INSIDE THE

NEWS + ADVICE

May 6 Weekly Defense Industry Roundup

Posted by Rob Riggins

Details Leak on DoD’s Budget Reprogramming

Paul McLeary (@paulmcleary), Zachary Fryer-Biggs and Aaron Mehta (@AaronMehta), Defense News. The Department of Defense is ready to submit a budget-reprogramming request to cover the costs of the estimated $28 billion in equipment that will need to be moved out of Afghanistan in the next year and a half. It faces a dwindling overseas contingency operations budget as well as cutbacks in operations and maintenance funds already. Defense News is reporting that in a draft document leaked Friday, the Army wants $1.34 billion more in O&M funding to make up for “increased fuel costs and increased use of multi-modal transportation methods for equipment movement and retrograde operations.” In addition, they want another $3.6 billion for OCO to support troops in Afghanistan. The Army has proposed to cut money from AH-64 modernizations, its WIN-T communications program and, interestingly, from its tracked combat vehicle programs. At DoD level, the Joint IED Defeat Organization may lose $276 million and a remarkable $730 million is being proposed in putting off Humvee recapitalizations and MRAP modifications for 12 months. A number of Air Force programs will get hit as well. This week should prove interesting as the request is parsed over and the various pet programs’ advocates flood into the fight.

China’s Cyberspies Outwit Model for Bond’s Q

Michael Riley (@rileybloomberg) and Ben Elgin, Bloomberg. Bloomberg takes a long look at one of the most disturbing examples of how deep and thorough the damage has been from the Chinese military’s long running hacking efforts against U.S. defense contractors. Over a three-year period, major defense contractor QinetiQ North America was infiltrated and most if not all of the company’s research was compromised and stolen. Even after hiring several outside companies to fix holes in their network and clean their computers of the various bugs and intrusions, the Chinese continued to find new avenues to steal millions of documents. QinetiQ is hardly alone, as it’s believed almost every major defense manufacturer has been raided and most of the incidents remain classified. The facts continue to point to the conclusion that the U.S. has almost no way to stop the continuing, well orchestrated, government funded effort by China to steal secrets. DoD is rushing to build Cyber Command in a tight budget environment but has a nearly impossible task of enticing highly skilled cyber experts to take government jobs in a time of furloughs and employment uncertainty. Neither of the terms ‘Cold War’ or ‘Hot War’ seem to fit what is going on right now as a raging digital war continues unabated.

Samsung, BlackBerry Devices Cleared for Use on U.S. defense Networks

David Alexander (@davidalexander5), Reuters. The Pentagon cleared new devices and operating systems from (ScoutComms’ client) BlackBerry and Samsung for use on DoD networks last week. The latest BlackBerry 10 phones and BlackBerry PlayBook tablets using their Enterprise Service 10 system are now able to use the networks as well as the Samsung Android Knox. They also said this week they expect to finally approve the Apple iOS 6 system for use at some point in May. These moves will mean that the Pentagon’s 600,000 users of smart phones, tablets and other mobile devices will face more options and a more robust competition to keep their business. Right now BlackBerry dominates because of its security protocols with some 470,000 users while 41,000 Apple and 8,700 Android devices are in use in mostly pilot programs around the world. The announcement last week does not mean there will be specific product orders but simply clears the way for purchasing organizations in the department to add these devices to their list of available options. The competition will be fierce for these power users of the government.

Defense Spending Cuts Lowering Job Gains

Paul Davidson (@PDavidsonusat), USA Today. While there was general good cheer with the new jobs numbers released on Friday, it is clear that they would have been better if not for the drastic spending cuts that are starting to make an impact on the defense industry. While they were described as modest in April almost all analysts are seeing a dismal picture in coming months as contracts that were cut last month begin to send workers to the unemployment office. So far defense and aerospace contractors announced about 2,000 layoffs in April, which is about double of March’s numbers but don’t include some 10,000 job cuts from the same month. Stephen Fuller at George Mason University believes defense cuts will begin cutting job gains by 25,000 to 30,000 a month going forward and many midsize firms are seeing IT and other services contracts like public relations coming to an end without renewal. The double whammy for small companies also comes with insourcing by the larger ones and less requests for proposals and subcontractor orders. So, while some are saying the cuts are having little impact on the big defense company bottom lines, that situation masks that those steady numbers are coming through massive cuts on costs and staffs.

