Category Archives: Military

Letting Government Contractors Pick Their Own Auditors is a Bad Idea

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Hand in Jar istockphoto by Getty

Image: istock photo by Getty

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“The law in question is the 2017 National Defense Authorization Act (NDAA) passed late last year.

When it comes to contract auditing, giving audit responsibilities to a company working directly for a contractor hampers the government’s ability to negotiate good deals for taxpayers.

Section 820 of the law states that “contractors with the Department of Defense may present, and the Defense Contract Audit Agency shall accept without performing additional audits, a summary of audit findings prepared by a commercial auditor” of contractors’ indirect costs (with some exceptions). This section is scheduled to go into effect on October 1, 2018.

Last year, in annual legislation setting defense policy, Congress gave military contractors the authority to hire their own auditors to review the bills those contractors send to the government. For decades, the Pentagon’s own Defense Contract Audit Agency (DCAA) has helped government contracting officials negotiate better deals by examining a contractor’s charges. But last year’s legislation, which goes into effect next year, diminishes the DCAA’s oversight authority to the detriment of taxpayers.

The topic was broached in an important, but under-the-radar Congressional oversight hearing in April.

Most of the hearing centered on the cost of government versus private auditors, with two conflicting tales being told. But a bigger issue went largely unaddressed: whether allowing contractors to pick their own auditors creates inherent conflicts of interest since the auditors would be in the position of serving contractors—their client—rather than taxpayers. There is a reasonable fear that these private sector auditors, in an effort to keep their client happy and win repeat business, would be reluctant to disclose to the government that the contractor is overcharging taxpayers.

New legislation pending before Congress would rescind Section 820, but it would also allow “contractors to engage commercial auditors to perform incurred cost audits,” according to a Department of Defense (DoD) analysis. The analysis also states that the new provision creates “several unintended consequences that will negatively impact the Department and industry.” The DoD opposes both Section 820 and the new Congressional language. The DoD’s proposed alternative keeps the power to conduct these audits in DCAA’s hands with an option allowing the government (rather than the contractors) to hire private sector auditors on a case-by-case basis. After analyzing the issue, POGO supports the Department’s proposed alternative.

DCAA’s Role

DCAA is responsible for auditing the financial side of certain defense contracts to “ensure that warfighters get what they need at fair and reasonable prices,” according to  its website. DCAA looks for whether contractor costs are “allowable, allocable, and reasonable,” and it performs other audits to ensure contractors have adequate business and accounting systems and adhere to federal cost and accounting principles. DCAA’s report for fiscal year 2016 notes that it audited $287 billion in contract costs that year. These audits are not usually intended to uncover fraud, although DCAA sometimes finds indicators of criminal activity and participates in law enforcement investigations.

What Are “Indirect Costs” and Why Do They Matter?

Contractors charge the government for two types of costs: direct costs that specifically relate to the contract, such as labor and materials, and indirect costs that exist apart from specific work on the contract, such as the rent a contractor pays for its office or fringe benefits for employees.

But there’s nothing fringe about these costs. Within incurred cost audits, indirect costs make up the majority of all questioned costs, according to DCAA Director Anita Bales. Because they are less clear-cut than direct audits, audits of indirect costs can be contentious—especially when auditors want more access to contractor information than the contractor is willing to provide—and quite technical. For instance, contractors are allowed to charge the government for indirect costs associated with litigation under some circumstances, but not in other situations. Contractors can easily pad their profits at taxpayers’ expense if these costs are not carefully examined.

An example of indirect cost overbilling made the news in February 2016 when the Justice Department announced that Centerra Services International (formerly known as Wackenhut Services LLC) agreed to pay $7.4 million to resolve a whistleblower lawsuit alleging the company had defrauded taxpayers. According to the Justice Department, Centerra double billed its labor costs while providing firefighting services on a military base in Iraq. The government alleged Centerra “inflated its labor costs by billing the salaries of certain managers as direct costs under the subcontract, when those salaries had already been charged as indirect costs.”

The Centerra case isn’t a one-off. In 2015, a DCAA audit questioned $14.6 million in costs that a contractor charged the government, according to a DoD Inspector General report to Congress. The vast majority—$14 million—involved wrongly billed indirect costs.

Lessons from the Recent Past

We don’t have to look very far back in history to see that allowing profit-motivated companies to hire their own profit-motivated auditors can lead to problems.

The Enron scandal showed that accountants and auditors aren’t immune from conflicts of interest. “Obviously the history of Enron and the financial crisis suggest we have to be very careful in this situation,” Representative Seth Moulton (D-MA), Ranking Member of the House Armed Services Oversight and Investigations Subcommittee said during his opening statement at the April hearing. Arthur Andersen, Enron’s auditor, had conflicts of interest. It was simultaneously employed as internal and external auditor, meaning that the supposedly independent external auditor could cover up the inaccuracies of the internal audit team.

More recently, during the fallout of the Great Recession, the government required banks to conduct mortgage foreclosure reviews. Banks were allowed to hire for those reviews their own “independent consultants” who proved to be not so independent. The New York Department of Financial Services (NYDFS) punished several of these consultants, including Promontory Financial Group, Deloitte, and PricewaterhouseCoopers, for “misconduct, violations of law, and lack of autonomy.” Settlements generally included multi-million dollar fines and temporary bans from consulting.

“A consultant’s allegiance too often goes to the client that pays the bills,” former NYDFS General Counsel Daniel Alter wrote in a 2015 piece for American Banker. Laws like Sarbanes-Oxley, which create criminal liability for misrepresenting financial statements, have helped to prevent future Enrons by balancing that pressure. However, criminal liability doesn’t apply to other types of financial reporting, such as the consulting work done in the aftermath of the housing crisis and the proposed contract audits.

Counting the Costs  

At the April Congressional hearing, DCAA Director Anita Bales testified that third-party auditors would cost an estimated 30 percent more than DCAA auditors. David Berteau, President and CEO of the Professional Services Council, a contractor lobbying group, countered in his testimony that when civilian agencies have used private auditors, they have in some cases paid significantly less than they used to pay DCAA.

Bales’ claim that DCAA auditors were 30 percent cheaper was based on a comparison of hourly billing rates, according to emails provided to POGO through the Freedom Of Information Act (FOIA). Berteau and other employees of the Professional Services Council did not respond to emails requesting evidence supporting their claims.

Other members of the federal auditing community have told POGO that the comparison of auditing costs is not clear cut. DCAA has more specialized experience and might charge lower costs per auditor hour, but they may also take longer to conduct audits (which may be a good thing in the long run, as more thorough audits may save even more money). Pricing for private auditors can also vary widely from company to company and even year to year, making a comprehensive analysis difficult.

And although cost was the most-discussed factor at the hearing, it isn’t the only factor that needs to be examined. A federal source, not authorized to speak on the record, who is familiar with both DCAA and private contract audits for civilian agencies said the work of private auditors still has to be closely checked, even when they are hired directly by the government. Both last year’s NDAA and a recent proposal for this year’s NDAA prohibit DCAA from examining the work of private auditors before accepting the results.

There is also concern over how the records generated by private auditors would be handled: Will they be subject to FOIA? How would the discovery of potential fraud be handled? Would private sector audits be incorporated into the DCAA’s “Management Information System” that tracks audit data so that auditors can spot trends and look at the bigger picture?

What About Incurred Costs?

