The Insider

By Tony Bertuca
January 4, 2011 at 4:52 PM

Defense analysts at the Lexington Institute have been tough on the Army's Ground Combat Vehicle lately -- one official even went as far as to call the vehicle program "doomed" -- but the service hasn't been shy about defending its strategy. This back-and-forth has been playing out online as industry prepares to respond to the GCV technology-development phase request for proposals on Jan. 21.

The latest volley comes from Lt. Col. Mark B. Elfendahl, chief of Training and Doctrine Command's joint and Army concepts division, who wrote a response to criticism leveled by Daniel Goure, a Lexington Institute analyst who questioned the Army's need to invest in the GCV, expected to cost $10 million per vehicle.

"Ground combat soldiers bear the brunt of war today and will do so tomorrow. America's adversaries have made the conscious decision not to fight the U.S. in the air, or at sea, and with good reason," Elfendahl wrote in comments that were posted on the Lexington Institute's website. "The GCV will be a well-used, highly challenged, effective and efficient means to employ U.S. soldiers around the world. It will field the latest technology to provide growth potential, enhanced survivability, and operational adaptability. Developing the GCV is an essential step toward providing the necessary capabilities for U.S. forces to engage and to respond to the wide variety of threats in our future."

But Lexington's Goure argued in a Dec. 8 blog entry that the Army faced greater challenges that trumped the need for a new ground vehicle such as networking the force or improving precision strike capabilities.

"While there is value to be had in a highly survivable vehicle that can transport an entire infantry squad while also carrying 'heavy' weapons, such a capability does not seem to address the Army’s biggest challenges," he wrote. "In fact, building another massive, fifty to seventy ton vehicle does not seem the right solution to the problem of deploying into austere locations and sustaining operations in immature theaters. But even if it were, the dominant problem for the Army is not how to get a nine man squad from a Forward Operating Base to the scene of a tactical engagement but whether it will be able to conduct expeditionary warfare in the future or operate in a high-intensity threat environment."

A focus of the GCV program is to deliver the capacity to transport nine soldiers (a full squad) to combat zones, a capability the Bradley Fighting Vehicle does not have. The Stryker can carry a full squad, but it is less armored and soldiers must deploy further away from the fight.

Ultimately, Goure wrote, the Army should focus on modernizing its current fleet of armored vehicles.

"While the re-released Ground Combat Vehicle RFP could be the start of a revolution in how the Army develops requirements and acquires weapons systems it may not be the right place to invest lots of scarce resources," he wrote. "The Army already has a massive fleet of armored combat systems virtually all of which can or are being modernized. The opportunity costs of investing in another ground combat system seem to be just too high at this point in time."

The exchange between Goure and Elfendahl marks the second time the Army has publicly responded to criticism of its GCV solicitation. The back and forth began when Lt. Gen. Michael Vane, the deputy commanding general of TRADOC and director of the Army Capabilities Integration Center, responded to Lexington's chief operating officer, Loren Thompson, who posted a blog entry on Forbes.com on Dec. 2 calling the entire program "doomed" due to high costs and contract changes that will disincentivize industry. The GCV technology-development phase solicitation calls for a "fixed-price incentive-fee" arrangement in which industry has been given a ceiling of $450 million. If winning companies come in below that cost, the government will pay them 20 percent of any money saved. If they come in over budget, however, contractors will be responsible for any additional costs.

Thompson expounded on his reasoning in a Dec. 3 interview with Inside the Army.

"The development schedule is too aggressive and it yields a unit cost that is too expensive," he said at the time. "Yet the contractors are under-incentivized to perform. You have to keep in mind that most of these contractors are conflicted here. They have existing armored vehicle lines that are doing well and generating strong margins. And here comes the Army with a new contract vehicle and a new structure of incentives that does not compare favorably at all. It's expecting these contractors to spend a lot of their own money to get through the technology-development phase and be poised to win. It's also expecting them to keep the program sold on Capitol Hill and it just hasn't given them a good reason for doing those things."

