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GAO Tells DOE to Improve Budget Estimates for Division Conducting Contract Incurred Cost Audits
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Government Accountability Office logo. GAO's new report finds shortcomings in DOE's budget estimate for ICAD

The Department of Energy’s Office of Inspector General underestimated the resources needed to audit incurred costs for billion-dollar contracts across the agency, according to a new Government Accountability Office report published Thursday.

Findings From GAO’s Review of ICAD

The congressional watchdog said that when the Energy Department established the Incurred Cost Audits Division, known as ICAD, in 2021, the OIG assumed that it would use agency auditors to audit incurred costs. The OIG also developed a cost estimate for 23 management and operating, or M&O, contracts without taking into account that the volume of such deals would evolve over time.

In 2021, the OIG estimated  $18.7 million per year rough order of magnitude to audit incurred costs. The initial estimate is far lower than the $43.7 million per year the OIG said it would need to conduct incurred cost audits based on DOE’s fiscal year 2025 budget justification.

While a rough order of magnitude estimate can be helpful, GAO warned that it is not precise.

The Energy Department, one of the largest civilian contracting agencies in government, spent about $36.7 billion in M&O contracts in fiscal 2023. M&O contracts, according to GAO, have inherent financial risks because the contractor can withdraw funds without an invoice.

The congressional watchdog urged the DOE’s inspector general to evaluate all relevant alternatives for conducting incurred cost audits. The move would give agency decision-makers a better understanding of long-term program costs.

The Energy Department’s OIG concurred with the recommendation.

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CISA Senior Adviser, Strategist Allan Friedman to Step Down
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Allan Friedman. Friedman has quit as CISA's senior adviser and strategist.

Allan Friedman has announced on LinkedIn on Friday that he has stepped down as the senior adviser and strategist of the Cybersecurity and Infrastructure Security Agency, or CISA. He said he will be departing from the agency on July 31. Friedman said being part of the agency was an “extraordinary chapter” in his life.

“In the meantime, I remain committed to supporting this community and continuing the momentum we’ve built together. I’m excited to share more soon about what’s next, focused on advancing supply chain security through transparency, collaboration, and shared purpose,” he said, commenting on his departure.

Who Is Allan Friedman?

Friedman brings over 20 years of experience in international cybersecurity and technology policy. He currently works part-time as an adjunct professor of informatics at Luddy School of Informatics, Computing, and Engineering, Indianapolis. He is also the director of Common Ground Track at BSides Las Vegas, which is an information security conference.

From 2015 to 2021, he served as the director of the cybersecurity initiatives at the U.S. Department of Commerce. Friedman was also a research scientist at the George Washington University. He began his career as the research director of the Center for Technology and Innovation at the Brookings Institution. 

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Pentagon to Expand Cloud Competition Under JWCC Next Contract
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Pentagon building. DOD CIO Katie Arrington unveiled plans for the JWCC Next contract.

The Department of Defense is preparing a new iteration of its $9 billion Joint Warfighting Cloud Capability contract to enable competition and a faster acquisition process.

Opening the Door to More Cloud Service Providers

At the recent ATO and Cloud Security Summit, DOD Chief Information Officer Katie Arrington, a Wash100 Award recipient, said the upcoming JWCC Next contract will allow smaller and non-traditional cloud service providers to participate. The move will mark a shift from the first JWCC contract, awarded in 2022 to Amazon Web Services, Google, Microsoft and Oracle.

“We are looking to expand the aperture,” Arrington said. “Competition breeds innovation, competition breeds efficiency.” The CIO emphasized that DOD is seeking companies offering innovative AI tools, satellite capabilities and faster methods for developing weapons systems and business tools.

Streamlining the Acquisition Process

Lt. Gen. Robert Skinner, director of the Defense Information Systems Agency and a three-time Wash100 awardee, previously said DOD aims to streamline the contracting process for JWCC Next. “What it’s going to bring is even faster commercial cloud capability, greater diversity where we can hope that we can have even more cloud service providers and potentially have an option of not having task orders competed,” Skinner said.

Under the current JWCC, DOD has already awarded more than 65 task orders worth over $1 billion. Arrington did not provide a timeline for the release of a draft JWCC Next request for proposals but noted it would be “very, very soon.”

JWCC succeeded the Joint Enterprise Defense Infrastructure contract, which was canceled following years of litigation and controversy.

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Matthew Lohmeier Confirmed as Air Force Under Secretary
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Matthew Lohmeier was confirmed by the Senate to serve as the Air Force's under secretary.

The Senate on Thursday voted 52-46 to confirm Matthew Lohmeier, a former fighter pilot and Space Force guardian, as the 29th under secretary of the Air Force.

The service said Thursday Lohmeier will work with Air Force Secretary Troy Meink to oversee more than $200 billion in assets and help organize, train and equip the U.S. Air Force and Space Force.

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Learn more about the air and space services’ modernization priorities, strategies, policies and more at the 2025 Air and Space Summit on July 31. Book your spot now for this Potomac Officers Club-hosted event!

“I’d like to welcome Matt to the team. His prior service makes him an excellent fit to help us strengthen the readiness and warrior ethos of the Air and Space Forces in order to defend our nation,” Meink said.

