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LCS 3 ‘Fort Worth’ Validates Surface Weapon Package, UAS Operations on Sea Trials

November 17, 2013 by · Comment
Filed under: Syndicated Industry News 

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Mikros Systems Corporation Continues To Fulfill US Navy Demand For ADEPT® Units; Seeks To Establish Additional Placements — Press Release

PRINCETON, N.J., Feb. 6, 2013 /PRNewswire/ — Mikros Systems Corporation (OTCBB: MKRS) announced today that it expects to deliver an additional 35 Adaptive Diagnostic Electronic Portable Testset (ADEPT®) Units to the US Navy during the first quarter of 2013. Upon fulfillment, Mikros will have delivered 139 ADEPTs to the Navy over the past five (5) years.

ADEPT units are manufactured in the Mikros Largo, FL facility. DRS Technologies performs initial build and assembly, with final assembly and testing being performed by Mikros under a $26M contract from the Naval Weapons Center in Crane, IN. Currently, each ship in the Aegis fleet is expected to have 2 ADEPT Units for support of the SPY- 1 radar. In addition to continuing the outfitting of the Aegis fleet of destroyers and cruisers, Mikros has contracts to supply ADEPT variants to the Littoral Combat Ship (LCS). This is a 55 ship program and Mikros’ ADEPT equipment will be on the USS Freedom (LCS-1) when she sails on her first deployment. The LCS program represents a substantial new market for ADEPT Units. Mikros is also proposing to apply ADEPT to conditioned-based maintenance applications on other naval platforms, such as amphibious ships, carriers and submarines. Combined, these platforms have the potential to generate wide placement of ADEPT Units and multiple additional orders throughout the Navy.

The ADEPT equipment was designed in conjunction with the Naval Surface Warfare Centers in Crane, IN, Port Hueneme, CA, and Dahlgren, VA, over a seven year period. This investment in research and development is beginning to provide benefits to the US Navy in the areas of efficiency and readiness. In addition to supplying the ADEPT equipment directly to the fleet, Mikros personnel are providing training both onboard ship, and at the Aegis Training and Readiness Center (ATRC) in Dahlgren, VA. Mikros has two Navy trained Fire Controlmen doing the final assembly of the product in Largo, as well as providing training, calibration and other support services to the fleet. “The 20 years of at-sea experience that our young Navy veterans bring to the fleet is an invaluable contribution to the weapons systems readiness of the Aegis ships. We expect that once these systems are fully integrated into the entire Aegis Fleet, other ship classes and equipments in the Navy will follow suit,” stated Thomas J. Meaney, President of Mikros.

The company has a number of other programs complementary to the ADEPT product line. We are under contract with the US Navy to develop a communications buoy that draws power from ocean waves and continuously charges the power supply, enabling a greatly expanded mission life. Mikros is teamed with Ocean Power Technologies of Pennington, NJ, who supply the ocean power take-off technology. Mikros is the systems supplier integrating the various power sources (waves, wind, solar) with radios and other technologies. It is anticipated that small buoys of this type with long mission lives could support various payloads such as sensors and communications for Navy war-fighting applications.

About Mikros

Mikros Systems Corporation is an advanced technology company specializing in the research and development of electronic systems technology primarily for military applications. Classified by the U.S. Department of Defense as a small business, its capabilities include technology management, electronic systems engineering and integration, radar systems engineering, combat/command, control, communications, computers and intelligence systems engineering, and communications engineering. Mikros’ primary business is to pursue and obtain contracts from the Department of Homeland Security, U.S. Navy, and other governmental authorities. For more information on Mikros visit: www.mikrossystems.com

Important Information about Forward-Looking Statements: All statements in this news release other than statements of historical facts are forward-looking statements which contain our current expectations about our future results. Forward-looking statements involve numerous risks and uncertainties. We have attempted to identify any forward-looking statements by using words such as “anticipates,” “believes,” “could,” “expects,” “intends,” “may,” “should” and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company’s actual results, events or financial positions to differ materially from those included within the forward-looking statements. Such factors include, but are not limited to, changes in business conditions, a decline or redirection of the U.S. Defense budget, the termination of any contracts with the U.S. Government, changes in our sales strategy and product development plans, changes in the marketplace, continued services of our executive management team, our limited marketing experience, competition between us and other companies seeking SBIR grants, competitive pricing pressures, market acceptance of our products under development, delays in the development of products, statements of assumption underlying any of the foregoing, and other factors disclosed in our annual report on Form 10-K for the year ended December 31, 2011 and other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date hereof.

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Austal Lays Keel for 3rd JHSV

May 7, 2012 by · Comment
Filed under: Editorial 

Austal America is the U.S. subsidiary of Australian high speed ferry and ship builder Austal. They have a yard in Mobile, AL and are currently working on two similar designed ships for the U.S. Navy. These are one of the two versions of the Littoral Combat Ship (LCS) as well as the fast, mobile support ship, the Joint High Speed Vessel (JHSV).

These are both aluminum, trimarans based on ferry designs manufactured by Austal. The LCS is a small combatant also being built by Lockheed Martin (LMT) and Marinette Marine at a yard in Wisconsin that uses a more traditional design. Austal has so far received orders for 9 JHSV from the U.S. Navy. Last week they laid the keel for JHSV 3 while construction on JHSV 2, USNS Choctaw County, continues.

JHSV 1 is close to delivery and recently conducted builder trials.

The company also has orders for five LCS and has delivered their first, USS Independence (LCS 2). LCS 4, USS Coronado, is close to delivery and LCS 6 and 8 are under construction.

Austal has been quite successful in winning orders based on their trimaran fast ferries. Ultimately up to 10 JHSV and 20-25 LCS could be built by the company.

Photo taken by Author.

