The Insider

By Ashley Tressel
February 19, 2019 at 11:36 AM

The Army is holding a market research demonstration event in May for the Robotic Combat Vehicle, the service announced today.

The Army's Ground Vehicle Systems Center plans to award an other transaction agreement through the National Advanced Mobility Consortium for market research on technology readiness levels of currently available platforms, according to a Federal Business Opportunities notice.

Interested NAMC members in Bryan, TX, the week of May 13 will demonstrate vehicles that meet the listed criteria: ability to travel on cross-country terrain, non-line-of-sight teleoperation capability and ability to integrate at least 1,000 pounds of subcomponents at TRL 6 or higher.

Data collected during the event will be used to form requirements for a subsequent solicitation to develop RCV prototype vehicles, the notice states.

The Army last week released an acquisition time line for the RCV program, targeting Nov. 22 for a prototype award.

By Marjorie Censer
February 19, 2019 at 9:42 AM

Leidos said today sales during its most recent quarter reached $2.7 billion, up about 5 percent from the same three-month period a year earlier. Quarterly profit hit $188 million, up 65 percent from the prior year.

Leidos said quarterly sales in its defense solutions group reached $1.3 billion, up nearly 4 percent from a year earlier. “The revenue growth was primarily attributable to new awards,” the company said.

For 2018, Leidos' sales reached $10.2 billion, essentially flat from 2017. The contractor recorded profit for the year of $581 million, up 59 percent from 2017.

The company said 2018 sales in its defense solutions business were just shy of $5 billion, nearly the same as the prior year.  

During a call with analysts this morning, Jim Reagan, Leidos' chief financial officer, said the contractor is more interested in acquiring products companies than services contractors.

“We don't need more of what we've got,” he said. “The things that we're looking for to build the company inorganically would be the kind of company with both a services and product differentiator.”

“A pure products company could also be of interest to us, but I would say the ones we've been interested in to this point tend to have some sort of service element to them,” he added.

By Marjorie Censer
February 19, 2019 at 9:40 AM

Northrop Grumman said this week it has named Om Prakash chief executive of Northrop Grumman Japan.

“Prakash will be responsible for ensuring effective performance on current programs, as well as developing in-country growth opportunities,” Northrop said. Prakash succeeds Stan Crow, who is returning to the United States, the company said.

Prakash previously was director of corporate strategy for Northrop. Before joining the contractor, Prakash, a retired Air Force colonel, worked on strategy and policy for the Air Force secretary and chief of staff. He also was principal military adviser to the deputy assistant secretary of defense for manufacturing and industrial base policy.
 

By John Liang
February 19, 2019 at 5:05 AM

Here are some must-reads from this week's issue of Inside the Navy:

1. SAN DIEGO -- The Navy's top civilians are convinced $13 billion aircraft carriers are not sustainable, but what the next aircraft carrier looks like and what it will cost is not clear to senior leadership, according to the service's second most senior civilian.

Full story: Modly: $13B carriers are not affordable, but what's next is not yet clear

2. SAN DIEGO -- The Navy's aircraft carriers will rely on other technologies to defend against torpedoes after determining its $700 million Surface Ship Torpedo Defense system is not worth pursuing any further, according to the Navy's acquisition executive.

Full story: With SSTD suspended, fleet will fall back on existing tech for torpedo defense

3. The Navy has delayed its time line for finishing an operational evaluation of the America-class amphibious assault ship's capability to accommodate 20 F-35B Joint Strike Fighters from the fiscal year 2020 to FY-21.

Full story: DOT&E: Navy pushes OPEVAL of LHA-6 to accommodate F-35s to FY-21

4. SAN DIEGO -- The Navy is starting to see benefits from a new aviation sustainment system in the form of reducing the time it takes to conduct various maintenance activities, one of the service's top aviators said.

Full story: Air Boss: New aviation sustainment system reducing maintenance times

By John Liang
February 19, 2019 at 5:00 AM

Check out some must-reads from this week's edition of Inside the Army:

1. The Missile Defense Agency is readying a potential $15 billion contract with Lockheed Martin to buy Terminal High Altitude Area Defense systems for Saudi Arabia, a deal in the works for years that would in a single package outfit the desert kingdom with seven batteries -- equivalent to the Army's current THAAD ballistic missile defense capabilities for the entire globe.

