New Bosses. Leon Panetta is now the defense secretary, following Robert Gates’ June 30 retirement. After being sworn in on July 1 Panetta tells the Department of Defense in a message “there will be no hollow force on my watch.” The former CIA director calls for preserving “the excellence and superiority of our military while looking for ways to identify savings.” He adds: “While tough budget choices will need to be made, I do not believe in the false choice between fiscal discipline and a strong national defense. We will all work together to achieve both.” Army Gen. David Petraeus is set to take over the CIA in September, following the Senate’s June 30 vote to confirm him. The Senate also approves the nominations of Marine Lt. Gen. John Allen to be promoted to general and replace Petraeus as commander of U.S. and NATO forces in Afghanistan, and of Navy Vice Adm. William McRaven to be admiral and the commander of U.S. Special Operations Command.

Inouye’s Money. SAC Chairman Daniel Inouye (D-Hawaii) calls for caution in cutting the defense budget in a June 30 statement. “While defense and other war-related costs–adjusted for inflation–have experienced substantial growth of 74 percent, ($364 billion) in the 10 years since 2001, these costs are clearly related to the cost of countering terrorism, defending the homeland, and supporting a larger veteran population,” he says. “We need an honest debate on how much is needed to preserve our security, but let me say this–we can only substantially cut these programs at our nation’s peril.” The SAC and its defense subcommittee, which Inouye also chairs, have not marked up their version of the FY ’12 defense appropriations bill. The committee also has not made so-called 302(b) allocations setting a dollar figure for its version of the defense spending bill. The HAC wants to trim President Barack Obama’s base defense budget proposal by $8.9 billion, down to $530 billion.

Explosive Technology. U.S. commanders in Afghanistan have had success with technology that allows them to detect bombs “before the critical components are put together and turned into a homemade explosive (HME),” McRaven tells the SASC June 28. “I think we need to continue to pursue that technology because it’s been reasonably effective early on…in the testing of it to be able to determine where some of this HME is and then we’re subsequently going after those compounds where we see it,” he says, adding he could share more details in a classified setting. SASC member Sen. Richard Blumenthal (D-Conn.) says he will be in Afghanistan and Pakistan next month “specifically to focus on this issue,” and pledge to support funding for such technology.

Boeing Overcharges. The Department of Defense Inspector General’s office, in May 3 a report titled “Excess Inventory and Contract Pricing Problems Jeopardize the Army Contract with Boeing to Support the Corpus Christi Army Depot,” finds Boeing owes the Army from $6.3 million to $10.9 million because the service “overpaid incentives for the repair turnaround time improvements.” The Project on Government Oversight released the “for official use only” report. “We identified $242.8 million to $277.8 million of excess inventory that could be used to satisfy current and future contract requirements for the Apache and Chinook Weapon systems,” Richard Jolliffe, assistant Pentagon inspector general for acquisition and contract management, writes in a summary. “In addition, we calculated that Boeing charged the Army about $13 million (131.5 percent) more than the fair and reasonable prices for 18 parts. Also, Boeing contract prices were $8.0 million (51.2 percent) higher than Defense Logistics Agency prices for 1,635 parts.”

Canadian VH-71. Canada’s Defence Department buys nine of the canceled VH-71 presidential helicopters and plans to use their parts for the Canadian air force’s Cormorant search-and-rescue choppers, the Ottawa Citizen reports June 27. The Canadians paid roughly $164 million for the VH-71 choppers and spare parts. The Navy canceled Lockheed Martin’s VH-71 program in 2009 because of cost overruns largely tied to added requirements from the government. The VH-71s and the Cormorants are similar variants of the AgustaWestland EH-101 helicopter so they have a number of common parts, Canadian Defence Department spokeswoman Kim Tulipan reportedly says. “This package is considered an excellent one-time opportunity for the Department of National Defence and the Canadian Forces to address long-standing CH-149 Cormorant fleet availability issues related to the availability of spare parts,” the Citizen quotes her saying.

Breaking Point. The current fighting season in Afghanistan will make or break Taliban forces holed up in the southern region of the country, with American troops on the cusp of routing the insurgency in that area, a top Marine Corps officer says. The 30,000-man surge of solders and Marines into Southern Afghanistan has resulted in massive gains for U.S. and coalition forces in the region, particularly around Kandahar, the birthplace of the Taliban resistance, according to Lt. Gen. Dennis Hejlik, commander of Marine Corps Forces Command, Fleet Marine Force Atlantic. The loss of a number of mid-level Talib commanders, coupled with a lackluster poppy harvest has left the insurgency low on funds and skilled leadership, according to Heljik. This year, he says, will be the “last big fighting season” for anti-American forces in the south. “This fighting season is going to determine a lot,” he says.

