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NEWS IN BRIEF – USA

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07 Nov 19. US Defense Secretary calls for greater efforts in AI development. The US Defense Secretary Dr Mark Esper has urged government, academia and industry bodies to collectively step up efforts to augment the country’s artificial intelligence (AI) capabilities in the field of defence.

Mark Esper highlighted the need for the public and private sectors to come together to revolutionise AI technology and strive towards enabling the US to steal a march on adversaries in the AI race.

To drive home his point, the Defense Secretary tried to draw parallels between the efforts made by the industry and the government during the Second World War (WWII) and what is needed now to gain an upper hand in the AI industry.

He referred to efforts put by ‘titans of industry’ to turn Detroit into an ‘arsenal of democracy’ to feed the US war effort during WWII.

He also mentioned how the US Government established the Defense Advanced Research Projects Agency (DARPA) and Nasa, and ‘took control of the space race’.

Speaking at a conference hosted by the National Security Commission on Artificial Intelligence in Washington, Esper said: “Mastering artificial intelligence will require similar vision, ambition and commitment.

“We need the full force of American intellect and ingenuity working in harmony across the public and private sectors. We need your leadership and vision to ensure we maintain a strategic edge.”

He highlighted how China is making strides to achieve its goal of being the world leader in AI by 2030.

Esper said that the Asian superpower developed autonomous vehicles and is seeking to operate them across many combat domains.

Esper continued that the US military ‘will harness the potential of AI to create a force fit for our time’.

He added: “We believe there is tremendous opportunity to enhance a wide range of the department’s capabilities from the back office to the front line, and we will do this while being recognised as the world leader in military ethics by developing principles for using AI in a lawful and ethical manner.”

According to Esper, the development of AI sits right at the top of the list of immediate technology needs for the US military.

Summing up the US Department of Defense’s focus, he said: “Whichever nation harnesses AI first will have a decisive advantage on the battlefield for many, many years. We have to get there first.” (Source: army-technology.com)

06 Nov 19. Surprise retirement shakes up defense spending in Congress. Defense budgeting will see a major shakeup in coming months as the head of the House Appropriations Committee’s panel on military spending announced he will not seek re-election next year.

In a surprise announcement Wednesday, Rep. Pete Visclosky, D-Ind., did not give a reason for his decision. Visclosky, 70, kept a low profile but had a major impact on defense policy and was considered a friend by the defense industry.

“For my entire career I have worked to build support for our domestic steel industry and organized labor, secure investments in transformational projects and improve our quality of place to benefit the only place I have ever called home,” Visclosky said.

Visclosky’s announcement comes weeks after Rep. Nita Lowey, D-N.Y., and the chairwoman of the House Appropriations Committee, announced her retirement, which set off a race for her seat between Connecticut Rep. Rosa DeLauro, who chairs the subcommittee overseeing Labor, Health and Human Services, and Ohio Rep. Marcy Kaptur, who chairs the Appropriations Subcommittee on Energy and Water Development.

Who takes over the defense and full committee chairs will play a major role in Democratic leadership’s ambitions to raise the non-defense side of the federal budget.

Next in line for defense subpanel gavel is Minnesota Democratic Rep. Betty McCollum, the defense subpanel’s vice chair and the current chairwoman of the House Interior and Environment Appropriations Subcommittee. McCollum was traveling Wednesday and unavailable for comment, her spokeswoman said.

McCollum represents the suburbs of the Twin Cities, which hosts defense and aerospace firms 3M, as well as outposts of BAE Systems, Science Applications International Corporation, Raytheon, Honeywell and various smaller defense firms.

Jim Moran, a former senior House appropriator now with law firm Nelson Mullins Riley & Scarborough, said the Appropriations Committee shakeup comes amid a disruptive time for defense spending. There’s not only speculation that rising deficits will suppress future defense spending, but the president’s initial troop drawdown in Syria was “out of step with the defense establishment,” Moran said.

The race for the full committee gavel could be a free-for-all, but it favors DeLauro, a longtime ally of House Speaker Nancy Pelosi.

