DoD Reporter’s Notebook

jared_notebook_notext“DoD Reporter’s Notebook” is a biweekly feature focused on news about the Defense Department and defense community, as gathered by Federal News Radio DoD Reporter Jared Serbu.

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Pentagon sticks to its guns on single-award approach to JEDI Cloud, but won’t tell vendors why

Despite months of protestations from industry, the Defense Department says it has no intention of budging from its plans to make just one award in its upcoming contract for commercial cloud computing services.

The Pentagon released a second draft request for proposals for the project, known as “JEDI,” on Monday, adding that the latest round of documentation “substantially” reflects the final solicitation it intends to publish in May.

The package also included responses to more than 1,000 questions vendors posed in response to DoD’s first draft solicitation last month. The majority were queries dealing with technical or narrow requirements issues. But dozens of others questioned DoD’s broader winner-take-all approach, implored the department to consider a multiple-award contract, or asked officials to at least publish their rationale for going the single-award route.

Patrick Shanahan

“The objective of achieving commercial parity seems contrary to the duration and single award aspects of this contract,” wrote one of the vendors, all of whose identities were made anonymous. “The single-award removes competition, which was the very impetus that drove the current cloud market. Also, the potential duration for this vehicle is 10 years, nearly equal to the age of the cloud market. This duration fails to recognize how fast this market is changing … the structure of this vehicle locks DoD into one vendor for the next decade.”

DoD’s contracting office said it still planned to press forward with a single award indefinite-delivery/indefinite-quantity (ID/IQ) contract, one which officials have previously said will be worth billions of dollars, but added that different vendors were free to team together to combine multiple cloud offerings into a single bid.

In reply to most questions raising objections to the one-contract approach, the department said simply, “Your comment has been noted.”

Several other vendors pointed out that federal law explicitly requires the government to award its ID/IQ contracts to multiple vendors if at all possible. And when it doesn’t, the Federal Acquisition Regulation requires it to document its decision to opt for single-award.

“What is DoD’s rationale for a single award given that DoD anticipates multiple providers can meet the requirements in this RFP, and the department’s stated desires to innovate and leverage commercial companies?” another company asked. “A 10-year, single award contract does not seem to encourage the experimental, risk-taking culture and environment of innovation called out in [Deputy Defense Secretary Patrick] Shanahan’s memo.”

The department’s response: “This rationale is not going to be published at this time.”

Considering that the JEDI project is a high priority for Shanahan, and one that he personally launched, several other questions had to do with how the eventual services DoD buys under the contract will interact with the many other cloud efforts the department already has underway.

Some examples include the Defense Information Systems Agency’s MilCloud offering — the latest version of which will be operated entirely by a commercial provider — and a multiple-award Navy enterprise cloud contract that service hopes to award later this year.

DoD mostly sidestepped those questions, other than to say that the JEDI project won’t prohibit individual services and agencies from setting up their own contract vehicles for buying cloud services.

“JEDI Cloud is only the initial step to provide the underlying foundational technologies required to maximize the capabilities of weapon systems, business systems, and data-driven decision-making for the military,” Lt. Col. Kaight Meyers, the JEDI program manager wrote in a memo accompanying Monday’s package of documents. “JEDI Cloud is intended to be available enterprise-wide and complementary to other existing cloud initiatives. It will not preclude the release of future contracting actions. Please understand that the JEDI Cloud team is focused on developing a high quality RFP package for JEDI Cloud and will not comment on the intended use of other contracting vehicles as part of this draft solicitation process.”

However, DoD did make some substantive changes in Monday’s updated draft solicitation. Among them:

  • A revised cybersecurity plan. In it, the department clarified that the winning vendor will not need to have earned the necessary “FedRAMP Plus” security approvals by the time the contract is awarded, and can do so after the fact. Currently, as one vendor pointed out, only one company (Amazon Web Services) has been certified for both classified and unclassified data.
  • In an effort to maintain “commercial parity,” DoD’s previous draft solicitation said the department would only make an award to a cloud provider whose commercial business was already large enough that JEDI would not make up a majority of its services. The updated version clarifies that the winning vendor’s non-Defense services across the globe will have to stay above 50 percent of its overall business, a statistic it will have to report each month.
  • Considering that DoD is insisting on one vendor that already has a massive commercial business, several vendors questioned how the department would meet its 30 percent small business contracting goal for JEDI. The updated solicitation says small businesses will only be able to provide “cloud support.”

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In lieu of BRAC, DoD plans big spending to demolish crumbling facilities

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When the Defense Department decided not to ask Congress to authorize a round of base closures as part of this year’s budget, it was a recognition that doing so would be an exercise in futility. After all, lawmakers have rejected those requests each year since 2012.

But Defense officials say that doesn’t mean they’ve changed their minds about the need to get rid of some of the military’s excess real estate, either through the traditional base realignment and closure (BRAC) process, or some other means that Congress finds more palatable.

