Future Combat System (FCS) May be Doomed

Rumors are strong that the Pentagon is set to "break up" the FCS prime contract while keeping its separate elements alive. Excepting the Manned Ground Vehicle element, which will be cancelled, the program will be renamed the Army Brigade Combat Team Modernization (ABCTM). The prime contractors, Boeing and SAIC, will be "yanked off the job" ( in the words of Defense News' Kris Osborn) after having spent tens of billions as lead systems integrators.

I have some nostalgia for FCS, having had a hand in helping Boeing win the program back in 2002. My company at the time, SM&A, managed Boeing's competitive effort to a very successful and surprising win over Lockheed Martin and other defense primes. I sold the SM&A effort to Boeing senior executives at the Paris Air Show in 2001. The win transformed Boeing into a key Army contractor, a claim that formerly could be made only by Lockheed Martin, Raytheon, General Dynamics, and handful of other primes.

More Pentagon Oversight?

President Obama signed a bill yesterday creating a Senate-confirmed independent position, "Director of Cost Assessment and Program Evaluation," within the Pentagon. The law also provides for greater field commanders input into the development and ordering of weapons systems. Congress voted for this bill unanimously in both houses (!).

The President expects that this new position will "end waste and inefficiency," "limit cost overruns before they spiral out of control," and "reform a system where taxpayers are charged too much for weapons systems that too often arrive late."

In this humble observers opinion:

• Every new Administration, Democrat or Republican, undergoes an initiative to eliminate waste, fraud, and abuse. The Pentagon is the typical target, even though fraud is equally rampant in other Government agencies, e.g., Health and Human Services, Homeland Security, and Veterans.

• The new position will in all likelihood have little impact. It might delay certain weapons procurements due to the increased scrutiny, but will not save money. In fact, if the increased scrutiny impact procurements underway, it will increase costs.

But it looks and sounds good. And the Congress voted unanimously (House 411-0, Senate 93-0) to approve the measure. Ah, politics.

NASA’s Hubble Repair Success

The completion of Servicing Mission 4 in space yesterday, 300 nautical miles above the earth, is a technical achievement for NASA. As Daniel Henninger of the Wall Street Journal writes, “Hubble is the Washington Monument of US science.” The mission to extend its life 5 additional years will reap huge bonanzas in data and imagery from space. The astronauts each had repair specialties and their work was a space variant of a typical Saturday working in one’s garage at home: repairing a camera, replacing six gyroscopes, and installing new insulation. They struggled getting bolts loosened -- can you use WD-40 in outer space? -- yet after some delays they are on their way home.

We Americans tend to take NASA for granted when times are good. This benign neglect is occurring today. The Obama Administration proposed a 5% increase for FY2010 versus FY2009 -- good news which included the continuation of Constellation, Ares 1, and Orion Crew Exploration Vehicle. But NASA followers are very cautious. There is a sense that the new Administration might not take space exploration seriously and that the increased figures are placeholders until further review occurs. Five months have passed and the Administration has yet to appoint a NASA Administrator. And, the tension created by the transition team late in 2008 still gnaws at NASA veterans, largely because the assigned transition staff were non-technical.

NASA watchers, including contractors, are right to feel uneasy for now.

Intelligence Community (IC) Update

The IC will continue to be a very promising market for small technology companies with new, novel ideas that align with the IC's priorities. Just returned from two days at the INSA (Intelligence and National Security Alliance) conference (May 18-19, 2009; Chantilly VA) and heard several Directors outline their technology needs and their open invitations for solutions.

IC budgets will continue to grow under the Obama Administration. The appointment of Gates as Secretary of Defense and Admiral Blair as Director of National Intelligence ensures stability in funding for the next two fiscal years at least. It is axiomatic that Defense and Intelligence funding is both political and dependent on threats to the nation. Both of these factors are in the market's favor.