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U.S. Navy Orders 2 of Last 3 JHSV from Austal

Yesterday the U.S. Navy announced that it had executed a contract option for 2 more Joint High Speed Vessels (JHSV) from Australian ferry builder Austal. This brings the total number of these ships ordered to 9.

Austal is close to finishing the first and has two more in production. The contract yesterday will allow the builder to begin buying long lead items and components for the two ships.

The JHSV is a fast transport based on Austal’s ferry designs that was originally planned to be used by the Navy and Army for rapid transport of troops and supplies to needed areas. It was decided that the Navy would manage the whole program and the ships were transferred to them.

Originally it was thought that up to 23 of the ships would be procured but in their FY13 budget proposal the Obama Administration reduced the planned number to 10. This means that 9 of them are now on order with the chance that only one more will be purchased.

Austal is building the ships in their Mobile, AL yard where they also make the Littoral Combat Ship (LCS). They have a contract for up to 10 of these. Interest

Photo from HerrKrueger’s flickr photostream.

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General Dynamics to Support Future Submarine Design

Due to the amount of new warships being built every year the number of suppliers is fairly limited. The U.S. Navy relies on two companies to build large warships, General Dynamics’ (GD) Bath Iron Works, and Huntington Ingalls Industries (HII), which formerly was part of Northop Grumman (NOC). GD is the only builder of submarines at their Electric Boat Division. The requirements are not enough to support any more companies.

The smaller ships like the Littoral Combat Ship (LCS) are being built by smaller contractors as they need less intensive facilities but for any ships bigger the Navy must rely on these defense contractors.

This is not only for future production but also for the design and development of new ships and submarines. That is why GD’s Electric Boat Division received a contract to continue work on developing the new “Common Missile Compartment” for potentially both the U.S. and the United Kingdom’s future ballistic missile submarines. The contract is worth about $190 million but has the potential to be over $700 million if all options are exercised.

Even though the U.S. defense budget is supposed to decline in the next few years the services must maintain some investment in future systems. That means that work like this must be done even if the new submarine is not ordered anytime soon. The U.S. needs to built a certain number of new ships and submarines each year to maintain their fleet and keep it reasonably modern.

While ships may be upgraded and have service lives of 25 or more years new technological developments mean that there has to be some new construction. GD and HII will be relying on this to keep their facilities and workforce employed.

Photo from Official Navy Imagery’s Flickr photostream.

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U.S. Navy Awards General Dynamics $87 Million for Unmanned Underwater Mine Countermeasure Vehicle — Press Release

U.S. Navy Awards General Dynamics $87 Million for Unmanned Underwater Mine Countermeasure Vehicle

Protecting ships and sailors with modernized underwater mine hunting capability

FAIRFAX, Va., Nov. 9, 2011 /PRNewswire/ — The U.S. Navy’s Naval Sea Systems Command has awarded General Dynamics Advanced Informational Systems a contract to design and build the Surface Mine Countermeasure Unmanned Underwater Vehicle (SMCM UUV) system. The system will initially be a part of the Littoral Combat Ship Mine Warfare mission package. The contract has a maximum potential value of $86.7 million for one Engineering Development Model (EDM) and five low-rate initial production systems if all options are exercised. General Dynamics Advanced Informational Systems is a business unit of General Dynamics (NYSE: GD).

The SMCM UUV system will allow Navy commanders and sailors to reliably detect and identify mines in high-clutter underwater environments in a single pass, including mines that are suspended in the ocean, resting on the sea floor or buried. Additionally, it will gather environmental data that can provide intelligence support for other mine warfare systems.

“General Dynamics continues to deliver affordable, flexible solutions that meet the Navy’s vision for open architecture,” said Lou Von Thaer, president of General Dynamics Advanced Information Systems. “Commanders and sailors will now have the most capable and advanced system available to detect, avoid and defeat mine threats.”

General Dynamics will use an open systems architecture approach to ensure the SMCM UUV will have the flexibility to be integrated into missions on Littoral Combat Ships, as well as other ship types. The Navy’s evolving and dynamic mission requirements call for a design that allows “plug and play” integration for ship’s systems and mission modules. These interchangeable packages of specialized equipment allow the Navy to quickly reconfigure a ship for changing mission requirements.

General Dynamics plans to hire 10 new employees to support this contract. The development and manufacturing will be done in Greensboro, N.C., Fairfax, Va., Quincy, Mass., Braintree, Mass., and Panama City, Fla.

The General Dynamics Advanced Information Systems team includes Bluefin Robotics, Quincy, Mass.; Ultra Electronics Ocean Systems, Braintree, Mass.; and Oceaneering International, Houston, TX.

The program office for this contract is the Unmanned Maritime Systems Program Office (PMS 406), one of six program offices within the Navy’s Program Executive Office, Littoral Combat Ship (PEO LCS).

For more information about General Dynamics Advanced Information Systems, visit www.gd-ais.com.

More information about General Dynamics is available online at www.generaldynamics.com.

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Navy Goes International for LCS Radar

Update at 1700 CDT – The post has been updated to make clear that the SAAB radar has been selected only for the Austal USA version of the LCS.

The U.S. Navy’s new Littoral Combat Ship (LCS) is a small combatant designed to fight close in to shore. It will carry out a series of different missions including anti-piracy operations, Anti-Submarine Warfare (ASW), surveillance and reconnaissance and sanction enforcement. It is unique to the U.S. Navy at this time in that two very different designs with the same basic capability are being built from two contractors This is to allow rapid production.

LCS construction is being carried out by Lockheed Martin (LMT) teamed with Marinette Marine Corp. of Wisconsin as well as Austal USA, a subsidiary of Australian company Austal. The Navy has ordered 9 of the ships so far split between the two teams.

