November 14, 2014 

The House and Senate returned to DC after the mid-term election recess. The House passed HR 4194, the Government Reports Elimination Act of 2014 and HR 5682, a bill approving the Keystone XL Pipeline. House Majority Leader Kevin McCarthy (R-CA) announced that the House will convene for the 114^th Congress on January 6, 2015. And he confirmed that the targeted adjournment date for the 113^th Congress is Dec. 11. The Senate approved a few judicial nominations and voted to invoke cloture on S1086, the Child Care and Development Block Grant Act of 2013.

Leadership Elections

This week Sen. Mitch McConnell (R-KY) was elected Senate majority leader and Sen. Harry Reid (D-NV) was elected Senate minority leader for the 114^th Congress, which convenes in January. McConnell was elected as GOP leader without dissent, while Reid received several no votes including Sens. McCaskill (D-MO), Warner (D-VA), Manchin (D-WV), and Kaine (D-VA). Republican senators chose Sen. Roger Wicker (R-MS) as chair of the National Republican Senatorial Committee for the 2016 cycle while democrats chose Sen. Jon Tester (D-MT) as chairman of the Democratic Senatorial Campaign Committee. Sen. Elizabeth Warren (D-MA) was appointed as Senior Policy Advisor to the Democratic Policy and Communications Center, a newly created Senate leadership post. And Sen. Amy Klobuchar (D-WI) was elected as chairwoman of Steering and Outreach.

The House Republican Conference voted to keep Rep. John Boehner (R-OH) as speaker of the House (his third term), and Rep. Kevin McCarthy (R-CA) was re-elected as majority leader. The votes came in as a secret ballot of the GOP caucus on Thursday. The full House must approve the GOP’s choice by a majority vote in January. Rep. Steve Scalise (R-LA) won a full-term as Republican Whip in the next Congress and Rep. Cathy McMorris Rodgers (R-WA) won her second term as chairwoman of the House Republican Conference. House Republicans also selected Rep. Luke Messer (R-IN) as Republican Policy Committee chairman. And Speaker Boehner announced today that he selected Rep. Pete Sessions (R-TX) to remain as chairman in the House Rules Committee in the next Congress. House Republicans also passed a party rule that a chairman must give up their gavel if they announce their intention to run for another office.

FY15 Appropriations

House and Senate Appropriations Chairmen Harold Rogers (R-KY) and Barbara Mikulski (D-MD) have directed their staffs to have a detailed, line-by-line omnibus spending plan ready for floor action by the week of Dec. 8. While some more conservative republicans may be pushing for a shorter-term spending deal, appropriations staff insist that a continuing resolution (CR) is not part of the leadership discussions. The current CR epxires on Dec. 11, so Congress needs to take action before then in order to avoid a government shutdown. House Republicans may wait on moving the omnibus bill potentially using it as a vehicle to limit any executive orders from President Obama on immigration reform. Sen. Mikulski has warned that any immigration provisions would be a deal-breaker for an omnibus. If the Senate opposes an omnibus with immigration riders attached, the House may then opt for a clean, short-term continuing resolution funding the government into the new Congress when republicans have the majority in the Senate.

The Obama Administration requested an additional $5.6 billion for Overseas Contingency Operations (OCO) activities for Operation Inherent Resolve, the military campaign focused on defeating the Islamic State of Iraq and the Levant (ISIL). The request includes $1.6 billion to establish an Iraq Train and Equip Fund (ITEF) to train and support approximately 12 Iraqi and Kurdish brigades, as well as an additional $520 million for State Department-related operations. This proposed OCO funding is in addition to the $58.6 billion Department of Defense OCO request sent to the Congress in June as these activities and operations were not anticipated at the time that request was submitted. Some Republicans were critical of the request questioning if it was large enough and whether all of it should be considered emergency funding, but stopped short of opposing it. The details of the request can be found at:

http://www.whitehouse.gov/sites/default/files/omb/assets/budget_amendments/amendment_11_10_14.pdf

Department of Defense Nuclear Enterprise Review

Today Secretary of Defense Chuck Hagel announced a comprehensive action plan to reform the nuclear enterprise and called for additional investments in sustainment as well as measures to address longstanding cultural issues. This announcement follows a series of missteps involving the nation’s nuclear forces and their leadership after which Secretary Hagel called for both an internal and external review of the entire Department of Defense nuclear enterprise. Together, the two reviews identified more than 100 recommendations to improve the nuclear deterrent forces. They focus on several key areas, including: oversight, investment, and personnel and training. Their recommendations range from acquisition investments that will cost several billion dollars over the five-year defense spending program. The Department will prioritize funding on actions that improve the security and sustainment of the current force, ensure that modernization of the force remains on track, and address shortfalls that are undermining the morale of the force.

Link to External Independent Review:

http://www.defense.gov/pubs/Independent-Nuclear-Enterprise-Review-Report-30-June-2014.pdf

Link to Summary of Internal Nuclear Enterprise Review:

http://www.defense.gov/pubs/Summary-Internal-NER.pdf

Link to DOD Fact Sheet on Implementation:

http://www.defense.gov/pubs/NER-Fact-Sheet.pdf

Veterans Affairs Reorganization

The Department of Veterans Affairs Secretary Robert McDonald announced a major restructuring of the department this week including creating a new VA-wide customer service office led by a Chief Customer Service Officer who will report directly to the Secretary. The reforms also include establishing new partnerships with a national network of Community Veteran Advisory Councils to coordinate better service delivery with local, state and community partners, and identifying opportunities for VA to realign its internal business processes into a shared services model in which organizations across VA leverage the same support services, to improve efficiency, reduce costs and increase productivity across VA. McDonald also confirmed that the department has taken disciplinary action against 5,600 employees and has plans to hire about 28,000 medical professionals around the country, including about 2,500 mental health professionals.

Senate Armed Services Committee

This week Sen. John McCain (R-AZ), the expected next chair of the Senate Armed Services Committee (SASC) said that he plans to shake up the committee when he takes over as chairman in the 114^th Congress. McCain is considering establishing one or two new subcommittees to better deal with cybersecurity and launch oversight investigations. Sen. Jack Reed (D-RI) is poised to take over as the ranking democrat on the committee.

National Defense Authorization Act

Leaders of the House and Senate Armed Services Committees met this week to negotiate the most contentious issues (which includes transfer of Guantanamo Bay prisoners, retiring 11 Navy cruisers, and retiring the A-10 Warthog attack jet) of the FY15 National Defense Authorization Act. Committee staff have been preparing an informal conference report that irons out the differences between the House passed bill and the Senate committee passed version. The conference report will be passed as stand-alone legislation in the House and Senate without amendments.

Political Updates

While Sen. Mark Begich (D-AK) has not yet conceded, the Associated Press has called the race for Republican Dan Sullivan. Sullivan’s win would make the new 114^th Congress majority in the Senate 53 republicans to 46 democrats. One more race will be decided in Louisiana after the runoff on Dec. 6.

The race between Rep. Ron Barber (D-AZ) and republican challenger Martha McSally is heading towards a recount. One legal challenge has already been filed over provisional ballots. A full recount will take weeks. McSally currently has a 133 vote lead.

The House swore-in three newly elected members who were filling current vacancies – Congresswoman-Elect Alma Adams (D-NC), Congressman-Elect Donald Norcross (D-NJ), and Congressman-Elect David Brat (R-VA).

The President nominated Deputy National Security Advisor Tony Blinken to become the next deputy secretary of state. If confirmed by the Senate, Blinken would replace William Burns who retired earlier this year. Previously, Blinken was Staff Director for the U.S. Senate Foreign Relations Committee and a Senior Fellow at the Center for Strategic and International Studies. In the Clinton Administration, he served on the National Security Council staff as Special Assistant to the President and Senior Director for European Affairs and as Special Assistant to the President and Senior Director for Strategic Planning and Speechwriting. He also served as Special Assistant to the Assistant Secretary of State for European Affairs at the Department of State.

The President also nominated Nicholas Rasmussen to be the director of the National Counterterrorism Center (NCTC), succeeding Matthew Olsen who stepped down this summer. Rasmussen is currently the Deputy Director of the NCTC, a position he has held since 2012. Rasmussen has also served on the National Security Council (NSC) staff, held senior policy and planning positions at NCTC, and served as Director for Regional Affairs in the Office of Combating Terrorism on the NSC staff. Director of National Intelligence James Clapper strongly endorsed the President’s nomination of Rasmussen.

Jeffery Baran, a current member of the Nuclear Regulatory Commission (NRC), was renominated for the position. Prior to becoming a member of the NRC, he served as Staff Director for Energy and Environment on the U.S. House of Representatives Committee on Energy and Commerce. Baran is serving out the term of Commissioner William Magwood IV, who stepped down in August to become director-general of the Organization for Economic Cooperation and Development’s Nuclear Energy Agency. The Senate confirmed Baran on a 56-44 vote in September.

Elissa Slotkin was nominated for Assistant Secretary of Defense for International Security Affairs. Slotkin is the Principal Deputy Assistant Secretary of Defense for International Security Affairs, a position she has held since 2012. She has also held the position of Principal Deputy Under Secretary of Defense for Policy, Chief of Staff to the Assistant Secretary of Defense for International Security Affairs, and Senior Advisor for Middle East Transition at the Department of Defense. Slotkin has also worked at the Central Intelligence Agency and in the Office of the Director of National Intelligence.