“I’m impressed by his dedication and focus on service culture and grateful for his advocacy for Department resources and modernization, and I know he will be a great asset to our Total Force Airmen, Guardians, and military families,” the secretary added.

Lohmeier said he is honored to work alongside Meink in support of airmen and guardians.

“They deserve all of the best tools, training, and support they need to perform their missions in an increasingly complex and quickly evolving threat environment,” he added.

Who Is Matthew Lohmeier?

Lohmeier has nearly two decades of experience in the Department of the Air Force. He served as a commander of a space-based missile warning squadron and logged 1,200 flight hours in the T-38 and F-15C aircraft.

The Arizona native is a public speaker and author who graduated from the U.S. Air Force Academy in 2006.

He has master’s degrees in military operational art and science and in military strategy from the School of Advanced Air and Space Studies.

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Richard Topping Confirmed as VA Chief Financial Officer
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VA CFO Richard Topping. Richard Topping was confirmed as chief financial officer of the Department of Veterans Affairs.

The Senate on Thursday voted 51-47 to confirm Richard Topping as chief financial officer of the Department of Veterans Affairs. He was nominated for the VA post in February.

Sen. Jerry Moran, R-Kan., who spoke on the Senate floor prior to the vote to support Topping’s confirmation, said, “I am grateful to Captain Topping for his willingness to continue serving his fellow veterans in this new capacity. I look forward to working with him to improve the lives of veterans, caregivers, survivors and military families in my home states of Kansas and across the country in the coming years.”

Who Is Richard Topping?

Topping is a seasoned health insurance, legal and finance executive specializing in managed healthcare and government contracting with extensive experience in executive management, strategic planning, corporate governance, profit and loss management, budget management, capital development, operations, team development, and mergers and acquisitions. He is also well-versed on matters regarding Medicaid, Medicare, Marketplace, Tricare and VA Community Care.

The new VA CFO most recently served as chief legal officer and president of CareSource. Before that, he was a special counsel at Mintz and CEO of Cardinal Innovations Healthcare for nine years. He was also a trial attorney for the Department of Health and Human Services and a counsel for the Center for Bioethics at the Brigham and Women’s Hospital. Topping served as a judge advocate and special assistant U.S. attorney in the U.S. Army.

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DOE Selects 4 Federal Sites for AI Data Center, Energy Infrastructure Projects
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Energy Secretary Chris Wright on leveraging DOE land assets for AI and energy infrastructure deployment

The Department of Energy has selected Idaho National Laboratory, Oak Ridge Reservation, Savannah River Site and Paducah Gaseous Diffusion Plant as the sites for artificial intelligence data centers and energy generation projects.

“By leveraging DOE land assets for the deployment of AI and energy infrastructure, we are taking a bold step to accelerate the next Manhattan Project—ensuring U.S. AI and energy leadership,” Energy Secretary Chris Wright said in a statement published Thursday.

“These sites are uniquely positioned to host data centers as well as power generation to bolster grid reliability, strengthen our national security, and reduce energy costs,” Wright added.

The department chose the sites by evaluating responses to its request for information in April.

DOE Solicitations for AI Data Center, Energy Generation Projects

DOE expects the solicitations to be released in the coming months, detailing the project scope, submission guidelines and eligibility requirements at each site. Private sector partners could be selected by the end of 2025.

The department said it is assessing additional sites that could release solicitations in the future.

Use of Federal Lands for AI Data Centers

The latest DOE announcement supports the Trump administration’s goals of using federal lands for data center and power generation infrastructure projects.

President Trump on Wednesday signed an executive order directing the departments of the interior, energy and defense to authorize data center construction on appropriate federal lands.

Under the EO, the current administration requires agencies to streamline environmental reviews and the permitting process for data centers by leveraging existing exemptions and developing new ones to speed up the construction of qualifying projects. 

The order also promotes the use of Brownfield and Superfund sites for data center development and includes the launch of an initiative to provide loans, tax incentives, grants and other financial support for qualifying projects.

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NASA Issues RFP for Advanced Moon & Mars Communications
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Earth and Moon. NASA seeks proposals for a next-generation Moon and Mars communications system.

NASA has started soliciting proposals for advanced communications and navigation systems for future Moon and Mars missions.

NASA Issues RFP for Advanced Moon & Mars Communications

Join the Potomac Officers Club’s 2025 Air and Space Summit on July 31 to learn about the latest initiatives aimed at advancing air and space capabilities.

Next-Generation Moon, Mars Communications System

According to the request for proposals issued on July 7, NASA intends to leverage private industry capabilities for critical satellite communications. The agency is particularly seeking concepts for reliable, high-speed communication systems linking Earth-based control centers to the Moon’s surface and establishing a communications relay on Mars that would enable data transfer with Earth.

The potential project aligns with NASA’s initiative to build an interoperable communication and navigation infrastructure in space to boost science, exploration and economic development. 

Interested vendors have until Aug. 13 to submit their responses.

