The INSIDER - September 20, 2012
Editor's Note: Updated September 21 at 10:23 a.m.
Up in the Air.
Air Force Chief And Air Guard Director Pledge To Bridge Information Gap
The director of the Air National Guard and the Air Force chief of staff are disputing allegations of a growing rift between the Guard and the Air Force following a tumultuous year in which budget cuts associated with the service's new force-structure strategy fell heavily on the Guard, prompting a group of governors to push back.
Next JSF PEO Blasts F-35 Program Structure, Lockheed-JPO Relationship
The next program executive officer of the Joint Strike Fighter program this week presented a harsh assessment of the major changes that need to be made to the way the F-35 is managed -- primary among them a reset of the relationship between manufacturer Lockheed Martin and the program office that he termed "the worst I've ever seen."
Carlisle: Air Force Chief Of Staff Will Have Final Say On Eielson AFB Study
A high-ranking commander will be meeting with the Air Force chief of staff soon to discuss what to do about an Air Force study that has ruffled the feathers of Alaska's senior senator.
Air Force Moves Into Final Negotiations On AETD Engine Program
The Air Force announced this week it is in final negotiations with two companies to contract propulsion technology work on an engine program designed to increase efficiency and strengthen the combat capabilities of its aircraft.
And two more stories of note today:
DOD Seeks OK From Congress To Shield Carrier Refueling Plans From Continuing Resolution
In a bid to avoid disrupting the Navy's tightly orchestrated aircraft carrier maintenance schedule -- and crimp the service's ability to surge naval power -- the Pentagon is seeking congressional permission to use fiscal year 2012 funds to finance work on two aircraft carriers that would otherwise be delayed under a pending FY-13 continuing resolution.
Hale: DOD Still Waiting To Issue Sequestration Guidance, Wants Congress To Act
The Pentagon wants to wait as long as possible before issuing guidance on how to deal with sequestration cuts, Defense Department comptroller Robert Hale told lawmakers today, stressing that Congress needs to find a way to avoid them.
Inside the Pentagon's top story today concerns spending rates for weapons programs:
Pentagon To Review Major Programs With Slow Obligation Rates
The Defense Department will review major weapons programs with slower-than-normal spending rates to ensure effective acquisition practices while shifting money as needed to meet its top priorities, according to new internal guidance.
In a Sept. 10 memo, DOD acquisition chief Frank Kendall and Pentagon Comptroller Robert Hale lay out a new joint approach to address longstanding problems in the way the department manages unobligated funding. The memo is aimed at reconciling Kendall's emphasis on obligating funds in a way that maximizes value for DOD and taxpayers with Hale's focus on ensuring the department funds pressing needs.
The new initiative comes amid DOD efforts to obligate hundreds of billions of dollars in unspent funding as the department stares down the twin challenges posed by a continuing resolution and sequestration. InsideDefense.com reported last month that DOD was working to reduce $328 billion in unobligated balances by putting money under contract before it expires or becomes subject to cuts.
DOD Memo On Unobligated Funds Management
In a Sept. 10, 2012, memo, Defense Department acquisition chief Frank Kendall and Pentagon Comptroller Robert Hale lay out a new joint approach to address longstanding problems in the way the department manages unobligated funding.
On a related note, we broke this story back in early August:
Pentagon Working To Reduce $328 Billion In Unobligated Balances
As the Defense Department stares down the twin challenges posed by a continuing resolution and sequestration, DOD is working to reduce $328 billion in unobligated balances by putting money under contract before it expires or becomes subject to cuts.
And: Sign up for our Defense Budget Alert for more budget news. Every time we post a story or key document on DOD budget issues, we'll shoot you an email so you can stay as up to date as possible. (Subscribers sign up here; Non-subscribers here.)
The latest on the Palantir controversy:
Shyu Alarmed Over Army Unit's Acquisition of Palantir System, Calls For 'Corrective Action'
Acting Army acquisition chief Heidi Shyu is concerned that Palantir Technologies may be providing intelligence software to an Army infantry division for training without a formal contract, telling Army Secretary John McHugh in an Aug. 16 email obtained by Inside the Army that she had called for a review of the matter and directed "prompt corrective actions."
Shyu wrote to McHugh one day after learning that Palo Alto, CA-based Palantir, which makes software that can be used to track positions of roadside improvised explosive devices, may have provided "equipment and training services to the 3rd Infantry Division (ID) on a cost-free basis and in the absence of any contractual agreement with the Army," according to her email.
"The concern is specifically based on a series of e-mails between the members of the 3rd ID, the [Rapid Equipping Force], and the [Office of the Secretary of Defense] Combating Terrorism Technical Support Office," Shyu wrote. "If accurate, these circumstances warrant immediate corrective action by the Army to ensure that we comply with fundamental rules relating to how the government obtains goods and services from industry."
The Price Is . . . ?
