April 15 Weekly Defense Industry Roundup

Posted by Fred Wellman

2014 DoD Budget a Step Toward ‘Grand Bargain’

John T. Bennett (@BennettJohnT), Defense News. The Obama Administration issued its 2014 budget last week including a $526.6 billion request for the Pentagon that ignores sequestration and mandatory limits set by Congress. There is a lot of slicing and dicing of the various numbers this week but the general consensus is that the request is really a political move to build the foundation for a hoped for “grand bargain” fiscal deal with the House Republicans. Within the budget is a call for another round of base closings and full funding for the F-35 but most see it as an interim budget to set the stage for a compromise this year and that the 2015 budget that will follow Secretary of Defense Chuck Hagel’s newly ordered strategic review. The problem with this plan is that every single gamble the administration has tried has failed and by building a budget that ignores sequester again then agencies will once again face year of budget uncertainty, stalled plans and frantic cutting at the last minute. You know…more of the same.

Lockheed Martin Benefits in Pentagon $527 Billion Budget

Tony Capaccio (@ACapaccio), Bloomberg. While the administration’s submitted budget plan is only a starting point, it’s clear that most weapons programs will remain unchanged. Capaccio points out that the world’s number one defense contractor will benefit from increases in spending for its F-35, the Littoral Combat Ship, and additional orders for C-130 transports. The Hill notes the plan includes a more detailed request than last year for two rounds of base closure panels including funding of $2.4 billion to support the upfront costs of those moves, such as moving organizations and building new facilities at consolidated bases. The DoD is looking to raise Tricare fees again on retirees and a lowering of the annual pay raise for military members to 1 percent. All major weapons programs were spared any kinds of cuts. The Army is the big loser as its continuing downward trend in funding continued with a $3.4 billion reduction from last year, the Navy stayed the same and the Air Force got a spending bump of $4.4 billion from last year. We’ll see if what really comes out of Congress even remotely resembles this plan.

Obama Boosts Pentagon Cyber Budget Amid Rising Attacks

Chris Strohm and Todd Shields, Bloomberg. One piece of the new budget that might just survive to see the light of day is the increase in spending for cyber security after reports of more and more attacks on corporate and government networks. The administration recommends spending more than $13 billion in the total budget and the Pentagon spending would jump some $4.7 billion from $3.9 billion in 2013. Some of the companies most likely to gain include SAIC, Northrop Grumman, Dell, and HP based on a Bloomberg analysis, but a number of other traditional defense companies and smaller players are becoming players in this market as it offers one of the few areas everyone agrees is a real and present danger to the U.S.

Selection of Vermont Guard Base for F-35 jets Was Based on Flawed Data, Raising Questions of Political Influence 

Bryan Bender (@GlobeBender), Boston Globe. After looking at some 83 locations for assigning F-35s, the Vermont Air National Guard was awarded the coveted new stealth fighter as it rolls off the line, but it seems that the decision had less to do with data and more with politics. Bender spoke with an Air Force analyst who says the decision to choose Vermont was simply to reward Sen. Patrick Leahy for his support of the program and came even before any data had been analyzed at all. While that may not seem like an unusual thing in Washington, the problem comes in the form of the Vermont Guard being based at Burlington International Airport and putting some 7,000 people in a zone that is deemed “incompatible for residential use” due to the increased noise created by the jets compared to the F-16s they will replace. While there is consistent support for the basing decision, it’s drawing a louder opposition including Ben Cohen, co-founder of Ben and Jerry’s Ice Cream.  A review is being done to confirm the earlier base decisions that used older impact statements but the entire story serves as a great case study in how political pressure is felt by the Pentagon when it makes decisions like basing, unit assignments, and closures.

Reduced Flying Hours Forces USAF to Ground 17 Combat Air Squadrons

Brian Everstine (@beverstine) and Marcus Weisgerber (@MarcusReports), Defense News. The Air Force took the dramatic and disheartening decision to begin grounding some 17 flying squadrons last week in response to the elimination of some 44,000 flying hours through September due to sequester budget cuts. Units will stand down immediately or upon return from overseas deployments and hours will be distributed to combat ready units. Units include F-22 squadrons at Langley, F-16s in Utah, B-1B bombers in South Dakota and A-10s in Arizona along with B-52s. At the same time, the Thunderbirds demonstration team is grounded for the remainder of the year and the Navy announced the cancelation of the Blue Angels schedule this year. All in all we are seeing the most dramatic cuts in flying and readiness in anyone’s memory.

Recent War Vets Face Hiring Obstacle: PTSD Bias

Gregg Zoroya (@greggzoroya), USA Today. Recognizing the problem its Soldiers are having finding jobs once they transition to civilian life, the Army is launching a new “Hire a Veteran” campaign. But unusually, this campaign doesn’t highlight the well-known reasons why employers should hire veterans. It’s focused on debunking myths about veterans and PTSD. Studies have shown employers think PTSD is very common, very debilitating, and potentially very dangerous. So while there are massive pushes to hire veterans, it’s middle management that needs to get the message that veterans aren’t mentally unstable liabilities, experts say. The new campaign is a welcome step towards ending the misperceptions, but still a sad sign of the times that after 10 years of war, the civilian world still has such a poor understanding of veterans.

