Category Archives: Security

Cyber Tech Firms Need Integrator Partners to Broaden Their Services

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Itegrator Parnter Oracle dot com

Image:  Oracle.com

“WASHINGTON TECHNOLOGY”

“Given the frequency and severity of security intrusions in the public and private sector, cybersecurity companies are now looking for more complete offerings beyond their core capabilities.

By demonstrating an ability to technically integrate with third party vendor products, these companies can show that they are able to more fully meet the needs of Federal government customers.”


“Government agencies are looking for companies that can act as general contractors, but not all companies are system Integrators. Therefore, the goal for many companies is to have the ability to provide a more expansive, holistic offering beyond just their own product portfolio.

That hasn’t traditionally been the case among cybersecurity providers. These companies have typically focused on selling their uniquely specialized products into agencies, which understandably can limit their success in responses to requests for proposals in more comprehensive programs.

For the government in particular, the approach agencies to more easily make decisions on which products to deploy in complex environments.

Let’s look at how some general technical cybersecurity integrations can add benefit to customers:

Multi-Factor Authentication (MFA) – An agency looking to deploy MFA tokens to all their employees will likely need a card management system (CMS) to enroll the certificates stored on the physical tokens. Some companies offer both tokens and a CMS, but particularly when looking for high assurance tokens that were designed with the Federal government in mind, they are unique areas of expertise. Having the ability to vet out, in advance, a working solution that can be jointly offered to a customer simplifies the overall process and allows a customer to more readily select the appropriate vendor.

Storage & Key Mgt Encryption – What’s important here is whether a storage encryption solution can work with a key manager through open standards such as the Key Management Interoperability Protocol (KMIP). This type of interoperability is another way of layering levels of security and creating an overall efficient solution for the customer. It alleviates the challenge of the customer having to validate that the products they purchase will properly integrate in their environments.

Complete offerings – In some cases a company may be missing one element to an overall holistic solution. Among encryption providers, encrypt everything is the Holy Grail. Some come very close to meeting that promise with encryption solutions for web/application servers, databases, file servers, disk encryption, virtual machines, etc. Often, however, what might be missing is the ability to encrypt email and documents. Companies should pool resources to be able to offer that level of encryption and storage with hardware for root key management, to provide an integrated solution for all available data venues.

So after being a bit late to the game on the need to create integrated offerings, cybersecurity firms have come to realize that there is more value to creating a simple means for agencies to ensure their IT security than there is to owning a narrow segment of the market.”

https://washingtontechnology.com/articles/2017/09/29/insights-schatz-cyber-integrator-role.aspx

 

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Harvey, Irma, and Maria: Hurricane Recovery Contract Spending by the Numbers

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Hurricane relief

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“Thanks to the Federal Procurement Data System (FPDS), taxpayers can start keeping a closer watch over some of the billions of dollars the US government is paying contractors to address the aftermath of hurricanes Harvey, Irma, and Maria.

According to the data, as of October 19, the federal government has awarded a total of $1.65 billion for supply and service contracts to aid and rebuild areas damaged by the storms: $794.8 million for Harvey, $368.7 million for Irma, and $492.7 million for Maria.”


“FPDS posts regularly updated spreadsheets containing a wealth of data about relief contracts awarded in response to the three hurricanes that made landfall in the United States and its territories this year: Hurricane Harvey, which pummeled Texas and Louisiana in late August and early September, Hurricane Irma, which cut a destructive swath through Florida in mid-September, and Hurricane Maria, which days later inflicted massive damage on Puerto Rico and the US Virgin Islands.

There are three caveats: First, the data only tracks contracts—not other types of spending, such as grants and assistance to individuals and local governments, or other forms of federal relief aid such as military transport. Second, according to FPDS, the data “represents a portion of the work that has been awarded to date,” due in part to the challenges some contracting offices—particularly those located in disaster recovery areas—are facing as they try to feed timely and accurate contracting data into the system. Third, for military operational security concerns, the availability of Defense Department data is subject to a 90-day delay.

More than three-quarters ($1.3 billion) of the total was awarded under full and open competition. About 94 percent of the total has been spent by the Department of Homeland Security, mainly through the Federal Emergency Management Agency (FEMA) and the US Coast Guard.

FPDS tracks the principal place of performance of the contract, which is defined as “the location of the principal plant or place of business where the items will be produced, supplied from stock, or where the service will be performed.” Hurricane Harvey primarily affected Texas and Louisiana, yet those two states are the principal place of performance for just 3 out of every 10 contract dollars. For Hurricane Irma, Florida is the principal place of performance for about 36 percent of the contract expenditures, while Puerto Rico is the locus of 56 percent of Hurricane Maria contract spending. The US Virgin Islands were battered by both Irma and Maria, but the territory— home to 100,000 US citizens—has been the place of performance for just 2 percent and .09 percent of Irma and Maria contract expenditures, respectively.

The most lucrative contracts so far have been awarded by FEMA to address the immediate needs of the victims of Hurricane Maria. One was a $122 million task order awarded to Disaster Solutions Alliance, a joint venture involving top 100 contractor URS Corporation, “to execute a feeding mission” in Puerto Rico. The other was a $118 million order placed with Florida-based engineering firm Team Systems International to deliver 80 million liters of bottled water to Puerto Rico. The current top hurricane relief contractor is medical transportation company American Medical Response, with $153.8 million in awards.