Lucian Niemeyer

“We realize that we have asked for six years, and for six years, Congress has said no. We can’t keep doing that,” Lucian Niemeyer, the assistant secretary of Defense for energy, installations, and environment told the House Appropriations Committee last week. “We have to work with you on a common way forward that will allow us to make prudent reductions in our infrastructure. We must ensure that our basic infrastructure is ideally sized to increase the lethality of our forces while minimizing the costs of maintaining unneeded capacity.”

In a report to Congress last October, the Pentagon estimated that it would have 19 percent more base infrastructure than it can put to military use, even assuming it had a force that was as large as the one that existed in 2012, prior to the last military drawdown.

In addition to seeing that excess facility footprint as wasteful and inefficient, DoD believes it simply can’t afford to adequately maintain the buildings and other facilities throughout its $1 trillion real estate portfolio. Although Congress gave the department a significant plus-up in maintenance funding this year, it’s already accumulated a backlog of $116 billion in unfunded repair projects.

“This year’s funding will not fully restore the damage caused by years of sequestration,” Niemeyer said. “Many of our facilities have degraded significantly from reduced investments in all accounts. A lot of our facilities are in either failed or poor condition. This will ultimately result in DoD facing larger bills in the future to go ahead and restore or replace facilities that deteriorate prematurely, but the stark reality is that it may be too costly to buy or sell us out of this backlog.”

In the absence of an agreed-upon path forward to restructure its basing footprint, the department says it’s doing what it can within existing law, and within the gates of its existing bases.

For now, that means a major investment in demolishing failed or underutilized structures in order to eliminate costly repair bills. That’s a step Defense officials have previously been reluctant to take, since demolition also costs money. But the department’s 2019 budget would spend roughly half a billion dollars on demolition.

The Navy, for example, plans to spend $120 million on razing unused or crumbling facilities in 2019, after having not requested any funds for demolition the year before.

The other services described similar approaches.

The Army, which estimates it has 170 million square feet of excess infrastructure, has significantly increased the percentage of its facility maintenance funds that it uses for demolition since 2016, said Lt. Gen. Gwen Bingham, the service’s assistant chief of staff for installation management.

“We took on an initiative we call ‘reduce the footprint,’ where we’re able to consolidate our soldiers into our best facilities first, use conversion authority and then demo those facilities that were in poor and failing condition that we know we wouldn’t use again,” she said. “In 2018, we have about $100 million that’s going toward demolition. In FY ‘19, we more than doubled that, well over $200 million. So we are taking it seriously and we are trying to rid ourselves of that excess, because we know it’s costing dollars.”

Similarly, the Marine Corps expects to use existing authority within its facilities budgets to demolish roughly 11 million square feet of floor space over the next several years, as part of what it calls an “infrastructure reset.”

“It’s really a comprehensive program, and demolition’s a big part of it,” said Maj. Gen. Vincent Coglianese, the commander of Marine Corps Installations Command. “We want to reduce and optimize the infrastructure footprint, make our investments in facilities with lowest life-cycle cost. And it’s really a great return on investment, because it’s about $9.4 million of cost avoidance or ability to invest in another program. The low-hanging fruit’s easy right now as we get rid of that excess and do a better job of space management in our facilities. It will be harder to get after it in the the next round, but I think it’s a really important part of our strategy.”

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Maritime Administration says US reserve fleet can’t meet wartime demands

When it comes to shortfalls in the U.S. government’s ability to meet its national security requirements at sea, the U.S. Navy is not the only organization that believes it has a capacity problem.

The U.S. Maritime Administration (MARAD) — the Department of Transportation component in charge of coordinating civilian ships and mariners to move military members and equipment during wartime — is woefully short of the numbers it believes it needs to meet its missions.

MARAD recently reported to Congress that its Ready Reserve Force, which draws from the U.S. shipping industry to provide the military with “surge” sealift capacity, would be able to do its job in the first few months of a major military operation. But it estimates its current force is roughly 1,800 people short of what would be needed if a conflict dragged on for much longer than that.

Currently, the U.S. has about 11,700 private sector mariners with credentials of the kind that would be need to be pressed into service during wartime, said Dr. Shashi Kumar, the MARAD deputy administrator who leads its education and training efforts.

“With normal operations, we’re OK. We’re in the green,” he said. “But when you activate the strategic sealift fleet, when they move from the reserve to full activation status, you need more mariners. You would have to pull them off of commercial ships, as well as people who are on leave or their annual vacation. So about three to four months into the activation of the strategic sealift, we would run into difficulties in crewing those vessels.”

The RRF’s capacity problem is a symptom of larger trends that have reduced America’s relative role in global commercial shipping over the decades. Those trends have also reduced the number of U.S.-flagged ships and U.S. civilian mariners that can be called upon to move military supplies and military personnel when DoD’s Transportation Command determines the Navy’s organic sealift forces aren’t sufficient.