The week ahead:

Tradeshows and Conferences: No major tradeshows this week of which we are aware.

Congress: Both chambers are in session this week.


The Fiscal Year 2014 National Defense Authorization Budget Request from the Department of the Navy House Armed Services Committee Tuesday, April 16, 2013 (10:00 AM) Witnesses: General James F. Amos, USMC, Commandant of the Marine Corps, U.S. Marine Corps, Admiral Jonathan W. Greenert, USN, Chief of Naval Operations, U.S. Navy, The Honorable Ray Mabus, Secretary of the Navy Location: 2118 Rayburn

The Readiness Posture of the U.S. Army House Armed Services Subcommittee on Readiness

Tuesday, April 16, 2013 (2:00 PM) Witnesses: Brigadier General Walter E. Fountain, Acting Deputy Director, U.S. Army National Guard, Lieutenant General James L. Huggins Jr., Deputy Chief of Staff for Operations, U.S. Army, Lieutenant General Raymond V. Mason, Deputy Chief of Staff for Logistics, U.S. Army, Major General Luis R. Visot, Deputy Commanding General for Operations, U.S. Army Reserve Location: 2212 Rayburn

Legislative Hearing on H.R. 569, H.R. 570, H.R. 602, H.R. 671, H.R. 679, H.R. 733, H.R. 894 and H.R. 1405 House Veterans Affairs Subcommittee on Disability Assistance and Memorial Affairs

Tuesday, April 16, 2013 (2:30 PM) Witnesses: TBA Location: 334 Cannon

The Fiscal Year 2014 National Defense Authorization Budget Request for Department of Defense (DOD) Science and Technology Programs House Armed Services Subcommittee on Intelligence, Emerging Threats and Capabilities Tuesday, April 16, 2013 (3:30 PM) Witnesses: RADM Matthew Klunder, Chief of Naval Research, U.S. Department of the Navy, Ms. Mary Miller, Deputy Assistant Secretary of the Army for Research and Technology, U.S. Army, Dr. Arati Prabhakar, Director, Defense Advanced Research Projects Agency, Mr. Alan Shaffer Acting Assistant Secretary of Defense for Research and Engineering, Dr. David Walker, Deputy Assistant Secretary of the Air Force for Science, Technology and Engineering, Office of the Assistant Secretary for Acquisition Location: 2118 Rayburn

Securing U.S. Interests Abroad: The FY 2014 Foreign Affairs Budget House Foreign Affairs Committee Wednesday, April 17, 2013 (9:30 AM) Witnesses: The Honorable John F. Kerry, Secretary of State Location: 2172 Rayburn

Recent Developments in Afghanistan House Armed Services Committee Wednesday, April 17, 2013 (10:00 AM) Witnesses: General Joseph F. Dunford, Jr., USMC, Commander, International Security Assistance Force, Commander, United States Forces-Afghanistan Location: 2118 Rayburn

The Fiscal Year 2014 National Defense Authorization Budget Request for U.S. Special Operations Command and U.S. Special Operations Forces House Armed Services Subcommittee on Intelligence, Emerging Threats and Capabilities Wednesday, April 17, 2013 (3:30 PM) Witnesses: Admiral William McRaven, Commander, U.S. Special Operations Command, The Honorable Michael Sheehan, ASD Special Operations and Low Intensity Conflict, Office of the Secretary of Defense Location: 2118 Rayburn


The Fiscal Year 2014 Budget for Veterans’ Programs Senate Veterans’ Affairs Monday, April 15 (2:30 PM) Witnesses: The Honorable Eric K. Shinseki, Secretary of Veterans Affairs, The Honorable Robert A. Petzel, MD, Under Secretary for Health, The Honorable Allison A. Hickey, Under Secretary for Benefits, The Honorable Steve L. Muro, Under Secretary for Memorial Affairs, Stephen W. Warren, Acting Assistant Secretary for the Office of Information and Technology, W. Todd Grams, Executive in Charge for the Office of Management and Chief Financial Officer Location: 418 Russell

The Situation in Afghanistan Senate Armed Services Committee Tuesday, April 16, 2013 (9:30 AM), 216 HSOB Witnesses: General Joseph F. Dunford, Jr., USMC, Commander, International Security Assistance Force, Commander, United States Forces-Afghanistan Location: 216 Hart

The Fiscal Year 2014 National Defense Authorization Budget Request from the Department of Defense Senate Armed Services Committee Wednesday, April 17, 2013 (9:30 AM) Witnesses: General Martin Dempsey, Chairman of the Joint Chiefs of Staff, The Honorable Chuck Hagel,Secretary of Defense Location: 216 Hart