The President nominated Antonio Weiss to be Under Secretary for Domestic Finance at the Department of the Treasury. Weiss is the Global Head of Investment Banking for Lazard and is a Member of the Council on Foreign Relations and the Economic Advisory Council of the Center for American Progress. He is Publisher of The Paris Review. Sen. Elizabeth Warren (D-MA) said that she would oppose Weiss’ nomination because of his past work with corporate inversions as he advised on Burger King’s acquisition of Canadian doughnut chain Tim Hortons.

The National Geospatial-Intelligence Agency announced that Susan Gordon will become deputy director upon the retirement of current NGA deputy director Mike Rodrigue on December 31. Gordon, a 34-year veteran of the intelligence community, is currently the director of the CIA information operations center.

President Barack Obama has renominated Jeffery Baran to the NRC. Baran, a former aide to outgoing Rep. Henry Waxman, was confirmed by the Senate in September to fill in the remaining months of the term vacated by William Magwood. Baran’s current term expires June 30, 2015. He’s been nominated to fill in the remainder of NRC Chairwoman Allison Macfarlane’s term, which expires June 30, 2018 – not the seat he now occupies, which will become vacant on July 1 and would’ve expired in 2020 if he were reconfirmed to it.

And the White House finally withdrew the nomination of Jo Ann Rooney nomination to be Undersecretary of the Navy undersecretary. Rooney was nominated 14 months ago, but faced opposition from Sen. Kirsten Gillibrand (D-NY) after Rooney said that rape and sexual assault should be prosecuted in the militarys chain of command. Rooney also clashed with Sen. John McCain (R-AZ) who said he would not support her nomination. Rooney is a two-time college president who served as principal deputy undersecretary of defense for personnel and readiness in 2011 and 2012. A new nominee for the Navy undersecretary position was not immediately announced.

Brendan Goode, the director of the Network Security Deployment division in the Office of Cybersecurity and Communications (CS&C) is leaving for the private sector. HIs last day will be Nov. 21. Danny Toler, the deputy director of the Federal Network Resilience division is being promoted to replace Goode.

Confirmation hearings for attorney general nomineee Loretta Lynch will likely wait until next year appeasing republicans who want to wait unitl they have the majority and freeing up the Senate Judiciary Committee to pursue enactment of the USA Freedom Act during the lame duck session. Overhaul of the domestic surveillance programs has been a priority for Senate Judiciary chairman Patrick Leahy (D-VT).

Next Week

The House will take up HR 1422, the EPA Science Advisory Board Reform Act of 2013; HR 4012, the Secret Science Reform Act of 2014; and HR 4795, the Promoting New Manufacturing Act. The Senate will resume consideration of S1086, the Child Care and Development Block Grant Act of 2013. The Senate will also take up S2280, authorizing the Keystone XL Pipeline and S2685, the Uniting and Strengthening America by Fulfilling Rights and Ensuring Effective Discipline Over Monitoring Act of 2014. Finally, the Senate could take up the USA Freedom Act as soon as next week, but the bill is still facing opposition from Senate Intelligence Chairwoman Dianne Feinstein (D-CA) and Sen. John Cornyn (R-TX), Senate Republican Whip.

November 7, 2014

Both the House and Senate were in recess this week.

Ebola Supplemental Funding Request

The World Health Organization reported this week that the number of suspected Ebola cases was at 13,042 and deaths were at 4,818. President Obama submitted to Congress a request for an additional $6.18 billion to contain and end the Ebola outbreak in West Africa and speed the development of treatments and vaccinations. This request will be a test of how Republicans will work with the Administration after making significant gains in the midterm elections and winning control of the Senate in the 114^th Congress.

The request includes $4.64 billion for immediate needs, which is broken down as follows:

• $2.43 billion for the Department of Health and Human Services (HHS)
  • $1.83 billion is for the Centers for Disease Control and Prevention (CDC)
  • $333 million is for the Public Health and Social Services Emergency Fund
  • $283 million for the National Institutes of Health (NIH)
  • $25 million for the Food and Drug Administration (FDA)
• $1.98 billion for the US Agency for International Development (USAID)
• $127 million for the Department of State
• $112 million for the Department of Defense (DOD)

The administration also requested $1.54 billion in contingency funding of which $751 million is for HHS and $792 million is for USAID and the Department of State. Given the changing nature of the Ebola epidemic the Contingency Fund is requested to ensure that there are resources available to respond to the evolving situation.

The President requested that all of the funding be designated as emergency spending not requiring an offset, which may draw some opposition from conservative budget hawks during consideration. One potential vehicle for this funding is an FY15 omnibus appropriations bill that will be considered during the lame duck session.

More details on the Administration’s request can be found at:

http://www.whitehouse.gov/the-press-office/2014/11/05/fact-sheet-emergency-funding-request-enhance-us-government-s-response-eb

Islamic State of Iraq and the Levant (ISIL) Use-of-Force Authorization and Emergency Funding Request

President Obama said that he would seek Authorization to Use Military Force (AUMF) against Islamic State of Iraq and the Levant (ISIL) from Congress. The President will begin discussions on the topic with congressional leaders when they visit the White House today. House Armed Services Committee Chairman Buck McKeon (R-CA) has said that he would like the new 114th Congress to address this issue rather than the current Congress, so it is unclear if the AUMF will be considered during the lame duck session.

The president also plans to request an additional $3.2 billion in war funding for the fight against ISIL. The request will come as an amendment to the administration’s $58.6 billion request for FY15 Overseas Contingency Operations (OCO) funding for the military. The funding will be used to replace munitions used in operations against ISIL extremists in Iraq and Syria, pay for the 12 teams of US military advisers that are working with Iraqi forces, and provide flying hours for intelligence and surveillance aircraft. US Central Command released an information sheet last month stating the cost of Navy munitions at $62 million, including $53 million for 47 Tomahawk cruise missiles. The emergency funding request may also provide at least $500 million to train and equip Iraqi and Kurdish forces fighting the Sunni militants.

Political Updates

Vantage Point Strategies’ in-depth coverage of the 2014 midterm elections can be found at:

https://www.vantagepointstrat.com/?attachment_id=295

President Obama will replace departing Attorney General Eric Holder with Loretta Lynch the United States Attorney for the Eastern District of New York. Lynch was confirmed by the Senate in 2000 and 2010 for her current position. She has also been a partner at Hogan & Hartson, and a member of the board of the Federal Reserve Bank of NY. Lynch earned both her BA and JD at Harvard. If confirmed as Attorney General, she will be the first African-American woman to hold the position, and it will be the first time in nearly 200 years that a president has nominated a US attorney general for Attorney General. While the President as asked that Lynch be confirmed as soon as possible, Sen. Mitch McConnell (R-KY) said the nomination should be considered in the new Congress.

The President nominated David Berteau to be Assistant Secretary of Defense for Logistics and Materiel Readiness. Berteau is currently Senior Vice President and Director of the National Security Program on Industry and Resources at the Center for Strategic and International Studies (CSIS), a position he has held since 2013. Berteau has also served as a Director at Clark & Weinstock, director of the National Security Studies Program at Syracuse University, Senior Vice President at SAIC, Acting Assistant Secretary of Defense for Production and Logistics, and Chairman for the Defense Conversion Commission.

The President also nominated Leigh Bradley to be General Counsel at the Department of Veterans Affairs. Bradley is currently Director of the Standards of Conduct Office in the Office of the General Counsel at the Department of Defense (DOD), a position she has held since 2008. Since July 2014, she has served on detail from DOD to the Department of Veterans Affairs as Special Counsel to the Secretary. Previously, Bradley was at the American Red Cross, a Partner at Holland & Knight, LLP, and General Counsel at the Department of Veterans Affairs. She served as Principal Deputy General Counsel for the Department of the Navy and as a senior attorney in the Office of the Deputy General Counsel at DOD. A veteran, she also served on active duty as a Judge Advocate for the US Air Force.

Howard Harary has been appointed director of the National Institute of Standards and Technology’s (NIST) Engineering Laboratory, which develops the measurement tools and standards needed to support technology-intensive manufacturing, construction and cyber-physical systems. The laboratory also conducts research to reduce the risks of fire, earthquakes and other hazards. Harary became the Engineering Laboratory’s acting director in 2013. The Department of Commerce approved Harary’s appointment, effective November 3, 2014.

Next Week

The House and Senate return from recess next Wednesday November 12. Newly elected members of Congress arrive for orientation and leadership elections for both the House and Senate. House Majority Leader Kevin McCarthy (R-CA) said that the House will take up three EPA-related bills the week of 11/17 – HR 4102, the Secret Science Reform Act, HR 1422, the EPA Science Advisory Board Reform Act, and HR 4795, the Promoting New Manufacturing Act. These bills have little chance of passing the Senate before the end of the 113^th Congress.

October 31, 2014

Both the House and Senate were in recess this week.

Armed Services Committees Chairmen

Rep. Randy Forbes (R-VA) announced this week that he will challenge Rep. Mac Thornberry (R-TX) for the chairmanship of the House Armed Services Committee. The current chairman, Rep. Buck McKeon (R-CA) is retiring at the end of this Congress. While Thornberry has seniority over Forbes, is favored by Republican leaders, has given the National Republican Congressional Committee significantly more than Forbes, and has the endorsement of McKeon, Forbes said that he would make his case to the Republican Steering Committee after the midterm elections. The Steering Committee is the group of 30 House leadership-aligned members who decide by vote who will chair committees with House Speaker John Boehner having weighted votes.

