The Insider

Sea Battle
By Christopher J. Castelli
June 7, 2010 at 5:00 AM

Senate Armed Services Committee Chairman Carl Levin (D-MI) today released a letter from the Pentagon stating the department's opposition to House legislation that would add mention of the Marine Corps to name of the Navy Department and the title of the Navy secretary.

The House Armed Services Committee's fiscal year 2011 defense authorization bill includes the provision, which is the brainchild of Rep. Walter Jones (R-NC). In recent years, House authorizers have repeatedly tried and failed to enact the proposal, which has never survived the conference process with the Senate Armed Services Committee. The May 26 letter from DOD General Counsel Jeh Johnson is the latest shot across the legislation's bow.

"In our view, the renaming of the Department is unnecessary, would incur additional expense of several hundred thousand dollars a year over the next several years (according to a Congressional Budget Office estimate) and would not enhance the standing or reputation of the Marine Corps," Johnson writes. "A re-designation could be viewed as more than symbolic, and could easily be misinterpreted as a step away from the heritage and tradition of a strong Navy and Marine Corps team." The Navy and Marine Corps have been one team led by one secretary since Benjamin Stoddert was named the first Navy secretary by President Adams in 1798, Johnson notes.

Testing, Testing . . .
By John Liang
June 7, 2010 at 5:00 AM

The Missile Defense Agency over the weekend had a two-stage, Ground-Based Interceptor successfully perform every action short of intercepting an actual target missile, according to an MDA statement.

The interceptor launched from Vandenberg Air Force Base, CA, at 3:25 p.m. Pacific time yesterday.

The two-stage rocket was originally meant to be the main weapon deployed to Europe to help defend the region against the Iranian ballistic missile threat, but the Obama administration in 2008 shifted its focus to using sea- and land-based versions of the Standard Missile-3.

Consequently, the two-stage vehicle is being developed as a hedge against the possibility of the administration's "phased adaptive approach" not working or experiencing delays. Specifically, according to the MDA statement:

The two-stage GBI is undergoing developmental testing as part of the Department of Defense’s strategy to invest in a new missile defense option which can contribute to our homeland’s defense. Results from the test will characterize two-stage performance and design for potential future missile defense applications.

A target missile was not launched for this flight test. After performing flyout maneuvers, the two-stage booster delivered an exoatmospheric kill vehicle to a designated point in space. The exoatmospheric kill vehicle is the component that, if a target missile were present, would collide directly with the threat warhead to perform a “hit to kill” intercept. After separating from the second-stage booster, the kill vehicle executed a variety of maneuvers to collect data to further prove the performance of the kill vehicle in space.

Several missile defense assets and emerging technologies observed the launch and gathered data for future analysis. Participants included the Space Tracking and Surveillance System, AN/TPY-2 X-band Radar, and the Upgraded Early Warning Radar at Beale Air Force Base, Calif.

Initial indications are that all components performed as designed. Program officials will evaluate system performance based upon telemetry and other data obtained during the test.

Vying for VXX
By Christopher J. Castelli
June 7, 2010 at 5:00 AM

Boeing is still advocating the CH-47 Chinook and V-22 Osprey for the VXX presidential helicopter mission despite launching a new relationship with AgustaWestland for U.S. production of the AW-101 medium-lift helicopter, Phil Dunford, vice president and general manager for Boeing Rotorcraft Systems, said today.

Dunford declined to say whether Boeing will ultimately offer a mix of at least two of those platforms for its VXX bid. Boeing will craft its offer based on what the Navy's analyses of alternatives says about factors such as the performance, "productivity" and the cost of VXX aircraft, he added. Those findings might become apparent in August, he said. Boeing will face competition from a Sikorsky-Lockheed Martin team that plans to offer Sikorsky’s H-92 helicopter. The new Boeing-AgustaWestland relationship for the AW-10 is solely for the VXX program, Dunford said.

According to a Boeing statement, the deal "will give Boeing full intellectual property, data and production rights for the aircraft in support of the VXX program. Because of this arrangement, the aircraft will be a Boeing aircraft, built by Boeing personnel at one of its U.S. facilities. The company will submit information regarding this aircraft in response to the Navy's current Request for Information by the June 18 deadline."