AOL Defense is now Breaking Defense

You may not have heard that a few months ago Breaking Media purchased the AOL’s Trade Media unit including AOL Defense, Energy and Gov. They have quietly been working behind the scenes to bring the reporters and content over to Breaking Media’s content management system and style and went live last week. So, change your bookmarks and RSS feeds to www.breakingdefense.com and see the interesting new direction for Colin Clark and his merry band of writers and contributors.

The week ahead:

Tradeshows and Conferences: No major tradeshows or conferences this week, butSOFIC is still on the horizon. Are we missing a big one? Email us and let us know at [email protected].

Congress: Both chambers return to work this week.

House:

Appropriations Subcommittee on Defense: Budget Hearing – Navy and Marine Corps

Witnesses: The Honorable Ray Mabus, Secretary, United States Navy, Admiral Jonathan W. Greenert, Chief of Naval Operations, General James F. Amos, Commandant, Marine Corps When: 10:00 AM, Tuesday, May 7, 2013 Where: H-140 Capitol Building

Veterans Subcommittee on Oversight and Investigations: VA Construction Policy: Failed Plans Result In Plans That Fail Witnesses: TBD When: 2:00 PM, Tuesday, May 7, 2013 Where: 334 Cannon House Office Building

Armed Services: National Defense Priorities from Members for the FY 2014 National Defense Authorization Act Witnesses: Members of Congress TBD When: 12:30 PM, Wednesday, May 8, 2013 Where: 2118 Rayburn House Office Building

Armed Services Subcommittee on Strategic Forces: Fiscal Year 2014 National Defense Authorization Budget Request for Missile Defense Programs Witnesses: The Honorable Madelyn Creedon, Assistant Secretary of Defense for Global Strategic Affairs, Department of Defense, The Honorable J. Michael Gilmore, Director, Operational Test and Evaluation, Department of Defense, Vice Admiral James D. Syring, USN, Director, Missile Defense Agency When: 3:00 PM, Wednesday, May 8, 2013 Where: 2212 Rayburn House Office Building

Appropriations Subcommittee on Defense: Budget Hearing – United States Army Witnesses: The Honorable John M. McHugh, Secretary, United States Army, General Raymond T. Odierno, Chief of Staff, United States Army When: 1:00 PM, Wednesday, May 8, 2013 Where: H-140 Capitol Building

Homeland Security: The Boston Bombings: A First Look Witnesses: Boston Police Commissioner Edward Davis, U.S. Senator Joseph I. Lieberman, Massachusetts Undersecretary for Homeland Security Director Kurt Schwartz When: 9:00 AM, Thursday, May 9, 2013 Where: 311 Cannon House Office Building

Armed Services Subcommittee on Strategic Forces: Fiscal Year 2014 National Defense Authorization Budget Request for Atomic Energy Defense Activities and Nuclear Forces Programs Witnesses: The Honorable Madelyn Creedon, Assistant Secretary of Defense for Global Strategic Affairs, Department of Defense, Dr. John Harvey, Principal Deputy Assistant Secretary of Defense for Nuclear, Chemical, and Biological Defense Programs, Department of Defense, Mr. David Huizenga, Senior Advisor for Environmental Management, Department of Energy, General C. Robert Kehler, USAF, Commander, U.S. Strategic Command, The Honorable Neile Miller, Acting Administrator, National Nuclear Security Administration, Dr. Peter S. Winokur, Chairman, Defense Nuclear Facilities Safety Board When: 9:00 AM, Thursday, May 9, 2013 Where: 2118 Rayburn House Office Building

Senate:

Armed Services Subcommittee on Strategic Forces: National Nuclear Security Administration Management of its National Security Laboratories Witnesses: Dr. Charles F. McMillan, Director, Los Alamos National Laboratory, Dr. Paul J. Hommert, Director, Sandia National Laboratories, Dr. Penrose C. Albright, Director, Lawrence Livermore National Laboratory, Dr. Charles V. Shank, Co-Chair, Committee to Review the Quality of the Management and of the Science and Engineering Research at the Department of Energy’s National Security Laboratories When: 2:30 PM, Tuesday, May 7, 2013 Where: 222 Russell Senate Office Building

Armed Services: Air Force Oversight Witnesses: Honorable Michael B. Donley, Secretary of the Air Force, General Mark A. Welsh III, USAF, Chief of Staff of the Air Force When: 9:30 AM, Tuesday, May 7, 2013 Where: 216 Hart Senate Office Building

Armed Services Subcommittee on Seapower: Navy Shipbuilding Programs Witnesses: Honorable Sean J. Stackley, Assistant Secretary of the Navy (Research, Development and Acquisition), Vice Admiral Kevin M. McCoy, USN, Commander, Naval Sea Systems Command, Vice Admiral Allen G. Myers, USN, Deputy Chief of Naval Operations, Integration of Capabilities and Resources (N8) When: 9:30 AM, Wednesday, May 8, 2013 Where: 232 Russell Senate Office Building

Armed Services: Army Modernization Witnesses: Lieutenant General William N. Phillips, USA, Principal Military Deputy to the Assistant Secretary of the Army for Acquisition, Logistics, and Technology Director, Acquisition Career Management, and Chief Integration Officer, Lieutenant General James O. Barclay III, USA, Deputy Chief of Staff of the Army (G-8) When: 9:30 AM, Wednesday, May 8, 2013 Where: 222 Russell Senate Office Building

Armed Services Subcommittee on Strategic Forces: Programs of the National Nuclear Security Administration and the Department of Energy’s Office of Environmental Management Witnesses: Ms. Neile L. Miller, Acting Administrator National Nuclear Security Administration Department of Energy, Honorable Don L. Cook, Deputy Administrator for Defense Programs National Nuclear Security Administration Department of Energy, Admiral John M. Richardson, USN, Deputy Administrator for Naval Reactors National Nuclear Security Administration Department of Energy, Mr. David G. Huizenga, Senior Advisor for Environmental Management Office of Environmental Management Department of Energy, Mr. David C. Trimble, Director, Natural Resources and Environment Government Accountability Office When: 2:30 PM, Wednesday, May 8, 2013 Where: 232 Russell Senate Office Building

Homeland Security Subcommittee on Emergency Management, Intergovernmental Relations, and the District of Columbia: Role of Private Sector in Preparedness and Emergency Response Witnesses: TBD When: 2:30 PM, Wednesday, May 8, 2013 Where: 342 Dirksen Senate Office Building

Armed Services Subcommittee on Strategic Forces: Programs of the National Nuclear Security Administration and the Department of Energy’s Office of Environmental Management Witnesses: Honorable Madelyn R. Creedon, Assistant Secretary of Defense for Global Strategic Affairs Department of Defense, Honorable J. Michael Gilmore, Director, Operational Test and Evaluation Department of Defense, Lieutenant General Richard P. Formica, USA, Commander, U.S. Army Space and Missile Defense Command/Army Forces Strategic Command and Commander, Joint Functional Component Command for Integrated Missile Defense, Vice Admiral James D. Syring, USN, Director, Missile Defense Agency Department of Defense, Ms. Cristina T. Chaplain, Director, Acquisition and Sourcing Management Government Accountability Office When: 2:30 PM, Thursday, May 9, 2013 Where: 222 Russell Senate Office Building

Think tanks and other news events:

New America Foundation: The Drone Next Door What: “Drones have become essential to the American way of war. They’ve given the military nearly constant surveillance from the sky, and allow for quick attacks from afar. And now, like countless other technologies forged in the heat of battle, drones are making their way to the home front, pressed into civilian service. Call them drones, unmanned aerial vehicles, or remote-control planes; these high-tech devices have appealed to Border Patrol and local law enforcement, but also to conservationists, journalists, hobbyists, and more. How do we decide who gets to have their own set of eyes in the skies? What does it mean for your privacy and safety if your neighbors get their own drone?” Who: Michael Toscano, President and CEO, Association for Unmanned Vehicle Systems International, Shane Harris, National Security Writer, Washingtonian, Rosa Brooks, Bernard L. Schwartz Fellow, New America Foundation, Catherine Crump, Staff Attorney, American Civil Liberties Union, Carter Roberts, President and CEO, World Wildlife Fund, Robbie Hood, Director of Unmanned Aerial Systems, NOAA, and others When: 9:00 AM, Tuesday, May 7, 2013 Where: 1899 L Street NW Suite 400, Washington, DC 20036

American Enterprise Institute: The F-35: Separating rhetoric and rationale What: “The fate of the F-35 Lightning II program hangs in the balance. The costly and controversial program has been a constant target for budget cutters, but their criticisms concentrate almost solely on problems of program and schedule rather than on the technological, tactical, operational, and strategic value of the Lightning II.” Who: Rebecca Grant, IRIS Independent Research, Major General Richard Johnston, US Air Force, Phillip Lohaus, AEI When: 10:00 AM, Tuesday, May 7, 2013 Where: Russell Senate Office Building 485, Constitution Avenue and 1st Street, NE, Washington, DC 20002

Delegation of the European Union to the United States: Transatlantic Partners In Global Security: The EU’s Common Security And Defense Policy What: “This transatlantic symposium brings together American and European crisis management policy-makers and experts – both military and civilian – for a day-long discussion of transatlantic cooperation on crisis management, in the context of the EU’s Common Security and Defense Policy.” Who: Ambassador João Vale de Almeida, Head of Delegation of the European Union to the United States, Catherine Ashton, EU High Representative for Foreign Affairs and Security Policy and Vice-President of the European Commission, Rick Barton, Assistant Secretary, Bureau of Conflict and Stabilization Operations, Dr. Kathleen Hicks, Principal Deputy Under Secretary for Policy, U.S. Department of Defense, Wendy Sherman, Under Secretary for Political Affairs, U.S. Department of State, Brigadier General Francois Lecointre, Mission Commander, European Union Training Mission Mali, and others When: 9:00 AM, Wednesday, May 8, 2013 Where: United States Institute for Peace, 2301 Constitution Avenue, NW, Washington, DC

Cato Institute: Buzzfeed Politics: Lessons from the Intersection of Journalism and the Viral Web What: “A discussion with Buzzfeed’s political news team on crafting viral content, keeping up in real time, and the future of journalism.” Who: McKay Coppins, Politics Editor, Buzzfeed, Benny Johnson, Associate Editor – Viral Politics, Buzzfeed, Kelly Cobb, Senior Director of External Affiars, Cato Institute When: 12:00 PM, Wednesday, May 8, 2013 Where: 1000 Massachusetts Ave NW, Conference Center Hall 3, Washington, 20001

Center for Strategic and Budgetary Assessments: SOF Future Missions: Addressing Proxy Wars, Violent Extremists, WMD and A2AD What: “From the crucible of more than a decade of continuous combat operations, Special Operations Forces (SOF) have emerged as one of the most cost-effective “weapons systems” in the U.S. military arsenal and a major source of strategic advantage for the nation. How can the United States capitalize on such development and extend the SOF’s strategic advantage well into the future?” Who: Rep. Mac Thornberry (R-TX), Vice Chair of the House Armed Services Committee and the Chair of the HASC Subcommittee on Intelligence, Emerging Threats and Capabilities, Michael Sheehan, Assistant Secretary of Defense for Special Operations and Low-Intensity Conflict, Jim Thomas, CSBA Vice President and Director of Studies, Chris Dougherty, CSBA Research Fellow When: 9:30 AM, Friday, May 10, 2013 Where: 2325 Rayburn House Office Building

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.

Google+

This entry was posted on Monday, May 06, 2013 8:25 am

Leave a Reply

Your email address will not be published. Required fields are marked *

Notify me of updates to this conversation