Application Essay For Graphic Design Graphic Design College Admission Essay Admissions Essay Graduate School Proper College Admission Essay Heading College Admission Essay Heading Graduate Admission Essay Heading Heading On Admission Essay Admission Essay Harvard Admission Essay For Harvard Application Essay For Harvard University Funny Harvard Admission Essay Jfk Harvard Admission Essay Harvard Llm Admission Essay Harvard Mba Admission Essay Harvard Admission Essay Prompt Rivers Cuomo Admission Essay Harvard Admission Essay To Harvard Kennedy#39s Admission Essay To Harvard Rivers Cuomo Admission Essay To Harvard Harvard University Admission Essay Prompt College Application Essay How Long Common Application Essay How Long Should It Be How Long Should Admission Essay Be Admission Essay How To Application Essay How To Application Essay How To Start College Admission Essay How To Application Essay To A University Admission Essay To Business School Admission Essay For Baylor University Admission Essay Cornell Admissions Essay Csu Admission Essay To Dental School Admission Essay For Dental Hygiene Admission Essay Ethical Dilemma Admission Essay For Duke Admission Essay Graphic Design Admissions Essay To Fidm Admission Essay For Graduate School Admission Essay For Mba Admission Essay Heading Admission Essay For Howard Admission Essay Mph Admissions Essay To Nursing Application Essay To Nyu Admission Essay Prompts Admission Essay Psychology Admission Essay Physical Therapy Admission Essay For Rutgers Admission Essay International Relations Admission Essay To Stanford College Application Essay How To Start Admission Essay Teacher Admissions Essay Ucf Admission Essay For Usf Admission Essay For Vcu College Application Essay How To Write Admission Essay Yale Nyu Admissions Essay Hugh Gallagher College Admissions Essay Hugh Gallagher Common Application Essay Help Uc Application Essay Help Ib Application Essay Help College Application Essay Help Online Study Abroad Application Essay Help Nyc Doe Application Essay Help Internship Application Essay Help Mba Application Essay Help Medical School Application Essay Help Scholarship Application Essay Help Nyc Teacher Application Essay Help College Application Essay Heading Heading For Application Essay Graduate School Application Essay Heading Heading On Application Essay Proper College Application Essay Heading Scholarship Application Essay Heading College Admission Essay Introduction Graduate Admission Essay Introduction Admissions Essay Art School Admissions Essay Blog Admission Essay College Admission Essay Computer Science Admission Essay Carnegie Mellon Admission Essay For Culinary School Admission Essay For Dental School Admission Essay For University Admission Essay Goals Admission Essay How Long Admission Essay Hooks Admission Essay For Howard University Admission Essay Ivy League Admission Essay For New York University Admission Essay For Njcu Admission Essay Occupational Therapy Admission Essay For Odu Admission Essay For Ohio State University Admission Essay Proofreading Admission Essay Public Health Admission Essay Public Administration Application Essay Quotes Admission Essay For Radiology Admission Essay Social Work Admission Essay To Mba Admission Essay Uf Admission Essay Word Limit College Application Essay Prompts 2011 College Application Essay Thesis Statement Application Essay For Internship Appic Internship Application Essay Essay Applying For Internship How To Write An Application Essay For Internship Moma Internship Application Essay Museum Internship Application Essay Marketing Internship Application Essay Nursing Internship Application Essay Psychology Internship Application Essay Research Internship Application Essay Science Internship Application Essay Teaching Internship Application Essay Ib Application Essay 2012 Student Application Essay For Ib Essay For Ib Application Pre Ib Application Essay College Admission Essay Prompts 2012 College Admission Essay By Hugh Gallagher College Admissions Essay Blog College Admissions Essay Body College Admissions Essays Brown College Admission Essay Conclusion College Admission Essay Double Space College Admission Essay Don#39ts College Admissions Essay Diabetes College Admission Essay Funny College Admission Essay For Uf College Admission Essay Humor College Admission Essay How Long College Admission Essay Length College Admission Essay Mistakes College Admission Essay Music College Application Essay Prompts Nyu College Admission Essay Narrative College Admission Essay On Nursing College Admission Essay On Music College Admission Essays On Yourself College Admission Essay Prompt College Admission Essay Pharmacy College Admission Essay Quote College Admissions Essay Religion College Admission Essay Stanford Which College Entrance Essay