And on the Senate side, Sen. Jack Reed (D-RI) was presumed to be the successor to retiring Senate Armed Services Committee (SASC) Chairman Carl Levin (D-MI). However, this week his spokesman stated that Reed hasn’t made a decision about which committee he would helm, and that he wouldn’t make the decision until after the election. Reed will be the most senior Democrat on SASC and Banking. If Reed opts for Banking, Sen. Claire McCaskill (D-MO) could be the most senior Democrat on SASC.

Cybersecurity

Financial Industry Regulatory Authority (FINRA)

The Financial Industry Regulatory Authority (FINRA) at a conference this week said that they are in the process of developing their new 2015 examination priorities and will publish them in January 2015. The new priorities are expected to include a more intense scrutiny of brokerage firms’ cybersecurity practices. FINRA is also hiring examiners with technology expertise to assist in reviewing firms’ practices. The new examiners will be looking for measures that firms have in place for securing clients’ data and testing the integrity of firms’ technology. FINRA is an independent, not-for-profit organization authorized by Congress to write and enforce rules governing the activities of securities firms and brokers, and to examine those firms for compliance with those rules. They are increasing their cybersecurity efforts in light of recent hacking events that compromised clients’ personal information and other data.

National Institute of Standards and Technology (NIST)

The National Institute of Standards and Technology (NIST) released their Draft Special Publication (SP) 800-150, Guide to Cyber Threat Information Sharing this week. The purpose of this publication is to assist organizations in establishing, participating in, and maintaining information sharing relationships throughout the incident response life cycle. It explores the benefits and challenges of coordination and sharing, presents the strengths and weaknesses of various information sharing architectures, clarifies the importance of trust, and introduces specific data handling considerations.  The goal of the publication is to provide guidance that improves the efficiency and effectiveness of defensive cyber operations and incident response activities, by introducing safe and effective information sharing practices, examining the value of standard data formats and transport protocols to foster greater interoperability, and providing guidance on the planning, implementation, and maintenance of information sharing programs.

The publication recommends implementing the following recommendation, which will enable organizations to make more efficient and effective use of information sharing and collaboration capabilities throughout the incident response life cycle:

1. Organizations should perform an inventory that catalogues the information an organization currently possesses, the information that it is capable of producing, and document the circumstances under which this information may be shared.
2. Organizations should exchange threat intelligence, tools, and techniques with sharing partners.
3. Organizations should employ open, standard data formats and transport protocols to facilitate the efficient and effective exchange of information.
4. Organizations should enhance their cybersecurity posture and maturity by augmenting local data collection, analysis, and management functions using information from external sources.
5. Organizations should define an approach for adaptive cybersecurity that addresses the full cyber-attack life cycle.
6. Organizations should ensure that the resources required for ongoing participation in a sharing community are available.
7. Organizations should protect sensitive information by maintaining an ongoing awareness of information security, vulnerabilities, and threats.
8. Organizations should establish the foundational infrastructure necessary to maintain its cybersecurity posture and clearly identify the roles and responsibilities for installing, operating, and maintaining these capabilities.

A copy of the draft publication can be found at:

http://csrc.nist.gov/publications/drafts/800-150/sp800_150_draft.pdf

Department of Defense Directives

In the past week Deputy Secretary of Defense Robert Work released three DoD directives, which are broad policy documents used to establish policy, assign responsibilities, and delegate authority to those working in and with the military. The recently released directives focus on the responsibilities of the Under Secretary of Defense for Intelligence, the management of serious security incidents involving classified information, and DoD’s privacy program.

Under Secretary of Defense for Intelligence (USD(I))

Last Friday, the Pentagon issued an updated version (attached) of DoD Directive 5143.01 defining the role of the Under Secretary of Defense for Intelligence. The position was established in the FY03 NDAA to improve management and coordination of defense intelligence programs. This update replaces the version issued in 2005 and reflects changes in the global environment as well as changes in the intelligence mission. Cybersecurity, insider threats, unauthorized disclosures of classified information, and biometrics are all new terms included in the expanded portfolio of the Undersecretary of Defense for Intelligence.

A copy of this directive can be found at:

http://www.dtic.mil/whs/directives/corres/pdf/514301p.pdf

Management of Serious Security Incidents Involving Classified Information

The Management of Serious Security Incidents Involving Classified Information directive released on Monday now designates unauthorized disclosures of classified information, leaks to the news media, acts of espionage, and certain other information security offenses as “serious security incidents.” The new terminology was adopted to standardize procedures for preventing, identifying, investigating, and reporting such violations when they occur. It replaces a previous directive from 2005. While not every case of mishandling classified information qualifies as a “serious security incident,” the term applies whenever there is an unauthorized disclosure. And the new directive says that “DoD personnel responsible for serious security incidents may be held accountable, as appropriate, in a criminal proceeding, civil judicial action, disciplinary or adverse administrative action, or other administrative action authorized by federal law or regulations.”

A copy of this directive can be found at:

http://www.dtic.mil/whs/directives/corres/pdf/521050p.pdf

DoD Privacy Program

Finally, the DoD Privacy Program delegates authorities and responsibilities for the effective administration of the DoD Privacy Program.

A copy of this directive can be found at:

http://www.dtic.mil/whs/directives/corres/pdf/540011p.pdf

Military Intelligence Program (MIP) FY14 Budget

The Department of Defense released the Military Intelligence Program (MIP) appropriated top line budget for FY2014. The total FY14 MIP budget, which included both the base budget and Overseas Contingency Operations appropriations, was $17.4B billion. The MIP budget has decreased by $10 billion over the past five years. It hit its high point in FY10 with $27 billion, FY11 $24 billion, FY12 $21.5 billion, and FY13 $19.2 billion (but reduced by sequester to $18.6 billion). The department determined that releasing this top line figure does not jeopardize any classified activities within the MIP. No other MIP budget figures or program details will be released, as they remain classified for national security reasons.

Department of Defense Acquisition Reform Weekend Meeting

Frank Kendall, Undersecretary of Defense for Acquisition, Technology and Logistics is scheduled to meet with members of the Aerospace Industries Association (AIA) this weekend to discuss Better Buying Power (BBP) 3.0. Kendall released the latest acquisition reform initiative last month. Mary Margaret Evans, who has been tapped as Kendall’s point person on the rollout and industry outreach for the Better Buying Power 3.0 initiative, will also attend the meeting.

The BBP initiative seeks to improve the Department of Defense’s procurement process by providing more incentives for contractors to meet cost and schedule goals, remove some barriers to buying commercial products, incorporate more input from the intelligence community into requirements for future weapons, expanding the Superior Supplier Incentive Program, and getting draft requirements out earlier and incorporating industry feedback into final solicitations. After the rollout, Undersecretary Kendall said his office would collect comments from stakeholders and then release a final product in early 2015.

A copy of the interim release of BBP 3.0 can be found at:

https://www.vantagepointstrat.com/?attachment_id=268

DHS Employee Morale Task Force

A Federal Register notice this week announced that DHS Secretary Jeh Johnson tasked his Homeland Security Advisory Council (HSAC) with establishing a DHS Employee Morale Task Force. The HSAC is comprised of leaders of local law enforcement, first responders, state and local government, the private sector, and academia. The new The DHS Employee Morale Task Force will provide findings and recommendations on how to improve employee morale throughout the DHS enterprise. They will address, among other closely related topics, the following questions: (1) What are the core or root causes of continued low morale in the Department of Homeland Security? (2) How can DHS strengthen its leadership cadre, in order to both enhance mission effectiveness and also increase employee morale? (3) How can DHS work as a whole, across the agencies and recognizing their distinct cultures, to build a greater sense of belonging and improve employee morale? (4) Referencing the 2007 HSAC DHS Morale Assessment: which of those recommendations were successfully implemented? For those items that were not but still remain relevant, what changes should be made to increase the likelihood of successful implementation and organizational adoption? The task force’s findings and recommendations will be submitted to the HSAC no later than nine months from Oct 21, 2014 (date of publication). HSAC will then deliberate and vote on the recommendations during a public meeting. Once approved, the report will be sent to the Secretary for his review and acceptance.

Political Updates

Customs and Border Patrol Commissioner (CBP) Gil Kerlikowske and DHS Secretary Jeh Johnson announced the selection of Kevin McAleenan as the Deputy Commissioner of CBP. McAleenan has served as the Acting Deputy Commissioner of CBP since April 1, 2013. Previously, McAleenan served as the acting assistant commissioner of the CBP Office of Field Operations, and as deputy assistant commissioner, Office of Field Operations. Prior to assuming these positions with CBP Field Operations, McAleenan served in several leadership capacities at CBP and the former US Customs Service. From 2006 to 2008, McAleenan served as the area port director, Los Angeles International Airport. Prior to his government service, McAleenan practiced law in California. He received his Juris Doctor degree from the University of Chicago Law School after earning a Bachelor of Arts Degree, cum laude, from Amherst College.

Next Week

The House and Senate are in recess until November 12.

