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Budget Allows Navy to Move Forward on Carrier Contracts

The signing by President Obama of the full year’s funding bill has allowed the different U.S. services to begin issuing contracts that had been waiting to see how sequestration and the Continuing Resolution would be resolved.

On Friday the Navy moved quickly to issue a contract to Huntington Ingalls Industries (HII) for the overhaul and refueling of the U.S.S. Abraham Lincoln, a Nimitz class aircraft carrier. The contract has a value of around $2.6 billion.

The work is expected to take over 3 years and will include upgrades to different parts of the ships as well as refurbishing components and compartments along with refueling the reactors that power the ship. Included are the necessary modifications to operate the Navy’s version of the F-35 Joint Strike Fighter which will fly in a Short Take-Off-and-Landing (STOL) configuration.

HII was also awarded a contract worth over $400 million to continue buying material for the new CVN 79, designated John F. Kennedy. The CVN 79 contract was started in 2009 and is expected to be delivered in 2020. It is of a modified Nimitz design referred to as the Gerald R. Ford class.

HII is the only company able to build the large nuclear aircraft carriers for the U.S. Navy.

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ATK Awarded $17 Million Contract for AIM-9P Sidewinder Rocket Motors — Press Release

ATK Rocket Motors Support Sustainment of AIM-9P Missiles
Production of ATK’s AIM-9P Rocket Motors to be Performed at Allegany Ballistics Laboratory (ABL) in Rocket Center, W. Va.

ARLINGTON, Va., Feb. 12, 2013 /PRNewswire/ — ATK (NYSE: ATK) has been awarded a contract worth $17 million for production of rocket motors for AIM-9P Sidewinder customers within the United States Foreign Military Sales (FMS) program. Under FMS, the U.S. government procures defense articles and services on behalf of one or more foreign customers. The U.S. Air Force (USAF) at Hill Air Force Base in Utah issued the award. Work will be performed at Allegany Ballistics Laboratory (ABL) in Rocket Center, W. Va.

This ATK rocket motor is used to power the AIM-9P version of the Sidewinder missile, which is a supersonic, heat-seeking air-to-air missile used by a variety of fixed-wing combat aircraft since the 1970s. The AIM-9P Sidewinder was previously exported and is still in use by NATO countries and other international U.S. allies. ATK manufactured more than 30,000 AIM-9P rocket motors at the ABL facility in Rocket Center, W. Va. between 1978 and 1990.

Many international inventories of the AIM-9P Sidewinder are aging beyond the missile’s period of expected use in service. By re-starting the AIM-9P rocket motor production line, ATK and the USAF provide international partners with an affordable solution to update and extend the service life of their defense systems well into the future, while avoiding substantial financial investments in new missiles and aircraft.

“ATK is proud to re-start production of the AIM-9P rocket motor to support the needs of our FMS customers,” said Jerry Brode, Tactical Propulsion Market Segment Director at ATK’s Missile Products division. “This rocket motor has a significant history with ATK and has maintained a long-standing position within our portfolio of tactical Sidewinder and air-to-air rocket motor production lines.”

“ATK is committed to the ongoing success of our international allies,” said Cary Ralston, vice president and general manager of the Missile Products division within ATK’s Defense Group. “We are honored to provide our customers around the globe with an affordable and efficient solution to reinvigorate and sustain the service life of their missile defense systems.”

Production of the AIM-9P rocket motor will occur at ABL, a U.S. Navy-owned, ATK-operated facility. ABL specializes in advanced manufacturing technologies for a variety of programs supporting current and future U.S. industrial base needs in advanced fuzing and integration, conventional munitions assemblies, solid rocket motor propulsion, and advanced material structures.

ATK’s Defense Group is an industry leader in providing innovative and affordable products across ammunition, precision and strike weapons, electronic warfare systems, and missile components across air, sea, and land-based systems. ATK is an aerospace, defense, and commercial products company with operations in 21 states, Puerto Rico, and internationally. News and information can be found on the Internet at www.atk.com.

