Capitol Hill Week Ahead. The service chiefs and secretaries will be busy this week testifying in front of the House and Senate authorization and appropriations committees, with hearings scheduled for Tuesday, Wednesday and Thursday. The Senate Armed Services committee will also have a closed hearing on the Air Force’s long range strike bomber program, which SASC Chairman John McCain (R-Ariz.) has threatened to block over its cost-plus contracting construct.
Munitions Shortfall in PACOM. During a Feb. 23 Senate Armed services Committee hearing, Adm. Harry Harris, the head of U.S. Pacific Command, pointed out an ongoing munitions shortfall in the region and calls for additional funding for more and better weapons. “Our subsonic ship-to-ship munition, the Harpoon, is essentially the same missile we had in 1978,” he says in his testimony. “Nearly 40 years later, competitors have developed supersonic ship-to-ship and land-based weapons that reach much farther, punch harder, and fly faster. USPACOM welcomes efforts to turn the tables back in our favor – quickly.” Harris declined to comment about the specific nature of the shortfall during the open session but told senators he would address it in a closed setting.
Offer. The $40 billion multi-industry company Honeywell last week disclosed that it has proposed a $108 per share cash and stock purchase of fellow multi-industrial United Technologies Corp., a deal valued at about $91 billion overall that would create a $97 billion global company. On Friday Honeywell made public its presentation to UTC, with charts showing that the combined entity would generate 39 percent of its business from homes and buildings products, 28 percent from commercial aerospace, 13 percent from defense and space, 12 percent from industrial, and 7 percent from oil and gas customers. This represents a 22 percent premium to UTX’s share price on Feb. 18, a day before the proposal was made.
…Rejection. UTX President and CEO Gregory Hayes on Friday issued a statement in response to Honeywell’s disclosure, saying the offer “grossly undervalues UTC and overstates potential synergies.” Honeywell puts the cost savings synergies at about $3.5 billion annually. Hayes further slammed the offer, calling it “a leveraged buyout of UTC using UTC’s own strong balance sheet.”
…Other Concerns. On top of these issues, Hayes says that while a combination of the two companies has been discussed “on-and-off for years,” shifts in the regulatory environment last year mean that regulators would block a deal, and if not, “the regulatory delay, required divestitures, and customer concerns and concessions would ultimately destroy shareholder value far beyond any synergies.” He also says an acquisition by Honeywell would hurt UTC’s “operations, customer relationships, and talent retention.”
EINSTEIN in the Future. Homeland Security Secretary Jeh Johnson says that the EINSTEIN 3A cyber intrusion prevention system his department is deploying to all federal civilian agencies provides a platform for future technology to block suspicious or bad cyber threat signatures. The system currently can block known threat signatures.
Acquisition Closes. Rockwell Collins completed its acquisition of the Matrix series digital projector lines from Christie Digital Systems, providing it with more comprehensive offerings of projectors for military and aviation simulation. The transaction also gives Rockwell Collins exclusive rights to sell other projection products and associated software tools from Christie in the worldwide simulation and training market segments for military or aviation applications.
U.S. Cuba Cyber. U.S. and Cuba working-level representatives this week held a technical meeting in Havana to exchange information and best practices related to preventing cybercrime and online fraud, including in the areas of pharmaceutical fraud and illicit narcotics. Participants also discuss the legal framework for investigating and penalizing cybercrime. The delegation is led by Alexis Torres, Assistant Deputy Associate Director from the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HIS).
GD DARPA Support. General Dynamics won a cost-plus-award-fee contract with options worth over $25 million to provide classified network support services for the Defense Advanced Research Projects Agency’s (DARPA) Mission Services Office at the Information Technology Directorate. Services include classified office computing, networking, communications services, desktop support, technical support, infrastructure, equipment, software, and data. Fiscal 2016 research and development funds of nearly $21 million are obligated at award time. Work is to be performed in Arlington, Va., with a completion date of February 2017.The contract is a sole-source acquisition. The contracting activity is DARPA.
Headquarters Contract. Vergis Group LLC won a firm-fixed-price contract worth over $33 million to provide responsive and high-quality information assurance service to all customers and stakeholders on behalf of the Washington Headquarters Service, Joint Services Provider, the Office of the Secretary of Defense, and other Defense Department agencies. Work is to be performed in several locations in the capital region, mainly the Pentagon, Mark Center, and Crystal City in Arlington, Va. Fiscal 2015 operations and maintenance funds of $7.3 million is obligated at award time. The contract is expected to be completed by Feb. 28, 2010. The Washington headquarters Services is the contracting office.
Army IT Support Contract. Advanced Alliant Solutions Team won a nearly $12 million vost-plus-fixed-fee incrementally funded contract with options to provide information technology support services to meet mission requirements of the Army Test and Evaluation Command Headquarters. The contract also covers subordinate commands including Operational Test Command, Army Evaluation Center, and the Aberdeen Test Center. Bids were solicited on the Internet with 13 responses. Fiscal 2015 and 2016 research, development, testing, and evaluation (RDT&E) funds of $4.7 million are obligated at award time. Work is to be performed at Aberdeen Proving Grounds, Md. and Ft. Hood, Texas. The contracting activity is the Army Contracting Command in Aberdeen, Md.