Vane, who helped develop the GCV's requirements, provided the Lexington Institute with a written response on Dec. 6, which the think tank posted on its website.

"Affordability arguments are always related to how much money one has and what the effect is on the operation," he wrote. "It is hard to argue that any force other than the Army (which includes Special Forces) does as much engagement with our friends and enemies and makes as much difference. So, $10 million for nine soldiers that actually engage the enemy directly in this conflict and nearly every conceivable conflict in the future is not a pretty good deal? It think it compares very favorably to a joint strike fighter, a littoral combat ship, or a submarine."

Army Vice Chief of Staff Gen. Peter Chiarelli recently appeared at a pre-proposal GCV conference in Dearborn, MI, to assure industry officials of the service's commitment to the effort.

"The bottom line is this: the Ground Combat Vehicle [request for proposals] represents a great opportunity,” Chiarelli was quoted as saying in a Dec. 18 statement from the Army. "There is a real need for this capability now and in the future. The challenge we face is providing that needed capability, under an accelerated time line and in a fiscally constrained environment. This can only be achieved by working together. I believe this large gathering -- on a Saturday, a week before Christmas -- clearly demonstrates our shared commitment."

By John Liang
January 4, 2011 at 4:32 PM

The Joint Staff recently promulgated an updated "Joint Training Policy" that "guides joint commanders and senior leaders of joint agencies and programs in developing and coordinating joint training programs for their assigned staffs and organizations, component forces and staffs, and assigned forces to support capabilities-based readiness."

The purpose of the Nov. 19 update was:

To establish the Chairman of the Joint Chiefs of Staff policy and guidance for the use of the Joint Training System (JTS) in planning, conducting, and assessing joint training. Training in the context of this instruction aligns with the Department of Defense Strategic Plan for Transforming DOD Training . . . and includes joint training, joint education . . . and job-performance aiding.

By Thomas Duffy
January 4, 2011 at 3:25 PM

The Obama White House is asking all federal departments and agencies to wrap up by Jan. 28 an initial assessment of how they safeguard national security information. The internal reviews, which began last November, were spurred by the massive release of internal national security documents by the website WikiLeaks.

In a Jan. 3 memo, Office of Management and Budget Director Jacob Lew said the director of the Information Security Oversight Office and the National Counterintelligence Executive within the Office of the Director of National Intelligence will evaluate and assist the departments and agencies in their compliance. "Their support will include periodic on-site reviews of agency compliance where appropriate," Lew said.

Lew's memo lays out what each department and agency should include in its review:

1. Assess what your agency has done or plans to do to address any perceived vulnerabilities, weaknesses, or gaps on automated systems in the post-WikiLeaks environment.

2. Assess weakness or gaps with respect to the attached list of questions, and formulate plans to resolve the issues or to shift or acquire resources to address those weaknesses or gaps.

3. Assess your agency's plans for changes and upgrades to current classified networks, systems, applications, databases, websites, and online collaboration environments as

well as for all new classified networks, systems, applications, databases, websites or online collaboration environments that are in the planning, implementation, or testing phases -in terms of the completeness and projected effectiveness of all types of security controls called for by applicable law and guidance (including but limited to those issued by the National Security Staff, the Committee on National Security Systems, the National Institute for Standards and Technology).

4. Assess all security, counterintelligence, and information assurance policy and regulatory documents that have been established by and for your department or agency.

By John Liang
January 3, 2011 at 4:07 PM

Rolling into the New Year, Deputy Defense Secretary William Lynn wants Pentagon leaders to maintain their focus on adhering to high ethical standards. According to a Dec. 21 memo, Lynn writes:

As DoD personnel, we occupy special positions of trust with the American people. Ethical conduct and moral responsibility must be a high priority for each of us as we carry out our official duties. Even the slightest lapses in our ethical decision-making can erode the confidence placed in us by the public. This memorandum reiterates my expectation that all DoD personnel will adhere to the highest ethical standards at all times.

