Category Archives: Technology

Neutrality Matters

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Net Neutrality CNN dot com

Image:  CNN.com

“WIRED”

“In a time when there are too few companies with too much power – we need net neutrality now more than ever.

Getting rid of Title II would lead to even more centralization, handing more power to the largest Internet companies while stifling competition and innovation.

Next month, Amazon, Netflix, and dozens of other companies and organizations will host a “day of action” aimed at saving net neutrality as we know it. The Federal Communications Commission, meanwhile, is on the verge of revoking its own authority to enforce net neutrality rules, and the country’s biggest telecommunications companies are cheering along. The future of the internet is on the line here, but it’s easy to be cynical about the conflict: What does it matter which set of giant corporations controls the internet?

Under the current net neutrality rules, broadband providers like Comcast and Charter, and wireless providers like AT&T and Verizon, can’t block or slow down your access to lawful content, nor can they create so-called “fast lanes” for content providers who are willing to pay extra. In other words, your internet provider can’t slow your Amazon Prime Video stream to a crawl so you’ll keep your Comcast cable plan, and your mobile carrier can’t stop you from using Microsoft’s Skype instead of your own Verizon cell phone minutes.

If the Trump administration gets its way and abolishes net neutrality, those broadband providers could privilege some content providers over others (for a price, of course). The broadband industry says it supports net neutrality in theory but opposes the FCC’s reclassification of internet providers as utility-like “Title II” providers, and that consumers have nothing to worry about. But it’s hard not to worry given that without Title II classification, the FCC wouldn’t actually be able to enforce its net neutrality rules. It might be less alarming if the internet were a level playing field with free and fair competition. But it’s not. At all.

If you want to search for anything online, you’ve got to go through Google or maybe Microsoft’s Bing. The updates your Facebook friends share are filtered through the company’s algorithms. The mobile apps you can find in your phone’s app store are selected by either Apple or Google. If you’re like most online shoppers, you’re mostly buying products sold by Amazon and its partners. Even with the current net neutrality laws there’s not enough competition—without them, there will be even less, which could stifle the growth and innovation that fuels the digital economy.

Fast lanes or other types of network discrimination could have a big impact on the countless independent websites and apps that already exist, many of which would have to cough up extra money to compete with the bigger competitors to reach audiences. Consider the examples of Netflix, Skype, and YouTube, all of which came of age during the mid-2000s when the FCC’s first net neutrality rules were in place. Had broadband providers been able to block videos streaming and internet-based phone calls in the early days, these companies may have seen their growth blocked by larger companies with deeper pockets. Instead, net neutrality rules allowed them to find their audiences and become the giants they are today, and without net neutrality, they could even potentially become the very start-up-killers that would’ve slowed or stopped their own earlier growth. Getting rid of net neutrality all but ensures that the next generation of internet companies won’t be able to compete with the internet giants.

The end of net neutrality could also have ranging implications for consumers. Amazon, Netflix, YouTube, and a handful of other services may dominate the online video market, but without net neutrality, broadband providers might try to make it more expensive to access popular streaming sites in an attempt to keep customers paying for expensive television packages. “[Net neutrality] protects consumers from having the cost of internet go up because they have to pay for fast lane tolls,” says Chris Lewis, vice president of the advocacy group Public Knowledge.

Lewis also points out that there are a few other consumer friendly protections in the FCC’s net neutrality rules. For example, the FCC rules require internet service providers to disclose information about the speed of their services, helping you find out whether you’re getting your money’s worth. They also force broadband providers to allow you to connect any device you like to your internet connection, so that your provider can’t force you to use a specific type of WiFi router, or tell you which Internet of Things gadgets you can or can’t use.

“The Internet is as awesome and diverse as it is thanks to the basic guiding principle of net neutrality,” says Evan Greer, campaign director for Fight for the Future, one of the main organizers of the net neutrality day of action, which will take place on July 12 and try to raise awareness about net neutrality across the web.”

https://www.wired.com/story/why-net-neutrality-matters-even-in-the-age-of-oligopoly/

Half of Industrial Control Systems Suffered Cyber Attack Last Year

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Cyber Attacks

The National Institute of Standards and Technology’s industrial control security testbed. (Photo Credit: NIST)

“FIFTH DOMAIN CYBER”

“Data gathered comes from 359 industrial cyber security practitioners in 21 countries that completed online surveys between February 2017 and April 2017.

One-in-five respondents experienced two incidents within the 12-month window.

Threats to industrial control systems are becoming increasingly widespread, according to a new survey from cyber security firm Kaspersky Lab and Business Advantage that found over half of the companies sampled reporting at least one cyberattack in the last 12 months.

