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22 Dec 21. Defense Production Act Title III Presidential Determinations for Submarine Industrial Base Production Capacity Essential to the Virginia Class Attack Submarine Program. The president signed on Dec. 21, 2021 three determinations permitting the use of the Defense Production Act (DPA) to strengthen the U.S. submarine industrial base. The expansion of the authority will allow the U.S. Navy to maintain its maritime superiority.
Scaling the production of Virginia Class Attack Submarines will ensure the U.S. Navy can meet its missions to maintain open sea lanes for global communication and commerce, enhance diplomatic partnerships, and grow a robust underwater warfare capability. Through the DPA, the U.S. Navy can make key investments with the manufacturers and suppliers executing the submarine shipbuilding plan.
These activities will strengthen the shipbuilding industrial base and allow its heavy manufacturing and large scale fabrication suppliers to meet growing demand and expand the maritime workforce training pipeline.
The department continues to work with key stakeholders to use the DPA authorities to address risks and challenges across the Submarine Enterprise supply chain. These authorities expand options and opportunities to accelerate and scale critical investments across key markets. More information about the DPA is available here, and the presidential determination can be found here: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/12/21/memorandum-on-the-presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended/?source=GovDelivery (Source: US DoD)
BATTLESPACE Comment: It is likely that this amendment was made to allow increased production to accommodate the AUKUS submarine requirement.
22 Dec 21. Defense Production Act Title III Presidential Determination for Radiation-Hardened and Strategic Radiation-Hardened Microelectronics Production Capability. The president issued an authorization on Dec. 21, 2021 to utilize Defense Production Act (DPA) Title III to strengthen and expand the domestic industrial base for radiation-hardened and strategic radiation-hardened microelectronics. DoD and many commercial industries require trusted and reliable radiation-hardened and strategic radiation-hardened microelectronic components to support strategic and space missions. These components ensure the functionality of these systems in high radiation environments such as ambient space and in proximity to nuclear detonations. They need to withstand short bursts of intense radiation, high temperatures, and, in some cases, extreme shock and vibration in order to meet mission requirements. DoD anticipates an increasing demand for radiation-hardened and strategic radiation-hardened microelectronic components to support programs such as satellites and nuclear modernization efforts. Maintaining and expanding domestic capabilities for the production of radiation-hardened and strategic radiation-hardened microelectronics components is of vital national importance.
The department is working with key stakeholders to address this industrial base shortfall as quickly as possible. More information about the DPA Title III program is available here, and a link to the presidential determination can be found here: https://www.whitehouse.gov/briefing-room/statements-releases/2021/12/21/a-memorandum-for-the-secretary-of-defense-on-presidential-determination-pursuant-to-section-303-of-the-defense-production-act-of-1950-as-amended/?source=GovDelivery (Source: US DoD)
22 Dec 21. GAO: U.S. weapons exports decreased 21% to $138.2bn in fiscal 2021. Sales of U.S. military equipment to foreign governments fell 21% to $138bn in the latest fiscal year, the U.S. State Department said on Wednesday, as the Biden administration shifts away from some of the more aggressive arms sales practices under former President Donald Trump. The U.S. State Department disclosed military sales figures for the 2021 fiscal year, which ended on Sept. 30. Sales included $3.5bn worth of AH-64E Apache attack helicopters to Australia and $3.4bn worth of CH-53K helicopters to Israel. Sales of U.S. military equipment in the prior fiscal year had totaled $175bn. President Joe Biden’s administration shifted away from selling offensive weapons to Saudi Arabia, due to civilian casualties in Yemen and intends to announce a new weapons export policy that emphasizes human rights when evaluating an arms sale. The 2021 dip comes after high one-time sales of fighter jets and guided missiles in the final year of the Trump administration. Major fiscal 2020 deals included Japan’s purchase of 63 F-35 fighter jets from Lockheed Martin (LMT.N) accounting for as much as $23bn of that year’s total. There are two major ways foreign governments purchase arms from U.S. companies: direct commercial sales negotiated between a government and a company; and foreign military sales in which a foreign government typically contacts a Defense Department official at the U.S. embassy in its capital. Both require U.S. government approval. The direct military sales by U.S. companies fell 17% to $103bn in fiscal 2021 from $124bn in fiscal 2020, while sales arranged through the U.S. government fell 31% to $34.8bn in 2021 from $50.8bn the prior year, the State Department said.
