Defense M&A — Seeking Alpha

Here is an article I wrote for Seeking Alpha on potential defense M&A activity.

AM General’s JLTV Candidate to be Unveiled in Warren — Press Release

LIVONIA, Mich., May 14, 2012 /PRNewswire/ — AM General LLC will exhibit its Blast-Resistant Vehicle – Off Road (BRV-O) for the first time at the Defense Industrial Base Expo of the National Defense Industrial Association in Warren on May 15-16.

AM General, whose Engineering and Product Development Center is based in Livonia, announced in March it is backing two separate proposals for the Engineering, Manufacturing and Development (EMD) phase of the Joint Light Tactical Vehicle (JLTV) program. BRV-O is based on more than a decade of the company’s own investments in research, development and testing for the next-generation light tactical military vehicle.

BRV-O features a crew capsule and modular armor already proven effective in government-supervised blast testing. This AM General design can be readily adapted to future changes in U.S. military missions, enemy threats and new protection technologies as they emerge. BRV-O also features a self-leveling suspension system, a C4ISR backbone with open-standard networked architecture and clustered super-computing power, and other advanced components. These and other mature subsystems make BRV-O a highly mobile and versatile platform that meets or exceeds 100 percent of JLTV EMD phase evaluation criteria including protection, performance, payload, transportability, reliability and affordability.

The lightweight, fuel efficient and high performance Optimizer 3200 engine powering BRV-O also will be exhibited at the expo, along with other products of General Engine Products and General Transmission Products, subsidiaries of AM General. The six-cylinder, 3.2 liter, sequentially-turbocharged engine is rated at 300 horsepower and 500 lb-ft of torque. GEP will also introduce its proposed solution for the Next Generation Combat Engine based on Optimizer 3200 technology.

More information on AM General, General Engine Products and BRV-O is at www.amgeneral.com. More information on the expo is at http://www.ndia-mich.org/Base_expo.aspx. The annual show is open to U.S. military personnel, government employees and NDIA members.

AM General designs, engineers, manufactures, supplies and supports specialized vehicles for commercial and military customers with more than six decades of experience meeting the changing needs of the defense and automotive industries. The AM General business units include two wholly-owned subsidiaries, General Engine Products, a diesel engine manufacturer, and General Transmission Products, an automatic transmission manufacturer. AM General is supported by approximately 1,500 employees at major facilities in Indiana, Michigan, and Ohio, and a strong supplier base that stretches across 43 states.

Lockheed Martin Completes Delivery of 17 CC-130J Super Hercules Aircraft to Canada — Press Release

MARIETTA, Ga., May 8, 2012 /PRNewswire/ — The Royal Canadian Air Force formally accepted the 17th Lockheed Martin [NYSE: LMT] CC-130J Super Hercules in ceremonies here today, completing the order placed in December 2007. The aircraft will be flown to Canadian Forces Base Trenton later this week.

The original contract called for all 17 aircraft to be delivered by the end of 2012. The first CC-130J was accepted in June 2010 and today’s acceptance demonstrates the success of the program and the completion of deliveries ahead of schedule.

“The delivery of the final CC-130J Hercules to the RCAF represents a significant milestone in the history of the RCAF,” said Lt. Col. Colin Keiver, Commanding Officer, 436 (T) Squadron. “The aircraft has already proven its worth around the world in places like Afghanistan and Libya, as well as here at home in Canada. Our partners at Lockheed Martin have delivered us an aircraft that more than lives up to the motto of 436 Squadron, Onus Portamus or ‘We Carry the Load.’”

“The C‑130 Hercules has acquired many nicknames and affectionate titles over the years, but it is in Canada that the aircraft has earned a name that I think summarizes the true meaning of this aircraft – Workhorse,” said George Shultz, Lockheed Martin vice president and general manager, C-130 Programs. “Today recognizes another great chapter in Canadian airlift history and in the continuation and expansion of the long and strong relationships with our industrial partners in Canada.”

To date, Lockheed Martin has delivered more than $350 million in Industrial and Regional Benefits (IRB) to Canadian industry as a result of the Government of Canada’s procurement of the CC-130J aircraft and In-Service Support.

Headquartered in Bethesda, Md., Lockheed Martin is a global security and aerospace company that employs about 123,000 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 net sales for 2011 were $46.5 billion.

For additional information, visit our website: http://www.lockheedmartin.com

Raytheon fires Excalibur from G6 self-propelled howitzer — Press Release

Excalibur will give G6 users precision artillery capability

TUCSON, Ariz., May 8, 2012 /PRNewswire/ — Raytheon Company (NYSE: RTN) has fired four Excalibur 155mm precision-guided artillery projectiles from the Denel-manufactured G6 self-propelled howitzer as part of a field trial demonstration.

Multiple rounds of the combat-proven Excalibur successfully fired from the G6 155mm wheeled howitzer out to a range of 38 kilometers (23.6 statute miles), with all rounds landing within 5 meters (16.4 feet) of the target.

