FROM: THE WHITE HOUSE
Remarks by the President on Review of Signals Intelligence
Department of Justice
Washington, D.C.
11:15 A.M. EST
THE PRESIDENT: At the dawn of our Republic, a small, secret surveillance committee borne out of the “The Sons of Liberty” was established in Boston. And the group’s members included Paul Revere. At night, they would patrol the streets, reporting back any signs that the British were preparing raids against America’s early Patriots.
Throughout American history, intelligence has helped secure our country and our freedoms. In the Civil War, Union balloon reconnaissance tracked the size of Confederate armies by counting the number of campfires. In World War II, code-breakers gave us insights into Japanese war plans, and when Patton marched across Europe, intercepted communications helped save the lives of his troops. After the war, the rise of the Iron Curtain and nuclear weapons only increased the need for sustained intelligence gathering. And so, in the early days of the Cold War, President Truman created the National Security Agency, or NSA, to give us insights into the Soviet bloc, and provide our leaders with information they needed to confront aggression and avert catastrophe.
Throughout this evolution, we benefited from both our Constitution and our traditions of limited government. U.S. intelligence agencies were anchored in a system of checks and balances -- with oversight from elected leaders, and protections for ordinary citizens. Meanwhile, totalitarian states like East Germany offered a cautionary tale of what could happen when vast, unchecked surveillance turned citizens into informers, and persecuted people for what they said in the privacy of their own homes.
In fact, even the United States proved not to be immune to the abuse of surveillance. And in the 1960s, government spied on civil rights leaders and critics of the Vietnam War. And partly in response to these revelations, additional laws were established in the 1970s to ensure that our intelligence capabilities could not be misused against our citizens. In the long, twilight struggle against Communism, we had been reminded that the very liberties that we sought to preserve could not be sacrificed at the altar of national security.
If the fall of the Soviet Union left America without a competing superpower, emerging threats from terrorist groups, and the proliferation of weapons of mass destruction placed new and in some ways more complicated demands on our intelligence agencies. Globalization and the Internet made these threats more acute, as technology erased borders and empowered individuals to project great violence, as well as great good. Moreover, these new threats raised new legal and new policy questions. For while few doubted the legitimacy of spying on hostile states, our framework of laws was not fully adapted to prevent terrorist attacks by individuals acting on their own, or acting in small, ideologically driven groups on behalf of a foreign power.
The horror of September 11th brought all these issues to the fore. Across the political spectrum, Americans recognized that we had to adapt to a world in which a bomb could be built in a basement, and our electric grid could be shut down by operators an ocean away. We were shaken by the signs we had missed leading up to the attacks -- how the hijackers had made phone calls to known extremists and traveled to suspicious places. So we demanded that our intelligence community improve its capabilities, and that law enforcement change practices to focus more on preventing attacks before they happen than prosecuting terrorists after an attack.
It is hard to overstate the transformation America’s intelligence community had to go through after 9/11. Our agencies suddenly needed to do far more than the traditional mission of monitoring hostile powers and gathering information for policymakers. Instead, they were now asked to identify and target plotters in some of the most remote parts of the world, and to anticipate the actions of networks that, by their very nature, cannot be easily penetrated with spies or informants.
And it is a testimony to the hard work and dedication of the men and women of our intelligence community that over the past decade we’ve made enormous strides in fulfilling this mission. Today, new capabilities allow intelligence agencies to track who a terrorist is in contact with, and follow the trail of his travel or his funding. New laws allow information to be collected and shared more quickly and effectively between federal agencies, and state and local law enforcement. Relationships with foreign intelligence services have expanded, and our capacity to repel cyber-attacks have been strengthened. And taken together, these efforts have prevented multiple attacks and saved innocent lives -- not just here in the United States, but around the globe.
And yet, in our rush to respond to a very real and novel set of threats, the risk of government overreach -- the possibility that we lose some of our core liberties in pursuit of security -- also became more pronounced. We saw, in the immediate aftermath of 9/11, our government engaged in enhanced interrogation techniques that contradicted our values. As a Senator, I was critical of several practices, such as warrantless wiretaps. And all too often new authorities were instituted without adequate public debate.
Through a combination of action by the courts, increased congressional oversight, and adjustments by the previous administration, some of the worst excesses that emerged after 9/11 were curbed by the time I took office. But a variety of factors have continued to complicate America’s efforts to both defend our nation and uphold our civil liberties.
First, the same technological advances that allow U.S. intelligence agencies to pinpoint an al Qaeda cell in Yemen or an email between two terrorists in the Sahel also mean that many routine communications around the world are within our reach. And at a time when more and more of our lives are digital, that prospect is disquieting for all of us.
Second, the combination of increased digital information and powerful supercomputers offers intelligence agencies the possibility of sifting through massive amounts of bulk data to identify patterns or pursue leads that may thwart impending threats. It’s a powerful tool. But the government collection and storage of such bulk data also creates a potential for abuse.
Third, the legal safeguards that restrict surveillance against U.S. persons without a warrant do not apply to foreign persons overseas. This is not unique to America; few, if any, spy agencies around the world constrain their activities beyond their own borders. And the whole point of intelligence is to obtain information that is not publicly available. But America’s capabilities are unique, and the power of new technologies means that there are fewer and fewer technical constraints on what we can do. That places a special obligation on us to ask tough questions about what we should do.
And finally, intelligence agencies cannot function without secrecy, which makes their work less subject to public debate. Yet there is an inevitable bias not only within the intelligence community, but among all of us who are responsible for national security, to collect more information about the world, not less. So in the absence of institutional requirements for regular debate -- and oversight that is public, as well as private or classified -- the danger of government overreach becomes more acute. And this is particularly true when surveillance technology and our reliance on digital information is evolving much faster than our laws.
For all these reasons, I maintained a healthy skepticism toward our surveillance programs after I became President. I ordered that our programs be reviewed by my national security team and our lawyers, and in some cases I ordered changes in how we did business. We increased oversight and auditing, including new structures aimed at compliance. Improved rules were proposed by the government and approved by the Foreign Intelligence Surveillance Court. And we sought to keep Congress continually updated on these activities.
What I did not do is stop these programs wholesale -- not only because I felt that they made us more secure, but also because nothing in that initial review, and nothing that I have learned since, indicated that our intelligence community has sought to violate the law or is cavalier about the civil liberties of their fellow citizens.
To the contrary, in an extraordinarily difficult job -- one in which actions are second-guessed, success is unreported, and failure can be catastrophic -- the men and women of the intelligence community, including the NSA, consistently follow protocols designed to protect the privacy of ordinary people. They’re not abusing authorities in order to listen to your private phone calls or read your emails. When mistakes are made -- which is inevitable in any large and complicated human enterprise -- they correct those mistakes. Laboring in obscurity, often unable to discuss their work even with family and friends, the men and women at the NSA know that if another 9/11 or massive cyber-attack occurs, they will be asked, by Congress and the media, why they failed to connect the dots. What sustains those who work at NSA and our other intelligence agencies through all these pressures is the knowledge that their professionalism and dedication play a central role in the defense of our nation.
Now, to say that our intelligence community follows the law, and is staffed by patriots, is not to suggest that I or others in my administration felt complacent about the potential impact of these programs. Those of us who hold office in America have a responsibility to our Constitution, and while I was confident in the integrity of those who lead our intelligence community, it was clear to me in observing our intelligence operations on a regular basis that changes in our technological capabilities were raising new questions about the privacy safeguards currently in place.
Moreover, after an extended review of our use of drones in the fight against terrorist networks, I believed a fresh examination of our surveillance programs was a necessary next step in our effort to get off the open-ended war footing that we’ve maintained since 9/11. And for these reasons, I indicated in a speech at the National Defense University last May that we needed a more robust public discussion about the balance between security and liberty. Of course, what I did not know at the time is that within weeks of my speech, an avalanche of unauthorized disclosures would spark controversies at home and abroad that have continued to this day.
And given the fact of an open investigation, I’m not going to dwell on Mr. Snowden’s actions or his motivations; I will say that our nation’s defense depends in part on the fidelity of those entrusted with our nation’s secrets. If any individual who objects to government policy can take it into their own hands to publicly disclose classified information, then we will not be able to keep our people safe, or conduct foreign policy. Moreover, the sensational way in which these disclosures have come out has often shed more heat than light, while revealing methods to our adversaries that could impact our operations in ways that we may not fully understand for years to come.
Regardless of how we got here, though, the task before us now is greater than simply repairing the damage done to our operations or preventing more disclosures from taking place in the future. Instead, we have to make some important decisions about how to protect ourselves and sustain our leadership in the world, while upholding the civil liberties and privacy protections that our ideals and our Constitution require. We need to do so not only because it is right, but because the challenges posed by threats like terrorism and proliferation and cyber-attacks are not going away any time soon. They are going to continue to be a major problem. And for our intelligence community to be effective over the long haul, we must maintain the trust of the American people, and people around the world.
This effort will not be completed overnight, and given the pace of technological change, we shouldn’t expect this to be the last time America has this debate. But I want the American people to know that the work has begun. Over the last six months, I created an outside Review Group on Intelligence and Communications Technologies to make recommendations for reform. I consulted with the Privacy and Civil Liberties Oversight Board, created by Congress. I’ve listened to foreign partners, privacy advocates, and industry leaders. My administration has spent countless hours considering how to approach intelligence in this era of diffuse threats and technological revolution. So before outlining specific changes that I’ve ordered, let me make a few broad observations that have emerged from this process.
First, everyone who has looked at these problems, including skeptics of existing programs, recognizes that we have real enemies and threats, and that intelligence serves a vital role in confronting them. We cannot prevent terrorist attacks or cyber threats without some capability to penetrate digital communications -- whether it’s to unravel a terrorist plot; to intercept malware that targets a stock exchange; to make sure air traffic control systems are not compromised; or to ensure that hackers do not empty your bank accounts. We are expected to protect the American people; that requires us to have capabilities in this field.
Moreover, we cannot unilaterally disarm our intelligence agencies. There is a reason why BlackBerrys and iPhones are not allowed in the White House Situation Room. We know that the intelligence services of other countries -- including some who feign surprise over the Snowden disclosures -- are constantly probing our government and private sector networks, and accelerating programs to listen to our conversations, and intercept our emails, and compromise our systems. We know that.
Meanwhile, a number of countries, including some who have loudly criticized the NSA, privately acknowledge that America has special responsibilities as the world’s only superpower; that our intelligence capabilities are critical to meeting these responsibilities, and that they themselves have relied on the information we obtain to protect their own people.
Second, just as ardent civil libertarians recognize the need for robust intelligence capabilities, those with responsibilities for our national security readily acknowledge the potential for abuse as intelligence capabilities advance and more and more private information is digitized. After all, the folks at NSA and other intelligence agencies are our neighbors. They're our friends and family. They’ve got electronic bank and medical records like everybody else. They have kids on Facebook and Instagram, and they know, more than most of us, the vulnerabilities to privacy that exist in a world where transactions are recorded, and emails and text and messages are stored, and even our movements can increasingly be tracked through the GPS on our phones.
Third, there was a recognition by all who participated in these reviews that the challenges to our privacy do not come from government alone. Corporations of all shapes and sizes track what you buy, store and analyze our data, and use it for commercial purposes; that’s how those targeted ads pop up on your computer and your smartphone periodically. But all of us understand that the standards for government surveillance must be higher. Given the unique power of the state, it is not enough for leaders to say: Trust us, we won’t abuse the data we collect. For history has too many examples when that trust has been breached. Our system of government is built on the premise that our liberty cannot depend on the good intentions of those in power; it depends on the law to constrain those in power.
I make these observations to underscore that the basic values of most Americans when it comes to questions of surveillance and privacy converge a lot more than the crude characterizations that have emerged over the last several months. Those who are troubled by our existing programs are not interested in repeating the tragedy of 9/11, and those who defend these programs are not dismissive of civil liberties.
The challenge is getting the details right, and that is not simple. In fact, during the course of our review, I have often reminded myself I would not be where I am today were it not for the courage of dissidents like Dr. King, who were spied upon by their own government. And as President, a President who looks at intelligence every morning, I also can’t help but be reminded that America must be vigilant in the face of threats.
Fortunately, by focusing on facts and specifics rather than speculation and hypotheticals, this review process has given me -- and hopefully the American people -- some clear direction for change. And today, I can announce a series of concrete and substantial reforms that my administration intends to adopt administratively or will seek to codify with Congress.
First, I have approved a new presidential directive for our signals intelligence activities both at home and abroad. This guidance will strengthen executive branch oversight of our intelligence activities. It will ensure that we take into account our security requirements, but also our alliances; our trade and investment relationships, including the concerns of American companies; and our commitment to privacy and basic liberties. And we will review decisions about intelligence priorities and sensitive targets on an annual basis so that our actions are regularly scrutinized by my senior national security team.
Second, we will reform programs and procedures in place to provide greater transparency to our surveillance activities, and fortify the safeguards that protect the privacy of U.S. persons. Since we began this review, including information being released today, we have declassified over 40 opinions and orders of the Foreign Intelligence Surveillance Court, which provides judicial review of some of our most sensitive intelligence activities -- including the Section 702 program targeting foreign individuals overseas, and the Section 215 telephone metadata program.
And going forward, I’m directing the Director of National Intelligence, in consultation with the Attorney General, to annually review for the purposes of declassification any future opinions of the court with broad privacy implications, and to report to me and to Congress on these efforts. To ensure that the court hears a broader range of privacy perspectives, I am also calling on Congress to authorize the establishment of a panel of advocates from outside government to provide an independent voice in significant cases before the Foreign Intelligence Surveillance Court.
Third, we will provide additional protections for activities conducted under Section 702, which allows the government to intercept the communications of foreign targets overseas who have information that’s important for our national security. Specifically, I am asking the Attorney General and DNI to institute reforms that place additional restrictions on government’s ability to retain, search, and use in criminal cases communications between Americans and foreign citizens incidentally collected under Section 702.
Fourth, in investigating threats, the FBI also relies on what's called national security letters, which can require companies to provide specific and limited information to the government without disclosing the orders to the subject of the investigation. These are cases in which it's important that the subject of the investigation, such as a possible terrorist or spy, isn’t tipped off. But we can and should be more transparent in how government uses this authority.
I have therefore directed the Attorney General to amend how we use national security letters so that this secrecy will not be indefinite, so that it will terminate within a fixed time unless the government demonstrates a real need for further secrecy. We will also enable communications providers to make public more information than ever before about the orders that they have received to provide data to the government.
This brings me to the program that has generated the most controversy these past few months -- the bulk collection of telephone records under Section 215. Let me repeat what I said when this story first broke: This program does not involve the content of phone calls, or the names of people making calls. Instead, it provides a record of phone numbers and the times and lengths of calls -- metadata that can be queried if and when we have a reasonable suspicion that a particular number is linked to a terrorist organization.
Why is this necessary? The program grew out of a desire to address a gap identified after 9/11. One of the 9/11 hijackers -- Khalid al-Mihdhar -- made a phone call from San Diego to a known al Qaeda safe-house in Yemen. NSA saw that call, but it could not see that the call was coming from an individual already in the United States. The telephone metadata program under Section 215 was designed to map the communications of terrorists so we can see who they may be in contact with as quickly as possible. And this capability could also prove valuable in a crisis. For example, if a bomb goes off in one of our cities and law enforcement is racing to determine whether a network is poised to conduct additional attacks, time is of the essence. Being able to quickly review phone connections to assess whether a network exists is critical to that effort.
In sum, the program does not involve the NSA examining the phone records of ordinary Americans. Rather, it consolidates these records into a database that the government can query if it has a specific lead -- a consolidation of phone records that the companies already retained for business purposes. The review group turned up no indication that this database has been intentionally abused. And I believe it is important that the capability that this program is designed to meet is preserved.
Having said that, I believe critics are right to point out that without proper safeguards, this type of program could be used to yield more information about our private lives, and open the door to more intrusive bulk collection programs in the future. They’re also right to point out that although the telephone bulk collection program was subject to oversight by the Foreign Intelligence Surveillance Court and has been reauthorized repeatedly by Congress, it has never been subject to vigorous public debate.
For all these reasons, I believe we need a new approach. I am therefore ordering a transition that will end the Section 215 bulk metadata program as it currently exists, and establish a mechanism that preserves the capabilities we need without the government holding this bulk metadata.
This will not be simple. The review group recommended that our current approach be replaced by one in which the providers or a third party retain the bulk records, with government accessing information as needed. Both of these options pose difficult problems. Relying solely on the records of multiple providers, for example, could require companies to alter their procedures in ways that raise new privacy concerns. On the other hand, any third party maintaining a single, consolidated database would be carrying out what is essentially a government function but with more expense, more legal ambiguity, potentially less accountability -- all of which would have a doubtful impact on increasing public confidence that their privacy is being protected.
During the review process, some suggested that we may also be able to preserve the capabilities we need through a combination of existing authorities, better information sharing, and recent technological advances. But more work needs to be done to determine exactly how this system might work.
Because of the challenges involved, I’ve ordered that the transition away from the existing program will proceed in two steps. Effective immediately, we will only pursue phone calls that are two steps removed from a number associated with a terrorist organization instead of the current three. And I have directed the Attorney General to work with the Foreign Intelligence Surveillance Court so that during this transition period, the database can be queried only after a judicial finding or in the case of a true emergency.
Next, step two, I have instructed the intelligence community and the Attorney General to use this transition period to develop options for a new approach that can match the capabilities and fill the gaps that the Section 215 program was designed to address without the government holding this metadata itself. They will report back to me with options for alternative approaches before the program comes up for reauthorization on March 28th. And during this period, I will consult with the relevant committees in Congress to seek their views, and then seek congressional authorization for the new program as needed.
Now, the reforms I’m proposing today should give the American people greater confidence that their rights are being protected, even as our intelligence and law enforcement agencies maintain the tools they need to keep us safe. And I recognize that there are additional issues that require further debate. For example, some who participated in our review, as well as some members of Congress, would like to see more sweeping reforms to the use of national security letters so that we have to go to a judge each time before issuing these requests. Here, I have concerns that we should not set a standard for terrorism investigations that is higher than those involved in investigating an ordinary crime. But I agree that greater oversight on the use of these letters may be appropriate, and I’m prepared to work with Congress on this issue.