The Navy announced this week that it has decided to install the Sea Giraffe AMB radar onto the Austal USA version of the LCS. This system is manufactured by SAAB’s (SAABB) American subsidiary. The “Agile Multi-Beam” radar provides air and surface surveillance capabilities and is used to generate a three dimensional picture of the area to support operations. It has already been installed on a variety of combatants in use with countries like Sweden, Canada and Australia.

No value for the contract was given.

The first two, LCS 1, USS Freedom, and LCS 2, USS Independence, have already been completed.

The Navy had gone back and forth on the acquisition strategy for the ship due to concerns about price and schedule after the first two were put on contract. The original plan to use the two sources was ended and there was discussion of ordering batches of ten to a single producer at a time. After the proposals were received for the first contract from Lockheed and Austal the prices were so good the Navy went back to ordering from two suppliers.

Late last year the Navy gave contracts for ten ships each to the two companies.

The LCS remain controversial due to their size, weapon suite and capabilities. The Navy seems committed to the program and has begun large scale production. The decision to use the Sea Giraffe also highlights their commitment. It is uncommon for a non-American system to be ordered like this. The standard U.S. Navy radar and combat system, the AEGIS Weapon System, is much too large for the LCS and buying an existing system like this should save time and schedule.

As with all new classes of ships once they have been in service for a few years, worked out their kinks and demonstrated their capabilities they will be accepted and should be a valuable addition.

Due to the concerns about future shipbuilding budgets and capabilities the LCS if it really is built in the numbers proposed will make up a decent portion of the U.S. surface fleet by mid-Century. Ships last a long time and can receive incremental upgrades as technology progresses and that is what will happen with this class.

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Alion Awarded $4.6M Navy Contract to Develop PC-based Training System for Littoral Combat Ship-2 — Press Release

Alion Awarded $4.6M Navy Contract to Develop PC-based Training System for Littoral Combat Ship-2

Technology Solutions Company to Continue its Support of LCS by Enhancing and Expanding Readiness Control Officer Trainer for the New LCS Hull

McLean, VA – May 2, 2011 – Alion Science and Technology, an employee-owned technology solutions company, was awarded a three-year, $4.6 million task order from the Naval Air Warfare Center Training Systems Division (NAWCTSD) to design a high-fidelity serious game to train sailors for the Littoral Combat Ship-2 (LCS) Readiness Control Officer (RCO) position.

Alion will expand its PC-based Virtual Maintenance Performance Aid (VMPA) from the current system developed for the LCS-1 RCO to an updated solution designed for the LCS-2 environment. This design approach demonstrates the reconfigurable nature of the simulation architecture and yields a more cost effective solution. Since each vessel has different training requirements, Alion’s VMPA RCO for LCS-2 trainer will include a ship-specific Electronic Control System graphical user interface, an instructor station that can control the training environment, the ability to integrate with the Surface Warfare Officers School’s LCS Bridge Training System and the virtual ship simulation that allows the trainee to learn the new equipment in a 3-D environment.

Ultimately, it is intended that the LCS-2 RCO will integrate with the LCS Shore Based Training Facility (SBTF) in San Diego.

“Alion is continuing its support of the VMPA Readiness Control Trainer program by building off of the existing trainer to provide a fully interactive, PC-based virtual ship environment to teach individual and team training on the LCS-2 hull,” said Rear Adm. Richard E. Brooks (USN, Ret.), Alion Senior Vice President and Manager of the Distributed Simulation Group. “Our trainer represents the capability to provide a total ship training environment, from tactical and force protection to damage control and maintenance training.”

Alion will provide the updated hardware and software for LCS-2 RCO to the Surface Warfare Officers School and the Littoral Combat Ship Class Squadron. VMPA was developed in partnership with the Office of Naval Research and NAWCTSD to bridge the gap between training, skills and performance. NAWCTSD is the Littoral Combat Ship Training System Executive Agent.

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Lockheed Martin Team Lights Off Diesel Generators Onboard Nation’s Third Littoral Combat Ship — Press Release

Lockheed Martin Team Lights Off Diesel Generators Onboard Nation’s Third Littoral Combat Ship

MARINETTE, Wis., May 16, 2011 /PRNewswire/ — A Lockheed Martin (NYSE: LMT)-led industry team reached a key milestone with the “light off” of the ship service diesel generators onboard the nation’s third Littoral Combat Ship (LCS), Fort Worth.

The generator light off signifies the ship is ready to run on its own power and this milestone included the successful light off of the ship’s four 750-kilowatt Fincantieri IsottaFraschini diesel generators. Fort Worth will undergo a series of light offs in coming months in preparation for sea trials, scheduled for later this year. During this time, the Lockheed Martin team will continue its dock-side testing of the ship’s systems at Marinette Marine. Fort Worth will be delivered to the U.S. Navy in 2012.

“The generator light off is an important milestone in preparing Fort Worth to complete testing and set sail, bringing us one step closer to delivering the Navy its next ship in this class,” said Joe North, vice president of Lockheed Martin’s Littoral Ship Systems business. “Throughout this process, the team has remained focused on building on our experience while remaining on schedule and on budget.”

The Lockheed Martin industry team designed and constructed the nation’s first LCS, USS Freedom, which has sailed more than 50,000 nautical miles and demonstrated its capabilities since its commissioning in 2008. Based in its homeport of San Diego, Calif., the ship completed a highly successful maiden deployment in 2010 and is now fully integrated into the fleet.

In addition to Marinette Marine Corporation, a Fincantieri company, the Lockheed Martin-led team for LCS 3 includes naval architect Gibbs & Cox as well as best-of-industry domestic and international companies.

Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 126,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation’s 2010 sales from continuing operations were $45.8 billion.