“It’s difficult to have a base of mariners if you don’t have work for them to do in peacetime,” Mark Buzby, MARAD’s administrator said in an interview with Federal News Radio. “If those ships don’t exist, the mariners don’t exist. It all sort of works together. So the peacetime role is really critical in getting more of those U.S.-flagged ships.”

Buzby, who took over as the MARAD chief eight months ago, said he is trying to refocus his agency, which is part of the Department of Transportation, on its national security role. In his view, that includes advocating for policies that would increase the number of U.S.-flagged ships.

Among those are ones that would increase U.S. shipping companies’ role in exporting American goods, and defending the Jones Act, the sometimes-controversial statute that requires all ships carrying goods from one U.S. port to another be carried on U.S.-built ships, owned by American companies and staffed by American crews.

“It all comes back to cargo. Cargo is king,” he said. “You have to have something to carry to justify ships being there, which then requires a certain number of people. So in figuring out where we get our hands on more cargo, we’re about to become a net energy exporter. That’s a lot of product that should be carried on our ships, and currently, most of it is not. That’s a way to gain fleet size.”

Those oil and natural gas shipments could go a long way toward spurring demand for an additional 40-to-45 U.S.-flagged cargo ships. Buzby said that number of vessels would probably be enough to generate the workforce MARAD would need in in order to close its 1,800-mariner gap.

And assuring that there’s enough work for them to do over the course of a career is among his agency’s biggest challenges, he said. As of now, civilian maritime academies, including the MARAD-operated Merchant Marine Academy at Kings Point, New York, generate enough graduates to meet the nation’s current demand.

“The challenge is retaining those people,” Buzby said. “It’s having enough jobs for them to progress through the ranks and to stick around. When your ocean-going fleet is 81 ships involved in international trade, which is what it is today, that’s not a lot of billets.”

But those ships aren’t the only ones whose crewmembers who could contribute to wartime service.

There are an additional 100 whose main function is to transport goods between U.S. ports because of the Jones Act, which forbids foreign-flagged ships from performing that service.

The statute is sometimes criticized as a protectionist measure; one that routinely and artificially raises the price of goods in places like Hawaii and other U.S. locations that depend on sea delivery for everything from milk to furniture.

It came under renewed scrutiny this summer, when some members of Congress pointed out that Puerto Rico’s recovery efforts could be dramatically accelerated if deliveries of supplies weren’t encumbered by legal requirements that those goods be delivered by U.S. ships, originating from other U.S. ports.

Although the Trump administration issued some temporary waivers for Puerto Rico to relieve the Jones Act’s requirements, Sen. John McCain (R-Ariz.), the chairman of the Senate Armed Services Committee, said the Puerto Rico disaster was a perfect example of why the law should be repealed.

“It is unacceptable to force the people of Puerto Rico to pay at least twice as much for food, clean drinking water, supplies and infrastructure due to Jones Act requirements as they work to recover from this disaster,” McCain said in a September statement. “Now, more than ever, it is time to realize the devastating effect of this policy and implement a full repeal of this archaic and burdensome act.”

Buzby said one of his main aims as MARAD’s administrator was to “educate” the public about what he believes is mistaken view of the military value of the Jones Act on the part of McCain and others.

“People say let’s get rid of it, because it costs too much. But if you took away those 100 ships, you’ve taken away the majority of people that are going to man my sealift forces in time of war,” he said. “That’s not to mention what it would do to ship building and repair, because all those ships get repaired in commercial yards. If you take that requirement away, the few remaining ship yards that build military vessels are now shouldering all of the overhead and burden.”

He suggested such a step would only serve to further reduce the competition among the handful of shipyards that are currently capable of building military vessels.

“If you’re worried about a $1.5 billion-dollar destroyer, try a $3.5-billion dollar destroyer if all of that cost has to get shifted,” he said. “It’s a big deal.”

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Army acquisition chief wants clearer lines between government, industry intellectual property

The Army’s top acquisition official said the government has a lot of work to do when it comes to how it treats vendors’ intellectual property. Among his top concerns: The Army needs to find new ways to conduct fair and open competitions without forcing companies to expose their best ideas to potential competitors, and ensure that it’s clear which IP is owned by whom.

On the latter point, Bruce Jette, who was sworn in as the new assistant secretary of the Army for acquisition, logistics and technology just last month, said both the government and industry have become “sloppy” in recent years.

He described a typical interaction over intellectual property rights this way:

“A vendor comes in and says, ‘You need to pick me for this project because I’m going to bring this intellectual property to the table that I paid to develop. And what [the government] will do is develop another piece, and then we got to integrate it,’” Jette said. “And then the next thing you know, we’re both locked together, and it’s messy. The government starts using your IP, you start using the government’s IP, and we cannot get extricated. And then we began having unpleasant conversations.”

Going forward, Jette said he wants to move the Army toward what he called a “more commercial” model in which each side of the negotiation has a clear understanding of who will own what before and after a contract is signed. It would include clear lines of demarcation between the portions of technology that have been paid for by the government and those over which the vendor will continue to hold exclusive rights.

