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Department of Defense Press Briefing on the President's Fiscal Year 2018 Defense Budget for the Missile Defense Agency

STAFF:  Hey, everybody.  Thanks for sticking around.  I know this is the brief you've all been waiting for, the last one of the day.  I'd like to introduce Mr. Gary Pennett.  He is the director for agency operations for the Missile Defense Agency.  He'll take remarks and then we'll have about 15 minutes for questions.  If you do have questions, I'd ask you limit to one question and a follow-up and please introduce yourself.

And with that, Mr. Pennett, please.

DIRECTOR GARY PENNETT:  Good afternoon.  I appreciate the opportunity to brief you today on the president's request for Missile Defense Agency's 2018 budget.  The agency requests 7.9 billion in FY 2018 to continue the development of reliable, increasingly capable, and state of the art defenses for our nation, deployed forces, allies, and international partners against ballistic missile threats.

Fiscal year 2018 missile defense program will support the development, testing, deployment, and integration of interceptors, sensors, and command-control battle management communications system for the ballistic missile defense system or BMDS.  Our priority in this budget remains the delivery of greater missile defense capability and capacity for the warfighter which includes investment in advanced technology and future capabilities.  Next chart.

MDA remains committed to delivering, expanding, and sustaining our nation's homeland missile defenses and requests $1.5 billion in FY 2018 for the ground-based midcourse defense program or GMD.  Today we have in place 36 ground-based interceptors and are on track to expand the fleet to 44 by the end of this year.  This budget also funds flight and system ground testing of our homeland defenses, continues redesigned kill vehicle development, enhances the stockpile reliability program and expands the GBI battle space.

We will continue developing GMD ground system hardware and software upgrades and fire control and kill vehicle software development to improve discrimination capabilities which is the ability to differentiate between lethal and non-lethal objects.  For the long-range discrimination radar, we request 358 million in FY '18 to complete the design, purchase critical antenna components, and initiative qualification and subsystem testing.

This radar which we will project will be available in 2020 is a critical midcourse sensor that will improve BMDS target discrimination capability while supporting a more efficient use of the GMD interceptors.  MDA request $131 million for the sea-based X-band or SBX radar which provides precision midcourse tracking and discrimination capabilities and participates in flight tests.

Responding to the requests by U.S. Pacific Command and Northern Command, the FY '18 program includes funds to extend the on-station time from 120 days at sea to 330 days in order to expand contingency operations for defense of the homeland.  

This budget request includes $28 million for the refurbishment of the Cobra Dane radar and initiate radar life extension.  The sensors analysis of alternatives conducted by the department found that a next near-term critical step to optimizing tracking and discrimination capabilities in the Pacific is to deploy a radar in the Pacific.  

MDA plans $5 million for an Atlantic radar study to assess the feasibility of appropriate tracking and discrimination sensor capabilities to support defense of the United States against an emerging long-range ballistic missile threats from Iran.  

Finally, we are requesting $21 million in FY 2018 for an enhanced homeland defense radar in Hawaii to conduct source selection activities.  We plan for the delivery of initial capability of this radar by 2023.  

Next chart. 

Moving now to regional defenses, the FY 2018 request for Aegis BMD is $1.7 billion, which includes sustaining the deployed Standard Missile-3 fleet.  

MDA will procure 34 SM-3 Block IB missiles for deployment on land at the Aegis Ashore site in Romania, and later in Poland, and at sea on Aegis BMD ships, along with associated hardware and support costs.  This will bring the total number of SM-3 Block IB missiles procured to 287 missiles by the end of 2018.  

MDA will also procure six SM-3 IIA rounds, which will support developmental and operational testing, and our commitments under the European and Phase Agreement Adaptive Approach, or EPAA.  Beginning in FY 2018, MDA will commence upgrades on the SM-3 Block IB hardware and software.  

The president's budget request for the Terminal High-Altitude Aerial Defense, or THAAD, is $797 million.  This will allow us to support the maintenance and upkeep of all BMDS-unique items of the fielded THAAD batteries, as well as for all THAAD training devices.  

In FY 2018, MDA will support seven THAAD batteries.  This budget procures 34 THAAD interceptors in FY 2017, bringing the total to 349 by the end of FY 2018.  

Further, MDA will continue development of THAAD software upgrades to engage SRBMs, MRBMs and limited IRBMs, that's short-range, medium-range and the intermediate-range ballistic missile threats, and the integration of THAAD into the Army's Integrated Air and Missile Defense Battle Command System planning process.  