There are also those who would like to see different changes to the FISA Court than the ones I’ve proposed. On all these issues, I am open to working with Congress to ensure that we build a broad consensus for how to move forward, and I’m confident that we can shape an approach that meets our security needs while upholding the civil liberties of every American.
Let me now turn to the separate set of concerns that have been raised overseas, and focus on America’s approach to intelligence collection abroad. As I’ve indicated, the United States has unique responsibilities when it comes to intelligence collection. Our capabilities help protect not only our nation, but our friends and our allies, as well. But our efforts will only be effective if ordinary citizens in other countries have confidence that the United States respects their privacy, too. And the leaders of our close friends and allies deserve to know that if I want to know what they think about an issue, I’ll pick up the phone and call them, rather than turning to surveillance. In other words, just as we balance security and privacy at home, our global leadership demands that we balance our security requirements against our need to maintain the trust and cooperation among people and leaders around the world.
For that reason, the new presidential directive that I’ve issued today will clearly prescribe what we do, and do not do, when it comes to our overseas surveillance. To begin with, the directive makes clear that the United States only uses signals intelligence for legitimate national security purposes, and not for the purpose of indiscriminately reviewing the emails or phone calls of ordinary folks. I’ve also made it clear that the United States does not collect intelligence to suppress criticism or dissent, nor do we collect intelligence to disadvantage people on the basis of their ethnicity, or race, or gender, or sexual orientation, or religious beliefs. We do not collect intelligence to provide a competitive advantage to U.S. companies or U.S. commercial sectors.
And in terms of our bulk collection of signals intelligence, U.S. intelligence agencies will only use such data to meet specific security requirements: counterintelligence, counterterrorism, counter-proliferation, cybersecurity, force protection for our troops and our allies, and combating transnational crime, including sanctions evasion.
In this directive, I have taken the unprecedented step of extending certain protections that we have for the American people to people overseas. I’ve directed the DNI, in consultation with the Attorney General, to develop these safeguards, which will limit the duration that we can hold personal information, while also restricting the use of this information.
The bottom line is that people around the world, regardless of their nationality, should know that the United States is not spying on ordinary people who don’t threaten our national security, and that we take their privacy concerns into account in our policies and procedures. This applies to foreign leaders as well. Given the understandable attention that this issue has received, I have made clear to the intelligence community that unless there is a compelling national security purpose, we will not monitor the communications of heads of state and government of our close friends and allies. And I’ve instructed my national security team, as well as the intelligence community, to work with foreign counterparts to deepen our coordination and cooperation in ways that rebuild trust going forward.
Now let me be clear: Our intelligence agencies will continue to gather information about the intentions of governments -- as opposed to ordinary citizens -- around the world, in the same way that the intelligence services of every other nation does. We will not apologize simply because our services may be more effective. But heads of state and government with whom we work closely, and on whose cooperation we depend, should feel confident that we are treating them as real partners. And the changes I’ve ordered do just that.
Finally, to make sure that we follow through on all these reforms, I am making some important changes to how our government is organized. The State Department will designate a senior officer to coordinate our diplomacy on issues related to technology and signals intelligence. We will appoint a senior official at the White House to implement the new privacy safeguards that I have announced today. I will devote the resources to centralize and improve the process we use to handle foreign requests for legal assistance, keeping our high standards for privacy while helping foreign partners fight crime and terrorism.
I have also asked my counselor, John Podesta, to lead a comprehensive review of big data and privacy. And this group will consist of government officials who, along with the President’s Council of Advisors on Science and Technology, will reach out to privacy experts, technologists and business leaders, and look how the challenges inherent in big data are being confronted by both the public and private sectors; whether we can forge international norms on how to manage this data; and how we can continue to promote the free flow of information in ways that are consistent with both privacy and security.
For ultimately, what’s at stake in this debate goes far beyond a few months of headlines, or passing tensions in our foreign policy. When you cut through the noise, what’s really at stake is how we remain true to who we are in a world that is remaking itself at dizzying speed. Whether it’s the ability of individuals to communicate ideas; to access information that would have once filled every great library in every country in the world; or to forge bonds with people on other sides of the globe, technology is remaking what is possible for individuals, and for institutions, and for the international order. So while the reforms that I have announced will point us in a new direction, I am mindful that more work will be needed in the future.
One thing I’m certain of: This debate will make us stronger. And I also know that in this time of change, the United States of America will have to lead. It may seem sometimes that America is being held to a different standard. And I'll admit the readiness of some to assume the worst motives by our government can be frustrating. No one expects China to have an open debate about their surveillance programs, or Russia to take privacy concerns of citizens in other places into account. But let’s remember: We are held to a different standard precisely because we have been at the forefront of defending personal privacy and human dignity.
As the nation that developed the Internet, the world expects us to ensure that the digital revolution works as a tool for individual empowerment, not government control. Having faced down the dangers of totalitarianism and fascism and communism, the world expects us to stand up for the principle that every person has the right to think and write and form relationships freely -- because individual freedom is the wellspring of human progress.
Those values make us who we are. And because of the strength of our own democracy, we should not shy away from high expectations. For more than two centuries, our Constitution has weathered every type of change because we have been willing to defend it, and because we have been willing to question the actions that have been taken in its defense. Today is no different. I believe we can meet high expectations. Together, let us chart a way forward that secures the life of our nation while preserving the liberties that make our nation worth fighting for.
Thank you. God bless you. May God bless the United States of America. (Applause.)
END
Friday, January 17, 2014
U.S. DEFENSE DEPARTMENT CONTRACTS FOR JANUARY 17, 2014
FROM: DEFENSE DEPARTMENT
CONTRACTS
DEFENSE LOGISTICS AGENCY
BOH Environmental LLC*, Chantilly, Va., has been awarded a maximum $250,000,000 fixed-price with economic-price-adjustment contract for several types of containers and container parts. This contract is a sole-source acquisition. This is a two-year base contract with three one-year option periods. Locations of performance are Virginia and Texas with a Jan. 16, 2016 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 through fiscal 2015 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPE8ED-14-D-0002).
AM General, LLC, South Bend, Ind., has been awarded a maximum $48,000,000 firm-fixed-price contract to provide parts as the prime services integrator in support of the High Mobility Multi-Purpose Wheel Vehicle Industrial Base Support program. This contract is a sole-source acquisition. Location of performance is Indiana with a Sept. 30, 2014 performance completion date. Using military service is Army. Type of appropriation is fiscal 2014 Army Working Capital Funds. The contracting activity is the Defense Logistics Agency Land and Maritime, Columbus, Ohio, (SPM7MX-14-D-0039).
Avfuel Corp.**, Ann Arbor, Mich., has been awarded a maximum $7,417,557 fixed-price with economic-price-adjustment contract for into-plane jet fuel. This contract is a competitive acquisition, and one offer was received. Locations of performance are Michigan and California with a March 31, 2018 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 through fiscal 2018 defense working capital funds. The contracting activity is the Defense Logistics Agency Energy, Fort Belvoir, Va., (SP0600-14-D-0015).
AIR FORCE
Goodrich Corp., Westford, Mass., has been awarded an $183,000,000 firm-fixed-price undefinitized contract action (P00013) for an existing contract (FA8620-12-C-4020) for the Royal Saudi Air Force DB110 Reconnaissance System program. This modification changes the requirements to include in-country setup and installation, ground stations, and pod survey study being produced under the basic contract. Work will be performed at Westford, Mass., and is expected to be completed by July 23, 2021. This contract is 100 percent foreign military sales for Saudi Arabia. Air Force Life Cycle Management Center/WINK, Wright-Patterson Air Force Base, Ohio, is the contracting activity.
Leidos Inc., Reston, Va., has been awarded a $62,480,000 indefinite-delivery/indefinite-quantity, cost-plus-incentive-fee contract for Mission Planning and Analysis Common Services. Contractor will perform software engineering, integration, technical support, and training requirements of the Integrated Strategic Planning and Analysis Network quality review function. Work will be performed at Omaha, Neb., and is expected to be completed by Aug. 9, 2019. This award is the result of a competitive acquisition, and three offers were received. No funds have been obligated at time of award. The 55th Contracting Squadron, Offutt Air Force Base, Neb., is the contracting activity (FA4600-14-D-0002).
NAVY
Northrop Grumman Systems Corp.-Electronics Sector, Baltimore, Md., is being awarded a $33,017,449 cost-plus-fixed-fee completion job order under basic ordering agreement (N00164-13-G-WT15) to design and build operational test program sets in support of the P-8A AN/ALQ 240 electronic support measures repair depot standup at the Naval Surface Warfare Center, Crane, Ind. Work will be performed in Linthicum, Md., and is expected to be completed by September 2019. Fiscal 2013 aircraft procurement, Navy funds in the amount of $33,017,449 will be obligated at time of award. Contract funds will not expire at the end of the current fiscal year. Navy Surface Warfare Center, Crane, Ind., is the contracting activity.
Transport Systems and Products Inc., Stamford, Conn., is being awarded a $7,366,373 firm-fixed-priced contract for self-propelled modular transport equipment manufactured by Scheuerle Fahrzeugfabrik GmbH that is necessary to support the moored training ship conversion project at Norfolk Naval Shipyard. Work will be performed in Pfedelbach, Germany, and is expected to be completed by October 2014. Fiscal 2014 shipbuilding and conversion, Navy funding in the amount of $4,000,000 and fiscal 2013 other procurement, Navy funding in the amount of $3,366,373 will be obligated at the time of award, none of which will expire at end of the fiscal year. This contract was not competitively procured. This requirement was negotiated on a sole source basis with Transport Systems and Products Inc.; Scheuerle Fahrzeugfabrik Gmbh’s exclusive distributor in North America in accordance with the Statutory Authority Permitting Other Than Full and Open Competition 10 U.S.C. 2304 (c)(1), as implemented by FAR 6.302-1; only one responsible source and no other supplies or services will satisfy agency requirements (Brand Name). The Naval Sea Systems Command, Washington, D.C., is the contracting activity (N00024-14-C-4304).
*Small Business
**Veteran Owned Small Business
CONTRACTS
DEFENSE LOGISTICS AGENCY
BOH Environmental LLC*, Chantilly, Va., has been awarded a maximum $250,000,000 fixed-price with economic-price-adjustment contract for several types of containers and container parts. This contract is a sole-source acquisition. This is a two-year base contract with three one-year option periods. Locations of performance are Virginia and Texas with a Jan. 16, 2016 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 through fiscal 2015 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa., (SPE8ED-14-D-0002).
AM General, LLC, South Bend, Ind., has been awarded a maximum $48,000,000 firm-fixed-price contract to provide parts as the prime services integrator in support of the High Mobility Multi-Purpose Wheel Vehicle Industrial Base Support program. This contract is a sole-source acquisition. Location of performance is Indiana with a Sept. 30, 2014 performance completion date. Using military service is Army. Type of appropriation is fiscal 2014 Army Working Capital Funds. The contracting activity is the Defense Logistics Agency Land and Maritime, Columbus, Ohio, (SPM7MX-14-D-0039).
Avfuel Corp.**, Ann Arbor, Mich., has been awarded a maximum $7,417,557 fixed-price with economic-price-adjustment contract for into-plane jet fuel. This contract is a competitive acquisition, and one offer was received. Locations of performance are Michigan and California with a March 31, 2018 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 through fiscal 2018 defense working capital funds. The contracting activity is the Defense Logistics Agency Energy, Fort Belvoir, Va., (SP0600-14-D-0015).
AIR FORCE
Goodrich Corp., Westford, Mass., has been awarded an $183,000,000 firm-fixed-price undefinitized contract action (P00013) for an existing contract (FA8620-12-C-4020) for the Royal Saudi Air Force DB110 Reconnaissance System program. This modification changes the requirements to include in-country setup and installation, ground stations, and pod survey study being produced under the basic contract. Work will be performed at Westford, Mass., and is expected to be completed by July 23, 2021. This contract is 100 percent foreign military sales for Saudi Arabia. Air Force Life Cycle Management Center/WINK, Wright-Patterson Air Force Base, Ohio, is the contracting activity.
Leidos Inc., Reston, Va., has been awarded a $62,480,000 indefinite-delivery/indefinite-quantity, cost-plus-incentive-fee contract for Mission Planning and Analysis Common Services. Contractor will perform software engineering, integration, technical support, and training requirements of the Integrated Strategic Planning and Analysis Network quality review function. Work will be performed at Omaha, Neb., and is expected to be completed by Aug. 9, 2019. This award is the result of a competitive acquisition, and three offers were received. No funds have been obligated at time of award. The 55th Contracting Squadron, Offutt Air Force Base, Neb., is the contracting activity (FA4600-14-D-0002).
NAVY
Northrop Grumman Systems Corp.-Electronics Sector, Baltimore, Md., is being awarded a $33,017,449 cost-plus-fixed-fee completion job order under basic ordering agreement (N00164-13-G-WT15) to design and build operational test program sets in support of the P-8A AN/ALQ 240 electronic support measures repair depot standup at the Naval Surface Warfare Center, Crane, Ind. Work will be performed in Linthicum, Md., and is expected to be completed by September 2019. Fiscal 2013 aircraft procurement, Navy funds in the amount of $33,017,449 will be obligated at time of award. Contract funds will not expire at the end of the current fiscal year. Navy Surface Warfare Center, Crane, Ind., is the contracting activity.
Transport Systems and Products Inc., Stamford, Conn., is being awarded a $7,366,373 firm-fixed-priced contract for self-propelled modular transport equipment manufactured by Scheuerle Fahrzeugfabrik GmbH that is necessary to support the moored training ship conversion project at Norfolk Naval Shipyard. Work will be performed in Pfedelbach, Germany, and is expected to be completed by October 2014. Fiscal 2014 shipbuilding and conversion, Navy funding in the amount of $4,000,000 and fiscal 2013 other procurement, Navy funding in the amount of $3,366,373 will be obligated at the time of award, none of which will expire at end of the fiscal year. This contract was not competitively procured. This requirement was negotiated on a sole source basis with Transport Systems and Products Inc.; Scheuerle Fahrzeugfabrik Gmbh’s exclusive distributor in North America in accordance with the Statutory Authority Permitting Other Than Full and Open Competition 10 U.S.C. 2304 (c)(1), as implemented by FAR 6.302-1; only one responsible source and no other supplies or services will satisfy agency requirements (Brand Name). The Naval Sea Systems Command, Washington, D.C., is the contracting activity (N00024-14-C-4304).
*Small Business
**Veteran Owned Small Business
MISSILEER RETESTING ALMOST COMPLETE AFTER EXAM CHEATING SCANDAL
FROM: DEFENSE DEPARTMENT
Missileer Retesting Nearly Complete
By Jim Garamone
American Forces Press Service
WASHINGTON, Jan. 17, 2014 – The retesting of nuclear ICBM launch officers is nearly complete, Pentagon spokesman Army Col. Steve Warren said today.
Air Force Secretary Deborah Lee James and Air Force Chief of Staff Gen. Mark A. Welsh III ordered the retesting after discovering that some nuclear launch officers cheated on proficiency exams. A total of 34 crewmen at Malmstrom Air Force Base, Mont., have been suspended from duty due to the allegations.
By close of business yesterday, 472 officers finished the retesting, Warren said. Of those, 21 officers failed the exam. The pass rate was 95.6 percent, well within historical averages. The 21 officers that failed will undergo retraining and then be retested.
“If they pass they will return to duty,” Warren said.
Another 27 officers who are on leave or who are on temporary duty have not been retested. Officials said they will be retested once they return to their bases.
The 34 officers who were suspended pending the investigation into cheating will not be retested, Warren said.
All told, 82 officers are not available for assignment.
“It is having an impact,” Warren said. “But it is an impact the missileers have been able to schedule around. It has no impact on the operational readiness, no impact on the safety, no impact on the capabilities, it is just more work for the individual missileers in the short term.”
Missileer Retesting Nearly Complete
By Jim Garamone
American Forces Press Service
WASHINGTON, Jan. 17, 2014 – The retesting of nuclear ICBM launch officers is nearly complete, Pentagon spokesman Army Col. Steve Warren said today.
Air Force Secretary Deborah Lee James and Air Force Chief of Staff Gen. Mark A. Welsh III ordered the retesting after discovering that some nuclear launch officers cheated on proficiency exams. A total of 34 crewmen at Malmstrom Air Force Base, Mont., have been suspended from duty due to the allegations.
By close of business yesterday, 472 officers finished the retesting, Warren said. Of those, 21 officers failed the exam. The pass rate was 95.6 percent, well within historical averages. The 21 officers that failed will undergo retraining and then be retested.
“If they pass they will return to duty,” Warren said.
Another 27 officers who are on leave or who are on temporary duty have not been retested. Officials said they will be retested once they return to their bases.
The 34 officers who were suspended pending the investigation into cheating will not be retested, Warren said.
All told, 82 officers are not available for assignment.
“It is having an impact,” Warren said. “But it is an impact the missileers have been able to schedule around. It has no impact on the operational readiness, no impact on the safety, no impact on the capabilities, it is just more work for the individual missileers in the short term.”
SURGEON GENERAL SAYS SMOKING RATES MUST DROP TO SAVE MILLIONS OF LIVES
FROM: DEPARTMENT OF HEALTH AND HUMAN SERVICES
Surgeon General report says 5.6 million U.S. children will die prematurely unless current smoking rates drop
Report also finds cigarette smoking causes diabetes and colorectal cancer
Approximately 5.6 million American children alive today – or one out of every 13 children under age 18 – will die prematurely from smoking-related diseases unless current smoking rates drop, according to a new Surgeon General’s report.
Over the last 50 years, more than 20 million Americans have died from smoking. The new report concludes that cigarette smoking kills nearly half a million Americans a year, with an additional 16 million suffering from smoking-related conditions. It puts the price tag of smoking in this country at more than $289 billion a year in direct medical care and other economic costs.
