Backers of Two Tanker Contracts Want To Stay Anonymous

The Wichita Eagle reports that the a group backing building both the Boeing and EADs tankers, doesn’t want to reveal its backers:
The investors backing a campaign asking the government to split its contract for aerial refueling tankers between Boeing and Northrop Grumman want to remain anonymous for now. The campaign is called Build Them Both. “We are funded by a group of investors who have asked to remain nameless at this time,” said the effort’s campaign manager, Carrie Giddens. The group is not union sponsored and does not have ties to either Northrop or Boeing, Giddens said in an e-mail exchange. However, “we have sought out funding from both companies, their suppliers and unions who would be impacted by building them both.” The requests went out in the past two weeks. On Monday, Giddens called Northrop’s decision to pull out of the bidding process “bad news for American workers, our men and women in uniform, and for the taxpayer.” With only one company seeking a contract, 50,000 jobs that would have been created won’t be, Giddens said in the statement. “Without an ongoing competition there is no way to control costs, to the detriment of our military and taxpayer.”

Now Reports That EADS May Bid After All

There is a rumor that the Pentagon may delay the deadline for submission of a proposal for the KC-X to accommodate either a solo bid or another partnership. This contradicts what was reported yesterday that EADS-NA CEO Sean O’Keefe said the company wouldn’t bid without Northrop Grumman (NOC). It will be seriously difficult for the company to bid by itself. It would need to find another U.S. company to work with.

This might be second thoughts by DoD as they realize how difficult doing a single bid contract award will be. This is not a sole source contract but right now it would only receive one qualified offer.

Wall Street Journal Says Trans Atlantic Defense Deal Falters

March 14, 2010 by admin · Comment
Filed under: KC-X, KC-X Tanker News, Northrop Grumman Corp. 
The Wall Street Journal has weighed on the KC-X Tanker bid process, in an article entitled “Trans Atlantic Defense Deal Falters.” The article notes:
The decision by Northrop Grumman Corp. and its European partner this week to drop out of a $40 billion competition to build aerial-refueling tankers for the Air Force is the latest example of how trans-Atlantic defense ventures have faltered. Many observers view the size of the tanker deal, and the prominent role played by Northrop partner European Aeronautic Defence & Space Co., as the most significant instance of how trans-Atlantic partnerships can get tripped up. Noorthrop billboard in Alabama in 2008 advertised a future tanker plant, but the company quit the project. “There’s no doubt that this outcome will reinforce the long-held understanding in Europe that the U.S. defense market is highly protected,” said Alex Nicholl, a specialist on European defense companies at the London-based International Institute for Strategic Studies. “This is not the first time that the rules of a U.S. competition have been rewritten to suit the American competitor. No doubt it won’t be the last.”
Read the entire article at theJournal.

Still Some Support For Northrop

Congressman Howard McKeon (R-CA) put out a statement today supporting Northrop. He said that he was “disappointed that Northrop Grumman has decided not to submit a proposal to build the Air Force’s next generation aerial refueling tanker.” He would like Northrop to reconsider its position.

Northrop is currently headquartered in California and has several thousand employees there. It is planning on moving to the Washington DC area in the near future.

The decision leaves Boeing as the sole announced bidder.

Reports That Northrop Won’t Bid

It is being reported that Northrop Grumman (NOC) will not submit a proposal in response to the new KC-X RFP released at the end of last month. Supposedly the announcement will be made after the markets close. Northrop had written to the DoD in December saying they most likely would not without changes in the RFP to make it fairer to the Airbus 330 based aircraft.

There is no word on whether EADS will find another partner or bid by themselves for the $35 billion contract.

Boeing Will Submit Proposal Based on K-767

As it did in the last contest two years ago Boeing (BA) plans to submit a 767 based tanker. This is similar to the ones they are already building for Japan. To differentiate it from previous versions they are calling it a “NewGen” aircraft. Boeing will upgrade the basic 767 design with a new fueling boom and parts of the 787 cockpit technology.

