The Insider

By John Liang
December 15, 2011 at 9:36 PM

The full Senate just passed the conference version of the fiscal year 2012 defense authorization bill by an 86-13 vote.

The House approved the conference report yesterday; the legislation now moves to the White House, where President Obama is expected to sign the bill into law by tomorrow.

By Christopher J. Castelli
December 15, 2011 at 9:04 PM

House Armed Services Committee Chairman Buck McKeon (R-CA) and other GOP colleagues today held a press conference to promote H.R. 3662, which they have named the "Down Payment To Protect National Security Act." The bill would delay sequestration by one year while also slashing the federal workforce by 10 percent over a decade, McKeon said, noting Defense Department civilians would not be exempt.

The workforce cuts would save $127 billion, enabling the Pentagon to avoid $55 billion in cuts while also sparing non-defense discretionary accounts from $55 billion in cuts and gleaning $17 billion for deficit reduction, according to McKeon. No Democrats have signed up to back the bill, he said, noting this is unlikely to happen given the president's threat to veto legislation that stops sequestration without slashing the federal deficit by $1.2 trillion.

The administration maintains that Congress "cannot simply turn off the sequester mechanism, but instead must pass deficit reduction at least equal to the $1.2 trillion it was charged to pass under the Budget Control Act," Defense Secretary Leon Panetta noted last month.

By Jason Sherman
December 15, 2011 at 8:19 PM

Sen. John McCain, in a speech prepared for the Senate floor highlighting flaws in the Pentagon's acquisition practices, said today that the Air Force's F-22As -- marquee assets that have yet to see combat -- “may very well become the most expensive corroding hanger queens ever in the history of modern military aviation.”

McCain, ranking member of the Senate Armed Services Committee, did not actually deliver those remarks as he skipped over parts of his prepared text while his allotted time to speak in the chamber expired.

Before offering that pithy summation of the F-22 program, McCain -- a former Navy pilot – walked through through the history of the Raptor program, which he said will eventually cost $67.3 billion and deliver 186 new fighters.

Another example of how flawed the Pentagon’s weapons procurement process is can be found in the F-22 RAPTOR program.  When the Pentagon and the defense industry originally conceived of the F-22 in the mid-1980s, they intended it to serve as a revolutionary solution to the Air Force’s need to maintain air superiority in the face of the Soviet threat during the Cold War. The F-22 obtained “full operational capability” twenty years later -- well after the Soviet Union dissolved.  When it finally emerged from its extended testing and development phase, the F-22 was recognized as a very capable tactical fighter, probably the best in the world for some time to come. But, plagued with developmental and technical issues that caused the cost of buying to go through the roof, not only was the F-22 twenty years in the making, but the process has proved so costly that the Pentagon could ultimately afford only 187 of the planes -- rather than the 750 it originally planned to buy.

Unfortunately, the F-22 also ended up being effectively too expensive to operate compared to the legacy aircraft it was designed to replace.  It also ended up largely irrelevant to the most predominant current threats to national security -- terrorists, insurgencies, and other non-state actors. In fact, if one were to set aside the F-22’s occasional appearances in recent big-budget Hollywood movies where it has been featured fighting aliens and giant robots, the F-22 has to this day not flown a single combat sortie -- despite that we have been at war for 10 years as of this September and recently supported a no-fly zone in Libya.

Politically engineered to draw in over 1,000 suppliers from 44 states represented by key Members of Congress and, by the estimates of prime contractor Lockheed Martin, directly or indirectly supporting 95,000 jobs, there can be little doubt that the program kept being extended far longer than it should have been -- ultimately to the detriment to the taxpayer and the warfighter.  As such, it remains an excellent example of how much our defense procurement process has been in need in reform. We may fight a near-peer military competitor with a fifth-generation fighter capability someday, but we have been at war for 10 years and until a few months ago had been helping NATO with a no-fly zone in Libya.  And, this enormously expensive aircraft sat out both campaigns.

Moreover, as a result of problems with its OBOG (On-Board Oxygen Generating) system, which has caused pilots to get dizzy or, in some cases, lose consciousness from lack of oxygen, on May 3, 2011, the Air Force grounded its entire fleet of F-22s. While this grounding was lifted earlier this year, exactly why F-22 pilots have been experiencing hypoxia remains unknown -- but similar unexplained incidents continue.