The top observed threat remains conventional malware, which played a part in 53 percent of actual incidents, followed by targeted attacks, such as spear phishing to more sophisticated advanced persistent threats. The top perceived threats are  third-party supply chain/partners and sabotage/intentional damage from other external sources.

This has led three-in-four companies to expect a cyber attack to happen to them, though 83 percent feel prepared to combat an incident.

Organizations might not be as ready as they believe themselves to be, however, considering the fact that the anti-malware solutions already implemented by 67 percent of respondents still allowed for so many incidents.

Increasing the frequency of issuing patches/updates could contribute to protection from incidents like the WannaCry pandemic, but the increased attack surface and access granted to external parties by growing enterprises complicates matters.

Therefore, risk management is being recognized as a growing priority, but finding properly trained staff and reliable external partners to implement cyber security tops the challenges of companies that acknowledge financial loss is shown to decrease in organizations that have security awareness programs for staff, contractors and partners.

Looking at the survey’s findings, the top risk factors appear to be the access of external parties, a lack of compliance with industry/government regulations and the use of wireless connections. This has led companies to express support for some level of mandatory reporting and governance to help bring about more transparency to help develop frameworks to address the risks.

Some factors that appear to help mitigate threats include documented cybersecurity programs being set in place; regular security assessments/audits being conducted; vulnerability scans and patch deployments happening biweekly at minimum; unidirectional gateways being installed between control systems and the rest of the network; anti-malware solutions being installed for industrial endpoints; industrial anomaly detection tools, intrusion detection and intrusion prevention tools being used; and staff and contractors being given regular security awareness training.”

The entire survey can be accessed by filling in a form on the Kaspersky blog.

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

Veterans Administration Has $1 Billion Unexpected Funding Shortfall

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VA Budget Shortfall httpdelmarvapublicradio.net

Image: delmarvapublicradio.net

“THE ARIZONA REPUBLIC”

“Under repeated questioning, VA Secretary David Shulkin acknowledged the department may need emergency funds.

The Department of Veterans Affairs was scolded by both parties over its budget Wednesday as lawmakers scurried to find a fix to an unexpected shortfall of more than $1 billion that would threaten medical care for thousands of veterans in the coming months.

“We would like to work with you,” Shulkin told a Senate appropriations panel. “We need to do this quickly.”

At the hearing, lawmakers pressed Shulkin about the department’s financial management after it significantly underestimated costs for its Choice program, which offers veterans federally paid medical care outside the VA. Several questioned Shulkin’s claim that the VA can fill the budget gap simply by shifting funds — without an emergency infusion of new money — without hurting veterans’ care.

“The department’s stewardship of funds is the real issue at hand,” said Sen. Jerry Moran, R-Kan., chair of the Appropriations panel overseeing the VA. He faulted VA for a “precarious situation” requiring a congressional bailout.

Shulkin cited unexpectedly high demand for Choice and defended President Donald Trump’s 2018 budget request as adequate, but allowed that more money may be needed.

“On financial projections, we have to do better,” he said. “We do not want to see veterans impacted at all by our inability to manage budgets.”

Shulkin made the surprise revelation last week, urgently asking Congress for help. He said VA needed legal authority to shift money from other VA programs.

His disclosure came just weeks after lawmakers were still being assured that Choice was under budget, with $1.1 billion estimated to be left over on Aug. 7. Shulkin now says that money will dry up by mid-August. He cited excessive use of Choice beyond its original intent of using private doctors only when veterans must wait more than 30 days for a VA appointment or drive more than 40 miles to a facility.

Skeptical senators on Wednesday signaled they may need to move forward on a financial bailout.

In a letter Wednesday to the VA, Moran joined three other GOP senators, including John McCain, in demanding more detailed information from VA on what fix is needed.

“Unless Congress appropriates emergency funding to continue the Veterans Choice Program, hundreds of thousands of veterans who now rely on the Choice Card will be sent back to a VA that cannot effectively manage or coordinate their care,” the senators said. “We cannot send our veterans back to the pre-scandal days in which veterans were subjected to unacceptable wait-times.”

VA is already instructing its medical centers to limit the number of veterans sent to private doctors. Some veterans were being sent to Defense Department hospitals, VA facilities located farther away, or other alternative locations “when care is not offered in VA.” It also was asking field offices to hold off on spending for certain medical equipment to help cover costs.

Congressional Democrats on VA oversight committees have also sharply criticized the proposed 2018 budget. Shulkin, for instance, says he intends to tap other parts of the VA budget to cover the shortfall, including $620 million in carryover money that had been designated for use in the next fiscal year beginning Oct. 1.

The budget proposal also seeks to cover rising costs of Choice in part by reducing disability benefits for thousands of veterans once they reach retirement age, drawing an outcry from major veterans’ organizations who said veterans heavily rely on the payments.

Shulkin has since backed off the plan to reduce disability benefits but has not indicated what other areas may be cut.