Meanwhile, EADS North America is seizing on the AW-101 deal to criticize its rival Boeing's rhetoric in the Air Force KC-X tanker competition. The AW-101 (also known as the EH-101 and US-101) is based on a foreign design, just like EADS' tanker bid.

“We’re pleased that Boeing has openly acknowledged the contribution that international teams, products and platforms make to U.S. national security,” EADS said in a statement. “For several years, Boeing and its allies have been harshly critical of the participation of EADS North America in the KC-X tanker competition. With this announcement, we now expect Boeing to cease its shrill rhetoric and finally allow the KC-X competition to focus on the merits of the tanker offerings.”

Intel Pick
By John Liang
June 4, 2010 at 5:00 AM

The New York Times is reporting that President Obama tomorrow will announce his choice of retired Air Force Lt. Gen. James Clapper to become the next director of national intelligence. According to the newspaper:

The decision could generate consternation on Capitol Hill, where the prospect of General Clapper’s nomination has already been met with mixed reactions among lawmakers of both parties, who argue the job should go to someone from outside the military world.

Clapper, the under secretary of defense for intelligence, recently objected to a proposal by House lawmakers to create a center of excellence for intelligence support to irregular warfare, Inside the Pentagon reported in April:

In a March 12 letter to the congressional defense and intelligence committees, Clapper responds to a requirement in the classified annex of the House version of the Fiscal Year 2010 Intelligence Authorization Act, which directed his office to provide a report on the value of establishing such a center.

“Due to the broad nature of irregular warfare activities, I do not believe there is one organization capable of serving as a Center of Excellence for Intelligence Support to Irregular Warfare, nor do I believe one is required,” Clapper writes. Inside the Pentagon reviewed a copy of the letter.

The Defense Department believes that an enterprise approach best serves the needs of all the organizations involved in irregular warfare activities, according to the memo.

Eye on Research
By Christopher J. Castelli
June 3, 2010 at 5:00 AM

Pentagon acquisition executive Ashton Carter has issued a memo on fundamental research that broadens guidance issued by his predecessor, John Young, on contracted fundamental research. Much of Carter's memo echoes Young's guidance, but there's a key change, according to Robin Staffin, the Pentagon's director of basic science.

"The Secretary maintains his strong support for basic research," Staffin tells us through a spokeswoman. "Since the 2008 memo, it became apparent that there were cases where fundamental research was funded by subcontract from industry with funding categories 6.3 or above, in addition to direct DOD university grants. This memo now covers these cases."

Here's a key section of Carter's May 24 memo:

There will be circumstances in which the DOD Components may find it valuable to perform research with other Budget Activity funds (e.g., Budget Activity 3 and higher) without placing restrictions on publications or personnel. This should be within the discretion of acquisition personnel in consultation with contracting officers, Component management, counsel, and the cognizant Comptroller to ensure consistency with financial management regulations. In addition, the DOD must not place restrictions on subcontracted unclassified research that has been scoped, negotiated, and determined to be fundamental research within the definition of NSDD 189 according to the prime contractor and research performer and certified by the contracting component, except as provided in applicable federal statutes, regulations, or executive orders. Provisions shall be made to accommodate such subcontracts for fundamental research and to ensure DOD restrictions on the prime contract do not flow down to the performer(s) of such research.

Re-Shuffling
By John Liang
June 2, 2010 at 5:00 AM

Lockheed Martin today announced a number of organizational changes to its information systems and global services business unit.

"We periodically review our portfolio of capabilities and services against the demands of the environment to find ways to continuously provide the best, most affordable solutions for our customers, a secure future for our employees and value for our shareholders by assuring a sound strategic fit for each of our lines of business," Lockheed Martin Chairman and CEO Robert Stevens said in a statement. "We completed such a review recently, factoring in the major changes we've seen in the global security environment, world economic conditions and the new priorities of the Administration. As a result, we are initiating several portfolio-shaping actions to strengthen our business over the long term."

Specifically, those actions include:

* Plans to divest most of the Enterprise Integration Group (EIG) and Pacific Architects and Engineers, Inc. (PAE), two units under the company's Information Systems & Global Services (IS&GS) business area. EIG provides high-quality, independent systems engineering and integration products and services to help customers optimize their resources and manage risk. PAE is a wholly-owned subsidiary of Lockheed Martin Corporation with core competencies in mission readiness, peacekeeping, global infrastructure support and disaster relief activities. EIG and PAE combined produce approximately 3 percent of the Corporation's revenue and less than 3 percent of its operating profit.