Full story: MDA readying sole-source Lockheed contract for Saudi Arabia THAAD deal

2. Democrats in Congress say they are eager to learn which military construction projects will go unfunded so President Trump can divert $3.6 billion to build a wall on the southwestern border following his declaration of a national emergency.

Full story: Capitol Hill readies for aftershock as Trump diverts DOD funds toward wall

3. The Army is delaying plans to begin full-rate production of the Joint Light Tactical Vehicle, originally slated for December 2018, until as late as early summer to assess options for vehicle-design changes suggested by soldiers and Marines during testing and evaluation in a move that could push the $28 billion program toward a schedule breach.

Full story: Army delays JLTV full-rate production to consider potential design changes

4. Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said last week he would back the Pentagon if it submitted a budget requesting a massively inflated warfighting account intended to skirt statutory spending caps, but his Democratic counterpart Sen. Jack Reed (D-RI) opposes the move on the grounds that it is a "dramatic retreat . . . from common sense and good government."

Full story: Pentagon's plans for inflated OCO request spark conflict on Capitol Hill

By John Liang
February 18, 2019 at 5:00 AM

Senior Pentagon officials are scheduled to speak around the Washington area this week. Congress is out.

Monday

President's Day observed.

Tuesday

Air Force Chief of Staff Gen. David Goldfein speaks at the Brookings Institution.

Leidos executives are scheduled to discuss the company's quarterly earnings.

Wednesday

ManTech International executives are slated to discuss the company's quarterly earnings.

Science Applications International Corp. executives are set to present at a Citi conference.

General Dynamics and United Technologies executives will speak at a Barclays conference.

Thursday

Leidos and Northrop Grumman executives are set to present at the Citi conference.

Friday

Washington Technology hosts a breakfast featuring a number of executives, including Mac Curtis of Perspecta and John Hynes of Applied Insight.

By John Liang
February 15, 2019 at 3:05 PM

This Friday INSIDER Daily Digest features coverage of the ramifications of the president's southern border emergency declaration on defense spending and much more.

We start off with the ramifications of President Trump's southern border emergency declaration on defense spending:

Trump to tap more than $6 billion in Pentagon funds to build border wall

President Trump declared a national emergency today to use $3.6 billion in Defense Department military construction funds to build a wall on the southwestern border. Additionally, he will seek to reprogram $2.5 billion to DOD's drug interdiction account from other unidentified Pentagon sources.

Capitol Hill readies for aftershock as Trump diverts DOD funds toward border wall

Democrats in Congress say they are eager to learn which military construction projects will go unfunded so President Trump can divert $3.6 billion to build a wall on the southwestern border following his declaration of a national emergency.

Here is more of our coverage from this week's AFCEA West conference in San Diego:

Air Boss: New aviation sustainment system reducing maintenance times

SAN DIEGO -- The Navy is starting to see benefits from a new aviation sustainment system in the form of reducing the time it takes to conduct various maintenance activities, one of the service's top aviators said.

Geurts: With SSTD suspended, fleet will fall back on existing technologies for torpedo defense

SAN DIEGO -- The Navy's aircraft carriers will rely on other technologies to defend against torpedoes after determining its $700 million Surface Ship Torpedo Defense system is not worth pursuing any further, according to the Navy's acquisition executive.

BAE Systems will be working on an active protection system for Army combat vehicles:

BAE electronic defense system chosen for active protection testing on Bradley

The Army today announced it has chosen BAE Systems to participate in a "layered" active protection demonstration this summer following a successful performance in a test last fall.

Maj. Gen. Stephen Davis, the director of global operations at U.S. Strategic Command, spoke this week at an event hosted by the Mitchell Institute on Capitol Hill:

STRATCOM establishes NC3 Enterprise Center

U.S. Strategic Command is setting up a new organization to oversee the Defense Department's disparate nuclear command, control and communications systems, as well as lead the development of next-generation NC3 requirements.