Greg Heckler, deputy program manager for capability development of the space communications and navigation program, said, “These partnerships foster important advancements in communications and navigation. It allows our astronauts, our rovers, our spacecraft – all NASA missions – to expand humanity’s exploration of the Moon, Mars and beyond.”

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Space Systems Command Activates Two System Deltas
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Space Systems Command Logo. Two System Deltas have been launched by Space Force's Space Systems Command.

The U.S. Space Force’s Space Systems Command has officially established two new system deltas, or SYDs, at a ceremony at the Los Angeles Air Force Base on July 10. The SSC said Wednesday that during the ceremony, Col. Stevie Medeiros and Col. Dane Bannach took charge of SYDs 84 and 810, respectively. USSF Lt. Gen. Philip Garrant, the SSC commander, led the ceremony.

What Are System Deltas?

SYDs combine SSC program offices responsible for designing, delivering and developing mission systems, following a structured approach to acquisitions. SYDs aim to analyze mission needs regularly and strengthen mission planning by focusing on specific missions, improving teamwork and clearly defining responsibilities.

Some support teams from SSC have already moved to the Space Operations Command, under SpOC mission deltas that handle mission generation, intelligence support and cyber defense.

In 2023, the USSF began matching system deltas and mission deltas from its two field commands. This started with trial pairings, where SpOC’s integrated mission deltas were matched with SYDs from SSC.

SYD 84, 810 Details

SYD 84 will be in charge of space-based missile warning and tracking, which means it will monitor missile threats like hypersonic weapons in space. SpOC Mission Delta 4 will be working with the SYD.

SYD 810 will handle space-based sensing and targeting, which involves environmental monitoring and tactical sensing. The SYD delivers worldwide cloud forecasts and weather images to support planning and execution, and it also provides the military with environmental surveillance vital to operations. SpOC Mission Delta 2 and Space Force component commands will work with SYD 810. 

USSF’s Philip Garrant Shares Thoughts

Garrant called the launch of the two SYDs a “historic day”.

“Through unity of effort, the Space Force’s System Delta framework allows us to streamline the work between acquisitions and operations accomplished through intimate collaboration with our Mission Delta counterparts across the field commands,” he said. 

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GAO Urges DOD to Address Foreign Reliance Threat in Defense Supply Chain
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International supply chain. GAO wants DOD to have more visibility into its supply chain

The Government Accountability Office has called out the limited visibility into the Department of Defense’s global supply chain.

DOD, according to a new GAO report, has over 200,000 suppliers involved in manufacturing advanced weapons and non-combat goods and equipment such as batteries. Although the Pentagon collects partner information, efforts across the department to improve supply chain transparency are uncoordinated.

The congressional watchdog warned that reliance on foreign suppliers poses national security risks for the DOD.

Defense Supply Chain Visibility Challenges

DOD has made efforts to increase transparency across its supply chain and reduce reliance on foreign sources. The Pentagon has already identified steps it could take to mitigate foreign dependency, such as adopting leading commercial practices for supply chain visibility.

GAO pointed out that the Defense Department has not assigned a single organization to oversee the application of leading practices for supply chain visibility. The watchdog also noted that the DOD has yet to identify resources, priorities and time frames for its plan to integrate supply chain transparency efforts across the department.

Moreover, the report revealed that defense officials propose contractually obligating suppliers to submit information related to foreign dependency risks. GAO shared that some DOD officials oppose the proposal, saying that it may be too costly and suppliers may not be willing to share foreign dependency information.

GAO urged the Pentagon to conduct cost analyses and identify challenges of requiring suppliers to provide foreign dependency information.

The report offers three recommendations, all of which DOD concurred with.

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DIU Selects LLNL to Build Telescope for Responsive Space Mission
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Lawrence Livermore National Laboratory logo. DIU selected LLNL to build a monolithic telescope.

The Defense Innovation Unit has selected Lawrence Livermore National Laboratory to provide a new monolithic telescope for a responsive space mission, which Firefly Aerospace will launch as early as 2027.

LLNL said Thursday the monolithic telescope includes two optical telescopes and an electronics module with an NVIDIA processor and is designed to be robust and highly adaptable for a range of optical payload configurations and missions. It is expected to be completed and delivered within 13 months. Firefly Aerospace will host and operate the device on board its Elytra orbital vehicle, which will be deployed to low Earth orbit, under a cooperative research and development agreement.

New Space Capabilities for DOD

Benjamin Bahney, LLNL’s space program leader, said the mission “will prove a new capability for future highly maneuverable, responsive in-space imaging missions for the U.S. Defense Department in a variety of possible orbits including in deep space and into the lunar regime.”

The anticipated space event will mark LLNL’s third mission to develop rapid space payloads for the Department of Defense, following the Tactically Responsive Launch-2 mission in 2021 and the Victus Haze mission expected for liftoff as early as 2025.  It will support the DIU’s Sinequone project aimed at delivering cost-effective, responsive access to xGEO orbits located a little more than 22,000 miles above the Earth.

“We are thrilled to be selected by DIU for this mission, continuing LLNL’s work to supply the Defense Department with our monolith payloads to support responsive space missions and prove out new capabilities for defense of the space domain,” said John Ganino, LLNL’s space hardware lead.

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