Page 6 – Defense Daily

Marine Corps’ Budget Includes JLTV Procurement Pause In FY ‘26, Cites Delivery Backlog

The Marine Corps’ budget request does not include plans to procure new Joint Light Tactical Vehicles (JLTV) in fiscal year 2026 citing “contract delays caused by a backlog in vehicle deliveries.”

The potential pause in procuring the AM General

-built vehicles follows the Army’s own plan to no longer buy JLTVs and comments from the Commandant Gen. Eric Smith that the Marine Corps would have to “buy less” JLTVs without an increase in its budget.

A Joint Light Tactical Vehicle displays its overall capabilities during a live demonstration at the School of Infantry West, Marine Corps Base Camp Pendleton, California, Feb. 27, 2019. The JLTV consists of multiple platforms capable of completing a variety of missions while providing increased protection and mobility for personnel across the Marine Corps. (Official Marine Corps video by Sgt. Timothy R. Smithers/Released)

While budget documents recently released by the Pentagon included a line item for the Marine Corps covering $81.9 million to buy 138 JLTV A2s in FY ‘26, a more detailed procurement budget document from the service notes that procurement quantity figure “is incorrect” and that “the correct quantity is zero.”

Along with adjusting procurement plans to account for the delivery backlog, the budget document also points to shifting funds for “other Marine Corps modernization priorities” as a reason for the reduction in the JLTV procurement quantity.

The Army awarded AM General a potential 10-year, multi-billion dollar deal just over two years ago to build the new JLTV A2 and take over as prime contractor from Oshkosh Defense [OSK]. AM General has said it remained on track to support the Army’s plan to begin fielding the JLTV A2 in mid-2026 (Defense Daily, Feb. 9 2023).

As part of its new transformation initiative, the Army has detailed plans to cut “obsolete” programs such as the JLTV as well as the Humvee, AH-64D Apache, the M10 Booker and Gray Eagles, and potentially ending development of the Improved Turbine Engine Program, Future Tactical UAS, and the Robotic Combat Vehicle.

Smith told lawmakers last month that the Marine Corps was “not consulted” on the Army’s JLTV decision and that the average per unit cost for the vehicle “will go up” (Defense Daily, June 24).

Gen. James Mingus, the Army vice chief of staff, told reporters in May while the service was not planning for any more procurement of JLTVs, that the Marine Corps can “absolutely” still purchase the platform under the current contract in place with AM General (Defense Daily, May 14).

The potential pause in JLTV procurement for FY ‘26 follows the Marine Corps’ budget of $324.1 million in FY ‘25 covering 672 vehicles.

At a House Appropriations Defense Subcommittee hearing in May, Smith said the Marine Corps was “fully committed” to the JLTV program, calling it “the workhorse” of the service’s ground tactical vehicle fleet.

House appropriators’ $831.5 billion FY ‘26 defense spending bill, approved by the full committee on June 12, rebukes the Army’s planned JLTV cut and allocates $345 million covering 863 vehicles for the Army and $169 million for the Marine Corps (Defense Daily, June 13).

Lockheed Martin Delivers First SPY-7 Aegis Radar Shipset To Japan

Lockheed Martin [LMT] on Monday announced it delivered the first full Aegis Systems Equipped Vessel (ASEV) shipset of radar panels to Japanese government control, with further testing this year before they are sent across the Pacific Ocean.

Each ASEV shipset consists of four ANSPY-7(V)1 radar antennas to be used on the two new ASEVs, set to be commissioned in 2027 and 2028. This first set was facilitated through Japan’s

Mitsubishi Corporation via a Direct Commercial Sale arrangement after rigorous acceptance testing, the company said.

“The successful on-time delivery of all antennas for the first ASEV showcases the maturity and scalability of the SPY-7 radar as well as production capacity, while also demonstrating Lockheed Martin’s dedication and expertise in system integration,” Chandra Marshall, vice president of Multi-Domain Combat Solutions at Lockheed Martin, said in a statement.

Japan is procuring two ASEV Japanese Maritime Self-Defense ships to bolster the country’s missile defense capabilities to replace two canceled Aegis Ashore sites that were set to use the company’s Long Range Discrimination Radar (LRDR). The ASEV SPY-7 radar is derived from the LRDR system (Defense Daily, June 29, 2020).

The Aegis Ashore sites were canceled due to technical and cost concerns as well as local community opposition.