Marine Training. Meggitt Training Systems recently received a $5.8 million third delivery order from Marine Corps Systems Command (MARCORSYSCOM), Program Manager for Training Systems to develop and deliver the Indoor Simulated Marksmanship Trainers (ISMT) system. The award raises Meggitt’s total contract value to $25 million of a $32.7 million IDIQ contract. The ISMT system provides realistic, state-of-the-art virtual small arms training in marksmanship and other areas. The latest award will provide another 166 ISMT small arms training systems and additional authoring stations.
AUSA VP. Carter Ham, a former Army four-star, joins the Association of the U.S. Army as an executive vice president. As executive vice president, Ham will report directly to AUSA president retired Gen. Gordon R. Sullivan, as do the three other vice presidents. Ham, who retired in 2013, commanded U.S. Africa Command, U.S. Army Europe and the storied 1st Infantry Division during his nearly 38 years in uniform. Ham most recently chaired the National Commission on the Future of the Army (NCFA), an eight-member panel that generated a detailed report on the recommended size, force structure and capabilities of the Army.
Humvee Work. JLTV is settled and Oshkosh is back to work churning out the trucks it was chosen to build over Lockheed Martin and incumbent Humvee manufacturer AM General. Nevertheless, the South Bend, Indiana, firm that this week won another in a long list of future work building, upgrading and maintaining the Humvee. AM General was awarded a $23 million firm-fixed-price contract with options to convert up to 251 of the Army National Guard’s Humvees from the M1151 enhanced armament carrier configuration to an M1167 expanded capacity TOW missile carrier variant.
DoD TLED. A DoD contractor is applauding the Pentagon’s decision to allow tubular LED (TLED) lighting installation categorically without the requirement to submit a waiver request for each retrofit project. James Tu, executive chairman and CEO of Energy Focus, Inc., welcomes this milestone, saying it enables all branches of the military to accelerate TLED lighting adoption in its existing 550,000-plus buildings in a much swifter fashion. Energy Focus says in a statement in a Feb. 1 revision, the Unified Facilities Criteria (UFC) expanded the allowable formats for LED lighting, also allowing DoD agencies to utilize “luminaire conversion kits” that upgrade existing fluorescent fixtures to LED.
Minuteman III Test. The Air Force launched an unarmed Minuteman III ICBM Friday at 2:01 a.m. EST from Vandenberg AFB, Calif., according to a service statement. This is the second Minuteman III test flight in less than a week for the Air Force. The ICBM’s reentry vehicle, which contained a telemetry package used for operational testing, traveled approximately 4,200 miles to the Kwajalein Atoll in the Marshall Islands. The Air Force says test launches verify the accuracy and reliability of the ICBM weapon system, providing valuable data to ensure a continued safe, secure and effective nuclear deterrent.
SpaceX SES-9. Space Exploration Technologies Corp. (SpaceX) has yet to decide on a new launch date for its SES-9 mission after scrubs on Feb. 24 and 25. Launch should eventually take place at Cape Canaveral Air Force Station, Fla. SES-9 is a communications satellite destined for Geosynchronous Transfer Orbit (GTO). The company is slated to try another drone ship landing, but cautioned for lower expectations as launches slated for GTO have higher velocity before landing.
EOTS. Lockheed Martin delivered its 200th Electro-Optical Targeting System (EOTS) for the F-35, according to a company statement. Lockheed Martin is delivering F-35 EOTS under low-rate initial production (LRIP) contracts with a total of 367 systems ordered to date. Planned production quantities for the F-35 exceed 3,000 aircraft with deliveries through 2030. EOTS also received a low-risk rating in a production readiness review performed by the F-35 Joint Program Office. The review assessed a program’s implemented strategies to reach and sustain full-rate production requirements.
Lawmakers Move to Obstruct Guantanamo Proposal… Sens. Richard Burr (R-N.C.), Kelly Ayotte (R-N.H.), Tom Cotton (R-Ark.) and Marco Rubio (R-Fla.) on Feb. 22 introduced a bill, S. 2559, that would block Obama from returning the Guantanamo Bay base back to Cuba without congressional approval. The bill’s sponsors argued that the base was a vital asset, and that relocating the prisoners could increase the threat of terrorism against the United States. “Recently, we learned that one of the former prisoners at Gitmo is back fighting for Al-Qaeda’s terrorist agenda,” Burr says in a statement. “It’s clear that the threats to the United States are increasing, not decreasing, and we need every available military asset.”
…Thornberry Slams Plan. HASC Chairman Mac Thornbery (R-Texas) called Obama’s Guantanamo proposal “more a press release than a plan,” arguing that the president did not put forward important details, including a recommended location for a new detention facility. “It suggests to me that the President is more interested in fulfilling a campaign promise at any cost, than in transparently addressing the risk associated with bringing terrorists to the United States,” he says.
…McCain Also Opposes Closure. SASC Chairman John McCain (R-Ariz.) was similarly colorful with his description of Obama’s proposal, calling it a “vague menu of options” that doesn’t included details such as where to house current and future detainees. “Rather than identify specific answers to those difficult questions, the president has essentially passed the buck to the Congress,” he says, adding that SASC will hold hearings to scrutinize the plan.