Sen. Patty Murray, D-Wash., told Shulkin that it sure sounded like VA needed money.

“You’re defending this budget, but your job is to defend veterans,” she said. “It seems to me if the administration makes the request, it will be better served.”

The VA’s faulty budget estimates were a primary reason that Congress passed legislation in March to extend the Choice program beyond its Aug. 7 expiration date until the money ran out, which VA said would happen early next year. At the bill-signing ceremony with veterans’ groups, Trump said the legislation would ensure veterans will continue to be able to see “the doctor of their choice.”

The department is now more closely restricting use of Choice to its 30-day, 40-mile requirements.

The unexpectedly high Choice costs are also raising questions about the amount of money needed in future years as VA seeks to expand the program.

Earlier this month, Shulkin described the outlines of an overhaul, dubbed Veterans CARE, which would replace Choice and its 30-day, 40-mile restrictions to give veterans even wider access to private doctors. He is asking Congress to approve that plan by this fall.”

http://www.azcentral.com/story/news/nation/2017/06/22/veterans-affairs-facing-1-billion-shortfall-because-unexpected-choice-program-costs/418787001/

 

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

 

 

Pentagon Declares Lockheed F-35 “Too Big to Fail”

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F-35 Too Big to Fail

(Photo Credit: Staff Sgt. Staci Miller/US Air Force)

“DEFENSE NEWS” By Michael P. Hughes

“Officially begun in 2001, with roots extending back to the late 1980s, the F-35 program is nearly a decade behind schedule, and has  failed to meet many of its original design requirements.

It’s also become the most expensive defense program in world history, at about $1.5 trillion before the fighter is  phased out in 2070.

The F-35 was billed as a fighter jet that could do almost everything the U.S. military desired, serving the Air Force, Marine Corps and Navy — and even Britain’s Royal Air Force and Royal Navy — all in one aircraft design. It’s supposed to replace and improve upon several current — and aging — aircraft types with widely different missions. It’s marketed as a cost-effective, powerful multi-role fighter airplane significantly better than anything potential adversaries could build in the next two decades. But it’s turned out to be none of those things.

The unit cost per airplane, above $100 million, is roughly twice what was promised early on. Even after U.S. President Donald Trump lambasted the cost of the program in February, the price per plane dropped just $7 million — less than 7 percent.

And yet, the U.S. is still throwing huge sums of money at the project. Essentially, the Pentagon has declared the F-35 “ too big to fail.” As a retired member of the U.S. Air Force and current university professor of finance who has been involved in and studied military aviation and acquisitions, I find the F-35 to be one of the greatest boondoggles in recent military purchasing history.

Forget what’s already spent

The Pentagon is trying to argue that just because taxpayers have flushed more than $100 billion down the proverbial toilet so far, we must continue to throw billions more down that same toilet. That violates the most elementary financial principles of capital budgeting, which is the method companies and governments use to decide on investments. So-called sunk costs, the money already paid on a project, should never be a factor in investment decisions. Rather, spending should be based on how it will add value in the future.

Keeping the F-35 program alive is not only a gross waste in itself: Its funding could be spent on defense programs that are really useful and needed for national defense, such as  anti-drone systems to defend U.S. troops.

Part of the enormous cost has come as a result of an effort to share aircraft design and replacement parts across different branches of the military. In 2013, a study by the think tank Rand found that it would have been cheaper if the Air Force, Marine Corps and Navy had simply  designed and developed separate and more specialized aircraft to meet their specific operational requirements.

Not living up to top billing

The company building the F-35 has made grand claims. Lockheed Martin said the plane would be far better than current aircraft — “four times more effective” in air-to-air combat, “eight times more effective” in air-to-ground combat and “three times more effective” in recognizing and suppressing an enemy’s air defenses. It would, in fact, be “ second only to the F-22 in air superiority.” In addition, the F-35 was to have better range and require less logistics support than current military aircraft. The Pentagon is still calling the F-35 “ the most affordable, lethal, supportable, and survivable aircraft ever to be used.”

But that’s not how the plane has turned out. In January 2015, mock combat testing pitted the F-35 against an F-16, one of the fighters it is slated to replace. The F-35A was flown “clean” with empty weapon bays and without any drag-inducing and heavy, externally mounted weapons or fuel tanks. The F-16D, a heavier and somewhat less capable training version of the mainstay F-16C, was further encumbered with two 370-gallon external wing-mounted fuel tanks.

In spite of its significant advantages, the F-35A’s test pilot noted that the F-35A was less maneuverable and markedly inferior to the F-16D in a visual-range dogfight.