In 2018 the Trump administration rolled out a “Buy American” program that relaxed restrictions on military sales while encouraging U.S. officials to take a bigger role in increasing business overseas for the U.S. weapons industry. (Source: Reuters)
22 Dec 21. GAO: Navy should disqualify Booz Allen from $400m Navy win. Two former Navy officials helped shape Booz Allen Hamilton’s winning bid for a nearly $400m Navy task order, but the Government Accountability Office agrees with incumbent Serco Inc. that the winner had an unfair advantage. Booz Allen Hamilton is at risk of losing a nearly $400m Navy contract it took away from an incumbent after the Government Accountability Office has ruled the firm unfairly benefited from insights from two former Navy officials.
In its 16-page decision unsealed Monday, GAO lays out two potential choices for the Navy to consider.
Choice number one that GAO sees as easiest and best: disqualify Booz Allen from the task order competition to support the deputy commander for Surface Warfare organization known as SEA 21.
The second, more complicated choice is to rework the contract to mitigate the information Booz Allen learned from the two former Navy officials.
Booz Allen officials declined to comment on the specifics of GAO’s decision but issued this statement through a spokeswoman: “We take strong issue with the accuracy and characterization of the protest allegations and have filed a request for reconsideration.”
A ruling in Booz Allen’s favor on the consideration is a real long shot. I can think of just one reconsideration that GAO ruled in favor of. That case involved a company that argued its protest was wrongly eliminated. GAO reinstated the protest. I can’t think of any other where GAO changed its mind involving a denied or sustained protest.
But a reconsideration is Booz Allen’s only course of action because task order protests can rarely be filed at the U.S. Court of Federal Claims. GAO is usually the one and only stop.
The competition for this task order was between Booz Allen and Serco Inc., which inherited the current task order through its acquisition of the Alion Science & Technology Navy systems engineering business in 2019.
Booz Allen first won the task order under the Navy SeaPort-NxG professional services vehicle in February 2021. Serco immediately protested, alleging that Booz Allen had access to non-public information via access to two former Navy officials who worked as subcontractors.
The Navy took a corrective action to investigate those allegations and told GAO no evidence was found that Booz Allen had “unequal
The award to Booz Allen was reinstated and Serco filed a fresh protest.
The task order supports four program offices at SEA-21: surface ship modernization, surface ship in-service readiness, surface training systems, and inactive ships.
One Navy officer, identified with the alias Capt. John Jones, is a former program manager for readiness at the Navy. A second officer, alias Capt. Sam Smith, was the program manager for training and also for the Navy. (Side note: As a kid I was a big fan of the TV western Alias Smith & Jones, about two outlaws trying to go straight.)
The Navy compiled monthly reports with information on labor rates, employees, and numbers of hours worked by name and position as part of the task order. As program managers, Smith and Jones had access to these reports.
In May 2018, Booz Allen began preparing to pursue the task order through a recompete. That same month, Jones left the Navy and went to work part-time for Hepburn & Sons LLC as director of advisory services.
Booz Allen signed a teaming agreement with Hepburn in June 2018. Jones immediately began meeting with Booz Allen officials, who would later prepare the company’s proposal.
Jones shared several criticisms of Serco’s performance such as vacant positions, inconsistent delivery, and a claim that the company “doesn’t do cyber well,” according to the GAO report.
Booz Allen also started teaming arrangement with CDI Government, where Smith was hired in July 2018 as operations center manager and capture manager. Smith provided information about manpower requirements at SEA 21 to Booz Allen.
Smith and Jones eventually met to discuss staffing. Smith subsequently left CDI and went to work at Hepburn. The pair continued to work with Booz Allen and helped confirm key personnel for the proposal.
Another area where Booz Allen received extra information was at a meeting with the contracting officer’s representative, who told them that Serco was going to exceed the ceiling of the current contract.
The COR also told Booz Allen the next award would increase to $400m and that a specific contract line item number would surge by 20 percent to $80 million.
That meeting took place before the Navy issued a solicitation.
GAO’s ruling in favor of Serco said that company identified “multiple specific examples, documented in the agency record, which establish Jones’s and Smith’s involvement in BAH’s proposal preparation efforts, noting that neither BAH or its teammates imposed any limitations on the input they provided.”
The information Jones and Smith provided formed the basis for Booz Allen’s bid, including the drafting and pricing of its proposal. That led to Booz Allen have a lower price and technical superiority, Serco said.
For its part, the Navy claims it didn’t find any unfair advantage in the branch’s own investigation. But the Navy also said it relied on Smith and Jones’ assertions that they “recalled very little regarding Serco’s contract or performance,” GAO quotes the Navy as saying.
GAO didn’t buy any of that and seems to have easily reached the opposite conclusion, particularly around the assertions that Smith and Jones didn’t recall much about Serco.