Contract expenditures for the three hurricanes grew at vastly different rates during the first two weeks, based on our analysis of the data posted at the time. For all three storms, spending increased very little for the first three to four days after landfall. After the fourth day, Harvey contract spending surged and continued to grow rapidly over the next eight days. Irma spending spiked on day six, but then grew very slowly over the following week. We were particularly intrigued by the spending trend for Hurricane Maria. Even though Maria was the last of the three storms—when, presumably, the government was most ready to initiate the recovery effort—the amount spent on relief contracts remained a relative pittance and barely grew at all during the first five days. After the fifth day, contract spending began to grow slowly and then grew sharply after day nine.

As the recovery efforts shift over the coming weeks from providing temporary relief to performing large-scale cleanup and infrastructure rebuilding, Harvey/Irma/Maria contract spending will grow exponentially. Eventually, it could even eclipse contract spending for both Hurricane Sandy (nearly $3 billion) and Hurricane Katrina (more than $20 billion), which means the risk of fraud and waste will also grow exponentially. In fact, Congress and the FBI are already hot on the trail of suspected mishandling of federal funds and resources flowing into Puerto Rico. Past experience has taught us that corruption related to natural and man-made disasters takes many forms and can take many years to investigate.”

http://www.pogo.org/blog/2017/10/harvey-irma-and-maria-hurricane-recovery-contract-spending-by-the-numbers.html

 

Of Guns At Home, And Guns Abroad

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Box cutters (top) were banned from aircraft after 9/11, and Reapers (bottom) were sent around the world to hunt down terrorists. But homegrown terrorists have easy access to AK-47s (middle). (Photo illustration by Mark Thompson, U.S. ATF, USAF)

“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)” By Mark Thompson

“The gun and terrorism issues show markedly different approaches to vexing problems.

Congress demands the Pentagon hunt down and kill every terrorist—and adds billions to its budget to do just that. But it refuses to lift a (trigger) finger to curb domestic terror like that which occurred Sept. 30 in Las Vegas. These mass firearm murders have become an itch that must be scratched.”


“My father hunted deer with his 30.06 deep in the woods of Maine, and taught me and my brothers how to shoot. I helped teach my two sons to shoot in the wilds of New Hampshire. But when you combine all-but-unrestricted access to near-automatic firearms with suicidal shooters, there needs to be a reckoning.

I embrace the Second Amendment, and I don’t want guns banned. I think I am like most Americans in this regard.

Congress has become increasingly pusillanimous during my nearly 40 years in Washington. Despite talk, they have refused to cut the deficit, reform entitlement programs, or fix the zany tax code. This week, we entered our 17th year of war in Afghanistan without lawmakers declaring war. So why should we expect them to do anything about their constituents slaughtering other constituents?

As a reporter for nearly 50 years, I’m pretty much of a First Amendment absolutist. OK: no shouting “fire” in a crowded theater, but that’s about it. That’s barred because—get this—it could lead to people getting hurt, or maybe even killed, in a stampede. But you can’t mow down innocent people by shouting vile epithets at them from the 32nd floor of a Las Vegas hotel.

Why are my staunch Second Amendment-backer friends so opposed to even the most common-sense measures to curb the gun violence in our midst? Do we really need semi-automatic weapons, huge magazines, suppressors—more commonly known as silencers—or “bump stocks,” a legal firearm option used in the Nevada massacre that all but turns semi-automatic weapons into machine guns?

Walmart and Cabela’s, two of the nation’s leading firearm retailers, apparently stopped selling bump stocks following the massacre. That’s sure to impress 58 families. And Congress hasn’t ruled out doing something about bump stocks. Such courage! Even the National Rifle Association broke its typical silence following such shootings to acknowledge such faux machine-gun devices might warrant restrictions. That’s a tentative, but tiny, step in the right direction.

Believing in the fundamental right to bear arms is a long way from the lust for personal firepower that has grown in this country since I was a kid. Why do so many gun advocates and their NRA allies have such a Pavlovian response to any suggestion that the nation needs to get a handle on this scourge? The notion that additional restrictions will inexorably lead to confiscations or bans is a black-and-white mindset in a gray world.

There are 89 guns in this country for every 100 people (No. 2 is Yemen, currently waging civil war, at 55). But 3 percent of American adults own half those guns (78 percent of Americans don’t own a firearm). Americans also possess an estimated 48 percent of the globe’s 650 million guns in civilian hands (that makes the Pentagon, which accounts for about 37% of global defense spending, look like a relative bargain).

One 2015 accounting noted that all of the nation’s wars killed 1,396,733 Americans…while 1,516,863—9 percent more—have been killed by guns, just since 1968. A Gallup survey earlier this year showed that 55 percent of Americans wanted tougher gun-control laws, with only 10 percent wanting them loosened. But that 10 percent, bolstered by more than $4 million in NRA campaign contributions to congressional candidates since 1998, has given the gun lobby unparalleled clout on Capitol Hill.

That’s led to some bizarre etymological debates. Joseph Lombardo, the Las Vegas sheriff, was asked if Stephen Paddock’s 58 murders were an act terrorism. “No, not at this point,” he said. “We believe it was a local individual.” That suggests the post-9/11 fear-mongering has worked, and that one must be an “other” to be a terrorist. A pathetic man can rake 22,000 people from high up in a nearby hotel, killing 58 and wounding nearly 500 more…and none (in charge) dare call it terrorism?

Some of my anti-gun friends say the Second Amendment was the Founding Fathers’ original sin. No, that’s not right either. A sound and fair Second Amendment makes sense for a nation spawned by those shrugging off the yoke of tyranny by force of arms.

