MRAP-ATV Continues To Drive Work For Plasan Bennington
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, Oshkosh Truck Corp, Plasan, Services, States, Vermont, logistics, production program
The MRAP-ATV is the new lighter, more maneuverable MRAP made for service in Afghanistan. Oshkosh won the production contract and so far has been awarded contracts for over 8,000 vehicles by the U.S. military. Plasan Bennington makes armor plates for the vehicles and as Oshkosh receives contracts so does the Vermont company.
It announced that Oshkosh had given it a sub-contract worth over $170 million as part of a recent order of 1,460 MRAP vehicles. As the U.S. industry geared up to produce not only MRAPs but also uparmored HUMVEE and trucks several companies expanded their capabilities. Plasan Bennington is one along with BAE Systems. Protection against IED and mines demands the production of sophisticated metal plates for use on military vehicles.
Defense Solutions Holding Hits The Big Time
Filed under: Business Line, Companies, Countries, Defense Systems Holding, Iraq, Services, logistics, production program
There are lots of little defense contractors who are started by people wanting more then just working for another company. They usually start with one or two small sub-contracts and work to establish a reputation or an opportunity to bid as a prime on a larger contract. This business model has been highly successful for the last thirty years. Of course for every company that makes it several do not.
The small defense contractor, Defense Solutions Holding, Inc, has had some luck in winning logistic support contracts in Iraq and other countries. Revenue in 2009 was on track to be under $2 million. They just announced that they have won a contract to provide foodstuffs to the Iraqi Government in a deal worth over $60 million if all options are exercised.
This is a major growth for a company this size and illustrates well how the business can work.
Oshkosh And The MRAP-ATV: 4 Billion Dollars And Counting
Oshkosh (OSK) was able to balance off its losses in their commercial sector though winning contracts to make Mine Resistant Ambush Protected (MRAP)...Non-Standard Ammo Contracts Paying Dividends For ATK
Alliant Techsystems (ATK) has been awarded several contracts from the U.S. Army to procure non-standard ammunition for Afghanistan's military and...Brazil Delays Fighter Order
Filed under: Boeing, Brazil, Business Line, Companies, Contract Awards, Countries, D'Assault, Events, Military Aviation, SAAB, production program
One of the biggest contracts currently under consideration is Brazil’s buying of modern fighter aircraft. Right now bids from Dassault, SAAB and Boeing are under consideration. This along with India’s new fighter program are two of the larger aviation contracts waiting for award. Brazil as part of this contract is expecting a great deal of investment in their economy using this and a major helicopter deal with Eurocopter to increase the capability and technology of their defense industry.
Now it is being reported that Brazil will delay a final decision on this contract until early next year. The decision is related to how much investment each company is willing to make and whether Brazil will be able to use their technology in future aircraft construction. Because the contract is so important especially to Dassualt and SAAB the amount of technology transferred may be high.
Boeing Begins Offsets In India
Boeing recently sold the P-8I maritime patrol aircraft to India. This country requires offsets for foriegn companies winning contracts and Boeing...BAE Continues To Build Armor Kits For Military Vehicles
Filed under: BAE Systems, Business Line, Companies, Contract Awards, Events, Services, U.S. Army, logistics, production program
Yesterday it was announced that BAE Systems won two different contracts to build armor kits for U.S. military vehicles. Due to the IED and mine threat in Iraq and Afghanistan the Army and Marines primarily have been developing extra armor and weapons for their different vehicles to maximize crew protection. BAE’s two contracts support the HIMARS mobile artillery as well as one for MRAP vehicles.
BAE Systems through its acquisition of Armor Holdings a few years ago made it well placed to get into this market. If the U.S. does begin winding down its operations in Iraq and Afghanistan though there will be little demand for further armor kits of these types and that market might dry up.
Navistar To Provide More Trucks To U.S. Army
Filed under: Business Line, Companies, Contract Awards, Events, Mississippi, Navistar, Oshkosh Truck Corp, Services, U.S. Army, logistics, production program
The United States military has expended a great deal of logistics and support vehicles in Iraq and Afghanistan. These trucks have taken a beating both from heavy use and enemy attacks. The Army has let several contracts recently to repair, reset and replace them. Yesterday it was announced that Navistar would be awarded a contract to provide tanker trucks, wreckers and generic troop transport vehicles. The value of this contract is over $400 million.
