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09 Jul 20. US government’s Huawei ban moving too fast, contractors say. With the Trump administration poised to impose a government-wide ban on contractors using Huawei and other Chinese-made telecommunications equipment, trade groups say that companies, still reeling from the economic effects of the coronavirus pandemic, should get more time.
The administration plans to finalize regulations that would prohibit government contracting with companies whose supply chains contain products from five Chinese companies including Huawei, Reuters reported Thursday. The administration, confronting China on trade and a host of issues, has deemed Huawei an espionage threat.
“The danger our nation faces from foreign adversaries like China looking to infiltrate our systems is great,” Russ Vought, acting director of the White House’s Office of Management and Budget, said in a statement to Reuters.
“The Trump Administration is keeping our government strong against nefarious networks like Huawei by fully implementing the ban on Federal procurement.”
But leaders of the National Defense Industrial Association and the Professional Services Council have been calling for the deadline, now Aug. 13, to be moved. They argue the focus should be on recovering from the fallout caused by the COVID-19 crisis. And citing the far-reaching implications of the government’s rules, NDIA says companies should get a yearlong extension.
Ordered by a 2019 law, the new rule from the Federal Acquisition Regulatory Council would touch any company that sells goods and services to the U.S. government, requiring them to either obtain a government waiver or certify they do not use products from those companies, even though some of the banned telecommunications and surveillance equipment is among the top sellers.
“While it’s difficult to project the impact of a FAR rule that we haven’t seen, the potential impact under the statute could affect nearly every contractor and subcontractor across the entire federal government,” PSC President and CEO David Berteau said in an email to Defense News.
“Compliance with a complex rule, one with consequences that reach beyond prime contractors, could be confusing, complicated, and technically challenging. An extension of the deadline would actually strengthen U.S. security by ensuring better planning and execution of the statutory prohibitions.”
The Defense Department’s undersecretary of defense for acquisition and sustainment, Ellen Lord, told lawmakers last month that contractors need more time to comply with the governmentwide ban or risk throwing the defense industrial base into disarray.
“The thought that somebody in six or seven levels down in the supply chain could have one camera in a parking lot and that would invalidate one of our major primes being able to do business with us gives us a bit of pause,” Lord testified at a House Armed Services Committee hearing last month.
NDIA supports the aim of the regulation but argues it’s too broad for implementation. It’s asking for a legislative fix in the next tranche of coronavirus aid, likely to be passed this month, according to NDIA’s director of legislative policy, Kea Matory.
It’s so broad, Matory said, a government contractor with a sales office in India that uses local internet, for example, would have to know the manufacturer of every piece of telecommunications equipment. Likewise, she added, a trucking contractor traveling cross-country would have to know whether his or her mobile phone is interfacing with the banned gear.
“We all understand the intent of the law, and companies are not only supportive of national security interests but protecting their own intellectual property ― and no one wants that to be taken by Huawei or any bad actor,” Matory said. “It’s just the fact it’s not a workable law, as written, and especially not in this time frame.” (Source: Defense News)
09 Jul 20. Where it Counts, U.S. Leads in Artificial Intelligence. When it comes to advancements in artificial intelligence technology, China does have a lead in some places — like spying on its own people and using facial recognition technology to identify political dissenters. But those are areas where the U.S. simply isn’t pointing its investments in artificial intelligence, said director of the Joint Artificial Intelligence Center. Where it counts, the U.S. leads, he said.
“While it is true that the United States faces formidable technological competitors and challenging strategic environments, the reality is that the United States continues to lead in AI and its most important military applications,” said Nand Mulchandani, during a briefing at the Pentagon.
The Joint Artificial Intelligence Center, which stood up in 2018, serves as the official focal point of the department’s AI strategy.
China leads in some places, Mulchandani said. “China’s military and police authorities undeniably have the world’s most advanced capabilities, such as unregulated facial recognition for universal surveillance and control of their domestic population, trained on Chinese video gathered from their systems, and Chinese language text analysis for internet and media censorship.”