“The declarations of both individuals are inconsistent with documents provided in the record,” GAO wrote.
GAO’s decision against Booz Allen is consistent with other rulings.
When a company hires “former government officials who have had recent access to competitively useful information, and uses those officials to assist in proposal preparation efforts, our Office will assume that the offeror benefited from the information,” GAO wrote.
“Disqualification is appropriate based on the appearance of an unfair competitive advantage.”
GAO went on to say that based on the record of the procurement, Booz Allen “obtained an unfair competitive advantage in preparing its successful proposal.”
The watchdog agency recommends that Booz Allen be disqualified, but nothing more will happen until GAO rules on the reconsideration. A decision is due March 23.
21 Dec 21. Inflation and budget gridlock take a toll on the Pentagon. Inflation is now a national security issue. The prospect of increased weapons costs and rising wages are already causing significant problems for Pentagon planners as they craft President Joe Biden’s upcoming budget proposal for fiscal 2023, defense experts say.
Complicating matters, the White House Office of Management and Budget, or OMB, has not yet given the Pentagon a topline for fiscal 2023, with the budget submission deadline just weeks away. Experts say that’s likely because Congress has yet to reach a longer-term spending deal for 2022 and passed a continuing resolution into mid-February instead.
“They had a budget, but I think they’re finding that because of the pay raise, and because of inflation being a lot higher than expected, they’re going to need more money,” said Todd Harrison, director of defense budget analysis at the Center for Strategic and International Studies.
“To do that you need a pass-back from OMB. That’s where they are right now, and I think that’s the option they’re most likely to pursue,” he added.
Federal agencies typically submit their budget requests to OMB in early September, and OMB decides on that request in November – the “pass-back” phase. Though the process is often delayed, the target is for the president’s budget to be decided in December, drafted in January and submitted in early February.
Asked for comment, the Pentagon deferred to the Office of Management and Budget, which declined to participate.
The administration’s initial plans to increase defense matched a projected 2% rise in inflation, but the Labor Department says inflation surged 6.8% in November, a 39-year high.
Related cost increases for fuel and other supplies are already are already forcing the Pentagon to triage its budget, according to American Enterprise Institute senior fellow Mackenzie Eaglen. She pointed to Defense Secretary Lloyd Austin’s announcement last month of a program to to help struggling military families deal with inflation-related price hikes.
“Take that and multiply it across 100 other issues and priorities across the department, not just in terms of compensation,” Eaglen said. “What it means is a scramble to readjust.”
The annual target date for the president to release a budget proposal is February, after which House and Senate lawmakers spend much of the rest of the year debating as part of their spending deliberations.
Because of the delays crafting an FY23 budget, Pentagon officials are discussing mid- to late March for a possible rollout, according to Eaglen.
The military’s basic pay formula is due to rise by 4.6%, potentially a 20-year high, because of increased inflation and wages across the country. That formula, the Employment Cost Index, tracks private sector wages and has often been the basis for pay boosts.
If that becomes the pay increase for 2023, it will be the highest boost for troops since 2003. But lawmakers could go even higher.
In October, House Armed Services Committee ranking member Mike Rogers, R-Ala., said the issue of military pay will be a top priority in next year’s budget debate, to include “significantly increasing compensation and benefits packages, particularly for enlisted personnel.” Committee Chairman Adam Smith, D-Wash., later echoed those remarks.
Pay raises can be costly. This year’s 2.7% pay raise adds about $1.4bn in personnel costs to the military budget, and a 4.6% boost next year would be about $2.5bn more, totals some Pentagon planners say cuts into training and modernization efforts.
How it affects modernization
The prospect of inflation-related cost increases are stoking fears in the defense sector the Pentagon will make up the difference by delaying some big-ticket modernization programs or by cutting quantities.
“They’re not making the hard choices yet, they’re working on some of it,” National Defense Industrial Association President Herbert “Hawk” Carlisle said of the budgeting delay at the Pentagon.
“From our initial view of it, it appears that some of the modernization required to counter China will be slipped to the right and in some cases be in jeopardy, if the budget that appears to be coming does come out,” he added.
Adding pressure, experts predict rising inflation will drive up weapons program costs, especially if the Pentagon has a cost-sharing contract. Bank of America Merrill Lynch analyst Ronald Epstein said he could see defense contractors seeking to renegotiate with the government as their costs rise due to higher prices for parts, materials and labor.
“DoD is a fair customer. I think they understand that [contractor costs are rising], and their budgets are going to reflect some concessions for inflation,” Epstein said during a recent Defense One event.
