next on "this week in defense news," an inside look at america's secret war against terrorists in africa, the ceo

welcome to "this week in defense news," i'm vago muradian. what's next for defense spending and can european companies break into a shrinking u.s. defense market? we'll talk to sean o'keefe, a former pentagon comptroller and nasa add administrator who now heads the north american arm of e.a.d.s. plus we'll talk to the chief of army programs about the hard budget choices he faces as defense spending drops. but, first, a glimpse inside america's secret war against al- qaida in the horn of africa. after a six-month investigation, army times senior writer shawn nailer has pieced together a fascinating portrait of the battle against al-qaida leaders who took refuge in africa after being forced from afghanistan and pakistan. this secret war which has included unmanned u.s. aircraft to track and kill terrorists predates by years president obama's public noinsment last month that he had deployed 100 troops to uganda to root out a

terrorist leader there. shawn's multi-part series can be found in all of military times newspapers as well as defense news. shawn, welcome back to the show. >> great to be here. >> it's absolutely a fascinating story. tell us what the mission to somalia was and why it was necessary. >> in the first of our series of articles in the times papers, we talk about a secret mission that navy seals launched from a submarine delivery vehicle into somalia to place a series, about a dozen hidden, disguised cameras along the coastline of somalia to keep watch on suspicious places that they thought al- qaida activity was occurring in. >> and it was a pretty controversial mission, wasn't it, within the u.s. government? >> it was indeed. the u.s. embassy in nairobi where the cia station basically ran much of the cia's war in

somalia, vigorously opposed the missions because they thought, a, they could be better handled by human spies, and secondly they thought it might actually endanger some cia assets in somalia. and this fight went all the way up to the cabinet between the director of central intelligence and the defense department, the defense secretary and was eventually settled, i'm told, by the president himself. >> were the missions -- i mean, you know, the cameras that we're talking about were sort of battery-powered cameras that would otake a picture every 12 hours and beamed them directly back for analysis at home, but the missions weren't quite deemed successful. were they ultimately successful? >> the seals part of the mission was absolutely successful. i mean, they were able to get in unseen into some of somalia's most sort of populous areas and place these cameras and get back onto the submarine

without anyone being any the whiter. >> without a close call. >> exactly, that's right. but the cameras themselves, they were set to take photographs every 12 hours or so and beam them back to the united states. at best they provided what i was told was good atmospherics. they didn't really deliver any critical intelligence as far as i'm aware. >> was there any benefit and lessons learned in having conducted those missions ultimately? >> i'm sure there was for the seals and for the special operations community in terms of tactics, techniques and procedures, and there was probably lessons learned in sort of a negative sense from the intelligence community about how valuable this sort of a device could be in tracking human activity. >> you've got a very long history in the horn of africa. i mean, we were in somalia almost 20 years ago together, but how has the way that this war is being conducted change from 2003 when we had to drive a submarine and to place cameras and such?

>> there's been a lot of resources quietly poured into u.s. efforts in the horn over the last several years. so you've now got a ring of unmanned aerial vehicle bases or bases that the u.s. is running predators and reapers among aerial to look at those things, so i don't think that this sort of daring do is quite as necessary now as it would have been eight years ago. >> let's go -- i mean, this is the first installment of a broader package. what are we going to be reading in some of the subsequent story? >> you're going to be reading about secret cia and joint special operations command missions into mogadishu, to liase with warlords by surface- to-air missiles back from the son of fairo i.d.ed, in the battle of the mogadishu and

also you're going to be reading about some tapping somali cell phone networks as well. >> shawn, absolutely fantastic work and everybody i'm sure looks forward to reading the entire series. thanks very much for coming out today. coming up a former pentagon comptroller who now heads the american arm of europe's largest aerospace company e.a.d.s. tells

with the pentagon embroiled in budget and strategy reviews and a super committee about to

