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  May 4, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  NDIA’s Wesley Hallman on a liability shield and other defense priorities for the next stimulus

  By: Joe Gould WASHINGTON―As the Pentagon works to defray the coronavirus pandemic's impact on its network of suppliers, it's worked hand-in-glove with defense and aerospace trade associations to find and address problems in the supply chain. The National Defense Industrial Association, whose members stretch into the lower tiers of the defense industrial base, surveyed more than 700 small businesses to find that cash-flow disruptions remained a problem as the Pentagon and major defense firms increase payments to suppliers. Retired Air Force Col. Wesley Hallman is NDIA's senior vice president of policy, charged with monitoring Capitol Hill on matters of concern to defense, including annual budgets, acquisition and procurement reform. This week, he spoke with Defense News about NDIA's priorities as Congress mulls how to follow its third coronavirus response bill, worth $2.2 trillion and intended to speed relief across the American economy. With NDIA's finger on the pulse of the supply chain and recent survey, how do you interpret the Undersecretary of Defense for Acquisition and Sustainment Ellen Lord's numbers, demonstrating more defense firms that have closed now reopening? What are you seeing among your members? As you know, A&S has been holding a call on Mondays, Wednesdays and Fridays, and we've been participating in all of those. The Defense Contract Management Agency has really been the clearinghouse for all these companies' challenges, and in fact we've been pushing our member companies that are seeing challenges to go to the website and fill in information about what their challenges are what they're seeing. And DoD has been responsive when something has closed down for whatever reason. Undersecretary Lord herself has picked up the phone to make calls to state governors to explain that we work very hard to ensure that the defense industrial base is considered essential. That was a question when people were starting to call for shelters in place. The very issues these companies have been seeing are things you're expecting: the result of closures, and sometimes those closures aren't state and local but on installations. Many contractors have to go to work on installations, and installation commanders are the mayors of their bases; they're tasked with the safety and security of their installations, and sometimes they've made the call to close facilities that have an effect on those performing contracts. There's also a growing concern on liability. There's uncertainty surrounding contractors' liability during the crisis for heeding calls to keep everything turned on. They also have to make sure that they're keeping their workforce safe and secure, and sometimes that's an issue as you look at reopening everything. Our last NDIA survey was really about what kind of things do you need to reopen to get to a new normal, where we're producing on contracts. Access to personal protective equipment is a concern, safety is a concern and more. DCMA has been following up with those companies to see what those issues are and what would allow them to reopen. We all know the supply chain ― and I'm sure you remember our report on the health of the defense industrial base at the beginning of the year ― but one of the things we highlighted is we have a relatively fragile supply chain already. This is a concern of the associations, the Pentagon and particular House Armed Services Committee members. Cash flow was also identified as an issue in NDIA's survey, and it's been a feature of DoD's press conferences. Ellen Lord said she was relying on the trade associations to help DoD understand how its accelerated progress payments are trickling down the supply chain to smaller firms, from the primes. How detailed is the information the associations are providing, and are the primes doing what's expected of them? What I have is anecdotal. It's proprietary data, and our members don't necessarily share that with us. I did get calls from all of the majors asking about accelerating payments through the supply chain, and one company was very explicit that “we have access to capital to get through this, but our supply chain doesn't.” Lockheed Martin has been very public with their commitment, and I know they're worried, and they're incentivized to keep their supply chain healthy because they've got to produce. The companies know their supply chains better than anyone else, so they're incentivized to push those dollars. It's not the amount of money but the velocity, and they understand that. This is me talking, but what the Pentagon wants to show ― and you've seen multiple groups saying, “not a dime for defense” ― is that the money that's being accelerated to these companies is not going to line anybody's pocket. This is to allow folks to survive. And beyond the national security aspect of this, which we could talk about forever, these are real companies with real people, doing real jobs that are key to our economy. They're as valid as any of the other small businesses that apply for the Paycheck Protection Program. So, ‘not a dime for defense' is I think a very shortsighted bumper sticker, because these are real people developing real capabilities for the defense of our nation. There have been some progressive lawmakers, as well as the chairman of the House Armed Services Committee who have already pushed back on the Pentagon's upcoming request for funding. But more broadly, what would NDIA like to see legislatively in the next stimulus package, including policy―or are your priorities being addressed directly through the Pentagon? So there's only so much the Pentagon can do without appropriations. What we're looking at ― and we are a 501(c)3, non-lobbying organization, though we engage when asked what we think ― is we think, first off, there needs to be a plus-up in appropriations for FY20. We all know that there's a lot of challenges to performing on contracts right now that are going to extend the length of those contracts. There's been a slowdown in the ability to perform on contracts because of this, and in some cases it has made made delivery on contracts more expensive. We believe that should be reflected in appropriations, and that shouldn't steal from the future. You know, we have a National Defense Strategy, we have a future-years defense program, there's already president's budget in. We don't think that the FY21 should be paying the increased cost for FY20. So it would be a defense supplemental to cover the extra expense to produce on contract because of COVID-19. That's first and foremost. The other thing is ― and you may know the Defense Logistics Agency and others, they pay out of a working capital fund. Back in November, DLA stopped following the accelerated payment policy passed by Congress because their working capital fund didn't have the liquidity to make that happen. They backed off to a 30-day instead of a 15-day payout. Well, that was hard enough in November, December, January, February. But you start getting to March with COVID-19, and these folks that have already performed on contract and are waiting to get their money are waiting an extra 15 days because of the lack of liquidity in the working capital funds. That's not acceptable. So another thing we'd like to see is a bump up in the working capital fund so those accelerated payments can start happening the way that Congress intended. You referenced liability issues. There's been a movement afoot to shield companies from lawsuits as they seek to reopen that's been met with partisan pushback. Are liability protections something NDIA favors? You have to be very careful because you don't want companies to do something that is not smart or not safe, but you do have to look at it because there's a potential that this is a ripe avenue for liability suits. We would rather see that stemmed up front so we can focus on producing for the war fighter. On a positive note, are you seeing companies employing any novel solutions to problems stemming from the pandemic? The Defense Department has a Joint Acquisition Task Force where companies can go and say what they can produce. We have worked with a lot of companies who can do harnesses for parachutes or where they can shift production to make you masks or other PPE. So it's been kind of heartening to see. A lot of small businesses are saying, ‘Hey, we can do this.' And we direct them over to the Joint Acquisition Task Force, which can look at their capabilities and explore those. https://www.defensenews.com/congress/2020/05/02/interview-ndias-wesley-hallman-on-a-liability-shield-and-other-defense-priorities-for-the-next-stimulus

