Congress Watch. All eyes are on the National Defense Authorization Act conference committee the week of July 20. Senate Armed Services Committee Chairman John McCain (R-Ariz.) says he expects major negotiations on the bill to wrap up late in the week of July 13. Committee aides say a conference report will likely be finalized and released over the next couple days, allowing the House and Senate to take up the bill before August recess.
Earnings Season. Defense company earnings kick off in earnest the week of July 20 with Lockheed Martin, Boeing, and Raytheon set to report second quarter results on Tuesday, Wednesday and Thursday respectively. United Technologies Corp. will report on Tuesday as well. Defense analyst Jim McAleese says the rumors of a potential Lockheed Martin acquisition of UTC’s Sikorsky helicopter business place a potential deal announcement as early as July 20. General Dynamics and Northrop Grumman report results July 29. 
Analyst Coverage Resumes. Investment banking firm JP Morgan resumes sell-side analyst coverage of the aerospace and defense industry following the tragic death in February of Joseph Nadol, a top industry analyst who was killed when the commuter train he was riding in collided with an SUV in New York. Seth Seifman, a JP Morgan analyst, says top industry picks are Boeing, General Dynamics, Lockheed Martin, Spirit AeroSystems, and TransDigm Group.
…Defense Upside. Seifman says “defense has had a great run, but stocks still have upside.” He says given that defense spending is “near a trough, defense could be a safe haven in a recession.” He adds that “defense companies’ willingness and ability to return cash to shareholders while interest rates are near zero have made the stocks stars of this bull market despite a shrinking budget,” and he expect the defense budget to begin increasing, which means “companies will continue returning cash,” and find other ways to deploy capital.
UAS SAR in Arctic. The Coast Guard’s Research and Development Center this month is conducting an evaluation of technologies for use in the Arctic Ocean, including the use of small unmanned aircraft systems (UAS) for search and rescue (SAR) missions as part of the annual Arctic Shield exercise. In one test, personnel from the National Oceanic and Atmospheric Administration are using a hand-launched Puma small UAS provided by AeroVironment aboard the polar ice breaker HEALY. The evaluation is also looking at how autonomous net capture of the UAS impacts Coast Guard operations and crew. Other technology initiatives include navigation, communication, shore landing improvements, and environmental data collection.
F-35 Contracts… Lockheed Martin picks up two contract modifications for systems associated with the F-35 Joint Strike Fighter. One award, valued at $718 million, pays for non-air vehicle spares, support equipment, Autonomic Logistics Information System (ALIS) hardware and software upgrades, supply chain management, full mission simulators and non-recurring engineering services in support of low-rate initial production Lot 8 F-35s for the Air Force, Navy, Marine Corps and international customers. Work is projected to wrap up in April 2020.
…Helmet Mounted Displays. A $101 million contract modification goes toward procuring helmet-mounted display systems (HDMS) for that provide F-35 pilots with aircraft and mission data. HDMS is a bi-ocular helmet display that projects flight, navigation, video and weapons information on the visor, using data from on-board sensors. The awarded funds will purchase display systems for all three U.S. operators of the joint strike fighter, FMS customers Israel and Japan, and unnamed international partners.
Saudi Training Contact. Booz Allen nets a $12 million cost-plus-fixed-free price modification to a previous contract to provide training and other services to the Royal Saudi Naval Forces. The award — administered through the Foreign Military Sales program—brings the total contract value up to $24 million. Booz Allen provides training and education, engineering, technical and management support services though July 2016, although if additional options are exercised, the contract could run until July 2017.
Standard Missile Contract. Raytheon is awarded a $14 million modification to a previous contact for Standard Missile-2 (SM-2) and Standard Missile-6 (SM-6) engineering and technical services. The work is necessary to ensure continuity in production, design integrity and total systems integration of the missile round and other components, and is expected to be completed by November 2016, a Navy contracting announcement said. The award combines the purchases of the U.S. Navy and Australian government.
War By Attrition. The Army announces that 17,000 civilian employees will lose their jobs in addition to the 40,000 soldiers it will divest over the next two years because of budgetary restrictions. Debra Wada, assistant secretary of the army for manpower and reserve affairs, says the week of July 13 those jobs will be eliminated primarily through attrition. Asked by a member of the National Committee on the Future of the Army about the Army’s civilian workforce morale, Wada says “challenging, at best, given the furloughs and the government shutdowns” with which they have had to recently contend.
New AMC Chief. President Barack Obama nominates Air Force Lt. Gen. Carlton Everhart as the next commander of Air Mobility Command (AMC), according to a Defense Department statement. Everhart is currently commander of the 18th Air Force. He previously served as the commander of the Third Air Force at Ramstein Air Base, Germany. Everhart is a command pilot with more than 4,500 hours flying aircraft including the T-38A, C-130E/H, C-17A, KC-135R and UH-1N, among others.