New guidance for pricing negotiations:
DOD Seeks Better Business Forecasts To Aid Pricing Negotiations
The Pentagon is striving to sharpen its defense-business forecasts to overcome costly obstacles in pricing negotiations with industry.
In a Sept. 14 memo to the services and defense agencies, Director of Defense Pricing Shay Assad calls for improved forecasts to enable the Defense Contract Management Agency to negotiate more agreements and recommendations for forward pricing rates.
Accurately evaluating a contractor's business base forecast is necessary for achieving pricing agreements, the memo states. Unreliable forecasting of the business base, particularly in the outyears of a contractor's forward-pricing rate proposal -- typically years three through five -- "has been the leading cause of inaccurate rate proposals, recommendations and agreements," Assad writes.
"It is also the single leading factor in our inability to reach an agreement on rates with a number of companies," the memo adds. "It has resulted in significant dollars at risk in the outyears of these rates of agreements. We cannot afford to have this situation continue."
DOD Memo On 'Improved Business Base Forecasting And Evaluation'
In a Sept. 14, 2012, memo to the services and defense agencies, Director of Defense Pricing Shay Assad calls for improved forecasts to enable the Defense Contract Management Agency to negotiate more agreements and recommendations for forward pricing rates.
News on a new program that has taken a few observers by surprise:
Navy Sets Plans For New $500M Competition To Manage Raytheon-Built SSDS
The Navy is readying plans to launch a new competition for the Ship Self Defense System (SSDS) Combat System Engineering Agent (CSEA), an estimated $500 million effort to manage a system that Raytheon developed and has provided exclusive support for since 1994 as part of a wider effort to force long-term, sole-source suppliers to compete for continued work.
On Sept. 27, the Navy's program executive office for integrated warfare systems -- headed by Rear Adm. James Syring -- is scheduled to provide industry an overview of the fledgling SSDS CSEA program and the planned requirement, the sea service announced on Sept. 18, an event likely to draw the interest of defense companies that would love to nab the work from Raytheon such as Lockheed and Boeing.
Raytheon's Ship Self-Defense System is a distributed, combat management system for surface ships designed to defend against a range of threats, including high-speed, anti-ship cruise missiles. The Navy, according to a 2007 Pentagon acquisition report to Congress, acquired 42 of the systems for use on its aircraft carriers and amphibious ships. The system, according to a company fact sheet, "links and automates standalone sensors and weapon systems to provide the required combat reaction."
New and noteworthy stories:
Kendall: DOD Still Eying Advice On Space-Based Interceptors, PTSS
The Defense Department is still evaluating recommendations from a missile defense study that called for avoiding investment in space-based interceptors and canceling the Precision Tracking and Surveillance System, according to Pentagon acquisition chief Frank Kendall.
Kendall: EMALS Set As Subprogram With 2011 Baseline To Avoid Breach
The Pentagon has designated the Electromagnetic Aircraft Launch System as a major subprogram of the CVN-78 Ford-class aircraft carrier to help Congress obtain visibility into its development and procurement costs, according to a recent letter Defense Department acquisition chief Frank Kendall sent lawmakers.
Lockheed Martin: Air-Launched LRASM Could Achieve IOC in 2016
Lockheed Martin's air-launched Long Range Anti-Ship Missile could achieve initial operational capability in 2016, according to Frank St. John, Lockheed's vice president for tactical missiles and combat maneuver systems.
Defense Industry Urged To Eye Commercial Sector For New Sales
International sales will not be enough to boost defense firms dealing with stagnant or declining U.S. sales, but sales to the commercial sector may help bridge the gap, according to a National Defense University professor.
AUVSI 'Surprised' By GAO Study Urging More Monitoring Of Drone Sales
The Association for Unmanned Vehicle Systems International says a Government Accountability Office report warning drone exports are not sufficiently monitored is surprising given the extent of current regulations.
In Case You Missed It . . .
. . . earlier this week:
NIE Report: Promising Network Technologies Need More Time To Develop
A report surfaced last week detailing the service's findings from its spring Network Integration Evaluation, stating that while most technologies are promising enough to merit further testing, a variety of challenges remain.
The spring testing event that was held at White Sands Missile Range, NM, and Ft. Bliss, TX, is known as NIE 12.2. The Army evaluated a total of 30 network products from industry and the government. Of that number, nine systems were recommended for fielding; seven were labeled "field and continue to develop"; 12 systems were designated as having "potential for follow-on assessment"; a single system was labeled "do not field, do not develop"; and another system's performance results were labeled "inconclusive," according to a June 30 "for official use only" executive summary obtained by Inside the Army.
Army Spring NIE Iteration Two Summary Report (FOUO)
The June 30, 2012, executive summary of an Army report -- labeled "for official use only" and obtained by Inside the Army -- details the service's findings from its spring Network Integration Evaluation, and states that while most technologies are promising enough to merit further testing, a variety of challenges remain.
-- Dan Dupont
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