Today’s report, The Health Consequences of Smoking—50 Years of Progress: A Report of the Surgeon General, comes a half century after the historic 1964 Surgeon General’s report, which concluded that cigarette smoking causes lung cancer. Since that time, smoking has been identified as a cause of serious diseases of nearly all the body’s organs. Today, scientists add diabetes, colorectal and liver cancer, rheumatoid arthritis, erectile dysfunction, age-related macular degeneration, and other conditions to the list of diseases that cigarette smoking causes. In addition, the report concludes that secondhand smoke exposure is now known to cause strokes in nonsmokers.
“Smokers today have a greater risk of developing lung cancer than they did when the first Surgeon General’s report was released in 1964, even though they smoke fewer cigarettes,” said Acting Surgeon General Boris Lushniak, M.D., M.P.H. “How cigarettes are made and the chemicals they contain have changed over the years, and some of those changes may be a factor in higher lung cancer risks. Of all forms of tobacco, cigarettes are the most deadly – and cause medical and financial burdens for millions of Americans.”
Twenty years ago male smokers were about twice as likely as female smokers to die early from smoking-related disease. The new report finds that women are now dying at rates as high as men from many of these diseases, including lung cancer, chronic obstructive pulmonary disease (COPD), and heart disease. In fact, death from COPD is now greater in women than in men.
“Today, we’re asking Americans to join a sustained effort to make the next generation a tobacco-free generation,” said Health and Human Services Secretary Kathleen Sebelius. “This is not something the federal government can do alone. We need to partner with the business community, local elected officials, schools and universities, the medical community, the faith community, and committed citizens in communities across the country to make the next generation tobacco free.”
Although youth smoking rates declined by half between 1997 and 2011, each day another 3,200 children under age 18 smoke their first cigarette, and another 2,100 youth and young adults become daily smokers. Every adult who dies prematurely from smoking is replaced by two youth and young adult smokers.
The report concludes that the tobacco industry started and sustained this epidemic using aggressive marketing strategies to deliberately mislead the public about the harms of smoking. The evidence in the report emphasizes the need to accelerate and sustain successful tobacco control efforts that have been underway for decades.
“Over the last 50 years tobacco control efforts have saved 8 million lives but the job is far from over,” said HHS Assistant Secretary for Health Howard K. Koh, M.D., M.P.H. “This report provides the impetus to accelerate public health and clinical strategies to drop overall smoking rates to less than 10% in the next decade. Our nation is now at a crossroads, and we must choose to end the tobacco epidemic once and for all.”
The Obama Administration’s ongoing efforts to end the tobacco epidemic include enactment of the landmark Family Smoking Prevention and Tobacco Control Act, which gives FDA regulatory authority over tobacco products; significant expansion of tobacco cessation coverage through the Affordable Care Act to help encourage and support quitting; new Affordable Care Act investments in tobacco prevention campaigns like the “Tips from Former Smokers” campaign to raise awareness of the long-term health effects of smoking and encourage quitting; and increases in the cost of cigarettes resulting from the federal excise tax increase in the Children’s Health Insurance Program Reauthorization Act.
Surgeon General report says 5.6 million U.S. children will die prematurely unless current smoking rates drop
Report also finds cigarette smoking causes diabetes and colorectal cancer
Approximately 5.6 million American children alive today – or one out of every 13 children under age 18 – will die prematurely from smoking-related diseases unless current smoking rates drop, according to a new Surgeon General’s report.
Over the last 50 years, more than 20 million Americans have died from smoking. The new report concludes that cigarette smoking kills nearly half a million Americans a year, with an additional 16 million suffering from smoking-related conditions. It puts the price tag of smoking in this country at more than $289 billion a year in direct medical care and other economic costs.
Today’s report, The Health Consequences of Smoking—50 Years of Progress: A Report of the Surgeon General, comes a half century after the historic 1964 Surgeon General’s report, which concluded that cigarette smoking causes lung cancer. Since that time, smoking has been identified as a cause of serious diseases of nearly all the body’s organs. Today, scientists add diabetes, colorectal and liver cancer, rheumatoid arthritis, erectile dysfunction, age-related macular degeneration, and other conditions to the list of diseases that cigarette smoking causes. In addition, the report concludes that secondhand smoke exposure is now known to cause strokes in nonsmokers.
“Smokers today have a greater risk of developing lung cancer than they did when the first Surgeon General’s report was released in 1964, even though they smoke fewer cigarettes,” said Acting Surgeon General Boris Lushniak, M.D., M.P.H. “How cigarettes are made and the chemicals they contain have changed over the years, and some of those changes may be a factor in higher lung cancer risks. Of all forms of tobacco, cigarettes are the most deadly – and cause medical and financial burdens for millions of Americans.”
Twenty years ago male smokers were about twice as likely as female smokers to die early from smoking-related disease. The new report finds that women are now dying at rates as high as men from many of these diseases, including lung cancer, chronic obstructive pulmonary disease (COPD), and heart disease. In fact, death from COPD is now greater in women than in men.
“Today, we’re asking Americans to join a sustained effort to make the next generation a tobacco-free generation,” said Health and Human Services Secretary Kathleen Sebelius. “This is not something the federal government can do alone. We need to partner with the business community, local elected officials, schools and universities, the medical community, the faith community, and committed citizens in communities across the country to make the next generation tobacco free.”
Although youth smoking rates declined by half between 1997 and 2011, each day another 3,200 children under age 18 smoke their first cigarette, and another 2,100 youth and young adults become daily smokers. Every adult who dies prematurely from smoking is replaced by two youth and young adult smokers.
The report concludes that the tobacco industry started and sustained this epidemic using aggressive marketing strategies to deliberately mislead the public about the harms of smoking. The evidence in the report emphasizes the need to accelerate and sustain successful tobacco control efforts that have been underway for decades.
“Over the last 50 years tobacco control efforts have saved 8 million lives but the job is far from over,” said HHS Assistant Secretary for Health Howard K. Koh, M.D., M.P.H. “This report provides the impetus to accelerate public health and clinical strategies to drop overall smoking rates to less than 10% in the next decade. Our nation is now at a crossroads, and we must choose to end the tobacco epidemic once and for all.”
The Obama Administration’s ongoing efforts to end the tobacco epidemic include enactment of the landmark Family Smoking Prevention and Tobacco Control Act, which gives FDA regulatory authority over tobacco products; significant expansion of tobacco cessation coverage through the Affordable Care Act to help encourage and support quitting; new Affordable Care Act investments in tobacco prevention campaigns like the “Tips from Former Smokers” campaign to raise awareness of the long-term health effects of smoking and encourage quitting; and increases in the cost of cigarettes resulting from the federal excise tax increase in the Children’s Health Insurance Program Reauthorization Act.
FDA WARNS OF WART REMOVER FIRES
FROM: FOOD AND DRUG ADMINISTRATION
Some cryogenic wart removers—which remove warts from the skin by freezing them off—have caught fire during use at home, harming consumers or setting fire to items around the house.
Since 2009, the Food and Drug Administration (FDA)—which regulates wart removers as medical devices—has received 14 such reports about over-the-counter (OTC) wart remover products, which are a mixture of liquid dimethyl ether and propane.
Ten patients have described singed hair, blisters, burns or skin redness, according to FDA nurse consultant Karen Nast, RN. Nearby items have also caught fire.
"The labeling for these products clearly states that they are flammable and should be kept away from fire, flame, heat sources, and cigarettes," Nast notes. In three of the reports, there was a candle nearby, but in the other 11 reports no ignition source was identified. "This is extremely concerning, especially because people may not be aware that everyday household items like curling irons and straight irons can be hot enough to be an ignition source for these products," Nast says.
How to Use These Products
Warts are growths caused by human papillomavirus (HPV) infection. Most treatments using a mixture of liquid dimethyl ether and propane instruct users to follow certain steps.
First, the user presses on the nozzle of a small, pressurized canister (dispenser) containing the mixture. The dispenser releases the mixture, cooled to approximately -40 degrees Celsius, onto an applicator, saturating it. (In some products, the applicator is attached to the cap.) The user presses the applicator on the wart for the amount of time specified in the product directions. An average of three to four treatments is required for warts on thin skin. Warts on calloused skin, such as plantar warts on the soles of the feet, might take more treatments.
In the reports FDA has received, the dispenser generally caught fire when it was releasing the mixture.
Some cryogenic wart removers—which remove warts from the skin by freezing them off—have caught fire during use at home, harming consumers or setting fire to items around the house.
Since 2009, the Food and Drug Administration (FDA)—which regulates wart removers as medical devices—has received 14 such reports about over-the-counter (OTC) wart remover products, which are a mixture of liquid dimethyl ether and propane.
Ten patients have described singed hair, blisters, burns or skin redness, according to FDA nurse consultant Karen Nast, RN. Nearby items have also caught fire.
"The labeling for these products clearly states that they are flammable and should be kept away from fire, flame, heat sources, and cigarettes," Nast notes. In three of the reports, there was a candle nearby, but in the other 11 reports no ignition source was identified. "This is extremely concerning, especially because people may not be aware that everyday household items like curling irons and straight irons can be hot enough to be an ignition source for these products," Nast says.
How to Use These Products
Warts are growths caused by human papillomavirus (HPV) infection. Most treatments using a mixture of liquid dimethyl ether and propane instruct users to follow certain steps.
First, the user presses on the nozzle of a small, pressurized canister (dispenser) containing the mixture. The dispenser releases the mixture, cooled to approximately -40 degrees Celsius, onto an applicator, saturating it. (In some products, the applicator is attached to the cap.) The user presses the applicator on the wart for the amount of time specified in the product directions. An average of three to four treatments is required for warts on thin skin. Warts on calloused skin, such as plantar warts on the soles of the feet, might take more treatments.
In the reports FDA has received, the dispenser generally caught fire when it was releasing the mixture.
CFTC OFFICIAL'S TESTIMONY REGARDING FUTURES MARKET OVERSIGHT
FROM: COMMODITY FUTURES TRADING COMMISSION
Testimony of Vincent McGonagle, Director Division of Market Oversight, Commodity Futures Trading Commission Before the Financial Institutions and Consumer Protection Subcommittee Senate Committee on Banking, Housing, and Urban Affairs
January 15, 2014
Chairman Brown, Ranking Member Toomey, and Members of the Subcommittee, thank you for the opportunity to appear before you today. I am Vincent McGonagle and I am the Director of the Division of Market Oversight of the Commodity Futures Trading Commission (CFTC).
Background on Commodity Exchange Act and the CFTC Mission
The purpose of the Commodity Exchange Act (CEA) is to serve the public interest by providing a means for managing and assuming price risks, discovering prices, or disseminating pricing information. Consistent with its mission statement and statutory charge under the CEA, the CFTC is tasked with protecting market participants and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives – both futures and swaps – and to foster transparent, open, competitive and financially sound markets. In carrying out its mission and statutory charge, and to promote market integrity, the Commission polices derivatives markets for various abuses and works to ensure the protection of customer funds. Further, the agency seeks to lower the risk of the futures and swaps markets to the economy and the public. To fulfill these roles, the Commission oversees designated contract markets (DCMs), swap execution facilities (SEFs), derivatives clearing organizations, swap data repositories, swap dealers, futures commission merchants, commodity pool operators and other intermediaries.
The CEA has for many years required that any futures transaction, unless subject to an exemption, be conducted on or subject to the rules of a board of trade which has been designated by the CFTC as a DCM. Sections 5 and 6 of the CEA and Part 38 of the Commission’s regulations provide the legal framework for the Commission to designate DCMs, along with each DCM’s compliance requirements with respect to the trading of commodity futures contracts. With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), DCMs were also permitted to list swap contracts. Along with this expansion of product lines that can be listed on DCMs, the Dodd-Frank Act also amended various substantive DCM requirements, under CEA Section 5, and adopted a new regulatory category for exchanges that provide for the trading of swaps (SEFs).1 The Commission revised its DCM regulations to reflect these new requirements, and also adopted regulations to implement the Dodd-Frank Act’s SEF requirements.
Under the CEA and the Commission’s contract and rule review regulations, all new product terms and conditions, and subsequent associated amendments, are submitted to the Commission before implementation. In submitting new products and associated amendments, DCMs and SEFs are legally obligated to meet certain core principles; one of the most significant being the prohibition, in DCM and SEF Core Principle 3, on listing contracts that are readily susceptible to manipulation.2 DCMs and SEFs self-certify most of their products to the Commission, as allowed under the CEA,3 and self-certified contracts may be listed for trading shortly after submission.4 The Commission has provided Guidance to DCMs and SEFs on meeting Core Principle 3 in Appendix C to Part 38 of the Commission’s regulations. Failure of a DCM or SEF to adopt and maintain practices that adhere to these requirements may lead to the Commission’s initiation of proceedings to secure compliance.
Among other things, a DCM or SEF that lists a contract that is settled by physical delivery should design its contracts in such a way as to avoid any impediments to the delivery of the commodity in order to promote convergence between the price of the futures contract and the cash market value of the commodity at the time of delivery. The specified terms and conditions considered as a whole should result in a deliverable supply that is sufficient to ensure that the contract is not susceptible to price manipulation or distortion.5 The contract terms and conditions should describe or define all of the economically significant characteristics or attributes of the commodity underlying the contract, including: quality standards that reflect those used in transactions in the commodity in normal cash marketing channels; delivery points at a location or locations where the underlying cash commodity is normally transacted or stored; conditions that delivery facility operators must meet in order to be eligible for delivery, including considerations of the extent to which ownership of such facilities is concentrated and whether the level of concentration would render the futures contract susceptible to manipulation; delivery procedures that seek to minimize or eliminate any impediment to making or taking delivery by both deliverers and takers of delivery to help ensure convergence of cash and futures at the expiration of a futures delivery month.
Commission staff utilizes considerable discretion and can request that DCMs and SEFs provide full explanations of their compliance with the Commission’s product requirements. Commission staff may ask a DCM or SEF at any time for a detailed justification of its continuing compliance with core principles, including information demonstrating that any contract certified to the Commission for listing on that exchange meets the requirements of the Act and DCM or SEF Core Principle 3.
Expansion of CFTC Enforcement Authority Under Dodd-Frank
The Commission’s responsibilities under the CEA include mandates to prevent and deter fraud and manipulation. The Dodd-Frank Act enhanced the Commission’s enforcement authority by expanding it to the swaps markets. The Commission adopted a rule to implement its new authorities to police against fraud and manipulative schemes. In the past, the CFTC had the ability to prosecute manipulation, but to prevail, it had to prove the specific intent of the accused to affect prices and the existence of an artificial price. Under the new law and rules implementing it, the Commission’s anti-manipulation reach is extended to prohibit the reckless use of manipulative schemes. Specifically, Section 6(c)(3) of the CEA now makes it unlawful for any person, directly or indirectly, to manipulate or attempt to manipulate the price of any swap, or of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity. In addition, Section 4c(a) of the CEA now explicitly prohibits disruptive trading practices and the Commission has issued an Interpretive Guidance and Policy Statement on Disruptive Practices.6
In addition, the Dodd-Frank Act established a registration regime for any foreign board of trade (FBOT) and associated clearing organization who seeks to offer U.S. customers direct access to its electronic trading and order matching system. Applicants for FBOT registration must demonstrate, among other things, that they are subject to comprehensive supervision and regulation by the appropriate governmental authorities in their home country or countries that is comparable to the comprehensive supervision and regulation to which Commission-designated contract markets and registered derivatives clearing organizations are respectively subject.
CFTC Coordination with Foreign and Domestic Regulators
The Commission recognizes that commodity markets are international in nature and, accordingly, regularly consults with other countries’ regulators. In particular, staff regularly consult with staff of the FCA (the LME’s home regulatory authority) as to market conditions with respect to products of mutual interest, including the LME’s recent introduction of warehouse reforms. The two agencies also participate in mutual information-sharing agreements for both market surveillance and enforcement purposes.
Similarly, the Commission formally and informally consults and coordinates with other domestic financial regulators. For example, the CFTC and the Federal Energy Regulatory Commission (FERC) have had a memorandum of understanding (MOU) in place since 2005 that provides for information exchange related to oversight or investigations. Earlier this month, FERC and the CFTC signed two Memoranda of Understanding (MOU) to address circumstances of overlapping jurisdiction and to share information in connection with market surveillance and investigations into potential market manipulation, fraud or abuse. The MOUs allow the agencies to promote effective and efficient regulation to protect the nation’s energy markets and increased cooperation between the agencies.
Again, thank you for the opportunity to appear before the Subcommittee. I will be pleased to respond to any questions you may have.
1 In addition to the provisions regarding listing of swaps on DCMs and SEFs, the Dodd-Frank Act provides that, unless a clearing exception applies and is elected, a swap that is subject to a clearing requirement must be executed on a DCM, SEF, or SEF that is exempt from registration under CEA, unless no such DCM or SEF makes the swap available to trade.
2 DCM and SEF Core Principle 3 states, “Contract Not Readily Subject to Manipulation—The board of trade shall list on the contract market only contracts that are not readily susceptible to manipulation.”
3 For example, while contracts can be submitted for approval, of the almost 5,000 contracts submitted by DCMs and SEFs since the Dodd-Frank Act was enacted, all were submitted on a self-certification basis, and over 2,000 contracts were certified in calendar year 2013 alone.
4 A DCM or SEF need wait only one full business day after the contract has been submitted to list the contract for trading.
5 Deliverable supply means the quantity of the commodity meeting the contract’s delivery specification that reasonably can be expected to be readily available to short traders and salable by long traders at its market value in normal cash marketing channels at the contract’s delivery points during the specified delivery period, barring abnormal movement in interstate commerce.
6 Antidisruptive Practices Authority, 78 FR 31890 (May 28, 2013),
Last Updated: January 15, 2014
Testimony of Vincent McGonagle, Director Division of Market Oversight, Commodity Futures Trading Commission Before the Financial Institutions and Consumer Protection Subcommittee Senate Committee on Banking, Housing, and Urban Affairs
January 15, 2014
Chairman Brown, Ranking Member Toomey, and Members of the Subcommittee, thank you for the opportunity to appear before you today. I am Vincent McGonagle and I am the Director of the Division of Market Oversight of the Commodity Futures Trading Commission (CFTC).
