SI International purchased by UK company
Filed under: Acquisitions, England, SI International, Serco, U.S. Air Force
Serco, a large service provider from the UK with worldwide operations, announced that it had purchased the US defense contractor, SI International. The $400 M deal expands Serco into the US defense market and represents another broadening of their market base. This continues the trend of European companies buying US ones in order to reach the large DoD budget here. By buying a US company many of the technology transfer and security requirements that impact foreign companies doing business can be minimized. SI International has 4,500 employees and primarily supports the US Air Force, an area that Serco does not do much business with.
The Guardian has the story here.
Union and Boeing try to agree
Filed under: Boeing, Contract Awards, GAO, Military Aviation, Proposal, Protest, U.S. Air Force, logistics, production program
Boeing is negotiating with the machinists union who make up the core of its workforce on both military and commercial aircraft. Today they sent their best and last offer. This includes the employees who will build the tanker for the US Air Force. So in the middle of trying to write and cost a proposal to the Air Force for a program that is seen as key to the company holding onto a market they are trying to prevent work stoppages. Strikes are the kind of thing that can kill a program’s schedule.
See Excite News for more.
Update: The union leaders have recommended rejection of the Boeing proposal and striking on 4 September. While this will have a large effect on civil aircraft production it won’t help Boeing get ready for the KC-45 if they win again.
See Bloomberg.com for a story on this mess.
Arrests in Afghanistan contracting scandal
Filed under: Contract Awards, Justice Department, U.S. Air Force, crime, logistics
Two Air Force personnel and three Afghan nationals were arrested over charges that bribes were paid to win contracts for military construction in Afghanistan. Two of the Afghans also resided in the United States. Supposedly a bribe of $30,000 was paid to the US Air Force officials to win a $1 M construction contract in 2004. Another bribe was paid later to win a road contract. Several US military and civilian personnel have been arrested and charged with contract related corruption in Kuwait, Iraq and the United States. With the amount of money going to the efforts in Afghanistan and Iraq there is always a chance for such crime.
There is more at The Wall Street Journal’s MarketWatch.com site.
US Air Force looks to replace C-130E aircraft
Filed under: Federal Budget Process, Lockheed Martin, Military Aviation, Proposal, U.S. Air Force, U.S. Marine Corps, production program
The US Air Force has begun talks with Lockheed Martin on executing a multi-year procurement contract for C-130J aircraft. These would replace the Air Forces and other Service’s current inventory of C-130E Hercules. The contract could be for up to 110 aircraft and have a value over time of $6 B. Multi-year procurements must be authorized by Congress and they are typically done for aircraft and other large systems in order to save money over time.
For more see The Guardian’s Business Feed.
Boeing and KC-45 in turmoil
Filed under: Boeing, Contract Awards, Department of Defense, EADS, GAO, Military Aviation, Northrop Grumman Corp., Proposal, Protest, U.S. Air Force, commercial aviation, logistics, production program
After meeting with DoD and the US Air Force to discuss the new tanker RFP due to the GAO upholding their protest, Boeing is now saying that without significantly more time to prepare a proposal they may have to drop out. The new schedule is for the Boeing and Northrop Grumman teams to submit by the end of October with a decision before the new calendar year. Boeing is saying that they may need to bid a larger aircraft then the KC-767 proposed last time due to the fuel capacity and range requirements. A variant of the 777 would have to be used. Boeing supposedly is asking for a more then 180 day delay in the submissions. EADS and Northrop Grumman will most likely submit a tweaked version of their original winning proposal.
For more see The Wichita Business Journal and WashingtonPost.com.
Air Force awards omnibus support contract
Filed under: Contract Awards, Military Aviation, Northrop Grumman Corp., U.S. Air Force, logistics
The US Air Force awarded an omnibus maintenance contract. Northrop Grumman was one of the twelve companies that qualified for the contract. See the press release here. If all parts of the contract are executed the value could be as much as $10 B. Normally how these contracts work the government, here the Air Force’s depots, will issue task orders which the qualified companies may bid on. There is no guarantee that any work will be awarded or any company will get work.
Air Force buys sounding rockets
Filed under: Alliant Techsystems, Contract Awards, NASA, U.S. Air Force, missile defense, production program, space
Alliant Techsystems was awarded a contract by the US Air Force to provide sounding rockets for it and NASA’s use. See a press release here. Sounding rockets tend to be small, single stage rockets that stay suborbital. They can be used to simulate targets for ballistic missile defense tests and experiments, and also support NASA activities and experiments. One common use before the Test Ban Treaty was to collect data from nuclear tests in the Pacific and the American West.
Air Force executes JASSM production option
Filed under: Alabama, Contract Awards, Lockheed Martin, U.S. Air Force, production program
Lockheed Martin was awarded a contract by the US Air Force for production of 111 Joint Air to Surface Standoff Missile (JASSM) and related services. The contract has a value of $107 M. See the press release here. The missiles will be produced at the company’s facility in Troy, AL. The JASSM has now had over a 1000 units ordered with a production goal of 4,000. For more on the system you can read Wikipedia here.
