February 21 Defense Industry Weekly Roundup

Posted by Fred Wellman

Pentagon’s $525 Billion Budget Takes Most From Lockheed F-35

Tony Capaccio and Gopal Ratnam, Bloomberg. The F-35 loses 13 aircraft in the new budget proposal while other systems also face cuts or slow downs to save costs on the acquisition budget. Capaccio and Ratnam have a good view of the various pieces in the budget that was received with some skepticism on Capitol Hill this week. Of course, the biggest cuts will come in personnel for the Army and Marines tied with raising the fees for current retirees and their healthcare.

Cuts in End Strength, Rise in Medical Fees Appear to have Senate Support

John Grady, ScoutComms. The DoD is hanging a large portion of their proposed budget savings in the personnel accounts, shaving some 12,000 to 14,000 soldiers a year off the roles along with rising fees and other costs for current “working age” retirees. Interestingly, there was little consternation or push-back during Senate hearings on the topic last week. While fights are being waged to save favored weapons systems little angst seems to accompany raising insurance fees and adding thousands of veterans to the job market. The House was less sanguine. Our special correspondent and former AUSA director of communications John Grady covered the hearings for ScoutComms.

DoD Avoids Termination Fees

Marcus Weisgerber, Defense News. It seems the DoD was very careful in the programs they chose for termination in the 2013 budget to avoid the costly termination clauses of many of the contracts. By allowing current production runs to continue, then simply retiring the systems once they are fielded, the DoD will avoid billions in costs associated with early cut off of programs. It will be interesting to see how plans like the Air Force’s proposal to take brand new C-27J cargo planes the Army has been asking for and mothball them right out of the factory. As is often the case, good accounting plans look like more wasted tax dollars and bureaucratic incompetence to the casual observer.

U.S. to Trim Commercial-Satellite Use

Andy Pasztor and Nathan Hodge, Wall Street Journal. The WSJ takes a close look at some fairly significant changes in the U.S. government’s approach to commercial satellites after a decade of increasing reliance on outside commercial augmentation in communications and imagery. There has always been some measure of resistance to outsourcing within the intelligence community but continued failure to get their own satellites into orbit and working has left the government little choice but to rely on outside help. The proposed 2013 budget sees substantial cuts with yet to be determined impacts on the major commercial companies in these sectors.

First Lady, Panetta Unveil Effort to Aid Spouse Employment

Elaine Sanchez, Armed Forces Press Service. First Lady Michelle Obama and Dr. Jill Biden, Vice President Biden’s wife, appeared at the Pentagon Wednesday with Secretary of Defense Leon Panetta to unveil the results of a joint Department of Labor and DoD study that revealed the depth of the challenges of employment for military spouses. The report showed that nearly 100,000 spouses are hampered by the need for licensing in their respective fields in different states for jobs such as nursing and teaching. The report offered a host of recommended improvements including streamlined and temporary licensing capabilities. This is a big issue in military families that affects them dramatically more than other professions, due to frequent moves.

Full Report (PDF ): Supporting our Military Families: Best Practices for Streamlining Occupational Licensing Across State Lines

The week ahead:

Themes: It should be quiet but we will be attending the AUSA Winter Symposium and will keep you updated at the @ScoutComms twitter feed and Facebook page all week.


IDGA 3rd Annual Cloud Computing for DoD and Government (Tues-Thurs, 21-23 February) Key Bridge Marriott, Alexandria, Virginia. This event focuses on transitioning data to the cloud and how industry and government can partner to make the moves. Several speakers from DoD IT programs are scheduled to speak and the event is fairly well attended.

AUSA ILW Winter Symposium and Exposition (Wed-Fri, 22-24 February) Ft. Lauderdale, Florida. The AUSA Winter Symposium is smaller compared to the massive annual conference in Washington. The venue offers the opportunity to hear from leaders of major Army organizations and for businesses to conduct meetings and interact in a more relaxed setting than the frenetic pace of the October event. This year’s theme focuses on the Army in transformation as the post 9/11 war’s wind to an end.

Congress: The full Congress is not in session this week.

Think tanks and other news events:

Center for Strategic and International Studies – Iran: U.S. Policy Options (5:00 PM, Thurs, 23 February) Description: Another event in the CSIS partnership with respected journalist Bob Schieffer on issues of national security focused this time on the challenges we face with Iran.

Participants:  Robert Schieffer, Chief Washington Correspondent, CBS News, Gen. (Ret.) James E. Cartwright, Former Vice Chairman of the Joint Chiefs, Adm. (Ret.) William J. Fallon, former commander U.S. Central Command, David Sanger, Chief Washington Correspondent, New York Times. Location: CSIS B1 Conference Center, CSIS 1800 K. St. NW, Washington, DC 20006

Fred Wellman with General Petraeus in Iraq

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 Tuesday, February 21, 2012 8:33 am

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