But Second Amendment backers also have to acknowledge that the Founding Fathers had no inkling of modern firearms, and the NRA’s death grip on Congress. If the recent conservative embrace of “originalism” in interpreting the Constitution and its amendments means anything, it means that the Founders were familiar with Brown Bess muskets and Pennsylvania rifles, not AK-47s and the NRA.

The nation rightly goes to great lengths to prevent its men and woman in uniform from dying on the battlefield. U.S. taxpayers spent $50 billion on 25,000 Mine-Resistant, Ambush-Protected vehicles that the Pentagon rushed to the wars in Afghanistan and Iraq, many by air, to shield U.S. troops from $100 roadside bombs. The flip side of that fact is just as critical: we will spend billions—no, make that trillions—to track down a relatively few terrorists no matter where on the globe they’re hiding. We hurl $2.4 billion B-2 bombers and grim MQ-9 Reapers around the world, along with the cream of our young, to find them and wipe them out.

But our federal government won’t do a damn thing to halt homegrown mass murder. Both terrorists and murderers are vile scum, but what accounts for our skewed priorities?

An annual “Survey of American Fears” (is this a great country, or what?) by California’s Chapman University helps put this into perspective. Government corruption ranked #1 (60.6 percent of those surveyed said they were “afraid or very afraid” of it) in 2016. Terrorism was #2, cited by 41 percent, slightly higher than the 38.5 percent who feared “government restrictions on firearms and ammunition.” Interestingly, in light of that concern, “people I love dying” ranked 6th, at 38.1 percent, edging out the 35.5 percent who feared “The Affordable Health Care Act/Obamacare.”

Experts say fears can be irrational because our brains have evolved to make speedy judgments, fueled by emotion, that may have made sense in the past but no longer do. “Our biases reflect the choices that kept our ancestors alive,” neuroscience journalist Maia Szalavitz has written. “But we have yet to evolve similarly effective responses to statistics, media coverage, and fear-mongering politicians.”

Box cutters were turned into blades of mass destruction on Sept. 11, 2001. They were used by 19 Islamic terrorists to hijack four airliners and kill 2,977 innocents. Forty-eight hours later, before post-9/11 flights resumed, the U.S. government barred them from U.S. commercial aircraft.

No one asked that the handy tool be banned elsewhere. In fact, I just bought a nifty ceramic-bladed model to help me slice up all the Amazon boxes that arrive at my house each week. But banning box cutters from commercial air travel was a necessary step in dealing with the violence they enabled.

The same logic needs to apply to guns. Of course tighter restrictions won’t end firearm violence. But few want to abolish the Second Amendment. They just want reasonable, responsible restrictions to curb the carnage. Such limitations, well beyond banning bump stocks, are coming. The only question is how many more will have to die first.”

Photo of Mark Thompson

By: Mark Thompson, National Security Analyst

Mark Thompson writes for the Center for Defense Information at POGO.

http://www.pogo.org/straus/issues/military-industrial-circus/2017/of-guns-at-home-and-guns.html

 

Top DoD Buyer Shifts Programs To The Services

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Adquisition Shift

“BREAKING DEFENSE”

“Revealed today in her first public appearance since her confirmation that she is making fundamental changes in how the Office of Secretary of Defense starts and manages military weapons programs.

These moves could begin a significant shift of power away from the Office of Secretary of Defense to the Army, Navy, Marines and Air Force.”


“Until today, only new major programs were managed by the four services. “I am relooking at the decisions  that have been made on older programs too. We are right in the midst of discussing that. There may well be others that go back and are relegated to the services,” Lord told me. She hasn’t decided yet, she said, how many of the OSD acquisition workforce will migrate to the services to help manage them: “We are actively talking about people moving.”

Breaking D readers know better than about anyone how this all started. Sen. John McCain hired Bill Greenwalt, a top acquisition expert, to change the laws governing Pentagon acquisition. Greenwalt wrote legislation, later passed as part of the 2016 National Defense Authorization Act, that shifted the balance of power from OSD to the services. All new programs, it says, will be managed by the services. Lord’s decision to shift most programs to the services may mean the beginning of the ascendancy of the services in starting and managing weapons programs.

Lord also said she expects to see a 50 percent cut in the time it takes to get a program started, the time it takes the Pentagon to turn a requirement into a Request for Information (RFI) or for Proposal (RFP). “No kidding — we’re going to get there on that,” she told the conference. How exactly she’s going to measure that wasn’t clear. “I know it’s way too long,” she told reporters. “I learned that on the other side.”

Lord also declared that, while she didn’t want to regularly meet with individual CEOs, she did plan to meet individually with the heads of the top six defense primes twice each year. She met yesterday with Phebe Novakovic, General Dynamics‘ CEO. Generally, she said she preferred to work with the defense industry groups, the National Defense Industrial Association (NDIA), the Aerospace Industries Association(AIA), and the Professional Services Council (PSC).

A key driver for her push to speed acquisition is the need for weapons to be useful for multi-domain battle. “We need to be interoperable,” Lord said We have to have all the systems communicate with one another, and they have to share data and we have to be able to mine that data.”

Finally, Lord also told reporters after her talk that “I’m not sure that” a Space Corps— pushed by Rep. Mike Rogers of the House Armed Services Committee –would help improve space acquisition, noting there is “a very healthy debate” underway about it.”

https://breakingdefense.com/2017/10/top-dod-buyer-lord-shifts-programs-to-services/

Inspectors General Community Launches “Oversight.Gov”

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“THE PROJECT ON GOVERNMENT OVERSIGHT (POGO)”

“Oversight.gov, a centralized and searchable database of reports from offices of the inspector general (OIGs) throughout the federal government.