Navistar was disappointed that it did not win a portion of the MRAP-ATV contract to provide the lighter vehicles for use in Afghanistan. That contract went to Oshkosh. This contract will offset some of the losses from not contributing to that effort. It also demonstrates that the U.S. has been able to grow a decent industrial base when it comes to logistic support vehicles.
Criticism In Malaysia Of Sole Source Submarine Contract
Filed under: Business Line, Contract Awards, Events, Malaysia, production program
In 2002 the Malaysian Government signed a contract to purchase two advanced diesel electric submarines from European manufacturers. The contract was worth about $1.5 billion. The first vessel has already been delivered and the second will be next year.
The opposition parties are criticizing the government for not doing the contract through competitive bids but rather sole sourcing it to France’s Aramis and Spain’s Navantia. The normal practice in Malaysia is to competitively bid large contracts but the Government defended the contract as protecting defense information. The argument must be that since no public RFP was put out only the builder learned about the requirements and capabilities needed. It is rather a strange argument unless there is an acceptance that only domestic suppliers can be trusted and as in this case there were none.
IT Spending By Government Predicted To Increase 50% Next Year
It is reported that due to the expiration of existing contracts and a re-focusing on IT that the Federal Government could see its total spending on...Nuclear Clean Up Contracts Cleaning Up On Stimulus
Two of the largest contracts let under the stimulus program are to clean up Hanford and Savannah River nuclear sites. The Department of Energy is...Oshkosh Wins Another Contract
Filed under: Business Line, Companies, Contract Awards, Events, Oshkosh Truck Corp, Services, U.S. Army, logistics, production program
Following up on its recent MRAP-ATV and heavy truck contracts Oshkosh announced that they have been awarded another contract to build Family of Medium Tactical Vehicle (FMTV) trucks and trailers. This contract is called the rebuy program. If all options are exercised over the next five years the contract could be worth up to $2.6 billion.
The initial order is for about $280 million worth of the vehicles. The rebuy seems to indicate that this contract is to begin replenishing the supply of the vehicles in the Army. The U.S. lost a great deal of vehicles in Iraq and Afghanistan to IED and mines. These were of all types including tanks, armored personnel carriers and logistic support vehicles like the FMTV.
Northrop Gets Two Big Sustainment Contracts
Filed under: Boeing, Business Line, Companies, Contract Awards, Department of Defense, Events, Military Aviation, Northrop Grumman Corp., Services, U.S. Air Force, U.S. Navy, logistics
Like Boeing recently winning a billion dollar support contract from the Air Force for the C-17 fleet Northrop Grumman received two large sustainment contracts yesterday. One each from the Air Force and the Navy. This kind of work certainly represents a good revenue stream for the contractors developing and producing large systems.
The first is for sustainment and maintenance of the B-2 fleet. This contract may be worth up to $3.4 billion over the next several years. The twenty aircraft fleet requires substantial support due to the complicated nature of the materials that it is made out of. The B-2 has been active in the former Global War on Terrorism as it does carry a large payload of conventional weapons.
The second contract is to refuel and refurbish the U.S.S. Theodore Roosevelt (CVN-71). This was the third Nimitz class carrier to be built. This contract has a value of over $2.4 billion and will cover a three year period of work. This is a one time maintenance action that is expected to continue the life of the ship out 2036. As part of the contract Northrop Grumman at Newport News shipyard will upgrade a whole host of systems and improve the capability of the ship overall.
These types of contract are very valuable to a company as they provide a steady stream of income over several years. The major cost of a modern weapon system is not the development or procurement but the sustainment over the very long life that are exhibited today. The United States for example is flying fifty year old B-52 aircraft and driving twenty-five year old M1 tanks. Both systems have received constant maintenance and upgrades over the years keeping them relevant to the modern war fight.
Government Failing Small Business?
The U.S. Government awards a great deal of contracts each year worth a lot of money. One of its goals is to award twenty-five percent of these...Is Defense Infrastructure Good Use Of Stimulus Funds
August 17, 2009 -- If you go to Recovery.org and look at a number of recent contract awards with the “Stimulus” funds you will see many are for...U.S. Department of Defense Buys Gas — Lots Of It
Filed under: Business Line, Companies, Contract Awards, DLA, Department of Defense, Events, Services, logistics
The United States Defense Logistics Agency (DLA) announced today a sheaf of contracts to buy gas. Gas for airplanes, ships, trucks and vehicles. The U.S. military runs on it as it is very heavily mechanized and relies on its helicopters and aircraft for the kind of support many armies would say no to or use artillery for.
World Fuel Services was awarded a contract worth $104.5 million for aviation fuel to support all of the services and Valero also received one worth up to $230 million.