October 24, 2014

Both the House and Senate were in recess this week.

House Republican Strategy Memo

On Wednesday, House Majority Leader Kevin McCarthy (R-CA) sent a memo to House Republicans in which he wrote that the party’s central policy goal of “restoring economic growth and job creation” will include a focus on “restoring competency in government.” Restoring competency requires both “shrinking government to its appropriate scope and mission and reforming how government operates in its core sphere.” So a portion of their legislative agenda for the 114th Congress will focus on reforming and streamlining federal agencies. McCarthy mentioned three examples of this type of legislation that passed the House in this Congress – pipeline permitting reforms, federal mining permit reforms, and FDA reforms – and asked his Republican members to think about areas of government reform they would like to focus on during the next Congress. McCarthy also wrote that their party “must legislate differently in order to restore trust in government.” He offered suggestions of sunsetting new agency reports and including basic regulatory reforms in any legislation that authorizes or requires new regulations. And he ends with asking members again for their suggestions, “if you have any legislative ideas or process reforms you would like considered as we formulate next year’s legislative agenda and revise on our internal protocols, please email or call me or have your staff reach out to mine.”

A copy of his memo can be found at:

https://www.vantagepointstrat.com/?attachment_id=288

DHS Science & Technology Directorate Visionary Goals

The Department of Homeland Security unveiled new visionary goals this week for its Science & Technology (S&T) Directorate. The long-term goals (20-30 years out) were finalized after collecting input from stakeholders in government, academia, and the private sector industrial base. The new visionary goals that will drive S&T’s strategic plan are:

• Screening at Speed: Security that Matches the Pace of Life.

Noninvasive, unobtrusive screening of people, baggage or cargo at speed while respecting privacy.

• A Trusted Cyber Future: Protecting Privacy, Commerce, and Community.

Underlying digital infrastructure that is self-detecting, self-protecting and self-healing protecting information is protected, ensuring privacy, and deterring illegal use.

• Enable the Decision Maker: Actionable Information at the Speed of Thought.

Predictive analytics, risk analysis and modeling-and-simulation systems to enable critical and proactive decisions made based on the most relevant information, transforming data into actionable information.

• Responder of the Future: Protected, Connected, and Fully Aware.

Responders of the future will be armed with comprehensive physical protection, interoperable tools, and networked threat detection and mitigation capabilities.

• Resilient Communities: Disaster-Proofing Society.

Critical infrastructure of the future will be designed, built and maintained to withstand naturally-occurring and man-made disasters. Rapidly-deployable countermeasures will shield communities from negative consequences.

Political Updates

Sanjeev “Sonny” Bhagowalia started as the new CIO of the Treasury Department and deputy assistant secretary of information systems this week. Bhagowalia was most recently Hawaii’s CIO and adviser to the governor. Prior to that he was deputy associate administrator in GSA’s Office of Citizen Services and Innovative Technologies, CIO of the Interior Department and Bureau of Indian Affairs, and a program management executive at the FBI. Prior to joining the federal government, he spent 14 years at Boeing as chief engineer of business development and systems integration. The Treasury CIO position has been vacant since the June retirement of Robyn East, with Deputy CIO Mike Parker filling in during the interim. As Treasury CIO, Bhagowalia will be in charge of a $3.5 billion IT/IRM portfolio and will be responsible for the department’s IT strategy, managing its IT investments and leading new technology initiatives.

Chris Chris Cummiskey, Under Secretary for Management (acting) at the Department of Homeland Security (DHS) announced last week that after six years at DHS and 24 years in public service that he would be leaving Oct 31 to pursue opportunities in the public sector.

Andrew Marshall, the 93-year old Director of the Department of Defense’s Office of Net Assessment (ONA) announced this week that he will retire in January. ONA was created in 1973 by President Richard Nixon to serve as the Pentagon’s internal think tank. Marshall has been at the helm of this internal think tank for 41 years, which was tasked with looking 20 to 30 years into the military’s future. During that time Marshall was seen as being able to keep the office independent of political or bureaucratic influence. Funding for ONA was sustained this year amid a restructuring of the Office of the Secretary of Defense when it was decided that it would begin reporting to the undersecretary of defense for policy. Prior to the restructuring the office was independent and reported directly to the Secretary of Defense. There is much speculation over the future of the office and who will run it.

US Nuclear Regulatory Commission Chair Allison Macfarlane announced this week that she plans to resign at the end of the year. The White House could appoint one of the four current commissioners as chairman, or it may appoint a new nominee as chairman. The nominee requires Senate confirmation, so Macfarlane’s departure could keep the agency evenly divided if Republican’s retake the Senate in the November elections. Macfarlane was appointed by President Obama after a period of tumult on the commission. She became chairman in July 2012 after the previous chairman, Gregory Jaczko, resigned after clashes with the agency’s four other commissioners over a variety of issues. Macfarlane is expected to join George Washington University as director of the school’s Center for International Science and Technology Policy.

Dr. Robert Griffin was appointed as the Department of Homeland Security Science and Technology (S&T) Directorate’s Deputy Under Secretary. Griffin has been serving in an acting capacity in the position since May 2014. Prior to this appointment, Griffin served as the Director of S&T’s First Responders Group. He has also served as the first director of the Arlington County Office of Emergency Management, the Director of Environmental Services for Arlington County, and the Assistant County Administrator and Chief of Fire and Rescue in Loudoun County. Griffin also is currently on the faculty of Georgetown University’s Public Policy Institute where he teaches graduate-level courses in state and local governance.

Deputy Secretary of State and “Diplomatic Legend” Bill Burns retired this week after a 32-year career as a Foreign Service officer. Burns is only the second career diplomat to rise to the deputy position. Burns also has served as under secretary of state for political affairs and as assistant secretary for the Middle East. In addition, he has been an ambassador to Russia and to Jordan and senior director for Near East and South Asian affairs at the National Security Council. There is speculation that he could be replaced by Wendy Sherman, undersecretary for political affairs or Tony Blinken, deputy national security advisor.

Next Week

The House and Senate are in recess until November 12.

October 17, 2014

Both the House and Senate were in recess this week. 

Consumer Financial Transaction Security

President Obama signed a new Executive Order today directing the federal government to adopt more secure financial transaction tools. The BuySecure Initiative will apply chip and PIN technology to newly issued and existing government credit cards, as well as Federal debit cards like SmartPay and Direct Express. The initiative will also upgrade retail payment card terminals at Federal agency facilities such as passport offices, VA canteens, and national parks so that they can accept chip and PIN-enabled cards.

Home Depot, Target, Walgreens, and Walmart were part of the President’s announcement today as all four retailers also agreed to upgrade all of their card terminals in their stores to chip and PIN-enabled. In addition, American Express will start a new program in January 2015 that will support small businesses upgrading their point of sale terminals and Visa will launch a public service campaign in 20 cities to educate consumers and merchants on chip and other secure technologies.

The Administration also announced a new effort to assist victims of identity theft. The Department of Justice, Department of Commerce, and Social Security Administration are working to make the fraud reporting process as easy as possible for Americans who have experienced credit card fraud. Their goal is to, within two years, reduce by half the amount of time it takes consumers to remediate the average case of identity theft. Today’s executive order will also support the Federal Trade Commission in their development of a new one-stop resource for victims of identity theft. IdentityTheft.gov. will streamline the reporting and remediation process with credit bureaus providing a portal that helps digitally submit reports of fraud to multiple credit bureaus.

The Consumer Financial Protection Bureau is working with leaders in the financial services industry to make credit scores more readily available to all Americans as shifts in credit scores can be a key first sign of identity theft. Beginning in January, Citi in partnership with FICO will make free credit scores available to their customers. This announcement builds on work done by institutions like Discover, Barclaycard, Pentagon Federal Credit Union, and First National Bank of Omaha who have implemented similar systems. And by the end of the year, MasterCard will offer all its card holders free, 24/7 identity theft resolution support and online identity theft monitoring services.

The Administration is also requiring all federal government agencies to ensure that personal data released by the government to citizens goes through multiple tests for authentication before being released.

In addition, the White House will host a Summit on Cybersecurity and Consumer Protection later this year to promote partnership and innovation. The Summit will bring together major stakeholders on consumer financial protection issues to discuss how all members of the financial system can work together to further protect American consumers and their financial data, now and in the future.

Finally, the President called on Congress to enact cybersecurity legislation and data breach legislation.

The White House announcement can be found at:

http://www.whitehouse.gov/the-press-office/2014/10/17/fact-sheet-safeguarding-consumers-financial-security

And a copy of the Executive Order can be found at:

http://www.whitehouse.gov/the-press-office/2014/10/17/executive-order-improving-security-consumer-financial-transactions

Border Security

Last week House Homeland Security Committee Chairman Michael McCaul (R-TX) released a proposal to secure the border entitled “Blueprint for Southern Border Security.” The proposal maps out sector-by-sector recommendations on resource allocation and capability improvements to achieve full situational awareness of the border. In addition to gaining situational awareness, the proposal also calls for:

• Developing outcome-based means to measure border security,
• Bolstering interior enforcement by enforcing strong penalties,
• Increasing coordination between federal, state and local law enforcement efforts,
• Creating a new command and control structure, and
• Engaging with international partners to strengthen partnerships for mutual security.