For additional information about Lockheed Martin, visit:

http://www.lockheedmartin.com/ms2/ and http://www.lmlcsteam.com

SOURCE Lockheed Martin

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Teledyne Wins $9 Million Littoral Combat Ship Mission Modules Manufacturing Contract

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

THOUSAND OAKS, Calif.–(BUSINESS WIRE)–Teledyne Technologies Incorporated (NYSE:TDY) announced today that its subsidiary, Teledyne Brown Engineering, Inc., in Huntsville, Ala., was awarded a $9 million contract from Northrop Grumman Corporation (NYSE:NOC) to manufacture four Littoral Combat Ship (LCS) Gun Mission Modules (GMM). Teledyne Brown will manufacture each of the modules and assemble and test them at the company’s Huntsville manufacturing facility. Each module will be equipped with a 30



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Alion Awarded $4.6M Navy Contract to Develop PC-based Training System for Littoral Combat Ship-2

May 2, 2011 by · Comment
Filed under: Syndicated Industry News 

MCLEAN, Va.–(BUSINESS WIRE)–Alion Science and Technology, an employee-owned technology solutions company, was awarded a three-year, $4.6 million task order from the Naval Air Warfare Center Training Systems Division (NAWCTSD) to design a high-fidelity serious game to train sailors for the Littoral Combat Ship-2 (LCS) Readiness Control Officer (RCO) position. Alion will expand its PC-based Virtual Maintenance Performance Aid (VMPA) from the current system developed for the LCS-1 RCO to an updat



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LCS Spin Off Contracts Begin to be Awarded

At the end of last year the U.S. Navy announced that it would go ahead and use two sources for the new Littoral Combat Ship (LCS). This was a reversion to the original plan for the small warship designed to fight inshore. Contracts were quickly awarded to Lockheed Martin (LMT) and Austal America (ASB:AUS) for ten ships each.

Now a variety of support and sub-contracts are beginning to be announced by suppliers for components to help assemble the new ships. While the two designs have very different hull forms the basic combat systems and weapons will be the same.

BAE Systems (BAE:LSE) has announced that they will fabricate 57-millimeter cannons for the Lockheed ships. These guns will be made at their plant in Minnesota. This is part of Lockheed’s almost $4 billion order for ships.

General Dynamics (GD) received a contract from Austal to build their ship’s combat and seaframe control systems. This is an open architecture system that supports the Navy’s plan to have different combat modules that are interchangeable on the ships.

One of the companies that may stand to gain the most from the contracts is Alcoa (AA). They not only provide engineering support to the Navy for the use of aluminum and other metals in ship construction including the LCS but also make the metal that Austal will use to assemble their LCS in Mobile, AL. If the Navy builds upwards of thirty or forty ships the amount of aluminum required will be quite substantial.

Lockheed also has awarded Rolls-Royce (RR:LSE) a contract for the power plants and propulsion systems. The Lockheed ships will be built at Marinette Marine’s yard in Wisconsin. Rolls-Royce makes the MT30 gas turbine which then uses water jets to propel the LCS.

As the two LCS programs continue more-and-more of these large sub-contracts will be announced as the money and work flows to different parts of the United States and many different companies. This continues to illustrate the economic effects of large defense procurement programs.

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Fort Worth Littoral Combat Ship Launches, Equipped With Argon ST Threat Detection System

December 21, 2010 by · Comment
Filed under: Syndicated Industry News 

FAIRFAX, Va.–(BUSINESS WIRE)–The nation’s third Littoral Combat Ship (LCS), Fort Worth, equipped with Argon ST’s WBR-2000 threat detection system, was recently christened and launched at the Marinette Marine Corporation shipyard in Wisconsin. “We’re proud to play a role in protecting and providing critical information to sailors through WBR-2000 capabilities,” said Terry Collins, general manager of Argon. “For more than two decades, Argon has delivered high-performance electronic warfare and s



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U.S. Navy Extends LCS Bids While Waiting on Congress

The U.S. Navy asked the two bidding teams for the new Littoral Combat Ship (LCS) contract to extend their prices until December 30 while they wait for Congress’ decision on whether two different contracts may be awarded. The original prices on the bids from Lockheed Martin (LMT) and Austal America (ASB:AU) were set to expire today but the Navy asked Congress to consider a change in the acquisition strategy from one to two sources.

As it is in their best interest to allow the Navy more time for this the two contractors agreed. The House of Representatives has already approved the move but the Senate must also.

The Navy recently decided after reviewing the proposals from the two bidders that it was in their best interest to return to the original acquisition strategy of using two sources for the new light warship. The prices offered were so good especially compared to the original four ships that it was felt that the rapid acquisition of the ships justified using two different builders.

At the start of the program the Navy intended to use ships from Lockheed and General Dynamics (GD) teamed with Austal to rapidly build dozens of the ships. In 2009 it was decided that the next contract would go to one contractor and then have follow on batches separately competed. Each of the original teams built two ships but cost increases and schedule delays led to rethinking that strategy.

The advantage gained by having more ships built quicker while keeping the U.S. industrial base busy in case of future demands may be worth the extra money the dual providers may require.

Since both designs carry almost identical weapon and sensor suites their capabilities are broadly similar the difference is in their hull designs. Lockheed is using a conventional shaped hull while Austal designed a trimaran based on their high speed ferries.

The Navy’s request for the price extension indicates that they support the two source program. If Congress does fail to act though there will be a return to the plan to order the next ships from one of the two bidders.

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Navy LCS Strategy Raises Idea of Split KC-X Buy Again

In the past some analysts and members of Congress floated the idea of using both Boeing (BA) and EADS (EADS:P) as sources for new tankers. This split buy would negate contract protests and also more rapidly replace the aging KC-135 aircraft. The U.S. Air Force had always pushed back saying that the logistical costs of having two very different aircraft would be too expensive. Neither Boeing or EADS really supported the idea publicly either.