“Show me the box. That’s your IP,” he said, describing the negotiation process. “Put that in the bid, show me what the limits of that is, and show me the functionality. I don’t want to know what’s in the box: that’s yours.  So tell me what you want to do for licensing. Do you maintain it? Do you want me to maintain it? Then, I’m going to design the box that goes next to it and interfaces with it. If I pay for it, I own it. If you pay for it, you own it.”

Two can play the IP game

But by the same token, those licensing arrangements can work in both directions, Jette said.

If the vendor discovers profitable commercial applications coming from the combination of its underlying technology and the government-funded integration work, the Army may be willing to license the IP behind its portion of the project.

“Most people don’t realize it, but the government can get paid for their intellectual property,” he said. “So I want to make sure that we both treat each other honestly and fairly.”

For the government’s part, Jette said he had begun discussions with the Army’s acquisition workforce on the need to respect industry’s IP – something he argued the government often does not do well during the acquisition process. He said private discussions in which vendors share their ideas and capabilities with the Army too often result in publicly-released bid solicitations that incorporate those same ideas, even when the vendor considers them to be proprietary.

Likewise, he said the government needs to improve the request for information (RFI) process by offering more discreet ways for vendors to ask questions and provide information.

“Right now, if you ask me a question after I put an RFI out, I take your question, publish it, and publish the answer,” he said. “I give away your insight, everybody else now sees what you saw. I’m working to try and find a way to fix that so that you can ask questions in a private manner and get answers, and it’s not seen as some sort of corruption of the acquisition process.”

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Congress gives DoD big boost for facility upkeep, but not enough to fix deteriorating buildings

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The 2018 omnibus appropriations bill Congress passed two weeks ago includes some significant plus-ups to what’s been one of the most neglected areas of the Defense Department budget in recent years: the funding lines that pay for maintenance and repair of the military services’ buildings, airfields and other facilities.

In some cases, it provides enough money to prevent the existing, multibillion dollar backlog in deferred maintenance projects from getting any worse. In others, it will only slow the rate at which the backlog is growing.

Among the Army, Navy, Marine Corps and Air Force, the package provided $9.9 billion in facilities sustainment, restoration and modernization (FSRM) funding for 2018 — 58 percent more than the services received in 2017, and modestly higher than the amounts they requested for 2018.

Facilities Sustainment, Restoration, Modernization (FSRM) spending in 2017 and 2018
Service 2017 enacted 2018 requested 2018 enacted Increase between ’17 enacted and ’18 enacted
Army $2,259,546,000 $3,401,155,000 $3,521,155,000 56%
Navy $1,667,742,000 $1,905,679,000 $2,105,679,000 26%
Air Force $1,682,019,000 $3,292,553,000 $3,403,053,000 102%
Marines $640,424,000 $785,264,000 $825,264,000 29%
Totals $6,249,731,000 $9,384,651,000 $9,855,151,000 58%

Service-by-service, the amounts of the increases varied widely, but the biggest bump, by far, went to the Air Force, whose facility officials have previously described an FSRM funding approach that largely required it to “wait for things to break” instead of performing preventative maintenance. Its 2018 appropriation more than doubled over the year before, climbing from just under $1.7 billion to $3.4 billion.

The second-largest increase went to the Army, whose $3.5 billion funding line for FSRM represented a 56 percent boost over 2017. The Navy and Marine Corps each received smaller increases: 26 percent and 29 percent (with final budgets of $2.1 billion and $825 million, respectively).

In each case, the amounts Congress appropriated were not only higher than in 2017, but modestly more than the services had asked for in 2018. And each service except the Air Force proposed still-larger numbers in their 2019 budgets.

But even those amounts are far from sufficient to undo several consecutive years of underfunding the Defense Department has decided to accept for its facilities, which have a total plant replacement value of more than $1 trillion.

It has done so intentionally and openly, arguing that overall caps on Defense funding required it to make difficult tradeoffs in its operation and maintenance budgets, and that facilities represented the area in which it could “accept risk” with the least amount of short-term damage to military readiness. The persistent underfunding, however, is a significant contributor to the fact that between one-fifth and one-quarter of the military’s facilities are now rated as in “poor” or “failing” condition.

In their 2019 budgets, the services said the FSRM funding they were proposing would still only pay for 80 percent of what the Defense Department’s facility sustainment model calculates they should be spending in order to keep their facilities in good repair. While that’s an increase from the mid-70s range at which the services had been funding FSRM over the last several years, it’s far short of the 90 percent goal officials set when they established the model.

Buried within the services’ 2019 budget documents are acknowledgements that the spending levels they’re proposing are still not enough to make any meaningful headway against the military’s growing backlog of needed building repairs.

The Air Force was the one service that requested an FSRM budget ($2.9 billion) that was lower than its 2018 proposal, although it is still $1.2 billion higher than what it received last year.

