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  25 septembre 2018 | International, Terrestre

  SAIC boss tackles Engility acquisition, space market and revenue goals

  WASHINGTON — News that SAIC would buy Engility was just the latest in a recent string of acquisitions among the professional services firms. But if you ask the CEO of SAIC, Tony Moraco, unlike some of the company's peers this was not transformational. This was instead a merging of two complementary businesses. In his words, “a momentum builder, as we are stronger together in the marketplace.” It's also the next phase for a company that technically formed five years ago, with the split of the $11 billion legacy company with the same name. Defense News sat down with Moraco to see how the acquisition fits into SAIC's future strategy, and how far the company has come since gaining independence. About a year after SAIC split from Leidos, I asked you about your vision for the company. And you said to return to an $11 billion company. How does this acquisition fit into your vision for SAIC these days? The Engility acquisition is very much consistent with our current strategy. It is not a deviation or a reset, as perhaps some of the other major transactions have been for some of our peers. But it really is about the theme of being stronger together, with [particular] compatibility of the intelligence community ... and also attributes in space market segments that we think we can both serve better. For us, this is opening market access to channels that we didn't have. It's momentum building, a vision and a strategy that was five years in the making, and it's a continuation of that strategy going forward. So have you been looking for an extended period of time? And why Engility specifically? We consistently look at the market. We were not going to be a high-volume buyer, but more selective. The Scitor [acquisition] was more than three years ago. But we felt that we had a good position in the marketplace to grow organically. And we proved very strong performance over five years and since [that last acquisition of] Scitor. And then we've looked at many deals, large and small, to see what makes the most sense to us, staying true to our strategy. The attraction with Engility was probably first sparked by the multi-intelligence agency portfolio that they have. Instead of buying a number of smaller concentrated firms, we could get a couple agencies in one larger deal. The company is large enough, they have a mature system. Again, in contrast to perhaps some of the small businesses, we think it has been through its own cultural shift to align very much to ours. Also of interest is the space market. Today, with denied access and with the threats that we have, space is becoming a much more serious domain. The U.S. wants to invest more in it for a range of reasons. And when we think about space, it does cross, in fact, with the intelligence community, the defense sector with Air Force and the other services, and then also the civilian agencies with NASA, [and the National Oceanic and Atmospheric Administration]. As that market evolves, I think the U.S. government will be a principal customer. I believe that the commercial space entities will find a way where they'll also require key outsourced space services just as the government had. So for a single transaction at scale where we could in fact use our equity, [and face] probably fewer buyers, filling three or four of our strategic initiatives in market access and in capabilities — we felt it was worth a serious look. But it's not just about space and intel. Defense will still be the largest part of our portfolio — 55 percent after we close [from 61 percent]. With the benefit of having the broader diversification in intel and federal civilian agencies, that serves all of our customers from a technology transfer perspective. We've seen an interesting transition in the market, where the big primes are shedding portions of their services segments. Have we officially returned to the days when manufacturers focus on platforms only and leave the rest to the professional services companies? I think we [for a period of time] faced a market that was uncertain. Our customers were reprioritizing their mission areas, and the industry was doing the same — looking at where they were going to focus their precious dollars, identify businesses they were going to protect, and areas that maybe weren't core. Then as the market started to improve and move away from cost reductions to protect margins to having some cash and some flexibility, you started seeing more portfolio shaping from the larger players. It's not just about scale. There's [a focus on] the diversification because as you know, the whole business is based on past performance and on what qualifications you have in people and in contract vehicles; if you have a broader base concentrated in a few key areas, your ability to compete and win in those domains is improved. There are a lot of technologies that are more heavily influencing the battlefield — whether ISR, electronic warfare, even still cyber, which is evolving. It seems those areas don't fit quite as neatly in one model or the other. We've been around. It's not a body shop service that we run. It is services and solutions. But technology integration is a direct link to the customer's demand for modernization, the interest in innovative solutions