Business

Roadmap for a busy autumn: DOD wants small drones; Embraer's new export, and more...

Marcus Weisgerber

|
Marcus Weisgerber
By Marcus Weisgerber
Global Business Editor

Much as it pains me to say farewell to summer (even this summer), it’s time to plan for the marathon that runs from Labor Day to December. Let’s break it down...

People

First, it looks like the Pentagon will have a full slate of senior-most leaders, both civilian and military, by the end of September. The Senate Armed Services Committee is expected soon to hold hearings on Ryan McCarthy, nominated as Army Secretary; and Barbara Barrett, picked to lead the Air Force. (In July, the committee and full Senate moved quickly to confirm Mark Esper as SecDef, David Norquist as deputy defense secretary, and Adm. Mike Gilday as chief of naval operations.)

But the Senate hasn’t voted on Air Force Gen. John Hyten’s nomination to be vice chairman of the Joint Chiefs of Staff, a position that has been empty for a month now.

The White House nominated Lisa Hershmam, the deputy chief management officer, to move up to be chief management officer, the No. 3 position at the Pentagon behind the SecDef and deputy secretary. The Senate has yet to act on her nomination and the White House has not said who might replace her, should she actually be confirmed.

And there are still a number of lower-level positions that still need nominees. Here’s what’s vacant: 

  • Defense undersecretary, comptroller: Vacant since David Norquist began performing the duties of the deputy defense secretary in January. Elaine McCusker is the acting.
  • Defense undersecretary for personnel and readiness: The acting is James Stewart, assistant defense secretary for manpower and reserve affairs.
  • And the list goes on: deputy defense undersecretary for policy; deputy defense undersecretary for personnel and readiness; inspector general; director of cost assessment and program evaluation; assistant secretary for international security affairs; assistant secretary for nuclear, chemical and biological defense programs; and assistant secretary for special operations and low-intensity conflict.

And as with Hershman and Ryan, some of these appointments will create new vacancies that need to be filled. 

Money & Policy

The House and Senate still need to conference on the 2020 authorization and appropriations bills. Under July’s budget deal, defense will get $738 billion, or about $12 billion less than the Trump administration requested, but up from the $716 appropriated in fiscal 2019. Since the topline figures are already in place, Congress could conceivably pass an appropriations bill before Oct. 1, the first day of the fiscal year, meaning no need for a continuing resolution.

“This would be the first time since FY 2004-2005 that defense would have appropriations enacted before the beginning of the fiscal year for two years in a row,” write Seamus Daniels and Todd Harrison from the Center for Strategic and International Studies. “And because this is a two-year budget deal, it means Congress may also be able to pass appropriations on time for FY 2021, which would be the first time in at least 50 years for defense to have on-time appropriations three years in a row.”

One of the most-watched policy items will be how lawmakers reorganize the military’s space responsibilities. It appears the Congress is poised to create a new space-focused service, within the Air Force. 

There are also some big weapons decisions, like whether Congress authorizes and funds new F-15s for the Air Force.

We've got an events schedule after the jump. But first...

Welcome

You’ve reached the Defense One Global Business Brief by Marcus Weisgerber. Send along your tips and feedback to mweisgerber@defenseone.com or @MarcusReports. Check out the Global Business Brief archive here, and tell your friends to subscribe!

From Defense One

The A-10 Warthog Is Sticking Around for At Least Another Decade // Marcus Weisgerber

After years of trying to retire the much-in-demand attack jet, the Air Force is putting new wings on 112 more planes.

The Pentagon Is Almost Two Years Late On Efficiency Reforms // Courtney Bublé

Little progress have been made on various requirements ordered in the 2018 authorization act, GAO found.

The US Must Prepare for a Cyber 'Day After' // Samantha Ravich

The government needs a continuity plan to ensure that critical data and technology remains available after a devastating network attack.

Conference Schedule

The fall is packed with events, starting next week:

Pentagon to VCs: Invest in Small Drones

The Pentagon still hasn’t stood up its matchmaking service that will link vetted investors with firms that make technology that the U.S. government sees essential to future weapons, but hopes to kick off the effort in October, Ellen Lord, the undersecretary of defense for acquisition and sustainment, said during an Aug. 26 briefing at the Pentagon. The goal is to get U.S. investors, not Chinese ones, to invest in companies with this tech.