New Congressional language would rescind Section 820 but would allow contractors to hire auditors to audit incurred costs. The argument for this is DCAA’s lower rate of return when it audits incurred costs. However, DCAA’s other auditing work with the same contractor and on the same contracts benefits from its incurred cost audits, and vice-versa. For instance, DCAA conducts audits of contractors’ billing, accounts, and internal control systems. The insights DCAA gains from those audits assists DCAA when it audits a contractor’s incurred costs. According to a DoD analysis of the impacts of the recently proposed legislation, keeping incurred cost audits in the hands of DCAA:

…allows for the continuation of many initiatives that DCAA has put in place to more efficiently and effectively perform audits (e.g., the use of the low risk sampling process, the coordination of subcontract assist audits, and the process for obtaining and determining adequacy of incurred cost proposals). Without one group coordinating the need for commercial auditors, the Department will lose many of these efficiencies and will lose adequate oversight over the complete incurred cost audit process. [emphasis added]

One of the primary motivations for the new Congressional language on incurred cost audits is DCAA’s incurred cost audit backlog, which was relatively large until a few years ago and has recently become more manageable according to DCAA’s most recent annual report. The agency said it was on track to eliminate the backlog by next year, although with the hiring freeze it may have to re-evaluate that goal. Regardless of whether the backlog is eliminated one or three or even five years from now, Congress is proposing a rather drastic solution to a problem that is no longer drastic itself.

This is not a backyard experiment with few consequences for failure. Billions of taxpayer dollars are on the line every year. While DCAA has room for improvement, privatizing the agency’s work would most likely make it harder to crack down on contractor overbilling.

Given the large risks and the unclear benefits or privatizing contract audits, Section 820 should be repealed. If DCAA needs a temporary boost, it should be given authority to hire more staff on a temporary basis, or perhaps even hire private sector auditors on a short-term basis. The Defense Department proposes the latter, calling it “much more effective” while ensuring “that a function that is inherently governmental in nature continues to be performed by Government auditors when feasible, but allows for the use of commercial auditors when necessary to address incurred cost backlog.”

POGO does not often agree with the Defense Department, but its proposal makes sense. Let’s learn from our past mistakes rather than repeat them.”

http://www.pogo.org/blog/2017/06/letting-contractors-pick-own-auditors-bad-idea.html

Generals and Admirals Need Checks and Balances Too

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ASSOCIATION OF UNITED STATES ARMY”  By Lt. Col. Joe Doty, USA Retired and Maj. Gen. Rich Long, USA Retired

“Without question, most past and present top officers are some of the finest, most competent, values-based and selfless officers our nation can produce.

But they, like us all, are human, flawed, and we all need a healthy dose of oversight and accountability.

Some generals have made the news lately for behaviors that violate the professional ethic. Although this trend seems new or current, it isn’t. Thomas E. Ricks, a well-published author on defense matters, wrote “General Failure” in the November 2012 issue of The Atlantic and in the same year published a book, The Generals: American Military Command from World War II to Today, on the same topic. His critique focused on a perceived lack of accountability in our armed forces at the general-officer level.

In June 2008, Lt. Col. Robert Bateman wrote “Cause for Relief: Why Presidents No Longer Fire Generals” in Armed Forces Journal. And in May 2007, then-Lt. Col. Paul Yingling wrote his (in)famous “A Failure in Generalship,” also in Armed Forces Journal. Our national security advisor, Lt. Gen. H.R. McMaster, in 1997 wrote Dereliction of Duty: Lyndon Johnson, Robert McNamara, the Joint Chiefs of Staff, and the Lies that Led to Vietnam. The book talks about failures at our highest officer and political levels up to and during the Vietnam War.

Generals are human beings and as such we need to be honest and frank about human behavior and human frailty. Nobody is perfect. So it seems to be an appropriate question: How is the system working in terms of oversight and accountability for general officers?

Recently we’ve had an admiral caught up in the “Fat Leonard” scandal; a former aide to the secretary of defense, Maj. Gen. Ronald Lewis, was relieved of his duties due to transgressions; and Maj. Gen. David Haight was forced to retire due to questionable professional behavior. At some point, we must ask ourselves whether there is a more effective system of checks and balances that can mitigate some of these issues. Lastly, and perhaps most egregiously, there is the case of former Brig. Gen. Jeffrey Sinclair, who pleaded guilty to adultery, maltreatment of a subordinate, engaging in improper relations and several other charges. Who was providing oversight of him or holding him accountable for his actions?

Don Snider, an expert in the study of the Army profession, notes that professions like the military are self-policing. Other unique aspects of professions (such as law and medicine) include that they:

  • Provide a necessary service to the country.
  • Have a shared ethic.
  • Have a unique expert knowledge.
  • Develop their own members.

Our military takes each of these aspects of being a profession seriously. As the most senior representatives of a self-policing profession, our general officers should be the standard-bearers and set the example for the rest of the force—and for the country—in their personal and professional lives.

They should also know how to self-police. Assuming there is real self-policing of generals, either by someone or a group, would it be helpful to make the policing process more transparent? Would making public the specific (and anonymous) examples of how generals are holding themselves accountable be an appropriate service to the nation?

At the risk of oversimplifying this self-policing and oversight challenge, is a general’s immediate supervisor responsible for policing and holding accountable his or her subordinate? Is the four-star responsible for the three-star? Is the two-star responsible for the one-star? Here, it is important to note that the concept of chain of command is ingrained in the DNA of every service member. It is part of the professional ethic. And the construct of chain of command has a built-in concept and understanding of responsibility and accountability, which does not cease once someone is promoted to general rank.

DoD inspectors general certainly play a role in oversight and accountability, but it’s a role initiated after an allegation has been made. IG investigators are not involved in the day-to-day business of general officers. How do we get more proactive and ahead of the allegations?

At the top levels, trust is sacrosanct. Theoretically, our promotion and selection system has selected those who need little or no oversight. However, the promotion and selection system is only as good as people can make it, and there will be bad apples. It can be argued that officers at this level need more or closer oversight due to their strategic responsibilities and the potential for national or international embarrassment. The Gen. David Petraeus affair could serve as an example.

Mathematically and statistically, it is safe to assume there are bad apples among general officers. The military’s selection and promotion system is run by human beings, so it must have flaws and make mistakes. Is it realistic to think every general never does anything wrong? This violates common and reasoned sense. There are just over 300 generals in the active Army and about 650 in the Total Army. The fact that only one or two get in trouble each year is pretty good and perhaps surprising, but because of the sacred nature of their duties, even one-tenth of a percent is too high. Again, the need for oversight and accountability.

In terms of the human dimension and understanding of this topic, there are basic psychological processes at work. One can be called the Bathsheba Syndrome or “the dark side of success,” which suggests absolute power corrupts absolutely or that enormous success can be an antecedent to ethical failure. There are numerous historical examples of this: Tiger Woods and Richard Nixon come to mind. As such, it can easily be argued that because of their success, top officers need more oversight and accountability.

Expectancy theory is taught in most basic psychology courses and suggests people behave in ways they are expected to behave. Officers who attain the rank of general are the best of the best and are expected to be that way—almost flawless—and in some cases, may think they are flawless (as their evaluation reports state) and therefore think they can get away with anything. Unhinged or unbalanced ambition and/or unhealthy narcissism are recipes for disaster.

There is a difference between an officer who knows they should be and deserve to be a general, and one who may be a bit surprised and humbled to obtain the rank. This difference may be cognitively and emotionally subtle at the individual level, but can be profound in how it plays out. Again, an argument for more structured oversight and accountability.

