Filed under: Boeing, Business Line, Companies, Contract Awards, development program, Events, production program, Services, U.S. Air Force
In another demonstration about how the world of nuclear weapons and classification of information has changed it was announced that Boeing (BA) has received a contract from the U.S. Air Force to design a new tail kit for the standard B61 aerial nuclear weapon.
The contract is worth a little over $175 million and is part of a program to improve the weapon’s reliability and upgrade the design.
The B61 has been in existence for almost fifty years in various versions. Boeing will work with the Mod 12 of the bomb. The B61 is a key component of the current U.S. stockpile of weapons.
In the past even confirmation of the existence of this weapon would have been impossible and now contract awards are treated routinely.
Filed under: BAE Systems, Business Line, Companies, Contract Awards, Countries, Events, India, production program, United States
The long running saga of attempts to purchase a new artillery howitzer for the Indian Army seems to be coming to an end. A process that stretched about two decades primarily due to corruption and contracting issues looks resolved as the South Asian nation formally requested of the United States the ability to purchase BAE Systems’ M177 gun.
The M177 is the standard towed howitzer used by the U.S. Army and Marine Corps. It is capable of firing a variety of 155mm shells including the Excalibur guided round to fairly long ranges. It has seen heavy use in Iraq and Afghanistan. It makes a good choice for the Indian Army and continues their recent trends of buying from Western suppliers.
The fact that this looks like it will be a Foreign Military Sale (FMS) rather then a contest and award via the Indian procurement system may be due to the all of the issues facing previous attempts to purchase the gun. In the past several contracts and contests fell and companies were banned due to corruption and bribery issues.
The contract is worth about $700 million.
Photo from The U.S. Army flickr photostream.
Filed under: Alliant Techsystems, Business Line, Companies, Contract Additions, Contract Awards, development program, Events, Services, U.S. Army
The XM-25 Punisher is a man portable weapon that fires 25mm programmable air burst shells. It is the result of the U.S. Army’s attempt to develop a new rifle earlier this century. The XM-8 rifle program was cancelled but it was decided to continue work on the XM-25. Alliant Techsystems (ATK) is the prime contractor for the XM-25. The system was issued in small numbers and tested in Afghanistan over the last several months and proved very effective. It is issued at the squad level and provides fire support for the members.
In March ATK was given a contract to continue the Engineering, Manufacturing and Development (EMD) of the Punisher. This was worth about $70 million. Now a further contract to continue EMD was issued this week. That one has a value of around $17 million.
The continued contract awards show that the Pentagon has interest in the Punisher and its further limited production and use. Once EMD is complete a decision will be made to bring it into large scale production.
ATK also will support a further assessment of the weapon in Afghanistan by providing another 36 XM-25 for use. The data collected in these types of trials will only aid development and providing the best systems possible.
Filed under: AM General, Business Line, Companies, Contract Awards, Department of Defense, development program, Events, General Dynamics, Lockheed Martin, Navistar, Oshkosh Truck Corp, production program, Protest, Services, U.S. Army
Two weeks ago the Army awarded 3 contracts for further efforts on the HUMVEE replacement, the Joint Light Tactical Vehicle (JLTV). The proposals from Lockheed Martin (LMT), Oshkosh (OSK) and AM General were selected. The Navistar and General Dynamic (GD) ones were not. The value of these contracts were between $55-65 million and are for the first year of a two to three year process to build and test prototypes. At the end of this one will be chosen to go into production.
The JLTV program has the potential to be quite large as the estimated quantities are in the tens of thousands. The current cost estimate for production is about $13 billion. This does not take into account future support and parts contracts as well as the potential for foreign and direct military sales to U.S. allies.
It has now come out that Navistar filed a protest late Friday near the end of the ten day period. The losers were supposedly briefed on Thursday as to why their proposals were not chosen.
