Friday, July 25, 2014

The INSIDER - July 24, 2014

Posted on July 24, 2014

An Inside the Pentagon front-pager on U.S. Southern Command's shortfalls:

SOUTHCOM Wary Navy Ship Decommissionings Will Further Limit Assets

A senior official at U.S. Southern Command this week described to Inside the Pentagon the types of military assets his command is sorely lacking, which together have contributed to diminished abilities for SOUTHCOM to meet its mission needs.

Maurice Manning, the command's assistant deputy director of operations, said in a July 21 interview that SOUTHCOM is hugely underfunded in dollar terms relative to its stated requirements, limiting projects like international travel, mobile training teams, expert exchange tours and the procurement and sustainment of military equipment on behalf of partner nations. The command is also almost entirely devoid of access to military assets like ships and aircraft. Without those, Manning said, SOUTHCOM simply cannot combat transnational organized crime, interdict drug traffickers or perform other core functions. Gen. John Kelly, the command's senior officer, has testified before Congress that SOUTHCOM receives about 5 percent of the military assets it requests.

Manning explained that the shortfall in military resources spans across the spectrum -- SOUTHCOM is insufficiently "sourced" with P-3 Orions and other maritime patrol aircraft, airborne intelligence-collection platforms ranging all the way from small unmanned aircraft up to the large RQ-4 Global Hawk, helicopters with forward-looking infrared and possibly munitions on board, small and fast patrol boats, and perhaps most critically, larger Navy ships with associated helicopters that are used to detect, track and arrest criminals in open water approaching the United States.


The head of Army Materiel Command spoke at a Defense Writers Group breakfast yesterday:

Army Acquisition And Sustainment Reviews Identify Systems To Divest

The Army has identified several systems to unload as a result of a series of joint acquisition and sustainment reviews launched late last year, according to a top general who helps run the effort.

Gen. Dennis Via, the chief of Army Materiel Command, said the JASR effort has helped pinpoint "different variants of vehicles" that have been utilized for "a certain niche requirement in Afghanistan" and can be divested from the service's inventory. Variants of the Mine Resistant Ambush Protected vehicles and "some of the mine rollers and other types of systems that we put in place that were bought . . . for that unique mission" were singled out, Via added.

"First and foremost we want to make sure that we can identify what the future requirements are going to be and so we have to have transparency of the programs," Via told reporters July 23 at a Defense Writers Group breakfast in Washington. "I think [JASR] also helps us in identifying how we transition systems to sustainment and part of that is divesting systems."

Earnings Hit.

The KC-46 tanker program impacted Boeing's earnings:

Boeing Took $272M Second-Quarter Hit On KC-46

Boeing absorbed a $272 million hit on the KC-46 tanker program in the second quarter of 2014 due to unexpected engineering challenges, company officials reported during a July 23 earnings call.

Boeing CEO Jim McNerney and CFO Greg Smith told investors during a second-quarter earnings call that the charge is owed to engineering challenges associated with wiring the first test aircraft, challenges that has previously reported.

"That [charge] largely relates to additional engineering and manufacturing labor associated with challenges we encountered in the wiring installation as we moved into the systems integration and final assembly on the first test aircraft," Smith said.

For more second-quarter defense contractor earnings statements, click here.

Stately Defense.

A new Atlantic Council report weighs in on the State Department's role in defense policy:

Atlantic Council: State Department Should Have Bigger Role In Defense Policy

A July 22 think tank report suggests the State Department should have an enhanced role in defense policy in key regions and advocates for a restructuring of the geographic combatant command system.

The report, released by the Atlantic Council and headed by former National Security Adviser to President Obama Gen. James Jones, states the "United States faces increased risks and missed opportunities to advance U.S. interests because it has focused on the military as the primary government instrument working with allies and partners at the regional level."

It goes on to say that a balanced approach between the Defense and State Departments would strengthen U.S. engagement more broadly and that the departments should focus more on regions than on a specific policy for each country.

Rocket Motors.

Continuing our coverage of the Senate Appropriations Committee's FY-15 defense spending bill:

Lawmakers Worried Over State Of Domestic Rocket Motor Production

Senate appropriators are concerned that the domestic industrial base for rocket motors is being damaged by budget constraints that are killing competition and driving the Defense Department to foreign vendors.

"Whenever possible, domestic sources should be considered, and full and open competition employed before awarding contracts," the Senate Appropriations defense subcommittee wrote in a report accompanying its version of the fiscal year 2015 military spending bill, which was approved by the full committee July 17.

The lawmakers singled out the Advanced Medium-Range Air-to-Air Missile and Guided Multiple Launch Rocket System as examples of programs with foreign vendors or a lack of competition.

More on the bill:

Senate Panel Increases Funding For DOD Basic Research, DARPA

Expressing concern that the Pentagon sought less money for basic research and development, Senate appropriators have increased the Defense Department's requested fiscal year 2015 funding for basic research to nearly $2.3 billion -- a 5 percent boost from the amount enacted in FY-14.

In a report accompanying its FY-15 defense spending bill, the Senate Appropriations Committee noted that this funding provides an additional $30.9 million for the Defense Advanced Research Projects Agency basic research. The panel approved the bill last week.

Senate Panel Questions SOCOM's Understanding Of Long-Term ISR Needs

Senate appropriators are concerned that U.S. Special Operations Command does not fully understand its intelligence, surveillance and reconnaissance needs, and are calling for a review of manned ISR aircraft requirements to support special operations forces.

In a report accompanying their fiscal year 2015 defense spending bill, Senate Appropriations Committee members said they agreed with their authorization colleagues that a review for platform requirements for manned ISR is needed. Senate appropriators also called for a $5.4 million reduction to the Pentagon's $40.5 million request to modify MC-12 aircraft that are being transferred from the Air Force to SOCOM.

DOD Could Be Directed To Transfer Technologies For Cross-Service Needs

Lawmakers want the Defense Department to create a pilot program aimed at increasing technology transfers with businesses and organizations to support critical cross-service needs.

The Senate Appropriations Committee's July 17 mark-up of the fiscal year 2015 defense spending bill directs DOD to "conduct a pilot program on public-private technology transfer ventures between Department of Defense research and development labs and centers and regionally-focused technology commercialization organizations."


A new DOD legislative proposal would call on the National Defense Stockpile to buy three new materials:

DOD Seeks Authority To Obtain New Materials For Defense Stockpile

The Defense Department is recommending authorization for the purchase of three new materials by the National Defense Stockpile, according to a July 2 legislative proposal.

The materials -- high and intermediate modulus carbon fibers, tantalum and germanium metal -- have been "identified as necessary to meet the military, industrial, and essential civilian needs of the United States as the result of a thorough analytical requirements determination processes," the proposal states.

The recommendation would allow the stockpile manager to use up to $50 million from the NDS Transaction Fund for the acquisition of the materials.

Document: DOD's Fourth Legislative Proposals Package For The FY-15 Defense Policy Bill

-- John Liang

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