To sustain an ethical culture that inspires public confidence, we must strive to faithfully fulfill our financial, civic, and ethical duties. Fundamental values like integrity, impartiality, fairness, and respect must drive our actions, and these values must be reinforced by holding ourselves and each other accountable for mistakes or wrongdoing. Each of us must also adhere to the ethics laws, regulations, and principles that govern participation in official matters where those matters intersect with our personal and financial interests.

Accordingly, all DoD personnel must be familiar with, and observe, all applicable ethics laws and regulations, including, the Federal conflict of interest statutes, the regulatory Standards of Ethical Conduct for Employees of the Executive Branch (5 C.F.R. part 2635), and the DoD supplemental rules in the Joint Ethics Regulation (DoD 5500.7-R). In addition to strict compliance with laws, rules, and regulations, we must also vigilantly avoid any action that gives rise to public concern about the integrity of DoD business processes and decisions. Honorable intentions or personal ethos cannot justify conduct that creates public doubt about the propriety and fairness of our programs and operations.

Ethical decision-making, however, is not solely a function of determining whether a law or regulation permits you to do something. You should also consider the appearance of your actions -whether they set the right example for peers and subordinates, and how they portray the Department in the eyes of the public. This is especially true for supervisors and managers, whom I expect to lead by example and whom I charge with creating an ethical culture in the workplace. We simply cannot tolerate ethical deviations or shortcuts.

Please be mindful of your ethical obligations. If you have questions, do not hesitate to ask your supervisor, commanding officer, ethics counselor, or others in positions of authority.

By Sebastian Sprenger
December 31, 2010 at 4:50 PM

It looks like 2010 will pass without a decision by the U.S. government on the Medium Extended Air Defense System. Pentagon acquisition chief Ashton Carter's staff fired off an e-mail to German and Italian defense officials earlier this week, we're told, telling them Defense Secretary Robert Gates still had not made a final call on whether he was willing to ask Congress for an extra $600 million required for the program.

Gates is putting the finishing touches on the fiscal year 2012 program objective memorandum -- probably his last -- before it gets rolled into the administration's budget submission in early February. The MEADS decision now is expected some time in January, presumably in the earlier part of the month.

Carter had told the two partner nations in the trinational project a few months ago that a U.S. decision on the way ahead with MEADS would be made by the end of the year. All three countries would have to put up extra money to plug a funding shortfall of about $1 billion for the program's development phase. A new round of negotiations likely would be required either way, we're told.

By John Liang
December 30, 2010 at 6:00 PM

The Navy yesterday made its "dual-buy" approach to acquiring Littoral Combat Ships official with the award of contracts to Lockheed Martin and Austal USA. Each company will build 10 ships apiece between fiscal years 2010 and 2015. According to a service statement:

The amount awarded to Lockheed Martin Corp. for fiscal 2010 littoral combat ships is $436,852,639. The amount awarded to Austal USA for the fiscal 2010 littoral combat ships is $432,069,883.

Both contracts also include line items for nine additional ships, subject to Congressional appropriation of each year's Littoral Combat Ship (LCS) Program requirements. When all 10 ships of each block buy are awarded, the value of the ship construction portion of the two contracts would be $3,620,625,192 for Lockheed Martin Corp., and $3,518,156,851 for Austal USA. The average cost of both variants including government-furnished equipment and margin for potential cost growth across the five year period is $440 million per ship. The pricing for these ships falls well below the escalated average Congressional cost cap of $538 million.

"The awards represent a unique and valuable opportunity to lock in the benefits of competition and provide needed ships to our fleet in a timely and extraordinarily cost effective manner," said Secretary of the Navy Ray Mabus.