Certain information discussed in this press release constitutes forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Although ATK believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those factors are: changes in governmental spending, budgetary policies and product sourcing strategies; the company’s competitive environment; the terms and timing of awards and contracts; and economic conditions. ATK undertakes no obligation to update any forward-looking statements. For further information on factors that could impact ATK, and statements contained herein, please refer to ATK’s most recent Annual Report on Form 10-K and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

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AECOM joint venture is one of five companies awarded U.S. State Department IDIQ contract worth up to US$10 billion

June 14, 2011 by · Comment
Filed under: Syndicated Industry News 

LOS ANGELES–(BUSINESS WIRE)–AECOM Technology Corporation (NYSE: ACM), a leading provider of professional technical and management support services for government and commercial clients around the world, announced today that a joint venture in which it participates was one of five companies awarded an Indefinite Delivery/Indefinite Quantity (IDIQ) contract worth up to US$10 billion by the U.S. Department of State’s (DoS) Bureau of International Narcotics and Law Enforcement Affairs. The bureau



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AECOM joint venture wins contract worth up to US$1.66 billion to support U.S. Department of Justice’s Asset Forfeiture Program

March 21, 2011 by · Comment
Filed under: Syndicated Industry News 

LOS ANGELES–(BUSINESS WIRE)–AECOM Technology Corporation (NYSE: ACM), a leading provider of professional technical and management support services for government and commercial clients around the world, announced today that Forfeiture Support Associates (FSA), LLC, a joint venture with L-3 MPRI, has been awarded a contract to provide professional, financial and legal support to the Department of Justice’s (DOJ) Asset Forfeiture Program. Valid through March 2018, the contract encompasses 36 lab



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Lockheed Continues to Support the P-3C Fleet

Even though the U.S. Navy is developing the P-8 Poseidon maritime patrol aircraft to replace the current fleet of P-3C Orions it still must keep that aircraft flying until Boeing (BA) starts delivering the 737 based aircraft. The Lockheed Martin (LMT) designed and built Orion must continue to be available and perform anti-submarine, surveillance and reconnaissance missions around the world.

The P-8 is currently undergoing testing at Patuxent River Naval Air Station while the first production aircraft is well into fabrication. The P-8 has also been sold to India as part of one of the largest arms deals with that nation.

So even though its replacement is going to enter service in the near future Lockheed received a contract worth over $130 million to build wing assemblies and provide engineering and logistical support to the P-3 aircraft.

Modern military aircraft fly for decades with new variants and upgrades introduced incrementally over the life of the system. The U.S. is slowly introducing replacements for a fleet of aircraft that mostly came into service in the Eighties. This includes the biggest program of them all Lockheed’s Joint Strike Fighter (JSF) which will become the major tactical aircraft in the Air Force, Navy and Marine inventory over the next twenty years.

The award of the KC-46A contract to Boeing this month means that the KC-135 tankers will begin to be retired and reportedly a new bomber is in the works to supplement the B-52, B-1 and B-2 fleet. Because aircraft do now have such long service lives the slow development and replacement cycle is not as critical as it was in the past.

The P-3 will continue to fly alongside the P-8 for several years as the Navy upgrades this capability.

Photo from Kingbob86’s flickr photostream.

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Army Invests in ChemImage’s Explosive Detection Technology

The U.S. military and Homeland Security Department are faced with a mission to detect and neutralize a variety of threats. These include Improvised Explosive Devices (IED) and mines on the battlefield as well as bombs and other threats used by terrorists. Over the last twenty years the Defense Department and now Homeland Security have invested research into different technology to identify these threats preferably from a distance.

ChemImage is a company that has developed a series of devices that uses molecular spectroscopy and digital imaging to analyze materials from a distance and identify if they are explosive, chemical or biological threats. Obviously this is of use on today’s battlefield where soldiers will come across IED or what look like IED and must identify and neutralize them. The safer the distance that this is possible the better.

The Army just awarded ChemImage a contract worth about $17 million to implement a real time sensor for use in the field. The company is teamed with General Dynamics (GD) to do this work.