from nontraditional players, the ability to field capabilities faster in a much shorter development cycle, and that leads you to a technology integration model that we have. It allows us to take mission understanding and translate requirements into capability needs. So we can integrate, we can innovate with the technology and we can implement the solutions, which is fundamentally what the customer needs to migrate them from a current state to a future state. But we're seeing more and more opportunities through the [Defense Innovation Unit], the [other transaction authorities], and other contract vehicles that provide a little more rapid prototyping flexibility. SAIC bid for the Marine Corps Amphibious Combat Vehicle and is now working to compete for the Army's Mobile Protected Firepower program.How does that all fit into the broader strategy? We do see it as a viable area, and I would characterize it as the next tier of complex technology integration, system integration. It's an extension of our command-and-control and ISR integration. I recall we pushed through 30,000 MRAP systematic build packages. That kind of integration of subsystems into a platform is what we felt was a baseline business that we could look to expand; and as the customer looked at, in this case, starting with Assault Amphibious Vehicle. Not a start-from-scratch build — the survivability upgrade really was around the armor, the underbelly and then your armaments protecting the vehicle. And then the related mobility requirements to change out transmissions and engines to support that extra weight. We felt that those subsystems and our mission knowledge afforded us the ability to extend to a little more of the physical platform itself. We're doing work on the next-gen combat vehicle. And we're using a services model for MPF. Again, nondevelopmental, major integration of existing platforms for rapid field development. That fits well into our technology and integration model. We see the ground vehicles and perhaps maritime [areas] as one that was probably more approachable versus, say, airframes. Modernization of aircraft has its own barriers of entry of getting flight readiness and the like. We've extended our test-equipment knowledge to partnering with Lockheed on the propulsion system for torpedoes, for example. So we're just looking for selective areas to do more complex system integration under this broad technology integration umbrella. It just happens to be bigger subsystems. Complex system integration sets us apart from some of the current peers in the marketplace right now. But we're selective in what we go after. How hard of a hit was the loss of the Marine Corps Amphibious Combat Vehicle in moving forward with that? It's disappointing. We try to be practical and objective about our market position. It's an alternative model. It's still early in the life cycle. But I think that as we see different opportunities, we learn from it as the customers get more comfortable. So yes, disappointing on ACV, but at the same time we learned a lot from it and I think the customer ultimately got a very good result by having a competitive phase. And we think that the Army [with MPF] will be as successful and come up with [the] best solution if they can maintain a competitiveness early in the process. When the split first happened, you and Leidos were generally two different companies. With this acquisition, and with the Leidos acquisition from Lockheed, have you all started to mirror each other more? I think we may be looking a little more alike. Five years ago I did not expect it. I think we had very clear strategies that [we] were intending to diverge, and therefore we did not have any formal noncompetes. We were looking at the services business model, and Leidos was looking to do more system development. I think their execution of that didn't play out as fast as they'd like. Roger [Krone, Leidos CEO], buying back in the services, more of the information system side, was a bit of a surprise. So if anything, they came back towards us versus us changing direction. So I'd say they probably navigated slightly different than expected. But even today we're still two different companies. We're still very focused on letting our investors and customers know what we do, and Leidos still has a pretty diverse portfolio from health systems and some engineering services. We compete in similar subsegments but not in all. We're also organized very differently, we go to market differently. When the deal closes, where does that put your total revenue at? Right around $6.5 billion. You told me you wanted to get back to $11 billion. Should we expect more? No, not right away. That was very tongue in cheek at the time. You knew I'd remember though. Oh, I know. I remember it too, actually, because we laughed. There are lots of things we can do, but I felt very comfortable then and still do that we've got a great future and can grow the business organically as well as through acquisition. But it's not to chase the size. It really is about the market leadership. Running good margins and providing good mission capabilities for our employees. I think our market is still very motivated by mission. Our employees are very motivated to serve in different capacities whether it's in uniform or not. https://www.defensenews.com/interviews/2018/09/24/saic-boss-tackles-engility-acquisition-space-market-and-revenue-goals