It is the nature of life in the military to cover for each other. Loyalty to and taking care of your buddies and comrades in arms is part of the professional ethic. These bonds are emotional and powerful, as they must be due to the nature of the profession. But to what extreme? When are the times when this loyalty does not and should not apply?

The answer is: when one’s actions are unethical, against the law or will hurt the effectiveness of the organization. Importantly, a subordinate’s loyalty to a general-level officer is often exponentially magnified due to the rank, position power, referent power and expert power of the general. Hence, loyalty at this level may be impervious to and blind to wrongdoing. Asking or expecting a subordinate to call out a possible transgression by a superior officer can, unfortunately, be a career-ender for the subordinate. Is it realistic to think people in and around Sinclair over the course of his career never suspected anything nefarious was going on?

A recommended solution to this challenge is for DoD to require colonels selected as executive officers for generals to attend the IG course and have as part of their duties a formal responsibility of reporting and answering outside the chain of command and to certify, under oath, that they are not aware of malfeasance or issues that must be addressed. Other duties could include:

  • Challenging the general’s assumptions and thinking.
  • Attempting to find blind spots in the general’s personality and thinking.
  • Asking lots of “why” questions.
  • Providing candid and blunt feedback and assessments.

We also recommend that DoD increase its education and developmental opportunities in terms of helping officers increase their emotional intelligence, specifically in terms of self-awareness and self-management. Emotional intelligence is a leadership skill that can be taught, learned and increased over time. Individuals with high levels of emotional intelligence are less vulnerable to self-delusion, burnout, and personal and professional indiscretions.

Our purpose here is not to poke anyone in the eye or throw stones. Our focus is on organizational improvement and learning. “

GENERALS NEED CHECKS AND BALANCES TOO

 

 

Industry/Pentagon Revolving Door Featured in Deputy Secretary of Defense Confirmation

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Industry Pentagon Revolving Door

“BREAKING DEFENSE”

“Mr. Shanahan, you’re not making me happy,” the chairman said. “You just ducked basically every question Sen. Fischer asked you.”

After Nebraska Senator Deb Fischer tried to elicit the nominee’s position on how to respond to Russian violations of the Intermediate Nuclear Forces (INF) treaty, McCain stepped in.

McCain’s biggest objection to Shanahan, however, was the nominee’s 31 years at America’s second largest defense contractor, Boeing. (Only Lockheed Martin sells more to the Pentagon. And Sen. McCain, thanks to the long-running scandal over Boeing’s former tanker deal, is believed to harbor a deep suspicion of Boeing’s conduct).

“Not a good beginning. Not a good beginning,” Senate Armed Services chairman John McCain told the administration’s nominee for deputy secretary of defense this morning. “Do not do that again, Mr. Shanahan, or I will not take your name up for a vote before this committee. Am I perfectly clear?”

“Very clear,” said Patrick Shanahan, enduring a rocky confirmation hearing for the No. 2 position in the Pentagon, which remains unusually short on senior officials. Other senators at the hearing asked Shanahan about Pentagon procurement, especially about nurturing innovation, continuing the Third Off Strategy for high-tech weapons, and starting the Pentagon’s long-awaited audit this fall. But McCain repeatedly took the mike to berate the Trump nominee for non-answers on Russia and for potential conflicts of interest after his 31 years at Boeing.

In that initial exchange, Shanahan’s specific offense was giving a vague non-answer in his written testimony to the committee’s question on whether he supported providing “lethal defensive weapons” to Ukraine. In the hearing, ironically, when McCain asked Shanahan to clarify, he stated his support for arming the Ukrainians so swiftly and unequivocally that the irascible but aging senator seemed momentarily thrown before returning to the attack.

“I want to move forward as quickly as I can with your nomination,” McCain told Shanahan at the hearing’s end, “(but) I am concerned. 90 percent of defense spending is in the hands of five corporations, of which you represent one. I have to have confidence that the fox is not going to be put back into the henhouse.”

“Mr. Shanahan, I think you’re a fine man; you have an outstanding record; (but) take a look at your responses that you sent to this committee,” McCain said. “Some of them were less than specific, at least one of them (was) almost insulting.”

Citing US casualties in Afghanistan, Ukrainian casualties against Russian-backed separatists, and the US shoot-down of a Syrian jet, McCain made it clear he wants clear answers on administration policy — and if the committee doesn’t get them, it will find answers of its own as it works on the annual defense policy bill.

“I want some answers, I want some straightforward answers, (and) if they don’t give us a strategy from the people that I admire most, we’re going to put a strategy in,” McCain warned. “I want to work with this administration, I want to work with this president, I want to work with the new secretary of defense, — who I happen to be one of the most ardent admirers of — but I have to tell you, in a couple of weeks, we’re going to mark-up up the defense authorization bill….The president has two choices: Either give us a strategy or we will put a strategy that we develop into the defense authorization bill.”

“Somehow over the last several years, this committee seems to have been treated as sort of a rubber stamp,” McCain concluded. “That’s not what the Constitution of the United States says. The Constitution of the United States says that the Senate would provide advice and consent.”

http://breakingdefense.com/2017/06/mccain-hammers-depsecdef-nominee-shanahan-on-russia-boeing/

Are You Prepared for a Contract Cancellation?

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nbmcwdot com 31949-Termination-of-Contract

Image:  nbmcwd.com

 

“WASHINGTON TECHNOLOGY”  By Darrell Hineman, Brian Courtney

“The possibility of a contract termination should be incorporated into every government contractor’s business continuity plan.

Implementing safeguards and procedures designed to mitigate the risk of a termination will limit the impact it has on your organization’s operations.

Preparing for the possibility of a contract termination is a defensive strategy that contractors should undertake now. Here are three key steps you should consider immediately:

  1. Plan ahead. Never consider your contract as “termination-proof.”
  2. Fully understand the contract termination process
  3. Learn how to calculate and submit your Request for Equitable Adjustment or settlement proposal.

The possibility of a contract termination should be incorporated into every government contractor’s business continuity plan. Implementing safeguards and procedures designed to mitigate the risk of a termination will limit the impact it has on your organization’s operations. Ask yourself, “Does my organization have procedures in place to deal with cure notices, customer complaints, and quality issues? What about monitoring subcontractors?”

If you are still reading this article, you probably are not as well prepared for a contract termination as you should be. Most contract terminations have a root cause and are not solely due to the government no longer requiring the items or services.

Here are some common contract termination causes and how to prevent them:

Failure to immediately address government concerns

Whether a complaint or “suggestion” is received verbally or in writing from the government, there should be a process in place to respond immediately. Often, we hear from clients that their program personnel were in the process of addressing a government issue (but apparently not in real-time). Now, they are dealing with a cure notice for many items to be corrected in two weeks.

Incorporate the handling and response to government communications and complaints/concerns into your program management policy and procedures. All complaints/concerns should be documented and tracked from the initial problem to the eventual solutions.

Regular communication with the government is also critical in staying ahead of potential contract issues and preventing a termination. The contractor program manager should routinely relay project status to the government in writing – even if not required under the contract terms. We recommend weekly communications but, depending on the project, monthly communications may suffice.

Failure to evaluate change orders for potential effect on cost or schedule

Sometimes, trying to fully please the client can actually lead to a termination. A contractor has only 30 days from the date of receipt of a written order to assert its right to an adjustment. Often, accepting changes without evaluating the impact on scope, cost, and/or schedule can lead to project delays and cost overruns. These may ultimately result in missed delivery/performance dates.