And then, there is the issue of the sky-rocketing maintenance costs to the Air Force in trying to sustain a barely adequate “mission capable rate” for the F-22. Its seems that the “plug and play” component maintenance features that were supposed to reduce costs for the Air Force over the life cycle of the aircraft doesn’t really play well. And, each time a panel is opened for maintenance, the costs to repair the “low-observable” surface in order to maintain its stealthiness have made this critical feature of the aircraft cost-prohibitive to sustain over the long-run. Finally, it seems that the engineers and technicians designing the F-22 forgot a basic law of physics during some point of the development phase -- that dissimilar metals in contact with each other have a tendency to corrode. The Air Force is now faced with a huge maintenance headache costing over hundreds of millions of dollars-and-growing to keep all 168 F-22s sitting on the ramp from corroding from the inside out.

One thing is clear: because of a problem directly attributable to how aggressively the F-22 was acquired -- procuring significant quantities of aircraft without having conducted careful developmental testing and reliably estimating how much they will cost to own and operate -- the 168 F-22s, costing over $200 million each, may very well become the most expensive corroding hanger queens ever in the history of modern military aviation.

By Jason Sherman
December 15, 2011 at 6:38 PM

Sen. John McCain (R-AZ) today cited the coming 50th anniversary of Eisenhower's farewell address, the Jan. 17, 1961 speech warning against the “acquisition of unwarranted influence . . . by the military-industrial complex,” in delivering a Senate floor speech on the many ways the former president's admonition has not been heeded.

The “military-industrial complex has become much worse than President Eisenhower originally envisioned:  it's evolved to capture Congress,” the ranking member of the Senate Armed Services Committee said. “So, the phenomenon should now rightly be called, the 'military-industrial-congressional' complex.”

The Arizona lawmaker outlined parts of this network of influence -- spanning the executive and legislative branches and encompassing the defense industry -- and said it props up unnecessary defense spending. McCain, a longtime critic of funding set aside in spending bills by lawmakers for projects in their home districts, called such earmarks “the currency of corruption.”

The movement of high-ranking Defense Department personnel to defense firms and vice versa is “another manifestation” of the military-industrial-congressional complex, McCain said, before turning his attention to how the Pentagon buys its largest weapon systems -- a $1.7 trillion portfolio.

To be clear, the military-industrial-congressional complex does not cause programs to fail.  But, it does help create poorly conceived programs -- programs that are so fundamentally unsound that they are doomed to be poorly executed.  And, it does help keep them alive -- long after they should have been ended or restructured. . . .

With the federal budget deficit having hit $1.3 trillion for the 2011 budget year and facing the fact that the defense budget will likely not grow to any significant extent in the near-term, we in Congress must be mindful of how the military-industrial-congressional complex can negatively affect decisions to buy and keep major weapon systems.

McCain discussed efforts under way to improve defense acquisitions, then enumerated programs with procurement issues that have led to rising costs: the F-35 Joint Strike Fighter, the Expeditionary Fighting Vehicle, the V-22 Osprey, the Space-Based Infrared System High, the Advanced Extremely High Frequency satellite, the Evolved Expendable Launch Vehicle, the Future Combat System, the Littoral Combat Ship, the F-22 Raptor and the DDG-100 Zumwalt Class Destroyer.

With his allocated speaking time running expiring, McCain skipped over many of the conclusions about how to improve procurement so the Senate could proceed to debating the fiscal year 2012 defense authorization bill. But the full version of his prepared remarks contains a lot more:

So, going forward, what can be done to prevent the havoc the military-industrial-congressional complex can wreak on how we buy major weapon systems?  Well, little can be done to disrupt the inherent biases of those who are the major forces in the military-industrial-congressional complex to maximize their own particular interests.  But, we can help the Department of Defense reform itself by developing a weapons procurement process that directly responds to the root causes of failure by, for example, starting programs on a solid foundation of knowledge with realistic cost and schedule estimates and budgeting to those estimates; locking in sufficiently defined requirements early; managing the cost, schedule and performance trade-space effectively to ensure that needed capability is procured within a fixed, reasonably short period of time; insisting on early and continued systems engineering; leveraging mature technologies and manufacturing processes; not procuring weapon systems that promise generational leaps in capability in a single bound; and definitely not doing so under cost-plus contracts.

We must also ensure transparency and accountability throughout, and use competition to encourage industry to produce desired outcomes and better incentivize the acquisition workforce to do more with less.  We should also embrace initiatives geared at making the government as skilled and knowledgeable a buyer as Industry is a seller.  With the right leadership, such approaches may help overcome the negative, pernicious effects of the military-industrial-congressional complex on how we buy major weapon systems.  And, given how tightly woven the military-industrial-congressional complex is into the fabric of our society and economy, this is all we can really hope for.