Officials wrote that the proposal reflected “refocusing funding to other readiness priorities. …This funding level continues to increase the multi-billion dollar FSRM project backlog, increases long-term facilities costs, and increases risk of not meeting unanticipated readiness enabling requirements.”

The Navy, on the other hand, said its $2 billion facilities maintenance budget would represent a 6 percent increase over what it requested in 2018. The amount would be enough to gradually chip away at its backlog, partly because some of the funds ($120 million) would be used to entirely demolish buildings that are no longer worth saving.

But even assuming Congress funds the Navy’s request at the level its officials want, it would take another 48 years of sustained funding at the same level before the backlog is entirely eliminated.

“The Navy continues to take risk in infrastructure funding but mitigates this risk by focusing investments on capabilities directly supporting critical warfighting readiness and capabilities,” officials wrote. “The Navy’s facilities maintenance backlog is $14.3 billion, and will be reduced by $300 million per year based on similar future investment levels.”

Notably absent from DoD’s 2019 budget proposal was a request for another round of base realignments and closures (BRAC), a feature that had accompanied each of the department’s budgets since 2012. Defense experts widely agree that a BRAC round — which would eliminate at least some of DoD’s excess real estate inventory — would relieve pressure on not just its FSRM accounts, but the Defense budget as a whole.

Congress has steadfastly blocked the idea, despite Pentagon studies that show the military services have 19 percent more base infrastructure than they need, even assuming they’re funded at levels that allow the military to grow its force structure to the proportions that Defense Secretary James Mattis believes are necessary. The department had previously projected the savings from a BRAC round at $2 billion per year.

However, the 2018 omnibus bill did offer a small glimmer of hope that lawmakers will allow the department to dispose of at least some of its excess inventory.

One provision orders Ellen Lord, the undersecretary of Defense for acquisition and sustainment, to work with the secretaries of the military departments to come up with a plan for selling some of its real estate by September.

But the report includes severe restrictions: DoD is only allowed to recommend the divestiture of property that’s already completely unoccupied and unused, and only if that’s been the case for five years in a row.

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DoD strategy for AI has implications ranging from intel to business reform

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There are a myriad of organizations in DoD that have a major interest in developing and using artificial intelligence, but until now, no coordinated strategy across the department to share lessons and avoid duplication of effort. That’s beginning to change, officials say.

The realization of the need for such a strategy set in last fall, when, as part of the process of developing the 2018 National Defense Strategy, DoD research leaders began to assess the specific AI and machine learning projects that were already underway throughout the department.

“We were surprised by the breadth that this area has expanded, because everybody has a way to use artificial intelligence — they can envision it,” Mary Miller, the acting assistant secretary of Defense for research and engineering told the House Armed Services Committee last week. “We started doing weekly meetings with people within the Department of Defense, over 40 organizations, over 150 people typically in any given week, that come to talk about what they are doing and how they are investing in what their needs are. Through this effort, we have been trying to shape an understanding of what we are spending our resources on and then to trying to organize those efforts into something that would apply to the National Defense Strategy and where we need to go.”

The unclassified version of the strategy describes offers few specifics about DoD’s precise ambitions for AI, other than to say the department plans to make more investments in the field “including rapid application of commercial breakthroughs, to gain competitive military advantages.” The spending is part of an overall $18 billion increase for science and technology spending DoD requested in its 2019 budget proposal.

But Miller said the development of the new AI roadmap is being organized along several lines of effort, including developing a workforce that understands AI, employing it to improve the military’s command and control systems, conduct intelligence analysis and find ways to team humans with machines in pursuit of a given mission.

She said the ultimate goal is to increase the military’s lethality, but that that doesn’t mean the strategy won’t consider ways to use AI in back-office business areas.

“The more we can save through our business reform, the more we can spend on achieving and attaining that lethality that he desires of the Department of Defense,” Miller said. “So we’re looking at, how do you apply AI to not only training and education, but finances, the medical field, and what we do in contracts acquisition and legal activities?”

The development of a new strategy for AI is far from the first time the department has publicly raised it as a major priority. Artificial intelligence, machine learning and “human-machine teaming” were major cornerstones of the “third offset” strategy DoD officials first embarked on in 2014 amid concerns that the U.S. military was at risk of losing its technological edge to potential adversaries, including Russia and China.

But military officials have been speaking in increasingly worried tones about the prospect of other nations making critical advances in AI before the U.S. does, and then applying them to warfighting.

“Simply put, I would characterize it as what you may roughly know as a revolution in military affairs,” Lt. Gen. Paul Nakasone, President Trump’s nominee to be the next commander of U.S. Cyber Command said at a confirmation hearing earlier this month. “I mean, this is a game changer for our adversaries if they get to artificial intelligence, if they get to quantum computing before we’re there. This is why it’s so critical that we continue our research, continue our work towards it.”