* Realignment of two other IS&GS units--Readiness & Stability Operations (RSO) and Savi Technology, Inc.--with our Simulation, Training and Support (STS) unit under Electronic Systems. RSO is a leading provider of global services, offering rapid, cost-effective capabilities in logistics, mission operations support and readiness, engineering support services, and integration solutions. Savi Technology provides wireless tracking solutions that enable decision-support for managing assets, inventory and shipments. The new line of business will be named Global Training and Logistics, which describes the breadth of its products and services and the international scope of its business.

* Renaming IS&GS to Information Systems & Global Solutions, replacing "Services" with "Solutions" to better reflect its focus and scope.

Christopher Kubasik, Lockheed's president and chief operating officer, said the plan to divest EIG was based on the U.S. government's "increased concerns about perceived organizational conflicts of interest (OCI)," according to the statement. "Through EIG, Lockheed Martin provides both systems and services to a broad range of government customers, and this has led to concerns about the potential for conflicting interests," Kubasik said. Divesting the company will free it from the OCI concerns and position it to grow, he added.

Inside the Pentagon reported in January that as the Defense Department mulls options for congressionally required conflict-of-interest guidance for major weapons programs, industry leaders were complaining the coming rule may not provide the solution sought by Congress. Specifically:

As part of the 2009 Weapons Systems Acquisition Reform Act, Congress directed the Pentagon “to provide guidance and tighten existing requirements concerning organizational conflicts of interest by contractors” in major defense acquisition programs. The aim was to prevent defense contractors from conducting their own product assessment work, either in house or via a contracted company with ties to the prime contractor.

The legislation prohibits such organizational conflicts of interest from occurring on current and future major defense programs, but leaves it up to DOD to develop a proper implementation plan to prevent such issues.

Some in industry are concerned the coming rule may be too stringent.

“It may be easy for some to recommend a ‘bright line’ test ((or)) not to permit an OCI in circumstances under A,B,G or F . . . and I’d be very concerned about those bright line tests that lead to prohibitions,” Professional Services Council Vice President Alan Chvotkin told Inside the Pentagon. A one-size-fits-all type of rule will simply not work, he argued.

“There has to be some way to know what the outcome of some of these decisions are because these become very significant business and procurement issues,” Chvotkin said. “As you are putting together a ((development)) team, you would like to be able to have some confidence that the team you put together will pass some conflict of interest review.”

Chvotkin, along with other senior industry representatives, made that case during a Dec. 8, 2009, meeting on the organizational conflict of interest issues, sponsored by DOD’s acquisition shop and the U.S. General Services Administration.

Narrowing The Gulf
By John Liang
June 2, 2010 at 5:00 AM

The RAND Corp. has come out with a new study on ways to build security in the Persian Gulf.

"Since the 2003 invasion of Iraq, the United States has found itself deeply – perhaps permanently – engaged in providing security throughout the region of the Persian Gulf and beyond," a RAND statement released today reads. "But how can the United States help create conditions that will foster greater security and stability in the region? Can it do so at potentially reduced cost to itself in blood, treasure and opportunities foregone elsewhere? And how can it enlist others in the effort?"

To that end, a new study by the organization "lays out the criteria and parameters for a new security structure for the Persian Gulf region that seeks to answer these questions."

The study, titled "Building Security In The Persian Gulf," is written by Robert Hunter, a RAND senior adviser and former U.S. ambassador to NATO under President Clinton. Hunter also served as a senior National Security Council official for the Middle East under President Carter. It "covers seven region-specific parameters that need to be considered in developing a new security structure," according to the statement. They are:

* The future of Iraq;
* Iran and its roles;
* Asymmetrical threats;
* Regional reassurance;
* The Arab-Israeli conflict; regional tensions,
* Crises and conflicts; and
* The roles of other external actors.