Marshall added that the company plans to continue full system integration and testing with all four antennas at their Production Test Center in Moorestown, N.J. this year, “prior to equipment delivery to Japan, which will significantly reduce integration risk and enable commissioning on schedule.”

Mitsubishi Heavy Industries and Japan Marine United Corporation were contracted in 2024 to build the two ASEVs, respectively.

Previously, in January the company announced the delivery of the first ASEV SPY-7 radar antenna to Japan (Defense Daily, Jan. 16).

In December, the U.S. Missile Defense Agency awarded Lockheed Martin a $579 million modification to continue developing and integrating support for the ASEV ships, increasing the total contract value to $1.54 billion (Defense Daily, Dec. 2, 2024).

Other uses of the company’s SPY-7 radar are Canada’s River-class destroyers, Spain’s F-110 Frigates, and the land-based version deployed by the Missile Defense Agency for the Guam Defense System (TPY-6) and the Long-Range Discrimination Radar.

Shipbuilder Fincantieri Appoints New CEO For U.S. Subsidiary

Italy’s shipbuilder Fincantieri appointed George Moutafis as the next CEO of U.S. subsidiary Fincantieri Marine Group (FMG), effective July 1.

Moutafis succeeds Marco Galbiati, who had served as CEO since July 2022 after a stint as general manager from 2018 to 2022.

Fincantieri logo

The company noted Moutafis has over 25 years of executive experience in strategic planning, program management and industrial restructuring in the public and private sectors.

Most recently, he served as the chief operating officer and general manager of Italy’s Beretta USA Corp. subsidiary.

“His background in defense and naval manufacturing, combined with his international perspective, and his proven ability to drive operational and financial management, aligns with the Group’s strategic direction in response to shifting priorities in the broader U.S. institutional and industrial context,” Fincantieri said in a statement.

The company said the change in leadership for the U.S. subsidiary is a “pivotal moment for the U.S. shipbuilding industry” as the Trump administration “places renewed strategic emphasis on strengthening domestic naval capabilities.” It also said the move reinforces a “long-term commitment to the United States by appointing a seasoned U.S. executive with deep expertise in defense, naval manufacturing, and international industrial transformation.”

This change comes as the Fincantieri Marinette Marine shipyard hopes to improve its capabilities in Wisconsin, which built the U.S. Navy’s Freedom-class littoral combat ship and is now working to improve upon significant delays to the Constellation-class guided-missile frigate.

House Panel Wants Coast Guard To Examine UAS For Its Medium Endurance Cutters

The House Transportation and Infrastructure Committee last week introduced a bill that would direct the Coast Guard to study deploying unmanned aircraft systems (UAS) it uses on its fleet of high-endurance National Security Cutters (NSCs) for operations aboard its current and future medium endurance cutters.

The Coast Guard Commandant would have a year to report the study results to Congress, according to the bipartisan Coast Guard Authorization Act of 2025 released on July 2.

The Coast Guard has been operating the Boeing [BA] Insitu ScanEagle medium UAS from its NSCs and is in the process of switching over to the Shield AI V-BAT drone aboard the 420-foot cutters. The service has previously stated its interest to operate UAS from its future 360-foot Offshore Patrol Cutters (OPC), which will replace an ageing fleet of medium endurance cutters that currently consist of about 25 270-foot and 210-foot vessels. The OPC program has been delayed, forcing the Coast Guard to rely longer on its current medium endurance cutters.

The service has a fleet of 10 NSCs. The UAS that operate from the ships are contractor owned and operated.

In addition to the feasibility of equipping the medium endurance cutters with UAS capabilities, study will also assess how the systems would strengthen the missions of these ships, and the projected costs of procuring and operating the systems, the bill says.

The committee also directs the Government Accountability Office to report within 18 months on the Coast Guard’s purchase and use of the service’s current unmanned systems. The Coast Guard also operates small drones, helps sister agency Customs and Border Protection pilot land-based long endurance UAS, and leases data and imagery from unmanned surface vessels (USVs) operated by Saildrone. The service has also tested other USVs.

When the Coast Guard authorization bill is signed into law, the committee also directs the commandant to reach out to the National Academy of Sciences to assess existing “unmanned, autonomous, or remotely-controlled maritime domain awareness technologies for use by the Coast Guard.”

The bill would also establish a 15-member National Advisory Committee on Autonomous Maritime Systems to advise the future secretary of the Coast Guard on the regulation and use of autonomous systems within U.S. territorial waters. The Coast Guard currently does not have a secretary but the bill would establish the position, which is in line with a proposal by the Trump administration.