As a preventative measure, create a standard procedure to evaluate the impact of any change request on the scope, cost, and/or schedule of a project. Share this required procedure with the customer: “Yes, we can make changes, but we first need to evaluate the scope, cost, and schedule to identify any project impacts.”

Subcontractor performance issues

Many contractors focus on complying with the requirement to issue subcontracts and neglect their associated responsibility for managing subcontractors under FAR 42.202(e)(2), Assignment of Contract Administration. Prime contractors often assume, without oversight or verification, that their subcontractors will meet prescribed performance and deliverable requirements.

When a subcontractor fails to deliver, the prime contractor is ultimately responsible for addressing the issue, or may face termination. Therefore, you should ensure that you flow down the proper terms and conditions to your subcontractors, including the prime contract termination clauses and deliverable dates.

Another step we recommend is to create a post-award subcontract administration procedure to address the risk. Ensure that adequate and comprehensive subcontractor oversight is built in to your procurement and project management processes. Any issue that can affect contract performance/delivery must be escalated quickly for resolution.

Bidding on unprofitable work

Today, when lowest price, technically acceptable typically beats out best value (though recent legislation directs more limited use of LPTA procurements), contractors often estimate their cost to fit the price they want to bid and what they think the government is willing to pay. Instead, you should be focusing on the actual cost required to address the government’s mission-stated requirements.

Even though you may know that the “price to win” is too low to perform the work adequately, the proposal development organization might not want to deviate from that winning number.

To avoid bidding on unprofitable work, you should develop a comprehensive estimating manual and system so that your estimated costs are based on real costs/prices currently in the marketplace. As part of this, build and encourage a corporate culture that incentivizes employees for more profitable work as opposed to contract wins exclusively.

As no contract is termination proof, the key is to always be prepared and have a defense strategy in place at all times.”

About the Authors

Darrell Hineman is the director of the government compliance group at the accounting, tax and advisory firm CohnReznick LLP. https://www.cohnreznick.com/industries/government-contracting

Brian Courtney is a senior manager at the accounting, tax and advisory firm CohnReznick LLP. https://www.cohnreznick.com/industries/government-contracting

https://washingtontechnology.com/articles/2017/06/09/insights-contractor-termination.aspx

 

For more information on the types of contract terminations, preparing for them and managing them, please see the article linked below:

http://www.smalltofeds.com/2011/08/federal-government-contract.html

U.S. Army Is Growing By Thousands of Soldiers

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ALLIED SPIRIT V

(Photo Credit: Markus Rauchenberger/Army)

“ARMY TIMES”

“The Army has used a suite of force-shaping measures and incentives to retain and recruit enough soldiers to bring the force back to over a million.

[Measures] including five-figure enlistment and retention bonuses, as well as major opportunities for National Guard and Army Reserve soldiers to go active.

The Army is on track to reach its end strength goal of 1,018,000 soldiers by the end of September, and that will mean enough manpower to fill holes in existing combat units, save some units from planned deactivations, and man some new ones.

Units throughout the Army will feel the benefit of adding 28,000 troops to the active and reserve components, according to a Thursday release from the Army, reversing a drawdown that had planned for just 980,000 soldiers this year.

“These force structure gains facilitated by the FY17 end strength increase have begun, but some will take several years to achieve full operational capability,” said Brig. Gen. Brian J. Mennes, director of the Force Management Division, in the release. “Implementation of these decisions, without sacrificing readiness or modernization, is dependent upon receiving future appropriations commensurate with the authorized end strength.”

The Army has used a suite of force-shaping measures and incentives to retain and recruit enough soldiers to bring the force back to over a million, including five-figure enlistment and retention bonuses, as well as major opportunities for National Guard and Army Reserve soldiers to go active.

In addition to filling existing manning gaps in brigade combat teams, the release said, the plus-up will save several units that were slated for deactivation. They are:

  • 4th Infantry Brigade Combat Team (Airborne), 25th Infantry Division, based Joint Base Elmendorf-Richardson, Alaska.
  • 18th Military Police Brigade Headquarters based in Grafenwoehr, Germany.
  • 206th Military Intelligence Battalion at Fort Hood, Texas.
  • 61st Maintenance Company at Camp Stanley, South Korea.
  • 2nd Combat Aviation Brigade at Camp Red Cloud, South Korea.

Soldiers retained during the end strength build up also could end up joining the recently announced Security Force Assistance Brigades and their training school, as well as an aviation training brigade at Fort Hood.

More soldiers will also help with the Army’s increased manning in Europe.

The Army is planning to station the following units overseas, according to the release.

  • A field artillery brigade headquarters with an organic brigade support battalion headquarters, a signal company and a Multiple Launch Rocket System battalion (MLRS).
  • Two MLRS battalions with two forward support companies.
  • A short range air defense battalion.
  • A theater movement control element.
  • A petroleum support company.
  • An ammunition platoon.

Further, the Army plans to convert an infantry brigade to an armored brigade and add 1,300 new staff to Training and Doctrine Command, in an attempt to increase training and recruiting capacity, the release said.

“The end strength increase will augment deploying units, and units on high readiness status, with additional soldiers to increase Army readiness and enable us to continue to protect the nation,” Mennes said.”

https://www.armytimes.com/articles/the-army-is-growing-by-thousands-of-soldiers-heres-where-theyre-going-to-go

 

 

The US Military’s Iran Connection?

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Military and IRAN

(Photo: KGL Logistics logo, Iran rials by Serova / Flickr)

“THE PROJECT ON GOVERNMENT OVERSIGHT”

“The chairman of a key US military contractor in the Middle East was recently charged with multiple felonies in a major fraud, money laundering, and public corruption scheme.

Fraud and money laundering charges are only the latest in a string of KGL controversies in recent years.

There have been accusations of business ties to Iran in violation of US sanctions, and of systematic leaking of sealed and privileged federal court documents and other sensitive material to KGL’s Washington lawyers by the Defense Logistics Agency (DLA), the DoD component that oversees KGL’s US military contracts.

According to court papers in Kuwait, where the charges were filed, misappropriated investor money so far totals more than $160 million, a figure that could go higher, the Project On Government Oversight (POGO) has learned. The contractor, Kuwait and Gulf Link Transport, better known as KGL, is a publicly traded conglomerate with hundreds of millions of dollars in US military contracts. The criminal charges, together with other court documents and unreported revelations made by former executives of a KGL affiliate in a US lawsuit, involve KGL’s possible violation of US sanctions against Iran, and accusations of potentially illicit flows of cash from Russia, Iran, and Syria. Taken together, the allegations raise troubling questions about the American military’s heavy reliance on the firm.

The 2017 criminal indictment by Kuwaiti prosecutors points specifically to a KGL affiliate, called KGL Investments (KGLI), as the alleged nexus of fraud and money laundering inside company headquarters from 2007 to 2015.

Two former KGLI executives have also made related allegations in little-noticed 2013 sworn statements filed in a US lawsuit. One executive said he was told by his KGLI boss that Iran’s state-owned shipping company, sanctioned by the United States in 2008 as a nuclear proliferator, was “KGL’s vehicle to Iran and she further told me that…[it] made a lot of money for KGL.”

The executive also said, “Specifically, it appeared to me that KGLI was engaged in money laundering, and presenting false financial information to investors.”

A spokesperson for KGL told POGO that, “Notwithstanding the name, KGL Investments is neither owned nor controlled by any of the KGL group of companies. No KGL entity is a party to the legal proceedings in Kuwait. The Kuwait courts will address and resolve the disputed allegations.” KGL has long denied it has ever violated US sanctions in any way.