What’s especially worrisome is that China in particular does not have the same bureaucratic impediments the U.S. does when it comes to transitioning new technologies from the private sector or academia into military use, said Rear Adm. David Hahn, the chief of naval research. That’s a fact of life in all areas of technology development, not just when it comes to machine learning and AI, he said.

“There are no structural impediments. They’ve lubricated their system to a point where if a direction is given to move it, it goes,” Hahn said. “By design, we don’t enjoy that same kind of streamlined system, and I’m not saying we need to change our design in the manner China has. But we certainly do need to think through how we’re going to do this differently so that the great work that’s done on the S&T side of the business — and that we see every single day in our personal lives – when it comes time to apply it to naval warfighting or the joint fight, we’ve got good pathways to get it there. That’s the part that worries me: our ability or inability to move at speed.”

Rep. Elise Stefanik (R-N.Y.), the chairwoman of the House Emerging Threats and Capabilities subcommittee said she intends to introduce legislation later this week that’s meant to begin that thinking process, and force a new look at how the U.S. government is organized to “understand and leverage AI.”

“Russia has increased their basic research budget by nearly 25 percent, and the Chinese have national-level plans for science and technology, as well as an approach to lead the world in artificial intelligence by 2030,” she said. “All of these signs point to top-down, government-driven agendas that provide resources and roadmaps for strategic collaboration between industry, academia, and civil society. These efforts could propel Russia and China to continue to leap ahead in many technology sectors, but adversarial dominance is not a forgone conclusion.”

TRICARE extends waiver for specialty care amid tumultuous transition to new contractors

Defense health officials say they’ve extended a waiver process for millions of TRICARE beneficiaries in the Western U.S. through the end of this month, letting them get specialty care without an explicit authorization from the health plan.

The extension follows a tumultuous transition period for TRICARE and its beneficiaries that began on Jan 1., the day the health system simultaneously underwent a consolidation of its regions, a switchover to two new multibillion dollar contracts to manage the program and a restructuring of the health benefit itself that was mandated in the 2018 National Defense Authorization Act (NDAA).

The new East and West regions both saw problems with long call center wait times, backlogged enrollments and referrals and delayed payments to providers. But the issues have proven to be longer-lasting in the Western region, where Health Net Federal Services assumed responsibility for administering the TRICARE system in January.

“As we started, both contractors were not meeting standards on performance,” said Ken Canestrini, the acting director of the TRICARE health plan said during an online Q&A hosted by the Military Officers Association of America.

But he said Humana, the East region contractor, has since begun meeting most of the contract’s requirements, including one which requires beneficiaries’ calls to be answered within 30 seconds. Health Net has not, particularly on the busier Mondays and Tuesdays of each week, when call volumes surge beyond its current capacity of about 19,000 per day.

“The demand was more than they could output. So basically every day we started seeing a backlog creep up, creep up, and what’s happening is we aren’t moving those referrals through the system like we should for our beneficiaries so they can go get care.”

In an email to beneficiaries, Health Net said TRICARE Prime patients could get outpatient care from outside specialty providers without a prior authorization as long as their primary care provider issues the referral before March 31, and as long as the specialty care is scheduled to take place before June 30. Instead of going through Health Net’s approval process to request an authorization, they’ll be able to use a blanket approval letter posted on the company’s website.

Ordinarily, TRICARE wants specialty care referrals to go through the prior authorization process – not just to control costs — but to make sure DoD isn’t letting its own clinicians and military treatment facilities go underutilized.

“We have the system so that we can maximize an MTF. It’s all about reviewing that referral and seeing if we could put them back into the MTF,” Canestrini said. “The problem [with the waiver] is it does not allow me to get those referrals back into the MTF as an opportunity for readiness. But the primary goal is to ensure that the patient’s going to get care in a timely manner, so we’re meeting that obligation. We also want to make sure the quality control is good on the referrals – that they’re going to the right provider, the right specialty, the right zip code, etc., and that Health Net can indeed sustain the demand.”

Health Net is not new to the TRICARE business. Prior to winning the contract for the West region as part of DoD’s TRICARE T-2017 contracts, it had managed the former North region, prior to that area’s absorption into the new East region.

Call volume

To deal with the large call volumes, the company is adding employees and cross-training some of its existing workers in some of the unique aspects of the TRICARE system.

But Canestrini acknowledged the volume of calls that began to flow into the TRICARE contractors’ call centers after Jan. 1 was larger than either DoD or its contractors planned for.

Calls were also longer and more complicated: eight minutes in duration, on average, compared to three minutes prior to the transition. That’s due, in some part, to the fact that DoD was making significant changes to the structure and co-pays involved in its health plans at the same time, and beneficiaries had a lot of questions about how the new system worked.

“Vice Adm. [Raquel] Bono (the Defense Health Agency’s director) made the decision to combine the transition to T-2017, three regions to two, and all the NDAA activities, which had a lot of requirements for the healthcare community, into one plan and move this all through together. The goal was to avoid doing this two times — going through one transition and then turning around and telling people, ‘Oh, by the way, here’s some more changes.’”