3DELRR. The Air Force re-enters source selection to take corrective action for its Three-Dimensional Expeditionary Long-Range Radar (3DELRR) program, service spokesman Justin Oakes says July 15. The program had been tied up in litigation after Raytheon sues the Air Force for withdrawing its contract award to the company and taking corrective action. Raytheon beat out Lockheed Martin and Northrop Grumman for the award, but a Government Accountability Office (GAO) official warned the parties that it would likely uphold bid protest, spurring the Air Force’s corrective action. Raytheon on July 6 appeals to a federal appeals court, asking it to halt the Air Force’s 3DELRR corrective action and any new award that may arise from it.
Antigua Station Closes…. The Air Force estimates that it will save over $10 million per year by deactivating its Antigua Air Station, according to a service statement. Antigua, officially stood down July 7 was home to Detachment 1, 45th Operations Group, that supports the space-lift mission of the Air Force’s Eastern space launch Range by providing high data rate telemetry. Air Force Fifth Space Launch Squadron commander Lt. Col. David Leach says July 17 in a press briefing that the equipment at Antigua was turned off one year ago.
…More Antigua. Leach says the decision to deactivate Antigua is related to the decision to use only GPS metric tracking at Cape Canaveral Air Force Station, Fla. The Air Force says a thorough review of mission requirements in recent years determines that the mandatory tracking and command responsibilities that were carried out by AAS could be accomplished using the data rate telemetry received from other service assets. The C-band radar used at AAS is relocating to Harold Holt Naval Communications Station, Australia, where it will be integrated into the U.S. Space Surveillance Network.
Pawlikowski AFMC. Air Force Gen. Ellen Pawlikowski assumes the top position of Air Force Materiel Command (AFMC) in early June during a ceremony at Wright-Patterson AFB, Ohio, according to a service statement. AFMC is responsible for installation support and the technology, acquisition, test and sustainment of the Air Force’s current and future weapons systems. Pawlikowski takes over for Gen. Janet Wolfenbarger, who retired July 1 after 35 years of service. Pawlikowski’s last position was assistant Air Force secretary for acquisition.
Kowalski Retirement. U.S. Strategic Command (STRATCOM) deputy commander Air Force. Lt. Gen. James Kowalski retires Sept. 1, according to a STRATCOM statement. Kowalski arrives at STRATCOM in October 2013 after previously serving as commander of Air Force Global Strike Command (AFGSC). DoD celebrates Kowalski’s 36 year career during a retirement ceremony at Offutt AFB, Neb., July 20 at 9 a.m. CDT. Kowalski commissions into the Air Force in 1979 through the ROTC program at the University of Cincinnati.
BlackBridge-Planet Labs. Planet Labs acquires BlackBridge’s geospatial businesses, according to a BlackBridge statement. BlackBridge focuses on providing end-to-end solutions across the geospatial value chain, including satellite operations, ground station services, data center and geocloud solutions and worldwide satellite imagery distribution. Planet Labs designs, builds and operates a network of satellites to create commercial and humanitarian value with a global imaging network. BlackBridge says its RapidEye constellation will continue operating at full capacity and customers will continue to have access to the complete RapidEye archive and new imagery acquisitions.
Orbital-Stratolaunch. The Stratolaunch project is “no longer active” for Orbital ATK, company spokesman Barry Beneski says July 17. He declines to comment further on whether the company is no longer developing the multi-stage booster for Stratolaunch Systems’ massive carrier aircraft or if the effort is just paused. Stratolaunch wants to demonstrate an air launch system capable of transporting payloads to low Earth orbit using a larger carrier aircraft acting as a mobile launch range. Vulcan Aerospace President Chuck Beames says July 16 the Stratolaunch carrier aircraft is over half assembled and should roll out of the hangar early next year for first flight. Vulcan is the parent company of Stratolaunch.
US-Japan Cyber Dialogue. The U.S. State Department announces the third U.S.-Japan Cyber Dialogue will be held in Tokyo on July 22. Officials from both countries are set to discuss bilateral cyber cooperation on infrastructure protection, capacity building, cybercrime, national security issues in cyberspace and common approaches to international venues. Christopher Painter, the coordinator for cyber issues at the State Department, leads the American interagency delegation. The delegation includes representatives from the State Department, Department of Homeland Security, Department of Justice, Federal Bureau of Investigation, Department of Defense, and other agencies. Takashi Okada, Japan’s ambassador in charge of cyber policy and deputy director-general of the foreign policy bureau, will lead the Japanese delegation.
New Pentagon Cyber Official. Secretary of Defense Ash Carter appoints Arron Hughes as deputy assistant secretary for cyber policy, DoD announces July 15. In this role, Hughes oversees the development and implementations of cyber policies, strategies, and plans which guide the department’s efforts in cyberspace. Hughes was previously the vice president for intelligence community support at the strategic investment firm In-Q-Tel. There he led the company’s engagement with the Intelligence Community, assisted in the formulation of investment priorities and technology identification for company partners.
IT Industry Council Hire. John Lenhart joins the Information Technology Industry Council (ITI) as director of global policy for China. Lenhart previously served on the US-China Business Council (USCBC) for nearly four years, becoming director and chief representative of the Beijing office. In the former position, he was responsible for managing strategic planning for USCBC’s policy research and advocacy activities in Beijing.