Some experts predict the Biden administration, as Congress authorized higher the $715 billion in defense spending Biden requested for 2022, will ask for more money instead of cutting back in other areas. Defense experts also see added pressure to increase defense because 2023 is a midterm election year.
“It looks like from the bills that are being proposed, it seems like deficit hawks are nowhere to be found,” Morgan Stanley analyst Kristine Liwag said during the Defense One event. “It seems like the probability, in terms of just plussing up the budget, is more likely than cutting equipment volumes.”
Predictions of flat military spending early in Biden’s first year in office have been upended by Congress’s apparent willingness, on a bipartisan basis, to increase the Pentagon budget to keep pace with China’s growing military capabilities.
While Congress has stalled on a federal spending deal, it this month passed a National Defense Authorization Act that backs $25 billion more in military spending for fiscal 2022 than the White House requested. Yet appropriations bills, which actually dictate spending levels, haven’t moved.
And without a budget deal for 2022, the Defense Department is operating under a stop-gap continuing resolution, which prevents new-start programs and multi-year activities, with some limited exceptions. The Pentagon, some defense-friendly lawmakers and defense industry voices fear Congress will deadlock and go to a year-long CR.
Rogers, ranking member of the House Armed Services Committee, voiced frustrations with the delays and blamed them on Democratic leaders in both chambers.
“I mean, these CRs are killing us,” he told Defense News. “If they do another CR in February to the end of the year, it’s going to basically cost [the Pentagon] $40bn. It’s going to negate everything we just did in this authorization, plus more. And it’s just literally un-American if we aren’t doing a better job to provide for our military than that.”
Senate Appropriations Chairman Patrick Leahy, D-Vt., has also urged progress on appropriations during a recent floor speech, offering a reminder that the NDAA does not contain “one penny.”
“The NDAA is a promissory note. The appropriations bill is the cash,” he said.
Highlighting the partisan differences, the Senate Appropriations Committee’s ranking member, Sen. Richard Shelby, R-Ala., called for more for the Pentagon than the NDAA authorized.
“I think that’s a good start, but that’s not what they need. They need more, and the military will tell you that,” Shelby said. “It’s better than what it was, but it’s not as good as it should be.”
By and large, appropriators are primarily focused on this year’s spending, but next year and inflation’s impact on it are creeping into their thinking. For the 2023 Pentagon budget, Shelby said inflation has “got to be factored in” ― but he said Congress will likely have to do it.
“I think they’re not going to add that,” Shelby said of the Biden administration. “They have a philosophical bent. A lot of them like butter rather than guns.”
At least one key Democrat says the administration should use NDAA’s higher topline as a starting point for its fiscal 2023 request.
“That’s usually how we operate. We start with the previous year’s budget and determine how much more we need,” said Rhode Island Democratic Sen. Jack Reed, who chairs the Senate Armed Services Committee and also serves on the appropriations committee. “The real issue is the budget should be based upon what we need to meet the threats.” (Source: Defense News)
20 Dec 21. Legislation Could Mandate DOD to Review How it Categorizes Drones. Recently proposed legislation would require the Defense Department to review its official framework for categorizing drones – and establish whether terms used reflect up-to-date commercial unmanned aircraft system technologies. The bill was introduced in the House on Monday by Rep. Don Bacon, R-Neb., and subsequently referred to the chamber’s Armed Services Committee. It might also see a path forward in the National Defense Authorization Act for Fiscal 2022.
“Unmanned systems have revolutionized warfare over the past several decades and we expect these changes to continue accelerating,” Bacon told Nextgov in an email on Tuesday. “This provision seeks to balance the safe regulation of unmanned aircraft with recent advances in technology.”
Text of the 4-page legislation, shared with Nextgov, would require the defense undersecretary for acquisition and sustainment to initiate a process to review DOD’s system for categorizing drones as described in its Joint Publication 3-30, titled Joint Air Operations. That document groups drones into five broad categories—and the intent of the proposed analysis would be to determine whether modifications are needed regarding those groupings.
Bacon is concerned DOD’s UAS group definitions aren’t on pace with commercial advances around elements including propulsion, automation, sensor, and flight control technologies, a press official in his office told Nextgov. The definitions, in some cases, “could place unhelpful and expensive requirements” on military users and potentially slow down the department’s adoption and integration of future-facing drone technologies, they argued.
The bill would direct officials to consider how revising those categories might impact multiple areas, including future capability and employment needs to support evolving military concepts, industry-made systems currently available, the rapid fielding of drones and their integration into the national airspace.