This award is a unique opportunity to maximize the buying power on the LCS Program by leveraging the highly effective competition between the bidders. Each contractor's 10-ship bids reflect mature designs, investments made to improve performance, stable production, and continuous labor learning at their respective shipyards. The award was based on limited competition between teams led by Lockheed Martin and Austal USA. Under these contracts, both shipbuilders will also deliver a technical data package as part of the dual award, allowing the government a wide range of viable alternatives for effective future competition.

This approach, which is self-financed within the program by adding a year to the procurement and utilizing a portion of the greater than $2 billion total savings (throughout the Future Years Defense Program), enables the Navy to efficiently produce these ships at an increased rate and meet operational requirements sooner.

Chief of Naval Operations Adm. Gary Roughead praised the Navy's plan to add both ship designs to the fleet: "The LCS is uniquely designed to win against 21st century threats in coastal waters posed by increasingly capable submarines, mines and swarming small craft. Both designs provide the capabilities our Navy needs, and each offers unique features that will provide fleet commanders with a high level of flexibility in employing these ships."

The innovation and willingness to seize opportunities displayed in this LCS competition reflect exactly the improvements to 'the way we do business' in order to deliver better value to the taxpayer and greater capability to the warfighter. Moreover, the Navy's LCS acquisition strategy meets the spirit and intent of the Weapon Systems Acquisition Reform Act of 2009 and reflects the Navy's commitment to affordability. The benefits of competition, serial production, employment of mature technologies, design stability, fixed-price contracting, commonality, and economies of scale will provide a highly affordable ship construction program.

"The rigor and diligence of the source selection process has resulted in the acquisition of quality, capable ships at fair prices," said Assistant Secretary of the Navy for Research, Development and Acquisition Sean Stackley. "This dual award strategy exemplifies the Navy's compliance with Secretary Gates' and Under Secretary Carter's direction to improve the buying power of the Defense Department. Both teams have shown cost control on their second ships, and we look forward to the delivery of these capable fleet assets in the future."

The Navy remains committed to a 55-ship program and the LCS is needed to fill critical, urgent warfighting requirements gaps that exist today. The LCS Program is required to establish and maintain U.S. Navy dominance in the littorals and sea lanes of communication choke points around the world. The LCS Program operational requirements have been virtually unchanged since the program's inception in 2002 and the both hull forms will meet the Navy's operational warfighting requirements.

Check out InsideDefense.com's recent LCS coverage:

New Continuing Resolution Authorizes LCS Dual Buy

As LCS Deal Passes House, Navy Says No More Extensions

Lockheed, Austal Push Back LCS Deadline To End Of Year

CBO: Navy Now Estimates LCS Price At $490 Million Each Under Dual Buy

By John Liang
December 23, 2010 at 8:12 PM

The Missile Defense Agency this week issued revised request for proposals documentation for the Ground-based Midcourse Defense development and sustainment contract competition. The original RFP, which was first released on Dec. 2, includes a decision to change the effort's performance period from 10 years to seven.

Among the revised documents included in the Dec. 22 notice posted on Federal Business Opportunities are an updated statement of work, transition strategy, compliance matrix, industry comments and clarifications, and a Ground-Based Interceptor "section tracker."

Click here to view them.

By John Liang
December 23, 2010 at 5:10 PM

While the Senate may have ratified the follow-on Strategic Arms Reduction Treaty this week despite the opposition of more than a quarter of its members, don't think for a second that the 26 senators who voted against the pact will be off the hook, at least as far as the Truman National Security Project is concerned.

The organization sent letters to each of those senators stating the group was "extremely disappointed in your decision to sweep aside the strong advice of military and security experts by campaigning against the ratification of the New START treaty in the lame duck session. In light of your efforts to undermine American security for political gain, this is the type of Christmas card you should expect to receive this year."

Dear Senator,

We are thinking of you during this difficult time.