House Speaker Boehner (R-OH) recently said that he believes that immigration reform would help the economy, but that we’ve got to secure the border first, which is the focus of McCaul’s blueprint. The White House had said it would move on its own on immigration reform by the end of the year (but after the elections) and may provide undocumented immigrants with a legal way to earn citizenship. Speaker Boehner and House Judiciary Chairman Bob Goodlatte (R-VA) warned that any unilateral moves from President Obama will “inject serious constitutional questions” into the broader immigration debate.

A copy of the blueprint can be found at:

http://homeland.house.gov/sites/homeland.house.gov/files/documents/100614-Blueprint-Southern-Border-Security.pdf

Department of Defense Climate Change Adaptation Roadmap

Defense Secretary Chuck Hagel outlined the effects of climate change on the world’s security environment at the Conference of Defense Ministers in Peru this week. Hagel also unveiled the Department’s Climate Change Adaptation Roadmap and Strategic Sustainability Performance Plan to meet those challenges. Hagel said that, “Rising global temperatures, changing precipitation patterns, climbing sea levels and more extreme weather events will intensify the challenges of global instability, hunger, poverty, and conflict,” and that “they will likely lead to food and water shortages, pandemic disease, disputes over refugees and resources, and destruction by natural disasters in regions across the globe.” The military could be called upon to provide humanitarian and disaster relief for these potentially more frequent and more intense natural disasters. The Department has established three broad adaptation goals:

Goal 1: Identify and assess the effects of climate change on the Department.

Goal 2: Integrate climate change considerations across the Department and manage associated risks.

Goal 3: Collaborate with internal and external stakeholders on climate change challenges.

These goals are supported by four lines of effort:

1. Plans and Operations include the activities dedicated to preparing for and carrying out the full range of military operations. Also included are the operating environments in the air, on land, and at sea, at home and abroad, that shape the development of plans and execution of operations.
2. Training and Testing are critical to maintaining a capable and ready Force in the face of a rapidly changing strategic setting. Access to land, air, and sea space that replicate the operational environment for training and testing is essential to readiness.
3. Built and Natural Infrastructure are both necessary for successful mission preparedness and readiness. While built infrastructure serves as the staging platform for the Department’s national defense and humanitarian missions, natural infrastructure also supports military combat readiness by providing realistic combat conditions and vital resources to personnel.
4. Acquisition and Supply Chain include the full range of developing, acquiring, fielding, and sustaining equipment and services and leveraging technologies and capabilities to meet the Department’s current and future needs, including requirements analysis.

DoD’s first step in planning is to identify the effects of climate change on DoD with tangible and specific metrics. DoD has almost completed a baseline survey assessing the vulnerability of their more than 7000 bases, installations, and other facilities. Drawing on these assessments, officials are integrating climate change considerations into plans, operations and training across the Defense Department to enable managing associated risks. They are also working with other nations to share tools for assessing and managing climate change impacts. The Deputy Under Secretary of Defense (Installations and Environment) is the Department’s Climate Change Adaptation Planning Officer and is responsible for overseeing the implementation of this plan.

A copy of the roadmap can be found at:

http://www.acq.osd.mil/ie/download/CCARprint.pdf

Political Updates

DHS Secretary Jeh Johnson announced this week the panelists who will serve on DHS’ independent review of the US Secret Service. The panelists are former Associate Attorney General Tom Perrelli, former Deputy Attorney General Mark Filip, former Cabinet Secretary and Assistant to the President Danielle Gray, and former White House Deputy Chief of Staff for Operations Joseph Hagin. The panel is tasked with submitting an assessment and recommendations concerning security of the White House and recommendations for potential new directors of the Secret Service by December 15. Sec. Johnson also asked the panel to advise him on whether there should be a broader review of issues concerning the Secret Service.

TSA Administrator John Pistole will retire at the end of this year after more than 31 years in the federal government. Pistole was the Deputy Director of the FBI before joining TSA four years ago. He has been nominated to become the president of Anderson University in Anderson, Indiana.

President Barack Obama has chosen Ron Klain to serve as the administration’s Ebola “czar,” responsible for the “whole of government Ebola response.” Klain will report directly to Obama’s Homeland Security Advisor Lisa Monaco and National Security Advisor Susan Rice. Klain was chief of staff to Vice President Joe Biden from 2009 to 2011 and also served in the same position under Vice President Al Gore. He was also a key member of the team that helped Obama prepare for presidential debates. He is currently president of Case Holdings, former AOL chairman Steve Case’s holding company, and general counsel of investment firm Revolution.

Deputy Attorney General James Cole announced this week that he will resign his position as soon as a replacement is confirmed. With Attorney General Eric Holder also on the way out, the top two positions at the Department of Justice will be vacant. Holder is also remaining on board until his replacement is confirmed. Senate Democrats may feel some pressure to confirm both jobs in the lame duck session if they lose control of the Senate in the elections.

Next Week

The House and Senate are in recess until November 12.

October 10, 2014 

Both the House and Senate were in recess this week.

Federal Contractor Minimum Wage Final Rule

The Department of Labor released a final rule today on raising the minimum wage for employees of federal contractors to at least $10.10/hour starting January 1, 2015. The regulation follows the Executive Order President Obama released back in February. The minimum wage will apply to most construction, service, concession, and federal property contracts signed on or after Jan 1, 2015. Workers who spend less than 20% of their time on a contract in a given work week are excluded from the new minimum wage as are students, apprentices, and employees paid with grants. Those who work more than 20 percent are only required to receive at least $10.10 per hour for the time they spend working on the contract. Contractors are required to apply the executive order to their subcontractors, and are responsible for notifying all of their employees of the minimum wage to which they are entitled. The Secretary of Labor can reset the minimum wage for contractors every year, but must publish the new wage 90 days before it takes effect. A copy of the final rule can be found at:

https://www.vantagepointstrat.com/?attachment_id=276

Defense Reprogramming Request

The Department of Defense submitted a $1 billion reprogramming proposal to Congress to pay for sending up to 4,000 troops to Africa in a mission to help fight Africa’s deadly Ebola outbreak. The House Appropriations and Armed Services Committee chairmen signed off on an additional $700 million this week permitting a total of $750 million in funds leftover for fighting in Afghanistan to be used for this mission. The first $50 million was released last month. The $750 million is expected to cover a six-month mission that includes airlifting personnel, medical supplies, protective suits and equipment such as tents to house Ebola victims and isolate people exposed to the virus. Sen. James Inhofe (R-OK), the Ranking Republican on the Senate Armed Services Committee, initially put a hold on the reprogramming request demanding more details about the military’s plans to keep US soldiers from contracting Ebola. Today he lifted that hold after receiving specifics from the Pentagon on the protocol to protect troops in the region. Senate Democrats and Sen. Thad Cochran (R-MI) the ranking Republican on the Appropriations Committee agreed to the request earlier.

Defense Acquisition Reform

The New Democrat Coalition this week released a set of recommendations for overhauling the Department of Defense’s acquisition system. The Coalition submitted a list of acquisition reform proposals to House Armed Services Vice Chairman Mac Thornberry (R-TX) and ranking Democrat Adam Smith (D-WA), who are leading a long-term acquisition reform project. The Coalition’s task force was led by Reps. Derek Kilmer (D-WA), Ron Barber (D-AZ), and Colleen Hanabusa (D-HI). Their recommendations include cutting down on audits, streamlining regulations, and exploring the possibility of expanding the acquisition workforce and increasing its pay.

A copy of the Coalition’s recommendations can be found at:

http://newdemocratcoalition-kind.house.gov/sites/newdemocratcoalition.house.gov/files/New%20Democrat%20Coalition%20National%20Security%20Task%20Force%20Acquisition%20Recommen….pdf

And a copy of their letter to Reps. Thornberry and Smith can be found at:

http://newdemocratcoalition-kind.house.gov/sites/newdemocratcoalition.house.gov/files/New%20Democrat%20Coalition%20National%20Security%20Task%20Force%20Acquisition%20Letter%200….pdf

Political Updates

Deputy Veterans Affairs Secretary Sloan Gibson announced this week his recommendation for removing Susan Taylor, the Deputy Chief Procurement Officer (DCPO) in the Veterans Health Administration Procurement & Logistics Office. Sloan’s recommendation follows an investigation by the VA Office of Inspector General in which allegations of multiple ethics violations related to her work with the private reverse auction firm FedBid were substantiated. Taylor was given five days to respond to the recommendation for her removal. In the meantime, Ricky Lemmon, Director, Service Area Office Central, has been designated Acting Deputy Procurement and Logistics Officer.

President Obama renominated Michael O’Rielly as a Commissioner on the Federal Communications Commission. O’Rielly is currently a Commissioner, a position he has held since November 2013. Prior to this, he was a Policy Advisor in the Office of the Senate Republican Whip led by Senator John Cornyn (R-TX) in 2013 and by Senator Jon Kyl (R-AZ) from 2010 to 2012. He has also worked for the Republican Policy Committee, Senator John Sununu (R-NH), the Committee on Energy and Commerce in the US House of Representatives, and Representative Tom Bliley (R-VA).

Elizabeth Sherwood-Randall was formally sworn in by Vice President Joe Biden as Deputy Secretary of the Department of Energy today. Sherwood-Randall replaces Dan Poneman.