Background on Commodity Exchange Act and the CFTC Mission
The purpose of the Commodity Exchange Act (CEA) is to serve the public interest by providing a means for managing and assuming price risks, discovering prices, or disseminating pricing information. Consistent with its mission statement and statutory charge under the CEA, the CFTC is tasked with protecting market participants and the public from fraud, manipulation, abusive practices and systemic risk related to derivatives – both futures and swaps – and to foster transparent, open, competitive and financially sound markets. In carrying out its mission and statutory charge, and to promote market integrity, the Commission polices derivatives markets for various abuses and works to ensure the protection of customer funds. Further, the agency seeks to lower the risk of the futures and swaps markets to the economy and the public. To fulfill these roles, the Commission oversees designated contract markets (DCMs), swap execution facilities (SEFs), derivatives clearing organizations, swap data repositories, swap dealers, futures commission merchants, commodity pool operators and other intermediaries.
The CEA has for many years required that any futures transaction, unless subject to an exemption, be conducted on or subject to the rules of a board of trade which has been designated by the CFTC as a DCM. Sections 5 and 6 of the CEA and Part 38 of the Commission’s regulations provide the legal framework for the Commission to designate DCMs, along with each DCM’s compliance requirements with respect to the trading of commodity futures contracts. With the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), DCMs were also permitted to list swap contracts. Along with this expansion of product lines that can be listed on DCMs, the Dodd-Frank Act also amended various substantive DCM requirements, under CEA Section 5, and adopted a new regulatory category for exchanges that provide for the trading of swaps (SEFs).1 The Commission revised its DCM regulations to reflect these new requirements, and also adopted regulations to implement the Dodd-Frank Act’s SEF requirements.
Under the CEA and the Commission’s contract and rule review regulations, all new product terms and conditions, and subsequent associated amendments, are submitted to the Commission before implementation. In submitting new products and associated amendments, DCMs and SEFs are legally obligated to meet certain core principles; one of the most significant being the prohibition, in DCM and SEF Core Principle 3, on listing contracts that are readily susceptible to manipulation.2 DCMs and SEFs self-certify most of their products to the Commission, as allowed under the CEA,3 and self-certified contracts may be listed for trading shortly after submission.4 The Commission has provided Guidance to DCMs and SEFs on meeting Core Principle 3 in Appendix C to Part 38 of the Commission’s regulations. Failure of a DCM or SEF to adopt and maintain practices that adhere to these requirements may lead to the Commission’s initiation of proceedings to secure compliance.
Among other things, a DCM or SEF that lists a contract that is settled by physical delivery should design its contracts in such a way as to avoid any impediments to the delivery of the commodity in order to promote convergence between the price of the futures contract and the cash market value of the commodity at the time of delivery. The specified terms and conditions considered as a whole should result in a deliverable supply that is sufficient to ensure that the contract is not susceptible to price manipulation or distortion.5 The contract terms and conditions should describe or define all of the economically significant characteristics or attributes of the commodity underlying the contract, including: quality standards that reflect those used in transactions in the commodity in normal cash marketing channels; delivery points at a location or locations where the underlying cash commodity is normally transacted or stored; conditions that delivery facility operators must meet in order to be eligible for delivery, including considerations of the extent to which ownership of such facilities is concentrated and whether the level of concentration would render the futures contract susceptible to manipulation; delivery procedures that seek to minimize or eliminate any impediment to making or taking delivery by both deliverers and takers of delivery to help ensure convergence of cash and futures at the expiration of a futures delivery month.
Commission staff utilizes considerable discretion and can request that DCMs and SEFs provide full explanations of their compliance with the Commission’s product requirements. Commission staff may ask a DCM or SEF at any time for a detailed justification of its continuing compliance with core principles, including information demonstrating that any contract certified to the Commission for listing on that exchange meets the requirements of the Act and DCM or SEF Core Principle 3.
Expansion of CFTC Enforcement Authority Under Dodd-Frank
The Commission’s responsibilities under the CEA include mandates to prevent and deter fraud and manipulation. The Dodd-Frank Act enhanced the Commission’s enforcement authority by expanding it to the swaps markets. The Commission adopted a rule to implement its new authorities to police against fraud and manipulative schemes. In the past, the CFTC had the ability to prosecute manipulation, but to prevail, it had to prove the specific intent of the accused to affect prices and the existence of an artificial price. Under the new law and rules implementing it, the Commission’s anti-manipulation reach is extended to prohibit the reckless use of manipulative schemes. Specifically, Section 6(c)(3) of the CEA now makes it unlawful for any person, directly or indirectly, to manipulate or attempt to manipulate the price of any swap, or of any commodity in interstate commerce, or for future delivery on or subject to the rules of any registered entity. In addition, Section 4c(a) of the CEA now explicitly prohibits disruptive trading practices and the Commission has issued an Interpretive Guidance and Policy Statement on Disruptive Practices.6
In addition, the Dodd-Frank Act established a registration regime for any foreign board of trade (FBOT) and associated clearing organization who seeks to offer U.S. customers direct access to its electronic trading and order matching system. Applicants for FBOT registration must demonstrate, among other things, that they are subject to comprehensive supervision and regulation by the appropriate governmental authorities in their home country or countries that is comparable to the comprehensive supervision and regulation to which Commission-designated contract markets and registered derivatives clearing organizations are respectively subject.
CFTC Coordination with Foreign and Domestic Regulators
The Commission recognizes that commodity markets are international in nature and, accordingly, regularly consults with other countries’ regulators. In particular, staff regularly consult with staff of the FCA (the LME’s home regulatory authority) as to market conditions with respect to products of mutual interest, including the LME’s recent introduction of warehouse reforms. The two agencies also participate in mutual information-sharing agreements for both market surveillance and enforcement purposes.
Similarly, the Commission formally and informally consults and coordinates with other domestic financial regulators. For example, the CFTC and the Federal Energy Regulatory Commission (FERC) have had a memorandum of understanding (MOU) in place since 2005 that provides for information exchange related to oversight or investigations. Earlier this month, FERC and the CFTC signed two Memoranda of Understanding (MOU) to address circumstances of overlapping jurisdiction and to share information in connection with market surveillance and investigations into potential market manipulation, fraud or abuse. The MOUs allow the agencies to promote effective and efficient regulation to protect the nation’s energy markets and increased cooperation between the agencies.
Again, thank you for the opportunity to appear before the Subcommittee. I will be pleased to respond to any questions you may have.
1 In addition to the provisions regarding listing of swaps on DCMs and SEFs, the Dodd-Frank Act provides that, unless a clearing exception applies and is elected, a swap that is subject to a clearing requirement must be executed on a DCM, SEF, or SEF that is exempt from registration under CEA, unless no such DCM or SEF makes the swap available to trade.
2 DCM and SEF Core Principle 3 states, “Contract Not Readily Subject to Manipulation—The board of trade shall list on the contract market only contracts that are not readily susceptible to manipulation.”
3 For example, while contracts can be submitted for approval, of the almost 5,000 contracts submitted by DCMs and SEFs since the Dodd-Frank Act was enacted, all were submitted on a self-certification basis, and over 2,000 contracts were certified in calendar year 2013 alone.
4 A DCM or SEF need wait only one full business day after the contract has been submitted to list the contract for trading.
5 Deliverable supply means the quantity of the commodity meeting the contract’s delivery specification that reasonably can be expected to be readily available to short traders and salable by long traders at its market value in normal cash marketing channels at the contract’s delivery points during the specified delivery period, barring abnormal movement in interstate commerce.
6 Antidisruptive Practices Authority, 78 FR 31890 (May 28, 2013),
Last Updated: January 15, 2014
NAVY ADM. GORTNEY DISCUSSES OPTIMIZED FLEET RESPONSE PLAN
 |
140115-N-LE576-010 CRYSTAL CITY, Va. - (January 15, 2014) Adm. Bill Gortney, commander U.S. Fleet Forces (USFF) leads a discussion about the Optimized Fleet Response Plan (O-FRP) at the 26th annual Surface Navy Association Symposium (SNA) Jan. 15. USFF and Pacific Fleet have worked together to develop O-FRP in to a full realignment of the Fleet's maintenance, training and deployment cycles into a stadard 36-month rotation. O-FRP will be integrated into the fleet beginning with the TRUMAN Carrier Strike Group in November 2014. (U.S. Navy photo by Capt. Jane Campbell/Released)
FROM: DEFENSE DEPARTMENT
Defense Media Activity
Adm. Gortney Unveils New Optimized Fleet Response Plan
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Story Number: NNS140116-10Release Date: 1/16/2014 3:13:00 PM
CRYSTAL CITY, Va. (NNS) -- The Navy's new Optimized Fleet Response Plan (O-FRP) was unveiled in a keynote address delivered at the 26th Annual Surface Navy Association National Symposium in Crystal City, Va., Jan. 15.
Commander, U.S. Fleet Forces Command Adm. Bill Gortney explained the changes to the new O-FRP, addressing Quality of Service and blending both Quality of Work and Quality of Life efforts by providing stability and predictability to deployment schedules over a 36 month O-FRP cycle. One of the highlights from his address was the Navy's efforts to lock in eight month deployment schedules for Sailors. These changes are intended to return a sense of normalcy to a Sailor's schedule by evening out the Sailor's family life and increasing retention rates and Quality of Work for their command.
"What's happened here is that over time ... we lost predictability in the way we generate readiness," said Gortney.
His address began by naming the problems with the current Fleet Response Plan, placing an emphasis on readiness through training.
"It doesn't matter how good the stuff is if people aren't there and they aren't properly trained," said Gortney. "Not only do they need to be on the ship ... they have to be there at the right time. If they show up after the training occurs just before deployment it's not going to work."
The plan aims to streamline pre-deployment inspection requirements and increase readiness by putting all the members of a strike group on the same maintenance and deployment schedule. Starting in fiscal year 15, all required maintenance, training, evaluations and single eight-month deployment will be efficiently scheduled throughout the cycle in such a manner to drive down costs and increase overall fleet readiness.
"The band is put together at the beginning of the maintenance period," said Gortney. "It's underneath a single chain of command for that entire 3-year period. It's got a stable maintenance plan."
The plan puts a strong emphasis on training crews correctly.
"We're going to be training a lot of ships at the same time through that cycle," said Gortney. "A resource they need is trainers. We have to synchronize it so the trainers are there and everyone gets their reps and sets with the proper oversight that happens to be there and they're assessed at the right time."
The O-FRP is set to roll out implementation in 2014 with the Harry S. Truman Carrier Strike Group after its current deployment. It will initially be focused on Carrier Strike Groups and eventually will roll out to all U.S. Navy assets from the ARG/MEU to submarines and expeditionary forces.
The Surface Navy Association was incorporated in 1985 to promote greater coordination and communication among those in the military, business and academic communities who share a common interest in Naval Surface Warfare and to support the activities of Surface Naval Forces.
AUTO PARTS MANUFACTURER AGREES TO PLEAD GUILTY TO PRICE-FIXING
FROM: JUSTICE DEPARTMENT
Company Agrees to Pay $56.6 Million Criminal Fine
WASHINGTON — Koito Manufacturing Co. Ltd., a Tokyo-based company, has agreed to plead guilty and to pay a total of $56.6 million in criminal fines for its roles in separate price-fixing conspiracies involving automobile lighting fixtures and lamp ballasts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
According to a two-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Koito engaged in separate conspiracies to rig bids for, and to fix, stabilize and maintain the prices of automobile lighting fixtures and automotive high-intensity discharge (HID) lamp ballasts sold to automakers in the United States and elsewhere. In addition to the criminal fine, Koito has also agreed to cooperate with the department’s ongoing auto parts investigations. The plea agreement is subject to court approval.
“The conspirators engaged in long-term conspiracies to fix the prices of essential components used in the production of automobiles,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Today’s criminal fine demonstrates the Antitrust Division’s continued commitment to hold companies accountable for collusive behavior that impacts American consumers.”
According to the charges, Koito and its co-conspirators sold the lighting fixtures and ballasts at noncompetitive prices to automakers in the United States and elsewhere. Koito and its co-conspirators carried out the conspiracies through meetings and conversations in which they discussed and agreed upon bids and price quotations and agreed to allocate among the companies certain sales of automotive lighting fixtures and HID lamp ballasts sold to automobile and component manufacturers. Koito’s involvement in the conspiracy to fix prices of automotive lighting fixtures lasted from at least as early as June 1997 until about July 2011. Koito’s involvement in the conspiracy to fix prices of automotive HID lamp ballasts lasted from at least as early as July 1998 until at least February 2010.
Koito manufactures and sells automotive lighting fixtures, which include automobile headlamps and rear combination lamp assemblies that employ various bulb technologies and are used for forward illumination, visibility and to signal various vehicular functions, such as braking, reversing direction and turning.
Koito also manufactures and sells HID lamp ballasts – electrical devices that are essential for the operation of an HID headlamp. HID lamp ballasts regulate the electrical current used to ignite and control the electrical arc that generates the intensely bright light emitted by an automotive HID headlamp fixture.
Including Koito, 24 corporations have pleaded guilty or agreed to plead guilty in the department’s investigation into price fixing and bid rigging in the auto parts industry, and have agreed to pay a total of more than $1.8 billion in fines. Additionally, 26 individuals have been charged.
Koito is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit Field Office of the FBI and the FBI headquarters’ International Corruption Unit.
Company Agrees to Pay $56.6 Million Criminal Fine
WASHINGTON — Koito Manufacturing Co. Ltd., a Tokyo-based company, has agreed to plead guilty and to pay a total of $56.6 million in criminal fines for its roles in separate price-fixing conspiracies involving automobile lighting fixtures and lamp ballasts installed in cars sold in the United States and elsewhere, the Department of Justice announced today.
According to a two-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Koito engaged in separate conspiracies to rig bids for, and to fix, stabilize and maintain the prices of automobile lighting fixtures and automotive high-intensity discharge (HID) lamp ballasts sold to automakers in the United States and elsewhere. In addition to the criminal fine, Koito has also agreed to cooperate with the department’s ongoing auto parts investigations. The plea agreement is subject to court approval.
“The conspirators engaged in long-term conspiracies to fix the prices of essential components used in the production of automobiles,” said Brent Snyder, Deputy Assistant Attorney General of the Antitrust Division’s criminal enforcement program. “Today’s criminal fine demonstrates the Antitrust Division’s continued commitment to hold companies accountable for collusive behavior that impacts American consumers.”
According to the charges, Koito and its co-conspirators sold the lighting fixtures and ballasts at noncompetitive prices to automakers in the United States and elsewhere. Koito and its co-conspirators carried out the conspiracies through meetings and conversations in which they discussed and agreed upon bids and price quotations and agreed to allocate among the companies certain sales of automotive lighting fixtures and HID lamp ballasts sold to automobile and component manufacturers. Koito’s involvement in the conspiracy to fix prices of automotive lighting fixtures lasted from at least as early as June 1997 until about July 2011. Koito’s involvement in the conspiracy to fix prices of automotive HID lamp ballasts lasted from at least as early as July 1998 until at least February 2010.
Koito manufactures and sells automotive lighting fixtures, which include automobile headlamps and rear combination lamp assemblies that employ various bulb technologies and are used for forward illumination, visibility and to signal various vehicular functions, such as braking, reversing direction and turning.
Koito also manufactures and sells HID lamp ballasts – electrical devices that are essential for the operation of an HID headlamp. HID lamp ballasts regulate the electrical current used to ignite and control the electrical arc that generates the intensely bright light emitted by an automotive HID headlamp fixture.
Including Koito, 24 corporations have pleaded guilty or agreed to plead guilty in the department’s investigation into price fixing and bid rigging in the auto parts industry, and have agreed to pay a total of more than $1.8 billion in fines. Additionally, 26 individuals have been charged.
Koito is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s prosecution arose from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the National Criminal Enforcement Section, with the assistance of the Detroit Field Office of the FBI and the FBI headquarters’ International Corruption Unit.
PRESIDENT'S CLIMATE ACTION PLAN REVIEWED BY GSA
FROM: GENERAL SERVICES ADMINISTRATION
President's Climate Action Plan R
Review of the President's Climate Action Plan
Senate Committee on Environment and Public Works
“Review of the President’s Climate Action Plan”
January 16, 2014
Good morning Chairman Boxer, Ranking Member Vitter, and Members of the Committee. I appreciate being invited here today to testify on this important topic.
Last year, the U.S. Government Accountability Office added climate change to its High Risk List, citing that it presents “a significant financial risk to the federal government.” According to the National Climatic Data Center, in 2012 weather and climate disaster events caused over $110 billion in damages, making it the second costliest year on record.
This Administration is committed to reducing the damage caused by climate change, and to preparing for its impacts, both in the long term as well as those we are already experiencing. In June 2013, the President reaffirmed this commitment with a Climate Action Plan that directs agencies to: cut carbon pollution; prepare for the impacts of climate change; and lead international efforts to address global climate change.
The U.S. General Services Administration (GSA) is one of the many Federal agencies doing its part to assist in this effort. As the landlord and caretaker of federal properties, GSA owns or leases 9,624 assets, which includes maintaining an inventory of more than 370 million rentable square feet of workspace, and preserving more than 481 historic properties. This large and diverse portfolio presents many opportunities for GSA to increase energy efficiency, reduce our contribution to climate change, save millions of dollars in energy costs and to plan and implement risk management.
As part of the President’s Climate Action Plan, GSA is improving the efficiency of our Federal buildings, identifying and preparing for climate risks, and working to ensure that we share lessons learned with our partner agencies.
Reducing Impact on Climate Change –
GSA reduces energy consumption across its portfolio through a variety of means. GSA leverages technology such as advanced metering, remote building analytics and smart building systems to uncover deeper energy savings opportunities. Advanced meters, which provide real time energy use information, have been installed in 450 buildings, representing 80% of GSA’s total electricity consumption metered. Continuous enhancements to the system, ongoing training of users, use of detailed historical data and expert modeling are all proven methods which are increasing energy efficiency at lesser cost.
