The INSIDER - October 11, 2012

Editor's Note: Updated October 12 at 10:30 a.m. Up in the Air. Front-pagers from Inside the Air Force: Air Force On Pace To Begin F-35A OUE Flights Before End Of October The operational utility evaluation being conducted on the Air Force's F-35A aircraft at Eglin Air Force Base in Florida is progressing as planned toward its scheduled first flight on Oct. 26, according to an Eglin AFB official. Global Hawk In-Flight Refueling Exercise Cut Short Due To Stand-down An exercise that would have demonstrated the ability of one RQ-4 Global Hawk unmanned aircraft to refuel another was cut short due to a stand-down that NASA implemented following the crash of one of the Navy's unmanned aircraft. USAF And Industry Monitoring Budget Climate As T-X Program Ramps Up An Air Force competition that would provide 350 trainers capable of preparing pilots to fly the service's F-35 fighter jets could be pushed back due to sequestration or other budget complications. A-10 Wing Retrofit On Schedule; Boeing Hit FY-12 Production Goal The Air Force's efforts to replace the existing wing structures on 233 A-10s are moving forward on schedule, according to the service and its prime contractor. And a few more stories of note: New 'Strategic Capabilities' Office Imagines Ways To Deal With Emerging Threats A new Pentagon office is spearheading efforts to cultivate cutting-edge technological concepts that could give U.S. forces new advantages against sophisticated military adversaries. Romney Camp Predicts Hitting Shipbuilding Goal By FY-16, Offers Few Details Mitt Romney would boost the Navy's annual shipbuilding rate to 15 vessels during his first term if elected to the White House, the Republican presidential candidate's advisers asserted today, but they did not explain how exactly a Romney administration would achieve the goal. Panetta: DOD Poised To Release Comprehensive Cyber Rules Of Engagement The Pentagon is poised to finalize "the most comprehensive change" to its rules of engagement in cyberspace in seven years, Defense Secretary Leon Panetta said tonight. DOCUMENT ALERT: Panetta's BENS Cybersecurity Speech On Oct. 11, 2012, Defense Secretary Leon Panetta gave a speech on cybersecurity to Business Executives for National Security. Includes the prepared text as well as a fact sheet. Vision Quest. Inside the Pentagon obtains and reports today on DOD's assessment of its night-vision needs and capacity: DOD Concludes Night-Vision Industry Must Shed More Excess Capacity Defense contractors that produce U.S. military night-vision sensors must shed more excess capacity to ensure they remain viable as the Defense Department rapidly cuts purchases of the devices, according to a previously unreported Pentagon assessment prepared for Congress. The "night-vision image intensification systems" that give U.S. troops a key edge over adversaries in darkness are built by two prime contractors -- ITT Exelis Night Vision and Imaging and L-3 Warrior Systems -- and multiple subtier suppliers. Contractors have already taken steps to "right size" production capacities given DOD's waning demand for the devices, but "the department needs industry to continue" these efforts to ensure the systems are affordable, states the report, which is dated August and was issued in recent weeks. Inside the Pentagon obtained a copy of the report. "Further downsizing may be forthcoming as the revised market is better understood," DOD writes. If industry were to further reduce the production base for the devices, the readiness of warfighters would not be hurt, the study adds. DOCUMENT ALERT: DOD Night-Vision Sensors Report To Congress The August 2012 Pentagon report to Congress assesses the defense industrial base for night-vision sensors. More on the report: DOD Report Touts Night-Vision Goggles, Cites Potential Program Growth The excellent performance of the Pentagon's new night-vision goggles might ultimately lead the department to expand the program, providing a boost to the industrial base, states a previously unreported Defense Department assessment prepared for Congress. In Night-Vision Report, DOD Disputes Comparison Between U.S., French Systems A new Pentagon report on the U.S. night-vision industrial base acknowledges American contractors' concerns about U.S. export controls limiting foreign military sales, but the assessment shoots down comparisons between U.S. and French systems that companies have cited in their arguments. Testy. Meanwhile, the Pentagon's top tester has learned some rules are being broken, and he wants it to stop: DOT&E Moves To Limit Role Of Non-Testers In Determining Reliability Aiming to bolster the independence of the testing process and improve verdicts of how reliable a system will be in combat, the Pentagon's top weapons tester wants to reduce the influence of non-testers during the operational evaluation of new programs. In an Oct. 5 memo, Michael Gilmore -- the Pentagon's director of operational test and evaluation -- wrote that he has recently "observed" practices that do not comport with the conduct of independent assessments. . . . "I have observed that, in some instances, operational test authorities" permit "externally developed" scoring criteria for a weapon system's reliability to be deemed a "mandatory" factor, Gilmore wrote. In addition, the top weapons tester says "external personnel" -- including those with allegiance to the office developing the weapon being tested -- are being permitted to "vote on the scoring of reliability failures" during operational tests and evaluations. DOCUMENT ALERT: Gilmore Memo On Independent OT&E Assessments In an Oct. 5, 2012, memo, Michael Gilmore -- the Pentagon's director of operational test and evaluation -- wrote that he has recently "observed" practices that do not comport with the conduct of independent assessments. Sub Optimal. New guidance from the CNO on