The US District Court for the Eastern District of Virginia released a decision this week declaring Virginia’s congressional maps unconstitutional because they concentrate African American voters into a single district. The 3rd Congressional District in Virginia is currently represented by Rep. Bobby Scott (D-VA). The existing map will remain in effect for the 2014 elections, but the state legislature must redraw the map by April 1, 2015. Currently Democrats control only three of the state’s 11 districts, and just one seat is truly competitive – only as a result of the retirement of GOP Rep. Frank Wolf. If the decision is not appealed and the districts are redrawn, the new map could have an impact on several Republican districts in the state making them competitive for Democrats, especially the district currently represented by Rep. Randy Forbes (R-VA).

Next Week

The House and Senate are in recess until November 12.

October 4, 2014

While both the House and Senate were in recess this week, the House Oversight and Government Reform Committee held a special hearing this week on the perimeter breach at the White House and new security concerns about the Secret Service.

Cybersecurity

The National Institute for Standards and Technology (NIST) published its NIST Framework and Roadmap for Smart Grid Interoperability Standards (v3.0) this week. The 3.0 framework updates the plan for transforming the nation’s aging electric power system into an interoperable smart grid—a network that will integrate information and communication technologies with the power-delivery infrastructure, enabling two-way flows of energy and communications. The Energy Independence and Security Act of 2007 established a goal to modernize the nation’s electricity system and assigned to NIST the primary responsibility to coordinate development of a framework to achieve interoperability of smart grid devices and systems.

This document first appeared in January 2010 and was last updated in February 2012 (v2.0). The new 3.0 version was needed because of recent progress in grid modernization, such as wide deployment of smart electric meters, NIST’s 74 new standards and protocols that support interoperability of the grid, updates to the reference architecture model of the smart grid, new developments and publications in smart grid cybersecurity, and the increased urgency of testing and certification. This final 3.0 version also incorporates public responses to the draft version that was released earlier this year.

A copy of the framework can be found at:

http://www.nist.gov/el/smartgrid-100114.cfm

NIST also published a revision to its Guidelines for Smart Grid Cybersecurity. The original version was released in 2010. The updated version includes new sections describing the relationship of smart grid cybersecurity to the NIST Cybersecurity Framework, cyber-physical attacks, cybersecurity testing and certification, and addresses regulatory changes involving privacy.

A copy of the guidelines can be found at:

http://nvlpubs.nist.gov/nistpubs/ir/2014/NIST.IR.7628r1.pdf

The White House this week announced more than $450 million in grants for nearly 270 community colleges partnered with over 400 employers nationwide to promote job training in high demand fields, including in cybersecurity and IT. There are 25 grants for developing new training programs for information technology and cybersecurity jobs, which are fields with a great need for trained employees. Employers partnering on the information security and technology programs include Lockheed Martin, Raytheon, Booz Allen, and SpaceX. The full list of grants can be found at:

http://www.whitehouse.gov/the-press-office/2014/09/28/white-house-announces-recipients-450-million-job-driven-training-grants

Homeland Security

On Tuesday, the General Services Administration (GSA) awarded a $139 million contract to Grunley Construction Company and Shalom Baranes Associates to renovate the 270,000-square foot historic center building on the campus of the former St. Elizabeth’s hospital for use as the new DHS headquarters. This facility is expected to be completed by fall 2017, but the overall renovation of the campus isn’t expected to be completed until 2022 at the earliest. The Coast Guard headquarters was completed in 2013 and houses 4,000 employees. This facility will initially house the DHS Secretary and ~700 employees, and the whole campus will eventually house 14,000 employees from across the Washington DC area. While GSA is committed to completing the project, it has been plagued with numerous delays and cost increases resulting in budget cuts from Congressional appropriators.

Defense Acquisition Reform

Senate Armed Services Committee Chairman Carl Levin (D-MI), Sen. John McCain (R-AZ) and the staff of the Permanent Subcommittee on Investigations released a report on defense acquisition reform this week. The report solicited opinions from more than 30 experts from a broad range of backgrounds seeking their views on a number of subjects relating to the Department of Defense’s (DOD) acquisition process and how the DOD’s procurement of major weapon systems can be improved. Four common themes emerged from the input:

1. Enhancing Incentives for the acquisition workforce
2. Bolstering programs for attracting and training a qualified acquisition workforce
3. Setting more realistic program requirements and budgets at the start of a program
4. Increasing the role of the service chiefs in the acquisition process

While the Subcommittee offered no recommendations of its own and endorsed no particular expert prescription, they did make two observations. The first is that cultural change is one of the most important factors identified as contributing to dysfunction in the defense acquisition system, but it is a function of leadership and an incentive structure and is the least amenable to legislation and policy changes. Second, continued “sequestration” of the DOD’s budgets will undermine any savings that could be achieved through even the most successful acquisition reform.

The full report can be found here:

http://www.mccain.senate.gov/public/_cache/files/7f54fe2e-9c26-4f66-b940-ebf8a9e9ef9c/psi-report—defense-acquisition-reform—a-compendium-of-views-10-2-14.pdf

Political Updates

Secret Service Director Julia Pierson resigned under pressure this week after a series of White House security breaches. On Wednesday, DHS Secretary Jeh Johnson appointed Joseph Clancy to be the interim acting director of the agency. Clancy is taking a leave of absence from his position as director of corporate security for Comcast to fill this vacancy. He retired from the Secret Service in 2011 where he was a special agent in charge of the Presidential Protective Division. Sec. Johnson also announced that he would appoint a “distinguished panel of independent experts” to conduct an outside inquiry into the security breaches and report recommendations by December 15.

Vice President Biden named Dr. Colin Kahl as his new national security adviser, succeeding Jake Sullivan, who left to teach at Yale Law School. Kahl was most recently an associate professor in the Security Studies Program in the Edmund A. Walsh School of Foreign Service at Georgetown University. He also was until recently a senior fellow and director of the Middle East Security Program at the Center for a New American Security.

Anne Neuberger was appointed chief risk officer of the National Security Agency (NSA) on September 17, a newly created position at the agency. NSA/CSS Director ADM Michael Rogers selected Neuberger who assumed the position at the beginning of October. In her first year, Neuberger will focus on creating and maturing a methodology and processes to assess the various risks across different missions and work toward meeting specific objectives assigned by ADM Rogers.

The President appointed Michèle Flournoy and Kevin Nealer to the President’s Intelligence Advisory Board. Flournoy is CEO of the Center for a New American Security, the non-profit research organization she co-founded in 2007.  She is also a Senior Advisor to the Boston Consulting Group, and served as Under Secretary of Defense for Policy at the Department of Defense (DOD. Nealer is a Principal and Partner at the Scowcroft Group, which he joined in 1993.

Next Week

The House and Senate are in recess until November 12.

September 26, 2014

Both the House and Senate were in recess this week.

National Intelligence Strategy

The Director of National intelligence James Clapper unveiled the 2014 National Intelligence Strategy (NIS) this week. The NIS is a blueprint to drive the priorities for the 17 US Intelligence Community (IC) components over the next four years. It identifies and explains the IC’s objectives – what the IC intends to accomplish (mission objectives) and how the IC will accomplish them (enterprise objectives). The seven mission objectives are: 1) strategic intelligence; 2) anticipatory intelligence; 3) current operations; 4) cyber intelligence; 5) counterterrorism; 6) counterproliferation; and 7) counterintelligence. The six enterprise objectives are: 1) integrated mission management; 2) integrated enterprise management; 3) information sharing and safeguarding; 4) innovation; 5) people; and 6) partners.

A copy of the NIS can be found at:

http://www.dni.gov/files/documents/2014_NIS_Publication.pdf

Tax Inversions

The Treasury Department released a notice on Monday stating that it will use regulatory authority to crack down on tax inversions. The notice eliminates certain techniques inverted companies currently use that make the practice profitable and makes it more difficult for US entities to invert. Specifically, Monday’s notice prevents inverted companies from accessing a foreign subsidiary’s earnings while deferring US tax through the use of “hopscotch” loans, prevents inverted companies from restructuring a foreign subsidiary in order to access the subsidiary’s earnings tax-free, closes a loophole to prevent inverted companies from transferring cash or property from a controlled foreign corporation to the new parent to completely avoid US tax, and makes it more difficult for US entities to invert by strengthening the requirement that the former owners of the US entity own less than 80% of the new combined entity. The new rules are only applicable to deals completed on or after Monday. And the department stated that they will continue to review a broad range of authorities for further anti-inversion measures as part of their continued work to close the inversion tax loopholes.

While the proposed rules did have a negative impact this week on the share prices of several publicly-traded companies involved in potential deals, some critics claimed that most companies considering inversion won’t change course even if the costs of inversion rise. Others think that the tighter rules will make US companies better acquisition targets with foreign firms initiating the transactions.

Defense Reprogramming Request

Earlier this month the Department of Defense Department submitted a reprogramming request to up to $1.54 billion in war spending to buy eight new Lockheed Martin F-35 fighter jets (including six for the Marines, to replace aircraft lost in battle) ($1.136B) and 21 additional AH-64 Apache helicopters built by Boeing ($404M). The request was included in a Sept 8 letter requesting permission to reprogram $1.9 billion in the Overseas Contingency Operations (OCO) account to pay for expanded operations against Islamic State extremists in Iraq and Syria. This week, House Defense Appropriations Subcommittee Chairman Rodney Frelinghuysen denied the Pentagon’s request to transfer money. Frelinghuysen’s subcommittee is one of the four spending and authorization panels in the House and Senate that must approve each item in reprogramming requests. In a letter to Pentagon Comptroller Michael McCord, Frelinghuysen responded that he was concerned that OCO funds are being used to “backfill budgetary shortfalls in acquisition programs that have only tenuous links to the fight in Afghanistan and other current operations.”

