New Share Buybacks. Northrop Grumman last Thursday announced a new $500 million accelerated share repurchase of its common stock during the second quarter that is incremental to previously planned repurchases. The accelerate share buyback is being done under the company’s existing share repurchase authorization, which has about $2.5 billion remaining. Northrop Grumman says it still plans to return more than 100 percent of its free cash flow to shareholders through dividends and stock buybacks this year. CACI International last week also announced an accelerated share repurchase agreement, with plans to quickly buyback $250 million of its common stock between Jan. 31 and Aug. 31. CACI’s accelerated repurchase is being made under a previously announced $750 million repurchase authorization.

People News.

General Dynamics has elected retired Army Gen. Richard Clarke as a director. He retired from the Army in 2022 after serving as the commander of U.S. Special Operations Command. Northrop Grumman has a new head of global business development, Stephen O’Bryan, who reports to Kathy Warden, the company’s chair, president and CEO. O’Bryan succeeds David Perry, who will retire on March 31. O’Bryan joined Northrop from Boston Consulting Group. Before that he was the chief global development officer for the L3Harris Technologies and before that was with Lockheed Martin. Eastern Shipbuilding Group has named Joey D’Isernia CEO, succeeding his father Brian D’Isernia, the company’s founder. Joey D’Isernia has been president of the shipbuilder since 2015. The 1,600-employee company is currently building the first four Coast Guard offshore patrol cutters. Finally, strategic investment adviser Anita Antenucci has left Houlihan Lokey and founded her own financial advisory firm, 3Wire Partners, which will focus on the aerospace, defense, government and related industries.

CISA Wants Security by Design. Industry needs to design cybersecurity into the technologies it produces and stop treating security as “niche issue,” write the top cyber officials at the Department of Homeland Security. “The incentives for developing and selling technology have eclipsed customer safety in importance—a trend that is not unique to software and hardware industries but one that has particularly pernicious effects because of the ubiquity of these technologies,” Jen Easterly, director of the Cybersecurity and Infrastructure Security Agency, and Eric Goldstein, the agency’s executive assistant director, write in the latest issue of Foreign Affairs. They liken industry’s reluctance to improve the cybersecurity of their technologies to the automobile industry’s resistance to making cars safer during the first half of the 20th Century. The CISA executives also call for a “new model” where “Problems should be fixed at the earliest possible stage—when technology is designed rather than when it is being used.”

Abraham (Cyber) Accords. Department of Homeland Security Policy Chief Rob Silvers last week said that the Israel, Bahrain, the United Arab Emirates, and Morocco have expanded the Abraham Accords to cybersecurity. The accords normalized diplomatic relations among the countries and were aided by the Trump administration. “The expansion of the Abraham Accords into cybersecurity is advancing our defensive operational collaboration with Israel and our partners across the Middle East to protect our critical infrastructure,” Silvers said during a visit to Tel Aviv.

Polar Drone Operations. The U.S. Air National Guard, Air Force, Marine Corps, and General Atomics Aeronautical Systems Inc. (GA-ASI) flight tested a company MQ-9A Reaper equipped with a Low Earth Orbit (LEO) satellite communications (SATCOM) system on Dec. 22–a demonstration of a “groundbreaking capability” that “provides global coverage and connectivity” for pole-to-pole operations of General Atomics’ drones, including the Reaper, the MQ-9B SkyGuardian, the SeaGuardian, and the Gray Eagle 25M, General Atomics said. David Alexander, the president of GA-ASI, said in a statement that “using LEO SATCOM not only keeps GA-ASI aircraft connected from the North Pole to the South Pole to allow operations in the most austere environments, but it will also provide resilient connectivity that allows operators to pass much more data to and from the aircraft.” The testing showed the promise of LEO SATCOM for significantly reducing communications latency in all phases of flight and for decreasing operational costs, said GA-ASI, adding that “the smaller hardware footprint will ultimately increase flexibility and reduce future payload integration costs.”

Hypersonic Missile Survivability and Cost. A Jan. 31 Congressional Budget Office (CBO) report–U.S. Hypersonic Weapons and Alternatives–says that while hypersonic missiles “have the speed to be useful in the early stages of a conflict with a near-peer adversary,” they will likely be less survivable and more costly than ballistic missiles. “Hypersonic missiles would probably not be more survivable than ballistic missiles with maneuverable warheads in a conflict, unless the ballistic missiles encountered highly effective long-range defenses,” the report says. “Only very effective long-range defenses would be likely to threaten ballistic missiles in midcourse; to date, no potential U.S. adversaries have deployed such defenses. Hypersonic missiles could cost one-third more to procure and field than ballistic missiles of the same range with maneuverable warheads. CBO estimates that buying 300 ground- or sea-launched, intermediate-range ballistic missiles with maneuverable warheads and sustaining the missile system for 20 years would cost a total of $13.4 billion (in 2023 dollars). The same number of comparable hypersonic missiles would cost about one-third more, $17.9 billion, CBO estimates.”