“Rosa, having chaired Labor-H, understands what the needs are. If she becomes chair she may have greater interest in rebalancing defense and non-defense,” Moran said.

Michael Herson, the CEO of American Defense International, a Washington defense lobbying firm, called Visclosky’s upcoming departure, “a big loss for the defense world.”

“Pete Visclosky was a friend of the defense industry. I always felt him to be an honest broker, accessible and a straight shooter,” Herson said. “He fought he good fight and always encouraged us to talk to members and influence members.”

Of McCollum, Herson said: “I like Betty a lot, and she has engaged the industry. Her staff has always been accessible and knowledgeable, and I think she would be a great subcommittee chair.”

In a statement, Lowey hailed Visclosky as one of the committee’s most respected voices, and a “champion for the women and men of our Armed Forces, and a supporter of a robust mix of defense, diplomacy, and development to keep our nation safe and strong.”

Though Visclosky’s seat was considered safely Democratic, the Times of Northwest Indiana reported that Hammond, Ind., Mayor Thomas McDermott Jr., was eyeing a primary challenge against him. After Visclosky’s announcement, McDermott immediately announced his intention to run for the seat.

In recent months, Visclosky joined other Democrats in their public criticism of Trump administration efforts to divert defense funding to his U.S.-Mexico border wall project―an issue that remains at the center of a partisan deadlock on the defense spending and policy bills for 2020.

In March, Visclosky made public a letter denying a $1bn reprogramming request from the Pentagon to support the Department of Homeland Security’s request to build border barriers.

Visclosky also spoke up several months ago in favor of repealing the administration’s limitations on transgender service members. “With so much anger and so much hate in this world today, it is time to be kind to people,” he said. (Source: Defense News)

05 Nov 19. Without Effective AI, Military Risks Losing Next War, Says AI Director. A next war against a near-peer competitor will be fast, chaotic and shockingly bloody, the director of the Joint Artificial Intelligence Center said. Air Force Lt. Gen. Jack Shanahan spoke at the National Security Commission on Artificial Intelligence today in Washington.

The side with the best AI algorithms will put the other side at an extreme disadvantage, he said, particularly regarding the speed of battlefield decision making. Shanahan described such a future battle as “algorithms vs. algorithms,” with the best algorithm victorious.

In the future battle scenario, Shanahan said events will move so quickly that a traditional chain of command won’t work. Junior, frontline troops will need to be empowered to make the decisions and to adjust AI algorithms on the fly.

This decentralization of command entails higher risks and consequences, he said, but without it, “we risk losing the fight.”

To get to the best AI, the department must rely on industry and academia, which are much further along in this endeavor than the DOD, he said.

Shanahan said there are lessons learned from Google’s unwillingness to continue working with the DOD on Project Maven last year. The project had to do with AI’s use in intelligence, surveillance and reconnaissance operations.

There needs to be a shared sense of responsibility and vision, along with trust and transparency from the DOD and industry, he said. “National security depends on it.”

Another step to take in adopting the best of industry’s AI is for service members to work directly in industry and academia and to bring AI experts from industry and academia into the DOD. “That’s already happening but we need to scale that up,” he said. “Peer-to-peer discussions and personal relationships matter.”

Lastly, Shanahan said an important step that was taken last week was the Defense Innovation Board coming up with a set of AI ethical principles, which he said are excellent.

The DOD will act on the Defense Innovation Board’s recommendations and then there will be deliberations on implementing them if the recommendations are accepted. “Implementation is not an overnight task,” he said. The ethical use of AI by the military in training, research, product development and operations should inspire confidence in the industry that the department is making ethical use of this new technology.  “China and Russia didn’t hold public hearings on the ethical use of their AI and I never expect them to do this,” he added. (Source: US DoD)

