The Insider

January 29, 2018 at 8:37 AM | Lee Hudson

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

1. The Pentagon's independent operational test and evaluation office has warned the Navy its CH-53K heavy-lift helicopter is unlikely to meet the service's goal of declaring initial operational capability in December 2019, becoming the second office to do so.

Full Story: Second Pentagon office says CH-53K helicopter IOC will be late

2. The F-35 program office has not purchased another F-35B ground article nearly a year after halting durability testing because the original test jet was no longer production representative.

Full Story: DOD has not purchased second F-35B test article, awaiting Lockheed study

3. The Marine Corps plans to kick off in the third quarter of fiscal year 2021 a new competition to replace its aging Light Armored Vehicle fleet.

Full Story: Marines set to release armored reconnaissance vehicle solicitation in FY-21

January 29, 2018 at 8:32 AM | Courtney McBride

Some must-reads from this week's edition of Inside the Army:

1. The Army's top civilian wants to modernize the force, but aims to avoid the extended acquisition time lines that have characterized previous efforts.

Full story: Esper: Modernization push will avoid pursuit of 'unobtanium'

2. The Army's effort to "install and characterize" non-developmental active protection systems on its combat vehicles has come with delays and limited successes, according to a new report.

Full story: DOT&E urges Army to conduct 'more operationally realistic testing effort' for APS

3. Early testing of the Pentagon's $7 billion replacement program for the Army and Marine Corps' laser- and radar-guided air-launch missiles -- the Joint-Air-to-Ground Missile (JAGM) -- has turned up cyber vulnerabilities and difficulty in select situations launching it from the Army's most advanced attack helicopter, the AH-64E Apache.

Full story: JAGM testing turns up cyber vulnerability, AH-64E integration glitches, missed shots

4. The Army is in the midst of a review of all requirements for small unmanned aircraft systems, with the results expected to drive all future small UAS requirements, the service told Inside the Army.

Full story: Army reviewing all small unmanned aircraft system requirements

January 29, 2018 at 5:00 AM | Tony Bertuca

The week will be dominated by President Trump's State of the Union address Tuesday. Meanwhile, Congress has scheduled committee hearings on defense issues and several contractors will hold quarterly earnings calls. Several Washington think tanks have also scheduled events focused on defense and national security.

Monday

Lockheed Martin executives are slated to discuss the company's quarterly earnings.

Engility and KeyW are set to present at Noble Capital Markets' investor conference in Florida.

The Brookings Institution previews the State of the Union.

The Center for Strategic and International Studies hosts an event on Russia's electronic warfare capabilities.

The Hudson Institute hosts an event on maritime strategy.

The Heritage Foundation hosts an event on U.S. military relations with Qatar.

Tuesday

The president delivers his State of the Union address.

The Senate Armed Services Committee holds a hearing on U.S. strategy for the Korean Peninsula and Indo-Pacific region.

The House Armed Services Committee holds a hearing on future warfare.

Harris executives are set to discuss the company's quarterly earnings.

Wednesday

Boeing and Textron executives are expected to discuss quarterly earnings.

Thursday

CACI International executives are set to discuss the contractor's quarterly earnings.

The Heritage Foundation holds an event focused on U.S. naval capabilities.

The Hudson Institute hosts an event on the South China Sea.

January 27, 2018 at 2:00 PM | Tony Bertuca

President Trump is expected to deliver a familiar message on defense and national security at his State of the Union address on Tuesday, calling for "peace through strength," a "rebuilding" of the military and "clarity" in terms of U.S. allies and adversaries, according to a senior administration official who briefed reporters.

The official, who spoke to reporters Friday, said "building a safe, strong and proud America" will be the central theme of the speech.

The speech is expected to adhere to the administration's new National Security Strategy and National Defense Strategy.

Meanwhile, as first reported by Inside Defense, the administration is poised to request a significant increase in defense spending for fiscal year 2019.

The senior administration official declined to provide policy specifics, but said the speech's other key topics would include a focus on economic prosperity, a $1 trillion infrastructure effort, reciprocal trade deals and immigration.

Trump can also be expected to "talk about North Korea," the official said.

The president's speech comes amid gridlock in Congress that shut down the federal government for three days. If a bipartisan agreement is not reached on spending -- which also includes debate about immigration policy -- the government could again close when a short-term continuing resolution expires Feb. 8.

January 26, 2018 at 3:12 PM | Marjorie Censer

Northrop Grumman said this week it will create a new sector known as Northrop Grumman Innovation Systems once it closes the acquisition of Orbital ATK.

