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19 Jan 24. Department of Defense Hosts Arctic Senior Leader Dialogue. On January 18, the Department of Defense (DOD) hosted the Arctic Senior Leader Dialogue (ASLD), co-hosted by U.S. Northern Command and DOD’s new Office of Arctic and Global Resilience. The ASLD brought together senior interagency leaders to enhance collaboration regarding Arctic security and inform decisions regarding Arctic capability investments. The Ted Stevens Center for Arctic Security Studies, the DOD’s newest regional center, also played a key role in facilitating the event.
The Office of Arctic and Global Resilience was created within the Office of the Under Secretary of Defense for Policy in 2022 to guide the Department’s Arctic strategy, policies, and engagement. The Ted Stevens Center for Arctic Security Studies was established by the Secretary of Defense on June 9, 2021, pursuant to the National Defense Authorization Act (NDAA) for Fiscal Year 2021. The Center, located in Anchorage, Alaska, enhances DoD focus on Arctic security issues through executive education, research and analysis, and strategic outreach.
The Arctic Senior Leader Dialogue opened by announcing the appointment of Maj Gen Randy “Church” Kee (ret.) as the inaugural Director of the Ted Stevens Center. Since September 2021, Maj Gen Kee has served as the Senior Advisor for Arctic Security Affairs for the Ted Stevens Center. Prior to his appointment with the Ted Stevens Center, he served as a Commissioner to the U.S. Arctic Research Commission and as the Executive Director of the Arctic Domain Awareness Center after his 30-year military career.
At the Arctic Senior Leader Dialogue, Performing the Duties of Assistant Secretary of Defense for Homeland Defense and Hemispheric Affairs Rebecca Zimmerman delivered keynote remarks, along with the Deputy Under Secretary of the Army Mario Diaz and Lieutenant General A.C. Roper (Deputy Commander, U.S. Northern Command). The dialogue also included senior participation from U.S. European Command, the State Department, the Executive Office of the President, and other Departments and Agencies.
The dialogue and the senior participation from across the Department underscores DOD’s commitment to Arctic security and leadership in the Arctic region. (Source: U.S. DoD)
18 Jan 24. Congress passes third stopgap funding bill instead of full FY24 budget. Congress on Thursday passed its third consecutive stopgap funding bill needed to avoid a partial government shutdown, extending Defense Department funding through March 8 as lawmakers continue to negotiate a full budget for fiscal 2024, which began on Oct. 1.
The short-term continuing resolution comes as lawmakers race to draft final defense spending legislation at an $886bn defense spending top line stipulated in last year’s debt ceiling agreement. Failure to do so could result in a one-year CR pursuant to the debt deal that would cut funding for all federal agencies, including the Pentagon, by 1% from FY23 levels.
“By continuing to move from one stopgap bill to another, we are shooting ourselves in the foot,” Sen. John Cornyn, R-Texas, said Wednesday on the Senate floor. “We’re weakening our own defense as China’s military strength continues to grow, and as we see more and more aggression on the part of Iran in the Middle East through various proxies like Hamas.”
The CR passed the Senate 77-18 and the House 314-108. While it extends Defense Department funding through March 8, funds appropriated for military construction will expire March 1. The cascading effect of short-term funding bills hampers Pentagon contracting on programs ranging from shipbuilding to the beleaguered munitions industrial base.
Navy Comptroller Russ Rumbaugh warned Wednesday that if Congress does not pass the FY24 budget “very, very soon,” the Pentagon would have to start taking actions to prepare for a sequester.
“It’s a $26 bn hit for us of misaligned funds if we’re under a full-year CR,” or continuing resolution, Rumbaugh said at a virtual event hosted by Mission Acceleration Center Pacific Northwest. “If we take sequester on top of that, add another $2.5bn, almost $30bn.”
He said the topline agreement would allow for a 4.5% increase to the Navy budget if Congress passes its FY24 appropriations bills.
“We are fortunate that part of the Navy got one of the few anomalies – the special exceptions in the current continuing resolution – that allows us to procure the second boat of the Columbia-class,” said Rumbaugh. “Without that Columbia class, we are staring at a fundamental problem in our nuclear deterrent.”
The third stopgap funding bill increases the carveout for the Navy to procure the second Columbia-class ballistic missile submarine up to $2.2bn.
Still, the lack of a full FY24 budget hinders three other Navy ship programs: the Virginia-class attack submarine, the Constellation-class frigate and a new submarine tender replacement program.
Justin McFarlin, the deputy assistant secretary of defense for industrial base development & international engagement, told Defense News that the CR will likely affect the Pentagon’s newly unveiled National Defense Industrial Strategy as they try to implement it.