The advisory committee would be stood up by the secretary—who would appoint its members—within 90 days of the bill becoming law.

Army Approves Officially Transitioning PrSM Inc. 1 Into Production Phase

The Army has officially transitioned its Precision Strike Missile (PrSM) Inc. 1 program from the development to production and deployment phase, the service said on July 5.

The Milestone C decision for the PrSM Inc. 1 was approved on July 2 and follows several successful evaluations, including a recent production qualification test, and a nearly $5 billion contract award to manufacturer Lockheed Martin

[LMT] in late March.

PrSM is the next-generation, long-range precision-strike missile delivering critical capabilities to attack, neutralize, suppress, and destroy targets, supporting successful mission execution via combined Joint All-Domain Operations. (Official U.S. Army photo, Darrell Ames)

“This Milestone C decision is a testament to the hard work and dedication of the entire PrSM team,” Maj. Gen. Frank Lozano, program executive officer for missiles and space, said in a statement. “PrSM will provide our soldiers with a critical capability to engage and defeat threats at extended ranges, enhancing our ability to deter aggression and protect our national security.”

PrSM is the Army’s program to replace its legacy ATACMS missiles, also built by Lockheed Martin, with the base weapon capable of reaching ranges up to 500 kilometers.

Following several years of prototyping work, Lockheed Martin has been building initial batches of PrSM Inc. 1 under Early Operational Capability (EOC) contracts.

Paula Hartley, Lockheed Martin’s vice president of tactical missiles, told reporters last October the company will have delivered an initial 26 missiles for EOC 1 by the end of 2024 and that EOC 2 will cover 50 PrSM missiles.

The Army in late March then awarded Lockheed Martin the new PrSM Inc. 1 indefinite-delivery, indefinite-quantity contract with a ceiling value of $4.9 billion, with work on the new deal expected to be completed by the end of March 2030 (Defense Daily, March 28).

Lockheed Martin received an initial order under the new contract for 400 PrSM Inc. 1 missiles, while the value of that deal has not been disclosed (Defense Daily, April 4).

The Army’s successful production qualification test for PrSM Inc. 1 in April included launching it from an M270A2 launcher, with the service noting it engaged a target “with precision and lethality” and that “the missile’s performance was nominal for all parameters” (Defense Daily, April 11).

Malave’s Employment With Boeing Comes With Temporary Restrictions

Incoming Boeing [BA] Chief Financial Officer Jay Malave will be working under several temporary restrictions related to the company’s defense business and work done by his former employer Lockheed Martin [LMT], Boeing said in a government filing.

In addition, Boeing said it will pay Lockheed Martin $2 million to release claims Malave’s prior employer has related to his upcoming employment with Boeing.

The July 3 filing with the Securities and Exchange Commission (SEC) lays out conditions imposed by Boeing and agreed to by Malave.

“These conditions include not participating in the Boeing Defense, Space & Security business until the end of 2025, although he may have visibility into its aggregate financial performance; not providing advice or making decision with respect to certain vendor relationships and programs in which Lockheed is or may be involved until April 2026; and not soliciting Lockheed employees or participating in procurement activities in which Lockheed is a known or expected competitor until April 2027,” Boeing’s July 3 SEC filing says.

Boeing on June 30 announced it had hired Malave, 56, as CFO, effective Aug. 15 (Defense Daily, June 30). He abruptly resigned from Lockheed Martin in April.

As to Boeing agreeing to pay Lockheed Martin $2 million, the company said this is “in connection with a release of claims relating” to his employment with Boeing.

The agreement with Boeing “ensures the protection of our proprietary and intellectual information, and includes recouping incentive compensation from the former executive,” a Lockheed Martin spokesperson said.

Malave’s annual salary with Boeing will be nearly $1.1 million with potential annual incentives reaching 120 percent of his base pay. Beginning next year, he will be eligible for $6.5 million in long-term incentive awards.

To soften the blow of any vested equity Malave forfeited when quitting Lockheed Martin due to non-competition agreements he had with his former employer, Boeing will pay him $7 million in cash that would have to be repaid if he voluntarily leaves the company within two years of his start date, the SEC filing says. Boeing will also pay him $1.5 million in cash to offset the value of unvested equity he had in Lockheed Martin, subject to the same repayment conditions as the vested equity.

Boeing is also providing him with restricted stock units and stock options valued at up to $9.5 million.

Boeing’s operating segments also include Commercial Airplanes and Global Services.

