Harris Wins Large FMS Contract

by: Matthew Potter
January 13, 2011

Category: Business Line, Companies, Contract Additions, Contract Awards, Countries, Department of Defense, Events, FMS, Harris Corporation, IT, logistics, production program, Services, United States | RSS 2.0

One of the advantages that defense contractors have if they make a core piece of equipment for the United States military is that they stand to gain millions in Foreign Military Sales (FMS) contracts. For reasons of interoperability and consistency the U.S. supports its allies buying similar systems as used by it. This extends to not only large items like fighter aircraft but also more mundane things like weapons and radios.

Harris Corporation (HRS) makes radios and components used heavily by the U.S. These includes the very poplar Falcon series of tactical systems. Over the last few years Harris has been growing its revenue and earnings as it gains more and more market share of this critical market for military forces across the globe. More importantly Net Income has grown even more rapidly then revenue. In 2006 Net Income was about $300 million and in 2010 over $600.

Now the U.S. has given Harris a contract worth almost $500 million if all options are exercised to provide FMS radios. The Indefinite Delivery/Indefinite Quantity (ID/IQ) contract allows customers to order the radios they need at specific prices. As with all ID/IQ contracts there is no guarantee that any sales will be made but it indicates that the U.S. is making a push to sell these radios to its allies overseas.

Radios are important and as the U.S. switches from its SINCGARS to JTRS standard radios there may be a large market as other countries move to replace their older systems. Harris is able to produce JTRS compliant radios and this includes the Falcon series in the ID/IQ contract.

The company may be well positioned for even further growth as the market continues to evolve.

Photo from The U.S. Army’s flickr photostream.

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