“Just making sure we have the bodies to actually put it all together and push forward with that strategy is challenging in a resource-constrained environment,” said McFarlin. ”
The office of industry engagement, for example, is a brand-new office,” he said. “When you’re thinking about a continuing resolution that funds the Pentagon at the level that it was last year, if this office didn’t exist, basically that means that this office doesn’t get any funding.”
Bill Lynn, the former deputy secretary of defense who is now the CEO of Leonardo DRS, said a half-year or full-year continuing resolution would be “extremely, extremely disruptive.”
“You’re going to enforce unpredictability on the department, because you’re going to lower the numbers, and you’re going to force the department in a very short timeframe to make fairly dramatic budget changes,” said Lynn.
“Where you’re going to go is the investment accounts,” he said. “You can change production lines almost overnight if you want. You can say, I’m only going to buy half of them. It costs you a fortune and it’s destructive to industry, but that is what you do.” (Source: Defense News)
17 Jan 24. DOD to Accelerate Investments in Defense Industrial Base With New Other Transaction Agreement Vehicle. The Department of Defense today announced the award of an Other Transaction Agreement (OTA) to Advanced Technology International (ATI) to serve as the consortium manager for the Defense Industrial Base Consortium (DIBC). This DIBC OTA will enable rapid research and allow access to commercial solutions for defense requirements and innovations from industry, academia, and non-traditional contractors.
“The Defense Industrial Base Consortium Other Transaction Agreement will not only help stimulate the growth of the defense industrial base, but it will also enable more rapid execution of Defense Production Act funding,” said Dr. Laura Taylor-Kale, Assistant Secretary of Defense for Industrial Base Policy. “Additionally, this helps us execute the National Defense Industrial Strategy, address defense supply chain pain points, develop the industrial workforce, sustain critical production, and allow for complementary investments from other federal agencies to build a robust, resilient, and modernized defense industrial ecosystem.”
ATI, a non-profit research institution selected through a competitive process, will serve as the consortium manager. The consortium will execute prototypes under the authority of 10 U.S.C. § 4022, research projects under 10 U.S.C. 4021, and production OTs under 10 U.S.C. § 4022(f). The OTA will have a ten-year period of performance, no funding ceiling, be overseen by the Office of the Under Secretary of Defense for Acquisition and Sustainment, and be administered by the Washington Headquarters Services Acquisition Directorate.
For more information about DIBC or to become a member, please visit: dibconsortium.org.
About the Office of the Assistant Secretary of Defense for Industrial Base Policy (OASD (IBP)
The OASD(IBP) works with domestic and international partners to forge and sustain a robust, secure, and resilient industrial base enabling the Warfighter, now and in the future. (Source: U.S. DoD)
16 Jan 24. Defense innovation hindered by Cold War-era practices, experts say. The Pentagon’s outdated weapons-buying processes are hampering its ability to integrate innovative technology and work with nimble start-up companies. A panel of defense experts wants to change that.
The Commission on Defense Innovation Adoption, established by the Atlantic Council in 2022, issued 10 recommendations for helping the U.S. Department of Defense overcome its innovation inertia in a Jan. 16 report.
Led by former Defense Secretary Mark Esper and past Air Force Secretary Deborah Lee James, the commission’s proposals center on reforming outdated, bureaucratic practices, creating in-roads for non-traditional companies and private capital and funding programs that aim to quickly scale technology.
“While US companies continue to demonstrate technological prowess, this rate of innovation serves little use in deterring conflict unless the DoD is able to procure and get new technology into the hands of warfighters at a faster pace,” the report states. “The primary objective behind this commission was to take DoD’s acquisition process and Congress’ role in that system out of the Cold War.”
According to the commission, DoD’s struggle to adopt commercial innovation is linked to long, inflexible program planning and execution timelines, a lack of knowledge about emerging technology and a shrinking defense industrial base.
One proposal aims to give acquisition officers more flexibility by letting them manage capabilities in portfolios rather than as independent programs. The move could allow the military services to more quickly respond to changing threats by shifting funds within portfolios.
Another recommendation calls on the Pentagon and lawmakers to strengthen the link between experiments and fielded capabilities, noting that it often takes two-to-four years for the department to buy a system that
The commission proposes that Congress establish a pilot program that would provide $250m to scale high-need technologies that would help deter aggression from adversaries including China.
“The funds will facilitate the acceleration and scaling of novel capabilities into the hands of the warfighter at the speed of relevance, helping vendors cross the valley of death and incentivizing new non-traditional companies to work with the DoD,” the report states.
Attracting private capital
Congress and DoD have taken steps during the fiscal 2024 legislative cycle that align with many of the commission’s recommendations, due in part to intentional engagement from the task force since releasing an interim report last April.
For example, commissioners recommended the department give the Defense Innovation Unit a greater role in helping field and scale commercial technology. Defense Secretary Lloyd Austin has since elevated the organization to report directly to his office, and the House Appropriations Committee has proposed creating a $1bn, DIU-managed hedge portfolio aimed at helping quickly field new systems.
