December 3 Weekly Defense Industry Roundup

Posted by Fred Wellman

Veterans Agency Can Ignore Vets Status in Contract Awards

Tom Schoenberg and Kathleen Miller, Bloomberg. A Federal Claims court judge in Washington has ruled that the Department of Veterans Affairs does not have to give preference to veteran owned small businesses in all contracts setting aside a ruling by the Government Accountability Office. The case is a milestone that could impact nearly $3 billion in federal contracts a year that could go to veteran owned businesses. The issue hinged on a loophole in the law that allows the government to use the general schedule of contractors and the discounts they often provide for contracts. The government’s concern is the challenge of competitions for even simple contracts for purchases of supplies or having to break with long term vendors for possibly unproven smaller businesses. It remains to be seen if Congress will seek to close this hole in the law or allow VA to have the flexibility in its contracts.

How In-Q-Tel Helps CIA Scout For Innovative Technology – A Model for Other Agencies?

Bridget Mintz Testa, AOL Government. When the intelligence community wanted to find ways to encourage new technology development outside of the traditional government contracting process they created the non-profit investment company In-Q-Tel in 1999.  Serving as a strategic investor, they focus on information and communications as well as physical and biological technologies with investments ranging generally from $500,000 to $2 million. While those are relatively small investments in the venture capital world, they have paid off for those who got them with all but one of the 37 start-ups they’ve supported eventually being bought up by larger companies. Other agencies have tried to replicate the model with varying levels of success but for now it’s working well for the intelligence agencies involved and with narrowing budgets ahead will likely serve an even more important function to ensure they have the best tech available.

Pentagon Says “Lots of Money” Still to Be Made in Arms Business

Andrea Shalal-Esa, Reuters. DoD’s Undersecretary for Acquisition, Technology and Logistics Frank Kendall told an investors conference last week that even with upcoming major cuts there will be plenty of money to be made for the industry. He insisted again that the Pentagon is not after cutting the profits of the industry but only in getting the most for their money and systems. There has been a lot of worry in the industry as impending cuts in the defense budget of varying sizes have come at the same time as the implementation of new buying initiatives such as the so-called ‘Better Buying Power 2.0’ effort that seeks to align profits with contractor performance. While many defense leaders are expressing optimism publicly, mid-size contractors and small businesses have already been taking the brunt of cuts due to large firms cutting back on sub-contracting and many contracts drying up. In the end there is indeed plenty of money to be made, but who will make it is a question everyone wants to avoid.

Obama Defense Pick Could Come Sooner Than Expected

Ben Feller and Julie Pace, Associated Press. Rumors in Washington are hinting that a substantially quicker replacement of SecDef Panetta is in the works. While few expected Panetta to remain at DoD very long into Obama’s second term, the change wasn’t expected until the spring. Instead there is talk of a single big announcement for replacements at State and CIA, too. The horse race has former Republican Senator and Vietnam 101st Airborne veteran Chuck Hagel as a top pick along with Michelle Flournoy, current DepSec Ash Carter, and current Democratic Senator and Vietnam Navy veteran John Kerry. Kerry is seen as a better fit for State and also in the hunt there along with UN Ambassador Susan Rice. Announcements could be as early as this week and transitions after the inauguration.

Government Services Businesses Revamp

Marjorie Censer, Washington Post Capital Business. Capital Business’s @CommonCenser takes a look at how the government services sector has changed and continues to struggle after 15 years of growth. The massive expansion draws to a close as budgets tighten and changes in government outsourcing rules dry up the business opportunities. The effect has been spin-offs by most major contractors of their services units and huge pressures on those who are focused solely on the sector as they go back to seeking commercial work. While times are tough, the business won’t be going away any time soon in spite of lower margins. But everyone expects consolidations and mergers are coming.

DIA to Send Hundreds More Spies Overseas

Greg Miller, Washington Post. The Defense Intelligence Agency is on track to transform dramatically with a major expansion of its active spies serving overseas in the next few years. The effort is the culmination of several years of work between the military’s intelligence arm and the CIA. It will add some 1,600 new positions across the globe that will focus on military issues and relieve the CIA of many of the more defense oriented tasks so it can better focus on political issues and other more traditional spycraft tasks. The effort will involve close coordination between the spy agencies both operationally and in training as the CIA will offer HUMINT training in its facilities for the new spies along with cooperation downrange.

New Google Resource Aims to Help Veterans Become Entrepreneurs

Jason Fell, Google has ramped up its veterans programs this week with VetNet on Google+ aimed at providing transitioning military job and career assistance along with a unique entrepreneurship training program in partnership with our friends at the Institute for Veterans and Military Families at Syracuse University. Among the resources available, IVMF will run an eight-week series of Google+ hangouts with Dr. J. Mike Haynie offering basic business start up advice and lessons. Other resources will include funding tips, research briefs, and business plan samples all through the Google+ page for the effort.  We are big supporters of veterans going into business and are happy to see this aspect being added to the pantheon of options for veterans including job fairs, career training programs, and support for returning to school.