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  June 26, 2020 | International, C4ISR, Security

  Pandemic doesn’t slow cyber training for the Army

  Mark Pomerleau While much of the national security community has had to rethink or delay operations and business practices because of the global pandemic, the Army's cyber school has been able to carry on business as usual due to prior investments in online tools and virtual training environments. “Our virtual training environment had existed prior to COVID and that was really what our students logged into and that's where our training ranges are and where we do a lot of coding and where we ... conduct our courses,” Col. Paul Craft, the Fort Gordon-based school's commandant told Fifth Domain in an interview. “Because we had that environment, we were already prepared, we were already postured.” This environment is called the Virtual Training Area or VTA. It is a conglomeration of open-source technologies that Army users can login from around the world on the open internet, not the closed DoD network, to access course prep materials, courses, tests or even to note curriculum changes. Now, all the officer courses are conducted remotely in the unclassified environment. With the empty classroom space this creates, the enlisted student body can now meet in person and still follow Centers for Disease Control mandated social distancing standards. For some of the classified material, officers still need to come into classes, also adhering to social distancing mandates and wear masks. “We did not change. For us, it just occurred over a weekend where our students backed out and said ‘I'm going to log in [from home]' ... continue to train like we were logging into that virtual training environment and we're still going to conduct the classes,” Craft said. “We set up for a success that we didn't know we needed to have.” This change is especially important as the cyber school expanded to teach “operations in the information environment,” which incorporates how cyber operations, electronic warfare and information operations interact. Within the last two years, the Army merged the electronic warfare and cyber branches together. While much of the rest of the world has been forced to either halt operations or drastically change practices, many within the military cyber community have been able to lean on technical advancements to continue training. In addition to the Army Cyber School, U.S. Cyber Command is conducting its annual major training event in June almost entirely remote relying on a virtual training platform for the first time called the Persistent Cyber Training Environment. Craft explained that when PCTE comes fully online for all of the Defense Department, the plan is to migrate operations from the VTA to PCTE to conduct their training. Migrating to an almost entirely remote environment on the officer side has also allowed the school to open up more seats to more trainees since they aren't limited to physical space. It's also reduced travel costs for those who need training, Craft said. For example, personnel can take courses from their home stations without having to travel all the way to Fort Gordon. Moreover, senior leaders are able to audit courses or even conduct guest speaking sessions right from their desks without having to travel to the cyber school. https://www.fifthdomain.com/dod/army/2020/06/25/pandemic-doesnt-slow-cyber-training-for-the-army/

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  June 3, 2019 | International, Land

  US Army to free up another $10 billion for priorities

  By: Jen Judson WASHINGTON — The U.S. Army is freeing up another $10 billion to apply to its top priorities in its next five-year budget plan, according to the service's undersecretary. “We are about to slap the table on the [program objective memorandum] here by no later than the middle of June,” Ryan McCarthy told a group of reporters during a May 29 media roundtable in his office. As part of a rigorous review of programs and spending, the Army set out to find $10 billion within the budget that could be reallocated toward priorities in its fiscal 2021-2025 program objective memorandum. The money shook out through another round of what the Army informally calls “night court,” a review process that freed up $30 billion in the last budget cycle to get ambitious modernization programs off the ground. The night court process was inspired by similar reviews conducted under Robert Gates when he was defense secretary. Rather than make $182 billion worth of decisions in a few hours, the process is meant to establish a deliberate route to applying funds against priorities, McCarthy said. For example, if a program didn't contribute to a more lethal battlefield or to one of the Army's six modernization priorities, it was canceled or downsized. The Army set up a new four-star command — Army Futures Command — last year to tackle the service's top six modernization priorities: long-range precision fires, the next-generation combat vehicle, future vertical lift, the network, air and missile defense, and soldier lethality. The review was conducted with the Army chief, vice chief, secretary and undersecretary at the head of the table last summer. But this year, to establish a more sustainable model, leadership fell to the major four-star commands and civilian heads in charge of major offices like acquisition and manpower. “Every dollar counts in this environment,” McCarthy said. “And so what we've done is we've realized that it's not a sustainable model to have the entire Army leadership hunkered down every summer, but should delegate to the appropriate echelon of authority.” Only the most difficult decisions will be brought to the top four Army leaders, he added. When it comes to finding another $10 billion across the five-year planning period to apply to priorities, McCarthy said, “we are in very good shape there.” The Army is also working to shift spending so that 50 percent is applied to new programs and 50 percent to legacy systems in the FY24-FY25 time frame. In FY17, the Army was applying 80 percent to legacy programs and 20 percent to bringing on new capabilities. https://www.defensenews.com/land/2019/05/31/army-freeing-up-another-10-billion-for-priorities/