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June 23, 2022 | International, Other Defence

Worried about inflation and the defense budget? A continuing resolution could make things worse

While rising inflation rates threaten DoD's purchasing power, congressional politics around a continuing resolution to start FY23 could exacerbate inflation's impact on the defense budget.

https://www.defensenews.com/opinion/commentary/2022/06/21/worried-about-inflation-and-the-defense-budget-a-continuing-resolution-could-make-things-worse/?utm_source=sailthru&utm_medium=email&utm_campaign=dfn-dnr

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  • How Kathleen Hicks will approach nukes, shipbuilding and the budget

    February 3, 2021 | International, Naval

    How Kathleen Hicks will approach nukes, shipbuilding and the budget

    By: Aaron Mehta WASHINGTON — Following a smooth confirmation hearing, it appears Kathleen Hicks is headed to the Pentagon. As had been expected, Hicks, the nominee to be deputy secretary of defense for Defense Secretary Lloyd Austin, received little in the way of pushback from senators. A significant number of them — including outgoing Senate Armed Service Committee Chairman Jim Inhofe, R-Okla., and his successor, Sen. Jack Reed, D-R.I. — indicated they would support her nomination out of the committee. The hearing, which lasted more than three hours, gave insight into how Hicks would approach a number of key issues for the Defense Department if she arrives in office. Hicks is open to changing budget traditions to drive joint activity. It is commonly accepted in defense circles that the Pentagon's budget will be flat at best, if not declining, in the coming years. That led to a number of questions from senators about how to drive reforms and find savings for the department. Hicks said the incentive structure must change, particularly for general officer- and senior civilian-level hires, in order to focus on joint impacts. A service that has “given up the capacity or the capability often believes that they will lose out overall, and the incentive structure is built around budget share. We should make clear always from a leadership perspective that the incentive is about serving the joint war fighter,” she said. “So the incentives start around promotion, but they also include how we keep the money, if you will, oriented towards services who are putting forward good ideas, even if those good ideas seem to go against a vested interest.” Hicks later committed to looking at “pass through” funding included in the Air Force budget each year. That money, which can account for as much as 20 percent of the service's budget request, goes to other government organizations and has for years been a thorn in the side of Air Force advocates, who argue it leads to the service having a smaller budget than the Army and Navy. The Navy's shipbuilding plan may get changed. The Trump administration delivered a long-awaited shipbuilding plan to Congress toward the end of 2020, one that was met with a skeptical eye from outside analysts who questioned some of the baked-in assumptions. Hicks, it seems, falls into that camp, although she said the broad structure is likely correct. “There's some really interesting operational themes that I'm attracted to: There's a focus on increasing use of autonomy, there's a focus on dispersal of forces and there's a focus on growing the number of small surface combatants relative to today,” Hicks said. “But there are some things in that unclassified report, as I mentioned to you, that I saw as flags. There's an indication that the information in there would require further analysis to validate the numbers.” Hicks said she would hope to work quickly once Navy leadership is in place on developing the Biden administration's plan. Focusing just on allied defense spending misses the point. President Donald Trump often focused his personal ire on allied nations who were not spending as much on defense as he would like. While NATO, with its pledge for countries to spend 2 percent of their respective gross domestic product on defense, was an early and common target, Japan and South Korea also drew his ire over the last four years. Hicks said she watched that with “concern,” noting that the focus purely on spending would impact how other nations work with the U.S. She believes the Biden administration will work to smooth over tensions around burden-sharing. “We should always be