submarine hunting: CNO: New Sub-Hunting Capabilities Challenge U.S. Undersea Dominance Emerging foreign capabilities to hunt and defeat stealthy submarines will force the Navy to find new ways to maintain dominance in the undersea warfighting arena, Chief of Naval Operations Adm. Jonathan Greenert writes in new internal guidance. In a Sept. 26 memo to his Strategic Studies Group, Greenert says revolutionary warfighting concepts must be developed to preserve the Navy's undersea edge in the coming years despite an array of rising challenges. The undersea environment "is the one domain in which the United States has clear maritime superiority -- but this superiority will not go unchallenged," he writes. New sub-hunting technologies and other developments could jeopardize this advantage, according to the memo, which launches a major assessment to grapple with the challenges and inform Navy investment plans for fiscal year 2015 and beyond. "A growing number of nations are developing capabilities to find and defeat submarines and exploit the undersea domain for their own purposes," Greenert writes, without citing examples. "At the same time, commercial and academic interests are monitoring and exploring the undersea domain to unprecedented degrees. To keep our undersea advantage, we need a combination of new operating concepts, innovative technology and the continued proficiency and confidence of our sailors." On Guard. National Guard cuts to come next? Westphal: National Guard Is Next In Line For Cuts If Army Gets Smaller The Army National Guard will be next in line for cutbacks following a decision to reduce the number of active-duty forces by roughly 80,000, according to Army Under Secretary Joseph Westphal. “We cut the Guard very little” in the current six-year spending plan, Westphal said at an Oct. 10 breakfast sponsored by Government Executive. “Any further cuts likely would come from the Guard.” In a brief interview with Inside the Army following his talk, Westphal toned down the prospect of reductions, saying any measures taken likely would be “minimal.” Westphal noted opportunities to “streamline” what he called a big organization. Whatever their extent, any cuts to the Army Guard will be politically sensitive, Westphal acknowledged in his speech. He made reference to an Air Force-Air Guard fight that ended with the active-duty air service's having to reconsider proposed cuts to the Air Guard because of congressional opposition. Sequestration Today. Speaking of potential cuts: House Appropriator's 'Dear Colleague' Letter On Sequestration In an Oct. 9, 2012, "dear colleague" letter, House Appropriations Committee Ranking Member Norm Dicks (D-WA) examines in extensive detail "the impact of sequestration on the whole range of Federal responsibilities and, I hope, help make the case for Congress to act responsibly by agreeing to a more sensible approach to deficit reduction." Grab Bag. More news of note: State, DOD Proceed With Security Assistance Plans Using New Fund The Pentagon and State Department are proceeding with multimillion-dollar plans to provide counterterrorism assistance to multiple countries through the new Global Security Contingency Fund, but further consultation with Congress will be needed before implementation, according to defense and diplomatic officials. Earlier this year, the departments sent Congress a $44.8 million proposal to provide security aid to the Philippines, Nigeria, Libya, Bangladesh, Hungary, Romania and Slovakia in what would mark the first use of the new fund, called the GSCF for short. The proposal generated debate among House lawmakers, according to congressional and administration sources. Now that the congressional notification period has passed, the administration is proceeding with the effort -- but with an understanding that lawmakers will require more details before the aid is provided to foreign militaries. "Regarding the GSCF, it is important to make clear that while we have identified countries as eligible for possible GSCF assistance, additional planning, and in some cases funding, will be required before activities are initiated," said Pentagon spokesman Lt. Col. Jim Gregory. "In addition, we will need to notify Congress prior to initiation of activities under any of these proposed programs of assistance." DSCA Cuts Surcharge For Foreign Countries Buying U.S. Weapons The Defense Security Cooperation Agency is reducing the foreign military sales administrative surcharge that other countries pay when buying U.S. weapons. The Arms Export Control Act requires that FMS activities be conducted at no cost to the U.S. government and mandates an administrative surcharge for FMS deals to recover all U.S. government costs incurred to execute, manage and oversee these efforts. The surcharge rate was set at 3.8 percent in 2006, but it will drop to 3.5 percent for all new FMS and building partnership capacity cases "accepted" on or after Nov. 1, according to a Sept. 17 memo from agency chief Vice Adm. William Landay. The agency reviewed the rate to the "dynamic business environment of FMS over the past five years," the memo states. The reduction in the charge, which was approved by Pentagon Comptroller Robert Hale, comes after the agency determined that the FMS trust fund administrative account has reached a substantial balance, Landay writes. The balances gives the agency sufficient time to recognize and react to major changes in the FMS business model before those changes threaten the account's solvency, he adds. United Launch Alliance Cites 'Data Signature' As Flaw In GPS IIF-3 Launch The United Launch Alliance detected an unanticipated "data signature" on one of the engines that powered the launch of the Air Force's newest Global Positioning System satellite last week, an issue that caused the rocket's upper-stage engine to provide lower thrust than expected. -- Dan Dupont