One of the leading proponents was Democratic Congressman John Murtha of Pennsylvania who died in the last year. The idea seemed to go away when the Air Force released its latest RFP and Boeing and EADS submitted their proposals.

Now the U.S. Navy’s decision to use two sources for their new small combatant the Littoral Combat Ship (LCS) is raising the issue again.

The original plan was to use two different designs and contractors to make this ship due to the large amount planned to be built. Two years ago because of cost and schedule problems the Navy changed its plan to one where several batches of ships would be awarded in separate contracts. But after receiving the proposals for the first batch the prices from the two bidders were so good the Navy has asked to go back to the dual source plan again.

There are some differences as the Navy planned for multiple providers even with the new acquisition strategy. The KC-X was always going to be one. The LCS despite two radically different hull designs meet the same basic requirements for speed, seakeeping, range and weapon layout. The Airbus 330 and Boeing 767 designs are quite different in fuel loads, range, runway and support requirements so the Air Force would still have two large, dissimilar logistic tails.

Even if Congress or others want the Air Force to copy the Navy in this case it really doesn’t make sense to do so. The original strategy should be stuck too and carried out.

Navy Changes LCS Aquisition Strategy Again Orders for GD and Lockheed

The Littoral Combat Ship (LCS) will be the next mass produced small warship for the U.S. Navy. As it names implies it is designed to operate close to a coast conducting patrol and combat missions. The Navy originally planned when the program began to buy fifty-five of the ships. In order to meet the production goals a novel acquisition strategy for the program was chosen with two different ships built to the same requirements being designed and ordered.

General Dynamics (GD) and Lockheed Martin (LMT) teamed with small shipyards were both given contracts for two ships. The two designs were not much alike with GD and Austal USA using a ship based on Austal’s fast multi-hull ferry designs built in Mobile, AL to deliver USS Independence (LCS-2). Lockheed and Marinette Marine of Wisconsin built a more traditional looking ship the USS Freedom (LCS-1).

Due to schedule delays and the delivery being more complicated then originally planned both teams faced cost growth. Due to this the Navy in late 2009 changed plans and decided to cancel the program and start over with a new competition. Because money had already been spent on LCS-3, the USS Fort Worth, Lockheed was allowed to complete the ship. It was decided to have one contest with a winner being announced this Fall and allow them to build ten ships. In 2015 another contest would be held to choose a builder for the next batch.

This week though the Navy said that the prices submitted by both teams for the competition were so good that they want to change acquisition strategy yet again to buy from both bidders. Obviously this is good news for Austal USA and Marinette and their bigger partners as they may each now get ten ships apiece to build.

This plan makes much more sense and is consistent with the original plan and will allow the LCS to enter service much more quickly in large numbers. It is based though on the bidders meeting their price quotes and this is where Congress may have second thoughts about it. They will be committing to buying a large number of ships at prices that based on the experience of the first three might be too low. This would mean that more money would have to be provided later on or quantities reduced.

There is every reason to think that the two teams can deliver on the prices they bid. They have had experience building ships and their supply chains are established giving good insight into costs. Congress might protest as their will be desire by the respective delegations to give as much work as possible to the shipbuilder in their state.

An interesting turn in the LCS program that will be the future of Navy surface warships for the next few decades as well as affecting revenue and earnings for the companies involved.

Photo from uscglantareapa flickr photostream.

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Potential Sale of Northrop’s Ship Yards Signal First Major Shakeup of U.S. Defense Contractors

On Friday Northrop Grumman (NOC) one of the biggest U.S. defense contractors filed paperwork with the Securities Exchange Commission (SEC) that lays the ground for selling their shipbuilding assets. As early as June the company had said that they were considering this move.

As we wrote several weeks ago the U.S. Navy is looking at a severe reduction in planned ships and ship construction:

“With the pressures on the defense budget caused by the fighting in Iraq and Afghanistan for the last nine years as well as the high cost of new ships the number of orders each year has been reduced. On top of that the Obama Administration canceled or restructured planned programs by ending the DDG-1000 and substituting current DDG-51 class ships as well as ending a plan to have two designs produced for the new Littoral Combat Ship (LCS) and have a competition.”

So far at least one company, Cleveland Ship, has said that they intend to purchase Northrop’s yards. There are also reports that several private equity companies are exploring the purchase. Many smaller defense contractors or parts of larger ones have recently been purchased by equity companies including the sale of Northrop’s SETA arm, TASC, to one in 2009.

There have been rumors that the then smaller Northrop would consider a merger with Boeing (BA) to maximize the similar product lines and capabilities.

In the Nineties as the defense budget declined due to the “Peace Dividend” there was major contractions in the number of defense contractors mainly through M&A activity. The expected decline in the next decade will have the same effect as the number of programs and contracts decline.

Northrop’s ship yards in Louisiana and Virginia make aircraft carriers, destroyers and amphibious war ships. The Newport News facility is the only place that aircraft carriers are made as well as doing major refit work on them. Its operation is critical to the support of the U.S. Navy which is built around these ships.

The yards are also major employers for these states and their closing or reduction would be severe blows to the local economy. Keeping them open and working is critical to not only the industrial base but also the economy during a recession.

Unfortunately the Department of Defense is looking at improving efficiencies in their defense contracting. Keeping sites open just to have jobs is inefficient and costly. This may mean money for other programs may have to be used to maintain this industrial base capability. The balancing act will only get harder as defense budgets decline.

The U.S. may be entering a time when it cannot afford or build enough ships to support its current industry and while ship construction is first it may spread to other sectors of the defense economy such as aerospace and vehicle development and production.

Any loss of industrial base this time around will be expensive and time consuming to recover when the U.S. is facing economic and budgetary difficulties.

Photo from cybaea’s flickr photostream.