Thesis Statement Is The Most Appropriately Focused College Application Essay Prompts Texas College Admission Essay Texas College Admissions Essay Ucf College Admission Essay Writing Prompts College Entrance Essay Writing Prompts College Admission Essay Word Limit College Application Essay Prompts New York University College Application Essay Art Institute Art Institute Of Chicago Admission Essay Admission Essay For Art Institute Application Essay For Art Institute Of Pittsburgh Art Institute Of California Admission Essay Essay For Admission To Art Institute Admission Essay Why I Want To Be A Nurse College Admission Essays For Criminal Justice Jmu Admissions Essay Prompt Juilliard Application Essay Johns Hopkins Application Essay 2012 Johns Hopkins Admission Essay Johns Hopkins Admission Essay Prompt Johns Hopkins Admissions Essays Worked Journalism Admission Essays Journalism Application Essay Journalism School Admission Essay Journalism College Admission Essays Jfk Admission Essay Jfk Application Essay Kellogg Admission Essays Kellogg Admissions Essays 2010 Kellogg Admissions Essays 2012 Kellogg Admissions Essays 2013 Kellogg Admissions Essays 2011 Kellogg Mba Admission Essay Kenyon Application Essay Kenyon College Admission Essay Kutztown Application Essay Ksu Admission Essay Ksu Application Essay Admission Essay Length Common Application Essay Length 2011 Graduate School Admission Essay Length Common Application Essay Length Limit Length Of Admission Essay Admission Essay Law School Best Law School Admission Essay Admission Essay For Law School Good Law School Admission Essay Harvard Law School Admission Essay Law School Admission Essay Length Yale Law School Admission Essay Admission Essay Low Gpa Admission Essays About Leadership College Admission Essay About Leadership College Admission Essay Leadership Mba Admission Leadership Essay Admission Essay For Lsu Application Essay For Lsu Harvard Law Admission Essay Nus Law Admission Essay Admission Essay To Law School Common Application Essay Length College Application Essay Length Common Application Essay Length 2012 Ut Application Essay Length Uc Application Essay Length Texas Application Essay Length Secondary Application Essay Length Common App Essay Length 2012 Common App Essay Length 2013 Ut Austin Application Essay Length Average College Application Essay Length Aampm Application Essay Length Texas Aampm Application Essay Length Common Application Activity Essay Length Common App Essay Ideal Length Tamu Application Essay Length Transfer Application Essay Length Texas Common Application Essay Length The Common Application Essay Length Apply Texas Application Essay Length University Of Texas Application Essay Length Common Application Transfer Essay Length Admissions Essay Leadership Application Essay For Leadership College Application Essay About Leadership College Application Essay Leadership Mba Application Essay Leadership Admission Essay On Leadership College Application Essay On Leadership Admitted Mba Essays Stanford Admission Essays Mba Application Essay For Mba Admission Essay For Business School Mba Admission Application Essay Mba Admission Essay Analysis Bu Mba Admission Essay Mba Admission Essay Consultant Mba Admission Essay Columbia Mba College Admission Essay Cambridge Mba Admission Essay Mba Admission Essay Editing Executive Mba Admission Essay Mba Admission Essay Help Hkust Mba Admission Essay Essay For Admission In Mba Mit Mba Admission Essay My Mba Admission Essay Nus Mba Admission Essay Nyu Mba Admission Essay Essay On Mba Admission Mba Admission Essay Pdf Personal Essay Mba Admission Mba Admission Essay Writing Service Mba Admission Essay Writer Wharton Mba Admission Essay Yale Mba Admission Essay Secondary Application Essay Medical School Best Medical School Admission Essay Admission Essay For Medical School Harvard Medical School Admission Essay Admission Essay To Medical School Mit Admission Essay Prompt Mit Admission Essay 2012 Mit Admission Essay 2013 Mit College Admission Essay Admission Essay For Mit Mit Graduate Admission Essay Mit Sloan Admission Essay Admission Essay For Msw Admission Essay For Social Work Application Essay For Social Work Secondary Application Essay Med School Admission Essay For Med School Application Essay For Mcgill University Medical College Admission Essay Application Essay For Medical School Application Essay Medical School Medical School Admission Essay Service Nursing Graduate School Admission Essay Nursing Grad School Admission Essay Essay For School Of Nursing Admission Writing Nursing School Admission Essay Admission Essay Nursing Admission Essay For Nursing School Admission Essay For Nurse Anesthesia Best Nursing Admission Essay College Admission Essay Nursing Graduate Nursing Admission Essay Nursing Admission Essay Help