The database makes it easier to find reports on cross-cutting problems across the government.”


“The project is the result of two years of work from the Council of the Inspectors General on Integrity and Efficiency (CIGIE).

Michael Horowitz, the Inspector General (IG) of the Department of Justice and the Chair of CIGIE, elaborates on the goals of the website in a press release, stating that “the public should have easy access to information about their government, and Oversight.gov is a big step in this direction.”

67 OIGs who make their reports public have committed to posting searchable versions of their reports from fiscal years 2015 through 2017 to Oversight.gov. They have also committed to posting all new reports to Oversight.gov whenever they post to their own site moving forward.

The homepage of Oversight.gov has data broken down by fiscal year on the number of reports available, on how many recommendations are in those reports, and on the potential savings identified by IGs. This data automatically updates every time an IG uploads a new report to reflect this new information.

The site also has a “Report Government Fraud, Waste & Abuse” button at the top of every page, which currently links to a list of contact information for all 73 OIGs. CIGIE has hopes of expanding the capacity of this whistleblower assistance functionality by, for example, assigning a full time CIGIE employee to facilitate whistleblower disclosures through the ‘report’ page of the site. However, such plans are contingent on funding.

The Project On Government Oversight has done extensive work to ensure IGs are independent and effective watchdogs, and we believe the introduction of Oversight.gov could serve to help those in the oversight community stay privy to the most recent findings of waste, fraud, and abuse, and to keep IGs accountable.

To keep up with the latest in the IG community, you can check out POGO’s database of vacant IG posts, and follow @OversightGov on Twitter to get live updates whenever new IG reports are available.”

http://www.pogo.org/blog/2017/10/inspectors-general-community-launches-oversight-gov-website.html

 

 

 

Army To Discard $6 Billion (WIN-T) Network Investment And Start Over Without A Plan

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 “DEFENSE NEWS”

“House lawmakers roasted Army officials for abruptly scrapping its acquisition strategy months after submitting its 2018 budget without a well-defined alternative. 

Whether the U.S. Army may shift a half-billion dollars from its ailing network programs and chart a new course will be up for debate as lawmakers reconcile rival House and Senate defense policy bills this month.”


“But several key lawmakers said they are not ready to let the Army reboot from a $6 billion investment without explaining what’s next.

Army officials argue the service lacks the survivable, mobile and hardened tactical network it would need on a modern battlefield. They are asking Congress to end the Mid-Tier Networking Vehicular Radio, the Command Post of the Future and the Warfighter Information Network-Tactical (WIN-T) Increment 2 at the end of fiscal year 2018 to free up money budgeted for the three.

And although at least two key lawmakers said they were supportive — chairmen of the House and Senate armed services committees — they want more information.

“I support them being willing to examine themselves and reverse course if that’s what’s appropriate,” HASC Chairman Mac Thornberry, R-Texas, said of the Army on Oct. 5. “It’s going to be up to them to prove to us that now we are on a better path, that we have learned the lessons.”

Thornberry said Army officials spoke with him in September about making the change.

“They’ll have to lay out their plans to us, but if we can have a path forward in ’18, there’s no reason to wait until ’19.”

The House-passed 2018 National Defense Authorization Act calls for WIN-T to be accelerated, and the Senate-passed version zeroes out the president’s request for WIN-T funding. The White House has defended WIN-T and some other programs the Senate NDAA would cut.

SASC Chairman John McCain, R-Ariz., and Sen. Tom Cotton, R-Ark., grilled Gen. Mark Milley, the Army chief of staff, at a May hearing and accused the Army of wasting $6 billion on WIN-T. That stance actually aids Milley’s aim to reboot Army network plans.

On Sept. 9, McCain met with Milley on Capitol Hill and asked him how he proposes the WIN-T funding be redistributed.

“We told them to send us what they want to do with it, and we will examine it, but we had to act to cut it off,” McCain said of the meeting.

McCain said his support for the Army’s next move “depends on what they want to use it for. WIN-T has been a total failure.”

Proposed changes could be handled as an Army request to reprogram the 2018 funding or as part of the NDAA depending on the timing, McCain said.

The Army envisions scenarios in which it fights a near-peer enemy in contested environments that require small units, operating independently and moving constantly to avoid defeat.

Yet the first increment of WIN-T, while fielded, can only function — transmitting voice, video and data — when a unit is stopped. The WIN-T’s second increment is meant to provide an on-the-move capability, but it has struggled.

The latest annual report from the Pentagon’s office of developmental test and evaluation faults WIN-T’s technical performance, usability and vulnerability to enemy jamming.

At a hearing of the HASC Tactical Air and Land Forces Subcommittee on Sept. 28 to question Army officials over its new plans, Chairman Michael Turner, R-Ohio, expressed deep skepticism the Army would get it right this time.

In a subsequent interview with Defense News, Turner said the goal is to provide new troops technology at least as advanced as what they were had in high school, and not to be eclipsed by adversaries who “have modernized and put at risk our ability to operate.”

“The question is what are we going to do, not just what are we not going to do,” Turner said.

Turner pushed back at the idea WIN-T had been a failure, noting it had been delivered, tested and fielded.

“The issue is not that it’s not working; the issue is: What are our goals and objectives, what are our technology needs, and how do you achieve those?” Turner said, “And the Army’s going to need to have an answer at least in scoping and in implementation, while they explain the nearly $6 billion that’s already been spent.”

https://www.defensenews.com/2017/10/05/lawmakers-if-us-army-ends-6b-in-network-programs-whats-next/

How to Manage Risk for Your Global Business

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Global Business Risk

Image:  STRATFOR

“STRATFOR” By Brett Boyd

“The global economy is a fascinating ecosystem to both study and participate in. 