We would like to thank you from the bottom of our hearts for your brave campaign to defeat the New START Treaty. In our continued efforts to get our hands on a nuclear weapon, you have been a real ally, and a true friend. We are disappointed that New START has been passed by an overwhelming, bipartisan majority of your peers, but we take comfort in knowing that you did your best, and that you were by our side from the beginning.

Now that the Russo-American relationship will be further strengthened and Russia's stockpile of nuclear weapons will again be monitored by U.S. forces, we will have to come up with new strategies to obtain a nuclear weapon. We hope we can count on you to continue to undermine American security.

With gratitude,

Osama Bin Laden

Sayyid Hassan Nasrallah, Hizbullah

And Other World Terrorists

By John Liang
December 22, 2010 at 8:26 PM

The Senate's approval of the follow-on Strategic Arms Reduction Treaty this afternoon by a 71-26 vote is somewhat "bittersweet" for arms control, according to an essay just published by the Monterey Institute's Center for Nonproliferation Studies. The pact, according to analysts Nikolai Sokov and Miles Pomper, "will aid strategic stability and international disarmament, bolster President Barack Obama's international and domestic standing, and further contribute to the effort to 'reset' U.S.-Russian relations on a more constructive path."

However:

Nonetheless, the issues raised during its consideration, the concessions granted to win its approval, and the closeness and urgency of the vote, indicate the limits and nature of the arms control and disarmament opportunities that the Obama administration will be able to undertake in the final two years of the president's first term. Indeed, those opportunities will narrow even further next year when Republicans will hold five more seats in the Senate and a few of the minority of Republicans who supported the treaty will have retired. The result is that President Obama's effort to build a world free of nuclear weapons, announced with much fanfare in Prague less than two years ago, is likely to be sidetracked for the time being, if not shelved altogether.

One setback to that effort may have occurred even before senators cast their new vote on the treaty in the weapons complex. In seeking to win Republican support, Obama pledged to devote well over $180 billion over 10 years to the modernization and maintenance of the complex that manufactures US nuclear weapons and the missiles, bombers, and submarines that deliver them a sizable investment that may lead some states to question the sincerity of the administration's pursuit of nuclear disarmament.

The second casualty is likely to be US ratification of the Comprehensive Nuclear-Test-Ban Treaty (CTBT). The United States is among a handful of countries that still must ratify this ban on nuclear weapons tests for it to enter into force. In his Prague speech, Obama had pledged to again seek Senate ratification of the treaty. In 1999, the Clinton administration had failed to convince a Republican-controlled Senate to muster the required two-thirds majority for approval. With the Republican minority growing and becoming even more ideological, the Obama administration is unlikely to want to tempt defeat again. Moreover, in agreeing to the modernization pledges as part of the New START ratification process, administration officials have already traded away what was seen as their potential trump card in any CTBT negotiation with Senate Republicans.

Finally , the conditions, understandings, and declarations attached to the treaty's resolution of ratification as well as proposed (if defeated) amendments to the treaty itself, indicate the pressure and limits Obama administration officials would have to operate within should they seek to carry out their desire for a more ambitious series of cuts in the US and Russian nuclear arsenals. New START in many ways merely retains the status quo. The reduction in nuclear weapons it entails is very modest—to 1,550 warheads from 2,200 in the 2002 Strategic Offensive Reductions Treaty (SORT, also known as the Moscow Treaty). The new treaty also does not solve any of the truly contentious issues that dominate the US-Russian arms control agenda—missile defense, conventional long-range weapons, uploading capability, nuclear weapons stockpiles, or non-strategic nuclear weapons, which negotiators have expressed a willingness to tackle, but which were postponed until the next stage. Essentially, the main purposes of New START are two: first, to restore the transparency and verification regime that expired with the expiration of START I in December 2009; and, second, to provide a stable and predictable environment for negotiating a new, more ambitious treaty. Given the modest goals of New START, the drama surrounding ratification in the United States is nothing short of perplexing and demonstrates that emotions and politics, rather than impassioned analysis, dominated debates.