Only after implementing such an approach over a period of time and under the right leadership can one hope to see the most elusive of all behavioral improvements—enduring cultural change.  But, if achieved—and it most certainly can be—cultural change would be a powerful panacea to the “unwarranted influence” of the military-industrial-congressional complex in the defense procurement process.

By Christopher J. Castelli
December 15, 2011 at 2:47 PM

Pentagon policy chief Michèle Flournoy released a statement Wednesday night concerning plans to shift Marines from Japan to Guam:

The United States is committed to Guam's role as a strategic hub, and to that end a U.S. Marine Corps presence in Guam remains an essential part of our Pacific strategy.

In fulfilling our regional commitments, we will continue to consult and coordinate with our allies and partners and stakeholders within the U.S. government - including Congress - to address concerns, while ensuring our forward presence in the region is geographically distributed, operationally resilient, and politically sustainable.

Within this context, we welcome the Government of Japan's assurances that it is preparing to move forward with the steps necessary for the Futenma Replacement Facility (FRF), specifically filing the necessary environmental impact statement by the end of the year. Progress on the FRF plan is necessary to build confidence about the viability of our realignment efforts.

We look forward to working with Congress on the critical elements to the realignment of our forces in Japan and Guam, which will result in a reduced number of Marines in Okinawa and a consolidation of our bases in Okinawa, both of which will lessen the impact in Okinawa. U.S. forces in Japan and Guam are also vital to our efforts to maintain a strong forward-deployed presence in the Pacific region.

Inside the Pentagon has some news this week on Guam:

House and Senate authorization conferees this week agreed to a Senate provision that would prevent the obligation or expenditure of funds to execute the realignment of Marine Corps personnel from Okinawa, Japan, to Guam until certain conditions are met.

But the final agreement, which follows a recent Pentagon appeal on the issue, also adds certain exceptions.

Meanwhile, the White House has been privately urging the Navy to defer the acquisition of land for the relocation project, according to guidance obtained by Inside the Pentagon.

This week's conference agreement for the fiscal year 2012 defense authorization bill urges the defense secretary to promptly provide lawmakers with a master plan, as well as a cost-mitigation strategy, for the realignment of forces to Guam. The provision calls for the Marine Corps commandant to provide lawmakers his preferred force lay-down for the U.S. Pacific Command area of responsibility. Also, the defense secretary would have to provide a master plan for the construction of facilities and infrastructure to execute the commandant's preferred force lay-down on Guam, including a detailed description of costs and a schedule for such construction.

In addition, the defense secretary would have to certify to Congress that "tangible progress" has been made regarding the related relocation of Marine Corps Air Station Futenma. The bill also calls for a federal plan detailing descriptions of work, costs and a schedule for completion of construction, improvements and repairs to the non-military utilities, facilities and infrastructure on Guam affected by the realignment of forces. The final version of the provision also requires the defense secretary to obtain a specific authorization for the use of appropriated funds in FY-12 to be used to construct or acquire public infrastructure on Guam.

By John Liang
December 14, 2011 at 10:24 PM

House Armed Services Committee Chairman Buck McKeon today introduced a bill that would "pay for the first year of sequestration cuts without doing serious harm to America's military," according to a just-released panel statement. "The bill holds to the spirit of the Budget Control Act  (BCA) and leaves total sequestration caps in place. The bill is co-sponsored by leading Republican members of the defense committees," the statement adds. The legislation is H.R. 3662, the "Down Payment To Protect National Security Act." The committee further states:

Last month's failure of the supercommittee to find $1.2 trillion dollars in savings over ten years triggered equivalent cuts in discretionary spending. America's military funding will be cut by $500 billion, compounded on the $465 billion already cut this year.

In addressing the perilous cuts facing the military, McKeon said, "America's military commanders have warned us that these cuts will cripple our ability to defend the nation.  After cutting almost $500 billion from defense, we are clearing a lot of waste, fat, and even muscle out of the military.  Going into sequestration cuts us to the bone.  It forces us to break faith with the men and women who have been at war for a decade now. We can and should have a national conversation about our role in the world and how our military is configured. That conversation should come before we cut the budget, not after."

