Lawmaker hits tight-lipped Pentagon; Q&A with Engility CEO; Another undisclosed Patriot buyer; and more…

By Marcus Weisgerber

January 11, 2018

Undersea drones were all the rage in the tightly packed exhibits at this week’s Surface Navy Association symposium. Now that’s partly because you can’t moor a destroyer outside the conference hotel, but it’s also a sign of the times as companies position themselves for what is expected to be a multibillion-dollar market.

I’ve spent a lot of time over the past year discussing L3 Technologies’ play to become a prime contractor in this space and Boeing’s push to get a foothold on the market.

Back in 2016, the Navy was said it would invest up to $3 billion in underwater drones. But as one consultant said, the potential revenue from undersea programs pales next to that of high-priced ship programs, like the new frigate on the horizon. (Keep reading for more on that.)

That means the Navy is going to have to advocate for these projects and explain to Congress and the American people why they are needed. But talking is one thing the Navy has been doing less of over the past year. It came to a head at this week’s conference when a lawmaker called out the service — and the Pentagon in general — for not talking more.

This all stems from a March 2017 memo from Adm. John Richardson, the chief of naval operations, who warned about talking too openly to the press about specific capabilities. That memo, has been interpreted as don’t talk to the press at all, particularly within some defense firms.

Questioned Wednesday by a reporter about the effect of that memo, the chief of naval operations reiterated his fear of “potential adversaries [being able] to reverse-engineer or come up with ways to defeat those technologies or warfighting concepts,” but said he was not forbidding anyone to talk to the press at all.

"If we talk less about specific capabilities and concepts, I'm fine with that," Richardson said.

And if the Navy wants Congress to fund its 355-ship vision, it’s going to have to start talking more.

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From Defense One

The Pentagon's Secrecy Is Undermining Its Quest for a Bigger Budget // Caroline Houck and Marcus Weisgerber

Last year, U.S. Navy and defense leaders warned their people to watch what they say. Lawmakers say that's made it harder to argue for spending bumps on Capitol Hill.

US Navy: More Ships, Tech, Training, Could Help Prevent Collisions at Sea // Marcus Weisgerber

The comments come as the Pentagon prepares to submit a budget plan expected to call for increases in the size of the military.

Tomorrow's Cargo Drones Won't Look Much Like Today's Helicopters // Patrick Tucker

Boeing unveils a squarish, skeletal quadcopter to try out new unmanned-delivery concepts.


Q&A: Engility CEO Lynn Dugle

By defense company standards, Engility is a fairly new firm, born in 2012 in an L-3 Communications spinoff. For nearly a year, Lynn Dugle has been CEO of the firm, which provides tech, space and cyber services to the federal government and defense and intelligence community. She spoke to Defense One and sister publication NextGov this week.

Q. How do you compete with Silicon Valley and others for talent?

A. I’m not going to try to diminish the challenge because it’s huge. As a member of the intelligence community for years, I really believe it’s a national-security issue. I’m very personally…very much engaged on the clearance issue. There’s no way we’re going to attract and retain talent if it takes 15 months to clear [people for jobs]. We have to have the right work environment. People work for a team and a team leader. You have to have the benefits spread and you have to be very sensitive, especially on guys in high demand, that they get interesting work and a variety of work. You have to be very deliberate and thoughtful about it because it you don’t, they’ll be board and they’ll move on.

Q. What would fix the security-clearance problems?

A. I would come at it a different way. I think there’s 24 different agencies that have, at the highest level, the same clearance process, but different forms. In some cases, we still have to fax in our paperwork. One definition of trustworthiness, reciprocity and personal portability for clearance. The way clearance works is, Lynn Dugle is cleared on Program X and that program holds my clearance. Then I change jobs or I go to a different program, I have to re-clear on every program — and think of the backlog — versus saying: Lynn Dugle has met the criteria for trustworthiness, no financial issues, no drug issues, no criminal record and then I get cleared as a person and then regardless what program I go to, that clearance would follow me. That would be an easy fix. That’s the low-hanging fruit. In our company we’re piloting continuous evaluation, continuous monitoring. What we know from a community is about 80 percent of people who lose clearances do so for financial reasons. Under continuous monitoring, instead of unclearing them because they had a bankruptcy, we can work with them.

