June 25 Weekly Defense Industry Roundup

Pentagon Tests New Way of Estimating Program Costs

Sarah Chacko, Defense News. It seems the first test of the new ‘should-cost’ approach to program estimates is being used in negotiations with Lockheed Martin for the next batch of F-25 Joint Strike Fighters. Under a complicated process to determine where savings can be achieved the DoD will give the contractor an estimate of what they think the system will cost as the first negotiating point as they wrestle over the next order for 32 F-35’s including 22 F-35A’s for the Air Force, three F-35B’s for the Marines and seven of the F-35C’s for the Navy. Most experts have little faith this process will change the system that is still dominated by costs associated with constant changes in requirements from the department itself and not cost issues with the manufacturer.

How I Accidentally Kickstarted the Domestic Drone Boom

Chris Anderson, Wired.Com Danger Room Blog. This is a great story for a window into what is promising to turn into a major issue in coming years as the idea of autonomous, small, domestic drones in our skies become a reality. Wired editor Chris Anderson connected a Lego robot control system to a Radio Controlled model plane in 2007 and before long founded the DIY Drones online community that has spawned what is potentially a whole garage-based domestic drone industry. These simple machines have all the capabilities that many who clamor for the ability to launch their own UAV’s desire; ease of use, high resolution cameras and relatively low costs. Watch this trend as it touches on a host of common worries from libertarians worried about privacy to liberals worried about government spying and our ‘mommy culture’ worries of drones falling from the skies. It should be interesting.

Defense News Top 100: Revenue Declines Are Just Beginning As U.S. Budget Cuts Loom

Zachary Fryer-Biggs, Defense News. Defense News just released their list of the top 100 defense companies for 2011 and the analysis of the list provides a glimpse of things to come as revenues have begun to decline in light of the budget tightening around the world. Only two of the top dozen companies on the list saw any kind of revenue increase and overall the list of 100 saw a decline of about 1% to $414.3 billion compared to last years $418.8 billion. Zachary offers a pretty extensive analysis of the top 100 that’s worth a look. The full list is linked here: Defense News Top 100 2011

Lockheed Martin Eyes Layoffs This Fall

Austin Wright, Politico. The rhetoric surrounding the impending sequestration cuts to the Department of Defense budget started ramping up more this week as Lockheed Martin announced that they will likely issue a layoff warning to all of its 123,000 nationwide workers just days before the November election. Citing federal regulations that demand 60-day notice for layoff actions, the top defense manufacturer insists that it has to start warning its employees of the possibility even though the Office of Management and Budget hasn’t issued guidance that will drive those possible cuts. It’s a clever political ploy to warn Congress and the President that unless they truly get off the dime and come up with a solution before the lame duck session there will be a price to pay at the ballot box.

$5B Camo SNAFU

Erik German, The Daily. The Army is once again looking for a new camouflage pattern for its combat uniforms just six years after fielding the much-maligned digital Army Combat Uniform pattern to the field at a cost of well over $5 billion. The story concludes that the pattern was selected before testing had been completed by Army leaders who had envy of the Marines new digital patterned uniforms and eager to issue their own cool new style. Unfortunately, the drab gray-green pattern is pretty much useless absolutely everywhere for actually concealing soldiers and has already been replaced in Afghanistan with the new MultiCam pattern uniforms. Let’s see what comes out of this cycle and how much it costs to replace uniforms once again.

High Veterans’ Jobless Rate Leads to State and Federal Initiatives

Katherine Yung, Detroit Free Press. The Veterans Small Business Conference is coming to Detroit this week and the Free Press takes a look at the efforts underway to find work for so many unemployed young veterans of our current wars. The job fair that will be part of the conference is expected to be the largest of its kind to date with over 10,000 attendees possible. It’s entirely appropriate that it will be held in Detroit as Michigan has one of the highest unemployment rates for veterans of all ages in the nation with 11.2% in 2011 out of work compared to just 8.3% for all U.S. vets.

The week ahead:

Tradeshows and Conferences:

IDGA Command and Control Summit 2012 (Mon-Weds, 25-27 June) Hilton Alexandria Old Town, Alexandria, Virginia. It’s a busy week for IDGA as they host four conferences in DC simultaneously. Command and Control systems are increasingly more complex and driven to be adaptive to multiple situations. This conference will explore the latest programs and offer discussions on current needs and lessons learned from the recent conflicts. Speakers from major C2 organizations in the DoD as well as interagency attendees are expected.

IDGA Cyber Warfare & Security Summit 2012 (Mon-Weds, 25-27 June) Crystal City Marriott, Arlington VA. This is a hot topic these days and this conference will discuss the newest developments within the cyber warfare domain, new technologies on how to identify and counterattack hackers and how a perfect cyber warrior should look like. The event will also take a closer look on how to react faster and more efficiently on cyber attacks and international alliance structures to establish cyber security. Prior to the main conference the event will kick off with a focus day discussing the human capital crisis the cyber security is currently facing and battling with 10,000 new cyber warriors.