Speaking to analysts Thursday, Kathy Warden, Northrop's president and chief operating officer, said she expects the deal to close in the first half of this year. The Federal Trade Commission is reviewing the transaction in consultation with the Pentagon, she added.

"As we prepare for integration, we are making good progress in our plans to combine our two outstanding companies after close," Warden said.

The contractor will establish a fourth sector -- innovation systems -- following the close. Blake Larson, Orbital ATK's chief operating officer, will lead the innovation systems business.

Scott Lehr, Mike Kahn and Frank Culbertson, who head Orbital ATK's flight systems, defense systems and space systems units respectively, will also remain in place, according to Warden.

"Maintaining this leadership team will ensure operational continuity and facilitate the integration of our two companies," she said.

January 26, 2018 at 1:19 PM | Marjorie Censer

Rockwell Collins said today sales in its government systems group during the most recent quarter reached $573 million, up 21 percent from the same three-month period a year earlier.

The business saw the greatest increase in its communication and navigation sales. Rockwell Collins attributed the boost to its B/E Aerospace acquisition. Additionally, the business recorded "higher test and training range and legacy communication sales."

The government systems unit's quarterly profit hit $109 million, up 14 percent from the prior year. Yet, the contractor said the division's operating margin declined because of "unfavorable sales mix, higher employee compensation costs, and higher pre-production engineering amortization."

January 26, 2018 at 1:15 PM | John Liang

The latest DOT&E report continues to dominate the INSIDER Daily Digest, with a special emphasis on the Air Force today.

The Pentagon's annual operational test and evaluation report looks at a variety of Air Force programs, including the KC-46 airborne refueling tanker, the Space Fence radar, the Air Operations Center Weapon System and more:

Air Force questions DOT&E assessment of KC-46 EMP tests

The Air Force is working with the Pentagon's top weapons tester to "reconcile" concerns raised this week that KC-46 electromagnetic pulse testing completed last summer may not have met the conditions of the program's test and evaluation master plan.

JMS operational test schedule 'unrealistic,' DOT&E says

The director of operational test and evaluation said in his 2017 report the Air Force's test plan for the Joint Space Operations Center Mission System is unrealistic and could cause delays to the Space Fence radar.

Air Force fields AOC upgrades despite continued cybersecurity gaps

The Air Force chose to field upgrades to the Air Operations Center Weapon System last year even though it knew cybersecurity vulnerabilities persisted, the Pentagon's director of operational test and evaluation said in his fiscal year 2017 report released this week.

MS-177 sensor, new weather radar pose problems in Global Hawk testing

Developmental testing on Northrop Grumman's RQ-4 Global Hawk revealed the MS-177 sensor's electromagnetic interference could lead to false signals intelligence reporting, the Pentagon's director of operational test and evaluation wrote in his fiscal year 2017 report released this week.

Air Force completes MOP testing; counter-WMD project launched in 2004 now program of record

The Air Force last year completed a fourth round of upgrades to Boeing's Massive Ordnance Penetrator -- a 30,000-pound bunker-busting bomb designed to hit deeply buried targets -- and established the weapon, the largest conventional explosive in the U.S. military inventory, as a formal program of record, according to a new report.

Navy-related DOT&E news:

Second Pentagon office says CH-53K helicopter IOC will be late

The Pentagon's independent operational test and evaluation office has warned the Navy its CH-53K heavy-lift helicopter is unlikely to meet the service's goal of declaring initial operational capability in December 2019, becoming the second office to do so.

DOT&E: Navy will complete operational evaluation of LHA-6 to support 20 F-35s in FY-20

The Navy will complete the operational evaluation of the America-class amphibious assault ship's ability to support 20 Joint Strike Fighters in fiscal year 2020, according to a new Pentagon report.

Check out Inside Defense's full DOT&E report coverage →

The head of the Air Force's Air Combat Command had a lot to say at the Brookings Institution earlier this week:

Air Force invites airborne networking proposals as 'combat cloud' plans begin

Air Force Air Combat Command is planning a second airborne networking industry day this spring to build on discussions from last year's meeting, with the goal of developing cloud-based technology that allows fourth- and fifth-generation aircraft to communicate.

Holmes suggests FY-19 multidomain investment priorities

The head of Air Force Air Combat Command this week outlined three near-term investments he believes the Air Force should make to achieve true joint, multidomain operations, as the Pentagon expects to publish its fiscal year 2019 budget request early next month.