propose cuts of its own, it's a tough environment leading a defense company which is exactly what our next guest advocates sean o'keefe. over the decades, sean has served as the pentagon's comptroller, navy secretary and most recently director of nasa. while his company lost the competition to supply the u.s. air force with new tanker aircraft, he's still trying to win new work like supplying the army with new armed aerial scouts and convincing congress that arm of europe's leading area space and defense company is american. sean, welcome back to the show. >> nice to see you, vago, always a pleasure. >> where do you think the budget and spending outlook, what are you seeing as you look at all of this and where is it going? >> it's an incredibly challenging time. there's a different dynamic that's almost a perfect storm in a fiscal context, a lot going on right now, a debate over revenues, where tax issues will be derived and how you reform that and a debate exactly on where the spending

occurs, both entitlements as well as disetionary -- discretionary spending. defense is in the middle between the revenue issues and how those are sorted out to afford versus the question of how do you balance entitlement reductions or potential changes to those versus the discretionary spending of which defense represents most of it. so as a consequence, it's the traditional tug-of-war, but even now more profound than ever before. we're seeing it all happen at exactly the same moment. >> how do you make calls on it, though? right now you don't know what's going to happen. you don't know what the pentagon is doing in a strategy review, you don't know what they're doing in terms of what they're going to cut and on the back edge you have a super committee and you're not quite sure what they're going to recommend. >> well, the process that congress has set in motion, that the administration has agreed to and endorsed is one that is very much driven by very specific events and dates. all are going to happen very soon. it's not like this is going to be a long-term mystery.

>> right. >> so understanding the top line, the aggregates of resources will be, particularly as it pertains to defense, or homeland security or any other government discretionary function is going to be a relatively known commodity not long after the new year. once all the triggering mechanisms go into place, all the different milestones are met, either achieved or not, there are a set of remedies that occur thereafter. it's having an understanding of what the top line position is going to be at least foreseeable within a span of time that all those uncertainties will be clarified. in terms of content, what's the implication for this program or that effort or some other specific public policy initiative, that's the part that's going to continue to be debated for considerable period of time to come. >> how do you plan in this kind of environment, though, when you don't know, you guys just did $2 to $3 billion in acquisition also, that means you guys were placing bets in some of the things you bought.

how do you plan in an environment like this? >> that's a good question. the basic approach we're looking at is independent of what the top line looks like is going to be a continuing need for competition in the services market, in areas where there's maintenance repair, overhaul, upgrade and just the capacity to perform and operate assets. and the better off you are at maintaining those assets for longer periods of time, particularly if you think this is going to be a downward spiral where the effect could be on and will be on modernization, procurement acquisition of things, then maintenance of assets and operations and services thereof is going to be an important area to continue focus on. that's what we're really put -- that's where we're really put ago lot of our effort and concentration. the acquisition of the firms that we've done in the recent six months are dominantly in the services market either for the satellite services, communication services, the range of platform services, for

assets, helicopters, fixed wing aircraft, et cetera or in the areas of dealing specifically with research activities that will develop new capabilities. those are the two areas we think will continue to grow or at least maintain their own. >> among those companies are vector, vizata and metron that you bought recently. looking at the tanker competition, you lost it with north rup, you lost it the second time around depending on how you count it to boeing. but what were some of the lessons there you learned as you went with a prime contractor that will be valuable as you go forward to compete for other high profile program? >> we learned a lot about what it really takes to be involved in a major category 1 acquisition program like that, to conduct this as a u.s. company as we are in the united states through all the processes and procedures that the defense department requires. we passed every one of those.

you know, in the end we like to believe that we won the quality and content competition and lost on price. so in terms of the achievement of all the criteria, we hit every one of those. >> and you took food out of boeing's mouth which would make it a success i guess financially for you as well depending on how you look at it. >> i have no problem with opening the books and ultimately demonstrate or not their overall profitability here. but in terms of the overall objectives of what we were after, it was really to goal to be viewed as a competitor and now recognized as a company that can participate and can compete at a broader level. we're now seeing a wider range of activities that the defense department is looking for competition, is looking for ways to look at alternatives to offer and provide the kind of off-the-shelf derivatives we're known for and they've now