IDGA 8th Annual Military Logistics Summit (Mon-Weds, 25-27 June) Ritz Carlton Pentagon City, Pentagon City, VA. The third summit of the IDGA surge this week is focused on military logistics operations but doesn’t seem to have a ton of support from the military with most speakers coming from the private sector and academic worlds.  They plan to discuss lessons from the drawdown in Iraq and focus on the coming changes in Afghanistan. They will simultaneously be hosting their Total Asset Visibility Summit at the same location as the logistics summit.

Department of Veterans Affairs National Veteran Small Business Conference (Tues-Fri, 26-29 June) Detroit, MI. The VA is hosting its annual small business conference in Detroit this year and is expecting some 6,000 veteran attendees who will have the opportunity to network with other businesses, meet with actual procurement officials from throughout the government, take classes on business topics and a host of other opportunities. There will also be a job fair in conjunction with the conference that promises to be one of the largest we’ve seen to date.

Congress:   The full Congress is in session this week.

Senate:

Senate Banking, Housing and Urban Affairs Committee – Hearing (10:00 AM, Tues, 26 June) Full committee hearing on “Empowering and Protecting Servicemembers, Veterans and their Families in the Consumer Financial Marketplace: A Status Update.” Witnesses: Delaware Attorney General Beau Biden; Col. Paul Kantwill, director of legal policy in the Defense Department’s Office of the Undersecretary for Personnel and Readiness; and Holly Petraeus, assistant director for servicemember affairs at the Consumer Financial Protection Bureau and wife of CIA Director retired Gen. David Petraeus, testify Location: 106 Dirksen Senate Office Building

Senate Veterans’ Affairs Committee – Hearing (10:00 AM, Wed, 27 June) Full committee hearing on “Health and Benefits Legislation.” Witnesses: Deputy VA Undersecretary for Health for Policy and Services Madhulika Agarwal in the Veterans Health Administration; Thomas Murphy, director of the Veterans Benefits Administration’s Compensation Service; Deputy VA Undersecretary for Health for Operations and Management William Schoenhard in the Veterans Health Administration; Jane Clare Joyner, deputy assistant VA general counsel; Richard Hipolit, assistant VA general counsel; Joy Ilem, deputy national legislative director of Disabled American Veterans; Tracy Keil, caregiver and spouse of Operation Iraqi Freedom veteran; Mark Thomas Edney, Operation Iraqi Freedom veteran and a member of the American Urological Association’s Legislative Affairs Committee; Heather Ansley, vice president of veterans policy for VetsFirst, testify Location: 124 Dirksen Senate Office Building

House of Representatives: 

House Veterans’ Affairs Committee – Markup (10:00 AM, Wed, 27 June) Oversight and Investigations Subcommittee markup of pending legislation. Location:  334 Cannon House Office Building

House Armed Services Committee – Markup (10:00 AM, Wed, 27 June) Full committee markup of the “Third Semiannual Report on the Activities of the Committee on Armed Services for the 112th Congress.” Location:  2118 Rayburn House Office Building

House Veterans’ Affairs Committee – Markup (2:00 PM, Wed, 27 June) Disability Assistance and Memorial Affairs Subcommittee markup of pending legislation. Location: 334 Cannon House Office Building

House Oversight and Government Reform Committee – Hearing (9:15 AM, Thurs, 28 June) National Security, Homeland Defense and Foreign Operations Subcommittee hearing on “Assessment of the Transition from a Military to a Civilian-Led Mission in Iraq.” Witnesses: TBD Location:  2154 Rayburn House Office Building

House Armed Services Committee – Hearing (11:00 AM, Fri, 29 June) Full committee hearing on “Expert Assessments on the Afghan National Security Forces: Resources, Strategy, and Timetable for Security Lead Transition.” Witnesses: Max Boot of senior fellow for national security studies at the Council on Foreign Relations; retired Army Gen. Jack Keane, former vice chief of staff of the Army; Michael O’Hanlon, director of research, senior fellow and chair of the Brookings Institution’s Foreign Policy Program, testify Location:  2118 Rayburn House Office Building

Think tanks and other news events: 

Ogilvy Washington, Defense Daily, and Northrop Grumman: The Expanding Use of Social Media in Disaster Preparedness and Response Washington, D.C. (8:00 AM, Tue 26 Jun) Description: The world communicates online. For many people, the first they will learn or hear of an important news event or incident is through their computer or mobile device. Those in the emergency preparedness and response community—from elected officials and non-profits to the media and the military—are realizing that social media has the power to transform the way emergency communications and operations are managed before, during and after the event. What are the opportunities and limitations for how responders can use social media during an event? Has it been done successfully yet? If so, what are some of the lessons learned from these efforts? How is the traditional emergency response community adapting to the social media world? What are the emerging legal, political, and resource challenges? RSVP online. Participants: The Honorable Jack Markell, Governor for the State of Delaware, Suzy DeFrancis, Chief Public Affairs Officer, American Red Cross, Lt. Cmdr. Chris Servello, Director, Navy Newsdesk, U.S. Navy, Jason Samenow, Chief Meteorologist and Founder, “Capital Weather Gang”, Washington Post, Jim Cowen, Senior Vice President, Ogilvy Washington Location: Ogilvy Washington Headquarters 1111 19th Street NW, 10th Floor, Washington, D.C. 20036