However, KGL Investments, KGL, and many of its subsidiaries are co-located in the same office building and directed, in part, by KGL’s just-indicted chairman, who is also a director of KGLI, according to court papers. The indictment says that a portion of the embezzled funds was channeled to KGL component companies.

Also targeted in the criminal complaint against KGL’s chairman is the Vice-Chairman of KGLI. Convictions could result in jail sentences. Court documents list victims of the alleged fraud as key government departments: Kuwait’s Public Institution for Social Security and its Ports Authority. The Ports Authority serves as a staging area for America’s ongoing military involvement in Iraq, and was indispensable to US Central Command (CENTCOM) in both the first and second Gulf Wars and occupation of Iraq.

According to an official in Kuwait, senior US military personnel at the American embassy and at Camp Arifjan, a large American base in Kuwait, were officially informed of the criminal indictment, and received written copies of the details. This was done, the official said, because the indictment targets executives related to a major US military contractor, allegedly involved in stealing from important Kuwaiti institutions. In a separate dispute, the Ports Authority recently banned KGL from operating in the port. It remained unclear what action, if any, the US military might take in response. Spokespersons at CENTCOM, the Department of Defense, and the US Army’s Contracting Command all declined to comment.

What Happens Next?

Further revelations about KGL or its subsidiaries, or a conviction of one or both of the indicted executives, could call into question the conglomerate’s grip on sizable US military contracts, and its eligibility to receive future awards. Beyond the large contracts it already has, KGL is currently in line for a sizable share of the new so-called Heavy Lift VIII (HL8), a $200 million transportation-services deal that the US military could assign by August. But there is the possibility the award could run afoul of federal contracting rules, which require ethical conduct and the avoidance of serious crimes.

According to contracting rules, officially known as the Federal Acquisition Regulation (FAR): “Purchases shall be made from, and contracts shall be awarded to, responsible prospective contractors only.” The FAR goes on to specify that, “… To be determined responsible, a prospective contractor must … have a satisfactory record of integrity and business ethics.” The regulation notes that contractors may be subject to debarment, suspension, or ineligibility if they are convicted or face a civil judgment for fraud, embezzlement, or “any other offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a Government contractor or subcontractor.”

In December, the Iran Sanctions Act was extended by 10 years on a 99-0 vote in the Senate, and a 419-1 vote in the House of Representations. The law states that the federal government “shall terminate a contract with such person or debar or suspend such person from eligibility for Federal contracts for a period of not less than 2 years” if they are found to have falsely certified to be in compliance with US sanctions against Iran.

KGL has repeatedly said it complied with provisions of the FAR.

A Hearing in Court

The criminal charges against KGL executives are the result of a four-year probe by Kuwait’s national security police. A court hearing on the matter in Kuwait was held on May 21, and another is scheduled for June 11. Among other records, POGO obtained a 21-page copy of a charge sheet dated May 9, 2017 (in Arabic).

The document names three defendants. Saed Dashti, 61, is chairman of KGL. Maria [Marsha] Lazareva, 44, is Vice-Chairman and Managing Director of KGLI, where Saed Dashti also serves as a director. A third defendant, Mohamed Al-Asfour, 71, is a senior public official: the executive vice-chairman of Kuwait’s Ports Authority.

Documents describe Lazareva as a Russian national. She was educated at the Wharton business school and public records associate her with real estate ownership in the Philadelphia area. According to news accounts, she showed up in court for the May 21 hearing, protesting her innocence.

The indictment says Dashti and Lazareva transferred large sums of investors’ money to their own private accounts and to a variety of KGL subsidiaries or related companies between 2007 and 2015. They did this, court documents say, partly using a network of financial institutions including the Hong Kong and Shanghai Banking Corporation (HSBC) and one of its branches in the Cayman Islands. The bank also has branches in the United States, Kuwait, Asia, and other parts of the world. It’s unclear whether any of the allegedly embezzled funds passed at some point through the American financial system, which could trigger a US investigation.

A civil lawsuit involving KGL in Pennsylvania has brought to light accusations that could bear directly on the alleged fraud and money laundering scheme in Kuwait. The lawsuit, brought by KGL, charges the firm’s principal competitor, Agility Public Warehousing Co., with defaming KGL’s reputation by falsely claiming it had ties to Iran.

Saed Dashti and Marsha Lazareva

Saed Dashti and Marsha Lazareva (Source: Instagram)

 

Testimony in the Pennsylvania case—which is ongoing—includes declarations sworn in 2013 by a pair of former executives of KGL Investments, as part of Agility’s defense. Both said Dashti and Lazareva misinformed investors about KGLI’s financial condition, and one of the executives reported they had made repeated trips to Russia, Iran, and Syria in an apparent attempt to shore up KGLI’s faltering finances.

The two former KGLI executives testified that Dashti and Lazareva occupied offices on the same floors and hallways at KGL’s headquarters in Kuwait along with other subsidiaries.

One of the executives who testified, Ahmed Mabrouk, is an American citizen currently employed in the US financial industry. Court records identify him as former KGLI Vice-President Investments, a job where he testified he spent 18 months in 2008 and 2009 (a period covered by the 2017 criminal indictment) helping to analyze KGLI’s so-called “Port Fund,” an entity that invested in marine facilities around the Middle East and elsewhere. Under oath, Mabrouk said:

“Ms. Lazareva described to me the Islamic Republic of Iran Shipping Lines (IRISL) as KGL’s vehicle to Iran and she further told me that IRISL made a lot of money for KGL. When I was employed at KGLI, I observed Ms. Lazareva in her office reviewing documents related to IRISL, which bore the logo of IRISL, as well as the Iranian emblem.”

The declaration of Mabrouk, who could not be reached for comment, did not include documentary or other evidence to support his statement.

The United States, European Union (EU), and United Nations (UN) have all imposed sanctions on IRISL, Iran’s state-owned shipping company and a former joint-venture partner with KGL. Referring to US sanctions, applied in 2008, then-Treasury Under Secretary for Terrorism and Financial Intelligence Stuart Levey explained:

“Not only does IRISL facilitate the transport of cargo for U.N. designated proliferators, it also falsifies documents and uses deceptive schemes to shroud its involvement in illicit commerce. IRISL’s actions are part of a broader pattern of deception and fabrication that Iran uses to advance its nuclear and missile programs.”

In his declaration, Mabrouk said, “I reviewed KGLI’s internal financial statements and observed that KGLI consistently had a negative cash flow.” Mabrouk also testified that he looked at “…financial statements that had been provided to investors. The financial statements provided to investors consistently, and in bad faith, misrepresented financial data regarding KGLI and its portfolio companies’ actual financial condition.”

Concern about KGLI’s financial condition, according to Mabrouk, caused KGLI’s banks to stop lending it money, creating a cash squeeze. And that led to “fundraising” trips by Dashti and Lazareva, he said:

“I understood that Ms. Lazareva and Saeeed (sic) Dashti took a number of trips on private planes to, among other places, Iran, Syria and Russia. Following each trip, I observed in KGLI’s internal financial statements an influx of funds into KGLI’s accounts. Ms. Lazareva told me and others at KGLI that these trips were for ‘fundraising;’ however, to my knowledge, such fundraising was not tied to any formalized investment process.”

Mabrouk did not say what, if anything, KGL Investments did in exchange for the money it allegedly received, or that he knew specifically that inflows had come from Iran, Syria, and Russia, even though he said the pair had travelled there.

