Second stage of Chinese telecom ban producing unintended consequences

The ZTE, Huawei ban is proving challenging for vendors doing business in countries where China-built networks are almost literally the only way to connect to th...

The DoD Reporter’s Notebook is a weekly summary of personnel, acquisition, technology and management stories that may have fallen below your radar during the past week, but are nonetheless important. It’s compiled and published each Monday by Federal News Network DoD reporters Jared Serbu and Scott Maucione.

Phase two of the U.S. government’s crackdown on untrusted Chinese hardware and software in its supply chain is only about six months old. But as some contracting experts both inside and outside of the government warned at the time, the latest implementation appears to be causing unintended consequences because of ambiguities over what it means to “use” equipment made by companies like ZTE and Huawei.

At issue is Section 889 of the 2019 National Defense Authorization Act, which sought to root out Chinese telecom equipment from the federal supply chain. The first section banned companies from selling that gear to the government. Part B, which the government implemented via an interim rule last August, prohibited prime contractors from using that equipment as a “substantial or essential” part of their own networks.

But at least some agencies have interpreted the rule to encompass the equipment that’s on the networks of their internet service providers and phone companies. Under that standard, it’s often impossible for contractors to self-certify that they’re in compliance — especially if they’re operating in countries where their only connectivity option is a telecom monopoly that’s known with certainty to use networks and equipment provided by Chinese firms, said Paul Foldi, the vice president for international development affairs at the Professional Services Council.

“It’s not just hardware — it’s also software, and it’s incredibly cumbersome” for companies working on Defense, State Department and U.S. Agency for International Development contracts in countries like Egypt and Ethopia, Foldi said.

While the rule lets agencies issue waivers in situations where companies literally have no choice, the paperwork process is intensive, and the waivers are issued one contract at-a-time. Each waiver, so far, has been taking at least four-to-six weeks to process before a vendor can begin work.

“It’s not as though if I’m working in Egypt I get a waiver for all my contracts in that country,” Foldi said. “And the waivers are not similar [to one another] from what we’re hearing. They’re not public, so we can’t tell you for sure whether they’re similar, but we’ve heard anecdotally that they’re not similar.”

The rule does provide for a more blanket (but still temporary) waiver that could help with situations like the ones faced by contractors operating overseas. But those can only be issued by the Office of the Director of National Intelligence.

“The last time I checked, ODNI is not staffed with contracting officers to go through all this paperwork,” Foldi said. “So in addition to the bottleneck in the agency, whether it’s the Department of Defense, State, USAID, you’ve got those issues that can take anywhere from four to six weeks at the earliest and then you’ve got to get through ODNI.” —JS

AFVentures brings its first report card home

The commercial-focused arm of the Air Force’s innovation-focused procurement shop awarded 2,300 small business awards totaling more than $700 million over the past two years.

AFVentures, which is an arm of the service’s larger AFWERX hub, released its annual report last week, and the program appears to have been busy. The organization spent a large chunk of its investment money in artificial intelligence, IT, aerospace, robotics and virtual reality, all areas where the Air Force is planning on taking its weapons of the future.

“AFVentures represents a counterbalance to Defense acquisition and procurement. We serve as the Department of the Air Force’s commercial investment group,” the authors of the report wrote. “Our mission: leverage commercial technology to deliver improved capabilities to the warfighter, faster. We create simple, easy to use pathways for commercial innovation to solve warfighter problems.”

The report is a first attempt at showing the key demographics of the organization to stakeholders since it was created.

AFVentures awards most of its contracts as Small Business Innovative Research (SBIR) Phase 1 awards, which are small bets on companies for short-term concepts. The $50,000 contracts allow companies to test feasibility of concepts and identify how helpful they can be to the Air Force.

The Air Force often likens the idea to sowing many seeds in hopes of striking gold on the next big technology.

A good chunk of those seeds seem to have flourished considering more than 500 of the contracts ended up going into Phase 2, where AFVentures gives companies $750,000 for prototyping, development, research and testing. Those contracts translated to $1.4 billion in non-SBIR contracts.

AFVentures did not detail how many projects reached phase 3, where awards usually combine SBIR funds with money from outside the SBIR program.

“At this point, AFVentures has not included this revenue data in current totals for Phase 3 commercialization impact because of the difficulty in isolating revenue specific to the Open Topic funded technology from unrelated company revenue,” the authors of the report wrote. “Nonetheless, AFVentures anticipates demonstrating yearly revenue growth by Open Topic portfolio companies.”

Last fall, AFWERX, which oversees AFVentures, was promoted to a more prominent role in the Air Force.

“Given the daunting challenges we face against peer competitors, the operative question is: ‘What are we doing to tip the scales?’” then-Air Force acquisition chief Will Roper wrote a Sept. 1 memo. “One answer is relaunching AFWERX with expanded authority. “With so much of the battlefield — over 80% — in commercial markets having a frontline organization bridge back to our PEOs, research labs and major commands can lower our fence line, multiply our partnerships and provide a plain-speaking menu for defense work where the first course isn’t acronym soup.”

The memo breaks AFWERX into three different branches: AFVentures, Spark and Prime.

The Spark branch is focused on empowering innovation at the operational edge, while the Prime branch will leverage other unique government resources by working with other agencies, programs and emerging markets. The Air Force’s Agility Prime program, which is trying to develop flying cars, falls under this branch. — SM

Pentagon slicing away at data centers, but not everything can move to the cloud

The Defense Department is on track to reduce its total number of government-owned data centers to less than 10 percent of what it had when the Federal Data Center Consolidation Initiative first began in 2010, according to the department’s top IT official.