There are entirely new challenges to be faced and business competencies required to compete and win in today’s economy, many of which have very little to do with the product or service that companies deliver to their customers.”


“The term ‘globalization,’ while important, has an academic connotation that tends to underplay the very real and tactical implications for what it means to operate a business in 2017.

Stratfor has enjoyed a unique vantage point for observing the internationalization of business interests over the past 20 years.  While there have always been international companies — Ford has been selling cars around the world since opening operations in Canada in 1904 and Europe shortly thereafter; ExxonMobil’s predecessor Standard Oil began international operations in China in the 1890s; and investment firms have traded globally for centuries — virtually all companies are now impacted by international events to some extent.  Even companies that only operate domestically in the United States, for example, are influenced by global dynamics to a far greater extent than they were 20 years ago.  Spikes or depressions in non-related commodities prices can cascade into shipping and transportation costs.  Political upheaval in far-away places can impact labor costs for essential subcomponents controlled by suppliers.  Default on large debt instruments by countries in “emerging” markets can impact domestic interest rates and investments.

However, more and more companies are taking the further step to actually operate in these international markets.  This can manifest as selling products in new markets, opening offices to develop international capacity in fields such as software development, or developing supplier, product or distribution relationships.  In some cases, companies’ international exposure is limited to individual travel; in other cases it requires management of buildings, physical infrastructure and supply chains around the world.  The risks associated with each type of operations are different, but all international operations incur some degree of risk. Even Europe, often considered a relatively risk-free region for new investments, has significant political, economic, and security risks that must be understood.

Not all risks associated with international operations are equal.  The degree of risk is determined both by location and activity. International expansion into Nigeria entails different risks than would a similar program in France.  Neither is inherently better or worse, but the political, economic and security risks are different and must be understood and mitigated accordingly. Thoughtful risk management entails a balance between the economic potential of an opportunity and the costs required to mitigate the risks associated with that opportunity.  Companies understand that they get paid for risk, to some extent, and that it is possible to conduct operations anywhere in the world. But there are places where the costs of risk management outweigh the economic potential of the opportunity.

Framework-Based Risk Assessment

Stratfor has helped investors and corporate executives evaluate and manage risks associated with international operations for decades.  We have developed a market-assessment framework to help our clients evaluate international opportunities – whether they are in moderate-risk locations such as Europe or in higher-risk locations around the world.  This framework includes four primary areas of evaluation: political, economic, infrastructure, and security.  In some cases, we will also look at demographics or other factors that impact the attractiveness of an international market for sales or hiring opportunities, but these four areas are at the center of the majority of our risk assessment efforts.

Political.  Political risks involve local political decisions that could affect the viability of an investment or business interest.  These risks can range from broad election-based shifts  in a country’s political direction, to more specific regulatory moves that could adversely affect an industry or type of company.  We have seen organizations who woke up one morning to find that the effective tax rate for their operations in a country doubled, changing the country business unit from an extremely profitable operation to one that was losing money and potentially needed to be divested.  The challenge with political risk is that it needs to be understood on a forward-looking basis, as these risks are better avoided than worked through.  If a company plans to buy a business in Eastern Europe it is helpful to understand the current political environment, but that is only the beginning of a responsible country assessment.  What that company really needs is to understand the most likely political trajectory for that country over the next 10 years. Though this is difficult, and never error-free, it is possible.

Economic.  Companies tend to excel at evaluating specific opportunity risks, but in our experience, are less proficient at evaluating the environmental or macroeconomic conditions that can also impact performance. A company looking to buy a company in Southeast Asia, for example, may completely understand the risks associated with that company – equipment replacement needs, product shortcomings and balance sheet issues, for example.  That same company may miss the fact that the regional food-based commodities economy is under extreme pressure from other actors in the South China Sea, which could lead to significant operational risk that will be outside of their ability to control.  In our experience, although investors are better at evaluating these types of risks, they remain challenging nonetheless.  Economic risks range from currency issues (which are often political), to workforce availability, to the overall economic trajectory of a country and the cascading impact that can have on all companies operating in that market.

Infrastructure.  First-world companies sometimes take for granted the availability of functional infrastructure, especially when considering opportunities in developing economies.  Ports, roads and airports constitute critical supply chain and transportation nodes required for the success of a multinational enterprise.  Healthcare and education systems can be considered important parts of national infrastructure, especially for companies that plan to operate, hire, and sell products in a region for decades. Telecommunications infrastructure is one of the most commonly under-appreciated infrastructure sectors, as gaps in telephone and internet connectivity are often not as obvious as shortcomings in ports and roads.

Security.  Security risks are one of the most obvious areas of concern that companies evaluate, especially when they put people in less-developed “emerging” or “frontier” markets.  Companies tend to inherently understand that there are security risks involved in sending employees to the Middle East, for example.  The complexity comes from the need to do something about it; aside from telling our people not to go, how do we manage risk when we need to send a team member to a high-risk country?  Stratfor evaluates security threats in terms of crime, terrorism, espionage, and business continuity, with the aim of helping our clients implement the right levels of protective measures to allow successful operations anywhere in the world.  Industrial espionage and information security risks are specific areas where we have found that most companies understand that there are risks, but few have appropriate mitigating strategies in place.  Travel to China, for example, is extremely important for many different types of businesses, and there are relatively simple measures companies can put in place to mitigate common information security risks.

Even small companies that send employees overseas only for limited travel to seemingly low-risk places need to understand the environments in which they operate.