focused on burden-sharing, ensuring that allies fulfill their commitments. But when it becomes that tactical issue that overrides the strategic value of the alliances, alliances that the Chinese and Russians could only hope to match ... if we get to that point, we have become astrategic,” Hicks said. “We need to make sure that we're taking a strategic approach to what commitment means,” she added. “I think we need to make sure that allies are as into the security relationship as we are. Sometimes it's through spending. Sometimes it's through defense spending. And sometimes that commitment is expressed in other ways, and I think we should be strategic about how we consider those commitments.” Because of Austin's recusals, she'll be the point person on any Raytheon projects. Prior to assuming office, Austin served on the board of defense giant Raytheon Technologies. During his confirmation process, he pledged to recuse himself, if at all possible, from any decisions related to Raytheon while serving as defense secretary. That means Hicks will be the highest-ranking voice on programmatic decisions regarding two key nuclear capabilities: the replacement program for America's intercontinental ballistic missiles known as the Ground Based Strategic Deterrent, or GBSD; and the Long Range Standoff Weapon, or LRSO, a nuclear cruise missile. In her written answers to members, Hicks noted she would likely end up running programmatic decisions on those systems as well as “other timely missile defense issues.” Hicks backs nuclear modernization, but won't comment on specific projects. Like Austin did during his confirmation hearing, Hicks was unequivocal in her support for broad nuclear modernization. But just like Austin, she stopped short of pledging specifically to uphold the entirety of the current nuclear modernization strategy, notable at a time when both the LRSO and GBSD programs find themselves as targets from the progressive wing of the Democratic Party, as well as from the nonproliferation community. She deferred on technical questions about GBSD and its timeline, noting she doesn't currently have access to that data. “My view is that the triad has served us very well, it has created stability and it has value,” Hicks said. However, she stressed that major decisions on nuclear policy, including about a potential “no first use” declaration, would come from above her. “I think our decisions on nuclear weapons should be driven foremost by strategy,” not money, she added. Hicks said it is her “understanding” that a Nuclear Posture Review will be conducted by the Pentagon; the assumption among experts is that the NPR under a Biden administration will come to some different conclusions than that of the Trump administration, whose document called for the creation of two new low-yield nuclear warheads. The transition fight will impact the fiscal 2022 budget. Before being announced as the deputy defense secretary nominee, Hicks was the leader on President Joe Biden's Pentagon landing team. While transitions between administrations are usually smooth, the unprecedented situation of Trump's refusal to accept his election loss bled over into the transition effort at the Department of Defense. By mid-December, officials on the Biden team were publicly complaining about political appointees at teh DoD blocking their access. Pentagon officials canceled a number of planned meetings but insisted there was no issue. Asked during Tuesday's hearing about the impact those delays may have going forward, Hicks stressed the issue was “really around a handful of folks who made things difficult,” but said there would be a hangover effect for the FY22 budget. “I think the biggest challenge that I will face, if confirmed, because of this is around budget transparency,” she said, indicating that the transition team was unable to look at what the Trump administration was doing with the FY22 budget request until late in January. “Typically that information is shared with the transition team because the administration will owe to Congress a president's budget submission in the spring. So the inability to look at that information ... I think it will cause some delay in the timeline by which we can give budget quality information back to Congress. So that would be the area [where] I would ask for a little relief or understanding.” https://www.defensenews.com/pentagon/2021/02/02/how-kathleen-hicks-will-approach-nukes-shipbuilding-and-the-budget/