The filing of the protest means the contracts cannot be executed until it is resolved. The General Accountability Office (GAO) has 100 days to do this. The result could be an overturning of the awards and direction to do a new contest or directing the Army to review its selection process. In some cases the GAO has awarded the protester the contract over the winner.
As the defense budget shrinks and contracts become more valuable to the different defense contractors protests should increase. This was the trend in the Nineties when there was the last major contraction in U.S. spending.
Filed under: Business Line, Companies, Congress, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, logistics, Military Aviation, production program, Restructuring, Services
Based on this press release from the House Appropriations Committee released yesterday it is clear that rather then try to pass a 2011 Defense Appropriations Act or any other part of the Fiscal Year 11 budget the Congress will use Continuing Resolution (CR) language for the remaining seven months of this FY.
Under CR funding will be capped at FY10 levels and it severely limits new contract awards and new program initiation. For example even if the U.S. Air Force announces in the next few weeks a winner for the KC-X aerial tanker program they may not be able to award the contract as the funding and language was not in the FY10 budget. This would potentially push that off to FY12.
One of the benefits to those wanting to reduce spending by the Federal Government by this approach is it holds spending at the FY10 level meaning that there is no growth in total spending. In fact the HAC release details over seventy programs that are being cut a total of over $70 billion.
Of course the problem for DoD with the CR is that they may need growth in funding for some parts of their budget including money for operations in Iraq and Afghanistan. The use of CR for the entire fiscal year may affect activities such as training as money is moved from stateside accounts into overseas operational ones.
Secretary of Defense Gates is still hoping to get Congress to pass a defense budget so that these types of choices do not have to be made and the U.S. military can meet its commitments.
The GEO Group Announces Selection for Contract Awards for 650 Beds at Two Community Correctional Facilities in California
BOCA RATON, Fla.–(BUSINESS WIRE)–The GEO Group (NYSE: GEO) (“GEO”) announced today that it has been selected by the California Department of Corrections and Rehabilitation (“CDCR”) for contract awards for the housing of 650 female inmates at GEO’s company-owned 250-bed McFarland Community Correctional Facility and 400-bed Mesa Verde Community Correctional Facility (the “Facilities”) located in California. The contract, which is subject to final review and approval by the California Department
RTI Announces Two Long-Term Titanium Fabrication Awards with Airbus and Modifies Long-Term Supply Agreements
PITTSBURGH–(BUSINESS WIRE)–RTI International Metals, Inc., (NYSE: RTI), announced today that it has modified its long-term agreement with Airbus to allow more flexibility in the near-term with Airbus’ ordering of titanium mill products. As part of the modification, Airbus has ordered more titanium mill product volume for 2010 than was anticipated at the start of the year. General terms and conditions remain in line with the original agreements. In addition, under two contract awards commencing
Oshkosh Defense Responds to U.S. Army’s Need for Tactical Vehicles; U.S. Army Program Maintains Original FMTV Contract Timeline — Press Release
Filed under: Business Line, Companies, Editorial, Events, logistics, Oshkosh Truck Corp, Press Releases, production program
Oshkosh Defense Responds to U.S. Army’s Need for Tactical Vehicles; U.S. Army Program Maintains Original FMTV Contract Timeline
OSHKOSH, Wis. (July 8, 2010) — Oshkosh Defense, a division of Oshkosh Corporation (NYSE:OSK), announced today it has received two orders from the U.S. Army TACOM Life Cycle Management Command (LCMC) to supply 950 U.S. Army Family of Medium Tactical Vehicles (FMTV) trucks and trailers. Oshkosh continues to hold fast to the Army’s original FMTV delivery schedule and expects to complete deliveries for these latest awards by December 2011.
“Oshkosh remains on target for FMTV production-unit deliveries starting in October of this year, allowing our men and women in uniform to receive these essential vehicles as quickly as possible,” said Mike Ivy, vice president and general manager of Army Programs for Oshkosh Defense. “From testing and production to training and service, we intend to satisfy every Army requirement related to the FMTV program with high quality Oshkosh products delivered on schedule.”