March For AUKUS. Secretary of the Navy Carlos Del Toro on Feb. 1 said he expects the Australian-U.K.-U.S. AUKUS submarine agreement will be made public within two weeks of the study wrapping up in March. The three countries are working on an 18-month exploratory period that aims to help Australia determine how to procure new nuclear-powered attack submarines. Australian officials previously said when they reveal the conclusion they will also outline interim measures to retain attack submarine capabilities until the new vessels are ready within decades. “Whatever happens, it will be in short time.” Del Toro said  during an American Society of Naval Engineers’ event on Wednesday. Del Toro noted he has been “deeply involved” in the discussions but said finding the “right solution, however, is complicated…I’m very excited by and not concerned about the challenges that lie ahead,” he added.

Saudi CAMM. The Navy awarded MBDA Inc. a $119 million undefinitized contract action on Jan. 31 to produce the Common Anti-Air Module Missile (CAMM) for Saudi Arabia’s Lockheed Martin Multi-Mission Surface Combatants (MMSC) ships. The MMSCs are based on the Freedom-class littoral combat ships and the contract uses funds for Foreign Military Sales (FMS). It include options that, if exercised, would raise the award value to $145.5 million total. Work will largely be split among Stevenage, England (70 percent); Indian Head, Md. (18 percent); and Huntsville, Ala. (nine percent) and is expected to be finished by January 2027. $66 million in FMS funds for Saudi Arabia was obligated at the time of the award. This was not competitively procured in accordance with regulations for the terms of an international agreement.

More Targets. The Navy awarded Kratos Defense a $50 million contract on Jan. 31 to build and deliver another 55 full rate production Lot 4 BQM-177A Surface Launched Aerial Targets. These targets act as mock cruise missiles while being recoverable unmanned aircraft. They travel at speeds up to 0.9 Mach and fly as low as 10 feet over the sea. The contract includes 55 Rocket-Assisted Takeoff Attachment kits, 277 mission kits, and associated technical and administrative data for the Navy as well as Canada and Australia. Work will mostly be split between Sacramento, Calif. (50 percent); Dallas, Texas (20 percent) and is expected to be finished by April 2024. This contract was not competitively procured in accordance with regulations. This award follows the target reaching full operational capability in August during an international missile intercept test.

USV Capacity. A top Navy unmanned systems official said unmanned vessels share some of the industrial base issues stressing the larger vessel shipbuilding industry, but by opening up options to smaller shipbuilders, it may open trade space. “So all of the normal industrial base things that are causing challenges – workforce, supply chain, electronics, and all these, they will be impactful to our USVs just as they are to the rest of the surface class,” Rear Adm. Casey Moton, Program Executive Officer For Unmanned and Small Combatants (PEO-USC), told reporters Monday during the American Society of Naval Engineers’ Technology, Systems and Ships Symposium. However, since the unmanned surface vessels (USVs) are smaller, “there’s several shipbuilders on the Gulf Coast that build smaller vessels, they could play [into it].. So I mean, in one sense, it kind of opens the trade space, because we’re not like a main ship of the line combatant. But in the other sense, we have the same industrial base aspects as anybody else.”

…UUVs Too. Moton said the balance for Unmanned Undersea Vehicles (UUVs) is different  because it “takes a lot of effort to be able to figure out how to get everything to fit inside a UUV,” but there is a “pretty good industrial base already there.” He said the UUV workforce has not had the same level of challenges, except when it comes to the same supply chain issues with electronics and chips like other industries. “You’re seeing that play out nationally with the CHIPS Act and all that. And then things like batteries, lithium ion batteries, I mean, these are all national news stories. And they certainly apply to UUVs.”

Eaglet ALE. General Atomics Aeronautical Systems, Inc. said on Jan. 31 it recently flew its new Eaglet air-launched effect (ALE) for the first time. The demonstration was conducted on Dec. 8 at Dugway Proving Ground in Utah and featured the Eaglet being launched from an Army MQ-1C Gray Eagle Extended Range UAS. “Eaglet is intended to be a low-cost, survivable UAS with the versatility to be launched from a Gray Eagle, rotary-wing aircraft, or ground vehicles. It enables extended reach of sensors and increased lethality while providing survivability for manned aircraft,” GA-ASI President David R. Alexander said in a statement. GA-ASI said Eaglet fits into the profile of the ALE-Large capability the Army has been exploring recently. “Eaglet’s design extends battlefield options for commanders while reducing their decision cycles. Gray Eagle can carry Eaglet for thousands of kilometers before launching it while being controlled through unmanned-unmanned teaming or as a component of advanced teaming command and control concepts,” the company wrote in a statement.