The U.S. is capable of doing similar things, he said, but doesn’t. It’s against the law, and it’s not in line with American values.
“Our constitution and privacy laws protect the rights of U.S. citizens, and how their data is collected and used,” he said. “Therefore, we simply don’t invest in building such universal surveillance and censorship systems.”
The department does invest in systems that both enhance warfighter capability, for instance, and also help the military protect and serve the United States, including during the COVID-19 pandemic.
The Project Salus effort, for instance, which began in March of this year, puts artificial intelligence to work helping to predict shortages for things like water, medicine and supplies used in the COVID fight, said Mulchandani.
“This product was developed in direct work with [U.S. Northern Command] and the National Guard,” he said. “They have obviously a very unique role to play in ensuring that resource shortages … are harmonized across an area that’s dealing with the disaster.”
Mulchandani said what the Guard didn’t have was predictive analytics on where such shortages might occur, or real-time analytics for supply and demand. Project Salus — named for the Roman goddess of safety and well-being — fills that role.
“We [now have] roughly about 40 to 50 different data streams coming into project Salus at the data platform layer,” he said. “We have another 40 to 45 different AI models that are all running on top of the platform that allow for … the Northcom operations team … to actually get predictive analytics on where shortages and things will occur.”
As an AI-enabled tool, he said, Project Salus can be used to predict traffic bottlenecks, hotel vacancies and the best military bases to stockpile food during the fallout from a damaging weather event.
As the department pursues joint all-domain command and control, or JADC2, the JAIC is working to build in the needed AI capabilities, Mulchandani.
“JADC2 is … a collection of platforms that get stitched together and woven together[ effectively into] a platform,” Mulchandani said. “The JAIC is spending a lot of time and resources focused on building the AI components on top of JADC2. So if you can imagine a command and control system that is current and the way it’s configured today, our job and role is to actually build out the AI components both from a data, AI modeling and then training perspective and then deploying those.”
When it comes to AI and weapons, Mulchandani said the department and JAIC are involved there too.
“We do have projects going on under joint warfighting, which are actually going into testing,” he said. “They’re very tactical-edge AI, is the way I describe it. And that work is going to be tested. It’s very promising work. We’re very excited about it.”
While Mulchandani didn’t mention specific projects, he did say that while much of the JAIC’s AI work will go into weapons systems, none of those right now are going to be autonomous weapons systems. The concepts of a human-in-the-loop and full human control of weapons, he said, “are still absolutely valid.” (Source: US DoD)
08 Jul 20. Pentagon reform boss on eliminating entire office: ‘This is a guaranteed failure.’ The Pentagon’s chief management officer has pushed back on congressional plans to eliminate her office, warning that doing so now guarantees the failure of reform efforts at the department.
In an exclusive interview with Defense News, Lisa Hershman, who was confirmed as the CMO in December 2019, stressed that any serious reform effort at the Defense Department requires a full-time official focused on it, one with high-level authority to make choices and force change.
“Here’s the thing: Congress has a choice to make,” Hershman said Tuesday. “It’s really about how serious Congress is about reform. And I mean real reform, where we’re moving not only big numbers, but making fundamental changes in how we do business.”
“It’s hard. It’s uncomfortable. It’s difficult for people,” she added. “So, they have a choice.”
Her comments come a week after the House Armed Services Committee agreed with its Senate counterpart that the CMO’s office is not working as intended and should be eliminated. Both committees put such language in their versions of the National Defense Authorization Act, although with different details.
The Senate Armed Service Committee’s version mandates the CMO’s office be broken up no later than Sept. 30, 2022, with the majority of the authorities going to the deputy defense secretary, who would then create a new performance improvement officer role that reports up to the deputy defense secretary.
In contrast, the HASC version gives the defense secretary the decision-making power on where to transfer the CMO’s authorities, so long as that person was not previously the chief management officer. That change would have to happen within 30 days of the NDAA’s enactment.