The Down Payment To Protect National Security Act imposes a reduction of federal workforce by 10% through attrition and applies the savings to pay for one year of sequestration, for defense and non-defense categories.  A 10% reduction will be achieved over 10 years by only hiring one federal bureaucrat for every three who retire.

Unlike other sectors of the government, the Department of Defense must plan for personnel costs, weapons systems, and other operational needs years before they are needed.  Decisions that will impact the FY 13 budget are being made now.  Many of those decisions, like canceling procurement projects, separating troops, and closing facilities, are irrevocable.

"The coming political year is likely to be marked with gamesmanship and brinksmanship.  My bill gives Congress a shot at statesmanship.  Over half of the deficit reduction efforts to date have come out of the military," McKeon said.  "The troops simply don’t have any more to give. It is time we address our debt crisis sensibly, by literally shrinking the size of government.  At the same time, we will meet our commitment to saving $1.2 trillion over ten years.  That should be enough to persuade the Commander in Chief to put politics aside and protect our troops."

By The Numbers:

Defense Cuts Since 2011

·         2011 Gates Efficiencies: $178 Billion

·         BCA Tier 1 Cuts: over $465 Billion

·         Sequestration Cuts: Over $500 Billion

·         Sequestration Cuts for FY 13: $55 Billion

Down Payment On National Security Act

·         Savings Through 10% Attrition: $127 Billion

·         Available Funding for Defense: $55 Billion

·         Available Funding for Non-Defense Discretionary: $55 Billion

·         Available funding for Deficit Reduction: $17 Billion

By John Liang
December 14, 2011 at 4:30 PM

Aerospace Industries Association CEO Marion Blakey thinks sequestration will ravage the aerospace and defense industry. In a year-end Q&A with SmartBrief, she said:

We believe the cuts will be devastating to our national security, economy and industry. With more than 1 million jobs at stake, our only option is to keep fighting. That means more rallies, more outreach to the press and ongoing efforts to educate policymakers and stakeholders across the country about the disastrous consequences of gutting the U.S. aerospace and defense industry. Aerospace and defense is Second to None and we intend to keep it that way.

When asked about the prospects for U.S. competitiveness in the international marketplace, she responded:

To preserve and expand on our industry’s historical export surplus (more than $51 billion in 2010) requires a level playing field. Adequate access to export financing and robust U.S. government advocacy for civil, space and defense exports are fundamental necessities. Implementation of the administration’s Export Control Reform initiative in 2012 will also be critical.

The lack of predictability, efficiency and transparency in the current licensing system has damaged our industrial base in many key sectors and hurts our national security and foreign policy cooperation with close allies and partners. Even with the best technology, our members tell us that they’ve lost business to international competitors, with small businesses being most impacted.

By Suzanne Yohannan
December 13, 2011 at 8:49 PM

Lawmakers conferencing the fiscal year 2012 defense authorization bill have decided to maintain a 2007 energy law provision that bans federal purchases of carbon-intensive alternative fuels, rejecting an attempt by the House to repeal the ban as it applies to the Defense Department.

The conferees' rejection of the House measure to block DOD compliance with section 526 of the energy law is referenced in the House-Senate conference report for the fiscal year 2012 defense authorization bill, released last night by the House Armed Services Committee. The House "recedes" in its attempt to exempt DOD from the section 526 alternative fuel procurement requirement, the conferees say in their final report.

Section 526 bars federal agencies from purchasing alternative fuels with higher greenhouse gas (GHG) emissions than conventional fuel. DOD is currently studying the lifecycle GHG emissions of fuels it purchases containing Canadian tar sands, in light of section 526 requirements.

But industry and other critics have sought to repeal the provision, charging it hampers demand for nonconventional fuels like tar sands, oil shale and coal-to-liquid fuels. Supplies of these fuels, especially Canadian tar sands, are expected to increase given two pipelines already approved by the State Department in recent years, and the possible approval of the controversial Keystone pipeline.

"Failure to repeal Section 526 will increase the nation's dependence on imported oil, while jeopardizing thousands of American jobs that depend on the continued flow of Canadian oil," the American Petroleum Institute (API) said in a press release earlier this year.

But earlier this year, former military officials publicly criticized the 526 repeal proposal, saying it would impede the military's move toward clean energy and maintain the military's reliance on oil and gas.

Rep. Adam Smith (D-WA), ranking Democrat on the House Armed Services Committee, opposed repeal during House floor debate last May on the defense bill. Section 526 bars "tax dollars from being used to purchase fuels that have a higher pollution emission than conventional fuels," Smith said. "As the largest federal agency, exempting DOD from 526 is a step backward in this effort."