The week ahead:

Tradeshows and Conferences:

National Training and Simulation Association I/ITSEC 2012, Orlando, Fl. (Mon-Thurs, 3-6 December) The Interservice/Industry Training, Simulation and Education Conference brings together representatives of all of the services with academics and industry to discuss issues training, education and modeling programs. It is billed as the world’s largest modeling, simulation and training conference. They are expecting a larger turnout but have been working feverishly to adjust the program to meet the new rules imposed on military attendance at conferences and tradeshows that had such a devastating effect on AUSA turnout this year.

Housing Assistance Council’s National Rural Housing Conference, Washington, DC (Thurs-Fri, 5-6 December) ScoutComms will be supporting the Housing Assistance Council at their conference this week that looks at the state of rural poverty in America. This year HAC, with assistance from The Home Depot Foundation, will be putting a focus on the challenges rural veterans face maintaining and staying in their homes. Keep an eye on @RuralHome, @ScoutComms, and @HomeDepotFdn to find out as it happens what the latest data says about veterans in rural America.

Congress: The full Congress is in session this week.  The focus is almost exclusively on the fiscal cliff issues.

House of Representatives

House Veterans’ Affairs Committee – Hearing (2:00 PM, Tues, 4 Dec) Disability Assistance and Memorial Affairs Subcommittee hearing on “Wading through Warehouses of Paper: The Challenges of Transitioning Veterans Records to Paperless Technology.” Witnesses: TBD Location: 334 Cannon House Office Building

Think tanks and other news events: 

Homeland Security Policy Institute: Counterterrorism in Africa, Washington, DC (10:00 AM, Mon 3 Dec) Description: General Ham will share his perspectives on the security challenges and opportunities facing the United States in Africa. He will address a range of issues affecting the regional security and stability of Africa, and will speak to developments in the region, including the terrorism threat in the Maghreb, the Sahel, and in the Horn of Africa. RSVP online. Participants: General Carter H. Ham, Commander, U.S. Africa Command Location: The George Washington University, Duques Hall, School of Business, Room 151, 2201 G. Street, NW, Washington, DC 20052

U.S. Naval Institute: 2012 Defense Forum Washington, Washington, DC (8:30 AM, Wed 5 Dec) Description: Members of Congress, officials from the Department of Defense, think tank fellows, academics, and executives from the private sector come together to discuss the impacts of the fiscal cliff on defense and national security. RSVP online. ($15 USNI Member/Government/Non-Profit, $25 Attendee) Participants: The Honorable William J. Lynn III, Chief Executive Officer, DRS Technologies and former Deputy Secretary of Defense, Dr. Nora Bensahel, Deputy Director of Studies and Senior Fellow, Center for New American Security, Dr. Gordon Adams, Professor, School of International Science, American University, Congressman J. Randy Forbes (R-VA), Member of the Judiciary Committee and Committee on Armed Services, and others Location: Navy Memorial, 701 Pennsylvania Avenue, N.W., Suite 123, Washington, DC, 20004

Government Executive: The Road Ahead: Under Secretaries Identify New Challenges Arlington, VA (7:30 AM, Thu Dec 6) Description: As the combat mission in Afghanistan winds down and the services move to address emerging threats, undersecretaries are being pressed to manage the transition in the context of new budget realities.  In a time of fiscal constraints, how can the services become more cost effective and use efficiency initiatives to shift money from support activities to warfighting capabilities? RSVP online. Participants: Dr. Jamie Morin, Under Secretary of the Air Force, LTG William Grisoli, Director, Army Office of Business Transformation, Bob Work, Under Secretary of the Navy Location: Crystal Gateway Marriott, Salon 1 & 2, 1700 Jefferson Davis Highway, Arlington, VA 22202

Asia Society: A Combatant Commander’s Perspective on the Asia-Pacific Rebalance Washington, DC (11:00 AM, Thu Dec 6) Description: Asia Society will be hosting Admiral Samuel J. Locklear III, Commander of the U.S. Pacific Command (PACOM), in his first public address to Washington audiences in this role. Adm. Locklear will discuss the U.S. rebalance to Asia and what it means for both the United States and PACOM. RSVP online. Participants: Admiral Samuel J. Locklear III, Commander of the U.S. Pacific Command (PACOM) Location: The Washington Club, 15 Dupont Circle, NW, Washington DC 20036

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, December 03, 2012 8:35 am

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