GD to Support Army Investment in Medical Facilities

The U.S. military has been spending a larger and larger portion of its budget on medical care and facilities over the last decade. This has been driven by the operations in Iraq and Afghanistan, the recent growth in the size of the military, a large number of retirees along with members dependents. Primary care is through the TRICARE program which operates as a HMO basically. The different services also operate hospitals and clinics across the globe and the U.S.

During the recent round of Base Realignment and Closure (BRAC) hospitals were moved, expanded or built new to handle the changes in personnel assigned to the bases. There was also substantial investment at FT Sam Houston in San Antonio, TX as BRAC dictated centralization of all medical training there. This meant that facilities across the U.S. had to be merged as Army, Navy and Air Force training will take place there.

All of this work requires contractors to manage, execute and conduct the required work. General Dynamics (GD), for example, received recently 3 task orders from the U.S. Army to support their medical facilities. These are worth together about $100 million and have a period of performance of just over 2 years.

They will have GD provide equipment and movement services as 2 new facilities are stood up at FT Riley and FT Benning. These are new hospitals built as BRAC moved substantial numbers of troops to these sites from other U.S. bases. Both are planned to open in 2014. The third task will support new equipment and services for 2 clinics in Korea.

As the U.S. sorts out its budget issues there may be changes to plans right now for this type of investment but there will be some continued efforts to build new and better medical facilities for even a smaller U.S. military.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Boeing to Provide Logistics Support for CH-47

The U.S. Army has invested billions in rotary wing aviation over the last ten years. The UH-60, AH-64, CH-47 and OH-58D have flown millions of hours in support of fighting in Afghanistan and Iraq. At the same time they have developed and put into operation new versions of the aircraft such as the UH-60M and CH-47F. These aircraft have required intensive maintenance, support and modification due to the demands of the last decade.

Boeing (BA) as the manufacturer of the CH-47 also has benefited through these demands by providing logistic support to the aircraft. It recently received a contract for Performance Based Logistics (PBL) for the main rotor blades of the CH-47. The contract is for 5 years and worth almost $200 million. Rotor blades need to be repaired and rebuilt due to the harsh environments in Iraq and Afghanistan that often cause erosion and wear.

PBL is a current trend in U.S. military logistics support where the government is buying a level of support measured through metrics. This is supposed to be more efficient and cost effective as it minimizes buying too much support and reduces stockpiling of parts. Logistic contracts like this are a boon to the OEM for systems as they often for the first several years a system is in use get most of the support work. Depending on how much of the technical data owned by the Pentagon it may be they are the only ones who can do it and make billions over the life cycle of the system.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Reports of 2 Deals for AH-64D Apaches

There are reports that 2 Asian nations have decided to purchase Boeing’s (BA) AH-64D Apache attack helicopters. These advanced aircraft are in use with the U.S. Army and several allied nations such as Great Britain, the Netherlands, Israel and others. They have seen extensive use in Afghanistan and Iraq. The U.S. is currently buying AH-64D Block III versions of the helicopter.

Now it seems that India will be adding them to their inventory. The plan is to purchase 22 aircraft with weapons and other support. Total contract value could be as high as $1.4 billion. India had also been looking at the Russian Mil-28 helicopter. India has recently been looking to more Western sources and already has purchase Boeing P-8 and C-17 aircraft. The deal will include offsets allowing for Boeing purchases and investment in India.

It is also being reported that Indonesia will move out and buy 8 AH-64D. There are less details on this proposal available. Indonesia was looking at using a domestically produced aircraft for this mission but it now seems the Apache is a preferred option.

