The Insider

By Marjorie Censer
July 22, 2019 at 7:59 AM

Parsons said today it has agreed to acquire QRC Technologies, a Fredericksburg, VA-based company focused on products for the radio frequency and signals intelligence market, for $215 million in cash.

The deal is Parsons' third acquisition in the last 14 months and marks its first since going public in May.

"Parsons plans to leverage its existing artificial intelligence and data analytics core competencies to further differentiate QRC's product portfolio and expedite actionable intelligence for its customers," the company said. "The transaction is consistent with the company's transformation strategy of acquiring high-growth, defense and intelligence technology companies with hardware and intellectual property that enhance its technology and transactional revenue growth and margin profile."

QRC counts among its customers U.S. Special Operations Command, intelligence agencies, the Navy and the Marine Corps, among others. It is slated to generate about $56 million in 2020 sales, according to Parsons.

Parsons said the deal is valued at about $185 million because it includes a $30 million transaction-related tax benefit.

The company previously acquired Polaris Alpha and OGSystems.

By Tony Bertuca
July 22, 2019 at 5:00 AM

The Senate is scheduled to vote this week on the nomination of Army Secretary Mark Esper to become defense secretary, while a nomination hearing has been scheduled for Pentagon Comptroller David Norquist to become deputy defense secretary. Top defense contractors will also hold a host of earnings calls.

Monday

Esper's nomination is scheduled to be considered on the Senate floor.

The Center for Strategic and International Studies hosts a discussion on homeland defense with Gen. Terrence O’Shaughnessy, chief of U.S. Northern Command.

Tuesday

Lockheed Martin executives are slated to discuss quarterly earnings.

Wednesday

The Senate Armed Services Committee holds Norquist's nomination hearing to become deputy defense secretary.

Air Force Vice Chief of Staff Gen. Stephen Wilson speaks about the Nuclear Posture Review at the Air Force Association.

Executives from Boeing, General Dynamics and Northrop Grumman are set to discuss quarterly earnings.

The Strategic Institute hosts a conference on acquisition intelligence featuring senior Pentagon officials.

The Federal Cloud Marketplace Forum will be hosted by Carahsoft and the Advanced Technology and Academic Research Center.

Thursday

The Air Force Association hosts a discussion on Iran and North Korea with Rep. Mike Turner (R-OH).

Raytheon executives are slated to discuss quarterly earnings.

By John Liang
July 19, 2019 at 2:06 PM

This Friday INSIDER Daily Digest has an update on the Army's future vertical lift programs, cybersecurity and more.

The Army as of now is planning to field the Future Long-Range Assault Aircraft and the Future Attack Reconnaissance Aircraft by 2030:

AROC approves Future Long-Range Assault Aircraft CDD

The Army Requirements Oversight Council this month approved a draft, "abbreviated" capabilities development document for the Future Long-Range Assault Aircraft, advancing the service's No. 2 priority of the Future Vertical Lift effort.

James Gauch of law firm Jones Day today argued the government should follow widely used cybersecurity practices including adoption of the National Institute of Standards and Technology's cybersecurity framework and standards for managing risks:

Huawei lawyer argues for risk-based cybersecurity over company-specific purchasing ban

A lawyer representing Huawei Technologies told federal officials today that statutory requirements for banning foreign influence in the government's IT supply chain should be met through a broad cybersecurity risk-management process, rather than an entity-based purchasing prohibition that targets Huawei products.

In case you missed it, the head of Army Futures Command briefed reporters at the Pentagon this week:

Army Futures Command logs first year

Gen. Mike Murray, head of Army Futures Command, said today the command will be fully operationally capable as of July 31, just over a year since its creation.

Murray: Small businesses key to Army Futures Command success

Army Futures Command is looking to engage more with small businesses to achieve its goals.

The White House Office of Management and Budget, in a July 9 statement of administration policy, formally objected to a provision in the fiscal year 2020 defense policy bill advanced by the House Armed Services Committee that would extend by a decade a prohibition a road-mobile GBSD variant first enacted in the FY-17 defense policy bill:

Trump administration wants to retain option for road-mobile GBSD variant

The Trump administration wants to retain the option to develop a road-mobile variant of the new Ground Based Strategic Deterrent, objecting to legislation that would extend through 2030 the current statutory ban on truck-launched intercontinental ballistic missiles -- which are more difficult for an adversary to target than silo-based weapons.