 …Slow And Steady.  As American troops prepare to withdraw from Afghanistan beginning this summer, Hejlik says that impending pullout must be gradual, to preserve the gains made by U.S and coalition forces. The progress in place now is “fragile” and a peace in a post-American Afghanistan is “not [yet] determined,” he says. “It has got to be a ramp-down, not a cliff, and I think everyone understands that,” the three-star says. When asked if the Obama administration’s plan to have all the 30,000 troops included in the surge back home by 2012 was too aggressive, Hejlik says the strategy “is about right.”

 …First Up. While the Marine Corps has yet to finalize the number of troops that will be part of the White House’s recent Afghanistan withdrawal strategy, Hejlik says the initial contingent of Marines that are headed home will likely be support, and not combat units. “What comes out first will be the crucial thing,” Hejlik says of President Obama’s drawdown plan. He adds that the Marine Corps frontline units will likely remain until 2012, when all of the 30,000 surge troops are expected to come home. Until then, those forces will continue to conduct counterinsurgency operations and support Afghan National Security Forces.

 …Growing Up.  Over the next few years, Marine Corps leaders plan to increase the number and capability of special operations forces within their ranks, with the goal of getting the services’s own special operations cadre on par with their service counterparts. The continuing evolution of Marine Corps Special Operations Command will be driven by a growth in capability over actual capacity, Hejlik says. That said, the three-star general and former MARSOC commander says the current 1,000-man force will eventually top out at 5,000 operators, similar to Navy SEAL manning levels at Naval Special Warfare Command. MARSOC operators will also eventually have air assets via a Marine Air-Ground Task Force assigned to command units. MARSOC units in Afghanistan have been heavily engaged in counterinsurgency and counterterrorism operations in the northern and western part of the country, as well as in Regional Command-South, where the majority of the Marine Corps contingent is stationed.

Increased Work Opportunities. Australian Minister for Defence Materiel Jason Clare says multinational defense companies Boeing, Raytheon, Thales, Eurocopter and Lockheed Martin have signed a Global Supply Chain agreement with the government. The government funds the companies to hire a team of people to identify and certify Australian companies as part of their global supply chains. The government has invested more than $11 million in the program over the past three years. When it began, the consensus was that if the program returned a 10-fold return on government investment it would be a success. To date, it has delivered a 30-fold increase.

ELINT Processing. ITT Corp. wins an Air Force contract to deliver an ES-5080 digital signal processing electronic intelligence (ELINT) system.  ITT’s ES-5080 will enable the Air Force to detect and analyze the most modern and sophisticated radar signals fielded throughout the world. “This award continues our commitment to provide leading-edge ELINT technology to the U.S. and its allies,” says Bill Devlin, vice president and general manager of ITT’s Radar, Reconnaissance and Acoustic Systems business area “We are working closely with our customer to ensure our technology is well adapted to fulfill critical U.S. Air Force mission requirements.” ITT leveraged its 40 years of experience with ELINT design and integration to develop this solution.

Founding Partner. Boeing’s Insitu Inc. says it has become a founding partner of the Association for Unmanned Vehicle Systems International (AUVSI) Foundation. As a founding partner, Insitu will contribute resources to the foundation and its global initiatives to develop educational programs that attract and equip students for careers in robotics and the rapidly growing unmanned systems industry. Insitu President and CEO Steve Morrow says: “Our intent is to help fund K through 12 learning and to continue the early, hands-on learning approach through our internship program where students work alongside our engineers to develop real UAS products.” says Morrow. The maker of Scan Eagle and Night Eagle UAVs wants to energize students. 

Cyber Crime Rising. Cyber crime is an increasing concern and “the market, the industry, in terms of cyber crime, is eclipsing the narcotics industry,” says a Department of Homeland Security (DHS) official. Cyber criminals are “generally after financial gain” and they are usually associated with organized crime although they are sometimes backed, or supported in some way, by nation state actors, Carlos Kizee, director of Strategic Initiatives for DHS Critical Infrastructure Cyber Protection and Awareness Branch within the National Cyber Security Division, tells a forum hosted by the Association for Enterprise Information. Kizee also says that cyber criminals are no longer just after personal data but are now going after “trade secrets, corporate and intellectual capital that can be sold on an expanding and growing international market.”

…Info Sharing Difficulties. Kizee, who was at the forum to discuss information sharing as it relates to cyber security issues, says that DHS is doing poorly in coordinating with other government agencies and the private sector when it comes to getting “past classification levels” to share information. What it boils down to is, “There should be a request for information on the part of a stakeholder who we are doing business with and we should be able to respond to that request with sufficient data that allows them to meet their mission need and we should be able, in the context of that collaboration, to identify what our mission needs are, what type of feedback or response we would like or would benefit from in response to that data,” Kizee says.

…Focus on Mission Needs. Rather than build an information framework from the top down, it needs to be generated from the bottom up, Kizee says. To do that means the focus is on satisfying mission needs and business interests, he says. “Meeting those requirements will let us tell you what the information sharing environment looks like rather than building the environment and hoping to achieve an outcome of information sharing.”