Hunter's study also "canvasses potential roles and/or models that include NATO, the European Union, an Organization for Security and Cooperation in the Persian Gulf, an Association of Persian Gulf Nations, and several arms control and confidence-building measures, such as political and military commissions, formal U.S. security commitments, an incidents at sea agreement, a counter-piracy convention and cooperation against terrorism." Additionally:

Within the context of fully securing U.S. interests and those of its friends and allies, the study also examines ways to reduce the long-term burdens placed on the United States in terms of military engagement, the financial cost of providing security risks, including to U.S. forces, and opportunity costs, especially in relation to East and South Asia, the Russian Federation and management of the global economy.

New Gigs
By Dan Dupont
June 1, 2010 at 5:00 AM

The Defense Department today made two announcements of key personnel changes in the information systems world:

Alan Lewis has been assigned as principal director, GIG Enterprise Services Engineering, Defense Information Systems Agency, Falls Church, Va. Lewis previously served as chief, GIG Engineering Center, GIG Enterprise Services Engineering Directorate, Defense Information Systems Agency, Falls Church, Va.

Henry Sienkiewicz has been assigned as chief information officer, Defense Information Systems Agency, Arlington, Va. Sienkiewicz previously served as technical program director, Computing Services Directorate, Defense Information Systems Agency, Falls Church, Va.

Tracking Dollars
By Thomas Duffy
May 28, 2010 at 5:00 AM

As Congress continues to pore over the Obama administration's fiscal year 2011 defense budget request, a group of Army financial planners is preparing to meet next month to talk about a vital part of Pentagon budgeting -- how each and every dollar is spent each year.

The Army Financial Improvement Plan Conference/Workshop will be held June 28-29 in the Pentagon, according to the meeting agenda. Army Under Secretary Joseph Westphal and Pentagon Comptroller Robert Hale are scheduled to speak.

The agenda lays out why the meeting is being held:

The conference objective is to inform attendees of Army auditability efforts and outline the Army's approach to obtaining auditability. The conference will address the business processes and controls that lead to audit readiness within the DOD, the importance of new systems (e.g. GFEBS, LMP, and GCSS-Army), the short-term goals to achieve auditability of the Statement of Budgetary Resources and assert the existence and completeness of mission critical assets and the roles the Chief Management Officer and the Army's Office of Business Transformation will play in obtaining and sustaining auditability. This two-day conference focuses on the audit executing roadmap, which includes critical preparatory steps affecting all Army commands.

For years Congress has leaned on the Pentagon to get what is called a "clean audit." Several members of Congress have argued that without knowing where the money is going, no type of budget reform is possible for DOD.

Sen. Tom Coburn (R-OK) recently wrote to President Obama's National Commission on Fiscal Responsibility and Reform, which is trying to tackle the U.S. national deficit problem. After laying out what he sees as serious problems with the nation's defense budget, Coburn offered several steps that could be taken to control defense costs. Coburn's first step may be of interest to the folks attending the Army's June meeting:

Begin a crash program to have the Pentagon pass a financial audit; To provide the necessary incentive for a financial audit the “base” Pentagon budget should be frozen in FY2012 at the FY2011 level. Unless and until all major components and all major defense acquisition programs are certified by the Inspector General or an independent public accountant for an unqualified audit opinion, spending for those components and those programs should remain frozen. This freeze should not apply to any spending for direct support of overseas contingency operations or Defense Department personnel and wounded warrior accounts. If the Secretary of Defense or Congress asserts that a freeze will harm the national security of the United States or our troops in combat, funding may be increased but only by equally reducing other Defense Department components or programs.

'Ignoring Reality'
By John Liang
May 27, 2010 at 5:00 AM

As could be expected, not everyone is a fan of the Obama administration's new National Security Strategy. House Homeland Security Committee Ranking Member Peter King (R-NY) released a statement minutes ago. It reads:

While I am heartened that this first Obama Administration National Security Strategy addresses the growing problem of al-Qaeda recruiting American citizens and those in the country legally, perhaps most notable about the Strategy is what it fails to say.

I have serious concerns about this Strategy. The Obama Administration refuses to even identify head-on the threat our nation faces. Even though we have been at war against radical Islamic jihadists since they killed almost 3,000 Americans on 9/11, the Obama Administration fails to even mention such terms. By his own account, assistant to the President John Brennan stated in a speech yesterday, "nor do we describe our enemy as 'jihadists' or 'Islamists,'" even after these terrorists we are fighting continue to commit their slaughter in the name of "jihad." The Administration is ignoring the quintessential rule of war: 'Know Your Enemy.' Failing to acknowledge the enemy we face will not make the enemy disappear.