MDA requests a total of $524 million to support the entire MDA radar fleet, which includes support for the Cobra Dane, upgraded early warning radars, or UEWRs, and 12 AN/TPY-2 radars, which includes four base mode radars in Japan, Turkey, Israel and the U.S. Central Command. 

This budget supports a development of algorithms to give these radars an improved ability to discriminate between lethal and non-lethal objects.  We will also transition to a production of the next-generation gallium nitride transmit received, the integrated, multichannel modules to improve AN/TPY-2 radar performance.  

Our budget request of $147 million in FY 2018 for Israeli programs continues MDA's longstanding support of U.S.-Israeli cooperative BMD programs, to include procurement of Iron Dome, and the co-development of David's Sling weapons system upper-tier interceptor, and the Arrow weapons system improvements.  

EPA Phase 3 is scheduled to be delivered by the end of calendar year 2018.  MDA requests a total of $90 million for Aegis Ashore and Poland.  Phase 3 will also consist of an upgraded version of the Aegis BMDS weapons system with a new SM-3 variant, the Block IIA. 

Next chart. 

MDA is developing advanced BMD technology for integration into the BMDS fleet to defeat future threats.  The investment strategy for these technologies balances the need to address the most dangerous current threats with a need to position the U.S. to respond to threats developing in the future.  

The MDA is requesting $259 million for the multi-object kill vehicle or MOKV.  For F.Y. '18, MDA has accelerated MOKV risk reduction and product development phases to achieve a demonstrated capability in the 2025 timeframe.  

We are requesting $75 million for hypersonic defense.  The F.Y. '17 NDAA directed for a program to be established in F.Y. '18.  The F.Y. '18 plan will begin the software modification to current BMDS assets and define requirements and architecture for future demonstrations.  

The directed energy request is $54 million, which will allow MDA to continue the development and scaling of a low-power laser demonstrator.  

Additionally, MDA requests $52 million for MDA space efforts in F.Y. '18.  This will fund space tracking and surveillance system, or STSS, satellite operations and sustainment.  STSS consists of two satellites operating in lower-earth orbit and provides risk reduction data for a potential operational BMDS tracking and surveillance constellation.  

This F.Y. '18 request will also complete on-orbit deployment of the space-based kill assessment sensor network.   

Next chart.  

We request $430 million in F.Y. '18 for command control battle management and communications, or C2BMC.  C2BMC spiral 8.2-1 allows C2BMC to integrate data from multiple AN/TPY-2 radars, SBX, UEWR, Cobra Dane, and the BMDS overhead persistent infrared, or OPIR, architecture, and becomes operational in F.Y. '18 in support of enhanced homeland defense.   

We will complete testing and deployment of C2BMC Spiral 8.2-3 in support of Aegis BMD engage-only remote functionality and the EPAA phase three, and we will continue development of C2BMC Spiral 8.2-5 to support integration of long-range discrimination radar into the ballistic missile defense system by 2021 to support a robust homeland defense capability.

We are requesting $410 million in F.Y. '18 for the (Targets ?) program and $306 million to conduct 23 ground tests and 12 flight tests, including critical operational flight tests, one of which will involve a demonstration of the EPAA phase three architecture against IRBMs.  

Next chart.  

In summary, this budget request helps MDA maintain its commitments to the warfighter and to the nation, to push forward with improvements to both homeland and regional defenses.  

I will now take a few questions. 


Q:  Can you talk a little bit to this proposed radar for Hawaii? Do you have a requirement for that yet? How is that being laid out?  

MR. PENNETT:  So, we worked with the combatant commanders and they identified the need for additional sensor coverage to enhance the defense of Hawaii.  And let me be clear that Hawaii is defended now with the current system, but as we see the threat continue to grow, they identified the need for an additional sensor on the Hawaiian Islands.  And so we're working with them on that requirement.  

And we will have, as I said, we have $21 million requested in F.Y. '18 to begin the requests for information from contractors and begin studies in terms of the details of that radar.  

Q:  There’s no plan yet going with radars, for example, another LRDR or AN/TPY-2 or anything like that?  

MR. PENNETT:  So, the AN/TPY-2, the study that we did determined the AN/TPY-2 is not a sufficient radar for that need.  So this will probably be a radar -- again, we have to do the study, but it will probably be not quite the scale of an LRDR, but definitely something more than an AN/TPY-2.

Q:  Yeah, hi.  James Drew from Aviation Week.

With the hypersonic defense plan, Russia and China have demonstrated these capabilities many years ago.  Why did it take so long for MDA to respond and start its program?