These contracts are good for a year. One of the increasing costs the Department of Defense is facing is the price of oil. As it has gone up and down over the last five years it has forced the Defense Department to adjust its O&M budget. The heavy demand of operations also means that money may have to be moved from procurement accounts to cover these costs. Ideally for good budgeting it would be hoped that the price would stabilize over the year so proper planning can be made.
BAE Systems To Provide Night Vision Enhancement Systems To U.S. Army
Filed under: BAE Systems, Business Line, Companies, Contract Awards, Events, IT, Massachusetts, Services, States, U.S. Army, development program, logistics, production program
BAE Systems following up on an announcement last week said that they were awarded two separate contracts by the U.S. Army to provide night vision systems and laser modules. The two contracts together are worth over $2 billion dollars. A formal press conference will be held today at their Lexington, MA plant.
The first contract is worth almost two billion itself and is for 338 Driver’s Vision Enhancers (DVE). These are installed on a variety of vehicles in use by the U.S. military to improve driving at night. The second contract is for 1,990 Laser Target Locator Modules (LTLM). These are used to point out targets. Both contracts will last five years.
The DVE contract illustrates that modern electronics are very expensive. Installing one of these on a truck adds tens of thousands of dollars to the cost of that system. It does though add significant capability through improving the ability to drive in reduced visibility.
Defense Department Awards Further RFID Contract
Filed under: Business Line, Contract Awards, Department of Defense, Events, IT, Intermec, Services, USCG, logistics, production program
Continuing their investment in Radio Frequency Identification (RFID) the United States’ Defense Department awarded an Indefinite Quantity/Indefinite Delivery (ID/IQ) contract for RFID equipment. Intermec, Inc. was one of the winners. If all options on the contract are awarded it could be for nine years with a value up to $418 million.
Intermec has been making equipment for the electronic tracking of goods for over twenty years and has received significant contracts from DoD in the past. RFID has made it easier and more efficient to track and ship materiel by providing quick means to identify cargo and route it. Under the Automatic Identification Technology (AIT) – IV contract not only DoD entities but the U.S. Coast Guard, NATO and other allies as well as foreign countries may purchase this technology. Intermec like with all ID/IQ contracts is not necessarily guaranteed any work from it depending on how the U.S. wants to exercise the contract.
Orbital Earnings Take A Hit
Filed under: Boeing, Business Line, Companies, Department of Defense, Earnings, Events, Federal Budget Process, IT, Military Aviation, Orbital Systems, S&T, SAIC, Satellites, Services, development program, logistics, missile defense, production program, space
Due to some restructuring of its work due to the Obama Administration’s efforts to reorient defense spending Orbital Sciences Corporation reported a downturn in revenue and operating income in its most recent quarterly results. The company saw a missile defense contract ended and some delays in satellite work leading it to reduce its estimates for the full year.
Of the major defense companies reporting so far results have been mixed. Some have seen better quarters then others. The effects of the major changes planned by Obama and Secretary of Defense Gates may take some months to have effect. The large programs they have ended will still be paying termination costs to the companies as they figure out what fees are needed and what work will be paid for. There are also chances that new contracts will be awarded in the next year or so.
Several programs will be continued in another form it may take two or three years for the next iteration to start. The Army’s Future Combat System (FCS) contract with Boeing and SAIC ended but the technology and work has been inserted into a new program. The contracts for the new program have not been fully awarded, so Boeing and SAIC may end of with revenue from that effort. In the end despite the cancellation the companies may not end up losing much revenue.
MRAP-ATV Fallout Leads To Navistar Layoffs
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, Mississippi, Navistar, Restructuring, Services, production program
Oshkosh won the MRAP-ATV contract for a new vehicle for use in Afghanistan. One of the losing bidders was Navistar who had sold several thousand MRAP vehicles for use in Iraq to the U.S. Department of Defense.
Now with the fact that they did not win the contract to build the new vehicles for use in Afghanistan the company has announced layoffs at their Mississippi plant. This illustrates one of the problems with defense contracting. If you don’t continue to win contracts to provide systems or services you will eventually wither. Defense acquisition is normally for a certain number of units or for a period of time that will end. Companies win or lose contracts and that leads to contractions or expansions in work forces.