Even though the U.S. is leaving Iraq and planning to do the same with Afghanistan there will still be a need for this technology. The IED has become a primary threat on the contingency operation battlefield and terrorist groups will continue to develop and improve their bomb and Weapon of Mass Destruction (WMD) capability.

Despite the potential for reductions in the defense budget this kind of core technology research and development is also a key requirement for the U.S. as it needs to try and improve its capabilities overall. This is one area that requires continued investment.

Photo from isafmedia’s flickr photostream.

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BAE Systems Awarded over ZAR900 Million RG31 MRAP Contract for Readiness and Sustainment

February 1, 2011 by · Comment
Filed under: Syndicated Industry News 

JOHANNESBURG–(BUSINESS WIRE)–Through its teaming agreement with General Dynamics Land Systems Canada (GDLS-C), BAE Systems, Land Systems South Africa won a contract worth more than ZAR900 million ($130 million) for survivability and mobility upgrades to its RG31 Mine Resistant Ambush Protected (MRAP) vehicles. The upgrade kits will further enhance the survivability and mobility of the battle-proven RG31 vehicles. As part of the modernization work in South Africa, a powerpack providing higher p



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AECOM joint venture awarded U.S. Army contract worth up to US$181.9 million to support Afghanistan National Army’s Technical Equipment Maintenance Program

January 10, 2011 by · Comment
Filed under: Syndicated Industry News 

LOS ANGELES–(BUSINESS WIRE)–AECOM Technology Corporation (NYSE: ACM), a leading provider of professional technical and management support services for government and commercial clients around the world, announced today that a joint venture with ANHAM that it manages, Afghanistan Integrated Support Services, was awarded a maintenance and capacity-building contract by the U.S. Army to support the Afghanistan National Army’s Technical Equipment Maintenance Program (A-TEMP). The new program suppor



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More V-22 Engines Ordered from Rolls-Royce

The controversial tilt rotor V-22 aircraft has now been in service with the U.S. Marine Corps and Air Force for a few years now. Their production is at a pretty steady state and they have carried out successful deployments to Iraq and Afghanistan. While the aircraft is produced by Bell and Boeing (BA) the two engines for each aircraft are manufactured by Rolls-Royce’s (RR:LSE) American operations.

As the V-22 builds up service time and continues production there will be a need for more engines. Not only to support the deliveries of new aircraft but to replace those in service or act as spares. Rolls-Royce has received two contracts in the last week for engines to support the V-22 program.

First the Navy executed a contract worth over $120 million to support their MV-22. Then the Air Force purchased 24 engines for the CV-22 at a cost of almost $50 million.

In November another contract to provide maintenance for in-service V-22 aircraft was also won. This will support all services operating the aircraft.

As a program goes through its life cycle the Original Equipment Manufacturers (OEM) are able to make significant revenue from providing this kind of support. The Department of Defense does have the right to order parts, equipment and support from other then the OEM and even if they purchased the data rights to have another company manufacture the engine.

Photo from Beige Alert’s flickr photostream.

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Germany Buys Protected Vehicles from GD

Due to the mine and Improvised Explosive Device (IED) threat that became so common in Iraq and Afghanistan many of the world’s military are equipping themselves with uparmored vehicles for most role and missions. The U.S. especially bought thousands of Mine Resistant Ambush Protected (MRAP) vehicles for engineering, troop transport and combat support roles. They also redesigned the ubiquitous HUMVEE light truck to carry more armor. Now as new vehicles are designed and acquired a level of armoring much beyond what was in the last generation is now expected.

It is because of this situation that General Dynamics (GD) was able to win a contract from Germany for a further 195 EAGLE vehicles in a contract worth over $160 million. This order brings the total of these vehicles bought for use by the German Army and police to almost six hundred.

The market for this type of vehicle has become bigger later as the U.S. plans to buy the Joint Light Tactical Vehicle (JLTV) and Australia and the U.K. to buy new light trucks. All will possess a level of armor and survivability design much higher then military systems of the past.