GSA uses rapid building assessments to perform sophisticated energy audits that require no onsite work or new device installations. Such remote analytics have resulted in significant cost savings over traditional audits and have identified additional energy savings opportunities.
The President’s Climate Action Plan also highlights other important tools we can use to improve the efficiency of our buildings, including continued use of Energy Savings Performance Contracts (ESPCs). An ESPC engages the private sector in an agency’s efforts to achieve energy efficiency improvements. The private sector provides the upfront capital to make energy efficiency upgrades in a facility, and is paid by the Federal agency from the guaranteed energy savings under the contract. Once the contract ends, the agency continues to benefit from the reduced energy costs. In December 2011, the President challenged Federal agencies to enter into a combined $2 billion worth of ESPCs by December 31, 2013. GSA exceeded its own target of $175 million with $191 million in contracts awarded. These contracts, which range from 12 to 23 years in duration, are projected to reduce GSA’s annual energy consumption by 365 billion Btus, or about the amount of energy used in 3,380 single family homes per year, resulting in direct savings (lower utility payments) of $10.6 million per year.
The President’s Climate Action Plan sets new goals on the Federal use of Renewable Energy, increasing the current goal from 7.5 percent to 20 percent by 2020. In FY 2013, 46.1 percent of electricity procured or generated by GSA came from renewable sources (nearly 1,200 GWh). Over 24 GWh of this renewable electricity was generated at our own facilities. GSA expects to generate nearly 29 GWh per year once on-site renewable projects currently underway are fully operational. This amount of on-site renewable energy is enough to power nearly 2,600 homes.
Through the use of Green Button data, the President’s Climate Action Plan also highlights the importance of collecting data to promote better energy management. Green Button is an industry-led effort, in response to the Administration’s call-to-action, that looks to meet the challenge of providing electricity consumers with secure, easy to understand information on their energy usage. As directed in the December 2013 Presidential Memorandum on Federal Leadership in Energy Management, GSA will partner with the Department of Energy and Environmental Protection Agency to prepare and initiate a pilot Green Button initiative at Federal facilities. Following the pilot, DOE, in coordination with EPA, is required to issue guidance on use of the Green Button standard at Federal facilities. GSA will leverage the Green Button standard within its federal facilities to increase the ability to manage energy consumption, reduce greenhouse gas emissions, and meet sustainability goals.
Taken together, these efforts have led to a significant reduction in GSA’s energy use intensity and greenhouse gas emissions. In FY 2013, GSA achieved a cumulative reduction in energy usage per square foot of 24.8 percent,1 ahead of statutory targets. Since Fiscal Year 2011, these reductions have saved $192.7 million in avoided direct energy costs.2 Also, in FY 2013, GSA achieved an approximately 50 percent reduction in greenhouse gas emissions, exceeding our FY 2020 target.3 That is the equivalent of more than 60,000 homes powered for one year.
Preparing for the Impacts of Climate Change –
GSA is also preparing for the potential impacts of climate change as part of the President’s Climate Action Plan. While it is impossible to predict the precise occurrence and costs of each and every climate risk, it is imperative to develop a robust risk management approach.
One such area of focus has been preparing for future floods. GSA is actively coordinating with the U.S. Army Corps of Engineers (USACE), U.S. Global Change Research Program (USGCRP), Federal Emergency Management Agency (FEMA), National Oceanic and Atmospheric Administration (NOAA), and Federal Interagency Floodplain Management Task Force to incorporate the most recent and relevant flood-risk reduction strategies into GSA’s operations. We are in the process of updating GSA’s internal floodplain management guidance and are taking into consideration updated FEMA floodplain maps and additional guidance on using climate projections.
GSA is also working to boost the resilience of buildings and infrastructure. We are in the process of prioritizing our most mission critical and vulnerable facilities, looking into cost-effective climate-resilient investments, and investigating solutions that reduce both climate change risks and greenhouse gas emissions. A pilot project is currently in place to incorporate climate risk reduction factors into a new land port of entry facility. GSA will take lessons learned from this pilot and share with other agencies.
We believe these efforts will ensure GSA, and the Federal government broadly, is more prepared to address the long-term consequences of climate change.
Conclusion –
The President’s Climate Action Plan represents a commitment to reduce and respond to the impacts of climate change. As a major landholding agency of the Federal government, GSA plays an important role in mitigating and preparing for these adverse effects. Through improved energy efficiency and risk planning, we hope to continue to make progress on both of these critical efforts.
I am pleased to be here today, and I am happy to answer any questions you may have. Thank you.
President's Climate Action Plan R
Review of the President's Climate Action Plan
Senate Committee on Environment and Public Works
“Review of the President’s Climate Action Plan”
January 16, 2014
Good morning Chairman Boxer, Ranking Member Vitter, and Members of the Committee. I appreciate being invited here today to testify on this important topic.
Last year, the U.S. Government Accountability Office added climate change to its High Risk List, citing that it presents “a significant financial risk to the federal government.” According to the National Climatic Data Center, in 2012 weather and climate disaster events caused over $110 billion in damages, making it the second costliest year on record.
This Administration is committed to reducing the damage caused by climate change, and to preparing for its impacts, both in the long term as well as those we are already experiencing. In June 2013, the President reaffirmed this commitment with a Climate Action Plan that directs agencies to: cut carbon pollution; prepare for the impacts of climate change; and lead international efforts to address global climate change.
The U.S. General Services Administration (GSA) is one of the many Federal agencies doing its part to assist in this effort. As the landlord and caretaker of federal properties, GSA owns or leases 9,624 assets, which includes maintaining an inventory of more than 370 million rentable square feet of workspace, and preserving more than 481 historic properties. This large and diverse portfolio presents many opportunities for GSA to increase energy efficiency, reduce our contribution to climate change, save millions of dollars in energy costs and to plan and implement risk management.
As part of the President’s Climate Action Plan, GSA is improving the efficiency of our Federal buildings, identifying and preparing for climate risks, and working to ensure that we share lessons learned with our partner agencies.
Reducing Impact on Climate Change –
GSA reduces energy consumption across its portfolio through a variety of means. GSA leverages technology such as advanced metering, remote building analytics and smart building systems to uncover deeper energy savings opportunities. Advanced meters, which provide real time energy use information, have been installed in 450 buildings, representing 80% of GSA’s total electricity consumption metered. Continuous enhancements to the system, ongoing training of users, use of detailed historical data and expert modeling are all proven methods which are increasing energy efficiency at lesser cost.
GSA uses rapid building assessments to perform sophisticated energy audits that require no onsite work or new device installations. Such remote analytics have resulted in significant cost savings over traditional audits and have identified additional energy savings opportunities.
The President’s Climate Action Plan also highlights other important tools we can use to improve the efficiency of our buildings, including continued use of Energy Savings Performance Contracts (ESPCs). An ESPC engages the private sector in an agency’s efforts to achieve energy efficiency improvements. The private sector provides the upfront capital to make energy efficiency upgrades in a facility, and is paid by the Federal agency from the guaranteed energy savings under the contract. Once the contract ends, the agency continues to benefit from the reduced energy costs. In December 2011, the President challenged Federal agencies to enter into a combined $2 billion worth of ESPCs by December 31, 2013. GSA exceeded its own target of $175 million with $191 million in contracts awarded. These contracts, which range from 12 to 23 years in duration, are projected to reduce GSA’s annual energy consumption by 365 billion Btus, or about the amount of energy used in 3,380 single family homes per year, resulting in direct savings (lower utility payments) of $10.6 million per year.
The President’s Climate Action Plan sets new goals on the Federal use of Renewable Energy, increasing the current goal from 7.5 percent to 20 percent by 2020. In FY 2013, 46.1 percent of electricity procured or generated by GSA came from renewable sources (nearly 1,200 GWh). Over 24 GWh of this renewable electricity was generated at our own facilities. GSA expects to generate nearly 29 GWh per year once on-site renewable projects currently underway are fully operational. This amount of on-site renewable energy is enough to power nearly 2,600 homes.
Through the use of Green Button data, the President’s Climate Action Plan also highlights the importance of collecting data to promote better energy management. Green Button is an industry-led effort, in response to the Administration’s call-to-action, that looks to meet the challenge of providing electricity consumers with secure, easy to understand information on their energy usage. As directed in the December 2013 Presidential Memorandum on Federal Leadership in Energy Management, GSA will partner with the Department of Energy and Environmental Protection Agency to prepare and initiate a pilot Green Button initiative at Federal facilities. Following the pilot, DOE, in coordination with EPA, is required to issue guidance on use of the Green Button standard at Federal facilities. GSA will leverage the Green Button standard within its federal facilities to increase the ability to manage energy consumption, reduce greenhouse gas emissions, and meet sustainability goals.
Taken together, these efforts have led to a significant reduction in GSA’s energy use intensity and greenhouse gas emissions. In FY 2013, GSA achieved a cumulative reduction in energy usage per square foot of 24.8 percent,1 ahead of statutory targets. Since Fiscal Year 2011, these reductions have saved $192.7 million in avoided direct energy costs.2 Also, in FY 2013, GSA achieved an approximately 50 percent reduction in greenhouse gas emissions, exceeding our FY 2020 target.3 That is the equivalent of more than 60,000 homes powered for one year.
Preparing for the Impacts of Climate Change –
GSA is also preparing for the potential impacts of climate change as part of the President’s Climate Action Plan. While it is impossible to predict the precise occurrence and costs of each and every climate risk, it is imperative to develop a robust risk management approach.
One such area of focus has been preparing for future floods. GSA is actively coordinating with the U.S. Army Corps of Engineers (USACE), U.S. Global Change Research Program (USGCRP), Federal Emergency Management Agency (FEMA), National Oceanic and Atmospheric Administration (NOAA), and Federal Interagency Floodplain Management Task Force to incorporate the most recent and relevant flood-risk reduction strategies into GSA’s operations. We are in the process of updating GSA’s internal floodplain management guidance and are taking into consideration updated FEMA floodplain maps and additional guidance on using climate projections.
GSA is also working to boost the resilience of buildings and infrastructure. We are in the process of prioritizing our most mission critical and vulnerable facilities, looking into cost-effective climate-resilient investments, and investigating solutions that reduce both climate change risks and greenhouse gas emissions. A pilot project is currently in place to incorporate climate risk reduction factors into a new land port of entry facility. GSA will take lessons learned from this pilot and share with other agencies.
We believe these efforts will ensure GSA, and the Federal government broadly, is more prepared to address the long-term consequences of climate change.
Conclusion –
The President’s Climate Action Plan represents a commitment to reduce and respond to the impacts of climate change. As a major landholding agency of the Federal government, GSA plays an important role in mitigating and preparing for these adverse effects. Through improved energy efficiency and risk planning, we hope to continue to make progress on both of these critical efforts.
I am pleased to be here today, and I am happy to answer any questions you may have. Thank you.
"SHELL PACKING" CO. & CEO AGREE TO SETTLE FRAUD CASE REGARDING BOGUS SECURITIES SALES
FROM: SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today announced nearly $300,000 in settlements against a Virginia-based “shell packaging” company and its CEO who were charged with facilitating a penny stock scheme as well as a Bronx, N.Y.-based stock promoter who received proceeds from the fraud.
Virginia-based Belmont Partners LLC and its CEO Joseph Meuse are in the business of identifying and selling public shell companies for use in reverse mergers. In an enforcement action in late 2011, the SEC alleged that Meuse and his firm aided and abetted a New York-based company that fraudulently issued and sold unregistered shares of its common stock. The SEC separately named Thomas Russo as a relief defendant in the case for the purposes of recovering ill-gotten gains in his possession as a result of his business partner’s participation in the scheme. According to the SEC’s complaint, Russo co-owned a stock promotion service called TheStockProphet.com.
In a final judgment ordered late yesterday by the Honorable Shira A. Scheindlin of the U.S. District Court for the Southern District of New York, Belmont Partners and Meuse agreed to pay $224,500. Meuse additionally has agreed to be barred from the penny stock business or from serving as an officer or director of a public company for at least five years. In a separate judgment entered last week, Russo agreed to pay $70,075.
“The SEC will continue to pursue and punish gatekeepers whose misconduct enables penny stock frauds to occur,” said Sanjay Wadhwa, senior associate director for enforcement in the SEC’s New York Regional Office. “Meuse and his firm not only sold the shell company but they fabricated the documents necessary to dupe the transfer agent into issuing shares that should never have been sold to the public. Russo received proceeds from the subsequent sale of the illicit stock.”
Belmont Partners and Meuse agreed to be permanently enjoined from violating Section 5 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. They neither admitted nor denied the SEC’s allegations.
The SEC previously entered into a bifurcated settlement with the Long Island-based issuer at the center of the scheme – Alternative Green Technologies (AGTI) – as well as its CEO Mitchell Segal, who agreed to be barred from the penny stock business or from serving as a corporate officer or director for at least five years. Financial penalties against Segal will be determined at a later date.
The SEC’s investigation was conducted by Steven G. Rawlings and Megan R. Genet, and the litigation has been led by Todd Brody and Ms. Genet. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
The Securities and Exchange Commission today announced nearly $300,000 in settlements against a Virginia-based “shell packaging” company and its CEO who were charged with facilitating a penny stock scheme as well as a Bronx, N.Y.-based stock promoter who received proceeds from the fraud.
Virginia-based Belmont Partners LLC and its CEO Joseph Meuse are in the business of identifying and selling public shell companies for use in reverse mergers. In an enforcement action in late 2011, the SEC alleged that Meuse and his firm aided and abetted a New York-based company that fraudulently issued and sold unregistered shares of its common stock. The SEC separately named Thomas Russo as a relief defendant in the case for the purposes of recovering ill-gotten gains in his possession as a result of his business partner’s participation in the scheme. According to the SEC’s complaint, Russo co-owned a stock promotion service called TheStockProphet.com.
In a final judgment ordered late yesterday by the Honorable Shira A. Scheindlin of the U.S. District Court for the Southern District of New York, Belmont Partners and Meuse agreed to pay $224,500. Meuse additionally has agreed to be barred from the penny stock business or from serving as an officer or director of a public company for at least five years. In a separate judgment entered last week, Russo agreed to pay $70,075.
“The SEC will continue to pursue and punish gatekeepers whose misconduct enables penny stock frauds to occur,” said Sanjay Wadhwa, senior associate director for enforcement in the SEC’s New York Regional Office. “Meuse and his firm not only sold the shell company but they fabricated the documents necessary to dupe the transfer agent into issuing shares that should never have been sold to the public. Russo received proceeds from the subsequent sale of the illicit stock.”
Belmont Partners and Meuse agreed to be permanently enjoined from violating Section 5 of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. They neither admitted nor denied the SEC’s allegations.
The SEC previously entered into a bifurcated settlement with the Long Island-based issuer at the center of the scheme – Alternative Green Technologies (AGTI) – as well as its CEO Mitchell Segal, who agreed to be barred from the penny stock business or from serving as a corporate officer or director for at least five years. Financial penalties against Segal will be determined at a later date.
The SEC’s investigation was conducted by Steven G. Rawlings and Megan R. Genet, and the litigation has been led by Todd Brody and Ms. Genet. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.
NEW BIONIC ARM SHOWCASED BY DEFENSE ADVANCED RESEARCH PROJECTS AGENCY
FROM: MILITARY HEALTH SYSTEM
Military’s Bionic Arm Enhances Life for Amputees
Amaani Lyle | American Forces Press Service
January 15, 2014
WASHINGTON– It’s metal, sleek and precise. It pivots and flexes like a real hand, or at least one from a science-fiction movie.
But with no Hollywood special effects involved, brain research experts at last week’s Defense Advanced Research Projects Agency Congressional Tech Showcase here demonstrated an artificial arm and hand that can do everything from picking up cups to playing the piano, powered by the user’s brain.
Mike McLoughlin, chief engineer for research and exploratory development at Johns Hopkins University’s applied physics laboratory, said the defense agency’s Revolutionizing Prosthetics Program developed the device over about five years to improve the quality of life for service members who have suffered the loss of an upper extremity.
“Five, six years ago [an amputee’s] option was essentially a hook,” McLoughlin said. “We want to give them a much greater level of functionality, because what they really want to do is go back and contribute to society.”
The demo also featured an excerpt from a 60 Minutes episode that aired in 2013 showing Jan, a patient suffering from a neurological condition, with two electrode chips, each about the size of a fingernail, in her brain.
Even simple tasks such as picking up a cup of coffee are the result of a complex series of commands and information “behind the scenes” in the brain, McLoughlin explained. “We’re able to take those complex things and reduce them down to simple thoughts.”
With the help of the arm and hand, Jan moved, interacted and grasped objects in a more natural way, McLoughlin said, adding that the arm also can function with information gleaned from a computer script.
He described the arm’s future and range of potential applications as “exciting” for service members and civilians alike.
“Think about the elderly,” he said. “If somebody has trouble getting around, and we can provide assistance through exoskeleton devices, that has huge impact, not only to the individual in terms of quality of life and being independent, but it also has huge financial implications, possibly saving them hospice care expenses.”
Thursday, January 16, 2014
U.S. DEFENSE DEPARTMENT CONTRACTS FOR JANUARY 16, 2014
FROM: DEFENSE DEPARTMENT DEFENSE
CONTRACTS
ARMY
CDM Constructors Inc., Bellevue, Wash., was awarded a $77,476,628 firm-fixed price contract to design and build a ‘Class A’ waste water treatment plant with nutrient removal and redundant process equipment to support the population of Joint Base Lewis-McChord. Fiscal 2013 military construction funds in the amount of $77,476,628 were obligated at the time of the award. Estimated completion date is March 1, 2016. Bids were solicited, via the Internet with 12 received. Work will be performed at Joint Base Lewis-McChord, Wash. Army Corps of Engineers, Seattle, Wash., is the contracting activity (W912DW-14-C-0002).
