Category Archives: Technology

Inside the ‘Foundational’ Future Technologies of the World’s Largest Defense Company

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Lockheed


“DEFENSE NEWS”

“Lockheed Martin is the world’s largest defense contractor, a company with more than $47 billion in revenue in 2016. 

Keoki Jackson, Lockheed’s chief technology officer, laid out to reporters the “foundational” technologies in which his firm will be investing over the next two to three decades.”


“The technologies fall into three broad categories, with the first being what Jackson called “strategic technology thread areas,” areas that “go across pretty much anything Lockheed Martin will do, all these domains whether from undersea to outer space.”

Included in that pot are autonomy, directed energy, signal processing and communications, sensor technology and exploitation, and advanced cybersecurity.

Usable directed energy weapons, long described in defense circles as just around the corner, are truly at a “tipping point”, according to Jackson, who said he is confident the company’s 60-kilowatt system, which has been used on a Stryker vehicle, can be scaled up to 150 kilowatts or more.

Although not initially part of his discussion, Jackson later acknowledged the company is working on hypersonic technology as well. “I do believe we’re on the verge of a revolution in hypersonics, and we are certainly committed to supporting our customers in their quest for high-speed strike capabilities,” he said.

The second pot involves enabling technologies ― areas where there is a “huge amount of investment” going on in universities and the commercial tech sector, Jackson explained.

These are areas where we look not just to develop specific capabilities in-house, but really to leverage these huge investments that are going on in the commercial world that are really advancing,” Jackson said, noting investments in these areas can be found anywhere from the financial sector to the agricultural world.

That pot includes data analytics and big data, advanced electronics, and advanced materials and manufacturing. This is where Lockheed Martin’s LM venture fund, a roughly $100 million pot of money for investing in outside tech companies, most comes into play.

Finally, there is the third pot, which is made up of emerging technologies that “are kind of longer range, they are iffier bets, they are higher risk.” Among those noted by Jackson in this pot were quantum computing, communications and cryptology, as well as synthetic biology.

“We’re in an age today where you can effectively design a living molecular machine, you can compile it using a set of tools that is very much like a program compiler in a programming language, and then you can auto-generate a set of DNA sequences,” Jackson said of the synthetic biology piece. “You can create molecular machines to build almost anything at that molecular level with molecular precision.”

But while predicting biological technology is going to “revolutionize” the aerospace world, Jackson admitted he‘s most excited about the potential from quantum technologies, particularly the potential impact on information sciences.

“I believe the next leap in information technology, computing and sensing is going to come out of the quantum world. It is going to enable us to solve computational problems that we just cannot address today. It’s going to enable us to design new materials that we don’t have any way to go after,” he said.

A 2015 study from the U.S. Air Force warned there is significantly more “hype” than reality around quantum tech, and Jackson was upfront that it may never pay off for Lockheed the way he hopes. But the potential of the technology is worth plunking down the research funding, including the procurement of an expensive D-Wave system.

“Some of this seems a little science fiction-y, but i will tell you we see it in labs in the U.S., in other countries, where you’re actually seeing multi-qubit kind of computation systems come together and some really interesting advances in communications and sensing,” he said.”

https://www.defensenews.com/show-reporter/ausa/2017/10/19/inside-the-foundational-future-technologies-of-the-worlds-largest-defense-company/

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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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Army Network $6B

 “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

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/

Techniques for Small Business Product/Services Development in Government Contracting

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Image:  Getentrepreneurial.com

“SMALLTOFEDS” By Ken Larson

“INTRODUCTION

This article will suggest approaches in developing a product or service to the point where it can be marketed in the small business federal government contracting venue. Individuals usually succeed at such an endeavor by forming a company, separating it from their personal assets and then developing the company and its product(s)/service(s); even if it is only a one-person operation at the start.

There are techniques for small business to gain government participation in growing an idea into a company. Small Business Innovative Research and Technology Transfer (SBIR/STTR) programs in major federal agencies seek concepts that can be funded and developed into products the government needs. Here are some examples:

DOD SBIR/STTR Small Business Portal

National Institute of Health SBIR/STTR

Service contracting is another form of gaining entrance into the market, creating opportunities for introducing products by selling skilled labor under a government agency service contract or prime contractor teaming arrangement.

