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Big Defense Contractors Duel for Missile Defense Contract

Since Desert Storm the United States has spent billions on developing different missile defense systems. While they have invested in more exotic systems such as the Air Force’s Airborne Laser (ABL) which uses a large chemical laser on a Boeing (BA) 747 to engage long range missiles the majority have been based around ground or ship launched interceptors. One of the largest programs and a priority of the previous George W. Bush Administration was the Ground-based Midcourse Defense system.

At one point called the National Missile Defense (NMD) system this consists of several silo mounted interceptors in Alaska supported by a collection of radars and other sensors across the world. The new Obama Administration canceled the expansion of the program which included more missiles in Alaska as well as building a site in Europe but has continued to maintain and keep ready the existing parts of the program.

The primary contractor on the systems has been Boeing and this has included a contract to maintain and run the deployed missiles and radar. This contract is coming up for renewal and the Missile Defense Agency (MDA) has decided to compete it. The contract has an initial value of about $600 million and has attracted interest from the major U.S. defense contractors.

Boeing obviously plans to try and win their existing work and has teamed with Northrop Grumman (NOC) to submit a proposal. Northrop has worked with Boeing since the Nineties on the system as it was developed, tested and deployed. As the incumbents they do have extensive experience with the system.

Lockheed Martin (LMT) and Raytheon (RTN) form the other team that has so far submitted a proposal. These two companies have worked extensively together on Army and Navy missile defense programs such as THAAD, PATRIOT and AEGIS. There teaming to try and win this contract away from Boeing is only natural.

The total value of the contract if all options are exercised could be as much as $10 billion. In a time when it looks like the U.S. defense budget may be flat or even decline large support contracts like these are attractive to many companies.

The MDA is hoping that with competition they will be able to get a better deal to maintain the system and the fact that they have attracted at least two bids seems to indicate there will be some price variation that must be balanced against technical capability and past performance.

The source selection will take several months and there is always a chance of a protest by the losing team. If defense funding does decline competition for these contracts will become more fierce leading to potential delays for the government in awarding work to the winner and saving money compared to the current contract.

Photo from Irish Typepad’s flickr photostream.

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Boeing Announces New Vice President for Boeing Military Aircraft India and Growth Adjacencies

June 16, 2010 by · Comment
Filed under: Boeing, Syndicated Industry News 
Boeing Announces New Vice President for Boeing Military Aircraft India and Growth Adjacencies
June 16, 2010

ST. LOUIS, – Boeing [NYSE: BA] today announced that Bob Gower has been named vice president, Boeing Military Aircraft (BMA) India and Growth Adjacencies.

In this new position, Gower will expand and manage the BMA product line in India, including P-8I, F/A-18IN, C-17, and Apache. Gower also will lead BMA’s efforts to grow aggressively into adjacent markets.

Prior to this assignment, Gower managed several businesses within BMA. Most recently, he served as vice president of F/A-18 and EA-18 Programs, managing a multibillion-dollar business as it maintained a perfect record of on-time deliveries. He also successfully completed development of the EA-18G Growler electronic attack variant and captured domestic and international orders.

Previously, as vice president of Tanker Programs, Gower was responsible for the technical, cost and schedule performance of the 767 Tanker Program. He led the program's start-up, capture of initial international customers, and development of the tanker and associated support.

Gower also has served as vice president of Supplier Management Operations for Boeing Defense, Space & Security. In this position, he led an e-commerce initiative, a common systems initiative, and strategic supplier contracting, and served as national chairperson of the Aerospace Industries Association Supplier Management Council.

Other positions Gower has held within McDonnell Douglas and Boeing include general manager of Navy Missile Systems, director of Supplier Management and Procurement for F/A-18, director of Process Improvement in the McDonnell Douglas Corporate office, assignments in Corporate Contracts and Pricing, and various financial positions on the Tomahawk Missile program.

"Bob is an outstanding leader who will be critical in helping Boeing grow and reposition to meet the complex defense and security challenges of the 21st century," said BMA President Chris Chadwick. "Bob understands customer needs and always works to find a way to exceed customer expectations."

Gower holds a bachelor’s degree in business administration from Southeast Missouri State University and a master’s degree in business administration from Lindenwood University. He is a graduate of the Advanced Management Program of the University of North Carolina at Chapel Hill. Gower served in the U.S. Marine Corps Reserve until 1988, attaining the rank of sergeant. He serves on the Executive Board of the Greater St. Louis Area Council, Boy Scouts of America.

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Raytheon Awarded $19 Million U.S. Navy Missile Launcher Contract

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

Raytheon Awarded $19 Million U.S. Navy Missile Launcher Contract
April 21, 2010

INDIANAPOLIS, — The U.S. Navy’s Naval Air Systems Command has awarded Raytheon Company (NYSE: RTN) an $18.9 million firm-fixed-price contract to produce LAU-115D/A and LAU-116B/A missile launchers.

The launchers are used on Navy F/A-18E/F and E/A-18G aircraft. They provide the structural and electrical interfaces that allow the aircraft to carry and launch missiles such as the Advanced Medium-Range Air-to-Air Missile (AMRAAM) and AIM-9X Sidewinder.

The launchers will be built at the Raytheon Technical Services Company LLC facility in Indianapolis, Ind. Work on this contract is expected to be completed in September 2012.

Raytheon Company, with 2009 sales of $25 billion, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 88 years, Raytheon provides state-of-the-art electronics, mission systems integration and other capabilities in the areas of sensing; effects; and command, control, communications and intelligence systems, as well as a broad range of mission support services. With headquarters in Waltham, Mass., Raytheon employs 75,000 people worldwide.

Note to Editors:

The AMRAAM and AIM-9X Sidewinder missiles are produced by Raytheon Missile Systems, Tucson, Ariz.

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