discovered a lot more about what that means. >> armed aerial scout is one of the things? >> armed aerial scout is positively one because it's an off-the-shelf derivative from a utility aircraft, becoming a helicopter, becoming and s and s battalion security capacity that's more rugged and in turn then turned into an armed aerial scout. all of those are derivative and platforms that are much, much less expensive, more competitive than developing from scratch and moving all the way through a process. >> we've got a little bit less than a minute. i want to ask the question, you are still the arm of a very large north american competitor that is with the u.s. government. how do you posture yourself so that feks think of you as an american company. >> every global company has issues that rise to this, boeing, general electric, any company you can think of. there are large global companies that have a large global marketplace activities. as a consequence, i think

everybody, every one of the globalization efforts that have occurred that have put us all into the market space that is as hotly as competitive as it is all have issues trying to define exactly what home kind of positions we have. here in the united states, we produce helicopters in places like mississippi. there aren't many folks down there that don't think they are not americans. >> sean, thanks for joining us. up next the chief of the u.s. army programs tells us about some of

impending budget cuts will force hard choices at the pentagon. lieutenant general robert lenox is among those making those hard choices. we caught up with him at the annual ausa conference here in washington. the army has been asked to cut its share of nearly $5 billion of spending cuts in the next decade. lenox wants to s

i asked him if the service has a plan b if cuts end up going deeper. >> first of all, the present has given his guidance to cut and the army will do its fair share. so if you just do the math of about $480 billion over 10 years and then divide it down to our share, you're thinking in terms of $11 or $12 billion a year. that's an awful lot of money. the challenge for us is going to be how do you take down end strength while you're fighting a war that will enable you to protect your modernization accounts. so we're struggling with that right now. >> what about moving money out of the supplemental? i mean, obviously you guys have lived with supplementals, there's a lot of very important things including end strength that exists in the supplemental funding. over time there is an expectation that that funding is going to go away. does that compound your problem and if show how do you work around it? >> it does. over time we've capped some training dollars so when a unit is not at home training, we've moved that money into a supplemental funding to train for them to go to war. now at some point we have to take that money and put it back

into our base budget and we probably have $6 billion or $7 billion over time that's migrated to the supplemental funding that we're going to have to figure out a way to address. so that's a challenge to us in addition to the cost cutting we're going through. >> and also may have to get rid of the end strength that would reside there as well. >> over time. that's always been part of the plan to draw down that end strength plan we had out of the supplemental accounts. the challenge for us now is we're still fighting and we still have 90,000 soldiers in afghanistan, a number still in iraq and how do you balance all those things so that you're ready to respond in case the nation calls you to do something else. >> most folks have said this is going to be an era of very hard choices. give us some examples of the very hard choices you're dealing with now. >> there's always hard choices and now more so than ever, so i think you're exactly right. for us it is that end strength calculation. while you're fighting -- for years we've had to struggle with making the right choiceses, but while you're fighting a war now, we're going to come down in end strength

and that's the first time we've really done that as a nation. after the wars have ended before, we've always been able to come down before at the appropriate pace. but now we're asked to do it while we're still in afghanistan, so that will be a challenge for us. and if you don't come down fast enough and you do have these cuts that you talked about, now you have to pay for those out of your modernization accounts, out of your training accounts and you can quickly find yourself hollowing out your force if you're not careful. and you guys, the army historically has been criticized for trying to protect people by cutting programs and then losing the programs anyway. >> i agree with you. we have been criticized. you know, sometimes you just -- you don't have choices, you think you do, but you don't. you come down because the bill is to the strength that you have to pay those bills and you have to do what you can early on. >> one of the issues of end strength is the potential cut of as many of 10 per day combat teams from the army over the next coming years. what kind of impact is that going to have on your program? >>el with, first of all, all of those are predecisional, it's still being worked with.