A GSA schedule affords a platform for products and services, but sales must have been achieved historically in the commercial or government markets before applying because GSA relies heavily the most recent 2-year pricing data in negotiating a schedule.

The government contracting product and services venue is competitive and requirements by federal agencies are often bundled into larger systems procurements. Therefore, it is necessary first to position a small enterprise and its product offerings before tapping the federal market for development support.

GENERAL OVERVIEW

Product entrepreneurs all face the same challenges. Those who succeed recognize they need to visualize themselves in the product development business, structuring an enterprise, generating a business plan, protecting intellectual property and then seeking industry partners and investors to bring the product to market.

In the process, copyrights, patents and royalty issues may come into play and development and distribution agreements are formed. Pricing is finalized based on cost and expense projections and competitive factors unique to the company as negotiation results are achieved with industry teaming partners, developers, manufacturers and distributors.

Financing is always a factor and can be achieved through loans or investors with a good business plan. The remainder of this article will address the basic elements of a framework within which to succeed with your product development for federal government contracting.

BUSINESS STRUCTURE

For the majority of individuals who are starting single person or no more than 2 or 3 person operations, a Limited Liability Company (LLC) registered with the state and with the federal government is recommended.

It will separate personal assets from company assets and protect them. When product or services sales begin generating revenue an LLC has many tax advantages. It can be registered as Sub Chapter ‘S’ for tax purposes and revenue and the expenses can be passed through to personal tax returns, paying no taxes as a company. The double taxation issue prevalent with many of the other types of incorporation is avoided with a Sub chapter “S” LLC. An LLC assists in limits your personal liability for debt and court judgments that may not fall in your favor.

Representing the business as a company allows pursuing financing as an enterprise. You can think of a creative name for your LLC and you can complete the articles of incorporation necessary to bring your enterprise into existence. The term, “LLC” must conclude the name of your company if you decide to form such an organization.

Instructions for registering in your state and federally with the IRS are available at your state web site and at the IRS site. You will receive tax and employer identification numbers by registering your business.

PROTECTING INTELLECTUAL PROPERTY

Patents and copyrights for your idea may ultimately protect you to a degree but the government agencies granting them have no enforcement arm so you must discover a violation yourself, retain a lawyer, bring a court proceeding against a violator and then hope to recover your costs and a reasonable settlement if you win.

The U.S. Patent System

Therefore, most of my clients use non-disclosure agreements (NDA’s) in dealing with other companies. Teaming is a practical fact of life in pursuing the larger federal government contracts.

You can download an NDA from the “References” Box Net Cube at the right margin of this site. Fill in the blanks as appropriate for a given exchange with outside individuals and companies. Before you meet to disclose details with a potential teaming company or investor, for instance, ask them to sign the document with you up front, put a serial number on it and reference the serial number and the agreement and date on any written materials you give to them.

After the meeting draft a short letter, documenting the minutes of the meeting, what was discussed and stating that the verbal disclosures and materials in the meeting are subject to the agreement and reference the agreement by number and date. Put an acknowledgment line on the letter and ask them to return a signed copy to you. This confirms their receipt of your proprietary information and their agreement to protect it in accordance with the NDA.

There are certain exceptions with regard to individuals or companies you may be dealing with on investing where you may not choose to use an NDA. Some Angel and Capital Investors are sensitive about being asked to sign them. You will have to trade their objections off against the value they represent to your company and conduct your risk analysis on a case-by-case basis.

For detail information asserting rights in technical data and software to government agencies and protecting intellectual property with other companies please see the following article:

Protecting Intellecutal Property

BUSINESS PLANNING

Visit the SBA website on business planning. There are major topics in the business planning process which, when addressed in a plan, will insure the success of your enterprise and assist you in determining and supporting the amount of funding you need. Such topics as marketing, advertising, competitor analysis and financing are covered there. You will find a presentation and examples that you can follow in improving your plan or in generating a plan if you do not have one. The link to the site is below:

Writing a Business Plan

Articles on strategic planning and developing your marketing plan are also at the “References” Box Net Cube at this site. They address evolving an operations vision for your enterprise showing its potential to present to a banker or to an investor.