The two delivery orders, valued at more than $136 million, include nearly 800 trucks and more than 160 trailers, increasing the total number of Oshkosh FMTV truck-and-trailer under order to 6,159. Oshkosh also will supply nearly 40 FMTV add-on armor “B” kits under the orders.
The five-year FMTV contract is for the production of up to 23,000 vehicles and trailers, as well as support services and training through fiscal 2014. The FMTV is a series of 17 models ranging from 2.5-ton to 10-ton payloads. Vehicles feature a parts commonality of more than 80 percent, resulting in streamlined maintenance, training, sustainment and overall cost efficiency for the U.S. Army.
About Oshkosh Defense
Oshkosh Defense, a division of Oshkosh Corporation, is an industry-leading global designer and manufacturer of tactical military trucks and armored wheeled vehicles, delivering a full product line of conventional and hybrid vehicles, advanced armor options, proprietary suspensions and vehicles with payloads that can exceed 70 tons. Oshkosh Defense provides a global service and supply network including full life-cycle support and remanufacturing, and its vehicles are recognized the world over for superior performance, reliability and protection. For more information, visit www.oshkoshdefense.com.
About Oshkosh Corporation
Oshkosh Corporation is a leading designer, manufacturer and marketer of a broad range of specialty access equipment, commercial, fire & emergency and military vehicles and vehicle bodies. Oshkosh Corporation manufactures, distributes and services products under the brands of Oshkosh®, JLG®, Pierce®, McNeilus®, Medtec®, Jerr-Dan®, Oshkosh Specialty Vehicles, Frontline™, SMIT™, CON-E-CO®, London® and IMT®. Oshkosh products are valued worldwide in businesses where high quality, superior performance, rugged reliability and long-term value are paramount. For more information, visit www.oshkoshcorporation.com.
®, ™ All brand names referred to in this news release are trademarks of Oshkosh Corporation or its subsidiary companies.
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, GAO, IT, L-3, Lockheed Martin, logistics, Protest, Services, U.S. Air Force
The U.S. Air Force recently suspended L-3 Communications Holdings (LLL) from work on various contracts because it faces criminal investigation over misusing government email and IT systems. Because of this suspension Lockheed Martin (LMT) was given the contract back to execute. The total value of the contract if all options are executed is about $5 billion.
L-3’s Special Support Programs Division is now banned at least temporarily from receiving new contracts or task orders. The group had a contract to manage the U.S. Air Force Special Operations Command’s IT network including email. The company used their access to the system to examine emails from government employees, their own workers as well as contractors to look at bidding on other contracts. They also attempted to discover if their employees were sharing information with other companies relative to competitions.
The news and suspension have had little effect on the company’s stock with it closing yesterday at 88.39, down a little over one-quarter-of-one-percent. If the case goes on to find criminal acts the company could see more suspensions, fines and limits on their ability to bid on new contracts as a whole rather then with just one unit.
Lockheed will transition to take over the contract over the next four months, slowly assuming the duties. Lockheed had won the work away from L-3 in 2009 but the two companies were waiting on a protest filed by the loser to be resolved. The decision to suspend the group means that Lockheed will get the contract which will last until late into the next decade. The wait to resolve the protest by the GAO may have delayed the start of this work by several more months.
Filed under: Australia, Business Line, Companies, Countries, development program, Events, Force Protection, General Dynamics, logistics, production program, Thales
Australia has announced a series of contracts to upgrade parts of their military. Some of this has been in response to the fighting in Afghanistan since 9/11 and others due to the expanding ability of the Chinese and other Asian states military. These contracts include updated naval combat ships as well as the major commitment to the struggling F-35 Joint Strike Fighter (JSF). When at all possible Australia is awarding these to companies based in the country to maximize the stimulus effect of the contract. As all nations Australia has been affected by the global economic downturn of the last two years and is trying to spend its defense dollars judiciously to help its own domestic suppliers.