In the process, the undersecretary would be expected to consult the secretary of State, Federal Aviation Administration administrator, chairman of the Joint Chiefs of Staff and each military department secretary. A report would need to be submitted to certain listed Congressional committees by October 1 that details the results of the review, any revisions planned, a prepared implementation plan for them and the costs and benefits of making any changes.
Bacon doesn’t seek to specify what the UAS group definitions should be, the press official noted, “rather he wants to ensure that DOD has carefully reviewed the current definitions and the impacts of its regulatory policies to ensure they best serve our defense requirements.”
The bill put forward in the House this week, according to the press official, is the final result of negotiations for the NDAA version the House passed last week, which their team “expects the Senate to pass and send to the president’s desk for signature in a few days.”
“Our adversaries are not standing still, and I want to make it easier for the U.S. military to quickly take full advantage of new technologies without unnecessary effort and expense,” Bacon said. (Source: UAS VISION/Nextgov)
15 Dec 21. Congress Passes Defense Policy Bill. Defense News reported today that Congress passed the defense policy bill with budget boost, military justice reforms. After months of debate and weeks of angst, the Senate on Wednesday voted 89-10 to finalized plans for a $740bn authorization bill for the Department of Defense, sending the sweeping military policy measure to the White House for the 61st consecutive year. The move codifies the annual 2.7% pay raise for troops in 2022, backs $25bn more in military spending for fiscal 2022 than the White House requested and overhauls how certain sexual misconduct crimes are prosecuted under military rules. But what the bill doesn’t include has gotten more attention than what it does.
To speed up passage, congressional leaders dropped language to add women to the Selective Service System for potential future conscription, scaled back plans for even more dramatic military justice changes and dumped several other provisions.
Completion of the bill — considered “must pass” legislation by congressional leaders each year because of the hundreds of reauthorization and policy reforms it includes — appeared in doubt as recently as two weeks ago, when Senate lawmakers still had not completed preliminary work usually done in late summer.
That prompted House and Senate Armed Services Committee leaders to ditch the typical conference and amendment process in favor of a simplified compromise bill, frustrating lawmakers from both parties.
But both Republican and Democratic leaders praised the final product as providing key support for the military in an uncertain global environment.
“It addresses a broad range of pressing issues, from strategic competition with China and Russia, to disruptive technologies like hypersonics, [artificial intelligence], and quantum computing, to modernizing our ships, aircraft, and vehicles,” Senate Armed Services Committee Chairman Jack Reed, D-R.I., said.
“It provides our forces with the resources and support they need to defend our nation, makes historic reforms to help improve the lives of our service members, and takes important steps to care for their families.”
“While the process has been imperfect, I’m glad that bipartisan work has produced a bill that authorizes an increase in top-line funding for our national defense,” Senate Minority Leader Mitch McConnell, R-Ky., said ahead of a procedural vote Tuesday.
President Joe Biden has signaled he will sign the measure into law in coming days.
More defense spending
Lawmakers’ biggest addition to the defense bill in recent months was arguably the $25bn in additional military spending. White House officials and House progressives complained in recent months the money was unnecessary, given significant defense funding plus-ups over the past four years under former President Donald Trump. But the extra funding found bipartisan backing in both chambers, with supporters pointing to military build-ups by Russia and China. Moderate Democrats said the money was needed to boost research and development spending, and future budget plans from Biden should follow suit.
“We’ve lost a lot of ground to the Chinese while we’ve been focused over the last 20 years on counterterrorism and counterinsurgency, and they’ve caught up in [artificial intelligence], machine learning, hypersonics and a lot of other things,” said Sen. Mark Kelly, D-Ariz., chairman of the Senate Armed Services Committee’s panel on emerging threats. “It’s important to me that we can regain the ground we’ve lost and make sure the Defense Department is well manned and well equipped.”
Sen. Deb Fischer, R-Neb., echoed that sentiment in a floor speech Tuesday. “The Biden administration originally proposed a top-line defense spending increase … that would not have kept pace with inflation even in a normal year,” she said. “But in a year when it is threatening to spiral out of control, it would have meant an unacceptable cut in resources for our military.
“[This bill] offers an increase of $25 bn on top of President Biden’s proposal, and we came together across party lines to agree to that because it is what our military needs.”
Thanks to the bill’s higher top line, lawmakers are calling for 12 more Boeing-made F/A-18 Super Hornets than the administration requested; five more Boeing F-15EX jets above 12 already planned; and 13 ships total ― including two attack submarines and two destroyers ― for five more than the White House’s budget plan. Lawmakers also authorized 85 Lockheed Martin-made F-35 aircraft.