The U.S. military has invested billions in rotary wing platforms over the last decade as they have been a critical force multiplier. The plans to reduce their spending over the next decade will make contracts like this more important to the bottom line of defense contractors.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Further JLTV Contracts Awarded

The Army as part of the ongoing Joint Light Tactical Vehicle (JLTV) contract which ultimately will lead to a replacement for the HUMVEE awarded 3 contracts yesterday to companies to conduct Engineering, Manufacturing and Development (EMD) work. This should lead ultimately to the selection of one or perhaps two of them to produce the vehicle. The JLTV program could build tens of thousands of the light trucks for use by the U.S. military and many allied nations.

The teams selected for the continued effort were AM General, the current HUMVEE supplier, Lockheed Martin (LMT) and Oshkosh (OSK).

The initial contracts are in the $55-65 million range and will begin a little over two year effort of prototype development and testing which should then lead to a Milestone C Low Rate Initial Production Decision in 2015-16.

The practice of funding multiple EMD contractors and then choosing a winner was the successful acquisition strategy used for the MRAP-AT program in 2008 that led to Oshkosh producing thousands of those lighter, more maneuverable Mine Resistant Ambush Protected trucks for use in Afghanistan.

This is the second attempt at the JLTV as an earlier contest was cancelled due to the size and cost of the systems being developed.

The new JLTV will be more rugged then the HUMVEE taking the lessons learned from the last decade of fighting into account.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

More CROWS for the Army from Kongsberg

Kongsberg is a Norwegian conglomerate that supports the maritime and oil industries as well as having a fairly active defense group. One of its more important products this last decade is supporting the U.S. Army through the production of Crew Remote Operated Weapon Systems (CROWS).

CROWS allow a soldier to aim and fire his weapon while inside his vehicle under maximum protection. The CROWS consists of a turret mounting a variety of machine guns or grenade launchers, visual detecting and aiming systems, and controls for the gunner. The use of these type of mountings has greatly reduced casualties by reducing the exposure of the crews to direct fire as well as the mine and Improvised Explosive Device (IED) threat.

The Army has just awarded Kongsberg a further five year contract for production of the systems. If all options are exercised the contract could be worth up to just under a billion dollars. Previous contracts have seen Kongsberg deliver almost 10,000 systems for use on HUMVEE’s, MRAP vehicles and other support vehicles.

The company operates a plant in Pennsylvania to support these efforts.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

New Light Air Support Contest for Sierra Nevada and Hawker Beechcraft?

Late last year the U.S. Air Force awarded a contract to a team of Sierra Nevada and Brazil’s Embraer to provide light attack aircraft for use by the Afghan military. The contract also had the potential for further orders to support the U.S. military and other potential foreign customers. The only other company to submit a bid was Hawker Beechcraft.

The award was controversial as the Air Force eliminated Hawker’s bid for not being in the competitive range as well as denied their attempts to protest the decision. Hawker sued in Federal Court and it came out that the contract had already been awarded to Sierra Nevada. After reviewing the process the decision was made four weeks ago to cancel the contract and begin an investigation into the contracting process.

The Air Force has stated that the investigation will conclude next week and that it focused on documentation of the decision and not the actions of either contractor. Based on the data gathered so far the Air Force has decided to reinstate Hawker, allow new proposals and may conduct another evaluation. The service also may reserve the right to conduct a whole new competition with a new request for proposals and new bids.

At the same time there are reports that Hawker may have to file for bankruptcy due to its current debt load. If that is true then the Light Air Support contract may be key to keeping the company viable.

The Air Force has struggled over the last decade with evaluating bids and awarding contracts for new aircraft. The KC-X aerial tanker took three tries before Boeing (BA) won it with a version of their 767 airliner over Europe’s EADS. The CSAR-X rescue helicopter had two different competitions with no satisfactory result and the program ended up being cancelled. This contract follows in a similar vein.

The review seems to indicate that the Air Force found enough issues with the source selection process to warrant a new competition. Hopefully this one when it is completed will be conducted in such a way to avoid protest and strife and the service can move out with buying the aircraft.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Changes in Guam’s Plans Lead to Contract Cancellations

For several years the U.S. and Japanese governments have been working on moving a majority of the U.S. military based on Okinawa to Guam. This is to reduce their presence and potentially provide better training facilities. The move was going to be jointly funded by the two countries. One sticking point has been relocating the main Marine air base on the island which under the current plans will stay.

