October 5, 2021 | International, Aerospace
January 9, 2019 | International, Aerospace, Naval, Land, C4ISR, Security
US government shutdown creating angst for defense contractors
By: Valerie Insinna
WASHINGTON — As the U.S. government shutdown continues into its 18th day, defense firms and industry advocates are beginning to worry that the pause in business could eat into companies' cash flow.
The Defense Department is funded for fiscal 2019, with Congress having passed a spending bill for the new fiscal year in September. That means work on the military's weapons programs continue apace, but many defense companies also hold contracts with agencies that are not currently funded, like the Department of Homeland Security — which includes the Coast Guard as well as Customs and Border Protection — and NASA.
The Aerospace Industries Association, a lobbying group that represents defense and commercial aviation companies, warned that impacts to the aerospace sector extend beyond the 800,000 federal workers who are furloughed or working without pay.
For example, weapons sales and transfers to U.S. allies and partners are stalled as a result of the closure of the departments of State and Commerce, AIA said in a Jan. 8 statement. Research projects at NASA, the Federal Aviation Administration, and National Oceanic and Atmospheric Administration are suspended, “setting back development of game changing technologies.” And meetings between the government and industry have been canceled or delayed.
“Every day the shutdown lasts, the impacts grow and become more difficult and more expensive to fix,” said AIA President and CEO Eric Fanning. “It's time to get these dedicated public servants back to work.”
Tony Moraco, the CEO of government service and information technology firm SAIC, told investors Jan. 7 that the effects of the shutdown are expected to be short term and primarily affecting accounts with NASA, the FAA and the U.S. Department of Agriculture.
Moraco characterized the effect on SAIC and Engility — the latter of which is set to merge with the former this year — as a “modest impact on revenues and potentially cash collection, which we think we can recover — mostly — if this is resolved in the near term.”
But SAIC Chief Financial Officer Charlie Mathis said the government is already behind on payments to the two companies by about $40 million to $50 million.
“If we get through this quickly, they could catch up,” he said, but the shutdown would have to be resolved within a week for the companies to hit their cash-flow goals for their fiscal year ending Jan. 31.
Furthermore, the companies are seeing a hit of about $10 million per week in revenue as the shutdown progresses, and “if it continues, that number could increase,” Mathis said.
The probability of an extended shutdown seems to be rising.
The government shutdown started Dec. 22 amid disagreements between President Donald Trump and Congress over funding for a border wall that would separate the United States and Mexico.
But with Democrats now controlling the House of Representatives, a deal on funding for the wall may take weeks and could propel this shutdown past the 21-day mark of the 1995 shutdown, currently the longest on the books, according to CNN.
Defense contractors will eventually get paid back for work accomplished while the government was shut down, but there could be long-standing consequences.
If the shutdown persists for a protracted amount of time, there could be repercussions for the federal government's recruiting pipeline, as well as the balance of federal employees and contractors, said Byron Callan, an analyst for Capital Alpha Partners.
“How will this shutdown impact the ability of federal agencies impacted by the shut-down to recruit and retain skilled individuals?” he wrote in an emailed analysis of SAIC's investor meeting. “There might be near-term collateral damage if people leave government service, but a 1-3 year factor to consider is how this shutdown and the potential for future ones accelerates reliance on federal service contractors.”