China Committee Dems. House Democratic Leader Hakeem Jeffries (D-N.Y.) has announced his party’s picks for the new Select Committee on Competition with China, to include naming Rep. Raja Krishnamoorthi (D-Ill.) as the panel’s ranking member. “I look forward to working with my colleagues in both parties on this committee to counteract the [Chinese Community Party’s] (CCP) escalating aggression and ensure that our nation is prepared to overcome the economic and security challenges that the CCP presents to our country,” Krishnamoorthi said in a statement. The Democratic members picked to serve on the select committee include Reps. Kathy Castor (D-Fla.), André Carson (D-Ind.), Seth Moulton (D-Mass.), Ro Khanna (D-Calif.), Andy Kim (D-N.J.), Mikie Sherrill (D-N.J.), Haley Stevens (D-Mich.), Jake Auchincloss (D-Mass.), Ritchie Torres (D-N.Y.), Shontel Brown (D-Ohio). Rep. Mike Gallagher (R-Wis.), the committee’s chair, said in a statement he was “thrilled” to have Krishnamoorthi as his partner “on this critical bipartisan effort.”

Army Suspension. The Army has suspended Maj. Gen. Kenneth Kamper from his role as commanding general of the U.S. Army Fires Center of Excellence and Fort Sill, Oklahoma, pending the outcome of a Department of the Army Inspector General investigation, a service spokesperson said on Feb. 3. Cynthia O. Smith, an Army spokeswoman, said Brig. Gen. Shane Morgan, deputy commander of the Fires Center of Excellence, will serve as interim commander. “Neither the investigation nor the change in leadership will have any impact on the operations or mission at Fort Sill, including the current training of Ukrainian forces on the Patriot missile system, and the suspension was not related to the mission or training of Ukrainian soldiers,” Smith said in a statement. 

Chinese Balloon Update. A high-altitude Chinese surveillance balloon, which the Pentagon first announced it was tracking on Feb. 2, “continues to move eastward and is currently over the center of the continental United States,” according to a department spokesperson. “The balloon has changed its course, which is again why we’re monitoring it. But that’s about as specific as I can get,” Air Force Brig. Gen. Patrick Ryder, the Pentagon press secretary, said during a briefing on Feb. 3. When asked if the location of the balloon is classified, Ryder said he couldn’t offer specifics and added that “the public certainly has the ability to look up in the sky and see where the balloon is.”

…Balloon Details. Ryder was also asked about the Chinese government’s statement that the balloon is a “civilian airship” that has been blown off-course. “We are aware of [China’s] statement. However, the fact is we know that it’s a surveillance balloon and I’m not going to be able to be more specific than that. We do know that the balloon has violated U.S. airspace and international law, which is unacceptable. So we’ve conveyed this to [the People’s Republic of China] at multiple levels,” Ryder said. Ryder also provided some insight into what the Pentagon has observed about the balloon. “It’s got a large payload underneath the surveillance component, underneath the actual balloon piece of it,” Ryder said. “There’s a basket underneath it, in layman’s terms. Large enough to concerning if there to be a debris field.”

F-16s for Türkiye? Sen. Jeanne Shaheen (D-N.H.) and Sen. Thom Tillis (R-N.C.), the co-chairs of the Senate NATO Observer Group, are leading a group of senators urging President Biden not to approve sales of Lockheed Martin F-16 fighters to Turkey, which the U.S. State Department began calling Türkiye last month, until that nation agrees to NATO accession protocols for Sweden and Finland. “Failure to ratify the protocols or present a timeline for ratification threatens the [NATO] alliance’s unity at a key moment in history, as Russia continues its unprovoked invasion of Ukraine,” the senators wrote in a Feb. 2 letter to Biden. Co-signatories of the letter are Sens. Chris Coons (D-Del.), Shelley Moore Capito (R-W.Va.), Jacky Rosen (D-Nev.), John Boozman (R-Ark.), Dick Durbin (D-Ill.), Bill Cassidy (R-La.), Sheldon Whitehouse (D-R.I), Lisa Murkowski (R-Alaska), Tammy Duckworth (D-Ill.), Angus King (I-Maine), Tim Kaine (D-Va.), Amy Klobuchar (D-Minn.), Tammy Baldwin (D-Wis.), Martin Heinrich (D-N.M.), Alex Padilla (D-Calif.), Kirsten Gillibrand (D-N.Y.), Maggie Hassan (D-N.H.), Cindy Hyde-Smith (R-Miss.), Mazie Hirono (D-Hawaii), Rick Scott (R-Fla.), Patty Murray (D-Wash.), Kevin Cramer (R-N.D.), Catherine Cortez-Masto (D-Nev.), Ron Wyden (D-Ore.) and Sherrod Brown (D-Ohio).