Cybersecurity

The National Institute for Standards and Technology (NIST) released a public notice this week stating that they had selected the MITRE Corporation to run their Federally Funded Research and Development Center (FFRDC) for cybersecurity. The IDIQ contract is worth up to $5 billion over 25 years. NIST announced plans for its first FFRDC in April 2013. The FFRDC will provide scientific and engineering support needed to carry out the research and engineering agenda set by NIST including engaging in, assisting, and contributing to the support of scientific activities and projects for developing practical cybersecurity solutions composed from commercial components; and performing and engaging in research, engineering, and technology transfer/integration services for trustworthy information systems to the U.S. Government. The new organization will also support the National Cybersecurity Center of Excellence, a public-private partnership closely associated with NIST. MITRE runs similar FFRDCs for the Defense Department and other agencies, and also manages the Common Vulnerabilities and Exposures database and developed specifications for the Structured Threat Information Expression (STIX) and Trusted Automated Exchange of Indicator Information (TAXII) under contract with DHS.

Political Updates

Eric Holder, the first African-American Attorney General, announced on Thursday that he will leave his post at the Department of Justice once a successor is nominated and confirmed. Holder has been in the job for nearly six years and is one of three of President Obama’s original cabinet members still serving in his post. Potential candidates to replace Holder include former White House counsel Kathryn Ruemmler, Massachusetts Governor Deval Patrick, Solicitor General Donald Verrilli Jr., former Michigan Governor Jennifer Granholm, Senator Sheldon Whitehouse (D-RI), Senator Amy Klobuchar (D-MN), Senator Richard Blumenthal (D-CT), California attorney general Kamela Harris, United States attorney for the Southern District of New York Preet Bharara, former Homeland Security Secretary Janet Napolitano, US Attorney for the Western District of Washington State Jenny Durkan, Labor Secretary Thomas Perez, Deputy Homeland Security Secretary Alejandro Mayorkas, former Associate Attorney General Tony West, US Attorney for Washington DC Ron Machen, former Joe Biden aide Neil MacBride, and United States attorney in Brooklyn Loretta Lynch. Gov. Patrick on Thursday said that it was not the right time for him to take such a job, and Sen. Whitehouse responded that his “heart’s desire is representing Rhode Island in the Senate” and he has no interest in other positions.

Defense Secretary Chuck Hagel nominated Navy Adm. Harry Harris this week to become the next commander of the US Pacific Command. If approved, Harris would replace Adm. Samuel Locklear, who took over the role in March 2012. The Pentagon has not yet announced the next move for Locklear. Harris is the US Pacific Fleet commander and is based in Pearl Harbor, Hawaii. He assumed command there in October 2013.

Jeffrey Johnson has been named chief of defense nuclear security and associate administrator for the National Nuclear Security Administration’s Office of Defense Nuclear Security. In his new role, Johnson will oversee the development and implementation of programs at the NNSA. He previously led the US Marine Corps Civilian Law Enforcement.

Next Week

The House and Senate are in recess until November 12.

September 19, 2014

Both the House and Senate passed a continuing resolution (CR) funding the federal government through December 11. The CR included language authorizing President Obama to train and equip Syrian rebels to fight the Islamic State in Iraq and the Levant. The House also passed HR 2, the American Energy Solutions for Lower Costs and More American Jobs Act (a 13-bill energy package) and HR 4, the Jobs for America Act (a 14-bill jobs package). The President issued Statements of Administration Policy on HR 2 and HR 4 threatening to veto them in their current form. The Senate took up S 2199, the Paycheck Fairness Act, but failed to garner the 60 votes needed to invoke cloture. The Senate did pass S 2651, the DHS OIG Mandates Revision Act of 2014 as well as S 2141, the Sunscreen Innovation Act. The Senate also passed by voice vote the Border Patrol Agent Pay Reform Act of 2014 (S 1691) and the Preventing Conflicts of Interest with Contractors Act (S 2061), and passed by unanimous consent HR 4994, the IMPACT Act of 2014; HR 5404, the Department of Veterans Affairs Expiring Authorities Act of 2014; S 1611, the Federal Data Center Consolidation Act of 2013; and S 2583, the E-LABEL Act (S. 2583), among others. And on Thursday, Petro Poroshenko, the President of Ukraine, appeared before a joint session of Congress and appealed to members to provide more assistance, including military equipment, to aid his government’s fight against Russian-backed separatists.

Appropriations

The House and Senate passed a continuing resolution (CR) funding the federal government through December 11. The House passed the CR by a vote of 319 to 108, while the Senate passed it by a vote of 78 to 22. The CR funds federal agencies at the current annual spending rate of $1.012 trillion.

The CR included authorization language providing President Obama the authority to train and equip Syrian rebels to fight the Islamic State in Iraq and the Levant (ISIS). A separate vote in the House on the amendment made it easier for members to vote against the ISIS language but not the CR. The House passed the amendment by a vote of 273 to 156. The administration’s authority to train those fighters will run out on Dec. 11. A copy of the amendment can be found at:

http://amendments-rules.house.gov/amendments/MCKEON021915141612381238.pdf

Sen. Ted Cruz (R-TX) argued for a longer CR funding the government into the 114^th Congress assuming that the Senate would have a greater number of Republicans in the next Congress. While he wasn’t successful now, it is a possibility that if Republicans make gains in the November election they will push to punt spending decisions into next year. The White House and Appropriators would oppose those efforts and instead support passage of an omnibus spending bill in the lame duck session.

The Defense Department on Tuesday submitted a reprogramming request to Congress seeking permission to shift $500 million to efforts to fight the Ebola outbreak in Africa, including plans related to the construction of 17 treatment centers for those infected by the deadly virus. The funds would come from unobligated funds from the Overseas Contingency Operations account. The $500 million would be in addition to $88 million in new funding sought in the continuing resolution that would go largely to domestic agencies.

Cybersecurity

The Senate Armed Services Committee (SASC) released an unclassified version of their “Inquiry into Cyber Intrusions Affecting U.S. Transportation Command Contractors” report this week. The committee unanimously approved the classified version of the report this spring. After a year-long investigation, SASC staff found that in a 12-month period (6/1/12-5/31/13) there were about 50 intrusions or other cyber events into the computer networks of US Transportation Command contractors. Of those 50, 20 can be attributed to hackers associated with the Chinese government, but TRANSCOM was only aware of two of those intrusions. They also found gaps in reporting requirements and a lack of information sharing among government entities that left the command largely unaware of computer compromises by China of contractors that are key to the mobilization and deployment of military forces.

In response to the investigation’s findings, the committee included a provision in its version of the FY15 National Defense Authorization Act directed at addressing reporting gaps and improving the way in which the Department disseminates information about cyber intrusions into the computer networks of operationally critical contractors. Specifically, the provision directs the Secretary of Defense to establish procedures for designating companies as ‘‘operationally critical contractors’’ and tightening requirements that those contractors report successful cyber penetrations by known or suspected government actors. It also requires DoD to establish new procedures to assist contractors in detecting and mitigating cyber threats while ensuring protections for trade secrets, commercial or financial information. The provision requires the Secretary to assess existing reporting requirements and DoD policies and systems for sharing information on cyber intrusions. It also requires the Secretary to designate a single DoD component to receive intrusion reports from contractors and other government agencies and to issue guidance ensuring that intrusion-related information is shared with appropriate DoD components.

A copy of the report can be found at:

http://www.armed-services.senate.gov/download/sasc_cyberreport_09-17-14

FY15 National Defense Authorization Act

While the Senate has not passed its annual defense authorization bill this year, the House and Senate Armed Services Committees (HASC and SASC) started an informal conference committee process this week. Members of the HASC and SASC had a chance this week to discuss their defense authorization priorities with House Armed Services Chairman Buck McKeon (R-CA) and Senate Armed Services Chairman Carl Levin (D-MI) this week. The closed, pre-conference general policy panel meeting is being done now as the House and Senate will have little time to reconcile their differences in a final measure when they return for the lame duck session November 12.

Defense

Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics, released a draft of DOD’s Better Buying Power (BBP) 3.0 at the Center for Strategic and International Studies (CSIS) this morning. The BBP initiative seeks to improve the Department of Defense’s procurement process by providing more incentives for contractors to meet cost and schedule goals, remove some barriers to buying commercial products, incorporate more input from the intelligence community into requirements for future weapons, expanding the Superior Supplier Incentive Program, and getting draft requirements out earlier and incorporating industry feedback into final solicitations. Kendall said that after receiving feedback on the draft he expects to release a final version of BBP 3.0 in January.

A copy of the interim release of BBP 3.0 can be found at:

https://www.vantagepointstrat.com/?attachment_id=268

Lame Duck Schedule

Senate Majority Leader Harry Reid (D-NV) announced this week that following the conclusion of the current work period, the Senate is expected to return to session on Wednesday, November 12, 2014. Orientation and Leadership elections will be conducted November 12 through 14 and Senators should expect votes starting November 12. The House calendar released at the beginning of this year has the House also reconvening on November 12 and remaining in session through December 12.