Q. Talk about Synthetic Analyst, your new AI platform.

A. I call it a tool-enabled service where we can use that basic core and customize by clinet. So what answers to they need? We use the engine and then we write the app. It’s very deliberate from an architecture perspective. It can run on your phone. It could run on a high-performance computing asset, so it’s scalable. What we’ve got is really good feedback from customers on speed and adaptability, so far. … That’s all a part of the strategy that says we want to be closer to mission and in more highly technical work. You’ll see us do some more of that kind of thing as we move forward.

New Navy Frigate Will Be Expensive

How much? About $950 million per hull for 20 new ships, according to NAVSEA program manager Regan Campbell. Rear Adm. John Neagley, the program executive officer for Littoral Combat Ships, said he he would like the price of each ship lower than that, about $800 million. By comparison, both versions of the Navy Littoral Combat Ship cost about $588 million per hull, while a fully equipped Flight IIA Arleigh Burke-class guided-missile destroyer cost some $1.8 billion, USNI News points out. The Navy says it will award four and six contracts to companies for conceptual design work for the new frigate by March. “There’s a pretty competitive field for this ship,” Neagley said.

Among the contenders for the new ship are an enlarged version of Lockheed Martin’s Freedom-class Littoral Combat Ship. The company showed off pictures of what Neil King, Lockheed director of business development for LCS and frigates, called a “notional understanding of what the potential FFG could look like.”

Saudi Ship Deal is Moving Forward: Lockheed is building a larger version of its LCS for Saudi Arabia, which it calls the Multi-Mission Surface Combatant. The four-ship deal that has been in the works for years, but were advanced by the Trump administration last year. Just this week, Lockheed awarded Gibbs and Cox a contract to conduct  “functional design” of the Saudi ships. Lockheed is still awaiting an detailed request to begin construction of those ship.

Export Control Changes Afoot?

Huge scoop from Reuters: the Trump administration is planning to ease export rules for weapons and military equipment. “A key policy change would call for embassy staffers around the world to act essentially as a sales force for defense contractors, actively advocating on their behalf,” the report states. Read the whole story here.

Another Secret Patriot Order

The last time we saw an announcement of a Patriot missile-defense interceptor order by an unnamed buyer was back in 2015. A week later, missile-maker Raytheon said the buyer was Saudi Arabia. This week, the company said it received a Patriot contract on Jan. 4 — this one “worth more than $1.5 billion” — from “an undisclosed member of the 14-nation group” that already own the missile interceptors. Similarly, the latest deal was a “direct commercial sale,” as was the one two years ago. It’s been no secret that Saudi Arabia has been regularly using Patriot to shoot down Houthi-fired rockets out of Yemen. Good chance the latest order is for Saudi too.

More Raytheon News

Boeing Military Deliveries, By the Numbers

Boeing’s defense deliveries in 2017 were not too different than 2016, but here’s something to look forward to in 2018: KC-46 tankers, which the company is hoping to start delivering to the U.S. Air Force by the middle of the year. Here’s a snapshot of the major defense programs:

Aircraft: 2016, 2017
AH-64 (New): 31, 11
AH-64 (Remanufactured): 32, 57
C-17 Globemaster: 4, 0
C-40: 1, 0
CH-47 (New): 25, 9
CH-47 (Remanufactured): 25, 35
F-15: 15, 16
F/A-18: 25, 23
P-8: 18, 19
Military Satellites: 2, 1

Lots of Folks Making Moves


By Marcus Weisgerber // Marcus Weisgerber is the global business editor for Defense One, where he writes about the intersection of business and national security. He has been covering defense and national security issues for more than a decade, previously as Pentagon correspondent for Defense News and chief editor of Inside the Air Force. He has reported from Afghanistan, the Middle East, Europe, and Asia, and often travels with the defense secretary and other senior military officials.

January 11, 2018

http://www.defenseone.com/business/2018/01/global-business-brief-january-11-2018/145132/