German Marshall Fund: Armed Drones and Targeted Killing: International Norms, Unintended Consequences, and the Challenge of Non-Traditional Conflict Washington, D.C. (12:15 PM, Tue 26 Jun) Description: A discussion of the many issues surrounding the use of UAVs, or “drones to include the implications for alliances, international norms, and their use outside of traditional armed conflict.” The panel will also address the unique capability this new technology presents as well as the potential for unintended consequences and “blowback.” To RSVP, email ashakerbrown@gmfus.org. Participants: Sarah Holewinski, Executive Director of CIVIC (Campaign for Innocent Victims in Conflict), Mark Vlasic, Georgetown University and Madison Law & Strategy Group PLLC, and Dr. Mark Jacobson, Senior Transatlantic Fellow at the German Marshall Fund and former Deputy NATO Representative in Afghanistan. Location: German Marshall Fund, 1744 R Street NW, Washington D.C., 20009

The Brookings Institution: Sequestration and the Nation’s Defense: Prospects and Perils Washington, D.C. (1:30 PM, Tue 26 Jun) Description: As the months slip by, the prospect of an additional $500 billion in defense cuts over the next 10 years increasingly looms, beyond the cuts of comparable magnitude already in effect under last summer’s Budget Control Act. Top Pentagon officials are voicing frequent and urgent concerns that sequestration will lead to the cancellation of weapons systems, curtail U.S. global operations and possibly invite conflict. How exactly would sequestration affect defense as well as the broader government? And what if anything might realistically be done to avert it? RSVP online. Participants: The Honorable Kelly Ayotte (R-N.H.), United States Senate, Michael E. O’Hanlon, Director of Research and Senior Fellow, Steve Bell, Senior Director of Economic Policy, Bipartisan Policy Center, Ron Haskins, Co-Director, Budgeting for National Priorities, Center on Children and Families, David Worn, Head, Washington Office, Palantir Technologies, Peter W. Singer, Director, 21st Century Defense Initiative, Tom Davis, Vice President, Strategic Planning, General Dynamics, Mackenzie Eaglen, Resident Fellow, American Enterprise Institute, Rebecca Grant, President, IRIS Independent Research Location: Falk Auditorium, Brookings, 1775 Massachusetts Avenue NW, Washington, D.C. 20009

Center for Strategic and International Studies: Smart Defense: How Defense Industry and Defense Exports Can Contribute, Washington, D.C. (4:00 PM, Tue 26 Jun) Description:  A speech by Gerald Howarth, Minister for International Security Strategy at the UK Ministry of Defense, titled: “Smart Defense: How Defense Industry And Defense Exports Can Contribute” followed by a Q&A.  RSVP online. Participants: Gerald Howarth, Minister for International Security Strategy for the UK Ministry of Defense Location: B1 A/B Conference Room, CSIS, 1800 K St. NW, Washington, D.C. 20006

The Heritage Foundation: Resourcing America’s Long-Term Security Commitment to the Asia-Pacific, Washington, D.C. (9:30 AM, Wed 27 Jun) Description: The end of combat operations in Iraq and the drawdown of forces in Afghanistan has refocused U.S. attention on the Asia-Pacific region. The Obama Administration declared its Asia Pivot strategy will augment and strengthen America military forces to address growing Asian security threats. But how much will U.S. forces actually be augmented in Asia? To what degree will massive defense cuts and reductions in the overall U.S. military structure constrain America’s global power projection and force sustainability capabilities? RSVP online. Participants: The Honorable J. Randy Forbes (R-VA), Chairman, House Armed Services Readiness Subcommittee, Ambassador James Glassman, Executive Director, George W. Bush Institute and former Under Secretary of State for Public Diplomacy and Public Affairs, General Paul Hester (ret.), USAF, Former Commander, U.S. Pacific Air Forces, Dr. Bruce Bennett, Senior Defense Analyst, the RAND Corporation, Bruce Klingner, Senior Research Fellow, Northeast Asia, The Heritage Foundation Location: Lehrman Auditorium, The Heritage Foundation, 214 Massachusetts Ave, NE, Washington, D.C. 20002

American Security Project: The Future of American Public Diplomacy, Washington, D.C. (12:30 PM, Thu 28 Jun) Description: American public diplomacy has turned a new page with the arrival of Under Secretary Tara Sonenshine. Since the end of the Cold War, the United States has struggled to define its foreign messaging in an evolving international system. Why is this the case, and what should be done to strengthen the way America communicates its ideals and policies overseas? RSVP by emailing events@americansecurityproject.org. Participants: Tara Sonenshine, Under Secretary of State for Public Diplomacy and Public Affairs Location: 1100 New York Avenue, NW, Suite 710W, Washington, D.C. 20005

Fred Wellman with General Petraeus in Iraq

Fred Wellman, President ScoutComms, brings us his weekly review of defense industry news via The Scout Report. Fred served over twenty years as an Army officer in both aviation and public affairs. You can follow Fred on Twitter @ScoutComms.

+Fred Wellman

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