  • Contract Awards by US Department of Defense - June 10, 2019

    June 11, 2019 | International, Aerospace, Naval, Land, C4ISR, Security, Other Defence

    Contract Awards by US Department of Defense - June 10, 2019

    NAVY Sikorsky Aircraft Corp., Stratford, Connecticut, a Lockheed Martin Co., is awarded $542,023,016 for firm-fixed price modification P00074 to a previously awarded fixed-price-incentive-firm contract (N00019-14-C-0050) in support of the Presidential Helicopter Replacement Program (VH-92A). This modification exercises an option for the procurement of six Low Rate Initial Production Lot 1 Presidential Helicopters, as well as interim contractor support, initial spares, support equipment, and system parts replenishment. Work will be performed in Stratford, Connecticut (50 percent); Coatesville, Pennsylvania (36 percent); Owego, New York (10 percent); Patuxent River, Maryland (3 percent); and Quantico, Virginia (1 percent), and is expected to be completed in April 2022. Fiscal 2019 aircraft procurement (Navy) funds in the amount of $542,023,016 will be obligated at time of award, none of which will expire at the end of the current fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. Taylor Defense Products LLC, Louisville, Mississippi, is awarded a ceiling $84,000,000 indefinite-delivery/indefinite-quantity contract for the Service Life Extension Program (SLEP) for up to a maximum of 145 all-terrain cranes. Work will be performed in Louisville, Mississippi, and is expected to be complete by June 2029. Fiscal 2019 procurement (Marine Corps) funds in the amount of $9,719,457 will be obligated on the first delivery order immediately following contract award and funds will not expire at the end of the current fiscal year. This contract was competitively procured via the Federal Business Opportunities website, with three offers received. The Marine Corps Systems Command, Quantico, Virginia, is the contracting activity (M67854-19-D-5018). QED Systems Inc.,* Virginia Beach, Virginia (N32253-19-D-0008); ORBIS Inc.,* Mount Pleasant, South Carolina (N32253-19-D-0009); Oceaneering International Inc., Chesapeake, Virginia (N32253-19-D-0010); Delphinus Engineering, Inc.,* Eddystone, Pennsylvania (N32253-19-D-0011); Electric Boat Corp., Groton, Connecticut (N32253-19-D-0012); and Confluence Corp. doing business as Regal Service Co.,* Honolulu, Hawaii (N32253-19-D-0013), are awarded a multiple award, indefinite-delivery/indefinite-quantity contract with firm-fixed-pricing for the procurement of non-nuclear, non-SUBSAFE touch labor at Pearl Harbor Naval Shipyard and Intermediate Maintenance Facility, Hawaii. The maximum ceiling value for all six contracts is $49,000,000 with options included. Touch labor trades include: marine electrician, electronics technician, temporary service sheetmetal mechanic, temporary service electrician, temporary service pipefitter, inside machinist, marine machinery mechanic, shipwright, plastic fabricator/woodcrafting, fabric worker, sandblaster, painter, painter/sandblaster, laborer, shipfitter mechanic, sheetmetal mechanic, firewatch/tankwatch, welder, pipefitter, and insulator. The six contractors may compete for task orders under the terms and conditions of the awarded contracts. Work will be performed in the state of Hawaii, and is expected to be complete by June 2020. Fiscal 2019 operation and maintenance (Navy) funding in the amount of $15,000 ($2,500 per awardee) will be obligated at the time of award and will expire at the end of the fiscal year. These contracts were competitively procured with six offers received via the Federal Business Opportunities website. The Naval Sea Systems Command, Pearl Harbor Naval Shipyard and Intermediate Maintenance Facility is the contracting activity. The Boeing Co., Huntington Beach, California, is awarded $22,834,133 for modification 0017 to delivery order 2001 previously issued against basic ordering agreement N00019-16-G-0001. This modification provides for additional acoustics software support activity and engineering support for the P-8A Poseidon aircraft. In addition, this modification incorporates virtual machine efforts and develops and integrates software for Multi-static Active Coherent Enhancements. Work will be performed in Huntington Beach, California, and is expected to be completed in January 2022. Fiscal 2019 research, development, test and evaluation (Navy) funds in the amount of $7,800,000 will be obligated at time of award, none of which will expire at the end of the fiscal year. The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity. BAE Systems Land & Armaments L.P., Minneapolis, Minnesota, is awarded a $19,636,725 modification to a previously awarded firm-fixed-price supply contract N00174-17-C-0022 to exercise option year two for the fiscal 2017-2020 production of the MK38 MOD 3 Machine Gun System (MGS) and associated spares. This contract is to fulfill specified requirements and technical performance requirements for the MK38 MOD 3 25mm MGS Ordnance Alteration and associated spares. The MGS produced is derived from application of an ordnance alteration to the MK 38 MOD 1 25mm MGS. Once