The next major contract announced is one for light armored vehicles that will be used to upgrade both troops in Australia and those deployed in Afghanistan. The U.S. and its Allies have seen the need for better systems with more maneuverability and protection against the mine and Improvised Explosive Device (IED) threat.
The contract could be worth up to $1 billion (Aus) and several different teams will be bidding for it. One of these will be Thales Australia based in Victoria. As it names indicates this is part of the Thales, French based, aerospace and defense company. The company has about a $1 billion (Aus) business already in Australia so winning this contract will be a major coup and increase in their business.
The Australian government plans to conduct the contract in the same manner as the U.S. Department of Defense’s recent MRAP-ATV contest. Here companies were paid to build prototypes that were tested and then one or more of the designs were chosen. Australia is giving Thales and General Dynamics Land Systems, part of the U.S. General Dynamics (GD) defense giant, as well as a company headed up by the U.S. Force Protection (FRPT) MRAP maker contracts to deliver prototypes.
The choice of a new vehicle will be a major upgrade to the Australian defense capabilities and the decision to use an Australian based company to do the development and production will aid the county’s economy.
Photo from ISAF media flickr photostream.
Filed under: Australia, Boeing, Brazil, Business Line, Canada, Companies, Contract Awards, Countries, development program, Events, Holland, India, Lockheed Martin, Military Aviation, northrop grumman, production program, Proposal, SAAB, Services, Sweden, U.S. Air Force, U.S. Marine Corps, U.S. Navy
Right now two of the biggest military aviation contracts out there are new fighters for Brazil and India. Both of these contracts have attracted bids from United States and European defense contractors. In Brazil the contest seems to be between the Boeing (BA) F/A-18 and the French Rafael. In India there have been offers from Boeing, Lockheed Martin (LMT), MiG of Russia, Rafael. Eurofighter and SAAB of Sweden. These contracts are interesting as all of these companies face declining markets at home due to budget difficulties and the decision by the U.S. and many of its Allies to focus on the F-35 Joint Strike Fighter (JSF) headed up by Lockheed.
Canada currently operates a force of older F/A-18 aircraft and is planning a potential buy of more modern aircraft worth about $9 billion (Canadian). Canada has put some money into the development of the JSF as have countries like Great Britain, the Netherlands, Australia and Japan but is not committed to buy the aircraft. They certainly could do that when the aircraft is ready in the 2015 – 2017 time frame or they could conduct a new competition. If they did this they would certainly draw a diverse group of suitors similar to what India has. The market for new fighters was supposed to stagnate as thousands of F-35 replace the F-16 aircraft of numerous U.S. Allies. Now with the delays and cost increases to that program some countries are having second thoughts.
A third major competition would be good for the industry and would allow some production lines like the SAAB Gripen to remain hot as the JSF program tries to get itself sorted out. If countries like Holland do decide to go a different path the market for current in production aircraft will increase greatly.
More fallout as the JSF program struggles with its cost and schedule may be expected as current customers re-think their commitments. This will increase the cost to the U.S. military while reducing Lockheed’s chances of making up some of their losses on the development piece of the contract. Canada if they choose to not buy the JSF may be the start of some bad news for the program and its prime contractor.
Photo from TMWolf flickr photostream.
Filed under: Business Line, Companies, development program, IT, logistics, Military Aviation, Northrop Grumman Corp., production program, S&T
The U.S. Air Force announced that it has awarded two contracts to Northrop Grumman (NOC) to continue production and development of the strategic Global Hawk UAV. The combined value of the contracts is worth almost $600 million. The Global Hawk flies long range missions autonomously and collects signals, communications and other type of intelligence.
The contracts call for continued production of four more systems. Two each of the Block 30 and 40 designs were ordered. The second contract will pay for two payload packages called airborne signals intelligence payloads (ASIP) and upgrade kits for three more ASIP.
