The Insider

Courtney Albon | August 17, 2018 at 12:29 PM

A new Defense Department inspector general report found Air Force Space Command's supply chain could be vulnerable to adversary infiltration because of poorly implemented risk-management policies.

The DOD IG took an in-depth look at supply chain risk on the Air Force's Space-Based Infrared System and conducted a limited review of the service's Satellite Control Network, the Family of Advanced Beyond-Line-of-Sight Terminals and the GPS Next-Generation Operational Control Segment.

According to the report, released Aug. 16, the Air Force made some effort to establish risk controls on SBIRS, but fell short in several areas, largely in analyzing critical components, conducting threat assessments of suppliers who provide those parts and incorporating "rigorous test and evaluation" processes. The report notes that while AFSPC did conduct many of the required analyses, the work was not thorough enough to provide key security information.

Less intensive reviews of the AFSCN, FAB-T and GPS OCX supply chains yielded similar findings.

"As a result, an adversary has the opportunity to infiltrate the Air Force Space Command supply chain and sabotage, maliciously introduce an unwanted function, or otherwise compromise the design or integrity of the critical hardware, software and firmware," the report states.

In response, the Air Force said it plans to conduct a "criticality analysis" to identify and compile critical components and conduct threat assessments on major suppliers. AFSPC also plans to use those reports to identify risk and develop possible mitigations. The service plans to adopt more modernized reuqirements and verification processes -- assessed by an independent third party -- to make sure systems and components are secure.

AFSPC also plans to conduct a supply chain risk management review of AFSCN, FAB-T and GPS as well as other critical programs.

Marjorie Censer | August 17, 2018 at 10:53 AM

Boeing said this week it would acquire Millennium Space Systems, which provides small-satellite solutions, in a bid to expand Boeing's satellite and space portfolio.

The terms of the deal were not disclosed.

El Segundo, CA-based Millennium was founded in 2001 and has about 260 employees. The company "has developed high-performance satellites for exacting missions," Boeing said.

The deal is slated to close by the end of September. Millennium will become a Boeing subsidiary, reporting to Mark Cherry, general manager of Boeing Phantom Works.

John Liang | August 17, 2018 at 5:00 AM

Some must-reads from this week's issue of Inside the Air Force:

1. Boeing expects the Federal Aviation Administration later this month to approve a key supplemental certification for the new KC-46 tanker fleet later this month -- one of a few remaining hurdles the company must overcome before it delivers the first aircraft this fall.

Full story: Boeing eyes KC-46 FAA supplemental certification to support first delivery

2. The Air Force awarded two sizable contracts this week for hypersonic weapons development and next-generation missile warning satellites using new rapid prototyping authorities granted by Congress.

Full story: Air Force uses rapid prototyping authorities to award two contracts

3. The Air Force will maintain its plan to field new Combat Rescue Helicopters starting in fiscal year 2020 despite looming problems for training reserve squadrons, because changing the schedule would require renegotiating its contract with Sikorsky, according to a new Government Accountability Office report.

Full story: GAO: Combat Rescue Helicopter fielding schedule poses reserve training problems

4. The Pentagon hasn't yet determined the cost to create a new Space Force, but the deputy defense secretary said last week he assumes it will require "billions" of dollars in additional resources.

Full story: Pentagon still working through cost, scope of Space Force

John Liang | August 16, 2018 at 9:46 PM

The Pentagon late on Thursday released its annual report to Congress on military and security developments regarding China.

According to the report:

"The United States seeks a constructive and results-oriented relationship with China. U.S. defense contacts and exchanges conducted in 2017 were designed to support overall U.S. policy and strategy toward China. They are carefully tailored to clarify and develop areas of cooperation where it is in our mutual interest and to manage and reduce risk; contacts are also conducted in accordance with the statutory limitations of the National Defense Authorization Act for Fiscal Year 2000.

"While the Department of Defense engages substantively with the People's Liberation Army, DOD will also continue to monitor and adapt to China's evolving military strategy, doctrine, and force development, and encourage China to be more transparent about its military modernization. The United States will adapt its forces, posture, investments, and operational concepts to ensure it retains the ability to defend the homeland, deter aggression, protect our allies and partners, and preserve regional peace, prosperity, and freedom."

Read the full report.

Tony Bertuca | August 16, 2018 at 5:25 PM

The Senate has begun consideration of the fiscal year 2019 defense appropriations bill as part of a "minibus" that includes other spending legislation.

Senate Appropriations Committee Chairman Richard Shelby (R-AL) said on the Senate floor today that lawmakers are working in bipartisan fashion to pass the minibus as quickly as possible.