the right number would have to come down and the right mix of those forces. as you can imagine, those will drive your modern diswhraition accounts. so if -- modernization accounts. if your heavy forces come down, for example, the equipment that you're buying to fit the heavy force, you wouldn't buy as much of. so it's really driven, first, by the strategy that we're going to have, the force that will fit that strategy, the organization of those forces and then we will buy and modernize through those forces. so all that is being worked down. >> one of the things you're also working is the acquisition process which has been criticized for unbridled requirements of growth, oftentimes, you know, driving the adoption of immature technologies and at the end development costs end up soaring. what are some of the reforms you want to see in the requirements growth, the acquisition piece and the development piece to cut the costs of new systems? >> the army has had challenges that way, i think everybody knows that. but i think we've had a lot of successes too, especially in the last 10 years. we've really focused on supports of the war fighter. the nation, congress, industry has all helped us team to make

sure our acquisition process in support of the war fighter has been really good and in terms of protection and uavs, situational awareness, we've really made some enormous progress. now we do have challenges for the future and a lot of that is how do you have an affordable modernization program. and we focused on incremental modernization, so not great leaps ahead in technology, but things that we think are achievable in the short term and we think that's how oyou face an uncertain future, uncertain in terms of threats, uncertain in terms of money and that's kind of our path ahead. >> how do you respond to critics who say that, for example, the ground combat vehicle which is sort of morphed into a 70-ton, almost m- 1 tank replacement, or the joint light tactical vehicle which some people are saying will be too heavy, too large, obviously you have an achord with the marines on that so that bides a little bit of time, but whos' saying why don't we go with what's proven

for a longer period into the future, stay with double vehall strikers, for example, instead of launching a new program to replace the m-1 carrier? how do you respond to that? >> we have a comprehensive strategy for our whole combat vehicle fleet. the first element of it is the transformation to replace our aging ininfantriry fighting vehicles and that's the purpose of the ground combat vehicle, to have a nine-soldier squad that's going to be in close proximity to the enemy is going to have protection built from the ground up and has growth for the future. i want to take a little bit of -- i want to disagree a little bit about your comment with the 70-ton vehicle. the approach is to have modular armor to go around it, to carry the squad in a vehicle that's suited for the threat. so if it's a high-fret area, then it will have the armore you talked about on it. if not, it can be built to operate independentlily in a

less risking area. >> a little bit like a stryker that gives you a base level of performance and armor and then you can uparmor it? >> exactly. you asked about other kinds of vehicles, ground combat vehicle and improve the abrams that we have today and the noninfantry fighting vehicle are probably good for the next 20 years, so we'll incrementally improve those. then the m113 fleet that we have that does squad carrying today, command and control -- >> that dates from the 1960s? >> exactly. those need to be replaced. you have soldiers fighting in emravs and other vehicles that are useful and relevant to threat they're in and they come home and they'll be on m113s. we have to do you can watch more of my interview with x÷

last week the military service chiefs again told congress that cutting more than $450 billion over the coming decade would gravely damage u.s. national security. they mñojhave a point. the notion that defense spending can plunge after american troops return from iraq and afghanistan is sim policic, but arguing against defense cuts is equally problematic. nations spend what they can afford on defense and shape their strategies accordingly to balance aims against available means. and for the foreseeable future, times will be tough. the world is in economic turmoil as america struggles with high unemployment and soaring debt while facing rising powers and continuing threats. meanwhile, how conflicts are fought has fundamentally changed, thanks to increasingly persistent surveillance to track critical targets and precision munitions to precisely attack them. the trend is away from mass and toward lighter and more agile forces, wielding greater

knowledge and fire power. d.o.d. still spends too much time on what it's good at, conventional warfare and too little on building partnerships to avoid conflict and speed reconstruction after the shooting stops. the current debate consistently devolves to dollars and sense rather than one of strategy, rethinking how u.s. forces prepare for a future, where potential adversaries consistently supply a means to negate our advantages. viewed that way, status quo thinking may well be more dangerous than budget cuts. thanks for joining us for "this week in defense news." before i go, i want to wish a very happy 236th birthday to the united states marine corps and a happy veterans day to veterans everywhere. i'll be back next week at the same time. until then, have a great week.