There is still no formal word from Northrop Grumman (NOC) or EADS (EADS:P) if they plan to submit a proposal this time around.

Northrop Might Wish It Had Not Won this Contract

March 4, 2010 by Matthew Potter · Comment
Filed under: BNET 
Virginia's Senate passed legislation restructuring the management of their massive IT out-sourcing contract with Northrop Grumman. The contract is...

EADS Supports Bid For KC-X

It is being reported by various sources that EADS is pressuring Northrop Grumman to go ahead and submit a bid for the new KC-X RFP. Northrop had informed the Government that they planned not to if the terms were not significantly changed. They felt the RFP was favoring Boeing’s cheaper, smaller KC-767 aircraft.

The final RFP came out two weeks ago and still no word from Northrop that they will go ahead and submit something in May. EADS obviously would like another chance to win the contest after they lost the last one to Boeing’s protest in 2008. The $35 billion would go a long way to make up for the lost A400M revenue.

As Expected Alabama Press Critical Of Air Force RFP

Writing in support of Northrop Grumman and the “Mobile region” the Mobile Press-Register has and editorial summing up the situation on the new RFP from their view. They do not demand that the RFP be changed or the contract be given to Northrop and EADS but they do point out that:

“If Northrop pulls out of the contest, Boeing may get the tanker contract, but the entire deal will be tainted — first by Boeing’s own corruption and collusion with some Pentagon officials several years ago over an earlier version of the tanker deal, and second by a decision-making process that puts politics above defense needs.”

It is true that a single bid competition is not much of a competition.

New Group Advocating For Split Tanker Buy

The Washington Post writes today about a new group buying advertisements to support the concept of buying KC-X tankers from both Boeing (BA) and Northrop Grumman (NOC). The group is called “Build Them Both” and its financiers have so far remained private. The idea of a split buy was floated last year but despite the ability to produce aircraft faster the related logistical costs are so high that the Air Force and DoD won’t consider it.

The article may be found here as the second part of the post.

Northrop Grumman’s Estimates, Target Boosted at Citigroup (NOC)

February 26, 2010 by Jeffrey Bradford · Comment
Filed under: Syndicated Industry News 
Northrop Grumman’s Estimates, Target Boosted at Citigroup (NOC)
www.Dividend.com
February 26th, 2010

Security specialist Northrop Grumman Corporation (NOC) saw its earnings estimates and price target raised on Friday by analysts at Citigroup.

The firm said it now sees shares of NOC, which had closed at $61.12 on Thursday, reaching $62. Citigroup also raised its earnings estimates for the company 2011, citing Northrop’s recently raised guidance.

Northrop Grumman shares were mostly flat in premarket trading Friday.

The Bottom Line
We have avoided shares of NOC since our early June 2008 coverage began, when the stock was trading at $71.70. The company has a dividend yield of 2.81%, based on last night’s closing stock price of $61.12. The stock has technical support in the $55 price area. If the shares can firm up, we see overhead resistance around the $65 price level. We would remain on the sidelines for now.

Northrop Grumman Corporation (NOC) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

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In Comparison To Those In Alabama Boeing Supporters Confident

The Herald a newspaper in Everett, WA has an article discussing how happy and confident Boeing’s legislator supporters are with the new RFP released yesterday by the Air Force. This is the opposite as to how those from Alabama feel. Senator Patty Murray (D-WA) is quoted as saying, “Given a fair shot, Washington state’s workers will bring home this contract,” Murray said. “We have the skills, the technology, and the experience of having built the only combat-ready tanker to prove it.”

If Northrop Grumman (NOC) and its partner Airbus don’t submit a bid it will be hard for Boeing (BA) to not win the contract. Hence the happiness of their supporters.