While some of the use cases mentioned above may seem tied to large investments, these factors are important for all organizations to understand.  Even small companies that send employees overseas only for limited travel to seemingly low-risk places need to understand the environments in which they operate.  Information and physical security considerations are important for small companies with individual international travelers, just as they are for large companies with significant international business interests.  Financial reward is often correlated in part with risk, and company executives understand that there are times where they need to incur risk in order to realize success.  Risk must be managed in a balanced fashion. Excessive risk aversion can lead to missed opportunities while ignoring risks can lead to disaster.

Companies that can understand and manage risk in a thoughtful, cost-efficient fashion tend to have an advantage over their competitors.  The most successful companies are those that go beyond understanding the present risk environment, and instead assess what it will look like in the next three to five years. This type of thinking facilitates the first-mover advantage, developing business infrastructure and relationships in a country before it becomes obvious that the risk environment there has improved.  Companies that lead in this fashion can be extremely successful, benefiting from the rush of competitors and capital that follow once the market understands that the risk environment has changed.”

ABOUT THE AUTHOR:

Bret Boyd leads Stratfor’s enterprise business, which includes products and advisory services to support executives and fund managers operating in international markets. Prior to Stratfor, Mr. Boyd served in leadership roles at several high-growth companies and as an officer in the U.S. Special Operations Command. Mr. Boyd is a graduate of the U.S. Military Academy at West Point, where he studied international relations and systems engineering.

https://marcom.stratfor.com/horizons/how-manage-risk-your-global-business?utm_campaign=B2C_LL_Push&utm_source=hs_email&utm_medium=email&utm_content=57066641&_hsenc=p2ANqtz-8ZojjZwwtkstMewsmWkP8Ka0Uae7SVA2n4-z5r3EzwIA6p8rT0ZAq2nXraawnflbWG-FqIFKoGgOUilBnJh-YqhSWDDw&_hsmi=57066390

Jimmy Carter: “What I’ve Learned From North Korea’s Leaders”

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Jimmy Carter...In this photo released by China's Xinhua News Age

Image – AP – Former president Jimmy Carter in Pyongyang

“WASHINGTON POST” By Jimmy Carter

“Over more than 20 years, I have spent many hours in discussions with top North Korean officials and private citizens during visits to Pyongyang and to the countryside. I found Kim Il  Sung and other leaders to be both completely rational and dedicated to the preservation of their regime.

The next step should be for the United States to offer to send a high-level delegation to Pyongyang for peace talks or to support an international conference including North and South Korea, the United States and China, at a mutually acceptable site.

The Pyongyang government believes its survival is at stake.  Secretary of State Rex Tillerson’s statement last week that “we have lines of communications to Pyongyang. We’re not in a dark situation” is a good first step to defusing tensions.


“As the world knows, we face the strong possibility of another Korean war, with potentially devastating consequences to the Korean Peninsula, Japan, our outlying territories in the Pacific and perhaps the mainland of the United States. This is the most serious existing threat to world peace, and it is imperative that Pyongyang and Washington find some way to ease the escalating tension and reach a lasting, peaceful agreement.

What the officials have always demanded is direct talks with the United States, leading to a permanent peace treaty to replace the still-prevailing 1953 cease-fire that has failed to end the Korean conflict. They want an end to sanctions, a guarantee that there will be no military attack on a peaceful North Korea, and eventual normal relations between their country and the international community.

I have visited with people who were starving. Still today, millions suffer from famine and food insecurity and seem to be completely loyal to their top leader. They are probably the most isolated people on Earth and almost unanimously believe that their greatest threat is from a preemptory military attack by the United States.

The top priority of North Korea’s leaders is to preserve their regime and keep it as free as possible from outside control. They are largely immune from influence or pressure from outside. During the time of the current leader, Kim Jong Un, this immunity has also applied to China, whose leaders want to avoid a regime collapse in North Korea or having to contemplate a nuclear-armed Japan or South Korea.

Until now, severe economic sanctions have not prevented North Korea from developing a formidable and dedicated military force, including long-range nuclear missiles, utilizing a surprising level of scientific and technological capability. There is no remaining chance that it will agree to a total denuclearization, as it has seen what happened in a denuclearized Libya and assessed the doubtful status of U.S. adherence to the Iran nuclear agreement.

There have been a number of suggestions for resolving this crisis, including military strikes on North Korea’s nuclear facilities, more severe economic punishment, the forging of a protective nuclear agreement between China and North Korea similar to those between the United States and South Korea and Japan, a real enforcement of the Non- Proliferation Treaty by all nuclear weapons states not to expand their arsenals, and ending annual U.S.-South Korean military exercises.

All of these options are intended to dissuade or deter the leadership of a nation with long-range nuclear weapons — and that believes its existence is threatened — from taking steps to defend itself. None of them offer an immediate way to end the present crisis, because the Pyongyang government believes its survival is at stake.”

https://www.washingtonpost.com/opinions/jimmy-carter-what-ive-learned-from-north-koreas-leaders/2017/10/04/a2851a9e-a7bb-11e7-850e-2bdd1236be5d_story.html?hpid=hp_no-name_opinion-card-c%3Ahomepage%2Fstory&utm_term=.126cb97e6a40

National Network for Manufacturing Innovation – On the Move

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Manufacturing USA

“DEFENSE NEWS”

“A series of centers of excellence spread around the country, with each center focused on a different technological area of study.As the initiative matures, it is beginning to show tangible feedback for relatively low cost.

