January 23 Weekly Defense Industry Roundup

Posted by Fred Wellman

Marines, Lockheed Handed Big Victory as Panetta Ends F-35 Probation

John Bennett, U.S. News and World Report DOTMIL. Secretary Panetta took a trip out to Naval Air Station Patuxent River, Maryland to meet the folks working on testing the F-35 Lightning series of aircraft and announced he plans to lift the “probation” on the F-35B set by his predecessor. Sighting great progress in the last year bringing the Vertical Takeoff version of the aircraft in line with its sister models, Panetta gave a major boost to the embattled program and the Marine Corps’ hopes for a replacement for its aging jet fleet. 

Pentagon Said to Propose Ending $6.8 Billion Missile, Satellite

Tony Capaccio, Bloomberg. The first of what will likely be a series of background previews of the upcoming defense budget was grabbed by Tony Capaccio at Bloomberg, and includes hints of cancellations of the Joint Air-to-Ground Missile, Air Force Light-Attack aircraft and the Defense Weather Satellite System, all totaling nearly $7 billion in savings. An additional 10-year program upgrading C-130 cockpit electronics is also on the chopping block. There will be a number of these trial balloon previews in the next couple of weeks leading up to testimony on February 7 for SecDef Panetta and Chairman of the Joint Chiefs Gen. Martin Dempsey at the Senate Armed Services Committee. A briefing has been announced for this Thursday to preview the budget outline of the department and our own John Grady will be reporting.

Contractors Vie for Edge in Cybersecurity Race

Marjorie Censer, Washington Post Capital Business. Censer reports on the growing rush by larger contractors to position themselves apart from their competitors in the cybersecurity space. The market is seen as wide open and one of the few growth areas for the defense budget based on the new security strategy announced two weeks ago. Booz Allen Hamilton has built a new “cyber solutions network” and both General Dynamics and SAIC are developing their own cyber focused facilities and approaches. This sector promises to be an interesting, non-traditional dog-fight in the years ahead.

Pentagon Eyes Prototyping Strategy as Budgets Tighten

Marcus Weisgerber, Defense News. This is an interesting take on the way ahead for industry as budgets tighten, but the need to maintain advanced design teams and engineers remains.  Speaking at the Precision Strike Association conference last week, Principal Deputy Undersecretary of Defense for Research and Engineering Al Schaffer argued that increasing use of prototyping of new technologies will likely be a more common practice by the DoD. It’s much like the old systems such as the famous X-plane tests of the 1950’s and 60’s that tested faster than sound and radar evading technologies, later used in operational systems. Many inside the industry are seeking ways to maintain the defense industrial base as there are fewer programs to keep a robust research and production cycle afloat.

The Pentagon’s Budget Sky Isn’t Falling

John Grady, AOL Defense. Our own special correspondent John Grady has a fascinating history piece up on AOL Defense this week taking a look back at previous defense cut cycles and the hysteria that accompanied each one. Grady points out that each of those times the ‘end times’ predictions were more often than not greatly exaggerated and diverted long before coming to fruition. As he points out “The budget wasn’t handed down on Mount Sinai either. It can be changed to reflect the circumstances.” Circumstances often have a way of intervening in the best-laid plans.

Department of Defense: Phones Can’t Outsmart Troops

Charles Hoskinson, Politico Morning Defense. Chuck looks at the challenges faced by the military as every soldier and Marine who has a smart phone can potentially cause an incident like last week’s infamous video of Marine’s urinating on the bodies of dead Taliban fighters.  The military is struggling to come up with an approach beyond warning troops of the dangers these tools can present as well as the positives they offer.  Throw in that the Uniform Code of Military Justice as a governing body of law is from an analog age and ill suited to deal with the nature of the digital age. The military finds itself in a headlong rush to head off the next digital crisis before it can pop onto YouTube.

The week ahead:

Themes:  This week marks the start of the official focus on the Department of Defense budget cycle, as the first previews are rolled out in briefings and background interviews with reporters.  You can expect a lot of trial balloons on program cuts and gnashing of teeth in the halls of Congress and across the country, as potential cuts are presented to an anxious industry and its supporters. 


Biometrics for National Security and Defense: Institute for Defense and Government Advancement (IDGA) (Mon-Wed, 23-25 Jan) Hyatt Regency Crystal City, VA, Biometrics are a growing part of intelligence and security efforts. Establishing an individual’s identity with certainty provides military personnel an edge and aids other US government organizations. The market for Identity and Access Management (IAM) technologies is projected to grow from nearly $2.6 billion in 2006 to $12.3 billion by 2014. This conference examines the latest trends and offers networking opportunities for those in this growing field.

Soldier Technology 2012: (Mon-Thurs, 23-26 Jan) Marriott Gateway, Crystal City, VA, The Soldier Technology show focuses on the equipment and support of the individual soldiers and Marines of the future. They expect over 500 attendees representing 45 organizations with case studies and discussions on modernization and equipping of combat forces.

DGI (Defense Geospatial Intelligence) Conference 2012: (23-26 Jan) London, England, DGI is one of the top international conferences on Geospatial Intelligence issues and is supported by the Ministries and Departments of Defense of numerous countries.  Attendees come from 45 different nations and represent leaders in industry and government for GEOINT.

Congress:   The full Congress is in session this week.

House Veterans Affairs Committee – Hearing (10:00 AM, Tues, 24 January) Disability Assistance and Memorial Affairs Subcommittee hearing on “Rating the Rating Schedule – the State of VA Disability Ratings in the 21st Century.” Witnesses: TBD Location: 334 Cannon House Office Building

Think tanks and other news events:

The Future of the National Security Industrial Base: (Thurs, 26 Jan) Reserve Officers Association, One Constitution Ave, Washington DC. The Brookings Institution and the Defense Education Forum of the Reserve Officers Association (ROA), will host a discussion on the future of the U.S. national security industrial base in the context of changing American defense strategy, declining budgets and a transforming international security environment. The event will feature a keynote address by Rep. Mac Thornberry (R-Tex.), vice chairman of the House Armed Services Committee. Panelists will include Brookings Senior Fellows Peter W. Singer and Michael O’Hanlon; Mackenzie Eaglen of the American Enterprise Institute; Robert Haffa of Haffa Defense Consulting; David Morrison of Boeing; and David Worn of Palantir Technologies.

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 Monday, January 23, 2012 8:52 am

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