The Pentagon's top weapons tester has determined that the Navy will have to push back its testing of the F-35 Joint Strike Fighter's ability to operate on certain big-deck amphibious ships by a year:

DOT&E: Navy pushes operational evaluation of LHA-6 to accommodate F-35s to FY-21

The Navy has delayed its time line for conducting an operational evaluation of the America-class amphibious assault ship’s capability to accommodate the F-35B Joint Strike Fighter from fiscal year 2020 to FY-21.

The Pentagon has figured out how much the follow-on to the GPS system will cost:

GPS III Follow-On satellites acquisition will cost $10.7 billion

The Defense Department estimates the newest Global Positioning System satellite program -- the GPS III Follow-On being built by Lockheed Martin -- will cost $10.7 billion, a figure the Air Force has recently conveyed to Congress as part of a report establishing a baseline for the planned 22-satellite acquisition effort.

By Mallory Shelbourne
February 15, 2019 at 1:02 PM

The Navy plans to formulate an environmental impact statement for military training and testing at Naval Air Station Patuxent River, MD.

The service made the announcement in a Federal Register notice published today that states the public could present relevant comments until April 1.

"The proposed action includes testing and training activities analyzed in the Naval Air Systems Command, Naval Air Warfare Center Aircraft Division (NAWCAD) December 1998 [Patuxent River Complex] Final [environmental impact statement] and subsequent Environmental Assessments, plus adjustments to current testing and training activities required to support projected Navy military readiness requirements into the foreseeable future," the notice reads.

The Navy also plans to host a series of "public scoping meetings" from March 4 through 7.

"The Navy invites public comments on the scope of the analysis, including potential environmental issues and viable alternatives to be considered during the development of the Draft EIS," the notice continues.

Under the National Environmental Policy Act, the government must compile an EIS to evaluate how an action would influence the environment.

 

By John Liang
February 15, 2019 at 10:27 AM

The Defense Science Board will hold a meeting next week to discuss the findings and recommendations of a task force established in March 2017 to look into how biology could be used both against and by the Defense Department.

In March 2017, the Pentagon's then-acting acquisition chief tasked the DSB with the study, noting in a memo that the department's lack of involvement in this area could lead to battlefield surprises.

"The goal of this task force is to explore and articulate the opportunities and potential risks enabled by modern and emerging bioscience advances that could significantly impact our national security and improve our defense capabilities," James MacStravic, who at the time was performing the duties of the under secretary of defense for acquisition, technology and logistics, wrote in the Feb. 9, 2017 terms of reference memo.

On Feb. 21, Arup Chakraborty and George Whitesides, co-chairs of the biology study task force, "will provide a brief on the Task Force on Biology's findings and recommendations and engage in classified discussion with the DSB. The DSB will then vote on the Biology Task Force's findings and recommendations," states a Federal Register notice issued this morning.

The Pentagon has not engaged in the development of modern biology as it has with other major technologies, and DOD does not play a "significant" role in the bioscience university and industrial complex, according to the March 2017 memo.

"As a result, the department runs a serious risk of being surprised when bioscience is applied to strengthen or expand an adversary's capabilities," MacStravic wrote.

Following the biology task force briefing, Under Secretary of Defense for Policy John Rood, Chief of Naval Operations Adm. John Richardson and Director of Operational Test and Evaluation Robert Behler will provide classified briefings on the "challenges" their offices and organizations face, according to the Federal Register notice.

By Justin Katz
February 15, 2019 at 8:38 AM

SAN DIEGO -- The Navy yesterday announced it is establishing an office to crowdsource ideas between sailors and civilians within the service and to help industry ensure their ideas reach the appropriate commands, according to the service's acquisition executive.

"How do we connect all the awesome tools that are in the [Defense Department] to the folks at the lower levels that have problems? And how do we accelerate that whole process?” Hondo Geurts told reporters at the AFCEA West conference here.

The office, called NavalX, short for naval expeditionary, will start out internally within Geurts’ office.

“On the industry side, what that will look like is if you have an idea, I’m going to make it easy for you to walk in -- one-stop shop,” Geurts told conference attendees.

NavalX will act as a point of contact for industry to find the appropriate offices and commands for technologies they want to introduce to the Navy, he said.

