Lockheed Martin To Continue IT Support For Pentagon
Filed under: Business Line, Companies, Contract Awards, Department of Defense, Events, IT, Lockheed Martin, Services, logistics
The Department of Defense awarded a contract to Lockheed Martin to continue to provide network and IT support for the world’s largest office building, The Pentagon. The contract is worth almost $300 million. This contract is a continuation of one awarded in 2000.
The Pentagon has been undergoing renovation since the late Nineties with further work required due to the attack on 9/11. This has meant significant upgrades to the networks and capability installed in the building. At the same time the U.S. military has invested heavily in data and computer technology. This contract will have Lockheed Martin running the Network Infrastructure Service Center for the building.
Selling Overseas To Make Up For Coming U.S. Defense Cuts
Filed under: Arizona, Bell, Brazil, Business Line, Companies, Congress, Countries, Department of Defense, Events, Federal Budget Process, India, Qatar, Raytheon, Restructuring, Services, States, UAE, development program, logistics, missile defense, production program
Arizona is a top beneficiary of defense dollars. This is primarily due to Raytheon and Bell activities in the state. Raytheon makes missile defense systems and Bell helicopters. Now with the possibility that Obama’s cuts to the defense budgets starting in 2010 and out the companies there are looking overseas for work.
Unfortunately this will be the business plan for all defense contractors if their is a significant contraction in U.S. defense spending. The focus will be on selling systems and support to Asian, South American and Middle Eastern companies. India, Brazil, the U.A.E. and Qatar have already made major investments in U.S. and European equipment and there are several major contracts coming. In 2008 the U.S. already captured two-thirds of the market but overall purchases were the lowest they had been since 2005. If this trend continues due to the global downturn in the economy there may be less opportunity for these sort of sales.
These trends may lead to further consolidation of the defense industry in the U.S. and abroad as domestic and foriegn markets may not be able to support the amount of business built up since 2001 primarily by the United States. This will be the most important factor facing the industry which has not seen this situation since the early Nineties and the end of the Reagan arms build-up.
Australia To Expand And Restructure Military
Filed under: Australia, Business Line, Countries, Events, Military Aviation, Restructuring, development program, production program
The current government of Australia under Prime Minister Rudd has announced major plans to restructure the country’s military for the Twenty-First Century. A white paper describing the proposed changes was released late last week. The focus will be on expanding the ground forces, re-equipping the Navy and general modernization.
The government is also looking at this increased investment in the military as a sort of stimulus for the Australian economy during the current downturn in the world’s finances. As much of the work possible will be done in Australia and for the Navy especially there are plans for significant new construction of submarines and ships.
The core of the plan is to add twelve new submarines and new destroyers and multi-role patrol craft. There will also be new helicopters for the Navy to replace the SH-2 fiasco. The Air Force modernization will be built around 100 F-35 Joint Strike Fighters (JSF). The ground forces will see a slight growth with new vehicles.
The way this is structured shows that Australia is looking at defending themselves with the submarines and aircraft. The ground forces will allow intervention in regional conflicts if necessary. The submarines as well will provide the core offensive capability if required. The White Paper makes it clear that China will be the dominant Asian power for the next several years and Australia must adjust their capabilities for this.
While Australia has spent more since 9/11 and used their forces in Afghanistan the major modernization programs were carried over from the Nineties. This is the first stop and relook at the country’s needs and rebaseline of capabilities.
Finland Lets Large Contract For Air Defense System
Filed under: Business Line, Companies, Contract Awards, Events, Finland, Konsberg, Military Aviation, Raytheon, missile defense, production program
The Country of Finland awarded a team of Kongsberg and Raytheon a contract worth about three billion Norwegian Kronor for a complete air defense system. Defpro.daily reports that the system will be based on NASAMS IIs system. This $460 million contract is the largest by the country since it purchased F/A-18 aircraft in the early Nineties.
As it has done in the past Finland is replacing older, Russian equipment with more modern, NATO compliant systems. The new air defense network will offer a significant upgrade in capability over the existing one used by the Finnish military. The NASAMS IIs is based around the AIM-120 air-to-air missile and a Raytheon made radar. It has been purchased by a variety of NATO and Scandinavian countries and was originally developed for Norway.
The contract will allow some of the work to be done in Finland offsetting some of the cost.