Alabama Senators Not Happy With New RFP

In an article in The Mobile Press Register Senators Shelby (R-AL) and Sessions (R-AL) make it clear that they are not happy with the new RFP. Shelby says “The final RFP discredits the integrity of the entire process,” and Sessions seems to feel that Northrop Grumman (NOC) won’t bid. He laments the lack of competition in the process.

This of course is not a surprising reaction as Northrop and EADS planned to assemble the basic A330 aircraft in Mobile, AL and then integrate the military systems at a Northrop facility.

Harris To Make Radios For Northrop Grumman Battle Command System

Northrop Grumman awarded Harris Corporation a contract to provide radios for the Integrated Air and Missile Battle Command System (IBCS). The IBCS is being made for the U.S. Army by Northrop. As its name implies it will provide command and control for air and missile defense missions. Harris’ contract is for five years and is worth $25 million.

The Army has invested heavily over the last thirty years in systems such as the PATRIOT and THAAD to provide extended air and missile defense. They also procured Avenger systems that use AIM-120 air-to-air missile from vehicle mounts. These and their sensors need to be netted in such a way that a complete air and missile picture can be developed to best assign resources. Key to all of this is of course secure and redundant communications requiring advanced radios such as Harris is making for the IBCS.

LA Times Has Good Summary Of The KC-X Situation

The Los Angles Times today published a short article by W.J. Henigan that summarizes the current situation. He stresses that Los Angeles based Northrop Grumman (NOC) not participating may make the whole attempt moot again. He writes:

“But there are already signs that the competition could be derailed once again. Century City-based Northrop Grumman Corp., one of the two contenders, has threatened to withdraw its bid, accusing the Air Force of writing specifications that favor its rival, Boeing Co.”

The rest of the article may be found here.

KC-X RFP To Be Released Soon

The Federal Business Operations “FedBizOps” website posted a presolicitation notice yesterday stating that the final RFP for the KC-X will be posted no earlier than 23 February. The draft RFP had been released in September last year. Since then it has been updated and modified several times.

Most recently the latest set of questions and answers were posted on January 27th. The two big issues are how much the final RFP has changed from the draft one and whether Northrop Grumman (NOC) and its partner EADS will bid on the contract. The turn around time for a proposal may be fairly quick as this is the second competition in three years and the draft RFP has been out for six months.

Senator Shelby Freezes Obama Nominees Over KC-X

It has been reported that Senator Shelby (R-AL) has placed a hold on every nomination made by President Obama that must be confirmed by the Senate. This means that without a vote of over 60 Senators the nominations cannot be considered. Putting a hold on specific individuals is not uncommon but the use of the “blanket hold” is. Reportedly Shelby is upset about progress on the KC-X RFP as well as plans to build a new national Explosive Ordnance Disposal (EOD) school at Redstone Arsenal in Huntsville, AL.

Shelby had been a Democrat until the election of Bill Clinton when he switched parties. It would be hard to believe that this broad attack will force any changes to the RFP to make it more attractive to Northrop Grumman (NOC) and EADS (EADS:P). It will also be hard for Shelby to sustain this kind of action for long.

Northrop Grumman (NOC) Believes Better Is Ahead

February 5, 2010 by Matthew Potter · Comment
Filed under: BNET 
Northrop Grumman (NOC) became the latest of the large defense contractors to report their most recent quarter’s earnings. While the company...

KC-X Fully Funded In 2011 Budget

President Obama sent his 2011 budget to Congress yesterday. It contains as part of its record defense spending $12 billion for the development and initial production of the new KC-X tanker. The Administration and the Air Force have a goal of awarding a contract this Summer and beginning the development of the new aircraft fairly fast.

This plan is fraught with difficulties based on the history of the program. The two main competitors, Boeing (BA) and the Northrop Grumman (NOC) team, have their own supporters in Congress and their own issues with the approach the Air Force is taking. It can be expected that the source selection will be difficult and the chances for a protest fairly high if both groups do submit bids.