Defense "Secretary [Jim] Mattis -- a decorated general who commands deep respect on both sides of the aisle -- has warned that 'failure to modernize our military risks leaving us with a force that could dominate the last war, but be irrelevant to tomorrow's security,'" Shelby said. "I am pleased to report that this bill takes a big step in that direction."

The bill, which adheres to a bipartisan spending agreement brokered earlier this year, would provide $607 billion in base defense funding and a $68 billion Overseas Contingency Operations account.

Shelby noted that Congress has a poor record when it comes to passing spending legislation on time.

"It has been a dozen years since the president was able to sign a defense appropriations bill into law before the end of the fiscal year," he said.

Meanwhile, the House passed its defense spending bill in June.

The new fiscal year begins Oct. 1. If Congress does not pass an FY-19 spending package by that time, it must pass a stopgap continuing resolution or face a government shutdown.

"With the continued cooperation of my colleagues, I am confident that we will continue to get our work done in a deliberate and timely manner," Shelby said.

The Senate will begin voting on amendments Monday.

Marjorie Censer | August 16, 2018 at 3:41 PM

General Atomics Aeronautical Systems said today it will expand its Flight Test and Training Center near Grand Forks, ND.

The company said it first unveiled the expansion plan last week during a visit from Homeland Security Secretary Kirstjen Nielsen and Sen. John Hoeven (R-ND).

The "expansion is intended to address its increasing demand from U.S. and international customers for flight crew training and sensor system testing," the company said. "GA-ASI plans to add a second permanent hangar with more office and classroom space in the near term."

The company said it expects to at least double the 47 employees it has in the area.

John Liang | August 16, 2018 at 3:00 PM

The Air Force's Combat Rescue Helicopter program, defense industry news, the Senate's FY-19 defense spending bill and much more highlight this Thursday INSIDER Daily Digest.

The Air Force doesn't plan to push back its schedule to begin fielding Combat Rescue Helicopters in FY-20:

GAO: Combat Rescue Helicopter fielding schedule poses reserve training problems

The Air Force will maintain its plan to field new Combat Rescue Helicopters starting in fiscal year 2020 despite looming problems for training reserve squadrons, because changing the schedule would require renegotiating its contract with Sikorsky, according to a new Government Accountability Office report.

Defense industry news:

Industry groups tout legislation aimed at drastically reducing background investigations backlog

Industry groups are pushing Congress to compel the government to take steps to drastically reduce the backlog of background investigations as the Pentagon readies to take over the investigative process.

Huntington Ingalls hunts for new opportunities with technical solutions division

When Huntington Ingalls Industries bought Camber in late 2016, it paired the government services company with six other businesses -- from an oil and gas company to its unmanned systems group -- to create a new division called technical solutions.

Boeing eyes KC-46 FAA supplemental certification this month to support first delivery in October

Boeing expects the Federal Aviation Administration later this month to approve a key supplemental certification for the new KC-46 tanker fleet later this month -- one of a few remaining hurdles the company must overcome before it delivers the first aircraft this fall.

The White House weighs in on the Senate's FY-19 defense spending bill:

Trump administration notes objections to Senate defense spending bill

The White House "strongly objects" to a measure in the Senate's fiscal year 2019 defense appropriations bill that would add $475 million to procure a second Littoral Combat Ship, as well as host of other provisions, according to a recent statement of administration policy.

Military aviation news:

GAO: Service safety centers providing incomplete, inconsistent aviation mishap data

As lawmakers press the Defense Department for more details about the cause of increased aviation mishap rates, a recent Government Accountability Office report highlights a lack of standardization and enforcement in mishap data reporting from the services that is limiting the accuracy and breadth of the department's analysis on mishap trends.

Navy will spend $643M to upgrade 54 F-35Cs, including software to Block 3F

The F-35 Joint Program Office projects it will cost $643 million to upgrade 54 F-35C Joint Strike Fighters to Block 3F software between April 2016 and January 2020, among other modifications.

The Congressional Budget Office looks at what will happen to the defense budget if discretionary spending caps remain unchanged:

CBO: Statutory budget caps limit Pentagon base budget to $550B, $563B in FY-20, FY-21

The Pentagon's fiscal years 2020 and 2021 base budget allocations will total $550 billion and $563 billion respectively -- dramatically below Trump administration plans -- if discretionary spending caps required by the 2011 Budget Control Act for those two years are not adjusted, according to a new report from the Congressional Budget Office.

The Defense Department wants to give an Army heads-up display program more money:

Pentagon seeks $648M funding shift to accelerate Army's heads-up display technology

The Pentagon is asking Congress to approve a $648 million funding shift to accelerate a developmental Army heads-up display program championed by Defense Secretary Jim Mattis' close combat lethality task force, according to a document obtained by Inside Defense.