Air Force, Army plan joint multidomain tabletop exercises

Air Force Air Combat Command and the Army's Training and Doctrine Command will begin a series of four tabletop exercises over the next year to refine how the services would approach multidomain combat together, the head of ACC said this week.

Last year's enterprise study of multidomain command and control led the Air Force to create a "Shadow Operations Center":

'Shadow OC' scoping out first project but faces resource constraints

The commander overseeing the Air Force's fledgling "Shadow Operations Center" at Nellis Air Force Base, NV, recently told Inside the Air Force he wants to choose the group's first project within the month but that the effort could be hamstrung by funding and personnel shortages.

The hypervelocity gun weapon system holds the promise of conducting defenses against aerial, cruise missile and ballistic missile threats at a drastically reduced price:

SCO aims to transition hypervelocity weapon to services within the next year

The Strategic Capabilities Office expects to hand off development of the hypervelocity gun weapon system to the services within the next year.

Companies will likely need to adjust their onboarding training and their monitoring of former senior officials who come to work for them:

Experts say NDAA provision on lobbying could catch some in industry by surprise

Government contracting attorneys and advocates say a provision in the Fiscal Year 2018 National Defense Authorization Act on lobbying by former government officials is more restrictive than previous regulations and might surprise defense contractors.

January 26, 2018 at 10:18 AM | Lee Hudson

Florida senators Bill Nelson (D) and Marco Rubio (R) are urging President Trump to include funding in the fiscal year 2019 budget to homeport a nuclear-powered aircraft carrier at Naval Station Mayport, FL.

In 2007, the Navy decommissioned the conventionally powered aircraft carrier John F. Kennedy (CV-67), and since that time no aircraft carrier has been homeported at Mayport.

"In 2009, the US Navy officially announced its decision to homeport a CVN at Mayport, and the [Defense Department's] 2010 Quadrennial Defense review supported the Navy's decision," according to a Jan. 25 letter sent to Trump from Nelson and Rubio. "Then Chief of Naval Operations Admiral Gary Roughead testified 'a catastrophic event . . . has the potential to severely limit East Coast Carrier operations,' as justification for its inclusion in the DOD's 2010 Quadrennial Defense review and the US Navy Fiscal Year 2011 budget."

Nelson and Rubio recommend funding necessary improvements at Mayport such as construction of nuclear propulsion maintenance facilities in the FY-19 budget request.

"Strategic dispersal of our capital ships is a long-held Navy requirement and only prudent considering the cost and strategic value to our national defense," the letter reads.

January 26, 2018 at 9:55 AM | John Liang

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

1. The White House Office of Management and Budget told Congress in a recent report that significant changes to space organization within the Defense Department, including the option to create a separate 'Space Force,' are "not only prudent, but also necessary" -- an apparent departure from DOD's stance on space organizational reform.

Full story: OMB report highlights 'Space Force' merits, differs from DOD, Air Force stance

2. The commander overseeing the Air Force's fledgling "Shadow Operations Center" at Nellis Air Force Base, NV, recently told Inside the Air Force he wants to choose the group's first project within the month but that the effort could be hamstrung by funding and personnel shortages.

Full story: 'Shadow OC' scoping out first project but faces resource constraints

3. The Air Force is working with the Pentagon's top weapons tester to "reconcile" concerns raised this week that KC-46 electromagnetic pulse testing completed last summer may not have met the conditions of the program's test and evaluation master plan.

Full story: Air Force questions DOT&E assessment of KC-46 EMP tests

4. The Pentagon's new chief weapons tester said in his 2017 report he expects initial operational test of the F-35 Joint Strike Fighter will likely begin late this year -- a shift from his predecessor's prediction that operational testing could be delayed until 2020.

Full story: DOT&E eyes 2018 F-35 IOT&E start; Gilmore predicted further delays

January 25, 2018 at 5:03 PM | Tony Bertuca

The House Appropriations Committee today, in the middle of a partisan standoff over immigration and budget policy, re-introduced its fiscal year 2018 defense spending bill.

A House staffer said the bill was being re-introduced because GOP leadership promised the Freedom Caucus they would do so during recent shutdown negotiations.

The bill, the staffer said, can now be used by Republicans in the House as a political tool to highlight gridlock in the Senate, which continues to be mired in debate over issues involving immigration and relief from defense and non-defense caps set by the 2011 Budget Control Act.