Some of the problems were also inextricably linked to the complexity and inflexibility of DoD’s own IT systems.

The significant changes the NDAA called for in TRICARE benefits aren’t simple to accomplish in the Defense Enrollment Eligibility Reporting System (DEERS), the back-end system the department uses to manage and track who is eligible for various types of benefits.

In most cases, even a relatively simple policy change can force TRICARE to stop all new enrollments for a few days while DEERS is updated and restructured with new database fields. In this case, the changes were so significant that all enrollments were frozen for three full weeks leading up to the Jan. 1 transition, leaving the new contractors with a massive backlog of new paper-based enrollments that had to be entered into the system.

“Most of those are caught up now, but it took about 60 days of work to bring those in. It was another wrinkle that was out there,” Canestrini said.

Pentagon quashes DIUx’s billion dollar cloud agreement

The Pentagon on Monday abruptly walked back a nearly $1 billion cloud computing agreement its Silicon Valley outpost had signed only a month earlier, saying officials had determined the terms of the arrangement were excessively broad.

The $950 million other transaction agreement (OTA) with Herndon, Virginia-based REAN Cloud, and brokered by the Defense Innovation Unit-Experimental (DIUx), was supposed to have made the company’s services available to the entire Defense Department. But the deal will now be capped at $65 million, and its only authorized user will be U.S. Transportation Command.

“After reviewing the production agreement, the department has determined that the agreement should be more narrowly tailored to the original scope of the prototype agreement, which was limited to USTRANSCOM applications,” Col. Rob Manning, a Pentagon spokesman said. “We applaud DIUx’s efforts to advance the department’s initiative to accelerate adoption of cloud technologies.”

REAN’s relationship with DoD began last year, when it began helping TRANSCOM migrate its legacy systems as part of a mandate by its commander, Gen. Darren McDew, to move all of its logistics applications to the cloud.

Much of the preliminary work was conducted under a more traditional OTA in which the scope is limited to prototypes. But using authority Congress recently granted DoD to carry those prototypes forward into production OTAs without any further competition, DIUx decided to make the same REAN services available to all the military services and Defense agencies, a step the Pentagon decided was too far beyond the original intent of the prototype.

The deal DIUx announced in February was only the third production OTA the organization had signed since its official launch in 2016, and came just two weeks before the quiet departure of Raj Shah, who had served as its managing partner for the past two years.

The REAN OTA is separate from another large cloud computing contract currently being worked on by DoD’s Cloud Executive Steering Group. The department has revealed few details about its plans for what it has termed the “JEDI” (Joint Enterprise Defense Infrastructure) initiative, but plans to do so Wednesday at an industry day in Arlington, Virginia.

Also on Monday, the Defense Information Systems Agency announced that its MilCloud 2.0 service had attained a key security approval, another major step toward DoD’s adoption of commercial cloud computing.

The provisional authorization for what DoD classifies as “impact level 5” data means accreditors have determined the service offering to be secure enough to handle the most sensitive types of non-secret information.

Officials have previously said they expect MilCloud 2.0, which is operated entirely by a private vendor (CSRA) but housed within DISA’s computing centers, to achieve a PA for secret (level 6) data by the end of the year.

Read more of the DoD Reporter’s Notebook.

Military seeks seasoned industry professionals as next cyber warriors, but they’ll have to start at the bottom

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The likely next commander of U.S. Cyber Command told Congress last week that a pilot program lawmakers established to recruit more seasoned cyber experts into the military’s uniformed workforce is making some headway. But, he strongly suggested it’s been hampered by its inability to commission new officers at ranks that are commensurate with their experience.

Lt. Gen. Paul Nakasone, currently the commander of Army Cyber Command, was referring to the direct commissioning pilot program lawmakers authorized as part of the 2017 Defense authorization bill, letting all of the military services onboard new officers in cyber specialty areas after about 18 weeks of military training.

The Army began implementing its program in December, but said the first inductees would be commissioned as lieutenants,  irrespective of the skills and experience they’d already amassed in the private sector.

“What we have seen in the Army is we need greater constructive credit,” Nakasone said at his confirmation hearing Thursday. “So, if you are a high-end big data or forensics malware analyst, being able to get more credit for that service to bring you in at a higher rank will allow us to probably bring in higher level of talent. This is an early program. We’ve only started it within the past 90 days, but that’s the early results that we’ve seen.”

The Navy, however, has had a similar program in place for much longer, based on an earlier authorization from Congress.

The Navy first announced it would begin direct commissioning of civilians into its Cyber Warfare Engineer career field in 2010, but it’s recruited just 25 new officers via that route since then, according to a spokesman for the Navy’s Fleet Cyber Command. That’s compared to the 30 new officers who are expected to become CWEs after graduating from the U.S. Naval Academy in 2019 alone.

