Thursday, December 18, 2014

The INSIDER - December 16, 2014

Posted on December 16, 2014
SIGAR Inquiry.

Starting off this Tuesday INSIDER with a story posted shortly after midnight last night:

SIGAR Begins Inquiry Into Alleged $700M Mismanagement By DOD Business Task Force

The Special Inspector General for Afghanistan Reconstruction has begun what he calls a "full-court press" on a Pentagon business task force accused of squandering $700 million of taxpayer money with the release of two letters detailing allegations of imprudent spending and possible mismanagement, specifically its efforts to develop the Afghan gem industry and repair a gas pipeline.

In a Dec. 10 letter to Defense Secretary Chuck Hagel, SIGAR John Sopko states he has received troubling allegations related to the Defense Department's Task Force for Business and Stability Operations (TFBSO) involving budgetary excess and profligate travel by employees and contractors.

The letter requests DOD provide SIGAR with the names of the officials who oversaw TFBSO spending and programs as well as all travel documents from the end of 2012 to the end of 2014.

Document: SIGAR Letter To SECDEF On TFBSO

Document: SIGAR Letter To DOD On Natural Gas Pipeline In Afghanistan

Tanker Talk.

Developing the KC-46 tanker will cost more:

Air Force: KC-46 Cost Expected To Surpass Ceiling By $1.4B

The Air Force expects the development price tag for the KC-46 tanker will outpace the contract's ceiling by more than $1.4 billion -- an increase of about $441 million over last year's projections.

This year's annual KC-46 program office risk assessment, completed in November, pegs the expected cost for the program's development contract at $6.3 billion -- about $1.4 billion over the program's $4.8 billion fixed-price incentive firm development contract, according to the Air Force's Program Executive Officer for Tankers Brig. Gen. Duke Richardson.

The service in 2011 awarded Boeing a $3.6 billion engineering and manufacturing development contract to develop four KC-46A tanker prototypes. The contract set a $4.3 billion target price and included a provision stating that the service would pay 60 percent of any cost overruns up to a ceiling price of $4.8 billion, leaving Boeing to pay the rest. Under these terms and based on the updated cost estimate, Boeing could be left to absorb more than $1.4 billion in cost overruns.

Next Gen.

Congress wants the Navy to begin developing a next-generation fighter aircraft:

FY-15 Omnibus Establishes New Budget Line For Next-Gen Navy Fighter

Lawmakers have established a new budget line in the Pentagon's fiscal year 2015 budget for a next-generation Navy fighter, providing $4.7 million in seed money in anticipation that the service will soon begin a program to develop a replacement for the F/A-18E/F Super Hornet and F-18G Growler sometime in the 2030s.

House and Senate appropriators crafting the portion of the FY-15 omnibus spending bill that would fund the Pentagon created the new "F/A-XX (Next-Generation Fighter)" account but offered no comment about the action in the explanatory statement accompanying the spending bill.

Lawmakers funded the new account by cutting the Navy's $8.2 million request in its FY-15 research and development spending request for studies and analysis support to $3.5 million.

Joint Strike.

The Marine Corps has a lot to do before declaring its Joint Strike Fighters operational:

Marines Will Complete All F-35 Retrofit Modifications Before Declaring Jets Operational

The Marine Corps will complete all Joint Strike Fighter life limited retrofit modifications that expire within the next 10 years and all capability retrofit modifications that are required to meet mission sets before declaring the jets operational, according to a service spokesman.

The service worked closely with the F-35 joint program office to find the best balance of limited retrofit modifications and capability retrofit modifications, Marine Corps spokesman Capt. Dustin Pratico wrote in a Dec. 10 email to Inside the Navy.

"The Marine Corps will not fly jets that have parts that are beyond their life limits, nor will we take risk in modifications required for basic safety flight," he wrote.

Missile Defense.

The head of the Missile Defense Agency spoke this week:

MDA Continues Balancing Congress, Budget While Achieving Homeland Defense Initiatives

The Missile Defense Agency continues its homeland defense initiatives while balancing a tightened budget as well as congressional concerns, according to the organization's top official.

Missile Defense Agency Director Vice Adm. James Syring said Dec. 15 during a presentation at the Center for Strategic and International Security in Washington that his agency has five homeland defense priorities.

These include increasing the Ground-Based Interceptor inventory to 44 by 2017, improving Ground-based Midcourse Defense system reliability, improving discrimination capability, developing and testing future GBIs with a integrated, redesigned kill vehicle and a two-stage booster design with upgraded avionics as well as developing and deploying a long-range discriminating radar, he said.

Grab Bag.

Inside the Navy's front page this week:

Stackley: Navy Will Continue Dual-Source Approach For Modified LCS Hull

For the new small surface combatant, the Navy will continue the dual-source approach it has used to buy the first 20 Littoral Combat Ships, splitting upcoming buys between shipbuilders Lockheed Martin and Austal, senior Navy officials told reporters last week.

Appropriators Add Funding For Boeing's Growlers, Zero Out LCS RMS

The $1.1 trillion fiscal year 2015 omnibus spending bill Congress has fashioned reflects major discrepancies between appropriations and authorization committees regarding the way ahead for the Navy, with appropriators adding more than $1 billion for additional F/A-18G Growlers and zeroing out funding for the Littoral Combat Ship's Remote Minehunting System.

Navy Leaning Toward Using Osprey For Carrier Onboard Delivery Mission

LAUREL, MD -- The Navy is leaning toward using the Marine Corps' V-22 Osprey tiltrotor aircraft to perform the carrier onboard delivery mission now being executed by the service's aging C-2 Greyhound aircraft, a service official said last week.

GAO Sustains Bid Protest Filed By CGI Federal Inc. For Navy's CANES Program

The Government Accountability Office recently sustained a bid protest filed by CGI Federal Inc. for the Navy's Consolidated Afloat Network Enterprise System and the program office is reviewing the applicable recommendations, according to a spokesman.

-- John Liang

The daily INSIDER

The INSIDER is now a daily service, providing you with our latest news and analysis on the fast-paced changes happening at the Pentagon each day – breaking budget news, exclusive updates on major defense programs, hard-to-find documents and much more.

The INSIDER is a great way to stay ahead of the competition on the latest defense news.

If you haven't already, you'll have to create an account on our pay-per-view NewsStand service to continue receiving the INSIDER every day.

Setting up an account is free, and it will allow you the convenience of one-click access to the articles and documents referenced in the INSIDER. To get more details on the issues that matter most to you most, you'll pay only for what you want to read.

Most articles and documents cost just $10. And your first download is free when you set up an account.

If you have any questions about the INSIDER or's NewsStand, please contact our Customer Service Department at 1-800-424-9068 or

Sign up for INSIDER alerts.

Targeted E-Letters

Now there's another way to access subject-specific content from and Our new E-Letters, delivered weekly by e-mail directly to your inbox, offer complete content packages covering ground vehicles, fixed-wing aircraft, or unmanned systems, all at highly affordable subscription rates.

More Information