DEFENSE LOGISTICS AGENCY
KPMG LLP, McLean, Va., has been awarded a maximum $36,243,243 firm-fixed-price contract to provide all necessary management services, personnel and documentation required to support DLA’s financial audit. This contract is a competitive acquisition, and there were six offers received. Location of performance is Virginia with a Jan. 15, 2015 performance completion date. Using military services are federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Contracting Services, Richmond, Va., (SP4703-11-A-0017-0037).
Brit Systems*, Dallas, Texas, has been awarded a maximum $20,297,132 modification (P00007) exercising the first option year on a two-year base contract (SPM2D1-12-D-8309) with one two-year option and one one-year periods for digital imaging network-picture archive communication system. This is a fixed-price with economic-price-adjustment contract. Location of performance is Texas with a Jan. 19, 2016 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 through fiscal 2016 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
Safety Kleen, Richardson, Texas, has been awarded a maximum $12,930,214 fixed-price with economic-price-adjustment contract for re-refined motor oil program parts. This contract is a competitive acquisition and there was one offer received. Location of performance is Texas with a Jan. 15, 2015 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Aviation, Richmond, Va., (SPE4A6-14-D-0076).
St. Michaels Inc.**, Woodbridge, Va., has been awarded a maximum $10,490,323 firm-fixed-price contract to provide necessary support of management services, personnel and documentation required to support DLA’s financial audit. This contract is a competitive acquisition and there were six offers received. Location of performance is Virginia with a Jan. 15, 2015 performance completion date. Using military services are federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Contracting Services, Richmond, Va., (SP4703-14-A-0001-0007).
NAVY
General Dynamics Electric Boat Corp., Groton, Conn., is being awarded a $29,848,059 modification to a previously awarded contract (N00024-11-C-2109) to exercise an option for engineering and technical design services to support research and development (R&D) of advanced submarine technologies for current and future submarine platforms. Advanced submarine R&D includes studies to support the manufacturability, maintainability, producibility, reliability, manning, survivability, hull integrity, performance, structural, weight/margin, stability, arrangements, machinery systems, acoustics, hydrodynamics, ship control, logistics, human factors, materials, weapons handling and stowage, submarine safety, and affordability. Work will be performed in Groton, Conn., and is expected to be completed by October 2014. Fiscal 2014 research, development, test and evaluation funding in the amount of $625,000 will be obligated at time of award. Contract funds will not expire at the end of the fiscal year. The Naval Sea Systems Command, Washington, D.C., is the contracting activity.
AIR FORCE
General Dynamics C4 Systems, Scottsdale, Ariz., has been awarded a $6,886,969 cost-plus-fixed-fee modification (P00051) to an existing contract (FA8307-06-C-0010) for design and development of a CAROUSEL Applicable Specific Integrated Circuit solution. This modification adds the design, development, and testing of CAROUSEL crypto engines. Work will be performed at Scottsdale, Ariz., and is expected to be completed by March 21, 2016. Fiscal 2013 research and development funds in the amount of $831,000 are being obligated at time of award. Air Force Life Cycle Management Center, Cryptologic Systems Contracting Division, Lackland Air Force Base, Texas, is the contracting activity.
*Small Business
**Veteran Owned Small Business
CONTRACTS
ARMY
CDM Constructors Inc., Bellevue, Wash., was awarded a $77,476,628 firm-fixed price contract to design and build a ‘Class A’ waste water treatment plant with nutrient removal and redundant process equipment to support the population of Joint Base Lewis-McChord. Fiscal 2013 military construction funds in the amount of $77,476,628 were obligated at the time of the award. Estimated completion date is March 1, 2016. Bids were solicited, via the Internet with 12 received. Work will be performed at Joint Base Lewis-McChord, Wash. Army Corps of Engineers, Seattle, Wash., is the contracting activity (W912DW-14-C-0002).
DEFENSE LOGISTICS AGENCY
KPMG LLP, McLean, Va., has been awarded a maximum $36,243,243 firm-fixed-price contract to provide all necessary management services, personnel and documentation required to support DLA’s financial audit. This contract is a competitive acquisition, and there were six offers received. Location of performance is Virginia with a Jan. 15, 2015 performance completion date. Using military services are federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Contracting Services, Richmond, Va., (SP4703-11-A-0017-0037).
Brit Systems*, Dallas, Texas, has been awarded a maximum $20,297,132 modification (P00007) exercising the first option year on a two-year base contract (SPM2D1-12-D-8309) with one two-year option and one one-year periods for digital imaging network-picture archive communication system. This is a fixed-price with economic-price-adjustment contract. Location of performance is Texas with a Jan. 19, 2016 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 through fiscal 2016 defense working capital funds. The contracting activity is the Defense Logistics Agency Troop Support, Philadelphia, Pa.
Safety Kleen, Richardson, Texas, has been awarded a maximum $12,930,214 fixed-price with economic-price-adjustment contract for re-refined motor oil program parts. This contract is a competitive acquisition and there was one offer received. Location of performance is Texas with a Jan. 15, 2015 performance completion date. Using military services are Army, Navy, Air Force, Marine Corps, and federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Aviation, Richmond, Va., (SPE4A6-14-D-0076).
St. Michaels Inc.**, Woodbridge, Va., has been awarded a maximum $10,490,323 firm-fixed-price contract to provide necessary support of management services, personnel and documentation required to support DLA’s financial audit. This contract is a competitive acquisition and there were six offers received. Location of performance is Virginia with a Jan. 15, 2015 performance completion date. Using military services are federal civilian agencies. Type of appropriation is fiscal 2014 defense working capital funds. The contracting activity is the Defense Logistics Agency Contracting Services, Richmond, Va., (SP4703-14-A-0001-0007).
NAVY
General Dynamics Electric Boat Corp., Groton, Conn., is being awarded a $29,848,059 modification to a previously awarded contract (N00024-11-C-2109) to exercise an option for engineering and technical design services to support research and development (R&D) of advanced submarine technologies for current and future submarine platforms. Advanced submarine R&D includes studies to support the manufacturability, maintainability, producibility, reliability, manning, survivability, hull integrity, performance, structural, weight/margin, stability, arrangements, machinery systems, acoustics, hydrodynamics, ship control, logistics, human factors, materials, weapons handling and stowage, submarine safety, and affordability. Work will be performed in Groton, Conn., and is expected to be completed by October 2014. Fiscal 2014 research, development, test and evaluation funding in the amount of $625,000 will be obligated at time of award. Contract funds will not expire at the end of the fiscal year. The Naval Sea Systems Command, Washington, D.C., is the contracting activity.
AIR FORCE
General Dynamics C4 Systems, Scottsdale, Ariz., has been awarded a $6,886,969 cost-plus-fixed-fee modification (P00051) to an existing contract (FA8307-06-C-0010) for design and development of a CAROUSEL Applicable Specific Integrated Circuit solution. This modification adds the design, development, and testing of CAROUSEL crypto engines. Work will be performed at Scottsdale, Ariz., and is expected to be completed by March 21, 2016. Fiscal 2013 research and development funds in the amount of $831,000 are being obligated at time of award. Air Force Life Cycle Management Center, Cryptologic Systems Contracting Division, Lackland Air Force Base, Texas, is the contracting activity.
*Small Business
**Veteran Owned Small Business
STRONG RELATIONS STRESSED BETWEEN U.S.-ISRAEL
FROM: DEFENSE DEPARTMENT
Senior U.S., Israeli Defense Officials Meet, Stress Strong Relations
American Forces Press Service
WASHINGTON, Jan. 15, 2014 – Acting Deputy Defense Secretary Christine H. Fox and the director general of Israel's Defense Ministry reaffirmed the strength of the U.S.-Israeli defense relationship in a meeting at the Pentagon today.
This was retired Maj. Gen. Dan Harel's first visit to the United States in his current capacity, and Fox's first official foreign delegation meeting since she took office last month, said James Swartout, a spokesman for the acting deputy secretary, in a statement issued after the meeting.
The defense leaders committed to working closely to ensure Israel has the capabilities it needs to maintain its qualitative military edge, Swartout said, noting Israel's acquisition of several advanced capabilities from the United States, including the V-22 Osprey, which the United States has not released to any other nation.
“This decision underscores that military-to-military cooperation between the United States and Israel is stronger than ever,” he added.
Senior U.S., Israeli Defense Officials Meet, Stress Strong Relations
American Forces Press Service
WASHINGTON, Jan. 15, 2014 – Acting Deputy Defense Secretary Christine H. Fox and the director general of Israel's Defense Ministry reaffirmed the strength of the U.S.-Israeli defense relationship in a meeting at the Pentagon today.
This was retired Maj. Gen. Dan Harel's first visit to the United States in his current capacity, and Fox's first official foreign delegation meeting since she took office last month, said James Swartout, a spokesman for the acting deputy secretary, in a statement issued after the meeting.
The defense leaders committed to working closely to ensure Israel has the capabilities it needs to maintain its qualitative military edge, Swartout said, noting Israel's acquisition of several advanced capabilities from the United States, including the V-22 Osprey, which the United States has not released to any other nation.
“This decision underscores that military-to-military cooperation between the United States and Israel is stronger than ever,” he added.
TECHNICAL UNDERSTANDINGS SUMMARY ON IRAN'S NUCLEAR PROGRAM
FROM: THE WHITE HOUSE
Summary of Technical Understandings Related to the Implementation of the Joint Plan of Action on the Islamic Republic of Iran’s Nuclear Program
On January 12, 2014, the P5+1 (the United States, United Kingdom, Germany, France, Russia, and China, coordinated by EU High Representative Catherine Ashton) and Iran arrived at technical understandings for the Joint Plan of Action, which will be implemented beginning on January 20, 2014.
The Joint Plan of Action marks the first time in nearly a decade that the Islamic Republic of Iran has agreed to specific actions that stop the advance of its nuclear program, roll back key aspects of the program, and include unprecedented access for international inspectors. The technical understandings set forth how the provisions of the Joint Plan of Action will be implemented and verified, and the timing of implementation of its provisions. Specifically, the technical understandings specify the actions that Iran will take to limit its enrichment capacity at Natanz and Fordow, as well as the limits on safeguarded research and development (R&D); the actions Iran will take to implement its commitments not to fuel the Arak reactor or install remaining components at the reactor; and the actions Iran will take to facilitate International Atomic Energy Agency (IAEA) verification and confirmation that Iran is fully implementing these commitments. The understandings also clarify the reciprocal actions that the P5+1 and the EU will take.
Between now and January 20th, Iran, the IAEA, the United States, and our international partners, will take the remaining required steps to begin implementing the Joint Plan of Action on that date.
What Iran Has Committed To Do
On January 20th, the IAEA will report on the current status of Iran’s nuclear program, and particularly on its uranium enrichment program and the Arak reactor. The IAEA will also report on several specific steps that Iran has committed to take by or on the first day of implementation, including:
Halting production of near-20% enriched uranium and disabling the configuration of the centrifuge cascades Iran has been using to produce it.
Starting to dilute half of the near-20% enriched uranium stockpile that is in hexafluoride form, and continuing to convert the rest to oxide form not suitable for further enrichment.
In addition, over the course of the Joint Plan of Action, the IAEA will verify that Iran is:
Not enriching uranium in roughly half of installed centrifuges at Natanz and three-quarters of installed centrifuges at Fordow, including all next generation centrifuges.
Limiting its centrifuge production to those needed to replace damaged machines, so Iran cannot use the six-month period to stockpile centrifuges.
Not constructing additional enrichment facilities.
Not going beyond its current enrichment R&D practices.
Not commissioning or fueling the Arak reactor.
Halting the production and additional testing of fuel for the Arak reactor.
Not installing any additional reactor components at Arak.
Not transferring fuel and heavy water to the Arak reactor site.
Not constructing a facility capable of reprocessing. Without reprocessing, Iran cannot separate plutonium from spent fuel.
Iran has also committed to a schedule for taking certain actions during the six-month period. This includes:
Completion of dilution of half of its stockpile of near-20% uranium hexafluoride in three months, and completion of conversion of the rest of that material to oxide in six months.
A cap on the permitted size of Iran’s up to 5% enriched uranium stockpile at the end of the six-month period.
Verification Mechanisms
To ensure Iran is fulfilling its commitments, the IAEA will be solely responsible for verifying and confirming all nuclear-related measures, consistent with its ongoing inspection role in Iran. In addition, the EU, P5+1 and Iran will establish a Joint Commission to work with the IAEA to monitor implementation of the Joint Plan of Action. The Joint Commission will also work with the IAEA to facilitate resolution of past and present concerns with respect to Iran’s nuclear program.
The Joint Commission will be composed of experts of the EU, P5+1 and Iran, and it will convene at least monthly to consider the implementation of the Joint Plan of Action and any issues that may arise. Any decisions that are required on the basis of these discussions will be referred to the Political Directors of the EU, the P5+1, and Iran.
Transparency and Monitoring
Iran committed in the Joint Plan of Action to provide increased and unprecedented transparency into its nuclear program, including through more frequent and intrusive inspections as well as expanded provision of information to the IAEA.
The Iranian enrichment facilities at Natanz and Fordow will now be subject to daily IAEA inspector access as set out in the Joint Plan of Action (as opposed to every few weeks). The IAEA and Iran are working to update procedures, which will permit IAEA inspectors to review surveillance information on a daily basis to shorten detection time for any Iranian non-compliance. In addition, these facilities will continue to be subjected to a variety of other physical inspections, including scheduled and unannounced inspections.
The Arak reactor and associated facilities will be subject to at least monthly IAEA inspections – an increase from the current inspection schedule permitting IAEA access approximately once every three months or longer.
Iran has also agreed to provide for the first time:
Long-sought design information on the Arak reactor;
Figures to verify that centrifuge production will be dedicated to the replacement of damaged machines; and
Information to enable managed access at centrifuge assembly workshops, centrifuge rotor production workshops and storage facilities, and uranium mines and mills.
These enhanced monitoring measures will enable the IAEA to provide monthly updates to the Joint Commission on the status of Iran’s implementation of its commitments and enable the international community to more quickly detect breakout or the diversion of materials to a secret program.
What the P5+1 and EU Have Committed To Do
As part of this initial step, the P5+1 and EU will provide limited, temporary, and targeted relief to Iran. The total value of the relief is between $6 and $7 billion – a small fraction of the $100 billion in Iranian foreign exchange holdings that will continue to be blocked or restricted. Some relief will be provided from the first day; most will be provided in installments over the span of the entire six-month period. The relief is structured so that the overwhelming majority of the sanctions regime, including the key oil, banking, and financial sanctions architecture, remains in place – and sanctions will continue to be vigorously implemented throughout the six-month period.
Once the IAEA has confirmed Iran is implementing its commitments, in return the P5+1 and EU have committed to do the following on the first day of implementation:
Suspend the implementation of sanctions on Iran’s petrochemical exports and Iran’s imports of goods and services for its automotive manufacturing sector.
Suspend sanctions on Iran’s import and export of gold and other precious metals, with significant limitations that prevent Iran from using its restricted assets overseas to pay for these purchases.
License expeditiously the supply of spare parts and services, including inspection services, for the safety of flight of Iran’s civil aviation sector.
Pause efforts to further reduce purchases of crude oil from Iran by the six economies still purchasing oil from Iran.
Facilitate the establishment of a financial channel intended to support humanitarian trade that is already permitted with Iran and facilitate payments for UN obligations and tuition payments for students studying abroad.
Modify the thresholds for EU internal procedures for the authorization of financial transactions.
The P5+1 and EU have also committed to take certain actions to facilitate Iran’s access to $4.2 billion in restricted Iranian funds on a set schedule at regular intervals throughout the six months. Access to a small portion of these funds will be linked to Iran’s progress in completing the dilution process for near-20% enriched uranium. Iran will not have access to the final installment of the $4.2 billion until the last day of the six-month period.
The installments will be released on the schedule below, contingent on the IAEA confirming that Iran is fulfilling its commitments.
February 1st - $550 million (installment #1)
March 1st - $450million (contingent on the IAEA confirming that Iran has completed dilution of half of the stockpile of near-20% enriched uranium it is required to dilute)
March 7th - $550 million (installment #2)
April 10th - $550 million (installment #3)
April 15th - $450 million (contingent on the IAEA confirming that Iran has completed dilution of its entire stockpile of near-20% enriched uranium it is required to dilute)
May 14th - $550 million (installment #4)
June 17th - $550 million (installment #5)
July 20th - $550million (installment #6 is on day 180) (contingent on the IAEA confirming that Iran has fulfilled all of its commitments)
A Comprehensive Solution
With this implementation plan, we have made concrete progress. We will now focus on the critical work of pursuing a comprehensive resolution that addresses our concerns over Iran’s nuclear program. Shortly after the Joint Plan of Action takes effect on January 20th, the United States will determine with our P5+1 partners our approach to the comprehensive solution. Discussions with Iran will follow that coordination process.
With respect to the comprehensive solution, nothing is agreed to until everything is agreed to. We have no illusions about how hard it will be to achieve this objective, but for the sake of our national security and the peace and security of the world, now is the time to give diplomacy a chance to succeed.
Summary of Technical Understandings Related to the Implementation of the Joint Plan of Action on the Islamic Republic of Iran’s Nuclear Program
On January 12, 2014, the P5+1 (the United States, United Kingdom, Germany, France, Russia, and China, coordinated by EU High Representative Catherine Ashton) and Iran arrived at technical understandings for the Joint Plan of Action, which will be implemented beginning on January 20, 2014.
The Joint Plan of Action marks the first time in nearly a decade that the Islamic Republic of Iran has agreed to specific actions that stop the advance of its nuclear program, roll back key aspects of the program, and include unprecedented access for international inspectors. The technical understandings set forth how the provisions of the Joint Plan of Action will be implemented and verified, and the timing of implementation of its provisions. Specifically, the technical understandings specify the actions that Iran will take to limit its enrichment capacity at Natanz and Fordow, as well as the limits on safeguarded research and development (R&D); the actions Iran will take to implement its commitments not to fuel the Arak reactor or install remaining components at the reactor; and the actions Iran will take to facilitate International Atomic Energy Agency (IAEA) verification and confirmation that Iran is fully implementing these commitments. The understandings also clarify the reciprocal actions that the P5+1 and the EU will take.
