The INSIDER - July 19, 2012

Editor's Note: Updated July 20 at 10:39 a.m. Up in the Air. Today's front-pagers: Welsh, Nominated As Service Chief, Promises More Open Budget Process The general likely to become the Air Force's next chief of staff told Senators this week that the service's fiscal year 2013 budget was put together using a flawed process and that future budget submissions will solicit more input from state officials and the reserve components. Air Force To Submit New EELV Baseline To Congress By End Of October The Air Force will submit to Congress a new cost baseline for the Evolved Expendable Launch Vehicle program by the end of October as part of the Nunn-McCurdy process. USAF Opposed To Commission, But Parties Unite On Prior-Year Transfers The Air Force believes an in-house process for determining the service's future force structure, "informed where appropriate" by discussions with the Council of Governors and other state leaders, is preferable to a congressionally appointed commission, according to a senior Air Force official. USAF May Use Automated Vulnerability Analysis To Detect Mission Threats The Air Force may rely on automated vulnerability analysis in the future as increasingly sophisticated cyber attacks will likely push the service toward selectively conducting missions with infected software, according to its chief scientist. And two more items of note: Pentagon Establishes Key Issues For FY-14 Strategic Portfolio Reviews The Office of the Secretary of Defense has erected a new analytic framework to assess the services' fiscal year 2014 spending proposals and accompanying five-year investment blueprints, establishing more than a half-dozen strategic portfolios in a bid to identify capability gaps and potential redundancies. GAO: Five MDA Programs At Risk For Delays, Inefficiencies Five Missile Defense Agency programs run the risk of incurring delays and inefficiencies because their schedules do not meet best practices, the Government Accountability Office says in a new report. DOCUMENT ALERT: GAO Report On MDA Scheduling Best Practices In a July 19, 2012, report, the Government Accountability Office finds that five Missile Defense Agency programs run the risk of incurring delays and inefficiencies because their schedules do not meet best practices. Senate Hearing On Welsh, Kelly, Grass Nominations On July 19, 2012, the Senate Armed Services Committee held a hearing to consider the nominations of Air Force Gen. Mark Welsh to become the service's chief of staff; Marine Corps Lt. Gen. John Kelly to become the head of U.S. Southern Command; and Army National Guard Lt. Gen. Frank Grass to become the chief of the National Guard Bureau. Includes advance policy questions answered by the nominees. Bird Watching. Inside the Pentagon today leads with the latest on V-22 voice recorders: DOD Plan Would Take Years To Equip V-22s With Needed Voice Recorders The Pentagon's multimillion-dollar plan to finally buy cockpit voice recorders for V-22 Ospreys, a requirement established by Congress more than a decade ago, puts a fraction of the programmed funding in the department's current budget request and would take years to field the missing mandatory devices. The fiscal year 2001 Defense Authorization Act called on the Defense Department to install the devices on all Ospreys. Although V-22s carry flight data recorders, none -- including the Marine Corps MV-22 that suffered a fatal April 11 crash in Morocco and the Air Force CV-22 that crashed June 13 in Florida -- have been equipped with voice recorders. "Voice recorders have not been enabled on any MV-22Bs at the moment," Marine Corps spokesman Capt. Richard Ulsh said on July 2. Air Force Special Operations Command spokeswoman Capt. Kristen Duncan said on July 12 that the same was true for CV-22s. A Matter of Trust. More from the front page today: DOD's 'Trusted' Systems And Networks Policy In Final Coordination The Pentagon is preparing a new policy on trusted systems and networks to counter rising threats to vital U.S. national security data, according to a senior defense official. Pentagon Principal Deputy Assistant Secretary of Defense for Systems Engineering and Acting Director of Systems Analysis Kristen Baldwin said this week at a conference that the Pentagon will soon issue a policy that focuses on requirements for trusted microelectronic parts "where the risk presents itself." When asked about the policy following the event, Baldwin said the "trusted systems and networks policy" is in final coordination and slated to be finished in the next couple of months. This policy would "really build upon the overarching program protection planning outline and policy framework," Baldwin said. Rapid Fire. A new plan for the Rapid Innovation Fund: DOD Memo On 'Rapid Innovation Fund FY 2012 Implementation Guidelines' In a July 2, 2012, memo, Pentagon acquisition chief Frank Kendall issued a memo that details the Defense "Department's goals for use of the Rapid Innovation Fund (RIF) appropriation and provides guidance for RIF implementation and reporting." Our coverage: Kendall Issues Guidance For $200 Million Rapid Innovation Fund Emphasizing energy security, materials and microelectronics, the Pentagon this month issued internal guidance to defense officials on how the department plans to use the Rapid Innovation Fund to spur investment and followed up with a related solicitation to industry. The fund, which DOD did not request funding for in fiscal year 2013, is supposed to support small, urgent projects to be developed by industry. The FY-12 funding for the program is $200 million. Pentagon acquisition chief Frank Kendall's new guidance lays out detailed plans for the selection of proposals, the evaluation of the proposals, how the awards will be given and how the technology developed will be transitioned into other programs. The memo also says the effort will focus on enhancing energy security and independence, developing advanced materials and advancing microelectronics. Value Proposition. An earned value management progress