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Austal USA Continues Work on JHSV

The U.S. Department of Defense awarded Austal USA (ASB:AU), the U.S. subsidiary of Australia’s Austal, a contract for two more Joint High Speed Vessels (JHSV). These represent the fourth and fifth ships of the class being built for the U.S. Navy and Army. The JHSV will be used to move supplies and equipment to an area where they are needed. As there name implies they are much faster then traditional merchant shipping.

This order follows one for the advanced procurement items issued four months ago worth $100 million. This contract has a value of about twice that. Austal is building as many as ten under the contract but ultimately the U.S. would like to buy over fifty. Austal would be one of the sources considered for the follow on contracts.

Austal is known for making high speed ferries but their U.S. subsidiary based in Mobile, AL has branched out into military projects. They have teamed with General Dynamics (GD) to build one of the designs accepted for the original Littoral Combat Ship (LCS) program. The Navy was going to have this team along with Lockheed Martin (LMT) build the ships but has now changed their minds after the first three were started to have a competition for the remaining ships. Austal will most likely be one of the bidders for that contract.

The first JHSV will be delivered at the end of next year. The first of many ships that the company will build for the U.S. Navy Austal hopes.

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Work Continues on the Reduced DDG-1000 Program

Back at the turn of the century the U.S. Navy had major new ship programs underway to significantly modernize their fleet. These included a new aircraft carrier, CVX, a new cruiser, CGX, a new destroyer, DDG-21, and a small combatant, the Littoral Combat Ship (LCS). Since then due to budget constraints, technology difficulties and the effects of the operations in Iraq and Afghanistan the program has seen major changes. The cruiser was cancelled and the new DDG has morphed into the DDG-1000 Zumwalt program with only three of the new ships planned. To make up for this the Navy has continued buying DDG-51 destroyers that originally went into service twenty years ago.

The Navy had originally split the program between Northrop Grumman (NOC) and General Dynamics (GD). The current plan is for all three to be built at GD’s Maine yard with support from Northrop. The construction of the first one is in process and it should be completed in the 2012-2013 time frame.

In support of this the company and Navy are awarding numerous sub-contracts for the ships. For example, FieldServer Technologies, part of Sierra Monitor Corporation, has received a contract to build, install and integrate an automated fire detection and suppression system. No value for the contract was given. Fire is a major threat to any ship and this advanced system will aid the smaller-by-design crew in fighting them.

The program has faced challenges controlling cost growth but now seems to be on a steady path. Unfortunately due to budget pressures and technical issues only three of the advanced ships will be purchased. Th future fleet will consist of DDG-51, the three Zumwalts and thirty of forty LCS until a new small combatant program can be started.

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U.S. Shipbuilding Industry the First to Consilidate Due to Defense Spending Realities

Northrop Grumman (NOC) has announced that they will close one of their yards in Avondale, LA with the first layoffs planned for early October as well as look at selling their shipbuilding business. This decision is based on the fact that the Navy is not buying enough ships and has led to rumors of a Boeing (BA) and Northrop merger.

With the pressures on the defense budget caused by the fighting in Iraq and Afghanistan for the last nine years as well as the high cost of new ships the number of orders each year has been reduced. On top of that the Obama Administration canceled or restructured planned programs by ending the DDG-1000 and substituting current DDG-51 class ships as well as ending a plan to have two designs produced for the new Littoral Combat Ship (LCS) and have a competition. Northrop says that the Avondale facility will close when it completes the two LPD-17 class amphibious warfare ships being built there.

The Navy is trying to aid the company and keep its industrial base larger by accelerating a new tanker program three years. This will allow Northrop to bid on them and perhaps be able to build them in Avondale. The moving up of the construction will also free up dollars in the out years for the new SSBN program which is expected to eat up most of the ship building dollars.

Even with this announcement there is no guarantee that Northrop will win the work since the ships are based on an existing hull already made by General Dynamics for underway replenishment ships. Northrop is just reacting to the writing on the wall.

The Secretary of Defense, Robert Gates, has just announced a whole set of initiatives to make defense spending more efficient. Spreading work across multiple ship yards just to keep them working is not the way to gain efficiency. It might make sense from an industrial base concern but is not the best way to save the taxpayers money. The Pentagon either has to balance these two demands or accept that their industrial base will begin to wither if their is not enough work to keep it going.

The same may happen to the aviation industry as F-22 and C-17 production is ending leaving just the JSF and the new KC-X tanker as major programs. This might not be enough to support Lockheed Martin (LMT) and Boeing’s capabilities for military aircraft production. Boeing will close their Long Beach, CA plant once the last C-17 rolls off the line and without winning the KC-X won’t have a military aircraft in production. This might make them tempted to merge with another contractor to keep some capability.

The cost of modern weapons may lead to a round of consolidation such as happened in the Nineties as the industry adjusted to the reduced defense dollars after the end of the Cold War. Unfortunately this is capability that will be hard to re-grow if needed putting the U.S. in an interesting position in the future if there is a need for another ramp up in defense spending.

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Northrop Gains by Subtraction

Northrop Grumman (NOC) announced that they are considering selling their shipbuilding unit or even setting it up as a separate company. This news drove their stock to a recent high yesterday. The company has already separated a major part of their company with last year’s sale of TASC, its SETA branch and now seems willing to give up another part.

As part of the announcement the company also said that it would close one major and two minor yards in Louisiana and transfer all of their work to the Pascagoula yard in Mississippi.

The trend over the last twenty years had been consolidation of the defense industry in the United States. Companies used mergers and acquisitions to build their business and expand their product lines. Part of this was driven by the decline of the U.S. defense budget in the Nineties that led to less major programs and contracts which then supported fewer suppliers. Since 9/11 the large growth in defense spending has seen non-U.S. companies enter the market in large numbers to provide the necessary competition and capability. These companies like BAE Systems (BAE:L) and EADS (EADS:P) often established U.S. subsidiaries or acquired U.S. companies to allow market penetration.

