There has been some hyperbole and much drama in the mass-media analysis of the 2015 US defense budget request. Lost to most observers are the new and continuing opportunities for the S&T industry in this same budget document, Group Editor Marty Kauchak reports.

President Barack Obama’s defense topline request for fiscal year 2015 (FY15) presented to Congress this March 4 is set at $496 billion. The FY15 budget request keeps the Pentagon on a glide slope for continued defense spending reductions through 2022.

Ray Duquette, the president and general manager of CAE USA placed this budget and the US market in perspective, noting that “despite the DoD budget reductions, it still represents the world’s largest defense market and a continued willingness to invest in a well-trained and mission ready military.”

Indeed, beyond the budget topline of decreased macro-level spending, there are subtle as well as dazzling opportunities for the S&T industry to support program requirements.

A Budget Winner

The cyber mission is one significant area of increased FY15 funding. A cornerstone of the department’s cyber strategy is training readiness.

Captain Matt Stines, a media officer at the Air Force Press Desk, described his service’s upward trend in training investments for cyber missions. The Pentagon-based officer indicated his service will spend an additional $8.3M in training for cyber operations personnel in FY15 over what was spent in FY14.  He added, “The Air Force has not planned any additional training courses in FY15, but is increasing the student throughput capacity of existing schools to include the Cyberspace Defense Operations Course at Keesler Air Force Base (AFB), Mississippi and the Intermediate Network Warfare Training at Hurlburt Field, Florida. The student throughput of the Joint Cyber Analysis Course at Corey Station, Florida will remain the same.”

The Army is also increasing cyber defense capabilities “with the incremental fielding of Network Enterprise Technology Command (NETCOM) Cyber Protection Teams (CPTs). “NETCOM plans to support 19 operational CPTs collectively performing about 126 operational mission events in FY 2015,” Captain Matthew Bourke, assigned to the Office of the Chief of Public Affairs for the US Army’s Media Relations Division, pointed out.

The Pentagon includes cyber events in training exercises in the live and the other training domains.

Air Force cyber operators participated in Cyber Flag, Terminal Fury and Red Flag in FY14, and anticipate participating in these same events in FY15 to exercise cyber readiness.  “No additional exercises have been scheduled as of this date [March 20, 2014],” Stines said.

And here’s one opportunity in the cyber sector for the S&T industry.

The Air Force is moving away from a commercial range to the DoD IA (information assurance) range for initial cyber skills training in an effort to reduce range costs in FY15. Stines noted the Air Force also uses the SANS Institute's Cyber City for intermediate network warfare training and doesn't anticipate a change in range usage for this course. “We welcome industry partners to support cyber training and simulation during the exercise events previously mentioned.  This initiative will provide an avenue for assessing the cyber readiness of our personnel in a different range environment,” he remarked.

Other Budget Snapshots

This budget environment challenges the services as they transform their training programs in the post-Iraq and soon-to-be-concluded Afghanistan eras, and rebalance their forces to support the Obama administration’s Pivot to Asia.

Sailors assigned to Coastal Riverine Squadron (CRS) 3 participate in an Embarked Security Team (EST) training scenario using the Laser Shoot Combat Simulator. EST’s provide force protection to noncombatant Military Sealift Command vessels and contracted ships around the world. (U.S. Navy photo by Mass Communication Specialist 2nd Class Joshua Scott/Released)
Sailors assigned to Coastal Riverine Squadron (CRS) 3 participate in an Embarked Security Team (EST) training scenario using the Laser Shoot Combat Simulator. EST’s provide force protection to noncombatant Military Sealift Command vessels and contracted ships around the world. (U.S. Navy photo by Mass Communication Specialist 2nd Class Joshua Scott/Released)

Colonel Sean Gibson, the public affairs officer at Marine Corps Combat Development Command, said there are two significant future training challenges his service must address.