The Navy hasn't quite abandoned the idea of procuring a system that would defend aircraft carriers against enemy torpedoes:

Navy planning tech refresh contract for NIXIE

The Navy intends to award a contract to refresh a system aimed at protecting aircraft carriers from incoming torpedoes.

Two upcoming United Launch Alliance missions have been delayed:

Air Force delays two upcoming ULA launch missions due to component anomalies

The Air Force has delayed two upcoming United Launch Alliance missions after discovering an anomaly with a component shared by the company's Delta IV and Atlas V rockets.

By Courtney Albon
July 19, 2019 at 11:18 AM

A senior Air Force officer on Friday said the country would be "at a tremendous loss" if the administration and Congress do not move forward with a confirmation hearing for Gen. John Hyten, the nominee to serve as the next vice chairman of the Joint Chiefs of Staff, who was accused of sexual misconduct by a senior military officer.

Air Force Space Command Director of Operations and Communications Brig. Gen. DeAnna Burt's comments came during an event today on Capitol Hill during which she was asked about Hyten's qualifications in light of the recent allegations. Burt, who worked directly for Hyten in 2016 and 2017, praised Hyten for his professionalism and vouched for his character.

"I can tell you I have no higher regard for anyone I work with or for than Gen. Hyten," Burt said. "He is a consummate professional, he is an inspiring leader, and the man is so incredibly smart. Our nation would have a huge loss if he is not pushed forward for his nomination and confirmation hearing."

Hyten, currently the commander of U.S. Strategic Command, was nominated in April for the vice chairman post. Defense One first reported last week that soon after his nomination, Hyten was accused by a former senior aide of making a series of unwanted sexual advances. The Air Force investigated the claims and found they could not be substantiated.

Meanwhile, following the public revelation of the allegations, Hyten's confirmation has been stalled. A hearing date has not yet been scheduled.

By Justin Doubleday
July 18, 2019 at 3:19 PM

The background investigations backlog is down to 386,000 cases this month, as the Defense Department prepares to take on the federal government background investigations mission.

Charles Phalen, who is serving in a dual role as head of the National Background Investigations Bureau and acting director of the Defense Counterintelligence and Security Agency, presented on the new figures during a National Industrial Security Program Policy Advisory Committee meeting in Washington today.

The backlog famously peaked at 725,000 cases last April. But the total number of investigative cases is down to 386,000, Phalen said today.

"And it's still heading south," he added.

However, the time it takes to complete investigations continues to be a problem, according to Phalen's presentation. The fastest 90% of initial, confidential- or secret-level clearances in industry took an average of 132 days in May, down from the 171-day average in February, but well above the 40-day goal set by law.

The May average for the fastest 90% of initial, top-secret clearance investigations in industry took 319 days, well above the 80-day goal, according to Phalen's presentation. However, the May figure is an improvement from the 435-day average recorded this past December.

"We still have a ways to go on that, but we're seeing some good progress," Phalen said of the timeliness.

Phalen took over as acting director of DCSA earlier this month and is expected to stay on until a permanent director is named. The agency, formerly the Defense Security Service, is absorbing NBIB as part of the background investigations mission transfer from the Office of Personnel Management to DOD.

The transfer is supposed to be finalized on Oct. 1, the start of fiscal year 2020, according to an executive order signed by President Trump in April.

During the meeting today, Phalen said his goal is ensuring the merger of NBIB into DCSA does not disrupt the agency's work in conducting background investigations, protecting critical technology and conducting counterintelligence operations.

"The last thing we want to do is disturb that momentum in any way, shape or form," he said.

By Justin Doubleday
July 18, 2019 at 2:27 PM

President Trump said today he may look into the Pentagon's pending Joint Enterprise Defense Infrastructure contract competition in the wake of complaints from Microsoft and Oracle, according to a White House pool report.

"Great companies are complaining about it," Trump said of the JEDI cloud contract competition, according to the pool report, which listed Microsoft and Oracle as companies the president mentioned. Bloomberg News first reported yesterday that the president was considering intervening in the competition.

Last week, a judge ruled against Oracle America's protest of the JEDI solicitation in the Court of Federal Claims. Oracle had argued against the JEDI requirements, which the company said were unduly restrictive, as well as the Pentagon's single-award strategy for the potentially 10-year, $10 billion award.