Mabrouk did specify that Lazareva at one point asked him to travel to Syria to “review a potential investment in a port,” but he refused because that country was under US sanctions. Because Mabrouk also holds an Egyptian passport, he said Lazareva told him to use that travel document instead of an American passport. When he refused a second time, it set off a chain of events which, he said, led to his departure from the company.

Another KGLI executive also offered testimony in the same Pennsylvania court case. Wael Salam, an American citizen who worked for KGLI both in Kuwait and in Atlanta, said he was the firm’s Chief Investment Officer. He said both Dashti and Lazareva were directly and deeply involved in decision-making at the firm. He also reported that KGL funded KGLI with money from its subsidiaries as well as seeking contributions from outside investors.

Salam said that, from his perspective as an insider at the company, making profits did not appear to be KGLI’s principal goal, at least given its decision to sink its money and assets from its “Port Fund” into a variety of failing or near-bankrupt facilities in Egypt, Pakistan, and other countries.

Four years before the criminal indictments in Kuwait, Salam testified that he wanted to leave KGLI “…because I believed it was engaging in illicit activities … Specifically, it appeared to me that KGLI was engaged in money laundering, and presenting false financial information to investors.” His statements also show that Salam was trying to raise money to start his own investment fund after he left KGLI, which the company cited as one of the grounds for his dismissal. He could not be reached for comment.

Salam said Lazareva asked him on multiple occasions to visit Iran, sometimes without explanation and at other times to evaluate a port investment. When he refused because Iran was under US sanctions, she suggested that he, too, use his Egyptian passport. He again refused to go and, following a series of disputes and alleged high-pressure tactics by the company, was fired.

A KGL representative declined to comment to POGO on the testimony of Mabrouk or Salam.

More Ties to Iran

The Pennsylvania court case recently provided additional information about KGL’s relationship with Iran, a controversy that stretches back into the Obama Administration. As evidence emerged indicating possible sanctions violations by KGL in its joint ownership of ships with IRISL, Ashton Carter, then Under Secretary of Defense for Acquisition, Technology and Logistics and later Secretary of Defense, wrote to US lawmakers who had inquired about the situation.

In letters to Senators Claire McCaskill, Robert Menendez, Mark Kirk, Robert Bennett, and others in 2011, Carter wrote that DoD could find “no substantial information” that KGL had continuing ties to Iran that would prevent it from holding US military contracts. By that time, the company had publicly announced its decision to end all business dealings with Iran in compliance with US law.

Since then, however, as part of legal discovery in the Pennsylvania court case, KGL has divulged emails and documents, and offered testimony from one of its former executives that appear to show it did have business with IRISL—at a time when Under Secretary Carter was telling Congress just the opposite. At least that is the argument set forth in an extensively documented summary of KGL’s own internal records filed by KGL’s adversary in the Pennsylvania case. Among other things, the summary cites those KGL records showing that its joint venture with IRISL made “at least 63 financial transactions” with the Iranian shipper after US sanctions had been imposed. In another example from the summary, a former KGL executive, Allan Rosenberg, gave the court a statement describing how he set up a “ghost structure” email system that resulted in the concealment of KGL’s continuing business with the Iranian-owned company.

A KGL spokesperson declined to comment on the summary or on Rosenberg’s statement.

Airplane Parts for Iran?

In May last year, Fuad Dashti, a brother of the recently indicted Saed Dashti—both members of the wealthy Kuwaiti family that controls KGL—was arrested at San Francisco International Airport. He was charged with involvement in illegally selling aircraft parts to Iran, according to a senior US official, and brought to Washington, DC, apparently for questioning by the FBI. One official at the time described him as, “singing like a bird” while in US custody. Fuad Dashti has since been allowed to leave the United States and was photographed some months ago in Doha, Qatar. At the time of his arrest, a KGL spokesman told POGO that “the alleged conduct [of Fuad Dashti] does not involve KGL or any of its affiliates and that Mr. Fuad Dashti was not acting as a KGL employee or representative.”

However, Fuad Dashti maintains ongoing financial ties to KGL, and has been listed as a top executive and part owner of National Cleaning Company, which is partly owned by KGL. According to the recent indictment in Kuwait, Saed Dashti also owns a share of National Cleaning, though it is unclear whether misappropriated funds were diverted to the company. There was no reply to POGO’s repeated attempts to reach Fuad Dashti, including a message left at a California house where he is listed as owner.

Key Questions Remain

The criminal indictment of KGL’s chairman adds to a growing roster of unresolved issues swirling around the company and its role as a contractor with hundreds of millions of dollars in business with the US military. Questions surrounding the company’s possible financial ties to Iran, and even Syria and Russia, raise national security concerns at a time when those countries are actively engaged in confronting American interests.

America’s federal acquisition regulations require ethical conduct from companies and their leaders. The large body of evidence in Kuwait’s extensively documented fraud and money laundering case raises doubts whether that requirement is being met.

So, too, does the arrest of Fuad Dashti, long a key figure in KGL’s controlling dynasty, on charges of commercial dealings with Iran. Yet the US government has made virtually no public statements about the matter. The fact that KGL, as long ago as 2011 and perhaps earlier, has been the focus of a probe led by the FBI into its ties with Iran only adds to the doubts. Again, no result of that investigation has ever been made public. And the same is true of the US official response to a well-documented pattern of leaks to KGL’s Washington lawyers by the Defense Logistics Agency. Senior US officials have told POGO that the DoD’s Office of General Counsel and its Defense Criminal Investigative Service have looked at or been made aware of the matter. Yet neither has made a public statement about the issues.

Indeed, years of requests for information about KGL from agencies ranging from DoD to the Treasury’s Office of Foreign Assets Control have been met with incomplete answers and, on occasion, with apparently inaccurate information. Given that result, Congress needs to clear up what is going on with KGL and its huge government contracts, because federal agencies appear unable or unwilling to shed light on the issue, or credibly resolve it.

Given the new criminal charges lodged against KGL’s chairman, the American public needs to know whether the company is a responsible and deserving recipient of US taxpayer funds. To find out, Congress should look into what the FBI and other agencies have learned after years of investigating the company’s conduct, and inform the public of what it learns.

Of course KGL is not the only logistics contractor the US military could rely on. Its principal competitor, and one of the largest single US contractors in the Iraq war, is Agility Public Warehousing Company. Yet Agility, too, has faced its share legal problems: the Department of Justice recently settled criminal, civil, and administrative charges against it. In the criminal case, which began in 2009, DOJ sought hundreds of millions of dollars in compensation for alleged overcharging.  In the end, Agility was only required to “pay a maximum of $551…in restitution.” In the civil case, the company agreed to pay $95 million, ending its suspension and allowing it to bid once again on US government contracts.

Taken together, Agility’s recently resolved legal problems and the new criminal charges against KGL’s chairman highlight the need for Congress and the Defense Department to reevaluate a contracting framework that has made America’s military the captive of two giant companies in one of the most strategic parts of the globe, an area where US forces cannot operate without extensive logistical support. As an alternative to this dysfunctional system, Congress and the Defense Department should examine how to foster more competition by explicitly encouraging the Pentagon to make deals with a wider variety of market participants.”

http://www.pogo.org/our-work/articles/2017/us-top-militarys-iran-contracting.html

 

National Geospatial Intelligence Agency (NGA) To Offer Data to Industry for Partnerships

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NGA Federal News Radio

NGA Headquarters – Image:  “Federal News Radio”

“BREAKING DEFENSE”

“The idea: offer companies chunks of the “wonderland” of unclassified NGA data so they can use them to build new products or to test algorithms key to their products.