The Navy has been issuing contracts to build the new facilities on Guam which will include not only barracks but support capability such as a hospital, larger port, and the myriad things needed to support thousands of Marines, Sailors and Airmen and their families. The estimated cost of the move is close to $12 billion.

Right now though the move is under discussion and potential revision. This meant in the FY12 budget the Navy was specifically prevented from obligating anymore of the money from Japan. This meant that it has had to cancel two large contracts that were intended to be funded with that money.

The largest contract was an omnibus one, Mamizu Multiple Award Construction Contract, which would have allowed the Navy to issue orders to build facilities where the Marine headquarters were going to be. The other was for construction of a clinic.

The two governments have been working on this moved for several years. The fact that it remains unresolved despite much of the planning and work done in the last decade is not surprising. The presence of the U.S. on Okinawa has been a burden in the mind of the islanders and they would like all of it to leave. The relocation of the airbase has become a key sticking point and has not shown signs of resolution.

Even so eventually the U.S. will move a great deal of their infrastructure and personnel from Okinawa. The work on Guam will eventually get done and contracts issued and completed.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Long Running Saga of TRICARE Management Contracts Coming to an End?

Updated – To make clear this was an Agency level protest and not a GAO one.

TRICARE is the primary medical insurance program for the United States’ military. It covers those personnel, their dependents and retirees along with selected Reservists and National Guardsmen. It functions like a HMO for its members. The Defense Department divides up the country into regions and awards large contracts to individual health insurers to manage these. In 2009 new contracts were awarded but three of them were protested by different losers. Since then the Department of Defense has been working through the protests and getting new contracts in place.

The contracts are awarded regionally to provide management of care and providers. The West contract was originally won by the incumbent, TriWest, but UnitedHealth Group (UNH) protested. The Department of Defense upheld the protest and the contract was put up for bid again. Again TriWest and UnitedHealth bid on the contract. Now it is expected that a decision on the winner will be made in the near future.

Of course with the history of these contracts there is no guarantee that the loser may protest this decision. With the Southern contract Humana (HUM) and UnitedHealth went trough several iterations as the awards and protests followed each other. The last decision was by a Federal court in October that sided with Humana. This contract was in protest and litigation for over two years.

If the government can make a decision with this contract that sticks it should close out this saga. TRICARE contracts are usually only for five years so the next round should be coming up in 2014-2015. Expect competition to be just as fierce with that round.

Military health care is in transition as the Department of Defense looks for ways to reduce costs. These have increased greatly over the last decade due to the commitments to Iraq and Afghanistan and the larger size of the military. There are also now much more retirees and veterans who need care. In the next budget there is a proposal to increase the co-pays and fees paid by members for their TRICARE. There will also be pressure to reduce payments to service providers.

Even so expect the large health insurance companies compete for these contracts just like the last round.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

Despite Drawdown U.S. Awards Iraq Support Contract to Versar

The U.S. military may have left Iraq but that still leaves U.S. State Department and other agencies still working there. These will continue to require specialized support and utilize some contractors to do this. In this vein the U.S. Army Corps of Engineers awarded Versar, Inc. a contract to continue to provide personal services and support in Iraq.

The contract is for two years and will have a value of of almost $9 million if all options are exercised.

Versar, Inc. is a Virginia based corporation that provides a variety of different services and management to its customers. These include engineering & constructions, telecommunications support, hazardous material disposal, facility support and so on. The U.S. and other countries require these kind of services in Iraq, Afghanistan as well as other areas they operate.

Versar is publicly traded and for the last quarter reported results of $33 million in revenue and a net income of $824,000.00. The share price recently closed at just under $3.00.