Political Updates

The Kansas Supreme Court on Thursday sided with Democrats attempting to remove their candidate, Chad Taylor from the ballot in Kansas’ Senate race. Taylor’s withdrawal from the race clears a path for Independent candidate Greg Orman to challenge the incumbent Sen. Pat Roberts (R-KS) making this a potentially competitive race.

President Obama nominated Robert Sher to be Assistant Secretary of Defense for Strategy, Plans, and Capabilities at the Department of Defense. Sher is currently the Deputy Assistant Secretary of Defense for Plans in the Office of the Under Secretary of Defense for Policy, a position he has held since 2012. Scher has also served as the Deputy Assistant Secretary of Defense for South and Southeast Asia, the Chief of Staff to the Deputy Under Secretary of Defense, Asia and Pacific, and as a member of the Policy Planning Staff at the Department of State. He began his career in public service as a Presidential Management Intern in 1992, serving as a Special Assistant to an Assistant Secretary of Defense. If confirmed, Sher would succeed Madelyn Creedon who left the post this summer to be principal deputy administrator for the National Nuclear Security Administration.

The Senate voted to confirm the nominations of Linda Schwartz to be Assistant Secretary of Veterans Affairs for Policy and Planning, Gordon Tanner to be General Counsel of the Department of the Air Force, Debra Wada to be an Assistant Secretary of the Army, Elizabeth Sherwood-Randall to be Deputy Secretary of Energy, Robert Holleyman to be a Deputy United States Trade Representative, Eric Rosenbach to be an Assistant Secretary of Defense for Homeland Defense, Nathan Sheets to be an Under Secretary of the Treasury, Charles Fulghum to be Chief Financial Officer at the Department of Homeland Security, Alfonso Lenhardt to be Deputy Administrator of the United States Agency for International Development, and Thomas Frieden to be US Representative to the World Health Organization.

Federal Chief Information Officer Steven VanRoekel announced that he is departing his post at the White House to join the US Agency for International Developments Ebola response team. In his new role as USAID chief innovation officer, VanRoekel will be responsible for advising the agency on using technology and data in its response to the epidemic. VanRoekel has served as the federal CIO since August 2011. Lisa Schlosser, one of VanRoekel’s deputies, will oversee the Office of E-Government and Information Technology until the White House names a permanent replacement.

The Department of Defense appointed retired Lt. Gen. Frances C. Wilson, US Marine Corps, to serve as the chairperson of the Defense Advisory Committee on Women in the Services (DACOWITS). Wilson spent nearly 37 years in the U.S. Marine Corps, and served as the president of National Defense University and as the commandant, Industrial College of the Armed Forces. Since retiring in 2009, she has been part of various organizations in the Virginia Tidewater area, serving as an appointed member of the City of Virginia Beach Mayor’s Military Economic Development Advisory Committee, and as the chair, board of directors, Hampton Roads and Central Virginia USO. She was appointed by the Virginia governor as a member of the board of trustees, Fort Monroe Authority, and board of visitors, Virginia Military Institute. Wilson has also been a DACOWITS member since June 2012. She succeeds Holly Hemphill of Alexandria, Virginia.

Next Week

The House and Senate are in recess until November 12.

September 12, 2014

The House and Senate returned from their August recess this week. The House passed HR 5078, the Waters of the United States Regulatory Overreach Protection Act; HR 3522, the Employee Health Care Protection Act of 2013, a bill that would allow Americans to retain their health care policies until 2018 even if their plans do not meet federal rules set under the 2010 Affordable Care Act; and HR 5161, the E-LABEL Act. The Senate voted on a proposed constitutional amendment to let Congress limit campaign contributions and expenditures, but failed to reach the 2/3 vote needed for a constitutional amendment (vote 54 to 42). The Senate did pass HR 4197, the All Circuit Review Extension Act and S 2258, the Veterans’ Compensation Cost-of-Living Adjustment Act of 2014.

Appropriations

House Appropriations Chairman Hal Rogers (R-KY) introduced a continuing resolution (CR) earlier this week to fund the government into the new fiscal year starting on Oct. 1. The House had intended to begin consideration of the bill this week, but delayed action until next week in order to consider including authorization language for administration action against the Islamic State terrorist group (ISIS). Instead, the House will begin consideration of the CR next Tuesday with a vote on the measure most likely on Wednesday. It isn’t clear at this point whether the authorization language will be tacked on to the CR or considered as separate legislation. If the strategy is to include the language in the CR, the House would bring up the CR on the floor and then add the language as an amendment, allowing for a separate vote on the issue. Senate Majority Leader Harry Reid (D-NV) has said that his chamber will follow the House’s lead and decide whether to concur or make changes after they have received it.

The $1.012T CR introduced earlier this week funds non-defense-related programs at an annualized level of $494.548B, $2B above the FY15 cap in last year’s budget agreement making it a potential target for procedural objections in the Senate. The CR funds the government at current levels through December 11, 2014. While the CR was considered relatively “clean” and free of policy riders, it did include a number of provisions for expiring programs such as DOD activities, including counter-drug operations, support to the Office of Security Cooperation in Iraq, and rewards for assistance in combatting terrorism, and a provision to continue a surge in funding for State Department programs to counter regional aggression toward Ukraine and other former Soviet Union countries. The CR also includes several provisions related to the treatment of veterans and continued oversight of the Department of Veterans Affairs, as well as extending the operating authority for the Export-Import Bank through June 30, 2015 and extending the Internet Tax Freedom Act through December 11, 2014. And, finally, the CR includes provisions allowing funding flexibility for Customs and Border Protection and Immigration and Customs Enforcement to maintain staffing levels, border security operations, detention space, and immigration enforcement activities; addressing the recent Ebola crisis; additional funds to offset food price increases in the Commodity Supplemental Food Program; funding flexibility to maintain weather satellite programs; and the continuation of current funding for the Temporary Assistance to Needy Families (TANF) program.

Appropriators say that they are still working toward a year-end omnibus that would include most, if not all of the FY15 spending bills. This could change if Republicans win control of the Senate in the November elections. In that scenario, Republicans might opt for a short-term CR extending funding into the new Congress giving them a chance to write new bills that are more to their liking in the new Congress.

Tax Extenders

Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Dave Camp (R-MI) are reportedly considering a post-election, lame duck deal on a potential one-year extension of approximately 60 expired tax breaks. The tax breaks expired at the end of 2013 and include tax deductions for contributions to charitable organizations directly from an individual retirement account, mortgage interest premiums, state and local sales taxes, and some higher-education expenses. The duration of the tax breaks extensions has not been decided, as well as whether or not they would be retroactive. The Joint Committee on Taxation estimated that a one-year extension package would cost about $47 billion. Earlier this summer, the House passed bills that would make the IRA charitable contribution and several other extenders permanent, but the White House threatened to veto those bills because no tax revenue was provided to pay for the extensions.

Defense

Earlier this week, the Pentagon sent a $1.9B reprogramming request to Congress. The request diverts $1.2B for 8 new F-35s to replace older aircraft destroyed in the war, $404M for 21 new Apache helicopters to replace 21 Kiowa helicopters, and $122M for a “Massive Ordnance Penetration” weapon and pays for all of them from previously appropriated funds that are no longer needed because of the drawdown in Afghanistan. Four congressional committees – House Armed Services, Senate Armed Services, House Defense Appropriations, and Senate Defense Appropriations – all have to approve the request.

A copy of the request can be found at:

https://www.vantagepointstrat.com/?p=266

Political Updates

The Senate confirmed the nominations of David Radzanowski to be Chief Financial Officer at National Aeronautics and Space Administration, Miranda Ballentine to be an Assistant Secretary of the Air Force, and Joseph Nimmich to be Deputy Administrator for the Federal Emergency Management Agency at the Department of Homeland Security.

Rep. John Tierney (D-MA) lost his primary race in Massachusetts’ 6th congressional district. Tierney was ousted by primary challenger Seth Moulton, a first-time candidate and Iraq War Veteran. Tierney held seats on the House Education and Workforce and Oversight and Government committees. Moulton will face Repubican Richard Tisei in the November election. Tisei narrowly lost to Tierney in 2012. The loss makes Tierney the fourth House incumbent to lose primaries this cycle. The others are Reps. Ralph Hall (R-TX), Kerry Bentivolio (R-MI), and Eric Cantor (R-VA), who has since resigned.

Next Week

The House and Senate will return on Monday. The House will take up the FY15 CR, but it is not clear right now if the ISIS authorization language will be packaged in with the CR or will be a separate vote. The House will also take up a 14-bill jobs package and a 13-bill energy package as well as receive the President of Ukraine on Thursday. The House is scheduled to be in session through Friday. House Majority Leader Kevin McCarthy (R-CA) also announced that as of right now there is no change to the House schedule for the last week of September (9/29-10/2) when they are scheduled to be in session. The Senate will resume consideration of S 2199, the Paycheck Fairness Act, a bill that would require employers to demonstrate that wage gaps between men and women doing the same work are the result of factors other than gender. The Senate is also scheduled to vote on two nominations to the Nuclear Regulatory Commission.