By John Liang
February 15, 2019 at 5:00 AM

Here are some must-reads from this week's issue of Inside the Air Force:

1. The Air Force's strategy to develop the next generation of missile warning satellites on an aggressive schedule using new acquisition concepts and resiliency standards hit a snag last fall when Congress partially denied funding for a reprogramming request, delaying the start of payload development by about four months, according to a service official.

Full story: USAF works to mitigate early Next-Gen OPIR delay in the wake of reprogramming denial

2. The Air Force has established a $9.9 billion price tag for its new Advanced Pilot Training program, the Boeing-led project -- also dubbed T-X -- to recapitalize the aging fleet of T-38C aircraft used to train fighter and bomber pilots.

Full story: Air Force sets $9.9 billion price tag for new T-X program

3. A defense intelligence official told reporters this week that the biggest threat to U.S. space superiority is likely not a single adversary capability, but rather actions in recent years by Russia and China to better organize and integrate space capabilities within their militaries -- actions that could help the Pentagon as it makes a case to create a new Space Force.

Full story: Officials: Russian, Chinese organizational shifts signify greater space focus

4. Senate Armed Services Committee Chairman Jim Inhofe (R-OK) said this week he would back the Pentagon if it submitted a budget requesting a massively inflated warfighting account intended to skirt statutory spending caps, but his Democratic counterpart Sen. Jack Reed (D-RI) opposes the move on the grounds that it is a "dramatic retreat . . . from common sense and good government."

Full story: Pentagon's plans for inflated OCO request spark conflict on Capitol Hill

By Tony Bertuca
February 14, 2019 at 4:26 PM

President Trump will sign a congressional budget deal to avert another partial government shutdown, but will also declare a national emergency to fund construction of a wall on the southwestern border, according to a statement from the White House.

Though the move has the support of many Republicans in Congress including Senate Majority Leader Mitch McConnell (R-KY), Democrats are warning the GOP they will come to regret their support for the president's decision.

House Speaker Nancy Pelosi (D-CA) said Republicans should be filled with "dismay about the door they're opening, the threshold that they're crossing," underscoring speculation that Democrats will seek to use emergency powers to fund a partisan agenda when one of their own comes to occupy the Oval Office.

The bill Trump intends to sign includes $1.37 billion for 55 miles of physical barrier along the southern border in Texas, far less than the $5.7 billion that the White House had sought.

It remains unclear where Trump will find the additional money for the wall, but lawmakers suspect it will come from the Pentagon, the Army Corps of Engineers and other government agencies.

House Armed Services Committee Ranking Member Mac Thornberry (R-TX), who last month said he opposed any plan that would use Defense Department funds to construct a wall on the southern border, today reiterated that opposition.

"Each of the past five administrations -- Republican and Democrat -- have sent military personnel and resources to our southern border. It should be clear to everyone that Congress has not provided adequate resources to control who and what crosses our border for many years," he said in a statement. "I appreciate the president's determination to do so, and I denounce the stonewalling of the Democratic leadership in Congress, which I believe is based more on politics than the national interests.

"At the same time, I encourage the president not to divert significant Department of Defense funding for border security," Thornberry continued. "Doing so would have detrimental consequences for our troops as military infrastructure was one of the accounts most deprived during the Obama-era defense cuts. And it would undercut one of the most significant accomplishments of the last two years – beginning to repair and rebuild our military. I hope that the president will pursue other options."

Meanwhile, the Democrat-controlled House Budget Committee tweeted earlier today: "Trump is seriously mistaken if he thinks Dem support for the spending deal gives him a green light to take $ from other programs for his ineffective wall. We will use every means possible to stop POTUS from ignoring congressional intent and circumventing our power of the purse."

At the end of fiscal year 2018, the Defense Department had about $12.4 billion in unobligated military construction money, meaning it had yet to be put under contract, though it had been requested by DOD and authorized by Congress for specific projects, according to a Pentagon quarterly report sent to Congress in November and obtained by Inside Defense. 

Additionally, the department has about $8.5 billion that was appropriated for MILCON in FY-19, much of which, congressional staffer told Inside Defense in January, DOD is unlikely to have obligated.