MR. PENNETT:  We are -- we have been looking at that threat vector for some time, just the generic threat vector.  And so -- and this was just NDAA language that told us to start a program, but we have been doing studies in that area for a while.

Q:  And also why is -- why is Iran now featured fairly prominently in your -- in your budget request?  Is it a new threat that you expect to be operational soon?  Or something like that?

MR. PENNETT:  Iran has always been part of our original charter, both North Korea and Iran have been part of the Missile Defense Agency's charter.  

Q:  Sir, Sidney Freeberg, Breaking Defense.

The directed energy part is relatively small piece of the budget but has got a lot of excitement, interest around it.  What is the actual program there?  You hear things about long endurance, high altitude UAV being as sort of the end-state, but that's clearly not what you're buying now.  That's something you're buying now sort of more as a testing step toward that that.

MR. PENNETT:  Yes.  So our low-power laser demonstrator is in fact the stepping stone to that.  So one of the things is looking at the platform, which we would not develop.  We would either lease or have a platform that we would use for testing.  And -- but our focus is actually on the laser itself, scaling the laser up in power, reducing the size, and making it more efficient so that it could be on an airborne platform.

But that's all we're doing right now is just the demonstration on that.  That's correct.


Q:  I want to ask about the budget for the lead system integration transition plan.  And what -- what is the thinking right now in terms of -- Boeing's contract expires at the end of '18.  You guys have signaled industry you want to bring that in-house.  What's the thinking right now?  And how much money is in the budget for that plan?

MR. PENNETT:  I don't know off-hand.  I'll have to get back to you on the exact numbers for the transition and the Boeing -- I'll be clear -- the Boeing contract is not going away at the end of F.Y. '18.  It continues pretty much through the FYDP.

Q:  I thought you were looking to transition it in-house.

MR. PENNETT:  There are -- there are portions of that effort that we're looking at a lead system integrator that is bringing -- bringing the entire system together.  And so we're looking at competing that portion of the effort. 

Q:  On hypersonic, that's -- that's actually a new program.  What systems are you going to be upgrading with new software algorithms that counter potential threats?  I mean, SM-6?  Which systems?

MR. PENNETT:  We're looking at that.  That's part of what our study is to look at, what those -- what -- what the capabilities are that those systems may have.  And if there are some software that we can put into that.  And I'm sorry, to get back to your -- your question about the lead system integrator, I believe we have -- I'll have to get the exact number for you -- but it's about $37 million starting in F.Y. '18, thereabouts.

Q:  To begin a transition?  Or to modify the arrangement?

MR. PENNETT:  To do the competition for that.  Yes.

Q:  To compete (inaudible)?

MR. PENNETT:  The lead -- the lead system integrator part only.  Boeing will still be prominent in the effort, but -- in the ballistic missile program, but just the lead system integrator portion of that.  

Q:  That would be open to a competition?

MR. PENNETT:  Yes.  

Q:  OK.

Q:  Hi, Jen Judson with Defense News.

I wanted to ask about the Atlantic radar study that you mentioned.


Q:  Can you elaborate a little on what you're looking at?  Is it location, type of radar?  Have you ruled anything out at this point in terms of the type of radar that you're looking at?

MR. PENNETT:  No, we haven't.  And this is -- again, this is a study and part of the ballistic missile defense review, which is ongoing now, will inform that -- that -- the results on that as well.

Q:  With -- with the Atlantic radar, will -- how exactly -- where exactly are you thinking about putting this?  And is this a new requirement that has come up just recently?

MR. PENNETT:  Again, this is just a study we're doing.  And the ballistic missile defense review will inform the decisions on that.

Q:  And also, you have a big intercept test for the ground-based interceptor that was due to come up fairly shortly which would inform some budgetary decisions.  Do you -- do you know if that intercept test that is due to happen soon, or -- or when that -- that's expected to happen?

MR. PENNETT:  We're -- we're coordinating the resources associated with that test.  And when those resources are available, we will -- we will conduct that test.

Q:  Scott Stewart with, Sankei Shimbun. You have a joint development program for the Aegis SM-3 Block IIA…

MR. PENNETT:  That's correct.

Q:  ...with Japan.

MR. PENNETT:  That's correct.

Q:  And noticed the funds were going dramatically down and then seemed to be phased out.  Is it just the natural end of the program?

MR. PENNETT:  Yes, yes.  We're completing the cooperative program with Japan in F.Y. '18.  And believe it's the last funding, about $60 million for that.  That missile is going into production and we're starting to produce that.  And Japan will be buying some of those rounds as well.