The institutes are investing in what we call industrial commons. It’s a technology challenge that needs to be overcome, in order to get some capability.For small businesses, they say ‘what an amazing opportunity. “


“Tracy Frost, the Pentagon’s director of DoD Manufacturing Institutes and the acting head of the DoD Manufacturing Technologies (ManTech) program, sat down in August with Defense News to explain how it all works and why the defense industry should get involved.

Can you lay out the core idea behind the manufacturing institutes? – All of the technology advancements in the world don’t really mean much to the warfighter unless we can make it, make the product. We usually couch that as, ‘we have to make it when the troops need it, we have to make it in the quantity that they need, and we have to make it at affordable cost.’ The cheaper we can make things, the more we can buy. On a bigger scale, manufacturing kind of underpins all the productivity that we do in the country. That is both an economic and national security issue.

They are public-private partnerships, which is something the department has certainly utilized that authority for in the past but we’re using it in a very new way and revitalizing that authority. So one of the requirements is there was a 1:1 cost match of these awards. The Department of Defense puts [funding out] ranging from $55 million to $110 million of investment over a 5-7 year period. And the proposals had to come in with a 1:1 cost match, which can come from industry, academia and other government organizations.

By DoD standards, that’s not a ton of money. – It really isn’t a large investment considering what the goal was, and is, and what they’ve accomplished so far. And when you look at it as a 1:1 match, industry had to come to the table and match that funding, that’s a lot of skin in the game from day one. And that’s an important point, that from the beginning this is certainly a national effort.

The institutes are investing in what we call industrial commons. It’s a technology challenge that needs to be overcome, in order to get some capability. The applications are super wide. If we can figure out how to transmit information by light, look at the applications — It’s not just defense, its commercial. So all these institutes, we address a space that is going to change the world, not just DoD.

DoD has invested in eight areas. How did you go about selecting those? — We don’t want to bring all manufacturing back to the U.S., right? We want to bring advanced manufacturing back to the U.S. We’re selective, in the technology spaces we want to bring back. We tried to find a technology space that was advanced manufacturing, so not old-school, really moving it forward, where there was a commercial sector, an industry need for the technology as well, and where defense really thought we could use that technology going forward. If there wasn’t a strong commercial pull, it was off the table.

It’s interesting to look at the locations. Detroit makes sense for [the lightweight metals institute]. The fabric and textiles institute is in Cambridge, Massachusetts, which is located near Natick, which houses our Fabric and Textiles experts with the government. So there were some strategies when they proposed where it was going to be located. Youngstown is an old manufacturing town. It’s very economically depressed so the local government was happy to have them come in. A lot of them got fairly cheap rent spaces they can move into, because local government wants them there. It’s a national resource, but has local impacts.

It’s a public-private partnership, so how does industry funding work? – It’s all different. What was built into the institutes, in the model we have, is the flexibility. Each institute has membership agreements. Some they make public, some they don’t. There’s different tiers of membership. Some institutes say we’re a no-tiers institute. It’s a flat rate to join. Others range from membership fees goes anywhere from a couple hundred dollars for small businesses all the way up to a million dollars. They typically have higher-tier members. It depends, typically, on what kind of organization you are, and then also what you want to get out of it. The higher tier, the more money you give, you might have more seats on councils.

What has feedback been from the defense industry partners involved? – Large companies, some of our big OEM primes, I’ve been in some stakeholder meetings and they say ‘we came to the institutes first because there was money, and if DoD is going to put money somewhere we’ll go see what’s going on. But we’re staying because of the connections.’ The money is not that big. They’re staying because they’re getting access to our supply chain like never before.

For small businesses, they say ‘what an amazing opportunity, I’m sitting at a table with Lockheed and Boeing, and even the medium size companies that will buy my product and integrate into a subsystem Lockheed buys.’ We’re getting access to the rest of our supply chain in a way we couldn’t before. It’s a way to help secure our supply chain. It’s really catalyzed conversations and organizational relationships, and is addressing technology problems like we’ve never seen before.”

https://www.defensenews.com/smr/equipping-the-warfighter/2017/09/29/qa-tracy-frost-director-of-dod-manufacturing-institutes/

What Went Wrong in Vietnam and Why it Matters in Afghanistan

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What Went Wrong in Vietnam

The setting sun silhouettes a U.S. Marine firing his rifle into suspected North Vietnamese positions at the encircled the Sanh Base, March 18, 1968. (AP Photo)

“MILITARY TIMES” David Skidmore, Drake University, via AP

“In the Vietnam era, as today, the United States found itself engulfed in a seemingly never-ending war with mounting costs, unclear goals and few signs of success.  Muddling through offered presidents a politically safer short-run alternative to withdrawal or major escalation.

A similar dynamic appears at work in the U.S. approach to Afghanistan, where Presidents Bush, Obama and Trump have each accepted stalemate over the riskier options of retreat or decisive escalation.”


 

“The ghosts of the Vietnam War no doubt hovered over a recently assembled conclave of President Donald Trump’s advisers as they deliberated over the deteriorating situation in Afghanistan.

In both Vietnam and Afghanistan, successive presidents faced much the same options: Withdraw, decisively escalate or do just enough to avoid losing. Like his predecessors in both wars, Trump chose the middle path – incremental escalation with no clear exit plan. Although Trump called it a “plan for victory,” Secretary of State Rex Tillerson candidly admitted that the additional American troops will likely do little more than “stabilize the situation.”

How can we to explain the seeming preference of U.S. presidents for muddling through – whether in Afghanistan or, 50 years ago, in Vietnam? This has been a central question in a course on the Vietnam War that I have offered for the past 30 years. In it, we look for answers in a fascinating debate among former officials that emerged in the late stages of the war.

