Defense Procurement News

Lockheed Martin was awarded a contract by the Department of Homeland Security to provide human resources support to the Transportation Security Administration (TSA). See an article here. The contract could last eight years and have a value of over $1 B dollars. The company will provide support to all aspects of the TSA’s personnel system.

SAIC reported that their first quarter profits were up 25% over last year. See a story here. The company chose to highlight there contracts providing support to the various MRAPs deployed to Afghanistan and Iraq as part of the reason results were so good. Of interest is that the CEO, Mr. Dahlberg, complained of the fact that they cannot generate commercial growth to their satisfaction. This is often true of various large defense contractors. If there are significant decreases in the US defense budget in the future these companies may find it hard to sustain growth and profitability.

These three articles illustrate how the US defense budget as it has grown over the last several years effects localities economically. This one and this one discuss how Western Pennsylvania relies on the budget to support local industry. This article about Hawaii shows the effect of the Pacific Missile Range Facility on the island of Kaua’i. Although tourism is the major economy on that island the conduct of AEGIS missile defense tests certainly adds money to the local economy.   Read the rest of this entry »

SAIC won a contract with Naval Surface Warfare Center (NSWC) Crane to provide SETA services. See the article here. It is a two year base contract with three option years. They received about $30 M for now, with the possibility if all options are exercised of getting $240 M in work. These kind of omnibus service contracts have become more common and are used to allow various program and project offices to buy the services the need.

Kratos Defense and Security Solutions won a contract to support the Navy’s missile test ranges. See the press release here. Along with its team member, Systems Applications & Technologies, Inc, Kratos will support surface and aerial target operations. This includes mission planning as well as target maintenance and launch. Kratos continues its support of the various services in the area of target production and support. The contract is worth $59 M.

This article discusses the idea that Finmeccanica, the Italian defense conglomerate, is looking at DRS Technology for an American acquisition. Like EADS and BAE the Italian company has been expanding its presence in the US. Its helicopter arm, Augusta Westland, won the VH-71 Presidential helicopter teamed with Lockheed Martin and is also trying to win the CSAR-X recompete post-protest. DRS which makes advanced sensors and electronics while providing SETA services has long been an attractive take over target. It’s stock though has done very well recently and for Finmeccanica to buy it would require a substantial investment.   Read the rest of this entry »

This article describes the effect that Wright Patterson Air Force Base has on the local economy. As more contracts are placed for SETA support and R&D programs they spill over into the regular community. The area has certainly relied on the AFB in the past to support it, and looks forward to continuing to grow its economy based on the base’s activity.   Read the rest of this entry »

Orbital won a contract to provide engineering and analytical services to all three US armed services at White Sands Missile Range (WSMR). They are also part of a team supporting efforts at Wallops Range in Virginia which is used a great deal by NASA. See the story here. The contract, called Theoretical Studies and Engineering Services (TSER), will support all developmental activities at WSMR. This range is used to support air and ballistic missile defense tests.

As a recent GAO report highlighted the Department of Defense invests a great deal in Science, Engineering, Technical and Analysis (SETA) contracts. These contracts, and contractors, are most known as working with the military acquisition offices to provide necessary support. There are also SETA contracts with IT, testing, engineering, safety and pretty much any area that the DoD and Services are involved in. It is a large business employing thousands.

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The GAO had done a study of how DoD is using ID/IQ and time and material contracts. Now DoD is implementing some of the recommendations from the study. See the article here. GAO felt that the DoD agencies were utilizing these contracts as they were easier to award and then adjust based on funding. The contracts are considered more risky as they may commit the Department to a more open ended contract. These contracts are primarily used for SETA and other service contracts.

General Dynamics won an engineering support contract from the Navy for support to the AEGIS missile system. See the story here. They will support the sea-based system that recently shot down the wayward spy satellite. The contract is worth $191 M.

SAIC is one of the top ten defense contractors and provides engineering and technical services, not hardware.  This press release discusses a $98 M contract from the Army to provide technical and analytical support to the US Army Medical Research and Material Command.  This is a good example of such a contract.   Most of the large military acquisition and support commands have these type of contracts.  There are literally hundreds of companies large and small that provide that kind of work.

In yet another blow to Air Force contracting, the GAO upheld a protest by Booze Allen Hamilton of an engineering services contract awarded to Jacobs Engineering. See Rueters here for the full, dirty story. Once again, as in the KC-X and CSAR-X contracts, the way the Air Force did the evaluation led to the protest, and ultimate overturning by GAO, of the contract.   Read the rest of this entry »

URS corporation EG&G division was awarded a ID/IQ contract to support the Air Force’s Joint Unmanned Aircraft Systems (JUAS) Center of Excellence. This is a three year contract with a maximum value of $60 M. As previously discussed, there is no guarantee that any of the work will be awarded for this SETA support contract. Press release is here. More information on the JUAS COE is here.

Kratos Defense & Security Solutions, a California based company that provides IT and C4ISR solutions to the US military, completed the acquisition of Haverstick Consulting for about $85 M. Haverstick represents a more diverse business line for Kratos as they provide more technical support to systems and testing. See Fox Business News here. This is a common way for defense companies to expand their capabilities as well as their bottom line. If you are interested in expanding in a different area, or in a different geographical location, buy another company. You can also use this process to gain as big a market share of a product or service as possible.