The company also announced that it had received $30 million to purchase long lead items for these systems.
Global Hawks have been flying since before 9/11 and have carried out missions across South West Asia in support of U.S. operations there. The U.S. Navy and Australia are also looking at the system.
Filed under: Boeing, Congress, Contract Awards, EADS, KC-X, KC-X Tanker News, Syndicated Industry News, Washington
Kansas legislators in both the House and Senate are planning to introduce a bill that would require the Pentagon to take WTO rulings into account. The Department of Defense has maintained that in accordance with U.S. laws and regulations that those matters cannot be considered or punished in contract awards. If it did that would be a violation of the WTO itself.
The bill would allow price adjustments to be made in bids to reflect illegal subsidies rulings. The legislators, Senator Brownback (R-KS) and Congressman Tiahart (R-KS), claim it would be applicable to any defense contract but it is obviously targeted at EADS (EADS:P) and their KC-X bid. The legislators claim that without taking these subsidies into account the price of the A330 based tanker will be artificially low.
They would prefer the contract go to Boeing (BA) who would do substantial work in Kansas on their tanker program.
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, logistics, Services, training
The United State’s Department of Defense buys many different products and services. They announced yesterday that they will award Syracuse University’s Newhouse School of Public Communications a contract to continue to train military journalists. The contract has a value of over $4 million and will consist of a base year and four option years. The school has been providing this service since 1963 with annually renewed contracts.
The military in the modern era has always had journalists who produced news for the Defense Department and service members. It has obviously expanded in recent years to include broadcast television and radio, the internet and other media. The Newhouse school has played a major role in developing this capability and this contract continues that contribution.
Filed under: Contract Awards, Department of Defense, Syndicated Industry News
Filed under: Contract Awards, Department of Defense, Syndicated Industry News
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, J&J Worldwide, logistics, Services
J&J Worldwide Services of Texas was awarded a contract by the Defense Commissary Agency to operate and maintain thirty-one commissaries at U.S. military facilities on the East Coast. The contract has a value of up to $100 million. J&J has already won several contracts to support DoD medical facilities so the expansion into other housekeeping services like this is a natural progression.
Commissaries provide grocery and supermarket services on-base to U.S. military personnel, their dependents and retirees. They are one of the core benefits of the military as they provide competitive prices sales tax free. While with many parts of traditional military benefits they have suffered due to the massive movement of troops off of base into the civilian economy they are still operated worldwide.
J&J Worldwide is a growing defense contractor that is exploiting its niche in providing these kind of services.
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, IT, logistics, Services, States, Texas, U.S. Air Force
The recent round of BRAC moved most of the U.S. military’s medical training to Fort Sam Houston in San Antonio, Texas. This has required significant investment in contracts to help with the new construction, movement of organizations there and the other myriad work involved with the consolidation. Now the Department of Defense has awarded a $27 million contract to World Wide Technology to provide the necessary IT support.
World Wide will provide network services and storage as well as help desk support. They will also be responsible for supporting the A/V assets needed to conduct the training. The school when fully completed and implemented will have an average of 9,000 students at a time. The necessary teaching load will require substantial IT and A/V support from World Wide Technologies.
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, logistics, Oshkosh Truck Corp, Plasan, production program, Services, States, Vermont
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.
Filed under: Business Line, Companies, Countries, Defense Systems Holding, Iraq, logistics, production program, Services
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 (OSK) was able to balance off its losses in their commercial sector though winning contracts to make Mine Resistant Ambush Protected (MRAP)…
Alliant Techsystems (ATK) has been awarded several contracts from the U.S. Army to procure non-standard ammunition for Afghanistan’s military and…
Filed under: Boeing, Brazil, Business Line, Companies, Contract Awards, Countries, D'Assault, Events, Military Aviation, production program, SAAB
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.