Textron to Sell Unit to Raise Cash
Filed under: Acquisitions, Business Line, Events, Federal Budget Process, Military Aviation, Woodward Governor, commercial aviation, production program
Textron Incorporated has been struggling of late due to downturns in the business jet market and the cancellation of the RH-70 Armed Reconnaissance Helicopter (ARH) contract that its component, Bell, was developing. Earlier this month Forbes reported that the company was looking at possibly selling portions of itself to keep cash flow going. At that time the discussion was about its finance business, but now CNNMoney.com writes that Textron agreed to sell its aircraft control and fuel management development and manufacturing group, HR Textron. This group will be purchased by Woodward Governor for about $365 million. This is to help that company expand its business in the airframes systems market. As there continue to be changes in the defense budget there will be more fallout among the defense industry. The Nineties saw significant mergers and contractions and that is certainly possible in the future as the U.S. military purchases less-and-less big ticket systems.
Florida Worries About the Defense Budget
Filed under: Department of Defense, Federal Budget Process, Florida, Lockheed Martin, Military Aviation, Restructuring, production program
This article in the OrlandoSentinal.com describes concerns that with the continued payout of money to save finance and other companies the US government may be forced to cut the defense budget. Concern surrounds the two big ticket fighter aircraft currently in production for the US military. The F-22 program is winding down unless Congress decides to extend the production beyond current planned numbers. There are also worries that the F-35 JSF program will be cut back or canceled. These programs provide a lot of work to Lockheed in the Orlando area. Read more
US Air Force sues Boeing over parts prices
The US Air Force and Government has launched a civil suit against Boeing over the pricing of B-1 bomber spare and replacement parts. The Air Force claims that in the contract Boeing charged prices as if the parts were being made by Boeing. Boeing then turned around a bought the parts from a cheaper sub-contractor. The price break was not passed on the the Air Force. The contract was awarded in the late Nineties.
See this article at Australia.to for more details.
Navy continues CEC work
Filed under: Contract Awards, IT, Raytheon, U.S. Navy, development program
Raytheon was awarded a contract today to continue work on Cooperative Engagement Capability (CEC). See a press release here. CEC is a natural development of the work the Navy has done with datalinks for the last 50 plus years. By the Nineties the Navy was able to share the sensor picture from one ship with others over a tactical data link. Even during the Gulf War this was not good enough for targeting. CEC’s goal is to develope a netted sensor grid that will support providing a fire control solution good enough that one ship can guide a missile launched from another. The Navy was installing CEC on selected ships by the end of the Twentieth Century. For more on CEC see this.
FN reiterates desire for M4 contract
Filed under: Belgium, Contract Awards, U.S. Army, production program
This article describes the FN plant in South Carolina. FN makes M16, M240 and other weapons for the US military there. FN has been expanding the plant steadily over the last few years and is waiting for the biggest prize in the US small arms business – next years M4 competition. Currently Colt makes all of the M4 carbines and has since the Nineties. There have been many complaints about its performance and even if FN won the contract many of the design issues could not be fixed without going to a whole new weapon. The contest next year will be interesting.
ITAR screws up DoD contract
Filed under: ABB Bomem, Canada, Federal Budget Process, production program
According to this article, a Canadian company, ABB Bomem Inc., was a subcontractor to a US firm making a system for the US military. It needed parts from an American company that were delayed several months due to the International Trafficking in Arms Regulations (ITAR). ITAR is a complicated legal process governing the export of American weapons and components to foreign entities. Since the Clinton scandals of the Nineties they have been ramped up a lot. Of course with the international integration of the worlds defense production they have also made it harder for US companies to do business with foreign nations and companies, as well as making it worse for foreign companies trying to get in to the large US market. This is why BAE, EADS and Finemeccanica are trying to buy US companies. Since they are already in the US and are considered American it makes it easier to operate under the ITAR.
Fear of US export control laws lead Canada to deny sale of company
According to this article the Canadian government denied the sale of MacDonald Dettwiler and Associates Ltd.’s satellite business to Alliant Techsystems Inc. See a previous post about the planned sale here. Canada cited the fact that if the company became American the laws protecting US technology exports would deny Canada access to the company’s satellite that focuses on the Canadian Arctic. Due to several scandals in the Nineties the US ramped up the laws governing technology transfer and export and make it very difficult to do this. Read more
Boeing’s role in defense aviation shrinks
Filed under: Boeing, Military Aviation, commercial aviation, development program
This good article in The Seattle Times summarizes how defense aviation is playing a less-and-less role in Boeing’s business. See the article here. It traces how from World War II on Boeing built large transports, tankers and bombers for the US Army Air Corps and Air Force. Now, with the loss of the KC-45 contract, they really are not doing any such business. They obviously rely primarily on their civil aircraft for the bulk of their earnings and profits. Boeing defense business is starting to be more and more in the area of engineering services and total program development and management. They were the Lead System Integrator (LSI) on what used to be called National Missile Defense (NMD) in the Nineties. They have also had similar roles in other major contracts.
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