John Sherman, the acting DoD chief information officer said the military services and Defense agencies will reduce their total number of data centers to about 250 “in the next few years.” The department had more than 3,000 in 2010, and still owns about 1,500, he said.

A fair chunk of those closures have been because of migrations to the cloud, with many more to come. But Sherman said the analytical work the department has done in the process of optimizing its data hosting environments has led officials to conclude there are many applications that simply don’t make sense to move to the cloud.

Those types of applications and systems will continue to reside in government-owned facilities, such as the Defense Information Systems Agency’s capacity services offerings, until they’re finally retired.

“[We’ve looked] at some of our legacy systems and understand the juice isn’t worth the squeeze if something’s going to sunset, or you just cannot refactor it in a way that when you put it into the cloud you’re getting some kind of benefit,” he said during a virtual event hosted by Meritalk. “One of my colleagues calls DISA [capacity services] the ‘purgatory data center.’ These are where we’ve done a deliberative analysis of the systems, and they’re just not going to the cloud. And that’s a good decision – you’ve done the due diligence. And then you can really focus on how you’re going to use the cloud.”

In other cases, migrating a system to the cloud may deliver some cost savings, but the analysis shows they won’t amount to meaningful savings for several more years. In those instances, migration might still make sense. But more than that, Sherman said, getting out of the data center business improves DoD’s cybersecurity.

“Yes, we’re saving money, but also we’re not having to patch ourselves, or worry about HVAC and industrial control systems at the data center,” he said. “We are leveraging industry partners, and in the United States, we’ve got the best in the world I would argue. Not just with the big cloud service providers, but some of the others that are providing some of the integrating services and so on to make this happen.” —JS

Army emergency organization offering grants for childcare

Army Emergency Relief is expanding the financial assistance services it offers soldiers to encompass childcare, babysitting, remote-learning and other ways to take care of their children.

The organization will now offer 100% no-pay-back grants to Army families for those costs, as well as continuing to offer zero interest loans and grants for food, lodging, emergency travel, natural disasters, vehicle costs and many other options.

“We don’t yet know specifics on how many Army families will make use of these childcare and remote learning benefits,” Matthew Howland, a spokesperson for AER told Federal News Network. “However, we do know that the past year has been disruptive and challenging for our military families, thanks to the COVID-19 pandemic. There are military families out there who need help, and so we stand ready to support them by providing these programs.”

AER offers help to about 40,000 Army families and gives out around $70 million in grants a year.

Childcare is increasingly becoming a top issue for military families, especially since the onset of the COVID-19 pandemic.

“COVID-19 shutdown many childcare facilities which contributed to financial and logistical hardship for Army families,” Howland said. “Anything that distracts the service member from focusing on their mission jeopardizes soldier and unit readiness. In some cases, shortages or waiting lists happen, particularly in high-cost-of-living areas. Also, military families move more frequently than the average American family, which means finding long-term childcare options can be difficult. This can cause military families to have to go out of pocket to make their own temporary childcare arrangements. COVID-19 has only exacerbated these challenges.”

The childcare benefit AER is offering has no cap. The remote education benefit stops at $2,000 per year for K-12 and $3,000 for undergrad.

A list of covered expenses include costs for before/after school care, childcare facilities, nursery schools, and private sitters. For homeschool/remote learning assistance, costs involve tutoring, educational software, extended WiFi, computers, tablets, and more, for students from Pre-K through undergraduate. — SM

Army reinforces multi-domain strategy for future

The Army is reinforcing its need to encompass space, cyber, air and other domains into the strategy to rebuff rising powers like China and Russia within the next 15 years.

The strategy, dubbed Army Multi-Domain Transformation, will help the Army with the range, speed and convergence of cutting-edge technologies to provide future decision dominance and overmatch to win the next fight, according to Army Chief of Staff Gen. James McConville.

“It builds upon what has already been done by Army Forces Command and this was in concert with Army Futures Command working through the attributes” Col. Jason Charland, military deputy for the Army’s management office-strategy, plans and policy, said during a Friday call with reporters. “It brings a lot of the different ideas together. It’s focused out towards 2035.”

The Army plans to publish a posture statement in the near future to explain what it is specifically doing to improve multi-domain operations.

The strategy is based around “Four C’s”: competition, change, crisis, and conflict.

For the competition aspect, the Army wants to work with its international partners to expand the land power network and develop new capabilities. For crisis, the service wants to maintain contact in all domains, hold adversary interests at risk and impost costs on malign actions against the United States. Finally, in conflict, the Army wants to expand the battle space and create overmatch.

The strategy will involve the use of new Army units like the recently formed multi-domain task force.

The task forces are focused on defeating an enemy’s anti-access/area denial capabilities to allow the military to operate in hostile environments.

The Army plans to have three of these task forces by next year.

The first task force originally had a field artillery brigade as its core that merged with an intelligence, information, cyber, electronic warfare and space element.

“We face increased physical and virtual standoff through layered and integrated networks, where adversaries leverage all instruments of national power to blur the lines between competition and conflict, altering international norms to the detriment of the international community,”  Brig. Gen. Jim Isenhower, the task force commander said. — SM


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