Here is a site with free business plan samples:

Business Plan Samples

It may assist you in visualizing your own business growth to look at an example of how someone else addressed a given topic. I have learned from having worked with many new business owners that it is best to have you examine the material and continue your plan, contacting me with issues and questions as they occur.

THINGS TO THINK ABOUT WHILE PLANNING

Locate teaming companies to further the objective that they would market your product as part of their offerings with your company licensing and sharing in the proceeds.

A business plan and the guidance above for its generation is the road map for developing ideas, laying out how to expand the sales of your product and researching your market to do so. It will also assist in developing pricing to considering the direct costs of product development, service implementation and distribution as well as the indirect costs of the enterprise itself (operating expenses).must be considered and financed.

A negotiation position for a given product will be driven by certain strategic factors:

1. Does a developer or teaming partner have a strong but realistic incentive to actively make the product a part of the marketplace?

2. Does market research indicate the idea will have strong sales volume once it is developed and distributed?

3. How much will a prospective teaming partner or investor have to invest in the product to get it to market? Does the product require testing?

4. Which is the better deal? Is it better to receive a 7% royalty on $5,000 worth of sales or a 1% royalty on $500,000 of sales? Even though 1% does not sound too impressive, of course it’s the better choice in this example.

A negotiation position should be based on support by for the argument that a concept will experience a certain level of sales and the royalty should be based on a % of estimated end user volume sales, discounted for the investment that the developer and distributor must make to get it to market.

The royalty should be outside of the distributor cost breakdown and the end user cost breakdown. It is simply a deductive factor the manufacturer will have to introduce into their profit equation after the costs have been tabulated. They should not view royalties as a cost factor; they should view them as a share of the profit on the total estimated sales.

Chances of succeeding with a negotiation with a developer and/or distributor are increased by showing understand the prospective market for the product and drawing some comparisons between the product and other similar successful products.

Naturally there will be some give and take with the other side about estimated costs to get the product to market. Be forthright in acknowledging their investment but also support a position with some research and comparative data on the product potential.

Lastly, settle on a % of the end user sales volume based on an estimate to which is agreed with the other party and insures that the purchase agreement for royalties entitles the agreed upon % on all future sales.

FINANCING

The SBA assists prospective business owners in completing sound business plans, which can then be presented to a banker in applying for financial assistance.

In the event that 2 banking institutions deny a loan application, a candidate can apply to the SBA for a loan guarantee that may assist in achieving a loan, since it would back up the application to a bank.

Loan officers are interested in a business plan to get a view of the business future and place a value on products and services based on the market, the competition, the sales projections, costs, expenses and profit expectations. The link to the SBA loan guarantee program is below:

SBA Loans and Grants

Veterans have access to small business loans via the Patriot express program:

Patriot Express Program

ANGEL AND CAPITAL INVESTORS

Angel and private investors have two prominent characteristics:

(A) They want a high return on investment (ROI)

(B) They typically want a great deal of control of the operation.

According to the Colorado Capital Alliance, surveys of angel investors show that:

1. Angels are seeking companies with high growth potential, proven management and sufficient information about the company, its management team, and its market to be able to assess a company’s value.

2. On average, Angels expect 10 to 15 percent above of the S&P 500 return on equity.

3. Typically, Angels invest in companies seeking between $50,000 and $1,000,000.

4. Angels generally prefer to finance manufacturing or product-oriented ventures, especially in the high-tech fields.

5. On average, Angels are 47 years old, have a postgraduate degree, and management experience in an entrepreneurial venture.

An angel investor may ask for at least ten to twenty times return in just five years. For many angel investors, it’s not just about the money; they want to actively participate in developing your business. They want to act as a mentor and sometimes even to take an active role in managing the company. This often translates into the angel investor having a seat on the company Board of Directors.

Angels are also highly interested in an exit strategy from for a full return on their investment in your business. The closest thing to it is an astute business plan that calls out the specifics of potential ROI, based on sound planning and analysis and addresses the following as possible exit strategies. Remember, investors are very aware that an exit strategy cannot be guaranteed. But they can be offered more than the wishful thinking that an IPO will occur in three years.