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  1 avril 2020 | International, Aérospatial, C4ISR

  Space Force awards contracts worth as much as $1B for new modems

  Mike Gruss The Space Force awarded L3 Technologies and Raytheon's Space and Airborne Systems contracts worth as much as $1 billion for the development and production of new modems that would help with protected satellite communications. The indefinite-delivery/indefinite-quantity contracts, each worth as much as $500 million, are part of the Air Force and Army Anti-Jam Modem program, which is also known as A3M. The modems would be capable of handling the new Protected Tactical Waveform, which provides anti-jamming communications for warfighters on the battlefield. The program is led by the Army's Program Executive Office Command Control Communications – Tactical and the Space Force's Space and Missile Systems Center. Space Force officials emphasized that they awarded the contract about four months ahead of schedule. In a request for information from 2018, military officials said the modem would be used in the Air Force Ground Multiband Terminal and Army Space Transportable Terminal. The contracts are also expected to include terminals or terminal components to work with the new Protected Tactical SATCOM system, commercial satellites and the Air Force's Wideband Global SATCOM satellites. “We are very excited to be partnering with Raytheon and L3 Technologies Inc. to bring Protected Tactical Waveform anti-jam capability to both Department of the Air Force and Army users,” said Shannon Pallone, senior materiel leader, Tactical SATCOM Division, said in a release. “This was a joint team from the start, a partnership between the Space Force and the Army, and included support from the [National Security Agency].” https://www.c4isrnet.com/battlefield-tech/space/2020/04/01/space-force-awards-contracts-worth-as-much-as-1b-for-new-modems

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  22 juin 2018 | International, Aérospatial, Naval, Terrestre, C4ISR