Oracle had also alleged multiple DOD employees presented conflicts of interest due to their connections with Amazon Web Services. But the judge sided with DOD in determining those potential conflicts did not impact the integrity of the JEDI competition.

Now, DOD plans to award the contract to either Amazon or Microsoft in August after determining they are the only two cloud providers who can meet the department's requirements.

The Pentagon wants JEDI to be its "general purpose," enterprise-wide cloud available across the department, as well as U.S. military operating locations around the world.

By Justin Katz
July 18, 2019 at 2:18 PM

The Navy announced today it plans to award Perspecta another extension to the Next Generation Enterprise Network contract, according to a Federal Business Opportunities notice.

The contract is split into two parts. The first, end-user hardware, was scheduled to expire in October but will now be stretched until March 2020. The contract's second part is services management, which would have terminated in June 2020 but will now be extended between four and seven months, ending in the last quarter of calendar year 2020.

The newest extension is in addition to a contract modification the Navy previously awarded to Perspecta to avoid a lapse in services while it conducts a re-competition and transitions vendors.

Dubbed NGEN-R, the re-competition is now expected to award an end-user hardware contract in the fourth quarter of fiscal year 2019 and a services management contract in the second quarter of FY-20.

The original NGEN contract was awarded to a sole vendor, but the Navy decided to split NGEN-R into multiple contracts after soliciting feedback from industry.

The current contract, a five-year deal worth $3.45 billion covering 34 distinct services, was awarded in 2013 to Hewlett Packard Enterprise Services. That business unit merged in 2016 with Computer Sciences Corp. to form DXC.

By John Liang
July 18, 2019 at 2:13 PM

This Thursday INSIDER Daily Digest has news on the Ground Based Strategic Deterrent program, Army Futures Command and more.

Just because lawmakers don't want a road-mobile ICBM replacement doesn't mean the Trump administration agrees:

Trump administration wants to retain option for road-mobile GBSD variant

The Trump administration wants to retain the option to develop a road-mobile variant of the new Ground Based Strategic Deterrent, objecting to legislation that would extend through 2030 the current statutory ban on truck-launched intercontinental ballistic missiles -- which are more difficult for an adversary to target than silo-based weapons.

The Navy hasn't quite abandoned the idea of procuring a system that would defend aircraft carriers against enemy torpedoes:

Navy planning tech refresh contract for NIXIE

The Navy intends to award a contract to refresh a system aimed at protecting aircraft carriers from incoming torpedoes.

Two upcoming United Launch Alliance missions have been delayed:

Air Force delays two upcoming ULA launch missions due to component anomalies

The Air Force has delayed two upcoming United Launch Alliance missions after discovering an anomaly with a component shared by the company's Delta IV and Atlas V rockets.

The head of Army Futures Command briefed reporters at the Pentagon this morning:

Army Futures Command logs first year

Gen. Mike Murray, head of Army Futures Command, said today the command will be fully operationally capable as of July 31, just over a year since its creation.

Murray: Small businesses key to Army Futures Command success

Army Futures Command is looking to engage more with small businesses to achieve its goals.

The Air Force now estimates the cost to install 93 Family of Beyond-Line-of-Sight Force Element Terminals on certain aircraft to be $3.8 billion:

Air Force approves FAB-T acquisition strategy, new cost estimated at $3.8 billion

The Air Force has approved an acquisition strategy to buy at least 93 Family of Beyond-Line-of-Sight Force Element Terminals for an estimated cost of $3.8 billion, years after budget constraints drove the service to separate the airborne terminal acquisition effort from the overall program.

Pentagon acquisition chief Ellen Lord this week spoke about the administration's opposition to Turkey's purchase of the Russian S-400 missile defense system:

Pentagon says shifting F-35 supply chain after Turkey's ouster will cost $500M to $600M

The Pentagon's chief weapons buyer says it will cost between $500 million and $600 million to relocate the supply chain for more than 900 F-35 Joint Strike Fighter parts out of Turkey after the country's expulsion from the program.

The nominees to be the next defense secretary and chairman of the Joint Chiefs of Staff aren't wild about the idea to reorganize the Strategic Capabilities Office:

Esper, Milley decline to endorse SCO realignment under DARPA, pledge to review

At the prompting of the Senate Armed Services Committee, the presumptive next defense secretary and chairman of the Joint Chiefs of Staff both declined to endorse a controversial reorganization of the Strategic Capabilities Office under the Defense Advanced Research Projects Agency, pledging to review the proposed change.