Like the Army, the Navy’s program initially commissions officers as O-1s (ensigns), regardless of their outside experience. As of 2018, basic pay at that rank is just over $37,000 per year, not including housing and other cash allowances.

Vice Adm. Robert Burke, the chief of naval personnel, indicated at a Senate hearing in January that those pay rates are nowhere close to competitive with what people of the caliber the military is seeking are currently earning in industry.

“These [CWEs] are the folks that write the software, do the coding for the offensive operations, and they’re very much in high demand within other government organizations as well as in the civilian community,” he said. “You gave us some relaxed authority to give three years of constructive credit, but that’s still kind of O-1 to O-3 pay, which still leaves them in the mid-$40,000 initial salary range, give or take. And what we’re finding is those folks are in high demand elsewhere, and they’re being hired in the hundreds of thousands of dollar-a-year salary range.”

The Navy has long expressed interest in recruiting new officers from the private sector in something that more closely resembled a lateral entry program which would not require highly-skilled cyber professionals to start their military careers at the bottom. It had previously asked Congress to let it directly commission the new officers at ranks all the way up to captain (O-6).

“I think it would mean a lot to us operationally to be able to recognize people’s expertise, because right now, when we’re doing operations, the rank someone’s wearing on their collar might not have much of a correlation with how much expertise or ability they’re delivering in our cyber operations,” Vice Adm. Jan Tighe, the deputy chief of naval operations for information warfare, said in 2016. “We need to resolve that, either with incentives or promotions or rewards, or bringing them in at the right level to begin with. I think there’s a lot of opportunity there for us.”

Read more of the DoD Reporter’s Notebook.

Marines are latest to create specialized career field for cyber

The Marine Corps became the latest of the military services to stand up a dedicated series of occupational specialties for cyber late last week, calling it a key step toward improving its readiness and retention of cyber talent.

The move comes almost exactly a year after Gen. Robert Neller, the commandant of the Marine Corps, directed his service to create the new occupational field during an offsite meeting of senior leaders.

And it reflects the growing recognition among senior military officials that they must give service members the option to stay engaged in cyber operations for an entire military career if they have any hope of hanging onto their best talent for more than a couple of years. The new specialties begin at the Marines’ lowest ranks, and go up through lieutenant colonel on the officer side and master gunnery sergeant on the enlisted side.

“’Trigger fingers turn to Twitter fingers’? Not exactly, but this is the next step in professionalizing our cyber force, which will be critical to our success, now and in the future,” Neller wrote in a Twitter message Thursday.

Marine officials have previously said they planned to begin assigning troops to the new occupational field sometime in fiscal 2018, but the announcement formally establishes what the service has designated the Cyberspace Occupational Field and lays out the specific specialties available for service members to begin transferring into.

The new “1700” field creates seven cyber-specific military occupational specialties (MOS), including two for commissioned officers up to the rank of lieutenant colonel, two for warrant officers and three for enlisted personnel. Officials said they would release more information later this year about how Marines could apply for lateral movements into the new MOS positions, but a message released last week laid out high-level job descriptions and the corps’ overall intent.

“The (Cyberspace Occupational Field) provides the Marine Corps with a professionalized, highly skilled workforce that can effectively employ cyberspace capabilities and create effects across the Marine Air-Ground Task Force and support joint requirements,” wrote Lt. Gen. D. J. O’Donohue, the deputy commandant for information. “The OccFld supports the maturation of the Marine Corps’ cyberspace workforce through the establishment of specific career paths, standardized training continuum, and mechanisms to retain trained and qualified Marines within the cyberspace community.”

Within the seven new specialties, some are expected to serve as generalists; others will focus on either offensive or defensive operations in cyberspace.

The two new specialties for commissioned officers (Cyberspace Officer and Cyberspace Warfare Development Officer) fall into the former category, as does one of the new MOS positions for senior enlisted personnel (Cyberspace Operations Chiefs). They’re expected to supervise and direct “all aspects” of cyberspace operations and “possess an overall knowledge of the capabilities, effects, systems, platforms and resources required to conduct” them.

The remaining specialties include two each for offensive and defensive operations. Within those, there is one each for warrant officers and another for enlisted personnel from  private to gunnery sergeant.

The offensive billets are to focus on developing and using tools, tactics, techniques and procedures for attacking enemy targets via cyberspace and “conduct detailed planning and analysis of targets of interest in support of Joint and Marine Corps’ requirements.”

The Marines’ Defensive Cyberspace Weapons Officers and Cyberspace Defensive Operators, meanwhile, are charged with defending networks, detecting and mitigating attacks and cyber vulnerabilities. But they’re expected to work closely with their counterparts on the offensive side and others, O’Donohue wrote.

“CDOs recognize and leverage the application of offensive cyberspace operations in order to implement an effective defensive strategy. CDOs coordinate with network and system administrators to ensure the implementation of security controls in support of (DoD Information Network) operations.”

Read more of the DoD Reporter’s Notebook.

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