Air Force orders HC/MC-130 aircraft
Filed under: Contract Awards, Lockheed Martin, Military Aviation, U.S. Air Force, production program
The US Air Force placed a contract wit Lockheed Martin for six HC/MC-130J aircraft. This $470 M award was using the FY08 Advanced Procurement with the rest of the order being paid for in FY09. See a press release here. These aircraft will most likely support operations by US Special Forces Command, and are a variant of the C-130J that has been purchased by the USAF, Marines and foreign companies for the last few years.
USAF Secretary comments on protests
Filed under: Boeing, Contract Awards, EADS, GAO, Northrop Grumman Corp., Protest, U.S. Air Force, commercial aviation, logistics, production program
Secretary Wynne of the US Air Force discusses protests in this article. The gist is that the Air Force is accepting protests as a matter of course and is working to make the selection process more transparent in an attempt to limit them. The key quote is “”We’ve got so few suppliers that I’m not going to treat them badly because they protest. It’s their right,” Wynne told an aerospace industry group.” Read more
Congress begins to debate KC-45 FY09 funding
Filed under: Boeing, Congress, Contract Awards, Department of Defense, EADS, Federal Budget Process, GAO, Northrop Grumman Corp., Protest, U.S. Air Force, commercial aviation, logistics
As part of the beginning of the mark-up of the FY09 President’s budget by the various House and Senate committees Congress is beginning to debate the future of the KC-45. According to this article, Congressman Young from Florida has suggested that the US Air Force split award the tanker contract. This would mean half goes to EADS, the winner, and half to Boeing. While this may be a politically judicious solution it has many impracticable aspects. First the cost increase to the total program would be significant as there would now be two sources of parts and two training systems set-up for the different aircraft. Second the Air Force would have to revisit the whole concept of basing and deployment as you would now have a mix of larger and smaller aircraft. The basis for the whole program is a capability requirement that feeds from larger OSD requirements to support the actual warfight. The split might mean more then the current planned buy would be necessary - another cost increase. The DoD and USAF are taking a position of waiting for the GAO ruling in about 40 days before anything is decided. Congress would be advised to do the same.
UK goes the lease route for their tankers
Filed under: Boeing, Contract Awards, EADS, England, Northrop Grumman Corp., commercial aviation, logistics
In kind of a switch from the US the UK decided to lease their new tankers from EADS. It also looks like full Contractor Logistics Support (CLS) will be utilized. This means that the contractor will be paid to do all of the maintenance on the aircraft. This has become more common in the US as well as it minimizes the up front costs to the government as they do not have to stock parts or train mechanics. Read more
Boeing gets next V-22 production option
Filed under: Boeing, Contract Awards, Military Aviation, U.S. Air Force, U.S. Navy, production program
The US Air Force and Navy gave Boeing and its team a contract for another 167 V-22 aircraft. See the story here. The contract is worth over $10 B and will also provide necessary support services. The V-22 is deployed to Iraq and conducting heavy lift cargo and personnel transport missions.
KC-45 post on Seeking Alpha
Filed under: Boeing, Contract Awards, EADS, Northrop Grumman Corp., Protest, U.S. Air Force, commercial aviation, logistics, production program
I submitted a small article for Seeking Alpha on the KC-45 as a component of the future profit of either Boeing or EADS. The post reads: “Boeing lost out to EADS for the new airforce tanker contract. The KC-45 will be a version of the Airbus 330 transport aircraft. Boeing had proposed a version of the 767 aircraft. Boeing predicted in their Current Market Outlook 2007 that 28,600 new aircarft will be required to meet the growth in the airline industry by 2026. One would assume Boeing and EADS would get a large portion of these aircraft. The US Air Force will probably order less than 400 aircraft. So the tanker contract will be a small componenet of future production for Boeing or EADS, and a small component of earnings.”
Britain expected to buy KC-30 aircraft as well
Filed under: Contract Awards, EADS, England, Rolls-Royce, commercial aviation, logistics, production program
This short note at Forbes.com indicates that the UK government will buy KC-30 aircraft manufactured by EADS and with Rolls-Royce engines. This is a much smaller contract then the US Air Force one, but it builds on that success. I don’t know who else bid on this contract, but one would assume it had to be Boeing as there is nobody else. The contract will be worth $26 B dollars.
CNNMoney.com roundup of KC-45 award
Filed under: Boeing, Contract Awards, EADS, Federal Budget Process, Northrop Grumman Corp., U.S. Air Force, commercial aviation, logistics
This article is a pretty good summary of the situation relative to the KC-45 tanker contract. The US Air Force and Congress have themselves to thank that Boeing did not get the contract. As I have previously stated, when you open a competition you might be surprised by the results. The consilidation in the US aerospace industry that has been going on since the 1990’s is also a factor. Industrial policy, like the article states, cannot and should not be part of an award such as this. If it is the services get criticized for sweet-heart deals that are bad for the taxpayer, re: the tanker lease.
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