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September 3, 2019 | International, Security
What’s changing in the cyber domain? We ask industry experts
By: Andrew Eversden “What are you talking about now in cybersecurity that you weren't talking about six months ago?” Fifth Domain posed this question to cybersecurity experts at Black Hat, a cybersecurity conference in Las Vegas, Nevada, that ran from Aug. 3-8. With the cyber domain rapidly evolving, we wanted to know how conversations within the cyber community are changing. Some pointed to a new focus on utility systems and web-connected devices that sit on critical infrastructure. “It's only a matter of time until there's another major disruption in an electric utility somewhere in the world, probably not in the U.S., but elsewhere,” Sergio Caltagirone, threat intelligence director at Dragos, said at the conference Aug. 5. “But oil and gas has the higher likelihood of a major destructive and loss-of-life event. And I think most people did not realize how close to that we actually were.” Caltagirone was referring to the TRISIS event, malware that struck industrial control systems at a Saudi Arabian petrochemical plant and could've caused physical harm. He said that in the aftermath of that attack, threat researchers diving into the details realized just how bad it could've been. “We started finding a lot of stuff which hadn't been found before,” Caltagirone said. “Which made us realize very quickly how close that space is to a major event.” Dave Weinstein, chief security officer at Claroty, pointed to an “explosion” of devices connected to the internet of things.. “It's really a product of this general consensus among industrial organizations that the benefits exceed the costs in terms of embracing this type of digital transformation," Weinstein said Aug. 8, adding that organizations must be “mindful” of these devices and have a plan to mitigate their potential vulnerabilities. Brian Costello, a senior vice president at Flashpoint, told Fifth Domain on Aug. 8 that he is more often than before focusing on targeted cyberattacks from bad actors. That's a shift away from “campaign-based” attacks that tracked. There's “more planning out, more scoping out of targets and taking long-term planning to go after [a] particular target with a specific asset in mind,” Costello said. Along that same vein, Julian Zottl, a senior cyber architect at Raytheon, said he's noticing more inclusion of all-source intelligence in threat analysis. “We're looking at ... all the sources and trying to figure out indicators,” Zottl said Aug. 7. “[We're] even trying to do predictive analytics now, where it's like, ‘Oh, we see this threat might be coming.' I think that's something that we're starting to talk about more and more.” Several cybersecurity professionals interviewed by Fifth Domain said the U.S. government is moving away from the classic cyber kill chain and over to the MITRE ATT&CK framework, which dives deeper into potential threats to information security. “They used to think the hackers would just come in to steal secrets, conduct espionage and then leave,” said Tom Kellermann, chief cybersecurity officer at Carbon Black and a former commissioner on the Commission on Cyber Security for then-President Barack Obama. “In fact, they're maintaining persistence in these systems. They're manipulating the integrity of data and then they're using federal government agencies themselves and personnel's devices themselves to target anyone who implicitly trusts that person, that agency, that department.” he told Fifth Domain on Aug. 6. Chris Kennedy, chief information security officer at AttackIQ and a former official with the Treasury Department and the Marine Corps, said these new frameworks in use along with federal continuous monitoring programs allow for more attacker emulation, essentially simulating the attack agencies could face. “Agencies are starting to realize the value of attacker emulation as a way to measure and benchmark the effectiveness of their security controls,” Kennedy said on Aug. 7. And with government agencies in different stages of cloud migration, agencies will need to learn how that fits into their cybersecurity posture. Marten Mickos, CEO of white hat hacking company HackerOne, said this a new discussion. He also said the conversation surrounding the use of ethical hackers in government environments has evolved: The word “hacker” is becoming more accepted. “I do think it signals a shift in mindset," Michos said. There's a realization that "those people who portray themselves as hackers are actually those who will rescue us, not those who will destroy us.” Despite all the changing technology and evolving threats, one aspect of cybersecurity remains set in stone, said M. K. Palmore, a field chief security officer for the Americas at Palo Alto Networks and a recently retired FBI cyber agent. “It's about adhering to cybersecurity fundamentals,” Palmore said. “That message hasn't changed regardless of my position or where I'm located.” https://www.fifthdomain.com/show-reporters/black-hat/2019/08/30/whats-changing-in-the-cyber-domain-we-ask-industry-experts
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April 14, 2023 | International, Aerospace
Sweden, Colombia interested in Embraer's KC-390, says Brazilian minister
Brazilian Defense Minister Jose Mucio said late Thursday that countries such as Sweden and Colombia had expressed interest in buying Embraer's KC-390 military cargo aircraft.