The House sought to revoke section 526, as it applies to DOD, when it passed the defense bill in May. But the provision was rejected by the Senate Armed Services Committee earlier this year, with a committee spokesperson saying the panel lacked jurisdiction over the issue.

The conference report now goes to the House and Senate for votes on its final passage.

By John Liang
December 13, 2011 at 5:29 PM

National Guard Association of the United States President Gus Hargett is lauding the decision by House and Senate conferees to include language in the fiscal year 2012 defense authorization conference report that would allow the head of the National Guard to become a member of the Joint Chiefs of Staff.

In a statement released today, Hargett, a retired major general, says:

The passage of the fiscal 2012 defense authorization bill conference report last night brings the National Guard to the cusp of its greatest legislative victory in more than a century. Not since the Militia Act of 1903 created the modern, dual-mission National Guard have we seen approval of legislation that could have such a significant positive impact on our force.

But this is so much more than about giving the Guard a voice at the Pentagon by adding the chief of the National Guard Bureau to the Joint Chiefs of Staff. It's about ensuring our civilian leaders have access to expertise on the Guard's domestic-response capabilities in a crisis.

On this, the 375th birthday of the National Guard, we thank the conferees for honoring the will of the House and the Senate by keeping the fundamentals of National Guard Empowerment intact in their final report.

We also thank the principle sponsors -- Senator Patrick Leahy and Senator Lindsey Graham in the Senate and Representative Candace Miller and Representative Nick Rahall in the House -- for their support, their leadership and their determination. We know they were inspired by the daily sacrifice and service of our Guard men and women around the globe, and for that all who lead the National Guard are deeply humbled.

Presuming the House and Senate follow historic precedent and approve the conference report, I respectfully urge President Barack Obama to honor his 2008 campaign promise to us and with his stroke of a pen provide the National Guard with a seat at the table.

By John Liang
December 13, 2011 at 12:50 AM

House and Senate lawmakers this evening agreed on the conference report for the fiscal year 2012 defense authorization bill. Senate Armed Services Committee Chairman Carl Levin (D-MI) released the following statement:

For five decades, Congress has without fail passed an annual defense authorization act in the interests of protecting our nation and doing right by our troops and their families. The conference report we have just adopted gives us the opportunity to continue that unbroken line, and I am confident it will pass both houses with strong bipartisan support.

I want to thank my partner in the Senate, Senator McCain, as well as Chairman Buck McKeon and Ranking Member Adam Smith, for their extraordinary hard work and cooperation. Assisted by staffers who have worked way beyond the call of duty, we have demonstrated that even at a time of political polarization, and even when dealing with complex and sometimes controversial issues, members of Congress can come together to legislate and do our duty to the people we serve.

Our primary responsibility, this and every year, is to pass a bill that provides for the national defense, ensures that our troops and their families are cared for, and delivers maximum value for taxpayers’ hard-earned dollars.

This agreement authorizes $662 billion for national defense discretionary programs, which is $26.6 billion less than the budget request. That includes $23 billion less than the base budget request, $2.4 billion less than the overseas contingency operations request, and $1.1 billion less than the Department of Energy’s request for national security programs. It includes a 1.6 percent pay raise for all members of the uniformed services and authorizes more than 30 types of bonuses and special pays to encourage enlistment and re-enlistment.

The detainee provisions have generated a great deal of discussion. There were ample assurances in the Senate bill that there would be no interference with civilian interrogations and law enforcement. Those provisions:

* Left it to the president to determine who is connected to al Qaeda and therefore subject to presumed military detention;

* Provided that those procedures not interfere with ongoing intelligence, surveillance or interrogations by civilian law enforcement;

* Left it to the executive branch to determine whether a military detainee is tried by a civilian or military court;

* Gave the executive branch broad waiver authority.

However, to address the perception of some that the Senate bill somehow constrained civilian law enforcement, the conference report provides a number of additional assurances that there will be no interference with civilian interrogations or other law enforcement activities:

* We have added language that says:

'Nothing in this section shall be construed to affect the existing criminal enforcement and national security authorities of the Federal Bureau of Investigation or any other domestic law enforcement agency with regard to a covered person, regardless of whether such covered person is held in military custody.'

* We have changed the title of the section in question from ‘Requirement for Military Custody’ to 'Military Custody for Foreign al Qaeda Terrorists.'