Both versions need to be reconciled between each other, as well as approved by the full Congress. But it is unlikely that anyone outside the defense committees will raise enough of a fight to ensure the CMO’s office emerges intact following the NDAA’s eventual passage.
Asked if there were any positives in the proposed changes, Hershman was direct, saying: “I don’t. To be very blunt, no, I don’t see anything positive. The fact that they are reducing the role, regardless of which version, to a lower or lesser level” means that “this is a guaranteed failure.”
In terms of accomplishments — included in a fact sheet from Hershman’s office — the CMO team claims it found savings totaling $22.3bn between fiscal 2018 and the end of fiscal 2021, although the fiscal 2021 figures have yet to be validated.
In addition, the office says it identified $6.5bn in potential savings for the various “fourth estate” offices, for whose budget Hershman was placed in charge of by Defense Secretary Mark Esper earlier this year.
Those figures are “a game changer,” she said. “I just I wish everyone saw it that way, and realized what’s been accomplished and the outcome and how staggering they are.”
The importance of position
Fundamentally, Hershman argued, an undersecretary of defense-level appointee solely focused on the reform effort is required to get things done. (She sounded particularly cool to putting the job under the deputy defense secretary, which she called an “already overly burdened portfolio.”)
As proof, she points to the fact that since 2010, the Pentagon had only a deputy CMO role, which would live around the level mentioned in SASC’s NDAA plan.
That deputy role was unable to achieve the level of reform needed, in large part because of the lack of authority to drive real changes inside the building — an issue explicitly acknowledged by Congress when it created the CMO’s office and officially put its leadership third in command of the department four year ago.
“I want to make sure this is not about me. Look, I’m an appointee, right? I knew that my time was going to be limited regardless,” Hershman said. “But this is about the importance of getting that structure right. And the importance of having that level right. And the importance of making sure it is properly resourced and the possibilities of what can be accomplished.”
Hershman also argued that pulling the plug on her office now — less than three years after it was officially stood up, the first year of which was obscured by a chaotic leadership situation — is unfair, as reform efforts require more time to find their footing within an organization.
She also described a Defense Business Board report from May — which recommended abolishing the CMO’s office — as “flawed” for a number of reasons, including a requirement to weigh evenly the smaller reform offices going back to 2008 and the current elevated CMO office. That report, which was requested by Congress, appears to be central in the push to eliminate the office.
The CMO declined to speculate on why many lawmakers who backed the creation of the CMO’s office in 2016, including Rep. Mac Thornberry, R-Texas., who at the time was the HASC chairman, now oppose the office’s continued existence. She did note that SASC Chairman Sen. Jim Inhofe, R-Okla., has “actually never spoken to me about this.”
Thornberry, who authored the amendment doing away with the CMO office, recently told reporters: “I have come to the conclusion that Congress is largely responsible for making this an impossible job, and we need to figure out something different.”
Hershman disagrees that the job is impossible, even if she acknowledges that some changes could be made to the office. “Do I think [we need] more time? Yes. Do I think it bears some review? Sure I do,” she said, adding that it would be helpful to have the Government Accountability Office add the CMO to its regular high-risk review series.
Ultimately, “this is really up to Congress. They’ve asked me to deliver results. I’ve delivered them results,” she said.
“We can’t do it with one arm tied behind our back. They got the structure right. They need to instantiate it. And the rest is really up to them.” (Source: Defense News)
08 Jul 20. House defense spending bill would give the MQ-9 Reaper drone a second life. The House Appropriations Committee is aiming to resuscitate the MQ-9 Reaper program, which the Air Force wants to curtail in fiscal 2021. The committee’s version of the FY21 spending bill, which its defense subcommittee will deliberate Wednesday in a closed hearing, would allocate $344m for 16 MQ-9 Reaper drones.