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U.S. Army Advancing Prosthetic Limbs with Alion

The Vietnam War saw the addition to the U.S. military’s medical treatment program of the MEDEVAC helicopter. This speedily transported wounded troops from the battlefield to a hospital. Since 9/11 and the engagement of the U.S. troops there has been significant investment in preventing and treating combat wounds. These include advances in battle armor, bandages, head injury diagnosis and treatment.

One area that has also seen improvements is the development of new prosthetic limbs. The IED and mine threat has caused several hundreds of wounds requiring amputation of limbs. The U.S. government has put a great deal of money into advancing the science and medical technology of this treatment.

To further this the U.S. Army awarded Alion Science and Technology a contract worth a little over $1 million to build a modeling and simulation tool for research into using robotic control technology with prosthetic limbs. The goal is to help design limbs that are lighter and more lifelike at lower cost. The new limbs also utilize electric power so another goal is to improve battery life.

Contracts like these further the U.S. commitment to provide the best medical care that they can to their wounded veterans.

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Northrop to Upgrade E-3 AWACS for United Kingdom

The Airborne Warning and Control System (AWACS) aircraft developed originally for the U.S. Air Force is a modified Boeing (BA) 707 aircraft with an advanced Northrop Grumman (NOC) radar. The AWACS provide air based detection of aircraft and missiles as well as being able to perform air traffic control missions.

The AWACS has since entered use by American allies including NATO, the United Kingdom, Saudi Arabia and France.

One of the advantages a company has with systems like this is that they are used for decades and require constant support and upgrades. Some of this may be done in house by the service operating them or in some cases has been done by contractors other then the original developer and producer. Northrop though maintains a contract with the Royal Air Force and Ministry of Defence to work on the radars of the U.K. aircraft.

As part of this they were just awarded a contract worth a little over $60 million to upgrade the IFF interrogator to support the Mode S transponder.

The Mode S is a new standard that allows the interrogation and identification of aircraft in controlled airspace. It replaces the current air traffic control radar beacon system (ATCRBS) used across the world today. Mode S is starting to be a requirement by several nations for flying in their airspace.

Since the AWACS aircraft are deployable across the globe this addition allows it to fly to where it is needed without having to plan a route around the nations with this requirement.

Photo from Obskurantist’s flickr photostream.

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ReadSoft: Leading Defense Company Invests 300,000 EUR in ReadSoft’s Software to Automate Purchase to Pay Processes

October 26, 2010 by · Comment
Filed under: Syndicated Industry News 

STOCKHOLM–(BUSINESS WIRE)–Regulatory News: ReadSoft (STO:RSOFB) has secured an order with a leading defense company to provide a complete, end-to-end solution to automate Purchase-to-Pay processes within SAP®. The contract, worth over 300,000 EUR, concerns solutions that automates the entire purchase to pay process, from handling requisitions to managing the accounts payable function, streamlining the workflow and driving efficiencies into its business processes. The deal was signed during the



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AECOM one of four firms awarded contract worth up to US$60 million for planning and engineering services at U.S. Navy and Marine Corps facilities worldwide

October 14, 2010 by · Comment
Filed under: Syndicated Industry News 

LOS ANGELES–(BUSINESS WIRE)–AECOM Technology Corporation (NYSE: ACM), a leading provider of professional technical and management support services for government and commercial clients around the world, announced today that it is one of four companies awarded an Indefinite Delivery/Indefinite Quantity Multiple Award Contract by U.S. Naval Facilities Engineering Command Atlantic for planning and engineering services at various Navy and Marine Corps facilities worldwide. The contract provides fo



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VSE Awarded Interim Contract for Transportation, Storage, Management, Maintenance and Disposition of Seized and Blocked Property and Conveyances

October 12, 2010 by · Comment
Filed under: Syndicated Industry News 

ALEXANDRIA, Va.–(BUSINESS WIRE)–VSE Corporation (NASDAQ GS: VSEC) reported today that its International Group has been awarded a seven-month interim contract worth $25.9 million to provide continued support services to the U.S. Department of the Treasury. The scope of work includes comprehensive services to provide nationwide and U.S. Territory coverage of the transportation, storage, management and disposition of property and conveyances that has been seized by the U.S. Government. Michael E.