The spending total includes parameters for a 2.7% pay increase for all troops starting Jan. 1 and reauthorizes dozens of specialty pays and bonuses military commanders said are needed for recruiting and retention.
With regard to military end strength, the number of Army soldiers would drop by 900 (to 485,000) compared to this year’s levels and the Marine Corps would cut its troop numbers by 2,700 (to 178,500). That’s in line with White House end strength plans.
The Navy’s end strength total would drop by about 900 (to 346,920), about 700 more sailors than the White House requested. The Air Force would see a decrease of about 4,200 personnel (to 329,220), about 1,000 more airmen than the administration requested.
The Space Force end strength would be set at 8,400 guardians.
Lawmakers also included a new Basic Needs Allowance to give additional financial support to some low-income service members. And the measure has language to provide 12 weeks parental leave to all service members following the birth or adoption of a child, standardizing the rule across the services.
The bill authorizes $2bn above Biden’s request for the Pacific Deterrence Initiative, meant to bolster the military’s posture in the region and deter China, for a total of $7.1bn.
The bill authorizes $4bn for the European Deterrence Initiative, to deter Russia by bolstering cooperation with Eastern European allies, an increase over Biden’s $3.4bn request. Lawmakers added $50 m to Biden’s request for security assistance for Ukraine for a total of $300 m.
All that said, the policy bill only sets priorities. Lawmakers have deadlocked over actual federal spending for fiscal 2022, which began on Oct. 1. The government is operating on a funding patch through mid February, which Congress passed to allow time for further budget negotiations.
To the dismay of some, the bill does not include language requiring women to register with the Selective Service System for a potential future military draft. That proposal was included in earlier versions of the House and Senate authorization bill drafts, but was deemed too controversial for the final measure. Similarly, advocates for sexual assault victims sparred with chamber leaders over changes made to reforms of the military justice system related to how sexual misconduct cases are prosecuted. Under the final bill, the Defense Department would be required to create an independent prosecutorial office within each service to handle some serious crimes, including rape, sexual assault, murder, manslaughter and kidnapping.
Last week, House Armed Services Committee Chairman Adam Smith, D-Wash., hailed those changes as “a long overdue and crucial set of reforms [that] will dramatically improve the military’s response to the problem of sexual assault within the ranks.”
But Sen. Kirsten Gillibrand, D-N.Y., had pushed lawmakers to go even further, asking for all serious crimes to be taken out of the traditional military chain of command. She voted against the final measure in protest of the omission.
“[This bill] does not make the necessary changes to the military justice system,” she said in a floor speech Monday. “The change we must make, the change that survivors and veterans have asked for, is to remove all serious non-military crimes from the chain of command.”
Gillibrand, who voted in favor of the NDAA on Wednesday, has vowed to continue the fight for additional reforms next year, when Congress tries to pass the authorization bill for the 62nd consecutive year.
15 Dec 21. US to blacklist eight more Chinese companies including dronemaker DJI. American investors will be banned from groups accused of involvement in Xinjiang abuses. Washington’s blacklisting of DJI, the world’s largest commercial drone maker, follows similar measures against dozens of China’s other leading technology companies. The Biden administration will place eight Chinese companies including DJI, the world’s largest commercial drone manufacturer, on an investment blacklist for their alleged involvement in the surveillance of the Uyghur Muslim minority. The US Treasury will put DJI and the other firms on its “Chinese military-industrial complex companies” blacklist on Thursday, according to two people briefed on the move. US investors are barred from taking financial stakes in the 60 Chinese groups already on the blacklist. The measure marks the latest effort by US president Joe Biden to punish China for its repression of Uyghurs and other Muslim ethnic minorities in the north-western Xinjiang region. Last week, SenseTime, the facial recognition software company, postponed its planned initial public offering in Hong Kong after the Financial Times reported that the US was set to place the company on the blacklist.
The other Chinese companies that will be sanctioned on Thursday include Megvii, SenseTime’s main rival that last year halted plans to list in Hong Kong after it was put on a separate US blacklist, and Dawning Information Industry, a supercomputer manufacturer that operates cloud computing services in Xinjiang. CloudWalk Technology, a facial recognition software company, Xiamen Meiya Pico, a cyber security group that works with law enforcement, Yitu Technology, an artificial intelligence company, Leon Technology, a cloud computing company and NetPosa Technologies, a producer of cloud-based surveillance systems, will also added to the CMIC blacklist. DJI and Megvii are not publicly traded, but Dawning Information, which is also known as Sugon, is listed in Shanghai and Leon, NetPosa and Meiya Pico trade in Shenzhen. All eight companies are already on the commerce department’s “entity list”, which restricts US companies from exporting technology or products from America to the Chinese groups without obtaining a government licence. The White House did not comment and Treasury did not respond to a request for comment. DJI declined to comment. But last year, it said it had “done nothing to justify being placed on the entity list” after it was added to the commerce department’s export blacklist at the end of former president Donald Trump’s term. The commerce department is also expected to place more than two dozen Chinese companies on the entity list on Thursday, including some involved in biotechnology, according to the people familiar with the pending action.