John Brennan and others in the Obama Administration are completely ignoring reality and have used this critically important National Security Strategy as another opportunity to satisfy the politically correct left wing and apologize to the world for America.

War Funding
By John Liang
May 27, 2010 at 5:00 AM

The Senate just approved the fiscal year 2010 supplemental spending bill by a 69-29 vote.

The legislation would boost Pentagon procurement accounts by $512 million to buy new aircraft, ground vehicles and other equipment needed for operations in Afghanistan and Iraq, a move that would bring spending on new weapons in the supplemental request to $4.9 billion.

Earlier this month, the Senate Appropriations Committee agreed to a $32.7 billion FY-10 war cost supplemental spending request to help pay for the addition of 30,000 U.S. military personnel President Obama last fall ordered to Afghanistan. As InsideDefense.com reported on May 17:

The package hikes procurement spending above DOD-requested sums, including $104.3 million for the Army; $207.8 million for the Navy; $144 million for the Marine Corps; and $55.8 million for the Air Force.

These figures are detailed in the 90-page committee report accompanying the spending bill. InsideDefense.com obtained a copy of the report.

While the procurement accounts saw increases, DOD's $25 billion request for operations and maintenance accounts was cut by $435.5 million to $24.5 billion; and the $1.8 billion request for personnel spending was trimmed by $108 million to $1.7 billion.

The procurement accounts received funding to replace two “battle-loss” Army helicopters, an AH-64 and an UH-60. Also, the Senate measure would fund ballistic protection for Army helicopters.

The bill would fully fund five MC-12 Liberty aircraft for the Air Force.

Further, the Senate panel would add funds to “improve the Army's automated biometric identification capacity,” according to a statement.

House Keeps Engine
By Christopher J. Castelli
May 27, 2010 at 5:00 AM

On Thursday night, the full House rejected an amendment to the fiscal year 2011 defense authorization bill that would have stopped funding for the Joint Strike Fighter’s alternate engine program. The amendment was sponsored by Rep. Chellie Pingree (D-ME) and other lawmakers.

Defense Secretary Robert Gates has said President Obama should veto the fiscal year 2011 defense authorization bill if it includes funding for the alternate engine.

Seeking Information
By John Liang
May 26, 2010 at 5:00 AM

The Missile Defense Agency wants to gauge the interest of potential contractors in the agency's follow-on effort to the command, control, battle management and communications (C2BMC) program, according to a May 20 Federal Business Opportunities notice.

With responses due by June 21, MDA seeks the following information from interested contractors:

a. Company profile to include number of employees, annual revenue history, office locations, DUNs number, etc.

b. Explanation of the respondent’s ability to perform the capabilities described above (in whole or in part). This should include a description of the company’s effort in the past three years in support of same/similar requirement(s). Include information such as contract number (indicate if your role was a prime or subcontractor), organization supported, contract value, Government points of contact and current telephone numbers, and a brief description of how the contract referenced relates to the technical services described herein. Of particular interest are past performance examples where the company has developed international capabilities with host nations that share resources and sustain interoperability with U.S. systems; experiences where company has managed multiple contractors in a unified team developing capabilities; and experiences in fast-paced, dynamic programs with constant requirements change.

c. Describe the company's recommended approach to transition work from the current provider to ensure no break in C2BMC service and operation, and minimize schedule impact derived from transition. The company should also discuss whether it currently has specific expertise needed to execute the activities described in this RFI, or how it would gain such expertise.

d. If the company recommends parts of the C2BMC Program for separate development, provide the strategy to seamlessly integrate its parts with the other parts it is not providing with minimal schedule, cost, and performance risk.

e. Describe the company's approach in fostering relationships within and across the BMDS Elements and their respective industry team (to include, but not limited to GMD, THAAD, and Aegis BMD) to ensure responsive and efficient working relationships.

f. Describe the company's recommendation on how to foster innovation within the C2BMC Program to provide new approaches to C2BMC development. Alternate approaches to C2BMC architecture and development may be considered. Explain the alternate approach and provide examples of its performance.