Stealth over power

One key reason the F-35 doesn’t possess the world-beating air-to-air prowess promised, and is likely not even adequate when compared with its current potential adversaries, is that it was designed first and foremost to be a stealthy airplane. This requirement has taken precedence over maneuverability, and likely above its overall air-to-air lethality. The Pentagon and especially the Air Force seem to be relying almost exclusively on the F-35’s stealth capabilities to succeed at its missions.

Like the F-117 and F-22, the F-35’s stealth capability greatly reduces, but does not eliminate, its radar cross-section, the signal that radar receivers see bouncing back off an airplane. The plane looks smaller on radar — perhaps like a bird rather than a plane — but is not invisible. The F-35 is designed to be stealthy primarily in the X-band, the radar frequency range most commonly used for targeting in air-to-air combat.

In other radar frequencies, the F-35 is not so stealthy, making it vulnerable to being tracked and shot down using current — and even obsolete — weapons. As far back as 1999 the same type of stealth technology was not able to prevent a U.S. Air Force F-117 flying over Kosovo from being located, tracked and shot down using an outdated Soviet radar and surface-to-air missile system. In the nearly two decades since, that incident has been studied in depth not only by the U.S., but also by potential adversaries seeking weaknesses in passive radar stealth aircraft.

Of course, radar is not the only way to locate and target an aircraft. One can also use an aircraft’s infrared emissions, which are created by friction-generated heat as it flies through the air, along with its hot engines. Several nations, particularly the Russians, have excellent passive infrared search and tracking systems that can locate and target enemy aircraft with great precision — sometimes using lasers to measure exact distances, but without needing radar.

It’s also very common in air-to-air battles for opposing planes to come close enough that their pilots can see each other. The F-35 is as visible as any other aircraft its size.

Analysts weigh in

Lockheed Martin and the Pentagon say the F-35’s superiority over its rivals lies in its ability to remain undetected, giving it “ first look, first shot, first kill.” Hugh Harkins, a highly respected author on military combat aircraft, called that claim “a marketing and publicity gimmick” in his book on Russia’s Sukhoi Su-35S, a potential opponent of the F-35. “In real terms an aircraft in the class of the F-35 cannot compete with the Su-35S for out and out performance such as speed, climb, altitude, and maneuverability,” he wrote.

Other critics have been even harsher. Pierre Sprey, a co-founding member of the so-called fighter mafia at the Pentagon and a co-designer of the F-16, calls the F-35 “inherently a terrible airplane” that is the product of “an exceptionally dumb piece of Air Force PR spin.” He has said the F-35 would likely lose a close-in combat encounter to a well-flown MiG-21, a 1950s Soviet fighter design. Robert Dorr, an Air Force veteran, career diplomat and military air combat historian, wrote in his book “Air Power Abandoned”: “The F-35 demonstrates repeatedly that it can’t live up to promises made for it. … It’s that bad.”

How did we get here?

How did the F-35 go from its conception as the most technologically advanced, do-it-all military aircraft in the world to a virtual turkey? Over the decades-long effort to meet a real military need for better aircraft, the F-35 program is the result of the merging or combination of several other separate and diverse projects into a set of requirements for an airplane that is trying to be everything to everybody.

In combat, the difference between winning and losing is often not very great. With second place all too often meaning death, the Pentagon seeks to provide warriors with the best possible equipment. The best tools are those that are tailor-made to address specific missions and types of combat. Seeking to accomplish more tasks with less money, defense planners looked for ways to economize.

For a fighter airplane, funding decisions become a balancing act of procuring not just the best aircraft possible, but enough of them to make an effective force. This has lead to the creation of so-called multi-role fighter aircraft, capable both in air-to-air combat and against ground targets. Where trade-offs have to happen, designers of most multi-role fighters emphasize aerial combat strength, reducing air-to-ground capabilities. With the F-35, it appears designers created an airplane that doesn’t do either mission exceptionally well. They have made the plane an inelegant jack-of-all-trades, but master of none — at great expense, both in the past and, apparently,  well into the future.

I believe the F-35 program should be immediately canceled; the technologies and systems developed for it should be used in more up-to-date and cost-effective aircraft designs. Specifically, the F-35 should be replaced with a series of new designs targeted toward the specific mission requirements of the individual branches of the armed forces, in lieu of a single aircraft design trying to be everything to everyone.”

http://www.defensenews.com/articles/what-went-wrong-with-lockheeds-f-35-commentary

This article was originally published on The Conversation .

About the Author

Image result for Michael P. Hughes is a professor of finance at Francis Marion University.

Michael P. Hughes is a professor of finance at Francis Marion University. He served more than 21 years in the U.S. Air Force. During that time, he spent more than 14 years in nuclear treaty monitoring and related activities, while the initial 7 years were in the aircraft maintenance and engineering (propulsion) arena with F-4 and F-15 aircraft.

http://departments.fmarion.edu/business/hughes-michael-p.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