installed, incorporates two-axis stabilization, an improved electro-optical sight system (EOS), improved multi-function display, modified main control panel, a new main computing unit, a 7.62mm machine gun and remote control operation. Work will be performed in Haifa, Israel (67 percent); and Louisville, Kentucky (33 percent), and is expected to be completed by September 2021. Fiscal 2017 shipbuilding and conversion (Navy); 2019 weapons procurement (Navy); and fiscal 2019 weapons procurement (Coast Guard) funds in the amount of $19,636,725 will be obligated at the time of award and will not expire at the end of the current fiscal year. The Naval Surface Warfare Center, Indian Head, Maryland, is the contracting activity (N00174-17-C-0022). ARMY XL Scientific LLC,* Albuquerque, New Mexico, was awarded a $48,000,000 cost-plus-fixed-fee contract for non-kinetic, T&E needs, addressing Directed Energy, Electronic Warfare and nuclear systems and effects. One bid was were solicited via the internet with one bid received. Work locations and funding will be determined with an estimated completion date of May 31, 2029. U.S. Army Contracting Command, Orlando, Florida, is the contracting activity (W900KK-19-D-0007). Louisiana State University System, Baton Rouge, Louisiana, was awarded a $12,908,650 firm-fixed-price contract for Nutritional Biochemistries Analysis services. One bid was solicited with one bid received. Work locations and funding will be determined with each order, with an estimated completion date of June 9, 2024. U.S. Army Medical Research Acquisition Activity, Fort Detrick, Maryland, is the contracting activity (W81XWH-19-D-0010). Mahaffey Tent & Awning Co. Inc.,* Memphis, Tennessee, was awarded a $8,976,868 modification (P00006) to contract W9124E-16-D-0006 for shower trailers, environment control units, light sets, tentage of various sizes and configurations, hand washing stations, generators, cots, and other logistical life support equipment. Work will be performed in Fort Polk, Louisiana, with an estimated completion date of June 20, 2021. Fiscal 2019 operations and maintenance Army funds in the amount of $8,976,868 were obligated at the time of the award. U.S. Army Mission and Installation Contracting Command, Fort Polk, Louisiana, is the contracting activity. DEFENSE LOGISTICS AGENCY Kaba Mas, Lexington, Kentucky, has been awarded a maximum $20,548,845 fixed-price with economic-price-adjustment, indefinite-quantity contract for combination locks. This was a competitive acquisition with one response received. This is a two-year base contract with three one-year option periods. Location of performance is Kentucky, with a June 9, 2021, performance completion date. Using military services are Army, Navy, Air Force, and Marine Corps. Type of appropriation is fiscal 2019 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pennsylvania (SPE5EY-19-D-0542). Defense Energy Syndicate LLC, Bronx, New York (SPE600-19-D-0757, $10,580,489); and TC Chemicals LLC Pearland, Texas (SPE600-19-D-0795, $8,193,690), have each been awarded a firm-fixed-price, requirements contract with economic-price-adjustment under solicitation SPE602-19-R-0702 for additives. These were competitive acquisitions with nine responses received. They are two-year contracts with a 30-day carry-over periods. Locations of performance are New York, Delaware, New Jersey, Louisiana, Texas and California, with a June 30, 2021, performance completion date. Using customer is Defense Logistics Agency. Type of appropriation is fiscal 2019 through 2021 defense working capital funds. The contracting activity is the Defense Logistics Agency Energy, Fort Belvoir, Virginia. AIR FORCE Advanced Concepts and Technologies International LLC, Waco, Texas, has been awarded a $7,202,973 firm-fixed-price modification (P00003) to previously awarded contract FA4890-18-F-5102 for the 505th Training Group academic and training support. This contract provides for the exercise of option period one for services to cover requirements in the areas of course instruction, mission support, exercise support and lessons learned to the government-led maintenance and execution of select 505th Training Group courses. Work will be performed primarily at Hurlburt Field, Florida, as well as various other locations worldwide, and is expected to be complete by June 9, 2020. Fiscal 2019 operations and maintenance funds in the full amount are being obligated at the time of award. Air Combat Command Acquisition Management and Integration Center, Hurlburt Field, Florida, is the contracting activity. *Small business https://dod.defense.gov/News/Contracts/Contract-View/Article/1871303/source/GovDelivery/

  • Wormuth: US Army can 'no longer defer the big decisions' on its future

    October 12, 2021 | International, Aerospace, Naval, Land, C4ISR, Security

    Wormuth: US Army can 'no longer defer the big decisions' on its future

    The Army will have to make tough decisions in the coming years as it races to modernize and stay prepared for a potential fight with high-end adversaries, Secretary Christine Wormuth said at AUSA.

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