As part of a separate recommendation, the commission proposed that the military services should work with the Pentagon’s Office of Strategic Capital to establish pilot programs in FY24 designed to attract private capital toward specific technology projects.
The report notes that the Air Force, Army, Navy and the Defense Advanced Research Projects Agency have made some steps in this area, adjusting requirements to allow more companies who receive most of their funding from venture capitalist firms to participate in small business programs.
Speaking at a Jan. 16 Atlantic Council event, Esper said that while these steps are encouraging, they need to be part of a continued push to change the way the department adopts new technology.
“There is still much work to be done and much progress must be made if the U.S. armed forces are to remain the preeminent military force in the world, capable of handling all challenges, especially the People’s Republic of China,” he said. (Source: C4ISR & Networks)
16 Jan 24. Collaboration Is Key to Implementing DOD Industrial Base Strategy. The Defense Department will continue to work closely across agencies and with industry partners as it implements its strategy for strengthening the defense industrial base to meet the future needs of the warfighter, the Pentagon’s top industrial base policy official said.
Laura D. Taylor-Kale, assistant secretary of defense for industrial base policy, said DOD’s National Defense Industrial Strategy represents a bold vision that will require close and sustained collaboration across the full defense industrial ecosystem.
“While we say that it will guide use for the next three to five years, we’re also very much talking about having a generational change,” Taylor-Kale said of the newly released strategy during a discussion hosted by the Center for Strategic and International Studies in Washington, D.C., July 11, 2024.
“We understand that there’s a lot that is part of the current state of the industrial base,” she said. “You can’t make those changes over one or two years. It’s going to take concerted effort over time, not just within the Department of Defense.”
Taylor-Kale offered her vision just hours after releasing the NDIS, the first comprehensive strategy document produced by DOD to plot the course for creating a modern, resilient defense industrial ecosystem to deter U.S. adversaries and meet the production demands posed by evolving threats.
In unveiling the strategy, she underscored the urgent need to shore up the defense industrial base as U.S. adversaries build up their military power to levels not seen since World War II. She noted China’s increasing threat to upend the existing international order. She also highlighted the United States’ continued support for Ukraine as it defends itself from Russian aggression and for Israel in its fight against Hamas.
Despite the task at hand, Taylor-Kale said there is broad enthusiasm across government and industry partners and among key global allies.
The defense industrial base must continue to meet present demands, while remaining capable of adapting to future conflicts.
The strategy focuses on four key areas critical to building a modernized defense industrial ecosystem over the next three to five years. Those areas include resilient supply chains, workforce readiness, flexible acquisition and economic deterrence.
The NDIS is the product of months of engagement from stakeholders from across industry and government, which began at the direction of Deputy Defense Secretary Kathleen Hicks in March 2023.
The document also reflects President Joe Biden’s broader efforts to shore up domestic manufacturing and critical supply chains in the U.S.
Officials said the final strategy incorporates more than a thousand comments received from stakeholders.
Taylor-Kale said the strategy was far more than an “aspirational document,” noting that the department is finalizing an implementation plan that will detail measurable actions and metrics to gauge progress on the goals.
“I want to emphasize that the DOD can’t do it alone,” she said. “It will need the interagency. It will need our industry partners. It will need our global allies and partners, as well as our people on .”
She added that the strategy was worked extensively with elected leaders, and there is a broad, bipartisan consensus around improving the industrial base and meeting the needs of the warfighter.
“In my view, we can’t afford to wait,” Taylor-Kale said. “We have seen over the past few years the importance of why we need resilient supply chains – the importance not just to us domestically, but also for our close allies and partners.
“We think that the time for action is now,” she said. “We’re starting with this strategy and setting this vision. We’re wanting everyone to join with us so we can move forward, implement and meet the needs of warfighters today as well as for the future.” (Source: U.S. DoD)
15 Jan 24. New short-term funding bill will decrease risk of government shutdown. On 14 January, top Congressional Republicans and Democrats unveiled a short-term spending bill to avert a partial government shutdown and to keep federal agencies operating into March. The ‘continuing resolution’ (CR) aims to grant more time to negotiate the full FY2024 spending bill by extending the 19 January and 2 February deadlines to 1 March and 8 March, respectively. The Senate is set to vote on the CR on 16 January. Although agreed upon by Republican Minority Leader Mitch McConnell and House Speaker Mike Johnson, the legislation will possibly be challenged in the House by a right-wing faction of the Republican Party which seeks lower spending levels and tougher border security. Republicans currently control the House with a 219-213 majority. The Senate vote on the short-term funding bill will slightly decrease government stability risks. We assess that it is unlikely that the government will be shut down in the short term. However, continued disagreement on fiscal management and challenges to party leadership will exacerbate partisanship and policy stagnation in the long term. (Source: Sibylline)
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