report: As Lockheed Faces More Contract Penalties, Shipyards Fare Better Producers of the nation's multibillion-dollar warships have long struggled to comply with Defense Department management rules that last month triggered more contract penalties for Lockheed Martin, but recently the shipbuilders have either managed to prevent such penalties from escalating or dodged them altogether. Continuing problems with deficient business systems at Lockheed's aeronautics division, the F-35 Joint Strike Fighter's prime contractor, prompted DOD in June to increase the percentage of progress payments being withheld from the company from 2 percent to 5 percent, boosting the sanction by millions of dollars per month. In a similar blow last year to shipbuilder Huntington Ingalls Industries, the Navy opted to withhold 5 percent of progress payments for the $698 million contract for the construction of an Arleigh Burke-class destroyer (DDG-114) at the Ingalls shipyard in Mississippi. But recently the Navy decided, based on Ingalls' planned corrections, not to extend the shipyard's penalty to a new shipbuilding contract for the LHA-7 amphibious vessel, according to a company spokeswoman. And another shipyard, General Dynamics' Bath Iron Works in Maine -- which also faced a critical review last year that uncovered nearly as many management violations as those at Ingalls -- completely avoided a withholding, a Navy spokesman confirmed. Getting Ready. Latest on audit readiness issues: Pentagon Aims To Show Audit Progress Given Prospect Of Disclaimers As the Pentagon nears its upcoming audit-readiness deadlines, the department is eying ways to demonstrate progress given the likelihood initial audits will yield disclaimer opinions, according to defense officials. Marines To Focus FY-12 Audit On Current Year, Not Beginning Balances Following two consecutive disclaimer opinions on the Marine Corps' statement of budgetary resources, defense officials have shifted the fiscal year 2012 effort to focus on current-year balances. Grab Bag. More news of note: DOD Review Eyes Scope Of Joint Information Environment The Pentagon is poised this month to launch an assessment designed to look at establishing a common information technology infrastructure in Europe in what would be a microcosm of how the Joint Information Environment would work across the whole department, said Rear Adm. Marshall Lytle, the J-6 director at U.S. Cyber Command. JROC Approval Of New Cyberspace Concept Could Come This Summer The Joint Requirements Oversight Council is about a month away from approving a new concept for military cyberspace operations in the next decade that could steer major decisions on doctrine and resources, according to the Joint Staff. Authorizers To Eye Concern Over Corrosion Funding In Conference House and Senate authorizers agree the Pentagon's fiscal year 2013 budget request continues a trend of underfunding efforts to combat the corrosion of weapons, a problem that costs taxpayers billions of dollars annually, but just how much money lawmakers will add to the department's request to address the matter remains to be settled in conference. DOD Delays Report To Congress On Night-Vision Industrial Base A required Pentagon report on the industrial base for night-vision sensors, due last month to Capitol Hill, has been delayed with no estimate given on when it will be finished. Air Force Seeks Industry Input For Airborne, Sense-And-Avoid Technology The Air Force is seeking industry input to help shape an upcoming solicitation for technology that enables drones to sense and avoid other aircraft, with an eye toward issuing a contract in early 2014, according to a recent notice and a service official. On the Shelf. New and noteworthy documents: CRS Report On The UCP And COCOMS The July 17, 2012, Congressional Research Service report "provides information on the history, mission, and operational considerations for each of [the combatant commands] as well as a brief discussion of current issues associated with the [Unified Command Plan] and these commands." CRS Report On FY-13 Defense Authorizations And Appropriations The July 13, 2012, Congressional Research Service report provides an overview of the fiscal year 2013 defense authorization and appropriations bills. Industrial College Of The Armed Forces Study On The U.S. Weapons Industry The Spring 2011 report prepared by students at the Industrial College of the Armed Forces recommends that the U.S. government "(1) establish and communicate industrial policy to deal with pressures of a declining defense budget, (2) reform burdensome export processes and policies to enable industry to better compete internationally, and (3) address the need for policy and doctrine for emerging technologies that enable their development and implementation." In Case You Missed It . . . . . . earlier this week: DOD Disbands JTRS Program Office; Services To Take Over Radio Management The Pentagon's acquisition chief has approved a move to disband the Joint Tactical Radio System program office and transition oversight of all radio hardware to the services, according to an internal Defense Department memo obtained by Inside the Army. Kendall Approves Buy Of Additional JTRS Rifleman Radios The Pentagon's acquisition chief cleared the way last week for the Army to purchase an additional 13,000 Joint Tactical Radio System Rifleman radios for low-rate initial production, according to an internal Defense Department memo. DOCUMENT ALERT: JTRS Reorganization ADM In a July 11, 2012, memo marked "for official use only," Pentagon acquisition chief Frank Kendall approved a move to disband the Joint Tactical Radio System program office and transition oversight of all radio hardware to the services. JTRS HMS Acquisition Decision Memo In a July 11, 2012, memo on the Joint Tactical Radio System Handheld, Manpack and Small Form Fit program, Pentagon acquisition chief Frank Kendall authorizes an additional low-rate initial production "of up to 13,077 Rifleman Radio units, subject to the availability of funds." -- Dan Dupont