Australia’s First F/A-18 Delivered
Filed under: Australia, Boeing, Business Line, Companies, Congress, Contract Awards, Countries, Department of Defense, Events, Federal Budget Process, Military Aviation, Missouri, Services, U.S. Navy, production program
Boeing delivered the first F/A-18 Super Hornet for Australia on July 8. This is the first of twenty-four. The aircraft will provide a stop gap until either the F-35 JSF or the F-22 aircraft Australia has expressed interest in buying. The total value of the contract to Boeing is about $3 billion.
The F-18 for the U.S. Navy and Marine Corps is facing the end of production as the Obama Administration has proposed accelerating deliveries of the F-35 for those services as well as the U.S. Air Force. This is tied in to the ending of F-22 production. Congress has not received these proposals well and have included continued F-22 deliveries in the appropriation and authorization bills working their way through both Houses. The House has also looked at increasing planned F-18 deliveries as well as exploring the award of another multi-year production contract. Multi-year contracts have to be specifically authorized and have been used for large aircraft contracts in a bid to keep overall costs down. If there is a consistent buy profile over several years it makes it easier for the contractors to manage supplies and material ideally reducing costs.
DARPA Money Flows to Large Contractors
Filed under: Business Line, Companies, Contract Awards, DARPA, Events, IT, Northrop Grumman Corp., SAIC, Services, development program
One would expect an organization like the Defense Advanced Research Projects Agency (DARPA) to be funding small companies that possess breakthrough ideas and technologies. Often it does as it looks to provide seed money to jump start ideas that can then go on to be fully developed and produced. The Agency just announced major contract awards to two of the largest defense contractors in the U.S. Northrop Grumman and SAIC each will work on developing tetrahertz frequency amplifiers. Northrop actually received two contracts. Total value of these awards are $57 million.
There are some things that the large contractors have already done a lot of work in or possess the necessary facilities. These contracts are for an incremental development in a known technology — microchip integration. Moving forward to the higher frequencies that are required for advanced transmitters and receivers will require this kind of development.
The Small Business Innovative Research (SBIR) program provides funding to a variety of companies each year to look at developing advanced concepts or technologies that DoD requires. This fund is generated through a portion of all R&D funding and will continue despite DARPA’s efforts to fund other efforts.
BRAC Moves Air Force Unit to Aberdeen Proving Ground
Filed under: Battelle Memorial Institute, Business Line, Companies, Contract Awards, Department of Defense, Events, Maryland, S&T, Services, States, Texas, U.S. Air Force, development program
The U.S. Air Force under the last round of BRAC is moving its chemical, nuclear and biological defense development unit to the Aberdeen Proving Ground (APG) in Maryland. Battelle was given a $32 million contract to aid in moving the 649th Aeronautical Systems Squadron from Texas. This round focused on concentrating the various parts of the services that carry on like roles. The Army has used APG for most of their chemical and biological research and the Air Force unit will move there to gain benefits from co-location. The Air Force bases in Texas though are gaining Army and Navy units related to medical research and training so that state will not suffer with this move.
Unlike a lot of contracts related to BRAC this is not for construction of facilities. Battelle will provide analysis and support so that not only with the Squadron be able to continue their programs and research without interruption; but also so that the unit can receive improved equipment and processes as part of the move. This is also a benefit of the BRAC process. By moving an organization or unit it is possible to upgrade and modernize their capability through improving facilities. The combining of like abilities from various services and organizations will also aid in sharing and exchanging experience and knowledge.
New British Aircraft Carriers Have Trickle Down Effect
Filed under: Business Line, Companies, Contract Awards, Countries, England, Events, Scotland, Thales, production program
Even though you can project the Royal Navy at being two carriers and twenty or so escorts the most expensive ship building contract in the UK’s history is having an economic effect. The Engineer Online reports that three major sub contracts were awarded worth over $130 million to support construction of the two new ships. The contracts are for insulation, water management systems and command and control systems. Thales will provide the internal ships communication system as well as an HF long range radio. Ormandy Group will build the system for treating and providing hot and cold water for the ship. Finally Ticon Ltd UK will supply various types of insulation for the ship. These two large warships will continue to generate revenue and jobs for a variety of companies across England.
Contracts Continue for BearingPoint
Filed under: Bearing Point, Business Line, Companies, Contract Awards, DLA, Events, IT, Services, logistics
Despite its recent bankruptcy filing BearingPoint continues to win contracts providing technical and management support to the U.S. Department of Defense. WashingtonTechnology.com writes that the Defense Logistics Agency (DLA) just gave them a small contract to provide acquisition management and support. The contract is worth about $3.5 million. BearingPoint has supported DLA in this area since 2002. DLA has been satisfied with the work that BearingPoint has done.
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