The language is a good sign for the aircraft’s manufacturer, General Atomics, which stood to lose hundreds of ms of dollars in sales if the Air Force stopped buying the aircraft. The service in FY20 had planned to buy nine MQ-9s in FY21, 17 in FY22, two in FY23 and three in FY24, but zeroed out all plans to buy additional Reaper drones as part of its FY21 budget request.
However, the Reaper isn’t home free just yet. The Senate Appropriations Committee has yet to unveil its own version of the legislation, leaving it unclear whether the Senate will concur with the House committee’s spending bill.
The MQ-9 wasn’t the only aircraft program to get a boost from House appropriators. The committee added 12 more F-35s to the budget, for a total of 91 jets and $9.3bin.
The lawmakers are also planning to authorize $965m for 11 C-130J aircraft — an increase of two planes — and they boosted the number of V-22 Ospreys tilt-rotor aircraft from nine to 11.
The bill also beefs up the investment for the UH-60 Black Hawk with an additional $141m, funding a total of 42 helicopters.
The legislation funds three P-8A Poseidon submarine-hunting planes for the Navy Reserve force. Those aircraft were not originally included in the budget. The Navy would get an additional E-2D Advanced Hawkeye, for a total of five planes costing $791m. The committee also approved $1bn for nine CH-53K helicopters, two more than the request.
Additionally, the legislation would allow U.S. Special Operations Command to begin its Armed Overwatch Program, but the bill summary did not state how much funding would be allotted in FY21.
The House committee fully funded most other major military aircraft programs, including money for 50 AH-64 Apache attack helicopters, five CH-47 Chinook Block II cargo helicopters and long-lead funding for additional Chinooks for the Army.
The Air Force would get 12 F-15EX fighters, 15 KC-46 tankers and 19 HH-60W combat rescue helicopters.
Meanwhile, the Navy’s request of 24 F/A-18E/F Super Hornets was also fully funded by the committee. (Source: Defense News)
08 Jul 20. Pandemic Revealed Supply Chain Vulnerability, Pentagon Official Says. One of the biggest lessons learned during the COVID-19 pandemic is that the supply chain is vulnerable to offshore suppliers, particularly adversaries such as China, a senior Pentagon official said.
Ellen M. Lord, undersecretary of defense for acquisition and sustainment, spoke on defense spending and capabilities after COVID-19 at the Brookings Institution’s European Union Defense Washington Forum today, participating in the discussion via video.
The United States and its allies and partners now have a better understanding of the fragility of the supply chain, Lord said. Critical military systems depend on rare-earth mineral processing and microelectronics made in China or fabricated and packaged there.
In addition to the problems uncovered in the manufacturing of military components, adversarial capital is coming in that involves intellectual property theft, as well as merger and acquisition activity that involves takeovers of critical companies in the U.S. and its allied and partner nations, she said.
“We need to make sure we re-shore as much as possible,” she said — bringing as much of the defense industrial base back to U.S. shores as is feasible while still relying on allies and partners for their contributions. Canadian, Mexican and European partners produce military hardware for the United States, she noted.
When the Defense Department goes out for bids for a system, the DOD officials like to have as many competitive bids as possible — both to bring down cost and to have more options, Lord said. If just two companies are bidding, she said, she’d prefer that one is domestic.
One of the most important aspects of the U.S. industrial base and the trans-Atlantic industrial base in Europe is frequent and transparent communications, Lord said. She noted that she’s in constant communication with her European counterparts to bounce ideas off of them on reform and modernization, as well as issues of interoperability and countering malign Chinese influence.
“When we go to war, we go together,” Lord said. “We need to be interoperable. Unless we’re working on these systems together, we will not be interoperable.” (Source: US DoD)
07 Jul 20. House Appropriators Add 12 F-35s, Boost Weapons Spending, But…
“To us, it means that there is going to be much more tension and debate over future modernization programs as flat investment will not enable DoD to recapitalize in a timely and militarily relevant pace,” says defense analyst Byron Callan.
