June 6, 2023 | International, Aerospace
Lockheed picks engine to bolster interim tanker case for US Air Force
The Air Force is considering skipping a competition for its interim tanker and instead buying more modified KC-46s for Boeing.
September 6, 2018 | International, Aerospace, Naval, Land, C4ISR
Adam Smith expects future defense budgets to dip below $716 billion
By: Aaron Mehta
WASHINGTON — When Congress delivered a $716 billion defense budget to the Pentagon, defense leaders made it clear it was a welcome boost — but some questioned if the number would be enough to do everything the department foresees as necessary.
Now the ranking Democrat on the House Armed Services Committee — who is poised to take over the HASC should November elections go blue — is warning that tightened belts are on the horizon.
Asked specifically if $716 billion is the right number for defense and whether future budgets will stay at that level, Rep. Adam Smith, D-Wash, said flatly: “No and no.”
“I think the number's too high, and its certainly not going to be there in the future,” Smith said at the second annual Defense News Conference.
The congressman argued that the debt and deficit situation facing the country requires balancing out how the government is spending, particularly after the Trump administration's tax cuts made it “even more difficult to get our budget under control.”
But drawing down the defense budget has to be part of a broader look at U.S. strategy, something that Smith said requires a realistic look at America's military strategy. He pointed to the idea that 355 ships are vital for the Navy as an example of flawed logic, because “capability matters.”
“We can do this,” Smith said of the U.S. remaining the key world power. “I'm not even remotely worried about it. It is a more complicated and different world in some ways, but the Cold War was no walk in the park either. World War II certainly wasn't. We will always face challenges. The question is about being smart.
“We just have to be smart instead of trying to force our way back into a world that is never going to be again."
“We are going to be a major, major player, probably the major player, on the global stage” for a long time to come, Smith added. “But we are not going to be utterly and completely dominant.”
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December 17, 2024 | International, Aerospace
Space Force must grow to counter China and Russia, lawmaker says
House Armed Services Chairman Mike Rogers, R-Ala., said the service is not sized to meet increasing threats from China and Russia.
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August 4, 2020 | International, Aerospace, Naval, Land, C4ISR, Security
Defense contractor with billions in sales got millions in pandemic loans intended for small businesses
By Aaron Gregg August 3, 2020 at 8:00 a.m. EDT A military equipment supplier that has been accused of fraudulently misrepresenting its size in order to benefit from privileges associated with being a small business has received a Paycheck Protection Program small business loan worth at least $2 million, public records show. Atlantic Diving Supply, a Virginia Beach, Va.-based reseller of specialized military gear, is the latest organization whose receipt of taxpayer-backed loans through the Paycheck Protection Program has raised questions about a program launched in early April to help sustain employment at small companies through the economic crisis. In late April, the Treasury Department retroactively clarified its rules after well-known restaurant chains, car dealerships and hotel companies reported receiving PPP loans. Several of them returned the loan funds following public uproar; others kept the money. The SBA has said it will audit all PPP loans above $2 million to determine whether the recipients were eligible. Representatives from the Small Business Administration and Atlantic Diving Supply did not comment on the company's receipt of SBA loans. The company's legal issues are detailed extensively in a report released Monday by the nonprofit Project on Government Oversight, known as POGO. A review of business data by POGO and the nonprofit Anti-Corruption Data Collective concluded that ADS was one of at least 27 PPP recipients estimated annual sales of more than $1 billion in 2019. Another 2,068 loan recipients cleared $100 million in sales last year, according to the analysis. Nick Schwellenbach, a senior investigator at POGO, questioned whether it's appropriate for ADS to receive small business coronavirus loans. Schwellenbach's investigation also found that two other firms allegedly tied to ADS ― including one that was named in a settlement with the Department of Justice ― separately received smaller PPP loans. “It's important that taxpayer funding reserved for genuine small businesses isn't siphoned off by companies that are not eligible,” Schwellenbach said. “As a top government contractor with revenues well over a billion dollars a year, it strains credibility that Atlantic Diving Supply is a real small business, especially given several recent settlements and law enforcement outcomes related to their alleged small business contracting fraud." Although it received a favorable ruling from the SBA as recently as November 2019, ADS's small business credentials have long been called into question. ADS started as a small, family-owned shop focused on the military diving community in Virginia Beach, which includes the Navy SEALs. It was transformed under the leadership of long-time chief executive Luke Hillier, winning its first major government contract in 2000. It grew quickly to meet an insatiable demand for military gear of all sorts in the years following 9/11. That fast growth became permanent business as the U.S. military presence in Iraq, Afghanistan and elsewhere dragged on for nearly two decades. At one point, ADS filed papers to go public, something that is usually the purview of large corporations. In 2015 it purchased Theodore Wille International, a military food and equipment supplier with offices in seven countries. Its business has remained healthy despite recent troop reductions. ADS received more than $3 billion in unclassified government contract dollars in 2019, procurement records show. That's more than some well-known, objectively large government contractors, including Bechtel, KBR and CACI. ADS has already cleared $1 billion in federal contract receipts in 2020 despite the economic crisis. As it has grown ADS's continued status as a small business status has been critical to its participation in the Defense Department's Tailored Logistics Support, or TLS program, a lucrative military supply line that is largely restricted to SBA-approved small and disadvantaged businesses. In recent years, ADS's official headcount has teetered close to the SBA's 500-employee limit for small-company designation, and the company has fought off repeated challenges to its size status. If ADS were declared “no longer small,” it would not only be ineligible for SBA coronavirus assistance, but would also be forbidden from competing on small business set-aside contracts that drive its business. In 2017, ADS settled federal allegations that it used a network of allegedly-affiliated companies to rig bids and fraudulently misrepresent its size. The Justice Department called the $16 million settlement “one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility.” Hillier, who has moved on from the CEO role but remained the company's chairman as of July 20, according to a company filing, separately paid $20 million to settle federal allegations that he “violated the False Claims Act by fraudulently obtaining federal set-aside contracts reserved for small businesses that his company was ineligible to receive.” The settlements resulted from a Qui Tam lawsuit brought by whistleblowers. Two of the alleged affiliate businesses — Karda Systems and SEK Solutions — were named in a related case in which Ron Villanueva, a former state lawmaker from Virginia Beach, pleaded guilty to federal charges that he conspired to defraud the United States. Villanueva admitted that he and a friend pretended both companies were run by people who qualified for particular grants and drafted a misleading letter to the SBA that mischaracterized the degree to which one firm relied on other suppliers. ADS briefly lost its small business designation as a result of those allegations when a Defense Department contracting officer, concerned by ADS's settlement, requested a formal SBA review of the company's size status and its degree of affiliation with other companies named in the whistleblower lawsuit, according to documents obtained by The Washington Post. That SBA review determined that ADS was “other than small,” which temporarily blocked the company from bidding on set-aside contracts. But ADS successfully appealed that ruling, which was reversed because it relied on old financial records. Today the company continues to receive federal contracts designated for small firms. Because the settlements arrived at by ADS and Hillier did not include a determination of liability, the company has been allowed to keep benefiting from the SBA's various small business programs. Its most recent size determination, which found it to be a small business, was finalized in November 2019. https://www.washingtonpost.com/business/2020/08/03/defense-contractor-with-billions-sales-got-millions-pandemic-loans-intended-small-businesses