Between now and January 20th, Iran, the IAEA, the United States, and our international partners, will take the remaining required steps to begin implementing the Joint Plan of Action on that date.
What Iran Has Committed To Do
On January 20th, the IAEA will report on the current status of Iran’s nuclear program, and particularly on its uranium enrichment program and the Arak reactor. The IAEA will also report on several specific steps that Iran has committed to take by or on the first day of implementation, including:
Halting production of near-20% enriched uranium and disabling the configuration of the centrifuge cascades Iran has been using to produce it.
Starting to dilute half of the near-20% enriched uranium stockpile that is in hexafluoride form, and continuing to convert the rest to oxide form not suitable for further enrichment.
In addition, over the course of the Joint Plan of Action, the IAEA will verify that Iran is:
Not enriching uranium in roughly half of installed centrifuges at Natanz and three-quarters of installed centrifuges at Fordow, including all next generation centrifuges.
Limiting its centrifuge production to those needed to replace damaged machines, so Iran cannot use the six-month period to stockpile centrifuges.
Not constructing additional enrichment facilities.
Not going beyond its current enrichment R&D practices.
Not commissioning or fueling the Arak reactor.
Halting the production and additional testing of fuel for the Arak reactor.
Not installing any additional reactor components at Arak.
Not transferring fuel and heavy water to the Arak reactor site.
Not constructing a facility capable of reprocessing. Without reprocessing, Iran cannot separate plutonium from spent fuel.
Iran has also committed to a schedule for taking certain actions during the six-month period. This includes:
Completion of dilution of half of its stockpile of near-20% uranium hexafluoride in three months, and completion of conversion of the rest of that material to oxide in six months.
A cap on the permitted size of Iran’s up to 5% enriched uranium stockpile at the end of the six-month period.
Verification Mechanisms
To ensure Iran is fulfilling its commitments, the IAEA will be solely responsible for verifying and confirming all nuclear-related measures, consistent with its ongoing inspection role in Iran. In addition, the EU, P5+1 and Iran will establish a Joint Commission to work with the IAEA to monitor implementation of the Joint Plan of Action. The Joint Commission will also work with the IAEA to facilitate resolution of past and present concerns with respect to Iran’s nuclear program.
The Joint Commission will be composed of experts of the EU, P5+1 and Iran, and it will convene at least monthly to consider the implementation of the Joint Plan of Action and any issues that may arise. Any decisions that are required on the basis of these discussions will be referred to the Political Directors of the EU, the P5+1, and Iran.
Transparency and Monitoring
Iran committed in the Joint Plan of Action to provide increased and unprecedented transparency into its nuclear program, including through more frequent and intrusive inspections as well as expanded provision of information to the IAEA.
The Iranian enrichment facilities at Natanz and Fordow will now be subject to daily IAEA inspector access as set out in the Joint Plan of Action (as opposed to every few weeks). The IAEA and Iran are working to update procedures, which will permit IAEA inspectors to review surveillance information on a daily basis to shorten detection time for any Iranian non-compliance. In addition, these facilities will continue to be subjected to a variety of other physical inspections, including scheduled and unannounced inspections.
The Arak reactor and associated facilities will be subject to at least monthly IAEA inspections – an increase from the current inspection schedule permitting IAEA access approximately once every three months or longer.
Iran has also agreed to provide for the first time:
Long-sought design information on the Arak reactor;
Figures to verify that centrifuge production will be dedicated to the replacement of damaged machines; and
Information to enable managed access at centrifuge assembly workshops, centrifuge rotor production workshops and storage facilities, and uranium mines and mills.
These enhanced monitoring measures will enable the IAEA to provide monthly updates to the Joint Commission on the status of Iran’s implementation of its commitments and enable the international community to more quickly detect breakout or the diversion of materials to a secret program.
What the P5+1 and EU Have Committed To Do
As part of this initial step, the P5+1 and EU will provide limited, temporary, and targeted relief to Iran. The total value of the relief is between $6 and $7 billion – a small fraction of the $100 billion in Iranian foreign exchange holdings that will continue to be blocked or restricted. Some relief will be provided from the first day; most will be provided in installments over the span of the entire six-month period. The relief is structured so that the overwhelming majority of the sanctions regime, including the key oil, banking, and financial sanctions architecture, remains in place – and sanctions will continue to be vigorously implemented throughout the six-month period.
Once the IAEA has confirmed Iran is implementing its commitments, in return the P5+1 and EU have committed to do the following on the first day of implementation:
Suspend the implementation of sanctions on Iran’s petrochemical exports and Iran’s imports of goods and services for its automotive manufacturing sector.
Suspend sanctions on Iran’s import and export of gold and other precious metals, with significant limitations that prevent Iran from using its restricted assets overseas to pay for these purchases.
License expeditiously the supply of spare parts and services, including inspection services, for the safety of flight of Iran’s civil aviation sector.
Pause efforts to further reduce purchases of crude oil from Iran by the six economies still purchasing oil from Iran.
Facilitate the establishment of a financial channel intended to support humanitarian trade that is already permitted with Iran and facilitate payments for UN obligations and tuition payments for students studying abroad.
Modify the thresholds for EU internal procedures for the authorization of financial transactions.
The P5+1 and EU have also committed to take certain actions to facilitate Iran’s access to $4.2 billion in restricted Iranian funds on a set schedule at regular intervals throughout the six months. Access to a small portion of these funds will be linked to Iran’s progress in completing the dilution process for near-20% enriched uranium. Iran will not have access to the final installment of the $4.2 billion until the last day of the six-month period.
The installments will be released on the schedule below, contingent on the IAEA confirming that Iran is fulfilling its commitments.
February 1st - $550 million (installment #1)
March 1st - $450million (contingent on the IAEA confirming that Iran has completed dilution of half of the stockpile of near-20% enriched uranium it is required to dilute)
March 7th - $550 million (installment #2)
April 10th - $550 million (installment #3)
April 15th - $450 million (contingent on the IAEA confirming that Iran has completed dilution of its entire stockpile of near-20% enriched uranium it is required to dilute)
May 14th - $550 million (installment #4)
June 17th - $550 million (installment #5)
July 20th - $550million (installment #6 is on day 180) (contingent on the IAEA confirming that Iran has fulfilled all of its commitments)
A Comprehensive Solution
With this implementation plan, we have made concrete progress. We will now focus on the critical work of pursuing a comprehensive resolution that addresses our concerns over Iran’s nuclear program. Shortly after the Joint Plan of Action takes effect on January 20th, the United States will determine with our P5+1 partners our approach to the comprehensive solution. Discussions with Iran will follow that coordination process.
With respect to the comprehensive solution, nothing is agreed to until everything is agreed to. We have no illusions about how hard it will be to achieve this objective, but for the sake of our national security and the peace and security of the world, now is the time to give diplomacy a chance to succeed.
GENEVA II PROGRESS REMARKS BY SECRETARY OF STATE KERRY
FROM: STATE DEPARTMENT
Remarks to the Press
Remarks
John Kerry
Secretary of State
Briefing Room
Washington, DC
January 16, 2014
Good morning, everybody. Good afternoon. And let me just say that I know you’d like to ask some questions, and unfortunately I have to go straight from here over to the White House for a meeting, but I will have an availability tomorrow in the morning when we have our friends from Mexico here, and I’ll take a couple of extra questions to make up for not being able to answer some here now.
I know that many of you have been asking about some of the recent revisionism as to why the international community will be gathering in Montreux next week, so let me make it clear here today.
From the very moment that we announced the goal of holding the Geneva conference on Syria, we all agreed that the purpose was specifically and solely to implement the 2012 Geneva I communique. That purpose, that sole purpose, could not have been more clear at the time this was announced and it could not be more clear today. It has been reiterated in international statement after international statement that the parties have signed up to, and venue after venue, in resolution after resolution, including most recently in Paris last weekend when both the London 11 and the Russian Federation reaffirmed their commitment to that objective, the implementation of Geneva I.
So for anyone seeking to rewrite this history or to muddy the waters, let me state one more time what Geneva II is about: It is about establishing a process essential to the formation of a transition government body – governing body with full executive powers established by mutual consent. That process – it is the only way to bring about an end to the civil war that has triggered one of the planet’s most severe humanitarian disasters and which has created the seeding grounds for extremism.
The Syrian people need to be able to determine the future of their country. Their voice must be heard. And any names put forward for leadership of Syria’s transition must, according to the terms of Geneva I and every one of the reiterations of that being the heart and soul of Geneva II, those names must be agreed to by both the opposition and the regime. That is the very definition of mutual consent.
This means that any figure that is deemed unacceptable by either side, whether President Assad or a member of the opposition, cannot be a part of the future. The United Nations, the United States, Russia, and all the countries attending know what this conference is about. After all, that was the basis of the UN invitation send individually to each country, a restatement of the purpose of implementing Geneva I. And attendance by both sides and the parties can come only with their acceptance of the goals of the conference.
We too are deeply concerned about the rise of extremism. The world needs no reminder that Syria has become the magnet for jihadists and extremists. It is the strongest magnet for terror of any place today. So it defies logic to imagine that those whose brutality created this magnet, how they could ever lead Syria away from extremism and towards a better future is beyond any kind of logic or common sense.
And so on the eve of the Syrian Opposition Coalition general assembly meeting tomorrow to decide whether to participate in Geneva in the peace conference, the United States, for these reasons, urges a positive vote. We do so knowing that the Geneva peace conference is not the end but rather the beginning, the launch of a process, a process that is the best opportunity for the opposition to achieve the goals of the Syrian people and the revolution, and a political solution to this terrible conflict that has taken many, many, many, too many lives.
We will continue to push in the meantime for vital access for humanitarian assistance. I talked yesterday with Russian Federation Foreign Minister Lavrov in an effort to push still harder for access to some areas where the regime played games with the convoys, taking them around a circuitous route instead of directly in the way that the opposition had arranged for and was willing to protect them in. It is important that there be no games played with this process.
We will also continue to fight for ceasefires where we could achieve them, and we will continue to fight for the exchange or release of captive journalists and aid workers and others in order to try to improve the climate for negotiations.
Now, obviously, none of this will be easy. Ending a war and stopping a slaughter never is easy. We believe, though, this is the only road that can lead to the place where the civilized world has joined together in an effort to lead the parties to a better outcome. And to the Syrian people, let me reiterate: The United States and the international community will continue to provide help and support, as we did yesterday in Kuwait, where we pledged $380 million of additional assistance in order to try to relieve the pain and suffering of the refugees.
We will continue to stand with the people of Syria writ large, all the people, in an effort to provide them with the dignity and the new Syria which they are fighting for. Thank you. And as I said, I’d be happy to answer questions tomorrow. Thanks.
Remarks to the Press
Remarks
John Kerry
Secretary of State
Briefing Room
Washington, DC
January 16, 2014
Good morning, everybody. Good afternoon. And let me just say that I know you’d like to ask some questions, and unfortunately I have to go straight from here over to the White House for a meeting, but I will have an availability tomorrow in the morning when we have our friends from Mexico here, and I’ll take a couple of extra questions to make up for not being able to answer some here now.
I know that many of you have been asking about some of the recent revisionism as to why the international community will be gathering in Montreux next week, so let me make it clear here today.
From the very moment that we announced the goal of holding the Geneva conference on Syria, we all agreed that the purpose was specifically and solely to implement the 2012 Geneva I communique. That purpose, that sole purpose, could not have been more clear at the time this was announced and it could not be more clear today. It has been reiterated in international statement after international statement that the parties have signed up to, and venue after venue, in resolution after resolution, including most recently in Paris last weekend when both the London 11 and the Russian Federation reaffirmed their commitment to that objective, the implementation of Geneva I.
So for anyone seeking to rewrite this history or to muddy the waters, let me state one more time what Geneva II is about: It is about establishing a process essential to the formation of a transition government body – governing body with full executive powers established by mutual consent. That process – it is the only way to bring about an end to the civil war that has triggered one of the planet’s most severe humanitarian disasters and which has created the seeding grounds for extremism.
The Syrian people need to be able to determine the future of their country. Their voice must be heard. And any names put forward for leadership of Syria’s transition must, according to the terms of Geneva I and every one of the reiterations of that being the heart and soul of Geneva II, those names must be agreed to by both the opposition and the regime. That is the very definition of mutual consent.
This means that any figure that is deemed unacceptable by either side, whether President Assad or a member of the opposition, cannot be a part of the future. The United Nations, the United States, Russia, and all the countries attending know what this conference is about. After all, that was the basis of the UN invitation send individually to each country, a restatement of the purpose of implementing Geneva I. And attendance by both sides and the parties can come only with their acceptance of the goals of the conference.
We too are deeply concerned about the rise of extremism. The world needs no reminder that Syria has become the magnet for jihadists and extremists. It is the strongest magnet for terror of any place today. So it defies logic to imagine that those whose brutality created this magnet, how they could ever lead Syria away from extremism and towards a better future is beyond any kind of logic or common sense.
And so on the eve of the Syrian Opposition Coalition general assembly meeting tomorrow to decide whether to participate in Geneva in the peace conference, the United States, for these reasons, urges a positive vote. We do so knowing that the Geneva peace conference is not the end but rather the beginning, the launch of a process, a process that is the best opportunity for the opposition to achieve the goals of the Syrian people and the revolution, and a political solution to this terrible conflict that has taken many, many, many, too many lives.
We will continue to push in the meantime for vital access for humanitarian assistance. I talked yesterday with Russian Federation Foreign Minister Lavrov in an effort to push still harder for access to some areas where the regime played games with the convoys, taking them around a circuitous route instead of directly in the way that the opposition had arranged for and was willing to protect them in. It is important that there be no games played with this process.
We will also continue to fight for ceasefires where we could achieve them, and we will continue to fight for the exchange or release of captive journalists and aid workers and others in order to try to improve the climate for negotiations.
Now, obviously, none of this will be easy. Ending a war and stopping a slaughter never is easy. We believe, though, this is the only road that can lead to the place where the civilized world has joined together in an effort to lead the parties to a better outcome. And to the Syrian people, let me reiterate: The United States and the international community will continue to provide help and support, as we did yesterday in Kuwait, where we pledged $380 million of additional assistance in order to try to relieve the pain and suffering of the refugees.
We will continue to stand with the people of Syria writ large, all the people, in an effort to provide them with the dignity and the new Syria which they are fighting for. Thank you. And as I said, I’d be happy to answer questions tomorrow. Thanks.
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT FOR WEEK ENDING JANUARY 11, 2014
FROM: LABOR DEPARTMENT
UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT
SEASONALLY ADJUSTED DATA
In the week ending January 11, the advance figure for seasonally adjusted initial claims was 326,000, a decrease of 2,000 from the previous week's revised figure of 328,000. The 4-week moving average was 335,000, a decrease of 13,500 from the previous week's revised average of 348,500.
In the week ending January 11, the advance figure for seasonally adjusted initial claims was 326,000, a decrease of 2,000 from the previous week's revised figure of 328,000. The 4-week moving average was 335,000, a decrease of 13,500 from the previous week's revised average of 348,500.
The advance seasonally adjusted insured unemployment rate was 2.3 percent for the week ending January 4, an increase of 0.1 percentage point from the prior week's unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending January 4 was 3,030,000, an increase of 174,000 from the preceding week's revised level of 2,856,000. The 4-week moving average was 2,908,750, an increase of 38,250 from the preceding week's revised average of 2,870,500.
UNADJUSTED DATA
The advance number of actual initial claims under state programs, unadjusted, totaled 534,431 in the week ending January 11, an increase of 51,190 from the previous week. There were 556,621 initial claims in the comparable week in 2013.
The advance unadjusted insured unemployment rate was 2.8 percent during the week ending January 4, an increase of 0.3 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 3,638,564, an increase of 354,387 from the preceding week. A year earlier, the rate was 3.0 percent and the volume was 3,867,784.
The total number of people claiming benefits in all programs for the week ending December 28 was 4,703,499, an increase of 508,309 from the previous week. There were 5,873,824 persons claiming benefits in all programs in the comparable week in 2012.
No state was triggered "on" the Extended Benefits program during the week ending December 28.
Initial claims for UI benefits filed by former Federal civilian employees totaled 1,569 in the week ending January 4, an increase of 372 from the prior week. There were 1,741 initial claims filed by newly discharged veterans, an increase of 533 from the preceding week.
There were 22,811 former Federal civilian employees claiming UI benefits for the week ending December 28, an increase of 2,103 from the previous week. Newly discharged veterans claiming benefits totaled 30,676, an increase of 2,111 from the prior week.
States reported 1,350,663 persons claiming Emergency Unemployment Compensation (EUC) benefits for the week ending December 28, an increase of 63,626 from the prior week. There were 2,059,438 persons claiming EUC in the comparable week in 2012. EUC weekly claims include first, second, third, and fourth tier activity.
The highest insured unemployment rates in the week ending December 28 were in Alaska (6.2), New Jersey (4.0), Connecticut (3.8), Pennsylvania (3.6), Montana (3.5), Wisconsin (3.5), Oregon (3.4), California (3.2), Illinois (3.2), Idaho (3.1), Massachusetts (3.1), Michigan (3.1), Minnesota (3.1), New York (3.1), and Rhode Island (3.1).
The largest increases in initial claims for the week ending January 4 were in New York (+28,314), Georgia (+18,734), South Carolina (+9,632), Alabama (+6,782), and Texas (+6,638), while the largest decreases were in Michigan (-17,635), New Jersey (-6,882), Massachusetts (-5,485), Ohio (-5,482), and Iowa (-4,212).
