equitable distribution in capability and modernization level regardless of component. Sufficient equipment must be available to support training and readiness requirements of the RCs and its personnel for Federal, HD, and DSCA missions. Special consideration should be given to dual use equipment for the RCs. Equipment to meet training requirements does not need to be assigned to the unit using it for training purposes; equipment pools and use of simulation trainers are encouraged. Simulation strategies should be developed to offset the need to maximize equipment levels available for training. The formation and use of multi-component units is encouraged to maximize resources while increasing operational effectiveness in support of warfighters.

d. Full transparency and traceability shall be provided from procurement planning to delivery to the RC. To achieve the goal of transparency of RC procurement funding, disciplined reporting from the Services is required to both DoD leadership and the Congress. The equipment transparency report (ETR) is a critical deliverable for DoD and Congressional leaders. Diversions of funding of equipment shall be reported on the ETR in accordance with this Instruction. Information that reveals RC readiness status will be classified and protected in accordance with appropriate classification standards.

e. Proposals for withdrawals, reductions, or loans of any equipment from the RCs, together with an equipment replacement plan for the removed equipment and a memorandum of agreement (MOA) signed by both the losing and gaining components, shall be forwarded for Secretary of Defense approval through the procedures outlined in this Instruction. Equipment transfer conditions subject to this approval process include:

(1) All withdrawals, reductions, or loans outside of the RC that will last longer than 90 days except those previously approved by the Secretary of Defense as described in paragraph (4), those actions that benefit the RC such as testing/evaluation, depot maintenance, conversions, and/or repair that upon completion will be immediately returned to the original RC, and retirements or other transfers previously approved by Congress.

(2) Transfers to other governmental departments or other countries to satisfy United States Security Assistance Program requirements.

(3) Equipment directed (inter or intra-component) by the Military Department or combatant commander to remain in a theater of operations beyond the original owning unit’s rotation for an enduring mission requirement.

(4) Transfer incidental to a force restructuring unless that force restructuring was previously approved by a Secretary of Defense decision after the facts of the transfer were presented during issues team deliberations, three-star programmer reviews, and the defense advisory working group so that the impacts to the RC were fully analyzed and understood.

(5) Diversions of equipment funded through the National Guard and Reserve Equipment Appropriation (NGREA) or Congressional additions specified for equipping RCs.

f. Continued transparency of equipment existing in RC units is paramount. All accountable equipment shall be documented in accordance with DoDI 5000.64 ["Accountability and Management of DoD-Owned Equipment and Other Accountable Property," May 19, 2011] and a quarterly equipment movement report (EMR) will be a vehicle for maintaining transparency.