It has been expected that the defense M&A market would start picking up due to the expected decline in the U.S. defense budgets. While there have been some deals this activity has not been at a high level yet.

This move by Northrop to divest its ship building may be a sign that such activity might be picking up. It is clear by the effect on the share price that the market feels this is a good move for the company.

Northrop faces a reduced market as the U.S. Navy finishes some products such as the LPD 17 amphibious assault ships and has limited near term future. The Navy will build the Littoral Combat Ship (LCS) but will choose between Lockheed Martin (LMT) and General Dynamics (GD) for that product. The new destroyer and cruiser were canceled with the focus being on the DDG-51 continuation. Northrop builds that ship along with General Dynamics.

Because the U.S. ship building market looks bleak it might be hard for another defense contractor to acquire Northrop’s group and it might end up as a separate company.

The U.S. defense industry looks like it is entering a phase of re-structuring similar to what happened twenty years ago and which is not unexpected. The questions will be the long term effects on the U.S. economy and industrial base.

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Northrop Grumman Mine Detection System Flying Towards Operational Evaluation

Northrop Grumman Mine Detection System Flying Towards Operational Evaluation
June 30, 2010

MELBOURNE, FL. - Northrop Grumman Corporation (NYSE:NOC) and the U.S. Navy have begun the next phase of the flight test program leading to the "final exam" Operational Evaluation and potential approval next year for full-rate production of the Airborne Laser Mine Detection System (ALMDS). The Navy is conducting the Developmental Flight Test-IIE (DT-IIE) program from its Surface Warfare Center Panama City Division site in Florida. The first flight occurred on June 8.

ALMDS is an airborne mine countermeasures system, one of several systems in development by Northrop Grumman to address the threat posed by mines to U.S. and allied ships. ALMDS uses its pulsed laser light and streak tube receivers to image in 3-D, day or night, the near-surface of the ocean.

The system is housed in a pod that is mounted on the port side of an MH-60S helicopter and measures just under nine feet long with a 21-inch diameter. ALMDS will be a key component of the Littoral Combat Ship (LCS) Mine Countermeasures Mission Package. Northrop Grumman also is the LCS Mission Package Integrator for the Navy.

"Mines are worldwide, inexpensive, and readily available to terrorists and rogue nations for use against military and commercial ships," said Dan Chang, vice president of Northrop Grumman Maritime and Tactical Systems. "Being able to find them rapidly, without slowing the pace of our fleet, is the purpose of ALMDS. It's about getting the sailor out of the minefield wherever possible."

The Navy will fly ALMDS approximately 40 times during the DT-IIE evaluation. A technical evaluation will follow and will lead to the full-scale Operational Evaluation late next year.

"We've had four flights to date and, though I can't go into details, the feedback we've gotten is that the system is performing well and reliably," said Chang. "The flight test data have allowed us to make a few minor software adjustments that have sharpened the capabilities of the system."

Northrop Grumman has delivered five ALMDS pods to the Navy, all on or ahead of schedule, under LRIP phase-1 and -2 contracts. An LRIP phase-3 contract is expected later this year.

In addition to ALMDS, Northrop Grumman is developing the Rapid Airborne Mine Clearance System (RAMICS) for the U.S. Navy, which will use ALMDS data to relocate and then destroy the mines from a safe distance. The company is testing its Airborne Surveillance, Target Acquisition and Minefield Detection System (ASTAMIDS) for the U.S. Army, and its Coastal Battlefield Reconnaissance and Analysis (COBRA) for the Marine Corps.

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Lockheed Martin Team Reaches 50 Percent Completion in Construction of Nation’s Third Littoral Combat Ship

Lockheed Martin Team Reaches 50 Percent Completion in Construction of Nation's Third Littoral Combat Ship
June 15, 2010

MARINETTE, Wis., -The Lockheed Martin (NYSE: LMT)-led industry team recently accomplished a key milestone by reaching the 50-percent completion mark in the construction of the nation's third Littoral Combat Ship (LCS). LCS 3, named Fort Worth, is on track for delivery to the U.S. Navy in 2012.

Fort Worth is being built by Marinette Marine Corporation and is scheduled to be launched later this year. All of the ship's major equipment has been installed and 100 percent of its modules are under construction.

"Lockheed Martin and its teammates have demonstrated strong performance in constructing LCS 3," said Joe North, Lockheed Martin LCS program manager. "We are on schedule and on cost under a fixed-price contract. This performance proves our ability to deliver a low-risk solution that will meet the Navy's need for a class of affordable and survivable warships."

Marinette Marine constructed and launched the nation's first LCS, USS Freedom. USS Freedom's capabilities have been demonstrated since its commissioning in 2008. The ship has been operational for 18 months and successfully completed its first deployment in April. Throughout the deployment, the crew completed four drug interdictions, in which more than five tons of cocaine were seized in the U.S. Southern and U.S. Pacific Command areas of responsibility.

In addition to Marinette Marine Corporation, a Fincantieri company, the Lockheed Martin-led team for LCS 3 includes naval architect Gibbs & Cox as well as best-of-industry domestic and international companies. In late 2009 and early 2010, the team installed Fort Worth's main propulsion equipment, including the 16-cylinder diesel engines, produced by Fairbanks-Morse, as well as two Rolls-Royce MT30 gas turbines.


Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 136,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The corporation reported 2009 sales of $45.2 billion.

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Lockheed Martin Announces Briefing Schedule for Navy League Sea-Air-Space Exposition

Lockheed Martin Announces Briefing Schedule for Navy League Sea-Air-Space Exposition
April 27, 2010 4:17 PM

WASHINGTON, — Lockheed Martin will present a number of program briefings for members of the media during the Navy League Sea-Air-Space Exposition May 3-5, 2010.