By John Liang
December 22, 2010 at 4:15 PM

Rep. Buck McKeon (R-CA), the incoming head of the House Armed Services Committee, will have six years to enjoy his chairmanship.

That's because House Speaker-to-be John Boehner (R-OH) has re-established term limits for the number of years a lawmaker can serve as a committee chairman, according to an organization that advocates term limits:

U.S. Term Limits President Philip Blumel today praised House Republican Leader John Boehner for restoring House rules limiting the number of years a member of Congress can serve as the chairman of a committee.

"Speaker-elect Boehner is clearly listening to the American people, who don't want congressional committee chairmen to become institutions unto themselves.  Boehner deserves the thanks of all Americans," Blumel said.

"Committee chairmen term limits will allow new blood to take leadership spots, and bring fresh ideas to key committees," Blumel added.

Under the new proposed rules, members will be limited to three two-year terms as committee chairmen.  This rule had existed under the previous Republican majority, but was eliminated when Democrats took control of the majority in 2007.

By Cid Standifer
December 22, 2010 at 2:46 PM

A continuing resolution authorizing a dual-block buy of Littoral Combat Ships is on its way to the president’s desk following a vote to pass the bill in the House last night.

After lawmakers cast their last votes on the bill around 7:30 pm, Navy Secretary Ray Mabus and Chief of Naval Operations Adm. Gary Roughead sent out statements lauding Congress for the decision.

"I'm grateful Congress has authorized the Navy to move forward with the dual block buy for LCS,” Mabus wrote. “This is a unique and valuable opportunity to lock in the benefits of competition and provide needed ships to our Fleet in a timely and extraordinarily cost effective manner. It is the right thing to do; for our Navy, our industrial base, and the taxpayers."

"I am very pleased and grateful Congress has enabled the Navy's plan to add these needed ships to our Fleet,” Roughead added. “This is good for the Navy, shipbuilders and taxpayers."

The Navy has been pushing since November for Congress to approve its new acquisition strategy for the LCS. Earlier in the year, the service planned to downselect between the Lockheed Martine-Marinette Marine team and Austal USA, but after bids came in with lower-than-expected prices, Navy officials switched gears and asked for permission to buy both versions of the ship.

Getting the approval had been a race against the clock because the price guarantees in the bids originally expired on Dec. 14. They were later extended to the end of December.

Language permitting the dual buy was included in several bills, most of which died on Capitol Hill. The one that passed was a stripped-down continuing resolution that extends the federal budget to March. It included a single clause stating, “Subject to the availability of appropriations, the Secretary of the Navy may award a contract or contracts for up to 20 Littoral Combat Ships (LCS).”

By John Liang
December 21, 2010 at 11:02 PM

Incoming House Armed Services Committee Chairman Buck McKeon (R-CA) today announced the chairs of the panel's subcommittees. According to a statement from his office, they are:

* Air and Land Forces – Rep. Roscoe Bartlett, Maryland
* Military Personnel – Rep. Joe Wilson, South Carolina
* Oversight and Investigations – Rep. Rob Wittman, Virginia
* Readiness – Rep. J. Randy Forbes, Virginia
* Seapower and Expeditionary Forces – Rep. W. Todd Akin, Missouri
* Strategic Forces – Rep. Michael Turner, Ohio
* Terrorism, Unconventional Threats and Capabilities – Rep. Mac Thornberry, Texas

By John Liang
December 21, 2010 at 8:29 PM

A just-released Government Accountability Office report states that the agency "cannot render an opinion on the 2010 consolidated financial statements of the federal government, because of widespread material internal control weaknesses, significant uncertainties, and other limitations," particularly at the Pentagon. Further, according to the statement:

"Even though significant progress has been made since the enactment of key financial management reforms in the 1990s, our report on the U.S. government's consolidated financial statement illustrates that much work remains to be done to improve federal financial management.  Shortcomings in three areas again prevented us from expressing an opinion on the accrual-based financial statements," said Gene Dodaro, Acting Comptroller General of the United States.