05 Nov 19. Chinese dronemaker DJI plays ‘textbook’ game in Washington. Company attaches itself closely to parts of government and responds quickly to political concerns. DJI has been carefully navigating US-China tensions. As the US government ramps up its scrutiny of Chinese technology companies, one in particular is coming under the spotlight: DJI, the world’s biggest dronemaker. But DJI appears to have spotted the danger early and has spent years on what its rivals describe as a “textbook” example of lobbying in Washington, attaching itself closely to parts of the government and responding quickly to political concerns. Its approach contrasts with other companies such as Huawei or ByteDance, the owner of the viral video app TikTok, which are struggling to respond as the US hits out at Chinese tech. Huawei, for example, has said it is unable to secure a single meeting in Washington as its executives attempt to push back against US sanctions. The Trump administration is now split over whether or not to ban DJI’s drones outright or to take a softer approach. “There are people within the administration who want to hit DJI with a hammer right now,” said one senior government official. “But there are plenty of others who are warning that if you do, there are not many alternatives.” One Washington-based industry lobbyist said: “DJI has played this perfectly. They have got themselves on to key committees, they have made sure they have champions within government.”

DJI does not release sales figures, but industry estimates suggest that it has more than 70 per cent of the US market, which will reach roughly 7m drones by the end of next year. Its products, which are equipped with high-resolution cameras, are sold as recreational items in high-street shops. But they are also widely used by government agencies to fight fires, monitor wildlife and conduct search-and-rescue operations. The company estimates that “thousands” of its drones are being used for such work. Now it is lobbying to retain the ability to deploy its drone identification system, known as Aeroscope, which monitors low-altitude airspace against rogue drones. Last week, the US interior department temporarily grounded its entire fleet of 810 drones, including 121 made by DJI, while it assessed whether drones made partly in China pose a threat to national security. The move is the latest sign of a growing concern within the White House and in Congress that the data collected by hundreds of thousands of Chinese drones across the US could be fed back to Beijing and used to spy on American citizens. Recommended The Future of African Healthcare Drones deployed in Africa’s ‘leapfrog’ vaccine drive But Mario Rebello, DJI’s North America country manager, said the company has been working to develop a new model of drone designed specifically for the US government which gives users greater control over their own data. “We have engaged closely with the Department of the Interior, and have become more embedded with state agencies,” he said.

Speaking before the fleet was grounded, Mark Bathrick, head of the interior department’s Office of Aviation Services, said: “Pretty much everything we do to manage people’s land, we can do with the help of drones. This includes DJI, which we feel is reasonably secure. Using them takes one-seventh the time and one-tenth of the cost of using manpower.” DJI has also fostered close links within the Federal Aviation Administration, which is in charge of writing the rules that govern drone use across the US. Brendan Schulman, DJI’s vice-president of policy and legal affairs, serves on the FAA’s Drone Advisory Committee — the only employee of a non-American company to do so. The company has hired Washington figures such as Mark Aitken, a former industry lobbyist, and David Hansell, a former National Security Council official. It has also set up teams of consultants who can be dispatched to areas around the country should state-level agencies need help operating their DJI drones. “If a fire department has a problem with its DJI drones, we can send a team up there to work with the operators themselves,” said Mr Rebello. “Sometimes it is a couple of hours, sometimes it is a couple of days, but they will be there until the problem is resolved.” Even at the defence department, DJI drones were in common use before the army issued a directive banning staff from using them. Congress is now debating a bill that would ban the Pentagon from buying or using any Chinese-made drone. In its fight against such a ban, the company is being helped by the drone industry’s main industry group, the US-based Association of Unmanned Vehicle Systems International, of which DJI is a member. In September the AUVSI hosted an event in Washington which included speeches from two members of the House of Representatives’ transport committee. At the event, association members were told to warn politicians that a ban on DJI could harm the economy and prevent the defence department from using the company’s drone-tracking technology, according to a document seen by the Financial Times. A large part of DJI’s success has been the dominance of its technology. A host of western companies, including the US’s 3D Robotics and France’s Parrot, have tried to take on the Chinese company in the consumer market, but were defeated, in part by the costs of manufacturing. But its lobbying efforts have been an important part of making sure it does not get shut out of one of its most important markets — though that success might yet be shortlived. Senators are considering a bill that would see all parts of the federal government banned from buying its products, and the Pentagon’s Defense Innovation Unit is looking at ways to support US rivals. People close to DJI admit they are concerned Donald Trump could at any point issue a presidential order to sanction the company, as he did with Huawei. But the company’s rivals say the fact that he has not yet done so is testimony to how successful DJI has been in fostering allies within government. (Source: FT.com)