By Marjorie Censer
July 18, 2019 at 1:03 PM

BAE Systems' U.S. business said today it has made three new appointments to its senior leadership team.

Alice Eldridge has been promoted to general counsel, succeeding Ian Graham, who departed the company in May. She previously was chief counsel for BAE's platforms and services sector. Before joining BAE in 2012, Eldridge worked at Lockheed Martin.

BAE said Eldridge has also been named to the company's board of directors and will serve as board secretary.

Travis Garriss has been tapped to serve as chief information officer, a newly created position. BAE said he "will lead efforts to invest in and maintain critical systems to meet the company's expanding high-technology requirements, while preserving strong information security and governance."

Garriss previously was CIO and vice president of user and functional enablement at Honeywell.

Additionally, BAE said Leslie Jelalian has been named senior vice president of strategy and corporate development. She joined the company in 1988 and has served in multiple roles, including in engineering, program management and strategy development. Most recently, she was vice president of strategy and planning for the electronic systems business.

In her new role, Jelalian will be "focused on pursuing strategic growth through domestic and international business opportunities and identifying key initiatives to strengthen BAE Systems' portfolio with appropriate acquisitions, divestitures, and organic investments," BAE said.

By Tony Bertuca
July 18, 2019 at 12:56 PM

The Senate Armed Services Committee has voted to report the nominations of Army Secretary Mark Esper, picked to be defense secretary, and Army Chief of Staff Gen. Mark Milley, chosen to be chairman of the Joint Chiefs of Staff, to the full Senate.

Appearing before the committee Tuesday, Esper defended his record as Sen. Elizabeth Warren (D-MA) criticized his past work for Raytheon.

Last week, Milley testified that he is worried about the consequences for the Defense Department if Congress is unable to reach a bipartisan budget agreement.

The full Senate is scheduled to consider Esper's nomination on Monday

By Tony Bertuca
July 18, 2019 at 10:03 AM

The Senate Armed Services Committee has scheduled a July 24 nomination hearing for David Norquist, who has been selected to serve as the Pentagon's deputy defense secretary.

Norquist, whom the Senate confirmed as Pentagon comptroller in June of 2017, has been serving as acting deputy defense secretary since Jan. 1.

Once the White House officially sends Norquist's nomination to the Senate, he will return to his duties as comptroller and await confirmation.

Committee Chairman Jim Inhofe (R-OK) and Ranking Member Jack Reed (D-RI) said they would work to expedite Norquist's nomination. They have also pledged to do so for Army Secretary Mark Esper, who has been tapped to serve as defense secretary.

"The deputy secretary of defense is the number-two civilian role at the Pentagon, so it's incredibly important to receive a formal nomination and confirm the nominee quickly," Inhofe said in a statement. "But while there is a sense of urgency, the committee must thoroughly consider nominations that we receive. Mr. Norquist has been performing the duties of deputy secretary for the past several months to maintain stability and continuity in the department. I believe Mr. Norquist is more than capable of fulfilling the requirements of this critical position."

Reed said it is important to begin moving on Norquist's nomination, as well as those of other senior Pentagon officials, as quickly as possible.

"I commend Chairman Inhofe for scheduling this hearing and look forward to discussing issues with Mr. Norquist," Reed said. "It is very troubling that there are almost 20 top jobs across the Pentagon and military that are vacant or being filled on a temporary basis. The president needs to realize this is a significant problem and quickly nominate qualified nominees for these key positions."

Traditionally, the committee waits seven days between receiving a formal nomination and voting out the nominee. But the committee is going to waive that rule for Norquist, just as it did for Esper, who is awaiting confirmation by the full Senate.

By Justin Katz
July 18, 2019 at 9:20 AM

The White House yesterday nominated Vice Adm. Michael Gilday, director of the Joint Staff, to become the next chief of naval operations as well as receive his fourth star, following the abrupt retirement of the officer previously tapped for that post.

Gilday’s upcoming selection was first reported by the Wall Street Journal earlier this month.

Former Vice Chief of Naval Operations Adm. William Moran had been confirmed to become CNO, but declined the position after it had surfaced that he maintained contact with a former Navy officer accused of sexual harassment.

By Sara Sirota
July 17, 2019 at 2:29 PM

An Air Force pilot for the first time flew Sikorsky's HH-60W Combat Rescue Helicopter on July 11, marking an important milestone as the service moves toward the program's production phase.