The main obstacles to a GAO opinion were: (1) serious financial management problems at the Department of Defense (DOD) that made its financial statements unauditable, (2) the federal government's inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies, and (3) the federal government's ineffective process for preparing the consolidated financial statements. . . .

Dodaro also cited material weaknesses involving an estimated $125.4 billion in improper payments, information security across government, and tax collection activities. He noted that three major agencies-DOD, the Department of Homeland Security, and the Department of Labor-did not get clean opinions. Nineteen of 24 major agencies did get clean opinions on all their statements.

"Given the federal government's fiscal challenges, it's imperative that Congress, the administration, and federal managers have reliable, useful, and timely financial and performance information. Improved accuracy and transparency in financial reporting are urgently needed," Dodaro said.

Here are some more DOD-related excerpts from the GAO Auditor's Report:

Property, Plant, and Equipment and Inventories and Related Property

The federal government could not satisfactorily determine that property, plant, and equipment (PP&E) and inventories and related property were properly reported in the accrual-based consolidated financial statements. Most of the PP&E and inventories and related property are the responsibility of the Department of Defense (DOD). As in past years, DOD did not maintain adequate systems or have sufficient records to provide reliable information on these assets. Other entities, most notably the National Aeronautics and Space Administration, reported continued deficiencies in internal control procedures and processes related to PP&E.

Deficiencies in internal control over such assets could affect the federal government’s ability to fully know the assets it owns, including their location and condition, and its ability to effectively (1) safeguard assets from physical deterioration, theft, or loss; (2) account for acquisitions and disposals of such assets and reliably report asset balances; (3) ensure that the assets are available for use when needed; (4) prevent unnecessary storage and maintenance costs or purchase of assets already on hand; and (5) determine the full costs of programs that use these assets.

Liabilities and Commitments and Contingencies

The federal government could not reasonably estimate or adequately support amounts reported for certain liabilities. For example, DOD was not able to estimate with assurance key components of its environmental and disposal liabilities. In addition, DOD could not support a significant amount of its estimated military postretirement health benefits liabilities included in federal employee and veteran benefits payable. These unsupported amounts related to the cost of direct health care provided by DOD-managed military treatment facilities. Further, the federal government could not determine whether commitments and contingencies, including any related to treaties and other international agreements entered into to further the federal government’s interests, were complete and properly reported.

Problems in accounting for liabilities affect the determination of the full cost of the federal government’s current operations and the extent of its liabilities. Also, deficiencies in internal control supporting the process for estimating environmental and disposal liabilities could result in improperly stated liabilities as well as adversely affect the federal government’s ability to determine priorities for cleanup and disposal activities and to appropriately consider future budgetary resources needed to carry out these activities. In addition, if disclosures of commitments and contingencies are incomplete or incorrect, reliable information is not available about the extent of the federal government’s obligations.

Cost of Government Operations and Disbursement Activity

The previously discussed material weaknesses in reporting assets and liabilities, material weaknesses in financial statement preparation, as discussed below, and the lack of adequate disbursement reconciliations at certain federal entities affect reported net costs. As a result, the federal government was unable to support significant portions of the total net cost of operations, most notably those related to DOD.

With respect to disbursements, DOD and certain other federal entities reported continued material weaknesses and significant deficiencies in reconciling disbursement activity. For fiscal years 2009 and 2008, there was unreconciled disbursement activity, including unreconciled differences between federal entities’ and the Department of Treasury’s (Treasury) records of disbursements and unsupported federal entity adjustments, totaling billions of dollars, which could also affect the balance sheet.