The commerce department did not respond to a request for comment. The sanctions action comes as the US has maintained a tough stance over China’s policies in Xinjiang, where more than 1m Uyghurs and other minorities have been held in detention camps. The White House last week announced a diplomatic boycott of the 2022 Winter Olympics in Beijing. The editorial board Beijing turns inward as US decoupling gathers pace The Biden administration on Thursday will also consider tightening rules on US companies selling technology to Semiconductor Manufacturing International Corp, the largest Chinese chip manufacturer. The Trump administration put SMIC on the entity list a year ago, but the decision included a provision that critics said created a loophole that some companies had exploited. Eric Sayers, head of the Indo-Pacific practice at Beacon Global Strategies, a consultancy, said Biden was moving into the implementation phase after reviewing many of his predecessor’s technology policies. “It will be interesting to watch if these targeted but significant steps are just the beginning of a more aggressive approach being driven by the White House or the minimum the inter-agency can muster for now,” said Sayers. “If it’s the former, we could see further restrictions on SMIC and new outbound investment restrictions in the months ahead.” In another example of Washington’s escalating confrontation with Beijing over Xinjiang, the US House of Representatives unanimously passed a bill on Tuesday that would ban imports from the region unless companies could prove the goods were not produced with forced labour. The House and Senate earlier reached agreement on a compromise draft of the bill, setting the stage for a vote in the upper chamber of Congress before senators recess for the year-end holidays. The White House welcomed the agreement over the Uyghur Forced Labor Prevention Act. Sophie Richardson, China director at Human Rights Watch, called for Biden to sign the legislation after it was passed by Congress “immediately”. “Beijing and businesses have long banked on a global willingness to put profits ahead of humans’ rights — even in the face of crimes against humanity,” said Richardson. “Congress rightly shifted the burden of proof to Xinjiang authorities and to companies.” Jewher Ilham, an activist whose father Ilham Tohti, a Uyghur rights advocate, was jailed for life by China on widely criticised charges of separatism, said it was “promising” that Congress had reached a deal to hold companies “accountable for their complicity in the world’s worst forced labour regime”. (Source: FT.com)
09 Dec 21. Congress drops Army mandate to buy more ‘Iron Dome’ defenses against cruise missiles. Congress plans to scrap its requirement for the U.S. Army to procure two additional batteries of the Rafael-Raytheon developed Iron Dome air defense system as an interim cruise missile defense capability, a move for which the Army has been pushing. The FY22 National Defense Authorization Act released this week, which has passed the House and will be taken up for a vote by the Senate next week, would eliminate the requirement in order to prioritize resources for the service to pursue an enduring Indirect Fires Protection Capability, or IFPC, system, according to a summary of the legislation. IFPC is designed to defend fixed or semi-fixed sites from drones, cruise missiles and rockets, artillery and mortars.
The provision, according to the summary, “would not eliminate the requirement for the Army to deploy or forward station interim cruise missile defense capabilities,” a nod at Iron Dome systems already in the inventory.
The Army has already purchased, received and has been training air defenders on two Iron Dome batteries to fill a gap in cruise missile defense capability while the service works toward an enduring IFPC system.
One of the Iron Dome batteries has already deployed to Guam this fall. The deployment, dubbed Operation Iron Island, tested the capabilities of the system and further refined the training and deployment capabilities of air defenders from mid-October through November.
Congress, in its FY19 NDAA, required the Army to buy four interim cruise missile defense batteries. Lawmakers wanted two batteries selected and fielded by the end of FY21 and two subsequent batteries by Sept. 30, 2023, if an enduring system was not yet in place.
The Army has stressed in recent years that it needs funding and energy directed toward an enduring capability, not additional Iron Dome batteries.
The service finalized a $247m contract in September with Leidos-owned Dynetics to build prototypes for its IFPC system to counter both drone and cruise missile threats. Defense News broke the news of that decision in August.
Dynetics will deliver 16 launchers, 60 interceptors and associated all-up round magazines to the Army over a performance period ending March 31, 2024.