  US Must Hustle On Hypersonics, EW, AI: VCJCS Selva & Work

  By SYDNEY J. FREEDBERG JR. WASHINGTON: China is besting the United States in key military technologies like hypersonic missiles and electronic warfare, Gen. Paul Selva, vice-chairman of the Joint Chiefs said today. We can still catch up, he predicted. What about Artificial Intelligence? That's too close to call, said former deputy Defense Secretary Bob Work, so we'd better get a move on. Both men spoke at a CNAS conference on “Strategic Competition: Maintaining The Edge.” “I actually regret talking about the Third Offset Strategy, in hindsight,” Work said, referring to the high-tech initiative he launched in the Obama Pentagon. “It made it sound like we had the advantage and we had the time to think about it and go through the motions.... I wish I would have said, ‘we need to start about upsetting the Chinese offset, which is coming uncomfortably close to achieving technological parity with the US.' “At this point, I would think that the outcome is too close to call,” Work said. “It's time for the US to crack the whip. (Let's) hope it's not too late.” Hypersonics & Electronic Warfare So what are some of these shortfalls? The most high-profile is hypersonics, weapons designed to move through the atmosphere at more than five times the speed of sound. Defense Undersecretary for R&D Mike Griffin has made hypersonics his top priority and has warned that China has conducted 20 times more tests than the US. China has demonstrated some impressive technology, Gen. Selva said today, but the race is far from over. “They haven't mass-deployed hypersonics or long-range ballistic missiles,” he said. “What they have done is proven the technologies, so they are able now to deploy those capabilities on a larger scale. “We are behind in the demonstration of many of those technologies,” Selva admitted, elaborating on a statement he made in January, “but we also can take asymmetric approaches and catch up. We are way ahead in a lot of the sensor integration technologies” — essential for telling the hyper-fast weapons where to go — “and we have to maintain that edge.” What about Electronic Warfare, I asked? Detecting, triangulating, and jamming enemy radio transmissions has long been a Russian strength and is increasingly a Chinese one, while the US disbanded many of its EW forces after the Cold War. Selva's answer got into technical nuances I hadn't heard before. “We're a step behind,” Selva said. “It's not hard to catch up, but as soon as you catch up the fast followers will actually leap over the top of you — and that's the dynamic that's set up by having digital radio frequency management capability.” DRFM, also called Digital Radio Frequency Memory, uses modern computing power to record enemy radio and radar signals, modify them, and copy them, allowing forces to transmit a false signal that the enemy can't tell from the real thing. It's a much more effective way of “spoofing” than traditional analog techniques, which suffered from telltale signal degradation. “We assumed wrongly that encryption and our domination in the precision timing signals would allow us to evade the enemy in the electromagnetic spectrum,” Selva said. It turns that that timing is everything in EW as well as comedy. While GPS is now part of daily life, a much less well-known feature is that GPS requires incredibly precise timing — within about three-billionths of a second — which can be used for other purposes, such as coordinating different radios as they switch rapidly from one frequency to another to avoid enemy detection and jamming. But apparently that wasn't enough to evade DRFM-based jamming, which can create a false timing signal that causes the entire network to fall out of synch. “We took a path that they have now figured out,” Selva said. “The Chinese and the Russians took an alternative path, which was to employ digitally managed radio frequency manipulation, which changed the game in electronic warfare. “We have done an in-depth study of where we are relative to the Chinese and Russians (across) the entire spectrum, and we've got some work to do,” Selva said. “We have to figure out alternative pathways for communications and command and control so it doesn't have to be an RF (Radio Frequency) game...It's an RF game because we chose to make it so.” He didn't specify what the alternatives to radio communication were, but there's been promising work using lasers to beam messages. (Breaking D readers will remember that we first reported the demise of America's lead in spectrum four years ago.) Securing our communications networks isn't enough, Work told me afterwards, because every weapon system now has chips in it that can be hacked into. “We have focused on securing network communications, but our biggest vulnerabilities now, Sydney, are in the DoD Internet of Things — the way you can crack into the network through platforms (e.g. tanks, aircraft, ships) and through components on platforms,” Work said. “The Russians and the Chinese understand these vulnerabilities and really try to exploit them.” So there are really three fronts in cyber/electronic warfare, and Work isn't sanguine about any of them. “Dominating the electromagnetic spectrum, and securing the DoD Internet of Things, and securing networks, all of these three things, in my view, we're well behind in,” he told me. The whole “Chinese theory of victory,” he said, is known (in translation) as “systems destruction warfare” because it focuses on electronically paralyzing command-and-control rather than physically destroying tanks, ships, and planes. Artificial Intelligence Now, artificial intelligence could potentially revolutionize electronic warfare. Computers can identify signals, trace them, and making jamming decisions much faster than human minds — a concept called “cognitive EW.” But that's just one of the many military applications of AI, from advising human commanders to coordinating swarms of combat robots. While Selva didn't address Artificial Intelligence, Work did; it's one of his passions and the central theme of the (now deprecated) Third Offset Strategy. So who's ahead in AI? Defense Innovation Advisory Board chairman Eric Schmidt, a former Google AI guru, told Work he had once thought the US was five years ahead of the Chinese, Work recounted. But after a recent trip to China, Work recounted, Schmidt changed his verdict: “If we have six months, we're lucky.” Schmidt said last year that the US lacks a coherent strategy to counter the Chinese in this area. The US has never been in a competition this intense, Work said. China has made AIan official national priority — something he thinks the White House should do here — and the Chinese have great coders. The Pentagon is now creating a Joint Artificial Intelligence Center, something Schmidt's DIB proposed over a year ago, Work noted. “We've got a lot of advantages and we can do very, very well in this race but don't take anything for granted,” Work told me. Just as politicians are warned never to take victory for granted, neither should DoD. “It's a political rule to always run like you're losing, and that's what we have to do in this area....The Chinese are very clever and very capable competitors, and they're intent on surpassing us.” https://breakingdefense.com/2018/06/us-must-hustle-on-hypersonics-ew-ai-vcjcs-selva-work/