Defense-related cyber news from our colleagues at Inside Cybersecurity:

Mixed views as Trump scraps Obama order on offensive cyber actions

Industry sources and Obama administration veterans are expressing concerns about President Trump's decision to scrap Presidential Policy Directive-20 -- which has guided the use of cyber weapons by the military -- while other sources say this simply removes bureaucratic hurdles that have undermined cyber deterrence policy.

Defense law requires Pentagon to assist DHS with 'non-reimbursable' resources

The Fiscal Year 2019 National Defense Authorization Act signed into law this week calls on the Pentagon to provide assistance to the Department of Homeland Security in protecting critical infrastructure from cyberattacks -- in line with a long-standing arrangement between DHS and private industryy on sharing threat intelligence -- as part of a pilot project slated to run through 2022.

Marjorie Censer | August 16, 2018 at 9:47 AM

CACI International said today it has purchased General Dynamics' Navy systems engineering business, which GD had acquired through its purchase of CSRA.

The new business adds almost 1,000 employees to CACI, Ken Asbury, CACI's chief executive, said in a call with analysts today.

He pointed to the focus on shipbuilding and modernizing naval platforms, arguing CACI is now well positioned to benefit from those efforts. 

“We will remain an acquisitive strategic integrator,” Asbury added.

Meanwhile, CACI reported this week sales during its most recent quarter reached nearly $1.2 billion, up almost 3 percent from the same three-month period a year earlier.

The contractor's quarterly profit hit $52 million, up 17 percent from the prior year.

CACI attributed the sales boost to “on-contract growth of existing work and new business wins.”

The profit gains were a result of the tax reform legislation and “improved program execution.” CACI said its profit boosts were offset by investments it made in a shared services center as well as higher incentive compensation.

John Liang | August 16, 2018 at 5:15 AM

Some must-reads from this week's issue of Inside the Pentagon:

1. At the behest of President Trump, the Pentagon has begun taking immediate steps to establish a sixth branch of the U.S. military -- a Space Force -- by 2020, though its creation requires congressional authorization, according to a new report provided to Congress.

Full story: Pentagon moves to create Space Force as a new branch of the military

2. The Pentagon is considering a series of recommendations for how it can fix vulnerabilities in its supply chain and convince contractors to take security as seriously as cost, schedule and performance.

Full story:  New report offers DOD ideas on delivering capabilities 'uncompromised'

3. The new director of the Strategic Capabilities Office says several technology demonstrations are planned for the coming weeks, as he looks to maintain the "optempo" the office has set in developing novel ways of using existing conventional capabilities to deter China and Russia.

Full story: New SCO director aims to maintain 'optempo,' with tech demos forthcoming

4. The Pentagon is asking Congress to approve a $648 million funding shift to accelerate a developmental Army heads-up display program championed by Defense Secretary Jim Mattis' close combat lethality task force, according to a document obtained by Inside Defense.

Full story: DOD seeks $648M funding shift to accelerate Army's heads-up display tech

Ashley Tressel | August 15, 2018 at 4:03 PM

The Army is seeking a new reduced-range practice rocket to train crews that employ the High Mobility Artillery Rocket System and the M270A1 and A2 MLRS, according to a recent solicitation.

The service uses the current Multiple Launch Rocket System Reduced-Range Practice Rocket, which has been in service since the early 1990s, during annual live-fire rocket exercises.

The precision fires rocket and missile systems project office said today it is looking for a new system "due to future obsolescence issues with the current practice rocket."

"The overall intent of this effort is . . . to determine the best sustainable approach in the development and production of a potential RRPR replacement," the project office said.

Lockheed Martin produced the current RRPR, which has a maximum range of 15 km.

The Army issued a request for information Aug. 7 asking for schedule and cost estimates, noting its desire for a rocket with a maximum range of 19 km and at least a 10-year shelf life that would require no scheduled maintenance.

The service could begin developing the new rocket "in the early-to-mid 2020s," according to the program office.

Marjorie Censer | August 15, 2018 at 3:48 PM

Aerojet Rocketdyne said today it will expand its Arkansas facility, where it builds solid rocket motors and warheads.

"Aerojet Rocketdyne's currently envisioned expansion plans include investing in new infrastructure and creating more than 140 new jobs over the next three years," the company said. "The growth would bring total employment to approximately 900 employees at the facility."

The company recently relocated its Solid Rocket Motor Center of Excellence from Sacramento, CA, to Camden, AR, “resulting in growth for the Arkansas plant in Camden, which already produces more than 75,000 solid rocket motors annually,” Aerojet said.