House appropriators made their first cut at the annual defense spending bill today, approving spending $3.5bn below the Trump Administration’s request — although lawmakers added a substantial $4.1bn for several weapons systems, including 12 additional F-35s.
Overall, the House Appropriations Committee trimmed $3.5bn from the Trump Administration’s 2021 budget request while still fully paying for a 3% pay raise and force structure increases to all but the Marines, who will lose 2,100 people.
The appropriators approval of an increase in F-35 buys makes it unlikely the House Armed Services Committee’s skepticism of the Joint Strike Fighter program will prevail. The HASC added no more planes above the administration request for 79 aircraft of all three models and docked at least a score of supporting line items by a total of $561m. By contrast the SASC added $1.36bn to buy more Air Force F-35As, Marine F-35Bs, and Navy F-35Cs, plus spare parts.
In other bump ups, the HAC funds 11 V-22 aircraft, adding $1.1bn to buy two more than the request. It also adds three P-8A Poseidon aircraft for the Navy Reserve, three more than the request for an additional $510m. And echoing the House authorizing committee’s support, the HAC added 16 MQ-9 Reaper unmanned aerial vehicles to the Pentagon request, for a cost of $344m.
But making sense of the HAC-D bill is difficult because it’s not yet clear what and where they’ve cut, as veteran defense stock analyst Byron Callan notes. It all gets complicated by the CARES Act and adjustments to contracts that have been made.
Overall, Callan says, it looks as if fiscal 2020 — last year — may have been the peak of whatever Trump defense boost there has been. But it’s all uncertain.
“Absent the pandemic budget impacts, however, the markups so far suggest that FY20 was a peak for DoD investment. This does not mean investment is at the peak and headed fast downhill in FY21 and beyond,” Callan writes. “To us, it means that there is going to be much more tension and debate over future modernization programs as flat investment will not enable DoD to recapitalize in a timely and militarily relevant pace.” (Source: Breaking Defense.com)
07 Jul 20. Defense Industry’s Covid Closings Decline, Pentagon Agency Says. The defense industry has made major strides reducing the impact of Covid-19 on operations, decreasing total closings of facilities to six on Monday from a high of 148 in mid-April, according to the Pentagon agency that oversees contracts.
“We’re seeing a significantly smaller fraction of the industrial base impacted on a daily basis” as contractors have become “better at restoring operational capability after potential exposures” to the coronavirus, Army Lieutenant General David Bassett, director of the Defense Contract Management Agency, said in an interview. “We’ve gone from having a substantial fraction of the industrial base impacted to today,” where it’s “just a handful.”
In total, 279 defense contracting locations were forced to shut down an average of 20 days since April because of the pandemic.
In addition, 149 locations currently have reduced operations because of the virus, according to the agency, which tracks 10,509 locations of major defense contractors and their subcontractors.
“These closures have generally been short-term in order to clean facilities” or to “reduce the potential exposure of employees,” according to agency spokesman Matthew Montgomery.
Ellen Lord, the Defense Department’s acquisitions chief, has warned that pandemic disruptions are expected to result in defense industry claims for reimbursement of more than $10bn under the Cares Act, which provides economic aid including reimbursing contractors for payments to employees affected by disruptions such as plant closings. She has said a single contractor, which she didn’t name, is estimated to have at least $1.5bn in potential claims.
Bassett said the decline in plant closings reflects that companies “have really got a plan in place so that they know what they have to do when they find people who have been exposed, how they have to handle the plant and then what they can do to get back up quickly and safely.”
Bassett assumed command of the contract agency on June 3 after a career that included positions as the Army’s top program manager for command-and-control networks and for ground-combat vehicles.
“As we watch right now and cases are beginning to rise in certain areas of the country, I’ve asked all of our teams to really think about what we can do right now to make sure if we do end up in a shutdown we can avoid impacts to the industrial base and our deliveries,” he said. (Source: Defense News Early Bird/Bloomberg)
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