Journalists may sign up to follow Lockheed Martin’s major Sea-Air-Space media activities on Twitter. Additionally, Lockheed Martin will post news, information and other multimedia during Navy League Sea-Air-Space.

Briefings will take place during the week on the exhibit show floor in exhibit hall A room MR3 by the Lockheed Martin renewable energy booth.

Lockheed Martin Press Briefings/Events

Monday, May 3

Gaylord National Resort
201 Waterfront Street
Exhibit Hall A Room MR3
National Harbor, MD 20745

11:00 a.m. — Littoral Combat Ship… An Affordable Design
Presented by Paul Lemmo, vice president, Business Development, Lockheed Martin MS2
In response to the Navy’s single-design acquisition plan for the Littoral Combat Ship program, Lockheed Martin has submitted a proposal with an affordable, low-risk design. Lockheed Martin will highlight the ways in which it is meeting the Navy’s need to drive down cost in the areas of sustainment, training, communications and the ship’s combat system.

2:00 p.m. – Ocean Thermal Energy Conversion… Renewable, Endless Ocean Power
Presented by Dennis Cooper, OTEC program manager and Dr. Ted Johnson, business development
To help the Navy and the country meet its renewable energy goals, Lockheed Martin and its team members are working to produce an economically viable renewable energy source that exploits the temperature difference between warm surface water and deep cold water. The process is free of global warming emissions and does not require any external fuel source. Lockheed Martin will highlight its design for a large scale “pilot plant” that will serve as the prototype and validate technologies for small to large scale commercial sized Ocean Thermal Energy Conversion (OTEC) power plants.

Tuesday, May 4

09:30 a.m. – Media Availability – New Technologies Continue to Make the MH-60R the World’s Most Advanced Operational Maritime Helicopter
Captain Dean Peters, MH-60 Program Manager, NAVAIR; George Barton, Lockheed Martin Director Naval Helicopter Programs; Len Wengler, Sikorsky Helicopter VP
The U.S. Navy and industry will be available to discuss technology upgrades for the U.S. Navy’s MH-60R, including the Joint Mission Planning System and periscope detection among other topics. Lockheed Martin and Sikorsky recently delivered the 56th mission-ready aircraft to the U.S. Navy and are actively marketing the aircraft internationally.

11:30 a.m. – K-MAX Media Availability-Unmanned Cargo Lift Capability Ready to Deploy
Dan Spoor, Rotary Wing Vice President; Terry Fogarty, KAMAN General Manager UAS Product Group
Team K-MAX is ready to begin modifying K-MAX aircraft for the U.S. Marine Corps’ urgent need for unmanned cargo lift rotorcraft. The K-MAX UAS can deliver a larger sling load in a shorter period of time, to more locations, and to higher altitudes than any other rotary wing UAS. To expand its cargo delivery capabilities, Team K-MAX is also flight testing cargo air drops as an alternative delivery mechanism.

2:30 p.m. – Lockheed Martin’s Technology Collaboration Center – An Integral Part of Low-Risk CANES Pursuit
Presented by Dan Phelan, Program Manager, TCC-W
In March 2010, the U.S. Navy competitively awarded two initial system design and development contracts for its Consolidated Afloat Networks & Enterprise Services (CANES) program. Lockheed Martin will explain how its Technology Collaboration Center-West (TCC-W) is playing a critical role in the CANES program and how its collaboration with small businesses on emerging leading-edge and Open Architecture (OA) technologies is accelerating warfighting capabilities for the U.S. Navy.

Wednesday, May 5
11:30 a.m. – JAGM: The Right Weapon at the Right Time
Presented by Rick Edwards, vice president for Lockheed Martin Tactical Missiles/Combat Maneuver Systems and John Myers, vice president of Tactical Programs for Aerojet
Currently in competitive technology development, Lockheed Martin’s Joint-Air-to-Ground Missile (JAGM) will be the next-generation air-to-ground missile for rotary-wing, fixed-wing and unmanned platforms. The missile will replace the HELLFIRE, Longbow, Airborne TOW and Maverick missiles for the Army, Navy and Marine Corps. This briefing will address recent testing accomplishments, as well as provide a look ahead at milestones that will culminate in a competitive down select later this year.

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Lockheed Martin Submits Littoral Combat Ship Proposal to U.S. Navy

Lockheed Martin Submits Littoral Combat Ship Proposal to U.S. Navy
April 12, 2010 4:40 PM

WASHINGTON, --The Lockheed Martin (NYSE: LMT)-led industry team submitted its proposal for the Littoral Combat Ship (LCS) fiscal year 2010-2014 contract to the U.S. Navy today.

Lockheed Martin is one of two industry teams competing for the contract. The Navy will award the winning team a fixed-price incentive fee contract to provide up to 10 ships as well as combat systems for five additional ships. Two of the 10 ships would be acquired in fiscal 2010 and the rest via options through fiscal 2014.

"We are offering the U.S. Navy a low-risk, affordable design that has already proven itself essential to the expanding challenges faced by our Sailors," said Lockheed Martin Chairman and CEO Bob Stevens. "Lockheed Martin is committed to continuing our strong performance to ensure delivery of an affordable class of LCS ships for our nation."

The Navy awarded the Lockheed Martin team a fixed-price incentive fee contract in March 2009 to build the Navy's third LCS. LCS 3, the Navy's future USS Fort Worth, is being built in Marinette, WI, with all of the ship's modules currently under construction and nearly 40 percent of the ship complete.

Lockheed Martin's first LCS, USS Freedom, was delivered to the Navy in 2008. In February, it began its maiden deployment approximately two years ahead of schedule. Since then, the ship has conducted a series of drug interdictions in which the crew seized more than five tons of cocaine.

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