* We have changed the waiver provision so that waiver authority now rests with the president, rather than the secretary of defense.

* And we have changed language that protects interrogations to make clear that it is civilian interrogation generally that is protected from interruption, and not just a single interrogation session.

Conferees adopted Senate language bill language making clear that we are not modifying existing law on the issue of who is an enemy combatant. Existing law on transfer of Guantanamo detainees to foreign countries is maintained, but with added flexibility for the executive branch in the form of a waiver. And existing law on transfer of Guantanamo detainees to the United States is maintained for another year.

After a decade of war against al Qaeda and its affiliates under the Authorization for the Use of Force of Sept. 18, 2001, it is long past time to provide a statutory basis relating to military detention under that authorization.

There are some other major accomplishments of the bill. The conferees have adopted the Senate’s strong provisions applying sanctions against Iran’s Central Bank virtually intact. Provisions from the Senate bill included in the conference report give us confidence that sanctions will not result in a windfall for Iran through increases in the price of oil. At the same time, these provisions will add major pressure on Iran to end its quest for nuclear weapons.

The conference report also includes the strong Senate provisions relating to counterfeit electronic parts in the defense supply chain. The Senate Armed Services Committee’s investigation revealed a flood of counterfeit parts, overwhelmingly traceable to China. That flood endangers our national security, threatens the safety of our troops, wastes taxpayers' money and costs American jobs. This legislation will help stem that tide.

The conferees have also adopted Senate language reauthorizing the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (SBTT) programs. These programs are important for the health of small business and for our ability to grow the economy through innovation. And they are important for our national security. The Department of Defense is the largest user of these programs, and innovations that they produce have made significant contributions to our defense.

Finally, the conference report contains no earmarks.

By Christopher J. Castelli
December 12, 2011 at 9:47 PM

Defense Secretary Leon Panetta announced today that Under Secretary of Defense for Policy Michèle Flournoy is stepping down. Here's his statement:

Under Secretary of Defense for Policy Michèle Flournoy has today announced her intention to step down and return to private life. In her discussions with me, Michèle made clear that her decision to leave is motivated by personal and family considerations. I am very pleased that she has agreed to stay on until early next year to enable a smooth transition.

Michèle has been an invaluable advisor to me during my six months as secretary of defense, and has been an outstanding departmental leader for nearly three years at a time of great consequence for our nation's defense. From guiding our strategy in Afghanistan and Iraq, to helping set the department's priorities and global posture through the 2010 Quadrennial Defense Review as well as the strategy review that has been underway this year, Michèle has made a strong and lasting positive imprint on this department and on our nation's security.

Michèle is a treasured colleague, and the entire Department of Defense will be sad to see her go, but she has built an incredible team that is a testament to her leadership. I will personally miss her valued counsel, but I understand the stresses and strains that holding senior administration positions can have on families. I look forward to having the opportunity to paying full tribute to Michèle and wish her and her family all the best in the next stage of their lives. I'm confident that she will have many years of service in her future.

By Gabe Starosta
December 12, 2011 at 3:09 PM

The Defense Department announced on Friday that it has come to an agreement with Lockheed Martin for the fifth lot of Joint Strike Fighter aircraft, and that lot -- which will include 30 planes -- will cost DOD about $4 billion. In a contract announcement, DOD states that Lot 5 of F-35 low-rate initial production will be made up of 21 conventional-takeoff-and-landing jets for the Air Force, six carrier variants for the Navy and three short-takeoff-vertical-landing aircraft for the Marine Corps. The contract also includes mission support equipment, flight test instrumentation for those 30 aircraft and flight test equipment for the United Kingdom.

Two-thirds of the work to be performed under Lot 5 will be done in Fort Worth, TX, where Lockheed has its primary F-35 production line. The rest of the work will take place at several locations around the United States, except for a small portion to be done in the United Kingdom by BAE Systems. The Lot 5 work “is expected to be completed in January 2014,” the announcement states.

DOD says $2.6 billion of the contract value, or about 66 percent, will come from Air Force accounts; $937 million, more than 23 percent, from Navy accounts; and $426 million, close to 11 percent, from the Marine Corps. The United Kingdom is also paying a tiny fraction of the contract value, around $4 million.

