Wednesday, April 16, 2014

The INSIDER - April 15, 2014

Posted on April 15, 2014 -- UPDATED 6:25 p.m.
New Report.

Posted late Tuesday:

DOD Report On 'Estimated Impacts Of Sequestration-Level Funding'

On April 15, 2014, the Pentagon released a report "that documents the damaging cuts to military forces, modernization, and readiness that will be required if defense budgets are held at sequester-levels in the years beyond fiscal 2015."

AMPV Reschedule.

The Army has moved the award date for its Armored Multi-Purpose Vehicle contract:

Army Delays AMPV Schedule As GDLS Forgoes GAO Protest

The Army has moved the award date for its Armored Multi-Purpose Vehicle contract from the first quarter of fiscal year 2015 to the second quarter, a move that coincides with General Dynamics Land Systems' decision to forgo protesting the service's AMPV acquisition strategy with the Government Accountability Office.

The Army has also modified its AMPV request for proposals to ensure wider industry availability of Bradley Fighting Vehicle technical data.

Whether the RFP changes are related to GDLS' decision to forgo a GAO protest is unclear; neither the Army nor GDLS could immediately respond to questions by press time.

"We will continue to discuss the AMPV program with the U.S. Department of Defense and the Congress," Peter Keating, a spokesman for GDLS, told "We do not believe a GAO protest is the right forum for this issue and we will not file one."

Chopper Contracts.

Lockheed Martin and Sikorsky are reminding the Navy of the consequences of scrapping MH-60R helicopter purchases:

Navy Assessing Impact, Cost Of Breaking MH-60R Multiyear Procurement Contracts

The Navy is scrutinizing its plan to scrap MH-60R helicopter purchases in fiscal year 2016, a move that would place at risk $1.6 billion in planned Defense Department savings and breach separate major multiyear procurement deals with Sikorsky and Lockheed Martin.

Sean Stackley, the Navy's acquisition executive, has directed the program executive officer for air anti-submarine warfare, assault at Naval Air Systems Command to conduct what he called "a lot of analysis" to support initial estimates of costs associated with removing 29 MH-60R aircraft from the FY-16 budget proposal -- including termination liabilities.

"We're reviewing that right now," Stackley told the Senate Armed Services seapower subcommittee on April 10. "There are estimates today that range form various factors to the Navy's share of an ultimate production shutdown to termination liability for any material that was procured earlier on as associated with the multiyear to unit cost impacts to Army aircraft."

The Navy's FY-15 budget proposal sets aside $215 million in contract termination liabilities for canceling the previously planned FY-16 MH-60R purchases.

On Guard.

Inside the Army's top story this week is on the service's ongoing feud with the National Guard over who gets certain helicopters:

Guard Bureau Counter-Proposal Cuts Deeper Into Active Force, Army Says

Army officials argued last week that a recent National Guard Bureau counter-proposal to the service's aviation restructure, which proposes keeping some Apaches in the reserve component, would cut deeper into the active component, jeopardizing its readiness.

Defense officials told Inside the Army that the Guard Bureau has held discussions with House and Senate lawmakers over the past few weeks, with a briefing to senators as recently as April 7, to advance a proposal that would allow the Army National Guard to keep some Apaches.

At issue is a sweeping plan to restructure the Army's aviation branch that would retire the service's entire fleet of OH-58 Kiowa Warriors and replace them with AH-64 Apaches teamed with Shadow unmanned aircraft systems to fill the armed aerial scout mission. To carry out the plan, the Army would take all of the Guard's Apaches and bring them over to the active component. In return, the Army would provide the Guard with 111 L-model Black Hawks. The Guard has strongly opposed losing its Apaches, arguing that the Guard must mirror the active component in capability. The Army has said the Guard could use more lift capability and has argued that it would be more cost-effective to have the attack capability reside in the active component.

In case you missed it last week:

Odierno: Army, Guard In 'Family Spat' Over Independent Commission

Army Chief of Staff Gen. Raymond Odierno told Senate lawmakers last week that he does not want Congress to form an independent commission to determine how to structure the Army and reduce the service's number of active and reserve troops, but National Guard Bureau Chief Gen. Frank Grass welcomed Capitol Hill intervention in a discussion Odierno characterized as a "family spat" over resources.

Helo Training.

Contractors want a law that would force the Army to hold a competition for a new training helicopter:

Industry Wants Legislation To Compel Competition For Training Helicopters

Government contractors are pushing behind the scenes on Capitol Hill for legislation that would compel the Army to hold a competition for a new trainer helicopter, which would upend the service's plan to divest its TH-67 trainers and replace them with LUH-72A Lakota helicopters.

In its fiscal year 2015 budget request, the Army said it would not only transfer Lakotas from the active and Guard units to make up the training fleet at Ft. Rucker, AL, it would also buy an additional 100 Lakotas from Airbus Group -- formerly known as EADS -- in FY-15 and FY-16. The purchase would allow the Guard to keep its share of Lakotas.

An information paper circulating on the Hill -- obtained by Inside the Army -- counters the service's arguments for using Lakotas as training helicopters and advocates for a competition to procure a new aircraft instead. The paper contains both the Army's justification as well as counterpoints crafted by AgustaWestland, according to a defense official. Primarily, the paper states that the Lakota is not as cost-effective as other options and questions why the Army didn't budget to replace the TH-67 in previous program objective memorandums if it wanted a new fleet. The information paper asks, "if the Army had foreseen a need to replace the TH-67 due to obsolescence, why wasn't there advanced planning and a normal acquisition program developed?"

The defense official confirmed that government contractors -- like AgustaWestland -- are lobbying on Capitol Hill for legislation to stop the Army's plan and open a competition for a new trainer.

More helicopter news:

Breaking Mi-17 Contract With Russian Arms Dealer Would Cost $100 Million

Should the Army have to break its contract with Russian arms dealer Rosoboronexport to buy Mi-17 helicopters for the Afghan army, it would cost the U.S. government roughly $100 million, according to the service's new top uniformed acquisition official.

Richard Blumenthal (D-CT), the new Senate Armed Services airland subcommittee chairman, who has long questioned the Army's decision to buy Russian-made helicopters from an arms dealer that has funneled weapons to President Bashar al-Assad's regime in Syria, asked Lt. Gen. Michael Williamson at an April 8 hearing what would happen if Congress "were today or tomorrow to instruct our Department of Defense to cease all delivery," of the helicopters in terms of penalties or termination costs.

Williamson said while he did not have an exact cost, he estimated it would be "upwards of about $100 million" -- a combination of both costs already incurred and fees in connection with breaking the contract.

Odds & Ends.

More briefings from last week's Sea-Air-Space symposium:

Document: NAVAIR Presentation On The X-47B UCAS Program

The April 8, 2014, briefing slides presented at the Navy League's annual symposium outline the status of the X-47B Unmanned Combat Air System.

Document: Navy/Northrop Grumman Presentation On The MQ-4C Triton UAS Program

The April 8, 2014, briefing slides presented at the Navy League's annual symposium outline the status of the MQ-4C Triton unmanned aerial system.

Document: NAVAIR Presentation On The Fire Scout UAS Program

The April 8, 2014, briefing slides presented at the Navy League's annual symposium outline the status of the Fire Scout unmanned aerial system.

-- John Liang

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