National Security & Foreign Policy Priorities in the FY 2014 International Affairs Budget Senate Foreign Relations Committee Thursday, April 18, 2013 (9:30 AM) Witnesses: The Honorable John F. Kerry, Secretary of State Location: 562 Dirksen

Current and Future Worldwide Threats Senate Armed Services Committee Thursday, April 18, 2013 (10:00 AM) Witnesses: Honorable James R. Clapper, Jr., Director of National Intelligence, Lieutenant General Michael T. Flynn, USA, Director, Defense Intelligence Agency Location: 106 Dirksen

Think tanks and other news events: 

United States Institute of Peace: Tribal Societies and Counterrorism in Pakistan What: “In recent months discussions around drone strikes have grown increasingly heated with claims and counter-claims around their legality, morality, and/or effectiveness as a counterterrorism weapon. Amid the heated disputes between diplomats, politicians, lawyers, and civil society activists, the views of those most directly affected by the drone strikes – those living in tribal communities in border regions – have yet to be heard.” RSVP online Who: Ambassador Akbar Ahmed, Ibn Khaldun Chair of Islamic Studies, American University, Author, ‘The Thistle and the Drone: How America’s War on Terror Became a Global War on Tribal Islam’, Peter Bergen, Director, National Security Studies Program, New America Foundation, Hamid Khan, Senior Program Officer, Rule of Law Center, U.S. Institute of Peace When: 11:00 AM, Monday, April 15, 2013 Where: 2301 Constitution Avenue, NW, Washington, DC 20037 (Webcast available online)

Center for Strategic and International Studies: Trends in Militancy Across South Asia What: “South Asia is fast approaching a period of profound change and potential upheaval. Troop withdrawals, pivotal elections, and domestic political strife highlight concerns over regional stability. Amidst these looming shifts, militant organizations are altering and adapting their behavior, relationships, and tactics, with potentially significant consequences for the region. High-profile anti-Shia violence in Pakistan is but one of these frightening developments. It remains to be seen if the U.S.-led redeployment from Afghanistan will be viewed as a ‘defeat’ by militant groups in South Asia, and if so, to what effect. To explore the trends in South Asian militancy, their potential impacts, and possible responses to them, please join CSIS on Tuesday, April 16th for the release of ‘Trends in Militancy across South Asia: A Region on the Brink,’ featuring an on-the-record discussion with report authors, and topical and regional experts.” RSVP online Who: LTG Michael Flynn, Director, Defense Intelligence Agency, The Honorable Juan Zarate, Senior Adviser, CSIS and former Deputy Assistant to the President and Deputy National Security Advisor for Combating Terrorism, Ambassador James Dobbins, Director, International Security and Defense Policy Center, RAND National Defense Research Institute, Gretchen Peters, Lead Associate, Booz Allen Hamilton and Author, Seeds of Terror, and others When: 8:30 AM, Tuesday, April 16, 2013 Where: 1800 K Street, NW, Washington DC, 20006

Bipartisan Policy Center: Does the Public Need to Know? Journalistic Perspectives on Sharing Intelligence What: “The Bipartisan Policy Center’s (BPC) Homeland Security Project will convene both members of the media and leaders in the intelligence community for a conversation about how information sharing can both be transparent and secure. Panelists will evaluate tackling the balance of sharing the proper amount of information with the public regarding national issues and events (such as last year’s attacks in Benghazi) without compromising sources, methods and other secure information.” RSVP online Who: Chairman Mike Rogers (R-MI), House Permanent Select Committee on Intelligence, Mike Leiter, Senior Counselor to the Chief Executive Officer, Palantir Technologies, Former Director of the National Counterterrorism Center, Dana Priest, Investigative Reporter, The Washington Post, Fran Townsend, Senior Vice President, MacAndrews & Forbes Holdings, Inc., Former Homeland and Counterterrorism Security advisor to President George W. Bush, National Security Contributor, CNN When: 3:00 PM, Tuesday, April 16, 2013 Where: 1225 Eye St. NW, Washington, DC, 20005

Potomac Institute for Policy Studies: Equipment Reset: Getting the Marine Corps Down to Fighting Weight What: “The Potomac Institute for Policy Studies is holding a special conference, Equipment Reset: Getting the Marine Corps Down to Fighting Weight” Who: Lt Gen William M. Faulkner, USMC, Deputy Commandant, Installations and Logistics When: 3:00 PM, Wednesday, April 17, 2013 Where: 901 N. Stuart Street, Suite 200, Arlington, VA 22203

Fred Wellman, President ScoutComms, brings us his weekly review of defense industry news via The Scout Report. Fred served over twenty years as an Army officer in both aviation and public affairs. You can follow Fred on Twitter @ScoutComms.

This entry was posted on Monday, April 15, 2013 9:33 am

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