First, future training must support developing a wider array of capabilities across the range of military operations (ROMO).  “Toward meeting this challenge, our Commandant [General James  Amos] has provided strategic guidance: we must rebalance training, leveraging our competencies in entry-level and skills progression training and re-emphasizing core competencies in combined arms and expeditionary and amphibious operations, focusing on Marine Expeditionary Brigade (MEB)-level core capabilities,” he said. “Our training challenge is to find the ‘sweet spot’ between the high (combined arms) and low (COIN (counter-insurgency/stability operations)) ends of the ROMO. “

Against this background, the Marine Corps’ three top training and education F15 budget priorities are: entry level training, professional military education enhancements and implementing its key service-level training initiative for the post-Operation Enduing Freedom environment - the MAGTF (Marine Air Ground Task Force) Training Program.

The Navy is directly investing in its service members’ Quality of Work efforts.  A foundation of this initiative is the proposed, approximate $410 million in spending across the future years defense program (FYDP) to enhance sailor training and proficiency. Lt. Robert Myers, a Navy News Desk action officer in the Navy Office of Information, highlighted the learning technology and related training investments to support Quality of Work and, more important, sailors and officers’ Quality of Service. “Specific training enhancements include: increased funds for training travel, expanding Common Core (Navy e-Learning) training, improving training range capability support and fleet synthetic training, increasing access to Mobile Small Arms Familiarization Trainers, and increasing shore-based training systems to support submarine and surface ship readiness to include trainers, coursework and simulators,” the Pentagon-based officer told MS&T.

Fewer resources have forced the Army to make plans for 19 combat training center rotations in fiscal 2015 – 17 are to validate brigade combat team readiness for full-spectrum combat capabilities and two are Mission Rehearsal Exercises. Captain Matthew Bourke in the Office of the Chief of Public Affairs for the US Army’s Media Relations Division noted that training will be available for units preparing to deploy to South Korean and Afghanistan, and forces in the Army Contingency Force (not the same as the Global Response Force). “It is units not in the Army Contingency Force, that training will not be funded to meet full readiness standards,” he emphasized.

Emerging US Air Force aircraft priorities, including the production of the KC-46 tanker and the development of a next generation, long-range bomber, continue to push the T-X program down the service’s priority list. T-X will replace the aging T-38 Talon.

The FY2015Air Force budget request throws a fiscal life ring to T-X, providing more research, development, test and evaluation (RDT&E) money. Ed Gulick, a spokesperson at the Air Force Press Desk, noted, “The Air Force is planning to buy six test aircraft with RDT&E funding in FY18.” This long-gestating program will not receive actual procurement funding until beyond the current FYDP – in future unspecified budgets.

(Editor’s note: See the T-X update elsewhere in this issue of MS&T).

More Opportunities

This budget request presents other opportunities for the S&T industry.

In one instance the Army continues to invest in modernization and lifecycle sustainment efforts at its three Combat Training Centers. Bourke pointed out “Requests in the FY15 PB (president’s budget) include procurement of the Range Communications System at the Joint National Training Center, Fort Polk, Louisiana.”

The FY15 budget request will also field the Live, Virtual, Constructive - Integrated Architecture and Homestation Instrumented Training Systems to three locations.

“In the virtual training environment, the FY15 PB request enables modernization of Bradley based simulators in the Close Combat Tactical Trainer while enhancing capabilities in the Aviation Combined Arms Tactical Trainer, specifically in the Non-rated Crew Member Manned Modules,” Bourke added.

The Army should increase its lead over the other services in developing the serious games for training domain. At least $10.17 million will allow the service to continue its investment in Commercial-Off-The-Shelf (COTS) technologies to support low-overhead training capabilities for soldiers, units, and leaders.

“Expanded development, production, and interoperability capabilities of the Synthetic Environment Core are a key component of the FY15 request,” Bourke further remarked.

In one overarching comment on Marine Corps S&T programs, the service’s Gibson emphasized that industry should ensure that when systems are developed and fielded, they are built with an open architecture.

Addressing another technology thrust, he added, “Industry should look to field hardware that supports virtualization, as well as thin/zero client servers. This will allow the services to move towards a ‘cloud’ environment.”

For specific FY15 programs, the MAGTF Tactical Warfare Simulation (MTWS) program will also re-compete its RDT&E and PDSS (Post Deployment Software Support) contract. “Industry should take note of the open architecture and virtualization aspects,” Gibson advised.