Down a slippery slope

Harvard historian Arthur Schlesinger offered one point of view in his 1967 book “The Bitter Harvest.” A onetime adviser to John F. Kennedy, Schlesinger compared Vietnam to a quagmire: The first step into a quagmire inexorably draws one down a slippery slope. Schlesinger argued that officials in the Kennedy and Johnson administrations stumbled blindly into Vietnam without understanding where the U.S. commitment would lead. Escalation proceeded through a series of small steps, none of which seemed terribly consequential. Each succeeding step was taken in the optimistic belief that a little more effort – a bit more aid, a few more troops, a slight intensification of the bombing – would turn things around by signaling American resolve to stay the course. Faced with this prospect, the reasoning went, the North Vietnamese communists would sue for peace on American terms.

These flawed expectations, Schlesinger argued, arose from a decision-making system characterized by “ignorance, misjudgment and muddle.” A dysfunctional bureaucracy fed presidents misleading and overly rosy intelligence. The Vietnam War debacle, in other words, arose from inadvertence and folly.

Just don’t lose

In separate pieces, this interpretation of what went wrong was challenged by Daniel Ellsberg and Leslie Gelb. Both Gelb and Ellsberg had formerly served as Defense Department officials during the 1960s, and both helped to compile the famous “Pentagon Papers.”

Gelb and Ellsberg reached similar conclusions about the sources of U.S. policy toward Vietnam. Ellsberg argued that policymakers during the Kennedy and early Johnson administrations followed two rules:

  • Do not lose South Vietnam to communism, and
  • Do not involve the U.S. in a large-scale ground war in Asia.

Each rule drew upon recent precedent. The “loss” of China to communism in 1949 led to charges that Democrats were “soft on communism” and a wave of McCarthyite hysteria at home. On the other hand, the public would also not tolerate another ground war similar to the unpopular Korean engagement.

The perceived domestic political costs of either extreme – withdrawal or unrestrained escalation – steered Kennedy and Johnson toward the middle. As long as feasible, each president did enough to avoid losing South Vietnam but shunned the direct commitment of U.S. troops that military advisers insisted would be necessary to bring victory.

By 1965, the deteriorating political and military situation in South Vietnam cut this middle ground from beneath Johnson’s feet. The minimum necessary to stave off defeat now required the commitment of American combat troops. Even once this line had been crossed, however, troops were introduced in a gradual manner and Johnson balked at imposing higher taxes to pay for the war.

As Kennedy and Johnson anticipated, public support for the war waned as U.S. casualties mounted. Richard Nixon responded to these domestic pressures by undertaking “Vietnamization,” which gradually reduced American troop levels even while prolonging U.S. efforts to stave off a communist victory.

Ellsberg refers to this as a “stalemate machine.” Policymakers acted in a calculated manner to avoid losing for as long as possible, but understood that their policies could not bring victory. Stalemate was a conscious choice rather than a product of overoptimism or miscalculation.

While echoing Ellsberg’s account of the domestic constraints on U.S. policy, Gelb added two sets of international constraints. Withdrawal was ruled out because policymakers believed in the domino theory, which predicted that the loss of South Vietnam would set off a cascade of communist victories throughout Southeast Asia. They also feared that the U.S. would lose credibility with its allies if we failed to put up a fight in South Vietnam. For these reasons, as well as fears of a right-wing backlash, Kennedy and Johnson were unwilling to walk away from Vietnam.

Yet Kennedy and Johnson also feared the international risks of major escalation, Gelb argued. An invasion of North Vietnam raised the possibility that either China or the Soviet Union would intervene more directly or retaliate against U.S. interests elsewhere in the world. In an age of nuclear weapons, the U.S. preferred to keep the Vietnam conflict limited and to minimize the risks of superpower war.

From Vietnam to Afghanistan

Gelb and Ellsberg rejected Schlesinger’s argument that policymakers were overly optimistic and lacking in foresight. Rather, they saw policymakers as generally pessimistic, recognizing that the next step along the ladder of escalation would not be sufficient and that future steps would be necessary just to maintain a stalemate. With victory viewed as infeasible, presidents chose stalemate as the least bad among a set of terrible options. Presidents had no clear exit strategy, other than the hope that the enemy would weary of the conflict or that the problem could be passed along to the next president.

Instead of blaming bureaucratic bumbling, Gelb argues that “the system worked.” The bureaucrats did exactly what top policymakers asked them to do: Avoid losing Vietnam for more than a decade. The problem lay rather in the underlying assumption – never questioned – that Vietnam was a vital interest of the United States.

Who was right?

I’d contend that Gelb and Ellsberg make a more convincing case than Schlesinger. Muddling through offered presidents a politically safer short-run alternative to withdrawal or major escalation.

Against an entrenched Taliban insurgency, U.S. policy has been driven by the need to stave off the collapse of weak local partners rather than the pursuit or expectation of military victory. Even President Barack Obama’s surge in Afghanistan provided fewer than half the troops requested by the military. On the other hand, Obama later retreated from his own stated deadline for total withdrawal, opting to leave 11,000 troops in place. Now Trump has also reneged from previous pledges to disengage from Afghanistan, instead sending additional troops.

It may be that the logic of the stalemate machine is built into the very concept of limited war. Or that it is a predictable consequence of how presidents manage the constraints posed by American politics. In any case, the histories of U.S. military involvements in Vietnam and Afghanistan should serve as warnings to future presidents who might be tempted to again jump onto the treadmill of perpetual war.