The Pentagon's latest operational test and evaluation report, released in January, recommended that MDA revise its Integrated Master Test Plan “to incorporate the operationally realistic testing needed to support the phased, adaptive approach to providing missile defense for Europe.” The Ballistic Missile Defense System elements that need updating in the plan include: the C2BMC system; Aegis Ballistic Missile Defense; Ground-based Midcourse Defense; and sensors.

New School
By Carlo Muñoz
May 26, 2010 at 5:00 AM

This week, the first cadre of Afghan Special Forces were graduated from the training and qualification course run by U.S. and coalition advisers, according to U.S. Special Operations Command chief Adm. Eric Olson. The newly minted cadre of elite Afghan troops will be the first of many expected to pass through the schoolhouse over the coming months, he said today during an irregular warfare symposium.

Once fully trained, those troops will form the backbone of the country’s counterinsurgency and irregular warfare operations.

As first reported by Inside the Pentagon in March, U.S. military advisers were looking to establish an Afghan special forces brigade and a separate Afghan commando brigade, akin to the way U.S. Special Forces and Army Rangers are organized. The Afghan soldiers who completed the SOF training course will be part of the special forces brigade.

Those special forces troops and commando units, known as Kandaks, will support the 134,000-man ANA general purpose force expected by October, which will keep the Afghan army on track to hit its 170,000 total force goal by 2011.

Fighting Words
By John Liang
May 26, 2010 at 5:00 AM

The head of EADS North America is urging Congress not to approve an amendment to the fiscal year 2011 defense authorization bill he says is "prejudicial against the EADS North America bid" for the Air Force's KC-X airborne refueling tanker competition.

"As you are aware, consideration is being given to amending the Defense Authorization Bill to incorporate issues currently before the World Trade Organization as factors in the KC-X tanker competition," Ralph Crosby writes in a May 25 letter to House Speaker Nancy Pelosi (D-CA). "If passed, this legislation would violate the WTO Treaty which forbids punitive action taken on trade matters being adjudicated by the organization."

As Inside U.S. Trade reported last week, the House Armed Services Committee attached an amendment to the FY-11 defense authorization bill that seeks to more closely tie the result of a WTO panel case against alleged European Union member state subsidies to Airbus to the tanker competition. Specifically:

But the amendment, offered by Rep. Adam Smith (D-WA) and accepted by the panel by voice vote late in the evening on May 19, is far weaker than another measure, sponsored by Rep. Todd Tiahrt (R-KS), that was kept out of the bill in part due to furious lobbying by the European Aeronautical Defense and Space Company (EADS) and the EU, sources said.

The lobbyists argued that the Tiahrt bill -- the “Fair Defense Competition Act,” which would have required the Defense Department to calculate the effect of illegal subsidies and add their amount to the EADS bid price -- would have violated the WTO Dispute Settlement Understanding agreement by taking unilateral retaliation outside of the WTO.

The Pentagon has stated that it will not take the Airbus or Boeing WTO cases into account in the tanker bid, in part because the WTO appeals processes are not yet exhausted and won’t be for years.

The weaker Smith amendment will require Defense to issue an interim report on the impact of WTO-illegal subsidies on the fairness of the KC-X tanker competition 70 days after the WTO panel makes its ruling public.

The public unveiling of the ruling is expected in June, but according to sources familiar with the confidential version of the report, the panel has found that Airbus received some prohibited export-contingent subsidies and some actionable subsidies which caused serious prejudice to rival Boeing’s products.

In his May 25 letter, Crosby writes:

In support of this initiative, it has been widely reported in the media that the Boeing Company today has made allegations of improprieties by EADS, specifically regarding trade with Iran. I assure you that these allegations are untrue. EADS scrupulously abides by the laws and regulations that govern the sale of our products -- which include the US Foreign Corrupt Practices Act.

Boeing clearly has resorted to the use of falsehoods, as their only possible tool to prevent the fair competition that the Department of Defense has committed to for the selection of a replacement aerial refueling tanker for the US Air Force. Their effort to use legislation to change the rules of this procurement places their own self-interest ahead of that of the US warfighter, who will be the primary beneficiary of this carefully formulated competitive procurement.