DoD OIG to Assess Effectiveness of U.S. Space Force Oversight of GPS OCX

The Pentagon’s Office of Inspector General (OIG) is to assess the effectiveness of U.S. Space Force oversight of the Global Positioning Satellites Next-Generation Operation Control
System (GPS OCX) by RTX‘s [RTX] Raytheon business.

“Specifically, the evaluation will address challenges related to delays and cost increases for the
program that were identified in H. Rept. 118-121, ‘Department of Defense Appropriations Bill,
2024,’” 118th Cong., June 27, 2023,” OIG said on June 26. “We may revise the objective as the evaluation proceeds, and we will consider suggestions from management for additional or revised objectives. We plan to perform this evaluation in accordance with the Council of Inspectors General on Integrity and Efficiency ‘Quality Standards for Inspection and Evaluation.'”

OIG is to conduct its examination at the GPS OCX program evaluation office in El Segundo, Calif., and at the Defense Contract Management Agency at Ft. Lee, Va.

The Space Force plans to field GPS OCX this year and has awarded Raytheon’s Aurora, Colo., site a nearly $380 million contract for “pre-operational acceptance support and post-operational acceptance interim contractor support” through March next year with an option for another year. Congress has criticized GPS-OCX for being nearly a decade late, and system cost estimates have significantly increased from the $3.9 billion estimated in November 2012 to more than $7 billion (Defense Daily, Oct. 4, 2023).

GPS OCX Blocks 1 and 2 are to control older GPS II and newer GPS III satellites, launched starting in 2018, and both older and modernized signals. The concurrent delivery of Block 2 is to add the international L1C and Military Code signals.

On March 26, 2020, Space Force said that it told RTX, then Raytheon, to replace GPS OCX’s IBM [IBM] computer hardware before the delivery of GPS OCX due to the sale of IBM’s computer product line to Lenovo, owned by China. Space Force said that it had successfully tested alternative computer hardware made by Hewlett Packard Enterprise [HPE], a U.S. company, in a pilot project that replaced IBM hardware with HPE’s in the 17 monitoring stations for GPS and four GPS ground antenna sites.

RTX has said that GPS OCX “will provide improved accuracy of the current system and will be able to fly more than twice as many satellites”–an increase that the company said “will increase coverage in hard-to-reach areas such as urban canyons and mountainous terrain.”

Moog Acquires Small Company To Complement Components Business

Moog Inc. [MOG.A] on Monday said it has acquired COTSWORKS Inc., a designer and manufacturer of fiber optic components for aerospace and defense applications, for $63 million.

COTSWORKS has more than 120 employees and operates from locations in Cleveland, Ohio, and Fulda, Germany. The company’s products include optical transceivers, custom cable assemblies, and test platforms.

“The acquisition of COTSWORKS strengthens Moog’s ability to deliver differentiated, edge-ready electronic systems that meet the evolving demands of our aerospace and defense customers,” Joe Alfieri, president of Moog’s Space and Defense segment, said in a statement. “The addition of their technology broadens our presence across major platforms while accelerate innovation in ruggedized, high-speed communication components and systems.”

Moog used cash and shares of its stock to acquire COTSWORKS. Moog said the deal will be immaterial to its 2025 results.

William Blair served as COTSWORKS financial advisor on the transaction.

Space Systems Command Gives Nod to Boeing Over Northrop Grumman for Evolved Strategic SATCOM

Space Force Space Systems Command (SSC) gave a boost to Boeing‘s [BA] confidence last week, as SSC chose the company over Northrop Grumman [NOC] for a $2.8 billion contract to build the first two Evolved Strategic SATCOM (ESS) satellites.

ESS is to replace the six Lockheed Martin [LMT] Advanced Extremely High Frequency (EHF) satellites for U.S. nuclear command, control, and communications (NC3). Space Force has looked to deploy ESS in fiscal 2030 to achieve an initial operational capability in fiscal 2032. The Extended Data Rate Advanced EHF has supplemented the five orbiting Milstar satellites built by Lockheed Martin. The latter satellites feature low and medium-data rate communications.

The ESS constellation is to be interoperable with Advanced EHF and eventually replace it.

In 2020, Lockheed Martin, Boeing and Northrop Grumman received contracts for ESS rapid prototyping, which SSC leaders have said is key to the command’s approach to NC3 modernization (Defense Daily, Oct. 6, 2023). Air Force Lt. Gen. Andrew Gebara, the service’s deputy chief of staff for strategic deterrence and nuclear integration, has said that NC3 has more than 250 nodes, and the Department of the Air Force controls about 75 percent of NC3, which ensures that nuclear forces are able to launch upon orders from the president.