Support For Northrop Not Bidding On KC-X

Northrop Grumman and its partner EADS threatened a few weeks ago not to participate in the next attempt at buying a new tanker for U.S.A.F. Many feel that this is just a negotiating ploy to have the terms of the RFP changed to make it easier for Northrop to win. The company has expressed concern that the way the RFP is written now it will favor Boeing to the point that Northrop sees no reason to bid.

The U.S.A.F. and DoD need to attract multiple bids. They cannot go through with the program without some sort of competition. Now it has been made clear that both the Board of Directors of Northrop, stock analysts are shareholders are supportive of the plan not to propose. One would think that there should be an attempt to win $35 billion of work but the goal of Mr. Bush, the new CEO, and his supporters is to increase the margin and profitability of the company. This means he and his supporters want to concentrate on getting work and getting it done.

The KC-X program in its third iteration faces some problems. The chance of a protest by either losing side is high. Both teams have supporter in Congress. The program may be hard to get up-and-running with so much politics involved. If Northrop feels there is little chance of them winning this contract again or quickly making money off of it then they should not proceed.

First Littoral Combat Ship (LCS) Commissioned

02/08/10 — The post was updated to make clear that LCS-1 is under construction by Lockheed Martin and not Northrop Grumman as previously stated.  Your humble editor got confused.

In the last week the U.S. Navy commissioned the General Dynamics built U.S.S. Independence (LCS-2). LCS-1 is under construction by Lockheed Martin. The original plan for the class was to have each company build about half. The two designs are completely different to say the least with GD building a tri-marine hull and Northrop a more traditional one. Both ships are outfitted the same with weapons and sensors. The U.S.S. Freedom (LCS-1) and the Independence are ships around 400 feet long and displacing about 3,000 tons.

If all goes well the Navy will build up to 55 of the ships. The most recent plan discussed was after completion of these two and one more to each design that a new contract will be competed and only one design will be built. Both ships have suffered from cost and schedule overruns and the optimistic initial cost assumptions were not met leading to the program restructure. If the plan is executed these ships and the new destroyer will be the main force of the U.S. Navy after 2020.

Alabama Keeps Pushing The Air Force

Supposedly in a meeting between DoD and Air Force officials with members of the Alabama Congressional delegation it came out that the U.S.A.F. will adjust the KC-X RFP to keep Northrop Grumman (NOC) and EADS (EADS.P) in the competition. This of course is a report by Senator Sessions (R-AL) from the meeting. There is no official response as to how the U.S. officials will react to Northrop’s threatened non-participation.

It is in the best interest of the U.S. Government to have two bidders for this program and this may be a necessary step to assure that.

DDG-51 Construction To Continue By Northrop Grumman

Due to the restructuring of the plans for the new U.S. Navy destroyer program the U.S. Department of Defense decided to continue building the DDG-51 Arliegh Burke Class ships. Originally this ship was to end its production as more DDG-1000 were ordered and delivered. The Obama Administration and Secretary of Defense Gates decided to cut back on the plans as the program was running late and over budget. To make up for these changes it was decided to keep building DDG-51 class ships.

These ships are made by either Northrop Grumman or General Dynamics at their respective yards. Northrop Grumman received recently a contract to provide long lead materials for the next ship they will build, DDG-113. The contract has a value of over $100 million. The Arliegh Burke’s have been in service now for almost two decades and the DDG-1000 would have been larger, more stealthy and with newer systems. The DDG-51 are certainly capable and have been upgraded as time has passed.

Northrop Grumman’s Hunter Unmanned Aircraft System Equipped with Tactical Common Data Link

December 23, 2009 by Jeffrey Bradford · Comment
Filed under: Syndicated Industry News 
Northrop Grumman's Hunter Unmanned Aircraft System Equipped with
Tactical Common Data Link

HERNDON, Va. - Dec. 23, 2009 - Northrop Grumman Corporation
(NYSE:NOC) has equipped and fielded Tactical Common Data Link (TCDL) on
a U.S. Army Hunter MQ-5B Unmanned Aircraft System (UAS), which has been
deployed in support of the Afghanistan surge. The TCDL increases data
transfer rates and doubles the communications range on the MQ-5B
Hunter, enabling additional payload capabilities.