The 413th Flight Test Squadron conducted the test at Sikorsky's facility in Florida, according to an announcement posted today on the service's website.

"The crew performed an instrumentation and telemetry checkout with the control room, gathered basic engine start data and flew referred gross weight level flight speed sweeps between 40 knots and maximum horizontal speed," the notice states.

CRH achieved its first flight with a Sikorsky pilot in May and until now, had only undergone tests with the company's personnel.

Per today's notice, the 413 Flight Test Squadron's HH-60W operations are expected to begin at Eglin Air Force Base, FL, this fall. It does not say when a milestone C decision is scheduled, but as of May, the program anticipated a review in September.

The Air Force intends to procure 113 HH-60W helicopters through 2026 to replace the legacy HH-60G fleet, which supports personnel recovery.

By John Liang
July 17, 2019 at 2:10 PM

This Wednesday INSIDER Daily Digest has news on the Pentagon's Fully Networked Command, Control and Communications effort, Textron's quarterly earnings, the ground-based training system for a new Navy training helicopter and more.

The office of the under secretary of defense for research and engineering will host classified "industry engagement days" later this month to discuss Fully Networked Command, Control and Communications:

Pentagon outlines strategy for 'fully networked' C3, plans meeting with industry

The Pentagon is preparing to meet with industry later this month to discuss its requirements for Fully Networked Command, Control and Communications, as the official in charge of the "FNC3" effort recently laid out his strategy for developing the military's future battle network.

Senior Textron executives this morning discussed the company's quarterly earnings results:

Textron says winning one or two new helicopter programs 'would drive significant growth' for Bell

Textron today reported lower quarterly sales and profit in its Bell Helicopter business, but said new opportunities from the Army and Marine Corps could provide growth.

The Navy last week held an industry day on the ground-based training system that will be used for the service's next-generation training helicopter:

Navy lays out notional schedule for TH-XX training system, contract award in mid-FY-20

The Navy intends to award a contract in the third quarter of fiscal year 2020 for the ground-based training system (GBTS) associated with its new training helicopter, the TH-XX, according to industry day slides.

The two contractors for the Ground Based Strategic Deterrent program's ongoing technology maturation and risk-reduction phase, Boeing and Northrop Grumman, will both compete for the engineering and manufacturing development contract:

Air Force releases RFP for GBSD engineering and manufacturing development phase

The Air Force has released a request for proposals for the engineering and manufacturing development phase of the service's intercontinental ballistic missile replacement system.

Here is more from yesterday's SECDEF nomination hearing:

Questioned about Raytheon ties, Esper and GOP point to Obama picks

Army Secretary Mark Esper, nominated to be defense secretary, today defended his time as a senior Raytheon executive as Sen. Elizabeth Warren (D-MA) argued that his failure to commit to several of her recusal proposals "smacks of corruption, plain and simple."

By Justin Doubleday
July 17, 2019 at 12:28 PM

The Defense Department will host a pair of meetings in September to discuss statutory changes to the way DOD acquires technical data rights, according to a notice scheduled to be posted in tomorrow's Federal Register.

"DOD is hosting public meetings to obtain views of experts and interested parties in government and the private sector regarding amending the Defense Federal Acquisition Regulation Supplement (DFARS) to implement statutory amendments and revisions to policies and procedures for the acquisition of technical data and computer software and associated license rights," the notice states.

The first meeting will be held Sept. 6, while the second is scheduled for Sept. 16. Both will be hosted at the Mark Center Auditorium in Alexandria, VA.

The meetings will focus on two amendments to the DFARS. One amendment, "Validation of Proprietary and Technical Data," implements Section 865 of the Fiscal Year 2019 National Defense Authorization Act, according to the notice.

The second DFARS amendment, "Negotiation of Price for Technical Data and Preference for Specially Negotiated Licenses," implements both Section 835 of the FY-18 NDAA and Section 837 of the FY-19 NDAA, according to the notice.

DOD plans on publishing advanced notices of proposed rulemaking, including initial drafts of the proposed DFARS amendments, prior to the September meetings, the notice states.

After the two September events, the department plans to hold further meetings, according to the notice, to discuss more changes to technical data rights policy mandated by recent NDAAs.

In addition to the statutory changes, DOD is also considering recommendations made by the congressionally mandated "Section 813" panel on technical data rights, according to the notice. It does not elaborate on the Section 813 recommendations under consideration.