"So we're talking about $20 billion sloshing around that could get used," a congressional staffer told Inside Defense in January. "But that money is spoken for in the sense that the department requested it and Congress has authorized and appropriated it already for a specific purpose. Those are projects at U.S. military installations and overseas that DOD will have to either cancel or defer if that money gets used to build a wall."

By Marjorie Censer
February 14, 2019 at 3:34 PM

Perspecta said this week sales in its most recent quarter reached $1.1 billion, up 49 percent from the same three-month period a year earlier.

The contractor's quarterly profit hit $38 million, down 63 percent from the prior year.

Perspecta attributed its sales growth to its mergers; the company was created in late May 2018 by combining DXC Technology's U.S. public-sector business with Vencore and KeyPoint Government Solutions. The results before May reflect only the public-sector business' results.

The company said sales were up "slightly" when taking into account the mergers and noted "continued growth" in its background investigations work.

Acknowledging the profit decline, Perspecta said it saw a $59 million tax benefit in last year's quarter as a result of tax legislation.

By John Liang
February 14, 2019 at 3:31 PM

Sens. John Cornyn (R-TX), Ted Cruz (R-TX), Susan Collins (R-ME), Marco Rubio (R-FL) and Lisa Murkowski (R-AK) have sent a letter to President Trump urging him to support the current funding schedule for the F-35 as opposed to investing in what they call the "outdated, fourth-generation F-15X."

"We are extremely concerned that, over the last few years, the [Defense Department] has underfunded the F-35 Program and relied on Congress to fund increases in production, sustainment, and modernization," the letter states. "In order to meet the overmatch and lethality goals laid out in the National Security Strategy, the DOD needs to make these investments in the F-35 to affordably deliver and operate this fifth-generation fighter fleet. The F-35 is the most affordable, lethal, and survivable air dominance fighter, and now is the time to double down on the program."

"In order to ensure the United States servicemembers are equipped with the most lethal aircraft capable of operating in the modern battlefield, we request your support and the support of the DOD in investing our defense funds in proven fifth-generation technology -- like the F-35 -- rather than technology that will be outdated before it even rolls off the production line," the senators write.

Read the full letter here.

By John Liang
February 14, 2019 at 2:31 PM

This Thursday INSIDER Daily Digest features news from the AFCEA West conference in San Diego and more.

We start off with coverage from the AFCEA West conference in San Diego, including news on aircraft carriers and submarines:

Modly: $13B carriers are not affordable, but what's next is not yet clear

SAN DIEGO -- The Navy's top civilians are convinced $13 billion aircraft carriers are not sustainable, but what the next aircraft carrier looks like and what it will cost is not clear to senior leadership, according to the service's second most senior civilian.

Navy bridging gap to MST by adding old Harpoon missiles to Los Angeles-class subs

SAN DIEGO -- The Navy is preparing to equip Los Angeles-class submarines with a Harpoon weapon system as a way to bridge a capability gap until the service can field its upgraded Tomahawk missile, according to a top admiral.

The Congressional Budget Office looks at the future years defense program:

CBO: Pentagon's spending plan calls for 11 percent base budget hike between 2023 and 2033

The Defense Department's base budget would have to reach $735 billion by 2033 -- an 11 percent increase from the topline projected for 2023 -- if it is to cover the spending plan the Pentagon envisions, according to the Congressional Budget Office.

Document: CBO report on long-term implications of the 2019 FYDP

Kevin Fahey, assistant secretary of defense for acquisition, spoke at an event this week hosted by the National Defense Industrial Association:

Pentagon developing plan to grade contractors on 'cyber score'

The Pentagon is moving forward with plans to score defense companies on cybersecurity, similar to measuring credit scores, as one Defense Department official says DOD's current efforts regarding contractor cybersecurity are not sufficient.

The Air Force has figured out how much its next-generation trainer aircraft will cost:

Air Force sets $9.9 billion price tag for new T-X program

The Air Force has established a $9.9 billion price tag for its new Advanced Pilot Training program, the Boeing-led project -- also dubbed T-X -- to recapitalize the aging fleet of T-38C aircraft used to train fighter and bomber pilots.