Unreliable cost information affects the federal government’s ability to control and reduce costs, assess performance, evaluate programs, and set fees to recover costs where required or authorized. If disbursements are improperly recorded, this could result in misstatements in the financial statements and in certain data provided by federal entities for inclusion in The Budget of the United States Government (President’s Budget) concerning obligations and outlays.

By John Liang
December 21, 2010 at 4:00 PM

The Pentagon's Committee on National Security Systems last month established a "National Policy on Reducing the Risk of Removable Media" like thumb drives and their ilk.

The policy memo "establishes the criteria for using removable media with National Security Systems (NSS)." Further:

Removable media are widely used and it is important to note that the essential problem is not with the media themselves, but with the inability of networks in their typical default conditions to prevent malicious code from executing. The use of removable media can be allowed on NSS, provided safeguards are employed.

Additionally:

Protecting NSS and their associated information infrastructures requires keeping pace with evolving technology and the efforts of adversaries to penetrate, disrupt, exploit, or destroy critical elements of NSS. A layered defense addressing training, technology, procedures, and personal accountability is required to manage risks to NSS that result from the use of removable media.

Following that November policy document, CNSS this month promulgated an "advisory memorandum" that "establishes additional criteria for using removable media with NSS."

To limit the threat posed by removable media, the advisory memo states:

Operators and users of NSS should begin using physical configuration, software settings, a capability such as a Host-Based Security System (HBSS) (a DoD capability designed to address exploit traffic on network hosts), or any combination of these, to disable all "write" privileges for all forms of removable media devices on NSS. Ensure all removable media is prohibited from use on all NSS workstations unless specifically authorized by appropriate authority.

CNSS "provides a forum for the discussion of policy issues, and is responsible for setting national-level Information Assurance policies, directives, instructions, operational procedures, guidance, and advisories for U.S. Government (USG) departments and agencies for the security of National Security Systems (NSS) through the CNSS Issuance System," according to the panel's website. Further:

The CNSS is directed to assure the security of NSS against technical exploitation by providing:  reliable and continuing assessments of threats and vulnerabilities and implementation of effective countermeasures; a technical base within the USG to achieve this security; and support from the private sector to enhance that technical base assuring that information systems security products are available to secure NSS.

By Thomas Duffy
December 20, 2010 at 8:15 PM

The Joint Strike Fighter program office says the F-35 is "the Department of Defense's focal point for defining affordable next-generation strike aircraft weapon systems for the Navy, Air Force, Marines and our allies. The focus of the program is affordability -- reducing the development cost, production cost, and cost of ownership of the JSF family of aircraft."

But Sen. Tom Coburn (R-OK) says the Pentagon is wasting taxpayer money in its pursuit of JSF.

Coburn today released his most recent annual government oversight report,"Wastebook 2010: A Guide to Some of the Most Wasteful Government Spending of 2010." The JSF is the only Pentagon program to make Coburn's list.

Here's what Coburn has to say about the JSF:

The Department of Defense's Joint Strike Fighter (JSF) program is the military's most expensive weapon system acquisition program, but constant cost overruns have kept the price tag climbing ever higher to get less and less. Pentagon officials plan to spend over $323 billion to acquire nearly 2,400 fighter planes, but in 2001, the military expected to pay $231 billion for 2,800 fighter planes. despite the more than 50 percent increase, taxpayers will be paying much more for fewer planes.

According to Coburn, at least $1.5 billion of the program's increased costs this year "are a result of DOD mismanagement."

Coburn does not call for the outright cancellation of the JSF. In a statement, he said he issued the oversight book to "give taxpayers and concerned citizens the information they need to hold Washington accountable."

Noting that military leaders consider the nation's debt to be the gravest national security threat, Coburn does give some insight to his thinking about his choices for this year's wasteful spending list. "Well-intentioned people across the political spectrum will argue about the best way to get us back on track. But we can all agree that cutting wasteful and low priority spending from the budget is not only sensible, but essential," he states.