The estimated cost of the non-aircraft portion of the Lot 5 contract is unknown, but a simple division of $4 billion by 30 aircraft would give the Joint Strike Fighter's fifth production lot a unit cost of more than $133 million. The actual cost -- assuming no cost or schedule overruns -- is likely to be slightly less than $133 million because of the inclusion of mission-support equipment in the contract.

By John Liang
December 9, 2011 at 7:48 PM

Montana's two senators are calling on Defense Secretary Leon Panetta to ensure that the 150 intercontinental ballistic missiles based in their state will not be subjected to budget cuts.

In a Dec. 7 letter to Panetta, Sens. Max Baucus (D-MT) and Jon Tester (D-MT) call for the ICBMs at Malmstrom Air Force Base -- which houses 150 out of the 450-missile ICBM fleet -- to be left intact. The senators wrote in response to a Nov. 14 missive Panetta sent to Congress that outlined the significant cuts that would take place if the bipartisan "supercommittee" failed to agree on trimming billions of dollars from the government budget. One of the victims would be the nation's ICBM fleet.

In their letter this week, the senators write:

We believe eliminating the ICBM wing would be disastrous for national security and fail to deliver significant budget savings over the next ten years. We hope to work with you to make the cuts required by our nation's financial constraints without jeopardizing national security or gutting critical national assets such as the ICBM force and we urge you to include robust funding for the ICBM wing in the Fiscal Year 2013 budget.

We appreciate the fiscal challenges facing the Department of Defense in the coming years, but ICBM reductions are not a smart way to achieve budget savings. ICBMs are by far the most cost-efficient leg of the nuclear triad. The ICBM fleet provides a critical deterrent because of its considerable survivability. Unlike an attack on the submarine or bomber leg of the triad, an enemy would be required to strike deep within the continental United States in order effectively eliminate ICBM strike capability. Such a visible, highly dispersed force creates a powerful disincentive for any adversary while also providing clear reassurance to our allies, many of whom have chosen not to pursue their own nuclear arsenal because of the security provided by America's nuclear umbrella.

Also, the ICBM force is in the final stages of a decade-long modernization effort. It will be extremely cost effective to maintain the Minuteman III fleet through 2030 as is now planned. It is doubtful that the Department could achieve $8 billion in savings -- as estimated in your November 14th letter -- by eliminating the ICBM force. The large costs associated with closing down large installations, such as environmental remediation and other costs associated with dismantling nuclear infrastructure, would likely offset most potential savings.

In a statement accompanying the letter, Baucus and Tester said:

"Cutting Malmstrom's ICBM force is a no-go in my book, and I'll keep fighting to make sure we keep our ICBMs," Baucus said. "We must make smart budget cuts to get our fiscal house in order, but cutting our ICBM force would jeopardize our national security, and wouldn't make a scratch on the surface of our national deficit. I'll keep pushing on Secretary Panetta and the Department of Defense to include funding for our ICBMs in the 2013 budget."

"Malmstrom's ICBMs are part of our nation's most powerful and cost-efficient nuclear deterrent. If the Defense Department is serious about identifying meaningful ways to save taxpayer dollars, it needs to look at our decades-old overseas bases we no longer need," said Tester, who is spearheading an effort in the Senate to close obsolete overseas bases. "This nation needs real solutions to get our deficit under control, but eliminating a cost-efficient military asset that keeps our nation safe isn't the way to go."

By John Liang
December 8, 2011 at 9:54 PM

Two senior administration officials this week publicly drove home the point that the ongoing export control reform initiative aimed at streamlining the United States Munitions List (USML) is on track to be completed by late next year, and that Defense Secretary Leon Panetta supports the effort as strongly as his predecessor Robert Gates, Inside U.S. Trade reports today. Further:

Anthony Aldwell, deputy director of the Defense Technology Security Administration, told a Dec. 6 session of an export control conference organized by the Practicing Law Institute that Panetta has not been as visible as Gates on the initiative, but that he fully backs the effort.

Aldwell said that Panetta made a "very strong statement that he is fully behind" the export control reform initiative in a meeting he recently held with "prominent" chief executive officers of U.S. companies and Commerce Undersecretary for Industry and Security Eric Hirschhorn.

He also said Panetta will be more public about his support in the near term. "I think you will see him a little more active [on the export control reform initiative] as we get into the new year," Aldwell said.

Gates unveiled the export control reform initiative in an April 2010 speech. In his remarks, he emphasized that the administration would safeguard critical military items, but also wants to facilitate increased trade in defense items with close allies and move away from controlling items that are widely available.