The deal came after the service held a shoot-off that pitted Dynetics against a Rafael and Raytheon Technologies team.
Raytheon and Israel-based Rafael offered up the Iron Dome launcher and Tamir interceptor (known as SkyHunter in the U.S.), while Huntsville-based Dynetics brought Enduring Shield, featuring a launcher based on the Army’s internally developed, but later canceled, Multi-Mission Launcher, along with the Raytheon-produced AIM-9X Sidewinder interceptor.
The Army originally planned to develop and field its own multi-mission launcher as part of the enduring solution, but canceled that program in favor of finding a more technologically mature launcher.
Following the prototyping phase, the Army may initiate a follow-on production contract for 400 launchers and associated interceptors, according to the solicitation. (Source: Defense News)
10 Dec 21. As Pentagon calls for industry innovation, top acquisition nominees remain stalled. With an eye toward technological competition with China, Defense Secretary Lloyd Austin announced a lofty “call to arms” for the American businesses to work with the Pentagon, to “bring the American way of war to the 21st century” and together “meet this moment with all the innovation and ingenuity that America can muster.”
One problem? There are few Senate-confirmed acquisition officials at the Pentagon to welcome them.
Nearly a year into President Joe Biden’s administration, the U.S. defense industrial base is confronting a supply chain crisis, challenges implementing Biden’s vaccine mandate, congressional budget gridlock and unpredictability about how the Pentagon will use new authorities to quickly buy and field cutting-edge tech.
At the same time, only about half of the defense nominees Biden has sent to the Senate have been confirmed, and the president has yet to nominate officials for key acquisition and sustainment jobs. Where critical jobs are vacant, career civilians lead in their place.
To be sure, there are longstanding leap-ahead efforts at the Pentagon. In his speech at the Reagan National Defense Forum in California, Austin pointed to DARPA programs, small business grants and Pentagon-sponsored innovation hubs, all meant to “transform the way that we do business” and put advances in unmanned systems, nanotechnology and artificial intelligence in the hands of troops.
Still, defense advocates say the vacancies slow the U.S. military as it races to compete with China and undermine effective stewardship of bns of dollars of acquisition and sustainment programs across the military. Temporary office-holders often lack the authority and direction to carry out major bureaucratic reforms or take new approaches, they say.
“Congress has actually given quite a few authorities to accelerate acquisitions ― but the regulations to apply it, the leadership to go out and do it, is just not happening,” National Defense Industrial Association President Herbert “Hawk” Carlisle told Defense News.
As the Pentagon drafts its National Defense Strategy and builds its annual budget, which accounts for more than half of the government’s discretionary spending, its acquisition community ― typically a key voice for modernization ― will have limited representation by Senate-confirmed senior officials.
Last month, Russia’s Navy said it successfully test-fired a prospective hypersonic missile, which is set to enter service next year. China recently tested a hypersonic weapon capable of partially orbiting Earth before reentering the atmosphere and gliding on a maneuverable path to its target and has been growing its nuclear arsenal dramatically.
“Obviously the department is responding to those, but if you had confirmed acquisition folks in place they could be taking steps to dig into programs to look for ways to accelerate efforts that are underway and bring senior-level management attention to bear to some problems right now,” said one former defense official who asked for anonymity because they are under consideration for a Pentagon job.
On Nov. 30, Biden nominated former Air Force acquisition chief Bill LaPlante for undersecretary for acquisition and sustainment, known as A&S, capping months of uncertainty after Defense Innovation Unit chief Mike Brown, first nominated for the job in April, withdrew his nomination. For industry, LaPlante cannot be confirmed fast enough.
“The primary conduit for industry with the Department of Defense is A&S, and the fact you don’t have these political positions filled is just terribly challenging for industry. You don’t get the guidance, the strategy and the leadership,” Carlisle said. “One of the key jobs of A&S is to telegraph to industry that government’s willing to take a little risk and not be so risk averse, because we all know you have to take risks to have that kind of agility and speed.”
Biden has not nominated a deputy undersecretary for research and engineering, deputy undersecretary for acquisition and sustainment, assistant secretary for acquisition or several other lower level acquisition officials in the services.
Among other key positions for Pentagon suppliers is undersecretary for research and engineering Heidi Shyu, who was confirmed by the Senate this summer. But the nominee for Army undersecretary, Gabe Camarillo; Army acquisition chief, Douglas Bush; and Air Force acquisition chief, Andrew Hunter, have been waiting to receive Senate floor consideration after clearing the Senate Armed Services Committee weeks ago. (Source: Defense News)
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