It’s a bold and rare move by a large and largely secretive government agency.

The top two leaders of the National Geospatial Intelligence Agency, Robert Cardillo and Susan Gordon, met with Anthony Vinci, now NGA’s director of plans and programs, to discuss ways to get more value from the agency’s incredibly valuable pools of data.

Using The Economist‘s description of data as the oil of today — the most valuable commodity in our economy — Vinci argued the agency must deploy it and help pay the American people back for the investment they have made in building the agency. If data is the new oil, Vinci said companies should “turn it into plastic,” adding value.

Cardillo told reporters would NGA would create a B corporation — in effect a non-profit government company — and hire an outsider to run it.

This, I think it’s fair to say, is not a slam dunk. Culturally, it will be challenging, Vinci admitted. “It’s straightforward, but it sort of breaks every rule we have in the IC (Intelligence Community).” The IC doesn’t share data and it doesn’t partner with outsiders, except for allied and friendly governments when needed.

This process may sidestep the whole process of generating a requirement for an intelligence system. “I don’t think that’s how problems can be solved any more,” Vinci said. The current system, which can be circumvented if an urgent need exists, is generally slow and restrictive, one that the Pentagon and the IC are increasingly trying to amend.

I spoke with three senior industry officials who listened to Vinci’s presentation and they were hopeful but cautious. All three said they thought the new effort could yield unexpected and useful returns on taxpayer’s investments in the data.

The biggest obstacle may be Congress. Although NGA would not be making money from the data sharing and it would not be releasing any data that could help our enemies, they would be sharing a government resource which voting taxpayers paid for and over which lawmakers have oversight. Whether the products resulting from the data would be licensed back to NGA, or allowed to generate profits for companies is all still to be determined.

“That’s part of what were trying to figure out Vinci told me,: “taxpayers paid for this data and how can we get that value back to them.”

http://breakingdefense.com/2017/06/nga-to-offer-data-to-industry-for-partnerships/

 

Big Industry Winners in the Saudi Weapons Offer

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SAUDI-DEFENCE

(Photo Credit: FAYEZ NURELDINE/AFP/Getty Images)

“DEFENSE NEWS”

“The big winner, at least on the platform side, is Lockheed Martin, with an estimated $29.1 billion in potential sales.

That includes seven THAAD missile defense batteries ($13.5 billion), and three KC-130J and 20 C-130J aircraft ($5.8 billion), as well as four multi-mission surface combatant ships ($6 billion)

Now that details of the $110 billion arms package offered to Saudi Arabia are known, Lockheed Martin appears to be the clear winner among American defense firms.

First, a caveat: Defense News broke the details of the roughly $84 billion in unknown weapons offerings that President Donald Trump brought with him on a May 20 visit to the Kingdom. But by the nature of how foreign military sales are completed, dollar totals are best-guess estimations and likely represent the ceiling for what could be spent. The figures listed may well come down, and the timeframes listed may well change, based on final negotiations around the equipment.

the company’s Sikorsky arm also benefited, with two types of Black Hawk variants: 14 MH-60R Seahawk rotorcraft ($2 billion) and 30 UH-60 rescue helicopters ($1.8 billion). That could potentially grow. A statement from Lockheed, released after the visit to Saudi Arabia, claimed that a deal was being reached with Saudi company Taqnia to “support final assembly and completion of an estimated 150 S-70 Black Hawk utility helicopters for the Saudi government.”

A few other companies also fared well.

Boeing cashed in with an eight-year sustainment deal ($6.25 billion) for their F-15 aircraft, along with a relatively small $20 million deal to run a study on recapitalizing Saudi’s older fleet of F-15 C/D aircraft.

Raytheon’s big win came from an unknown type of enhancement for the Patriot missile system ($6.65 billion). BAE, meanwhile, hopes to bring in $3.7 billion worth of work on its Bradley vehicle, with a pair of contracts – one to modify 400 existing vehicles, and another to produce 213 new ones. (The company may also cash out on an order for 180 Howitzers, worth $1.5 billion.)

There is also a $2 billion order for an unknown number of Mk-VI patrol boats, produced by SAFE Boats International.

The previously unreported list includes roughly 104,000 air to surface weapons, including 27,000 GBU-38 designs ($1.24 billion, Boeing), 9,000 GBU-31v3 designs ($690 million, Boeing), 9,000 GBU-31v1 designs ($490 million, Boeing), 50,000 GBU-12 designs ($1.67 billion, Lockheed and Raytheon) and 9,000 GBU-10 designs ($370 million, Lockheed and Raytheon.)

Known unknowns
But there is a chance for more growth, based on a set of unspecified aircraft and satellite programs. The list includes $2 billion for a light air support aircraft, type and quantity to be decided later. It also includes another $2 billion for four new aircraft to replace the Kingdom’s Tactical Airborne Surveillance System, which serves a similar role to the U.S. Air Force JSTARS.

The light air support seems to have a fairly small list of options: either Textron with it’s AT-6 (or, perhaps, its Scorpion jet, still in search of a first customer) or the Embraer/Sierra Nevada team’s A-29 Super Tucano. Both the UAE and Jordan have ordered the A-29, so buying the Super Tucano would give the Kingdom commonality with two of its closest allies.

The wildcard may be the U.S. Air Force’s OA-X experiment, which is holding a flyoff between the Scorpion, AT-6 and A-29 this summer. In theory, the Air Force is looking at replacing the A-10 with one of the three planes, but the service has been careful to stress this summer’s action is more of a fact-finding exercise than a downselect. At the same time, if the USAF shows a preference for one of the jets, the Saudis may look in the same direction.

As to the TASS replacement, the first question is whether the Saudis look to glom onto the JSTARS recapitalization, which should be awarded sometime in fiscal year 2018. If so, Boeing, a Northrop Grumman/L-3/General Dynamics team and a Lockheed Martin/ Bombardier team would benefit here.

However, the TASS and JSTARS setups are somewhat different, and it may be the Saudis would look for a custom solution.

Meanwhile, the Kingdom has been offered a clutch of satellites, with as-yet-unknown designs: two “Remote Sensing Satellites” estimated at $800 million and two satellite communications & space based early warning systems estimated at $4 billion.

Given the focus on missile defense, the space based early warning systems could well be a derivative of Lockheed’s Space Based Infrared System (SBIRS) missile defense satellite. If so, the U.S. may be able to seek an arrangement with the Kingdom on information sharing, which would widen the overall capability of the missile tracking system.

How quickly these contracts can be pushed through the system is an open question. Roman Schweizer, an analyst with Cowen Washington Research Group, wrote in a note to investors Friday that “precision munitions and missile defense remain top priorities for the Kingdom.”

“We think the elements of the package will probably go through as individual items, which could reduce opposition. We think some of the more easily defined items that have been either sold to Saudi before or to other countries could proceed quickly (such as THAAD, Patriot, precision munitions, helicopters, F-15, C-130Js, etc.),” he wrote.”

Army Colonel, Wife and Defense Contractor Accused – $20 Million Bribery and Kickback Scheme

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Gavel and law books

(Photo Credit: BrianAJackson/Getty Images via iStockphoto)

“ARMY TIMES”
“Col. Anthony Roper conspired with his wife and others to seek and accept bribes in exchange for rigging more than $20 million in Army contracts to individuals and companies, prosecutors said Thursday.