Air Force Maj. Gen. Ty Neuman, the director of strategic plans, programs, and requirements at Air Force Global Strike Command, has discussed a role for artificial intelligence in aiding cyber protection for NC3 and in choosing the best NC3 inputs among over the air high frequency waves, SATCOM, voice, beyond line of sight, and future fiber optic cables that are to replace the Minuteman III’s copper-wired Hardened Intersite Cable System in the Air Force’s NC3 Next architecture for the future Northrop Grumman LGM-35A Sentinel ICBM.

“The ESS system of systems is composed of cryptographic, ground, and space segments procured by the Space Force and a user terminal segment procured by the individual [military] services,” SSC said last week in announcing the award to Boeing for the first two ESS satellites. “The first four satellites will be delivered under a cost reimbursement contract. As part of the larger $12 billion ESS Space Segment acquisition, additional satellites are planned to be procured through fixed price contract actions that may be awarded as sole source to support Full Operational Capability and attain global coverage, including enhanced Arctic capability.”

House Sends Massive Reconciliation Bill With $150 Billion For Defense To Trump’s Desk

The House on Thursday voted 218-214 to pass the massive reconciliation bill with $150 billion for defense that the Pentagon has built into its fiscal year 2026 spending plans.

After consideration of the tax and spending bill went through the night in the lower chamber, the “One Big Beautiful Bill” now heads to President Trump’s desk for final signature.

House Speaker Mike Johnson (R-La.) gives his remarks in honor of WWII Ghost Army veterans, formerly assigned to the 23rd Headquarters Special Troops and the 3133rd Signal Service Company, during a special ceremony at Emancipation Hall, U.S. Capitol Visitors Center in Washington, D.C., March 21, 2024. (U.S. Army photo by Henry Villarama)

“The One Big, Beautiful Bill makes a historic and long overdue investment of $150 billion to achieve President Trump’s Peace Through Strength agenda and restore American deterrence. We can’t afford to wait any longer to begin rebuilding our military capacity, launching the future of American defense, and supercharging American manufacturing,” Rep. Mike Rogers (R-Ala.), chair of the House Armed Services Committee, said in a statement. “From the beginning, the House and Senate Armed Services Committees have recognized the urgent need to invest in our national security and worked closely with the White House to develop a unified approach.”

House Speaker Mike Johnson (R-La.) faced a tenuous situation late on Wednesday with several holdouts from hardline conservatives who sought deeper spending cuts in the bill, with Republican leadership having pressed ahead with considering the version of the legislation passed by the Senate earlier in the week (Defense Daily, July 1).

Ultimately, just two Republicans, Reps. Brian Fitzpatrick (R-Pa.) and Thomas Massie (R-Ky.), joined all Democrats in voting against the measure, with the minority having opposed the bill’s massive cuts to Medicaid and food assistance programs.

The reconciliation process allowed the Senate to pass the billions of dollars in budget-related Trump administration priorities without requiring the 60-vote threshold needed to break the filibuster.

Sen. Roger Wicker (R-Miss.), chair of the Senate Armed Services Committee, last week unveiled the updated version of the defense portion of the legislation, which included adding funds for industrial base and critical minerals efforts, a cut to border operations support and removing classified programs (Defense Daily, June 25).

The House and Senate Armed Services Committees were responsible for crafting the defense portions of the reconciliation bill, which covers $150 billion in defense spending that would be allocated over the next four years and builds in flexibility to be spent over the next decade, to include $25 billion for the Golden Dome missile defense system, tens of billions to boost shipbuilding and production of munitions and drones and increases for a wide swath of defense priorities.

Lawmakers, including Wicker and top Senate defense appropriator Mitch McConnell (R-Ky.), have pushed back on the Trump administration’s decision to include $113 billion of the total $150 billion in anticipated reconciliation funds to achieve its proposed $1 trillion defense request for fiscal year 2026 (Defense Daily, June 4).

“In the realm of national defense, there is still more to be done. Reconciliation was an opportunity to make an urgent, additive investment on top of a steadily increasing base budget, not an invitation to offload major annual priorities to a one-time injection of funds. Largely missing this opportunity makes the Congress’ work to secure robust topline defense funding even more important, and I will continue to urge my colleagues and the Administration to meet growing and coordinated threats to America’s security with the resources they demand,” McConnell said on Tuesday.