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U.S. Department of Defense to Pay for Management of Water Purification Systems

The Defense Logistics Agency (DLA) awarded a contract worth over $300 million to Aqua-Chem, Inc. as part of the H2O Water Purification Initiative (WPS). If all options on the five year contract are executed the total value will be $386 million.

Aqua-Chem of Tennessee is a world leader in the manufacture of water purification and treatment systems. These include those not only for military applications but also for ships, offshore marine applications, and the power and bio-tech industries. The U.S. Department of Defense with personnel deployed all across the globe in varied climates has great demands for water. Aqua-Chem systems supports these operations with different systems to purify or provide water.

The contract is for logistical support of existing systems by providing storage and management of parts and materials to support existing Aqua-Chem systems in use today.

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BAE Systems Continues Nulka Decoy System for Australia and Allies

BAE Systems (BA:LSE) along with the Australian Defense Science and Technology Organization makes the Nulka anti-missile system for use on ships. This consists of a rocket carrying an electronic warfare payload launched from the deck to decoy cruise missiles. The system has been in production for several years and is in service on several different nation’s naval vessels.

The team which includes Lockheed Martin (LMT) for the EW package and Aeroject (GY) for the motor was awarded an extension to their current production contract worth over $40 million (Australian).

The system will be installed on new Australian warships currently under construction as well as on those used by Allies. The system has brought in over $800 million worth of foreign sales for Australia and its defense establishment. This makes it one of their most successful programs.

Photo from Royal Australian Navy via mashleymorgan flickr photostream.

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How Much Money Did Canceling the VH-71 Save?

Update — The Associated Press and other media corrected this report to say that it was an extension of a contract worth $8.4 million. The total contract value with the extension is over $8 billion. The point stands that there will be a cost associated with keeping the aging systems working while a new system is developed.

One of the programs that was ended as part of the Obama and Gate’s defense reforms was the new Presidential Transport helicopter. Lockheed Martin (LMT) and its Italian partner, Finmeccanica, had won the contract to build a new helicopter to ferry the President around replacing a fleet of venerable VH-3 and VH-60 aircraft made by Sikorsky (UTC). The program had faced cost and schedule issues due to massive requirements creep that caused the total cost to balloon. In 2009 the Navy pulled the plug on the program and started over.

Because a whole new program began it meant that the existing aircraft would need to extend their planned service lives. Some in Congress, especially Congressman Hinchey (D-NY), who represented the area where Lockheed Martin was doing the work on the program argued that this decision could end up being more expensive then continuing the existing program. Lockheed and Finmeccanica did offer a reduced cost program utilizing the aircraft already purchased that could meet some of the requirements but not all of them. One aspect that was raised that there would be a cost related to continuing the use of the older aircraft as they would need to be maintained and modified to stay in use.

Today the Defense Department announced that they were awarding Sikorsky a contract to carry out “VH-3D executive helicopter special progressive aircraft rework induction.” This means money to overhaul and update the current fleet of VH-3 aircraft. The estimated value of this contract is over $8 billion. This is money that is needed because the President’s aircraft must be maintained to the highest standard.

This does illustrate that in some ways Congressman Hinchey was right. The money saved by ending the VH-71 will now go to keeping the older aircraft flying and starting the new program. Eight billion dollars will buy you a great deal of helicopters and capability. Not neccessarily what you wanted in the VH-71 but certainly it would go a long way to meeting the needs of that program.

Penny wise and pound foolish as my Nana use to say.

Photo from sophiea’s flickr photostream.

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Another Contract To Support BRAC Activity Awarded, This Time To STG, Inc.

The last round of Base Realignment and Closure (BRAC) moves required many different organizations and commands to consolidate. The Pentagon plans to move similar schools and test centers to joint locations as well as close some smaller bases and realign facilities. One such move is the plan to close Fort Monroe near Norfolk, VA and move commands and schools to nearby Fort Eustis. One such Army unit being affected is the Training and Doctrine Command (TRADOC) headquarters.