The U.S. will continue to need all sorts of support contractors as they transition both Iraq and Afghanistan from direct military action to supporting those country’s governments. While the market will not be as large as it has been over the last decade there will still be a significant amount of work especially for contractors like Versar which can provide a variety of specialized services.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

ITT Exelis (nee Defense) Enters Brave New World of Defense Contracting

ITT Exelis (XLS) is what used to be ITT Defense, one of the component parts of the former ITT Corporation (ITT). That company decided to break itself into three separate parts spinning its defense, water and electronic components into separately traded companies. Reportedly the flat performance of its defense business had been one of the prime factors driving the decision.

In the early Nineties ITT Corporation itself was formed as ITT broke itself apart into ITT Industries; Starwood Resorts, which managed hotels and casinos; and Hartford which sold insurance. ITT Industries changed its name to ITT Corporation in the last decade.

ITT Exelis will now have all of the defense related industries which includes electronic warfare systems, radars, command & control systems, intelligence and surveillance as well as defense services and sensor and networks.

The new company is estimated to have earnings of about $800 million for this year and there are already rumors of the defense component being the target of acquisitions by other larger defense contractors.

ITT follows Northrop Grumman (NOC) which earlier this year separated its shipbuilding piece into a separate company entirely, Huntington Ingalls Industries (HII). Northrop was concerned that with budget cuts and the U.S. Navy’s shipbuilding plans that growth in this area would be very limited. This allows them to separate that sector from other more successful parts of the parent company.

How long ITT Exelis makes its as a unique company depends on how quickly the U.S. defense spending decreases and decisions about what the U.S. and Western Europe buys. If there are smaller amounts of budget available for new electronic systems ITT Exelis could be facing a very limited market. This might make it attractive to someone looking at buying capability and access to specific parts of the ITT Exelis portfolio and would see chunks of the company wither away.

The other question will be if similar moves are made by defense contractors splitting their military and commercial arms or jettisoning pieces that in the view of management and shareholders do not have much upside in the future. Exelis could be the start of a trend.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

ATK Follows Others and Moves to Washington D.C. Area

Following in the footsteps of other defense contractors Alliant Techsystems (ATK) announced that it would re-locate its corporate headquarters from Minnesota to Washington D.C. Recently Northrop Grumman (NOC), much larger then ATK, did the same transferring its personnel out of California and settling in the Northern Virginia suburbs. These moves are to aid the companies in preparing for future reductions in the U.S. defense budget by allowing better and easier engagement with Congress, the Pentagon and other Federal offices.

ATK will now be near the majority of the larger defense contractors as Lockheed Martin (LMT), General Dynamics (GD) and SAIC (SAIC) are also in the D.C. suburbs. This means that of the biggest defense contractors only Boeing (BA) and Raytheon (RTN) maintain their headquarters somewhere else. Boeing in Chicago and Raytheon in Massachusetts. Certainly the tax and economic situation in their states could easily see them moving at some time in the future to Virginia.

ATK is a mid-size defense contractor who primarily make ammunition, pyrotechnics and rocket engines. They serve a variety of U.S. defense customers as well as NASA. They have done quite well in the last decade due to the U.S. demand for small arms and heavier rounds for machine guns, tanks and artillery often used in Afghanistan and Iraq. Recently ATK has seen some contraction in their business with the last quarter reporting a drop in earnings and revenue.

A few months ago the company lost the contract to run the Army’s Radford plant making explosives to BAE Systems (BAE:LSE). This would have had a further significant effect on future earnings and the company protested. Before the protest could be resolved the Army decided to carry out a new competition which gives ATK hope of staying the incumbent.

The move to DC will not only help the company with its lobbying and engagement with customers but also allow easier business development efforts as being co-located with so many other companies will allow easier discussions of teaming and participating in larger contracts. Somewhat ironically BAE and ATK have teamed together to develop the new defense system for U.S. Navy aircraft called JATAS. Being in Washington may facilitate further contract efforts like this.

If companies feel they need to do this to gain a competitive advantage or even to maintain there current level of business we may see more moves. It used to be that companies did not feel the need to have a large office in D.C. and maintained headquarters across the country. Now it seems that in order to fight for every penny of reduced defense budgets this may be one way to gain an upper hand.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

EADS NA Will Not Protest

At a press conference earlier today EADS NA (EADS:P) stated that they will not protest the KC-X tanker award to Boeing (BA).