It is always good to have a lawyer involved in complex documents or in the development of documents. This will further protect a concept. A lawyer does not necessarily have to be present during the exchanges with prospective companies, but a lawyer review and comment on documents before they are signed.

SUMMARY

This article has conveyed preliminary steps for the small business in product development for the federal marketplace.

It should be noted that much of the process discussed in this article is the same for the commercial product development and a certain amount of commercial success is usually achieved before selling products in the government contracting venue. The exception to that rule is in highly technical product pursuits where the government is funding advanced development.

To consider non-profit grants and direct government contract funding potential please see the following article:

Grants Vs, Direct Government Contracts

Once a company is formed, a product platform established and a position to market a useful product to the federal government is achieved, please see the following articles at this site in developing a marketing plan

Registering Your Business For Government Grants and Contracts

Multiple Front Marketing

Should You Consider Small Business Governement Contracting?

Small Business Teaming

With careful structuring, planning and marketing, a product with potential can find its place in federal government contracting.”

Smalltofeds – Techniques for Product Development

ABOUT THE AUTHOR:

Ken Portrait

Ken Larson has over 40 years in the Military Industrial Complex. He is a veteran of 2 tours in the US Army Vietnam. Subsequently Ken spent over 30 years in federal government program and contract management and 10 years in small business consulting. As a Micro Mentor Volunteer Counselor, he assists many small businesses with their planning and operations processes. 

DHS Science & Technology Directorate Leading the Way on Cyber Innovation

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Homland Security Cyber Innovation

“FIFTH DOMAIN” By Chris Cummiskey

“One of the greatest impediments to taking innovative ideas and putting them into action is the federal acquisition process.

The Cybersecurity Division (CSD) R&D Execution Model has been utilized since 2004 to successfully transition over 40 cyber products with the help of private sector companies.”


“It isn’t often that the words innovation and government find their way into the same sentence. When they do, it is often to decry the lack of innovation in government practices. Silicon Valley and other corporate leaders have long lamented that the federal government just doesn’t seem to understand what it takes to bring innovation to government programs.

One office in the federal government is having an outsized, positive impact on bringing private sector innovation to government cybersecurity problem solving. The Cybersecurity Division (CSD) of the Science & Technology Directorate at the Department of Homeland Security has figured out how to crack the code in swiftly delivering cutting edge cyber technologies to the operators in the field. Some of these programs include: cybersecurity for law enforcement, identity management, mobile security and network system security.

The mission of CSD is to develop and deliver new technologies and to defend and secure existing and future systems and networks. With the ongoing assault on federal networks from nation-states and criminal syndicates, the mission of CSD is more important than ever.

CSD has figured out how to build a successful, actionable strategy that produces real results for DHS components. Their paradigm for delivering innovative cyber solutions includes key areas such as a streamlined process for R&D execution and technology transition, international engagement and the Silicon Valley Innovation Program (SVIP).

R&D Execution and Technology Transition

 As a former chief acquisition officer at DHS, I certainly understand why there needs to be federal acquisition regulations. The challenge is these regulations can be used to stifle the government’s ability to drive innovation. I am encouraged by the efforts to overcome these obstacles by federal acquisition executives like DHS Chief Procurement Officer Soraya Correa – who is leading the fight to overcome these hurdles.

Under the leadership of Dr. Doug Maughan, CSD has created a process with the help of procurement executives that swiftly establishes cyber capabilities and requirements with input from the actual users. They have designed a program that accelerates the acquisition process to seed companies to work on discreet cyber problems.  The model sets up a continuous process that starts with workshops and a pre-solicitation dialogue and ends with concrete technologies and products that can be utilized by the operators in the various DHS components. To date the program has generated cyber technologies in forensics, mobile device security, malware analysis and hardware enabled zero-day protections and many others.

International Engagement

Maughan often states that cybersecurity is a global sport. As such, many of the challenges that face the United States are often encountered first by other countries. Maughan and his team have worked diligently to leverage international funding for R&D and investment. CSD is regularly featured at global cyber gatherings and conferences on subjects ranging from international cyber standard setting to sharing R&D requirements for the global entrepreneur and innovation communities.