05 Nov 19. U.S. needs allies in fight against China – report. The United States risks becoming increasingly isolated unless it works with allies to oppose China’s predatory economic policies, according to a new report that maps out a comprehensive strategy of U.S. “partial disengagement” from China. The report by the non-profit, non-partisan National Bureau of Asian Research calls for a four-part strategy to counter economic and security risks posed by China, including urgent moves to boost information-sharing and cooperation with allies. It also recommended a ceasefire in the 16-month old tariff war; strengthening defensive measure to reduce U.S. vulnerabilities to Chinese surveillance or sabotage; and increased investment in U.S. innovation and technology.

“None of these things are going to be easy, especially with this administration,” said Charles Boustany, a former Republican congressman from Louisiana who co-authored the report.

“But Congress is begging for alternatives to tariffs. There really doesn’t appear to be a coherent, comprehensive strategy.”

Democrats and Republicans broadly agree on the need to push back against China’s use of subsidies, tariffs and non-tariff barriers, its theft of intellectual property and forced technology transfer, but say tariffs are not the right answer.

China denies the U.S. accusations of unfair trade policies.

President Donald Trump’s tariffs – which will soon cover nearly all Chinese imports – have hit consumers, industry and farmers at home, while triggering retaliatory measures from China that have been squarely directed at U.S. farmers.

Trump has also imposed or threatened tariffs against U.S. allies such as Japan and the European Union, stoking uncertainty and making it difficult for those countries to find common cause with Washington, even if they share concern about Beijing’s behaviour, the report said.

Boustany said Washington should focus on confidence-building measures such as sharing information on China’s policies to rebuild its relations with key allies.

Aaron Friedberg, a professor at Princeton University and the other author of the report, said Washington should stop antagonizing its allies and focus on China.

“It doesn’t make sense. The magnitude of the challenges posed by China by far exceeds any complaints we may have with the EU, Japan or Korea about trade issues,” he said.

Joining forces would allow Washington and its key allies to exert the maximum possible leverage to get Beijing to stop its market-distorting trade and industrial policies. Then, if China did not adhere to those norms and standards, it would find itself at an increasing disadvantage in the global economy.

Better cooperation could also dispel the view held in some European capitals that the United States was raising concerns about Chinese products mainly to boost U.S. companies at the expense of all foreign competitors, the research group said.

Working together, the United States, Europe, Japan and others could rebuild a liberal trading system that has been strained since the 1970s by the rise of non-tariff barriers, other forms of protectionism and changes in technology.

Pooling resources would also allow advanced industrial countries to counter China’s growing influence in the developing world through its Belt and Road initiative. (Source: Reuters)

01 Nov 19. Deceptive Pentagon Math Tries to Obscure $100m+ Price Tag for F-35s: Triumphant headlines mislead the public about the program’s true costs. Pentagon leaders are likely reveling in the news that they have negotiated an agreement with Lockheed Martin that they claim drives down the unit cost of the F-35 joint strike fighter to below $80m in the next few years. While any reduction in costs for the most expensive weapons program in history is an improvement, all is not as it appears in the industry trade press. A quick perusal of publicly available Pentagon budget documents shows the real cost of the F-35 to be above $100m per copy for the fiscal year 2020 buy. Given the work that remains, and the way the Pentagon has surrendered many key responsibilities to the manufacturer, the price is likely to be at least that amount or higher for the foreseeable future.

The most commonly mentioned figure is for the F-35A, the Air Force’s conventional takeoff variant and the least expensive model. The current estimate for the lot of aircraft currently in production is $89.2m apiece. This figure is the unit recurring flyaway cost—the price tag for just the aircraft and engine, which by themselves do not make a fully functioning weapon system.