John Liang | August 15, 2018 at 2:35 PM

Defense authorization legislation -- both old and new -- dominates this Wednesday INSIDER Daily Digest.

The Air Force used a mechanism included in Section 804 of the FY-16 National Defense Authorization Act to award a couple of contracts this week:

Air Force uses rapid prototyping authorities to award hypersonics, Next-Generation OPIR contracts

The Air Force awarded two sizable contracts this week for hypersonic weapons development and next-generation missile warning satellites using new rapid prototyping authorities granted by Congress.

The FY-19 NDAA contains language that approves the multiyear procurement of the E-2D Advanced Hawkeye and the F/A-18E/F Super Hornet:

NDAA authorizes multiyear deals for Hawkeyes, Super Hornets

When President Trump signed the 2019 defense policy bill on Monday, he authorized multiyear buys of two major aircraft programs for the Navy.

In a presidential signing statement released Monday, President Trump reserves the right to disregard provisions in the FY-19 NDAA that "purport to restrict the president's authority to control the personnel and materiel the president believes to be necessary or advisable for the successful conduct of military missions":

Trump concerned about NDAA's Russia, Korea and JSTARS provisions

President Trump says he has "constitutional concerns" with dozens of provisions in the Fiscal Year 2019 National Defense Authorization Act, including those addressing U.S.-Russian military cooperation, continued stationing of American troops on the Korean Peninsula and the management of several weapon systems.

Army Under Secretary Ryan McCarthy spoke with reporters at a roundtable in the Pentagon this week:

McConville: Army S&T realignment is 'a good first step' toward NDS, modernization

Army senior leaders in developing its six-year spending plan required program managers to "justify" the purpose of any effort that does not directly support one of the service's six modernization priorities, according to the vice chief of staff.

Marjorie Censer | August 15, 2018 at 10:14 AM

Perspecta said this week sales in its most recent quarter hit $793 million, up 17 percent from the same three-month period the prior year.

The contractor's quarterly profit reached $29 million, down about 9 percent from a year earlier.

During a call with analysts this week, Perspecta executives said the company's quarterly revenue was driven by 11 percent growth in its defense and intelligence segment.

Mac Curtis, Perspecta's chief executive, said during the same call the company is working on an extension of the Navy's Next Generation Enterprise Network -- or NGEN -- program.

The existing contract, he said, comes to a conclusion at the end of September. The recompetition is also underway.

"We're in the process of negotiating a sole-source extension for this contract," Curtis said. "We expect to have that signed in the next two or three weeks."

Ashley Tressel | August 15, 2018 at 9:51 AM

The Army's Rapid Equipping Force this month will complete testing of tactical vehicles equipped with electronic warfare offensive and defensive capabilities for delivery to soldiers this fall.

The REF and its partners developed the new vehicles, composed of an EW system mounted on the Mine-Resistant Ambush Protected vehicle “in response to an operational requirement to sense and jam enemy communications and networks,” the service announced Aug. 2.

The Army chose to give Forces Command soldiers at Ft. Bragg, NC, this “EW tool for contingency operations” due to the location's “close proximity to training areas, operational alignment for deployment to both Korea and Europe, and the ease of platform integration,” according to the service.

The EW equipment is based on SRC Inc's Counter Remote-Controlled Improvised Explosive Device Electronic Warfare Duke, or CREW Duke, system, currently used on Army vehicles to protect against improvised explosive devices.

A contractor in support of the REF said in an Aug. 13 email the service is delivering “several” vehicles to FORSCOM this fall and does not have any future deliveries planned.

Courtney Albon | August 14, 2018 at 5:39 PM

The Air Force has awarded Lockheed Martin a contract potentially worth $2.9 billion to build three Next-Generation Overhead Persistent Infrared satellites.

The work is slated for completion in April 2021 and the service obligated $80 million in fiscal year 2018 research and development funds at the time of the award, according to Tuesday's contract announcement.

Next-Generation OPIR is the follow-on to the legacy Space-Based Infrared System constellation. The Air Force announced in May it would sole-source development of the Next-Generation OPIR geosynchronous satellites to Lockheed, the incumbent on SBIRS. The service awarded Northrop Grumman a $47 million undefinitized contract in late June to develop the program's polar satellites. 

The Air Force has said it plans to cut four years off its schedule for the SBIRS Follow-On effort, launching the first satellite in the 2023 time frame. At least some of that time will be saved by limiting initial competition. The service hasn't provided much detail on the constellation's new capability, but said the program's schedule targets would set the pace for other Air Force programs.