A day earlier at the same conference, Kevin Wolf, assistant secretary of Commerce for export administration, said Panetta is "equally on board" with the national security vision of the export control reform initiative as Gates. "He's expressed his support for [the initiative] equally," Wolf said.

Private-sector sources speculated that a more active role by Panetta will help quell objections from members of Congress who fear that the reform effort will compromise U.S. national security through easing controls. Some lawmakers have objected to scaling back the USML on these grounds.

By John Liang
December 8, 2011 at 8:58 PM

Under Secretary of Defense for Policy Michele Fluornoy is in Beijing this week holding talks with her Chinese counterparts. Those discussions "have been going in a very positive direction," Navy Captain John Kirby, deputy assistant secretary of defense for media operations, said at a Pentagon briefing this afternoon.

"This is a country that we have been trying very hard to develop a good, constructive military relationship with," Kirby said, adding: "We're taking steps in the right direction, and it is moving in the right direction."

Inside the Pentagon reports this morning about a new high-level document in which Chairman of the Joint Chiefs of Staff Gen. Martin Dempsey warns that the U.S. armed services must achieve unprecedented synergy to ensure access to contested waters, skies, land, space and networks in the face of emerging weapons.

Dempsey's admonition comes in the Defense Department's new Joint Operational Access Concept, which names no adversary but focuses on "anti-access" and "area-denial" threats -- terms that DOD associates closely with China. The threats include advanced long-range weapons designed to keep forces away and short-range arms designed to limit freedom of action. ITP further reports:

Inside the Pentagon obtained an unsigned copy of version 1.0 of the 75-page concept document, dated Nov. 22, which was recently blessed by senior military leaders and is due to be signed by Dempsey.

The concept casts the access problem as global, underscoring the growing importance of the Pentagon's AirSea Battle initiative, which aims to counter anti-access and area-denial threats. The proliferation of these weapons, changes in the U.S. overseas defense posture and the emergence of space and cyberspace as contested domains will drive "future enemies, both states and nonstates," to favor using anti-access and area-denial strategies against the United States, the document states.

Inside the Army reported last month that the service has turned to its red-teaming experts at Training and Doctrine Command to kick off what could turn into an existential debate about the Army's role in dealing with China and its reported arsenal of capabilities for keeping U.S. influence in the region at bay, according to officials. ITA further reports:

The request to study the issue comes as the Obama administration is putting in place a wholesale reorientation of its defense posture toward China and its environs following the planned drawdown of forces from Iraq and Afghanistan. Depending on who is asked in defense circles, the reason for the new focus is a either an intricate line of arguments concerning so-called "anti-access, area-denial" capabilities and the need to operate freely in the "global commons," or it's fears about Chinese military prowess that could curtail U.S. ambitions.

Defense Secretary Leon Panetta said in October that the future of U.S. national security in this century will be determined largely in the Asia-Pacific region, where the American military must maintain its presence despite China's development of new weapons that threaten U.S. power projection capabilities. As InsideDefense.com reported:

In what was billed by the Woodrow Wilson International Center for Scholars as Panetta's first policy speech since taking office in July, the defense secretary called for a greater focus on the region to remain competitive with a rising China, echoing a key theme from his recent classified planning guidance.

"And then we must contend with rising powers, and rapidly modernizing militaries, particularly in the Asia-Pacific region -- where the security and economic future of our nation will largely rest in the 21st century," Panetta said. "The rise of China will continue to shape the international system, and we will have to stay competitive and reassure our allies in the region. That means continuing to project our power and maintaining forward-deployed forces in the Asia-Pacific region."

Left unsaid by Panetta but stated in the prepared version of his speech was a reference to long-range weapons that could challenge U.S. power-projection capabilities in the Western Pacific: "Yet our traditional approach to power projection, in that region and elsewhere, is being threatened by the spread of new military capabilities that would deny military forces freedom of action."

Inside the Pentagon reported Sept. 29 that the Defense Department would likely boost investment in Air Force and Navy capabilities associated with countering China in accordance with the classified Defense Planning Guidance that Panetta signed in late August. DOD's latest annual report to Congress on the Chinese military warns that China is "pursuing a variety of air, sea, undersea, space counterspace, information warfare systems and operational concepts" to achieve anti-access and area-denial capabilities. The Air Force and Navy are developing an AirSea Battle concept to address that challenge. The Navy also recently launched a review to identify warfighting investments that could counter Chinese military methods for disrupting key battlefield information systems.