Q:  Thank you.


Q:  For the SBX – expanding it to 330 days out of the year, was it -- was that a -- a recent urgent requirement from PACOM in response with North Korea threat or issues with North Korea -- North Korea...


MR. PENNETT:  It's a -- a combination.  We have -- we had originally budgeted for 120 days.  And in the last few years, we have been operating it closer to 200 to 220 days.  So, we're just recognizing that we need to put that into budget to be more realistic about that.

Q:  That’s not something like, like two months ago, they said we need...


MR. PENNETT:  No, no.

Q:  So, I had one more thing.  The Aegis ashore sites that you have in Romania and Poland, it says in here that you'll initiate an Aegis ashore study.  Is that related to potential expansion of -- of that capability to other nations?

MR. PENNETT:  I'm not familiar with that - we have -- we do have those -- the site in Romania which is operational, the site in Poland will become operational by the end of calendar year 2018, which is a part of the EPAA phase, phase three.

There are -- there are -- there are ongoing discussions regarding a Aegis Ashore applications and other things which, again, is also part of the BMDR that's going on.

Q:  And actually I see here, I think it's related more to protection of those sites.  So, I think I might've had that one -- that wrong there.

MR. PENNETT:  I -- I see.  I see, OK.  That could be.  OK.

Q:  I wanted to ask an overarching question.  Sort of the -- this budget comes in advance of the ballistic missile defense review.  So, I'm wondering how much of this could be sort of considered a placeholder before changes are afoot, you know, are there certain areas where there was a struggle to figure out, you know, whether to invest further before, you know, you have some direction from a review.  Just -- just curious how you work out a budget just in advance of all of this because changes could be imminent.

MR. PENNETT:  Well, there's nothing that we did that would preclude moving forward. For example, the Atlantic radar study recognizing that that may be something that the BMDR may -- may suggest.  And so -- so, we recognize that -- and -- and those other types of investments so we try not to -- to preclude anything in advance of that and we did that with the thought in mind that the BMDR would potentially inform us as we go forward.  And so we're -- we're prepared for that.  Okay.

Q:  The move from 36 to 44 interceptors by September 30th, is that the plan?

MR. PENNETT:  No -- no it's calendar year, 27 -- 44 by the end of this, 2017.  Calendar year, yes.

Q:  How much is that contingent on a success in this next GBI test?  If that fails, would that derails the -- the movement to 44 temporarily? 

MR. PENNETT:  No -- no, we would continue -- we are continuing to produce those rounds, those rounds are essentially, for all intents and purposes, are essentially almost done.  We're really in the process of emplacing those rounds.

Q:  These are the CE-IIs?

MR. PENNETT:  The -- the CE-IIs, right.

Q:  The most advanced version?

MR. PENNETT:  Yes, yes.

Q:  Okay.  On your schedule you talked about having a second GBI test, budgeting for a second GBI test, would that be fiscal '18?

MR. PENNETT:  Yes, right, that'd be '18.

Q:  So you'd do two tests in '18, possibly?

MR. PENNETT:  No, not right now, right now we have one planned in '18.

Q:  Just one planned in '18.


Q:  The one come up is FTG-11?

MR. PENNETT:  15 -- 15.

Q:  15 comes before 11?  

MR. PENNETT:  GBI Math. (Laughter.)

Okay.  All right.

STAFF:  Anymore questions?

Q:  (off mic)  How much have you brought for the Multi-Object Kill Vehicle.  It's said that it's been accelerated slightly for introduction 2025.  What is that relative to what -- where it was previously?

MR. PENNETT:  So we were looking more at the 2030 timeframe and so this additional funding increase will bring it to the 2025 timeframe so about -- about five years roughly.

Q:  Can I ask you about the Israeli -- the Israeli cooperative program. Every year you guys come in with about $150 million...

MR. PENNETT:  147 this year, yes, okay.

Q:  ..expanded to like $500 million by Congress.  Where does that money come from?  Is that money that comes from other agencies into MDA or do you have to shift MDA money, resources, to pay for that gift?

MR. PENNETT:  That is -- those funds are appropriate by Congress so they're the ones that -- we -- we request -- as I said, this year we're requesting 147 so Congress determines how that gets financed.

Q:  But if they add like 300, 400 million does that come out of MDA in terms of you have to shift dollars around?

MR. PENNETT:  We don't -- we don't do that, congress makes all those decisions in terms of how money so I can't tell you where the money comes from, I don't know.

Q:  Thank you.

STAFF:  All right.  Thanks guys.