STG, Inc. (STG) was awarded a contract worth about $19 million to provide engineering services for this move. STG will be responsible for making sure that the TRADOC HQ’s IT and computer assets are moved, established and working when the move to the new base is complete. The contract will require that STG also ensure the existing systems are working so TRADOC can continue their mission while the move is going on.

STG has performed similar work for other government agencies and this give’s the Army confidence that they will complete this task on time and budget.

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Despite Research Into Alternative Fuels Defense Department Still Buys Good Old Gas

The United States Defense Department has begun several different projects to look at alternative fuels. These include efforts to develop algae and biofuel sources such as grass and grains. These are an obvious long term investment into a time when petroleum based power may be limited. At the same time it still consumes millions of gallons of aviation, diesel and gasoline to power aircraft, vehicles and ships. Because of this it was announced yesterday that several refiners were awarded contracts to provide gasoline and aviation fuel.

Valero (VLO) won a contract worth about $255 million and Tesoro (TSO) one worth close to $45 million. AGE Refining was also given a contract worth $84 million.

The Defense Logistics Agency (DLA) often makes multiple awards such as these as they use local refiners to support different units and facilities across the U.S. Despite the efforts to find alternative sources of energy petroleum based fuel will remain the main power source for several more years to come.

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Alliant Techsystems To Provide Composite Structures For F-35 Joint Strike Fighter

Despite the cost increases and the schedule delays Lockheed Martin (LMT) continues to work on building, testing and getting ready to deliver F-35 Joint Strike Fighter aircraft to the U.S. military and Allies. The recent defense budget revealed that estimated costs for the advanced aircraft have almost doubled. As part of the construction Lockheed buys assemblies and parts from a number of U.S. companies.

Yesterday, Alliant Techsystems (ATK) announced that they had received a contract worth about $250 million to provide composite fuselage, engine and wing pieces for the JSF. The contract illustrates the diversified industrial base required to build the sophisticated aircraft.

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Malaysia Signs Contract With BAE Systems And Nurol For Armored Vehicles

Malaysia has signed a contract worth up to $500 million with the U.K.’s BAE Systems (BAE:L) and Turkey’s Nurol Holding AS to establish an armored vehicle production line. The two companies are establishing a joint venture in the Asian country to design and produce 250 wheeled vehicles with a variety of capabilities. This contract is part of a major investment by Malaysia in its armed forces.

The end result of course will be an established production capability indigenous to Malaysia.. This could allow it to build more vehicles for itself and overseas sales. The contract is also valuable to BAE Systems as it may see declining markets in Britain and the U.S. due to budgetary pressures.

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MRAP-ATV Continues To Drive Work For Plasan Bennington

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.

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Northrop Wins Contract To Re-Engine the E-8C JSTARS

The U.S. Air Force operates E-8C JSTARS aircraft to survey the ground and provide information to combat commanders on enemy forces and movements. They are converted Boeing 707 aircraft carrying radars and other sensors. The aircraft were used successfully in Desert Storm but were designed to support the defense of Western Europe against the Soviet Union. That threat has obviously passed.

The aircraft were converted by Northrop Grumman at a facility in Florida. They are aging and money is being spent to upgrade the platforms and systems since the replacement E-12 MC2A was canceled a few years ago. Northrop was awarded a contract worth over $200 million to re-engine two of the aircraft. New engines will extend their useful life, improve fuel consumption and increase the range and mission time of the E-8. It is a wise investment of money into these capable and useful platfomrs.

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England Awards Initial Contract For Combined Training Site

The English government has ambitious plans to not only centralize their technical training but also privatize it. The goal is to save money within the defense budget. The consortium that is planned to construct and operate the new training site was awarded an initial contract worth almost $60 million to begin site preparation. The Metrix consortium which includes the British company QinetiQ will use this contract to move an existing Royal Air Force (RAF) school and begin demolition of existing buildings. Eventually the total program will be worth billions as the schools are established and classes taught.

The idea is fairly novel and controversial. In the United States for example they are moving away from contractor provided services by insourcing positions to civil service. They believe that this will save money in the long run. It will be interesting to compare how these two different paths work out over the next few decades.

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