"This important legislation reflects what our military leaders have recommended in countless meetings and briefings and demonstrates our commitment to restoring military readiness, force modernization efforts, and maintaining technological superiority on the battlefield," House Appropriations defense subcommittee Chairwoman Kay Granger (R-TX) said in a statement.

The bill funds the Defense Department's base budget at $584 billion and its Overseas Contingency Operations account at $75.1 billion.

The legislation is virtually the same as the FY-18 defense appropriations bill that passed the House in July and again in September as part of an omnibus funding measure, except that it now includes an additional $1.2 billion in Overseas Contingency Operations spending to support 3,500 additional U.S. troops in Afghanistan -- something the White House did not request until November.

"It is past time that this essential, must-pass Department of Defense funding bill is enacted into law," House Appropriations Committee Chairman Rodney Frelinghuysen (R-NJ) said in the statement. "Congress must act responsibly and quickly to get these dollars out the door and where they are needed as soon as possible."

Meanwhile, Congress, fresh from a three-day government shutdown, passed a short-term continuing resolution Monday set to expire on Feb. 8. If by then lawmakers do not reach a bipartisan deal on spending or extend the CR, the government will again close.

January 25, 2018 at 2:10 PM | John Liang

The director of operational test and evaluation's latest annual report dominates this Thursday INSIDER Daily Digest.

The latest annual report from the Pentagon's operational test and evaluation office -- which Inside Defense obtained a copy of before its official release -- has a lot to say about a variety of weapon systems under development. Check out our coverage so far:

DOD programs:

DOD's new weapons testing chief says test ranges do not match capabilities of adversaries

The Pentagon's new director of operational test and evaluation is concerned that existing methods for measuring the performance of U.S. weapon systems do not adequately reflect the threats posed by potential adversaries, especially in the cyber and space realms, according to a new report obtained by Inside Defense.

DOT&E: MDA shielded GMD system from cybersecurity assessment during marquee 2017 flight test

The Missile Defense Agency effectively cordoned off salient elements of the Ground-based Midcourse Defense system from independent cybersecurity experts attempting to assess its vulnerability during a marquee 2017 flight test, which the Pentagon hailed as a success after intercepting an intercontinental ballistic missile-class target, according to a new report.

Air Force programs:

DOT&E eyes 2018 F-35 IOT&E start; Gilmore predicted further delays

The Pentagon's new chief weapons tester said in his 2017 report he expects initial operational test of the F-35 Joint Strike Fighter will likely begin late this year -- a shift from his predecessor's prediction that operational testing could be delayed until 2020.

Army programs:

DOT&E urges Army to conduct 'more operationally realistic testing effort' for APS

The Army's effort to "install and characterize" non-developmental active protection systems on its combat vehicles has come with delays and limited successes, according to a new report.

Navy programs:

Cybersecurity vulnerabilities found in CANES force-level variant

The force-level variant of the Navy's afloat enterprise system is "not survivable in a cyber-contested environment," according to the director of operational test and evaluation's latest report released Jan. 24.

Offensive Anti-Surface Warfare program to undergo quick reaction assessments in FY-18, 19

The Navy's Offensive Anti-Surface Warfare (OASuW) Increment 1 program will undergo quick reaction assessments in fiscal years 2018 and 2019.

DOT&E, Navy disagree on Expeditionary Sea Base self-defense capability

The Pentagon's operational test and evaluation community is at odds with the Navy on the level of self-defense capability needed for an Expeditionary Sea Base, dubbed a T-ESB.

Meanwhile, earnings season rolls along apace:

Defense contractors report sales boosts

Some of the largest defense contractors today said they saw sales increases in 2017.

The Pentagon's industrial policy chief testified this morning before the Senate banking committee on foreign investment in the United States:

DOD supports increased scrutiny of foreign investments that could threaten defense industrial base

The Defense Department supports a proposed law that would expand the scope of the Committee on Foreign Investment in the United States to allow for more detailed government reviews of business transactions, especially those involving China and emerging technologies, that could put the defense industrial base at risk.

Document: Senate hearing on CFIUS


New York City-based Persistent Systems has lost a protest over the Army's two-channel radio request for proposals:

GAO rejects contractor's protest of Army's Leader Radio RFP

The Government Accountability Office has denied a bid protest filed over the Army's planned acquisition of a two-channel radio for team, squad and platoon leaders.