Silicon Valley Innovation Project (SVIP)

It seems like the federal government has been trying to get a foothold in Silicon Valley for decades. Every president and many of their cabinet secretaries in recent memory have professed a desire to harness the power of innovation that emanates from this West Coast enclave. One of the knocks on the federal government is that it just doesn’t move fast enough to keep pace with the innovation community. Maughan and the folks at CSD recognize these historic impediments and have moved deftly to build a Silicon Valley Innovation Project (SVIP) that is delivering real results. To help solve the hardest cyber problems facing DHS components like the Coast Guard, Customs and Border Protection, the United States Secret Service and the Transportation Safety Administration, SVIP is working with Silicon Valley leaders to educate, fund and test in key cyber areas. The program is currently focusing on K9 wearables, big data, financial cybersecurity technology, drones and identity. The SVIP has developed an agile funding model that awards up to $800,000 for a span of up to 24 months. While traditional procurement processes can take months, the SVIP engages in a rolling application process where companies are invited to pitch their cyber solutions with award decisions usually made the same day. The benefits of this approach include: speed to market, extensive partnering and mentoring opportunities for the companies and market validation.

Conclusion

Moving innovative cyber solutions from the private sector to the federal government will always be a challenge. The speed of innovation and technological advancement confounds federal budget and acquisition processes. What Maughan and CSD have proven is that with the right approach these systems can complement one another. This is a huge service to the men and women in homeland and cybersecurity that wake up every day to protect our country from an ever-increasing stream of threats.”

https://www.fifthdomain.com/opinion/2017/09/26/dhs-office-leading-the-way-on-federal-cyber-innovation-commentary/

ABOUT THE AUTHOR:

Chris Cummiskey is a former acting under secretary/deputy under secretary for management and chief acquisition officer at the U.S. Department of Homeland Security.

Vindictive Army Contractor Planted Virus Costing Taxpayers Millions

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Defense Contractor Virus

An Army investigation found that a defense contractor inserted a “logic bomb” into a computer program used to handle pay and personnel actions for reservists. Five of the servers associated with the program are located at Fort Bragg, North Carolina. (Senior Airman Franklin R. Ramos/Air Force)

“ARMY TIMES”

A defense contractor was found guilty Wednesday of knowingly transmitting malicious code with the intent of causing damage to an Army computer, the U.S. Attorney’s Office for the Eastern District of North Carolina said in a statement Thursday.

Mittesh Das, a 48-year-old resident of Atlanta, unloaded the computer virus in November 2014 — days before the company he was contracted under was supposed to hand over operations to a different firm.

The Army projected the total labor cost to remove the computer virus and restore the corrupted information as roughly $2.6 million.”


“The code affected a national-level computer program the Army Reserve uses to handle pay and personnel actions for nearly 200,000 reservists, according to the statement. Five of the servers associated with the program were located at Fort Bragg, North Carolina.

“Cyber-sabotage is not a ‘prank.’ It is a very serious crime with real victims and real costs. In this case, the crime cost taxpayers $2.6 million,” said John Stuart Bruce, United States Attorney for the Eastern District of North Carolina.

Das was indicted on April 5, 2016, for the offense that occurred in 2014.

In December 2014, the Army Times reported on incidents of delayed payments to Army reservists. The delay — which averaged about 17 days — was attributed to a glitch in the Regional Level Application Software, said Lt. Col. William Ritter, a spokesman for the Reserve. That software’s functions included processing pay and orders, as well as transfers, awards and promotions, Ritter added.

The Justice Department was pleased with the outcome of the indictment, said Director Daniel Andrews of the Computer Crime Investigative Unit, U.S. Army Criminal Investigation Command.

“Let this be a warning to anyone who thinks they can commit a crime in cyberspace and not get caught. We have highly trained and specialized investigators who will work around the clock to uncover the truth and preserve Army readiness,” Andrews said in the statement.”

http://www.armytimes.com/news/your-army/2017/09/22/man-who-planted-virus-in-an-army-computer-program-cost-taxpayers-millions/