This means that the U.S. Air Force has awarded a new tanker contract successfully and the last decade of fits-and-starts is over. Now the emphasis shifts to Boeing and their efforts to meet the schedule and performance requirements of the program.

Hopefully this means in a few years the KC-46A will be flying over the United States.

BAE Systems Bounces Back but Faces Uncertain Future

BAE Systems (BAE:LSE) is the largest United Kingdom defense contractor. Not only does it provide the bulk of equipment and support for that country’s armed forces it also has penetrated the U.S. market over the last decade as well as participating in many joint European defense projects. The company has had a rough few years revenue and profit wise recently but was able to turn a profit for 2011.

The company in 2009 reported a loss driven by two major issues. First they were forced to pay a fine related to bribery and corruption on a major Saudi contract. Second their U.S. subsidiary lost a contract to build trucks for the U.S. military causing the company to take a large charge. This led to a loss of about $100 million.

In 2010 the company reported a profit of just over one billion pounds ($1.62 billion) showing a respectable turnaround. In an indication of the world’s defense spending the British company earned just over half of its revenue from work for the United States’ military or over eleven billion pounds ($17.8 billion).

The corporation though faces an uncertain future in the near term. The U.S. is planning on little or no growth in its defense budget and Britain is planning quite steep cuts to its. The U.K. has already announced cancellation or restructuring of several major programs including the Harrier and Nimrod aircraft, reduced training and reductions in the size of the Royal Navy. BAE predicts that in 2011 “land and armaments sales” will be down over $2 billion.

The company does have some future bright spots being a major contributor to the international production of the F-35 Joint Strike Fighter. As this begins to ramp up in quantities and deliveries over the next decade it should provide a decent amount of revenue for BAE. The program is the largest in history and the cornerstone of future U.S. defense spending.

Like many other defense contractors BAE hopes to make up potential domestic and traditional market declines by expanding into Asia and the Middle East as India and the Gulf States continue their investment in modern, updated weaponry. Right now though India especially has yet to award its big contracts such as a new fighter or replacement helicopter program but are expected too in the next two years.

BAE is just one symptom of a changing market as the U.S. and U.K. face up to budget realities and begins the process of winding down their commitment to Afghanistan.

Photo from Shandchem’s flickr photos

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

U.S. Government Investment in Transportable Power Paying Off

The U.S. military and other agencies are deployed all across the world conducting combat, support and relief operations. One of their biggest demands is for electricity. This is used to power weapons systems, radios, data links as well as housekeeping services such as air conditioning. The U.S. soldier relies on batteries to power his personnel equipment such as Night Vision Goggles (NVG) and portable electronics. Much of this electricity including recharging batteries comes from generators powered by gasoline that are either stand alone or built into vehicles. The U.S. government has over the last decade looked at coming up with systems that don’t need to burn petroleum.

This is for a variety of reasons but mainly because oil is expensive to transport to places like Afghanistan. There are concerns too that eventually there won’t be any oil or it will become even more expensive.

The Defense Advanced Research Product Agency (DARPA) has invested money in different ideas. One of these is for small, flexible photovoltaic systems. Two years ago DARPA sponsored a contest for teams to come up with wearable power systems. These would replace batteries and be equipment that could be carried by the individual soldier and power his equipment.

Various parts of the government including DARPA, the Navy and Air Force have invested in biofuel research. In April the Navy flew a F/A-18 fighter using a mix of biofuel and standard jet fuel. The aircraft was able to fly at supersonic speeds with the use of its afterburner.

Another approach is being taken by SkyBuilt. This small defense contractor located in Arlington, VA builds portable, transportable systems that provide extended power generation through a combination of wind, solar and batteries. There design fits into a standard shipping container or can be built into a truck that may be set up quickly and left to run for several months at a time. They received investment capital from the U.S. government and now deliver systems for use by the military and other government agencies.

Even if there are not the predicted shortages of oil in the future development of low cost energy alternatives is a wise decision by the government. There are many instances where these systems may provide power and support. This kind of investment will also increase the supply of petroleum based products by mitigating the need for their use. Biofuel research achieves the same goal. As with many technologies there is a good chance of rapid improvement in size, cost and capability over the next decade now that a great deal of the basic research has been completed.

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

>