COUNTERNARCOTICS IN AFGHANISTAN
FROM: STATE DEPARTMENT
Future U.S. Counternarcotics Efforts in Afghanistan
Remarks
William R. Brownfield
Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs
Senate Caucus on International Narcotics Control
Washington, DC
January 15, 2014
Chairman Feinstein, Co-Chairman Grassley, and other distinguished Senators, thank you for the opportunity to appear before you today to discuss counternarcotics efforts in Afghanistan. The State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL), which I have the honor to lead, works alongside our Afghan partners to help them develop and sustain programs to minimize all stages of the drug trade, including cultivation, production, trafficking, and use; to better protect vulnerable populations from the scourge of drugs; and to bring to justice major traffickers. These programs are works in progress. There is no silver bullet to eliminate drug cultivation or production in Afghanistan or address the epidemic of substance use disorders that plagues many poor Afghans. But we are successfully building Afghan capacity to implement and lead counternarcotics efforts.
Afghanistan today produces well over 80 percent of the world’s illicit opium, undermining good governance and public health, subverting the legal economy, fueling corruption and insecurity, and putting money in the hands of the Taliban. The narcotics trade has been a windfall for the insurgency. The United Nations (UN) estimates that the Afghan Taliban received at least $155 million annually from narcotics-related activities including taxation, protection, and extortion.
Equally worrisome is the impact of the narcotics trade on Afghanistan’s democratic institutions and human development, which the United States has supported through heavy investment. At every level of the illicit narcotics market – from cultivation to production to trafficking and consumption – the narcotics trade undermines good governance and saps the capacity of the Afghan people. It is noteworthy that Afghanistan now has one of the highest opiate usage rates in the world.
According to the UN World Drug Report, Afghan opium fuels a global trade that generates over $60 billion in profits for corrupt officials, drug traffickers, organized criminal groups, and insurgents. And while the Drug Enforcement Administration (DEA) estimates that only a small portion of the heroin in the United States currently originates in Afghanistan, there is clear potential for transnational criminal networks to adapt and for this amount to increase in the years ahead.
Afghan poppy cultivation increased significantly in 2013. While cultivation is only one indicator of counternarcotics progress, it was disappointing news, as was the reported decline in poppy eradication by provincial authorities. With the vast majority of opium poppy cultivated in the least secure areas, poppy farming is inextricably linked to security. Illicit actors, including insurgents, profit from narcotic sales. And in 2014, preparations for the critical spring elections will create competing demands on Afghan security forces who assumed the security lead from international forces only six months ago and continue to build their capacities.
Despite these tough realities, we have seen encouraging progress in the Afghan government’s counternarcotics capacity. In particular, there have been positive developments in areas such as interdiction, prosecutions, treatment services for substance use disorders, and alternative livelihoods for Afghan farmers. We have also seen that farmers are less likely to grow poppy in communities where the government has established a strong foothold and where basic development facilities, such as electricity, medical clinics, and schools, are available.
Together with the United Kingdom, we have helped the Afghan government stand up skilled Afghan interdiction units with specialized intelligence capabilities. Over the past several years, we have seen a steady increase in the amount of illicit narcotics seized by the Counter Narcotics Police of Afghanistan (CNPA) and its vetted units, which have been trained through U.S. programs. The growing and self-sustaining capacity of these vetted units is the direct result of the mentoring, training, and assistance of U.S. programs, which INL implements with our partners at the DEA and Department of Defense. INL successfully transitioned the Kunduz Regional Law Enforcement Center to the Afghan Ministry of the Interior (MOI) in September. The MOI now manages this center and it continues to be used by the CNPA vetted units for sensitive interdiction missions.
The Counter Narcotics Justice Center (CNJC), a fully Afghan facility with jurisdiction for the investigation, detention, prosecution, and trial of major narcotics cases is another important development. INL, in partnership with the U.S. Department of Justice and the United Kingdom, provides advisory and facility operations assistance to the CNJC. During the most recent Afghan calendar year (March 2012-March 2013), the CNJC’s Primary and Appellate Courts each heard the cases of over 700 accused. The CNJC Investigation and Laboratory Department processed cases involving more than 233 metric tons of illegal drugs – a 26 percent increase over the previous year. The CNJC is often cited as one of the premier judicial institutions in Afghanistan and is where U.S.-designated drug kingpin Haji Lal Jan was tried last year and ultimately received a 15-year prison sentence. Recently, Afghan prosecutors at the court secured three convictions based on conspiracy statutes rather than seizures, demonstrating their use of additional provisions of Afghan law.
Drug treatment is another area where the Afghan government and civil society are making significant progress. The U.S. and other donors have provided substantial support to enable the Afghans to establish a network of over 100 facilities across the country offering evidence-based treatment services. We are now in the process of transitioning responsibility for all drug treatment services to the Government of Afghanistan. As a first step, the Ministry of Public Health has committed to hiring the clinical staff at all drug treatment centers as government employees, which is critical to ensuring that these programs will be sustained under Afghan ownership in the years ahead.
Supporting economic alternatives to poppy cultivation is also critical. While alternative development programs are best addressed by my colleagues at the U.S. Agency for International Development, last month we joined the Afghan government in launching a new Food Zone in Kandahar. Building on the successes and lessons learned from the Helmand Food Zone, which I know that this Caucus is very familiar with, the Kandahar Food Zone (KFZ) will provide comprehensive counternarcotics support: alternative livelihoods, law enforcement, public information, and demand reduction – in key districts in Kandahar province. I must thank the Caucus for its support of the expansion of this program, which has been a positive tool for the Afghan government.
Our work with the Afghan Ministry of Counter Narcotics (MCN) cuts across all of these efforts. In recent years, the leadership and staff of the MCN have demonstrated increased effectiveness in designing counternarcotics policies across the relevant Afghan ministries and in implementing counternarcotics programs nationwide.
Each of these positive developments has matured in spite of a difficult security environment, entrenched corruption, and criminal groups that have worked to undermine progress. But while the challenges are many, let us also keep them in perspective. The estimated value of opium to the Afghan economy has remained relatively stable over the last decade. Yet Afghanistan’s legal economy has grown steadily. As a result, the potential net export value of opiates now make up a much smaller fraction of Afghanistan’s economy – from 60 percent of the GDP in 2003 to 14 percent in 2013. Today, poppy is grown on less than three percent of Afghanistan’s farmable land – roughly the same amount of land devoted to rice and one tenth as much as is devoted to wheat production. In short, Afghanistan’s drug challenge may be formidable, but it is not insurmountable.
As our government’s policy makers define the scope and shape of our engagement in Afghanistan post-2014, we will be ready to tailor our security assistance programs to meet them. We are reviewing our INL counternarcotics programs to assess how to enhance their impact and to ensure we can maintain robust oversight even with anticipated reductions in staff mobility. Several principles will guide our efforts:
It will be essential that we help our Afghan partners preserve the capacities they have developed with our support. The Afghan government that emerges from next year’s elections will need to possess the capabilities – and the political will – to make further progress in the post-2014 period.
Counternarcotics efforts within Afghanistan are fundamentally the responsibility of the Afghan government and people. This is why, across the board, we will focus even more intensively on building the Afghan government’s capacity to successfully and sustainably take responsibility for future efforts. The Afghan opiate trade extends, however, far beyond Afghanistan. For this reason, we also stress and encourage bilateral and multilateral assistance from the international community, as agreed to in the Tokyo Mutual Accountability Framework, to support counternarcotics efforts in Afghanistan.
A number of our partners, including the United Kingdom, Canada, and Japan, already provide significant assistance to build the Afghan government’s capacity. We are re-doubling our efforts to bring additional countries to the table, particularly those which are most affected by Afghan opiates. For example, last month in Bangkok, we joined key regional countries – including Afghanistan, Pakistan, India, and China – to address precursor chemicals by identifying best practices, tools for tracking chemicals, and next steps to combat illicit trafficking of precursors.
Our counternarcotics efforts do not take place in a vacuum – they are an integral part of the broader U.S. strategy for Afghanistan. We will continue to ensure our CN programs are well integrated with broader U.S. efforts, including assistance programs aimed at supporting a vibrant legal economy. Regardless of the shape or scope of our future counternarcotics efforts in Afghanistan, rigorous monitoring, evaluation, and oversight are necessary to ensure that our assistance has an impact and that our programs are safeguarded from waste and abuse. As the U.S. footprint shrinks, we are regularly reviewing our multilayered oversight approach that includes U.S. direct hires having eyes-on wherever possible, supplemented by locally employed staff, independent third party audits, and reporting from implementing program partners and intergovernmental organizations.
As we look to the end of 2014, Afghan capacity to weaken narcotics production and trafficking will only become more important. To be successful, Afghan political will is critical, but we must also sustain assistance with programmatic support and advice. Our experience elsewhere in the world demonstrates that counternarcotics is a long-term effort, hand in glove with the equally long-term challenges of good governance and sustainable economic growth. Success generally requires sustained, long term efforts, so that our partners can develop the necessary capabilities to deliver real results. A diverse, well-coordinated set of programs to support Afghan counter-narcotics capacity, with support from across the interagency and our partners here on the Hill, will be necessary.
Thank you Chairman Feinstein, Co-Chairman Grassley, and members of the Caucus, for your time. I will do my best to address your questions.
Future U.S. Counternarcotics Efforts in Afghanistan
Remarks
William R. Brownfield
Assistant Secretary, Bureau of International Narcotics and Law Enforcement Affairs
Senate Caucus on International Narcotics Control
Washington, DC
January 15, 2014
Chairman Feinstein, Co-Chairman Grassley, and other distinguished Senators, thank you for the opportunity to appear before you today to discuss counternarcotics efforts in Afghanistan. The State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL), which I have the honor to lead, works alongside our Afghan partners to help them develop and sustain programs to minimize all stages of the drug trade, including cultivation, production, trafficking, and use; to better protect vulnerable populations from the scourge of drugs; and to bring to justice major traffickers. These programs are works in progress. There is no silver bullet to eliminate drug cultivation or production in Afghanistan or address the epidemic of substance use disorders that plagues many poor Afghans. But we are successfully building Afghan capacity to implement and lead counternarcotics efforts.
Afghanistan today produces well over 80 percent of the world’s illicit opium, undermining good governance and public health, subverting the legal economy, fueling corruption and insecurity, and putting money in the hands of the Taliban. The narcotics trade has been a windfall for the insurgency. The United Nations (UN) estimates that the Afghan Taliban received at least $155 million annually from narcotics-related activities including taxation, protection, and extortion.
Equally worrisome is the impact of the narcotics trade on Afghanistan’s democratic institutions and human development, which the United States has supported through heavy investment. At every level of the illicit narcotics market – from cultivation to production to trafficking and consumption – the narcotics trade undermines good governance and saps the capacity of the Afghan people. It is noteworthy that Afghanistan now has one of the highest opiate usage rates in the world.
According to the UN World Drug Report, Afghan opium fuels a global trade that generates over $60 billion in profits for corrupt officials, drug traffickers, organized criminal groups, and insurgents. And while the Drug Enforcement Administration (DEA) estimates that only a small portion of the heroin in the United States currently originates in Afghanistan, there is clear potential for transnational criminal networks to adapt and for this amount to increase in the years ahead.
Afghan poppy cultivation increased significantly in 2013. While cultivation is only one indicator of counternarcotics progress, it was disappointing news, as was the reported decline in poppy eradication by provincial authorities. With the vast majority of opium poppy cultivated in the least secure areas, poppy farming is inextricably linked to security. Illicit actors, including insurgents, profit from narcotic sales. And in 2014, preparations for the critical spring elections will create competing demands on Afghan security forces who assumed the security lead from international forces only six months ago and continue to build their capacities.
Despite these tough realities, we have seen encouraging progress in the Afghan government’s counternarcotics capacity. In particular, there have been positive developments in areas such as interdiction, prosecutions, treatment services for substance use disorders, and alternative livelihoods for Afghan farmers. We have also seen that farmers are less likely to grow poppy in communities where the government has established a strong foothold and where basic development facilities, such as electricity, medical clinics, and schools, are available.
Together with the United Kingdom, we have helped the Afghan government stand up skilled Afghan interdiction units with specialized intelligence capabilities. Over the past several years, we have seen a steady increase in the amount of illicit narcotics seized by the Counter Narcotics Police of Afghanistan (CNPA) and its vetted units, which have been trained through U.S. programs. The growing and self-sustaining capacity of these vetted units is the direct result of the mentoring, training, and assistance of U.S. programs, which INL implements with our partners at the DEA and Department of Defense. INL successfully transitioned the Kunduz Regional Law Enforcement Center to the Afghan Ministry of the Interior (MOI) in September. The MOI now manages this center and it continues to be used by the CNPA vetted units for sensitive interdiction missions.
The Counter Narcotics Justice Center (CNJC), a fully Afghan facility with jurisdiction for the investigation, detention, prosecution, and trial of major narcotics cases is another important development. INL, in partnership with the U.S. Department of Justice and the United Kingdom, provides advisory and facility operations assistance to the CNJC. During the most recent Afghan calendar year (March 2012-March 2013), the CNJC’s Primary and Appellate Courts each heard the cases of over 700 accused. The CNJC Investigation and Laboratory Department processed cases involving more than 233 metric tons of illegal drugs – a 26 percent increase over the previous year. The CNJC is often cited as one of the premier judicial institutions in Afghanistan and is where U.S.-designated drug kingpin Haji Lal Jan was tried last year and ultimately received a 15-year prison sentence. Recently, Afghan prosecutors at the court secured three convictions based on conspiracy statutes rather than seizures, demonstrating their use of additional provisions of Afghan law.
Drug treatment is another area where the Afghan government and civil society are making significant progress. The U.S. and other donors have provided substantial support to enable the Afghans to establish a network of over 100 facilities across the country offering evidence-based treatment services. We are now in the process of transitioning responsibility for all drug treatment services to the Government of Afghanistan. As a first step, the Ministry of Public Health has committed to hiring the clinical staff at all drug treatment centers as government employees, which is critical to ensuring that these programs will be sustained under Afghan ownership in the years ahead.
Supporting economic alternatives to poppy cultivation is also critical. While alternative development programs are best addressed by my colleagues at the U.S. Agency for International Development, last month we joined the Afghan government in launching a new Food Zone in Kandahar. Building on the successes and lessons learned from the Helmand Food Zone, which I know that this Caucus is very familiar with, the Kandahar Food Zone (KFZ) will provide comprehensive counternarcotics support: alternative livelihoods, law enforcement, public information, and demand reduction – in key districts in Kandahar province. I must thank the Caucus for its support of the expansion of this program, which has been a positive tool for the Afghan government.
Our work with the Afghan Ministry of Counter Narcotics (MCN) cuts across all of these efforts. In recent years, the leadership and staff of the MCN have demonstrated increased effectiveness in designing counternarcotics policies across the relevant Afghan ministries and in implementing counternarcotics programs nationwide.
Each of these positive developments has matured in spite of a difficult security environment, entrenched corruption, and criminal groups that have worked to undermine progress. But while the challenges are many, let us also keep them in perspective. The estimated value of opium to the Afghan economy has remained relatively stable over the last decade. Yet Afghanistan’s legal economy has grown steadily. As a result, the potential net export value of opiates now make up a much smaller fraction of Afghanistan’s economy – from 60 percent of the GDP in 2003 to 14 percent in 2013. Today, poppy is grown on less than three percent of Afghanistan’s farmable land – roughly the same amount of land devoted to rice and one tenth as much as is devoted to wheat production. In short, Afghanistan’s drug challenge may be formidable, but it is not insurmountable.
As our government’s policy makers define the scope and shape of our engagement in Afghanistan post-2014, we will be ready to tailor our security assistance programs to meet them. We are reviewing our INL counternarcotics programs to assess how to enhance their impact and to ensure we can maintain robust oversight even with anticipated reductions in staff mobility. Several principles will guide our efforts:
It will be essential that we help our Afghan partners preserve the capacities they have developed with our support. The Afghan government that emerges from next year’s elections will need to possess the capabilities – and the political will – to make further progress in the post-2014 period.
Counternarcotics efforts within Afghanistan are fundamentally the responsibility of the Afghan government and people. This is why, across the board, we will focus even more intensively on building the Afghan government’s capacity to successfully and sustainably take responsibility for future efforts. The Afghan opiate trade extends, however, far beyond Afghanistan. For this reason, we also stress and encourage bilateral and multilateral assistance from the international community, as agreed to in the Tokyo Mutual Accountability Framework, to support counternarcotics efforts in Afghanistan.
A number of our partners, including the United Kingdom, Canada, and Japan, already provide significant assistance to build the Afghan government’s capacity. We are re-doubling our efforts to bring additional countries to the table, particularly those which are most affected by Afghan opiates. For example, last month in Bangkok, we joined key regional countries – including Afghanistan, Pakistan, India, and China – to address precursor chemicals by identifying best practices, tools for tracking chemicals, and next steps to combat illicit trafficking of precursors.
Our counternarcotics efforts do not take place in a vacuum – they are an integral part of the broader U.S. strategy for Afghanistan. We will continue to ensure our CN programs are well integrated with broader U.S. efforts, including assistance programs aimed at supporting a vibrant legal economy. Regardless of the shape or scope of our future counternarcotics efforts in Afghanistan, rigorous monitoring, evaluation, and oversight are necessary to ensure that our assistance has an impact and that our programs are safeguarded from waste and abuse. As the U.S. footprint shrinks, we are regularly reviewing our multilayered oversight approach that includes U.S. direct hires having eyes-on wherever possible, supplemented by locally employed staff, independent third party audits, and reporting from implementing program partners and intergovernmental organizations.
As we look to the end of 2014, Afghan capacity to weaken narcotics production and trafficking will only become more important. To be successful, Afghan political will is critical, but we must also sustain assistance with programmatic support and advice. Our experience elsewhere in the world demonstrates that counternarcotics is a long-term effort, hand in glove with the equally long-term challenges of good governance and sustainable economic growth. Success generally requires sustained, long term efforts, so that our partners can develop the necessary capabilities to deliver real results. A diverse, well-coordinated set of programs to support Afghan counter-narcotics capacity, with support from across the interagency and our partners here on the Hill, will be necessary.
Thank you Chairman Feinstein, Co-Chairman Grassley, and members of the Caucus, for your time. I will do my best to address your questions.
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