With the addition of the TCDL, Hunter now complies with
requirements for all modern UAS aircraft to have encrypted data and
video links. The TCDL also serves as a foundation of establishing
interoperability among different U.S. Department of Defense air
vehicles and ground stations. Such innovation also allows for manned
aircraft to use unmanned aircraft, their sensors and weapons as an
extension of their own capabilities keeping aviators out of harm's way.

TCDL also allows for smoother integration of present and future
Hunter payloads that exchange digital data using airborne ground
computers. With additional digital payloads in the future for Hunter,
the warfighter can expect an air vehicle that can bring multiple
sensors to bear on an area of interest to the battlefield commander
allowing for more rapid intelligence gathering, monitoring and even
targeting of enemy forces.

"When we changed from the RQ-5A to the MQ-5B configuration of
Hunter, we doubled the endurance of the air vehicle. And with the data
link transition, we have doubled the communications range giving the
warfighter a much larger area of coverage," said Drew Telford, Northrop
Grumman Technical Services' TCDL program manager. "As we enter our 11th
year of deployed service in support of the U.S. Army, the entire
Northrop Grumman Hunter team is keenly focused on bringing new combat
multiplier capabilities to the warfighter faster than the traditional
programs of record can."

The MQ-5B Hunter, which is currently deployed in contingency
operations, provides warfighters with state-of-the-art reconnaissance,
surveillance, and target acquisition (RSTA), communications relay,
signal intelligence, and weapons delivery. Hunter recently surpassed
80,000 flight hours, 53,000 of which are combat-related.

The RQ-5A Hunter was the Army's first fielded UAS. The MQ-5B is
the next-generation Hunter, continuing a legacy of service to Army
corps, division and brigade warfighters. Flying over the battlefield
with its multi-mission optronic payload, the MQ-5B gathers RSTA
information in real time and relays it via video link to commanders and
soldiers on the ground.

The MQ-5B Hunter is distinguished by its heavy fuel engines, its
"wet" (fuel-carrying) extended center wing with weapons-capable hard
points and a modern avionics suite. The MQ-5B Hunter system uses the
Army's One System ground control station and remote video terminal. It
also carries a communications relay package to extend the radio range
of warfighters.

The MQ-5B features a robust, fixed-wing, twin tail-boom design
with redundant control systems powered by two heavy fuel engines - one
engine to "push" and another to "pull" the air vehicle. Another Hunter
capability is its relay mode that allows one Hunter to be controlled by
another Hunter at extended ranges or over terrain obstacles typical of
those found in Afghanistan.

Northrop Grumman Corporation is a leading global security
company whose 120,000 employees provide innovative systems, products
and solutions in aerospace, electronics, information systems,
shipbuilding and technical services to government and commercial
customers worldwide.

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Senator Murray (D-WA) Illustrates She Knows Nothing About U.S. Economy

The competition between Boeing (BA) and Northrop Grumman (NOC) for the KC-X contract is pretty hot. As with many of these contracts the states that stand to benefit the most legislators are supportive. The states being Washington and Kansas for Boeing and primarily Alabama for Northrop. At the same time it doesn’t help anybody to throw insults around and play loose with facts.

Recently Senator Patty Murray of Washington was on National Public Radio (NPR) and supposedly said that “I would challenge anybody to tell me that they’ve stood on a line in Alabama and seen anybody building anything.” Ms. Murray demonstrates taht she knows little or nothing about the U.S. economy and Alabama’s contribution.

Mercedes Benz and Honda make thousands of cars a year in Alabama one assumes on a production line. Hyundai has a 500,000 car a year plant as well. Boeing employs thousands of people in the state as well working for NASA and the Defense Department. So she insulted those people while supporting them at the same time.

The contest should be above such petty insults.

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