The USMC will additionally create a Virtual Training Support and Sustainment contract to support operations and maintenance of the virtual training systems. Gibson suggested, “Industry should look at ways to reduce the life cycle maintenance cost through successful efficiencies and modernization through spares.”

Also in FY15, the DVTE (Deployable Virtual Training Environment) program will be re-competing its RDT&E and PDSS contract, and, as for the MTWS program, Gibson reiterated “Industry should take note of the open architecture and virtualization.”

Industry Reactions

As S&T sector members keep a foot hold in the US market, some companies are refining their business models.

Dan Schimmel, the CEO of VT MÄK, observed on March 21 that as a COTS software vendor, his company believes it is in a good position to capitalize on the US market, due to its diversified offering, and wide range of defense contractor and systems integrator customers.

The industry executive further caught the attention of this author with a comment about ROI (return on investment). The metric is of increasing importance to decision makers and end users across the three S&T sectors in Halldale’s publication portfolio – military, civil aviation and healthcare. “The acid test now is unquestionably ROI in a less-is-more environment. Winners will provide real economic value and survive a tough competitive battle for dwindling budget,” he remarked.

VT MÄK also believes its primary value proposition to the US military market remains as relevant as ever, perhaps even more valuable now when the economic pressure is real to deliver distributed, high value, extensible systems built on open standards and new technologies. “Having said that, VT MÄK is definitely exploring applications in adjacent spaces such as civil aviation, homeland defense, non-defense C2 (command and control) applications, and health care with real customers in all these areas,” Schimmel said, and continued, “With our recent acquisition of DI-Guy, we are especially well-suited to serve T&S (training and simulation) applications where the use of realistic human characters enhances the solution. Geographically, VT MÄK has long been well-diversified, with a substantial percentage of revenues coming from T&S programs outside the US. We have focused on hotspots of military activity in Asia, the Middle East, Europe, and Latin/South America.”

CAE’s Duquette noted his company is also well positioned for the US market and highlighted some high-profile programs in its portfolio.  “For example, the Navy is funding the P-8A maritime patrol aircraft and MH-60R Seahawk helicopter, and the Air Force continues to fund variants of the C-130J Hercules, so we expect continued opportunities for these platforms,” the industry executive said.

The Army’s request to purchase an additional 100 UH-72 Lakota helicopters that will eventually replace the current TH-67 training aircraft at Fort Rucker Alabama, will give CAE the opportunity to expand its long-term relationship on this program with Airbus.  “CAE has already provided UH-72 cockpit procedures trainers and flight training devices to the Army,” he recalled and added, “We also see the beginning of funding for the USAF’s advanced trainer replacement program, commonly referred to as T-X.”  CAE recently teamed with General Dynamics and Alenia Aermacchi to support their T-100 Integrated Training System offering for this program.

Marines with 6th Marine Regiment, 2nd Marine Division, conduct a training command post exercise Sept. 18, 2013, inside the II Marine Expeditionary Force Simulation Center aboard Marine Corps Base Camp Lejeune. "Having been in COCs (command operation centers) before in Afghanistan, it is amazing how many similarities are right [in our simulated exercise]," said Maj. Kemper Jones, the operations officer with 6th Marines, from Richmond, Va.
Marines with 6th Marine Regiment, 2nd Marine Division, conduct a training command post exercise Sept. 18, 2013, inside the II Marine Expeditionary Force Simulation Center aboard Marine Corps Base Camp Lejeune. "Having been in COCs (command operation centers) before in Afghanistan, it is amazing how many similarities are right [in our simulated exercise]," said Maj. Kemper Jones, the operations officer with 6th Marines, from Richmond, Va.

And beyond the US, CAE will play on its strength of being truly global. “We are really the only ‘pure play’ simulation and training company with a significant global footprint. We have operations and training centers in more than 20 countries, and almost 8,000 employees worldwide, including an established and growing presence in markets that are actually growing in defense and security such as Asia and the Middle East,” Duquette pointed out. “This global footprint and our ‘multi-domestic’ strategy are important for the health of our business.  It gives us balance and geographic diversification which helps with the inevitable ebbs and flows of defense and security budgets globally” he concluded.