That $89.2m does not include procurement funds spent on initial spare parts, flight training simulators, the expensive – and poorly performing – ALIS support system, and more, all unique to the F-35. You need all of it, not just an air frame and engine – literally not including the cost of fuel to fly it. When we also consider the future modifications necessary to correct both the known and potential design flaws and the aircraft’s $44,000 per-flight-hour cost, it is easy to see why the F-35 program is the most expensive in history.

A handy tool for anyone interested in knowing more about actual costs of military programs and weapons is readily available online. The Pentagon posts budget materials for each fiscal year on the comptroller’s webpage. Included are budget estimates and the justification documents containing more charts and figures than any reasonable person would care to view.

The Air Force’s fiscal year 2020 budget pays for the 48 F-35As in Lot 11. The current $89.2m dollar price the Pentagon uses is calculated by separating out just the costs for the airframe and the engine from the larger total procurement cost that includes ALIS, simulators, initial spare parts, and more to get to the artificially low $89.2m. That is far from the whole story.

The Pentagon’s own budget documents list the FY 2020 procurement cost for those 48 aircraft as more than $101m, nearly $12m more than the figure rolled out for press reports. Using the Navy’s charts and the same math shows that the real costs for each F-35C is more than $123m, while each F-35B costs in excess of $166m. But even that figure doesn’t tell the whole story.

None of this factors in the research and development costs of the program. Ellen Lord, the Pentagon’s acquisition chief, announced on October 29 that the program needs more money to complete the developmental and testing phase of the program. The latest publicly available figures show that taxpayers will have spent approximately $55.5bn for F-35 research and development. If the Pentagon purchases all 2,470 F-35s in the current plan, the true cost of each aircraft goes up by nearly $22.5m.

Program officials had expected to complete development and operational testing by December 2019. But designers and engineers have struggled to complete the Joint Simulation Environment, a highly accurate simulator necessary to complete operational testing. The troubles stem from programming flight data and aircraft performance data gathered during real-world flights into the simulation software.

The Joint Strike Fighter program will run out of development money before the simulator and the subsequent operational testing can be completed. The Pentagon expects to announce before the end of 2019 just how much more money beyond the program’s current $406.4bn budget will be needed to complete this phase of the program.

No matter how the production costs are calculated, that money alone will not buy you a fully functional F-35. Engineers were not able to complete all of the combat capabilities that were supposed to be included as part of the original development phase of the program. This incomplete work, which taxpayers have already paid for, will now be completed in a new development phase and called “follow-on modernization.” Only time will tell how much will ultimately be spent in this effort, but taxpayers are already on the hook for $10.5bn.

There is also the matter of the cost of maintenance and ownership. Lockheed Martin stands to make most of its money from the F-35 program in annual non-competitive sustainment contracts. As POGO has reported before, the services can’t independently perform many of the most basic maintenance functions on the F-35 and must instead rely on civilian contractors. Lockheed Martin currently receives $2bn a year to keep the fleet of approximately 400 aircraft flying, meaning the annual operating cost for each F-35 is $5m.

Pentagon officials had expected to make the long-anticipated full-rate production decision for the F-35 program before the end of this year. Also known as a Milestone C decision, the program must complete all the steps, including operational testing, as required by federal law. No one appears to be letting such trifling details stand in their way, however. The recent cost estimates emerged as part of the announcement of a $34bn deal for three years’ worth of F-35 production—478 aircraft for the U.S. services and international customers—beginning in 2020. Officials continue to call this “low-rate initial production,” but this is essentially full-rate production in everything but name. The announced 169 F-35s for Lot 14 is the full-rate production figure for the program.

The public shouldn’t fall for the gimmicks the Defense Department constantly uses on aircraft unit cost, but the press, amazingly, seems to fall for it every time.

Congress shouldn’t buy these phony cost projections and compound the program’s problems, based on a phony buy-in price by buying more F-35s before testing is complete. (Source: defense-aerospace.com/Project On Government Oversight)

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