The Government Accountability Office wants Congress to pay more attention to the personnel security clearance process:

GAO adds security clearance process to 'high-risk list'

The Government Accountability Office has added the personnel security clearance process to its "high-risk list," aiming to draw increased lawmaker scrutiny to the background investigations backlog as the Defense Department prepares to take over investigations for its own personnel.

January 25, 2018 at 12:51 PM | Justin Katz

General Dynamics intends to invest $1.7 billion and $200 million in its submarine and shipbuilding businesses, respectively, over the next several years, according to the company's chief executive.

The announcement came from GD chief executive Phebe Novakovic during a Jan. 24 earnings call.

"In response to the significant, increased demand from our Navy customer across all three of our shipyards, we are investing in each of our yards," Novakovic said, citing increased production of the block V Virginia submarine and Columbia ballistic missile submarine.

She also said GD has increased its internal training programs, hiring and training 4,600 workers in the last two years at Electric Boat.

The company's $200 million shipbuilding investment will go to Bath Iron Works and NASSCO "to meet the Navy's demand for more destroyers and auxiliary ships," Novakovic said.

January 25, 2018 at 12:06 PM | Lee Hudson

Aviation readiness is the Marine Corps' biggest challenge after suffering 12 Class A aviation mishaps last year, according to the service's top officer.

Marine Corps Commandant Gen. Robert Neller said the service is in the process of purchasing new aircraft and streamlining its parts supply process so that more jets are on the ramp ready to fly.

"We had a horrible year last year -- we had 12 Class A mishaps," he said speaking at a Center for Strategic and International Studies event in Washington. "The majority of them were not the result of the materiel condition of the airplane."

In fiscal year 2018, the Marine Corps has suffered one Class A mishap. On Oct. 10, a CH-53E engine fire occurred in flight forcing the pilot to make an emergency landing. There were no injuries to the aircrew, according to the Naval Safety Center.

On average, Marine Corps pilots fly 11 to 16 hours per month, Neller said. "We've got to get more hours, we've got to get more time in the air," he said.

Many of the service's pilots are leaving to work for commercial airlines where they can get more flight hours. "You can't blame them," Neller said. "The best thing we can do is provide ready, basic aircraft for them to fly."

January 25, 2018 at 11:12 AM | John Liang

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

1. The Defense Department, along with the rest of the federal government, will release its fiscal year 2019 budget request on Feb. 12, according to the White House Office of Management and Budget.

Full story: OMB: Pentagon to submit FY-19 budget Feb. 12

2. Defense Secretary Jim Mattis has successfully lobbied the White House to increase the Pentagon's fiscal year 2019 base budget by approximately $35 billion to $40 billion, according to government sources and analysts with knowledge of the negotiations.

Full story: Sources: Mattis went to Trump for Pentagon budget growth -- and got it

3. Defense Secretary Jim Mattis said last week the new National Defense Strategy emphasizes military capability over capacity, increasing the Pentagon's focus on new investments in high-end technologies aimed at "great power competition" with China and Russia.

Full story: Mattis' new strategy emphasizes modernization and capability over military size

4. President Trump's nominee for the top technology post at the Pentagon believes boost-phase missile defenses could be rapidly deployed to counter North Korea's ballistic missile program, arguing only "will" has prevented the Defense Department from doing so already.

Full story: Nominee for top Pentagon tech job endorses boost-phase missile defense

January 25, 2018 at 10:17 AM | Justin Katz

The Navy is moving forward with a consortium focused on information warfare capabilities, projected to be operational in the first quarter of fiscal year 2019.

The consortium will primarily utilize other transaction (OT) authority to conduct research, development and prototyping on "underlying technologies, such as data sciences, cyber [and] autonomy that advance the Navy and Marine Corps' information warfare capabilities," Inside the Navy reported earlier this month.

Space and Naval Warfare Systems Centers Atlantic and Pacific will hold an industry day Feb. 1 in North Charleston, SC, about the Information Warfare Research Project, according to a Jan. 22 Federal Business Opportunities notice.

The commands intend to issue a program announcement that will request proposals following the industry day in the second quarter of fiscal year 2018, and issue an OT award at the end of May 2018, according to the notice.

The consortium will operate in two phases: the first is projected to last three to five years using a budget between $25 million and $50 million. The second phase will be competitively awarded at the conclusion of the first phase and have an estimated budget of $250 million. 

"The objectives for both phases are the same, which are to have an OT available to enable rapid prototyping of technology in the areas listed in the RFI.  Phase I just refers to this initial OT and Phase 2 would be a follow-on OT using lessons learned from this initial OT," the service said in a written response to an industry question.