The scheme began in 2008 and lasted nearly a decade, prosecutors said.

Roper was stationed at Fort Gordon near Augusta, Georgia. His duties included oversight of the Army’s efforts to build and modernize its information and communication networks, an indictment said.

Roper, 55, is charged with conspiracy, bribery, obstruction and making false statements. He faces up to 85 years in prison if convicted.

The colonel’s wife, Audra Roper, 49, is charged with conspiracy, false statements and obstruction.
Dwayne Oswald Fulton, 58, is charged with conspiracy and obstruction. Fulton was an officer for “a large defense contracting company.” The firm is not named in the court records.

Audra Roper operated Quadar Group, which prosecutors said was a shell company used to funnel bribe payments to her husband, the indictment states. It was one of multiple shell companies used to defraud the government, prosecutors said.

Court records filed this week do not list any attorneys for the defendants.

A spokesman at Fort Gordon did not immediately respond Thursday.”

Meet NASA’s 2017 Astronaut Candidate Class

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Next Astronauts

(Photo Credit: Robert Markowitz/NASA)

“MILITARY TIMES”

“Seven of the 12 men and women who made it into NASA’s 2017 astronaut candidate class are members of the military.

Competition is tough, and of the thousands of applications received, only a few are chosen for the intensive astronaut candidate training program.

The astronaut candidates, whose names were announced Wednesday, will report in August for a two-year preparation program at the Johnson Space Center in Houston.

NASA selects its astronauts from a diverse pool of applicants with a wide variety of backgrounds, according to its website. Including the “Original Seven,” only 338 astronauts have been selected since 1959.

Here are the seven military men and women in this year’s candidate class.

Navy Lt. Cmdr. Matthew Dominick

Matthew Dominick

Matthew Dominick has been selected by NASA to join the 2017 Astronaut Candidate Class. He will report for duty in August 2017.Photo Credit: Mark Garcia/NASA
Dominick grew up in Wheat Ridge, Colorado, and graduated with a degree in electrical engineering from the University of San Diego. He commissioned through the Reserve Officer Training Corps immediately after graduation.

He was deployed twice to the North Arabian Sea as a Naval fighter pilot before attending the Naval Postgraduate School and the U.S. Naval Test Pilot School Co-Operative Program. He served as a developmental flight test project officer from 2013 to 2016. He then returned to active duty and was a lieutenant commander on the USS Ronald Reagan when he received word of his selection to the astronaut candidate class.

He’s flown more than 1,600 flight hours in 61 combat missions.

Army Maj. Frank Rubio

Frank Rubio

Dr. Frank Rubio has been selected by NASA to join the 2017 Astronaut Candidate Class. He will report for duty in August 2017.Photo Credit: Mark Garcia/NASA
Born in Los Angeles but raised in Miami, Rubio graduated from the United States Military Academy with a degree in international relations. He has a Doctorate of Medicine from the Uniformed Services University of the Health Sciences in Bethesda, Maryland. During his time in the Army, Rubio served as a platoon leader, a company commander, an executive medicine provider and a flight surgeon.

Rubio was a battalion surgeon for 3rd Battalion, 10th Special Forces Group when he was selected by NASA.

Former Navy SEAL Jonny Kim

Jonny Kim

Dr. Jonny Kim has been selected by NASA to join the 2017 Astronaut Candidate Class. He will report for duty in August 2017.Photo Credit: Mark Garcia/NASA
Kim was born and raised in Los Angeles. He served as a special warfare operator on SEAL Team Three in San Diego. He was a combat medic, sniper, navigator and point man on more than 100 combat missions during two deployments to the Middle East. He later was commissioned into the medical corps through the Naval Reserve Officers Training Corps.

During his time as a SEAL, Kim earned the Silver Star, the nation’s third-highest award for valor, and the Bronze Star with “V” device, among other awards.

When he was selected by NASA, Kim was a resident physician in emergency medicine with Partners Healthcare at Massachusetts General Hospital.

Air Force Lt. Col. Raja Chari

Raja Chari

Raja Chari has been selected by NASA to join the 2017 Astronaut Candidate Class. He will report for duty in August 2017.Photo Credit: Mark Garcia/NASA
Chari, of Cedar Falls, Iowa, graduated from the Air Force Academy with degrees in astronautical engineering and engineering science. He also has a master’s degree in aeronautics and astronautics from the Massachusetts Institute of Technology.

He has more than 2,000 hours of flight time in the F-35, F-15, F-16 and F-18, including F-15E combat missions in Iraq and deployments to the Korean Peninsula.

Prior to being selected to the astronaut candidate class, Chari was the commander of the 461st Flight Test Squadron and the director of the F-35 Integrated Test Force. He also had been selected for promotion to colonel.

Marine Corps Maj. Jasmin Moghbeli

Jasmin Moghbeli

Jasmin Moghbeli has been selected by NASA to join the 2017 Astronaut Candidate Class. She will report for duty in August 2017.Photo Credit: Mark Garcia/NASA
Moghbeli was born in Germany but grew up in Baldwin, New York. She graduated from the Massachusetts Institute of Technology with a degree in aerospace engineering and earned a master’s degree in aerospace engineering from the Naval Postgraduate School.

Moghbeli was testing H-1 helicopters and serving as the quality assurance and avionics officer for Marine Operational Test and Evaluation Squadron 1 in Yuma, Arizona, when she was selected by NASA.

Air Force Reserve Lt. Col. Bob Hines

Bob Hines

Bob Hines has been selected by NASA to join the 2017 Astronaut Candidate Class. He will report for duty in August 2017.Photo Credit: Mark Garcia/NASA
Hines grew up in Harrisburg, Pennsylvania. and graduated with a degree in aerospace engineering from Boston University. He received his commission from Air Force Officer Training School in 1999 and has been deployed to the Middle East and Europe numerous times as a pilot.

Hines has served as a flight test pilot at Eglin Air Force Base, Florida, and the Naval Air Station Joint Reserve Base in Fort Worth, Texas. During his time at Eglin, Hines was an F-15C/D/E experimental test pilot and was selected to fly the U-28 on an overseas deployment in support of special operations troops.

He transitioned to the Air Force Reserve in 2011, serving in Texas as a flight test pilot for the Federal Aviation Administration. He later moved to NASA’s Johnson Space Center.

When he was selected for astronaut candidate class, Hines was working as a research pilot for the aircraft operations division of the Flight Operations Directorate at the Johnson Space Center. He also was the Air Force Reserve’s F-15E program test director and test pilot at the F-15 Operational Flight Program Combined Test Force at Eglin Air Force Base.

Navy Lt. Kayla Barron

Kayla Barron

Kayla Barron has been selected by NASA to join the 2017 Astronaut Candidate Class. She will report for duty in August 2017.Photo Credit: Mark Garcia/NASA
A native of Richland, Washington, Barron is a 2010 graduate of the U.S. Naval Academy with a degree in systems engineering. She later earned her master’s degree in nuclear engineering at the University of Cambridge in England.

After graduate school, Barron attended the Navy’s nuclear power and submarine officer training before being assigned to the USS Maine, an Ohio-class ballistic missile submarine. As a submarine warfare officer, Barron completed three strategic deterrent patrols.

Barron was serving as the flag aide to the superintendent of the Naval Academy when she was selected by NASA.”

http://www.militarytimes.com/articles/meet-the-seven-military-men-and-women-training-to-be-nasas-next-astronauts