Why the delay? Officials had planned to build a website to link venture capitalists and technology firms. “[W]e scrapped the idea, frankly, of a complicated, expensive website, and decided that what we wanted to do was to have face-to-face meetings and do more of them on very, very focused topics,” Lord said.

Defense officials will be traveling to “different cities around the country convening groups where we would invite the capital providers, as well as the industry representatives,” Lord said.  

“We're working on who all those people are right now,” she said. “And then we would provide a mechanism for them to work with one another. Now, the idea is we do not promise business to any of the businesses that would be there, but these are areas where we definitely have a strong demand signal.”

The first sector the Pentagon will look to have these venture capitalist invest: small drones.

“It's because where we are right now in terms of having our entire U.S. marketplace eroded, and also because it's very intuitive, people can understand what these small quadcopters are and so forth,” Lord said.

[W]e don't have much of a small [unmanned aerial systems] industrial base because DJI dumped so many low-price quadcopters on the markets,” she said. And we then became dependent on them, both from the defense point of view and the commercial point of view, and we know that a lot of the information is sent back to China from those.  So it's not something that we can use.”

ALSO: Lord is still rewriting the Pentagon’s acquisition guidelines. She intends to finalize the new policy in December.

Embraer Sells Five KC-390s to Portugal

Lisbon, which had declared its intention in July to become the first export customer for Brazilian-made KC-390, inked a deal with Embraer on Aug. 22 to buy five of the planes, which can refuel planes in flight as well as carry cargo and passengers.

Canada to Add SAR Helicopters

The Royal Canadian Air Force will buy two new CH-149 Cormorant search-and-rescue helicopters — a version of the AW101 aircraft — and upgrade the 14 aircraft it already owns. The project is worth just over $1 billion USD, according to the Canadian government. Upgrades include: “state-of-the-art avionics, a new ‘glass cockpit,’ the addition of the latest sensors, radar and search enhancement technology, more powerful digitally-controlled engines, wireless in-cabin communications, LED lighting, rescue hoist upgrades, synthetic training solutions and more,” according to Leonardo, the Italian firm that makes the helicopters. Norway already flies this upgraded version of the AW101.

Also part of the deal: CAE will deliver “Canada’s first AW101 full motion simulator and other synthetic training capabilities. GE Canada will provide the new engines and Collins Aerospace will provide the new cockpit displays and avionics.”

Charity Fight Raises $125K

The Boone Warrier Fight, a charity boxing match organized by former OSD staff and amateur fighter Joy Shanaberger, raised $125,000 for the EOD Warrior Foundation, the event organizers said. Shanaberger won her three-round bout, one of the evening’s seven matches. 

Spotted in the crowd: Bill LaPlante, Air Force acquisition chief-turned-senior vice president and general manager of MITRE’s National Security Sector; Andrew Hunter, former director of the Joint Rapid Acquisition Cell, now director of the Defense-Industrial Initiatives Group at the Center for Strategic and International Studies; and several other former Pentagon staffers and industry executives.

Making Moves

  • Adm. Mike Gilday became the 32nd chief of naval operations, relieving the retiring Adm. John Richardson. “My focus in the coming years is to move forward with a sense of urgency and sustaining our readiness and modernizing our force and taking care of our most important weapons system or sailors and their families,” he said (per USNI News) during an Aug. 22 change-of-command ceremony at the Washington Navy Yard.
  • The White House on Aug. 26 said President Trump would nominate Robert Sander to be Navy general counsel. He is currently the Army principal deputy general counsel.
  • Former U.S. Air Force Undersecretary Lisa Disbrow has been appointed to BlackBerry’s board of directors. She’s also on Mercury Systems’ board.

Correction: The post originally said that Lisa Hershman had not yet been nominated as the Pentagon chief management officer. The White House nominated her on July 22.

NEXT STORY: Pentagon Sees ‘No Major Concerns’ With Raytheon-United Technologies Merger