“These trials demonstrated Excalibur can give a true precision capability to G6 howitzers that can enhance the warfighter’s defensive posture,” said Kevin Matthies, Excalibur program director for Raytheon Missile Systems. “Excalibur improves tactical war fighting capability by providing precision that is essential to close-combat operations.”

The U.S. Army has demonstrated Excalibur in scenarios designed to defeat specific point targets while avoiding damage to structures, non-combatants and friendly forces. This targeting capability provides flexibility to engage at the tactical level, avoiding unintended consequences. Significantly fewer Excalibur rounds are required to defeat a target, lessening the burden of logistics.

About Excalibur

Successfully fielded in 2007, the Excalibur 155mm precision-guided, extended-range projectile is the revolutionary artillery round used in theater today by the U.S. Army and Marine Corps. Using GPS precision guidance technology, Excalibur provides accurate, first round, fire-for-effect capability in an urban setting. Excalibur is considered a true precision weapon, impacting at a radial miss distance of 6 meters from the target.

About Raytheon

Raytheon Company, with 2011 sales of $25 billion and 71,000 employees worldwide, is a technology and innovation leader specializing in defense, homeland security and other government markets throughout the world. With a history of innovation spanning 90 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. Raytheon is headquartered in Waltham, Mass. For more about Raytheon, visit us at www.raytheon.com and follow us on Twitter at @raytheon.

More F-35 Work for Lockheed Martin

The Pentagon awarded Lockheed Martin (LMT), the prime contractor for the F-35 Joint Strike Fighter, another $237 million of work on the advanced aircraft program. This contract action is to add to the fourth low rate production batch some changes that have been developed over recent times. The F-35 program is very concurrent with testing and development ongoing while production is as well.

This means situations like this where aircraft already delivered or on the production line will be retrofitted with changes that have come out of the test program or experience flying the system. This concurrency is one of the reasons the program has suffered cost and schedule problems. At the same time it allows Lockheed to deliver aircraft to support training and testing and ultimately deployment.

Originally the contracts for production had been cost plus where the government was responsible for any increases in cost related to changing requirements or specifications. The most recent production one due to pressure to control cost has a cap above which Lockheed will be responsible for any additional costs.

Despite the fact that their line workers remain on strike for what is now approaching three weeks the company continues to work on the aircraft.

The F-35 program continues to be the most expensive defense acquisition program in history and recent moves to stretch out deliveries by several years will only add to that total cost.

UTC Names Mick Maurer as President, Sikorsky Aircraft; Jeffrey P. Pino to Retire — Press Release

HARTFORD, Conn., May 7, 2012 /PRNewswire/ — United Technologies Corp. (NYSE: UTX) today announced the appointment of Mick Maurer as President of its Sikorsky Aircraft Corp. subsidiary, effective July 1. Maurer will report to UTC Chairman & Chief Executive Louis Chenevert, succeeding Jeffrey P. Pino, who will retire July 1. To ensure a seamless succession, Pino and Maurer will collaborate closely during the next two months, after which Pino will serve as a consultant to Sikorsky.

Maurer joined UTC in 1989 at the corporation’s Otis Elevator Co. unit, where he worked in positions of increasing responsibility until 2000, when he joined Sikorsky as Vice President, Enterprise Planning & Development. Most recently, Maurer served as President of the Sikorsky Military Systems unit, responsible for U.S. and International Military program and product line management, customer relationships and military aircraft delivery. He is a graduate of the U.S. Naval Academy and holds a master’s degree in engineering from Johns Hopkins University and a Master of Business Administration degree from Stanford University.

“I am confident that under Mick’s leadership, Sikorsky will continue to deliver unmatched value to customers and UTC shareholders,” Chenevert said. “Mick is exceptionally well qualified to lead Sikorsky, given his demonstrated leadership capabilities, strong customer relationships and deep industry knowledge.”

Pino is completing a career in aerospace that spans nearly four decades. He is a retired Master Army Aviator and served in the U.S. Army for 26 years in the active duty, Guard and Reserve components. Prior to joining Sikorsky in 2002, he spent 17 years with Textron’s Bell Helicopter unit.

Pino became Sikorsky’s president in 2006 after previously serving as the company’s Senior Vice President for corporate strategy, marketing and commercial programs. During his years at Sikorsky, the company achieved significant growth, increased productivity and expanded margins, while continuing to invest in game-changing technology.

“Jeff Pino has done a remarkable job leading Sikorsky,” Chenevert said. “Under his leadership, Sikorsky has become more competitive while doubling its production rates to become the world’s largest helicopter manufacturer, and has expanded into new markets with the S-70i international version of the iconic BLACK HAWK helicopter.

“Jeff has positioned Sikorsky well for the future, overseeing the successful development of the CH-53K heavy-lift helicopter and Sikorsky’s X2 technology, which was recognized with the 2010 Collier Trophy and is now being incorporated into the S-97 RAIDER,” Chenevert said. “We congratulate Jeff on an outstanding career and wish him all the best in retirement.”

United Technologies Corp., based in Hartford, Connecticut, is a diversified company providing high technology products and services to the building and aerospace industries. For more information, visit www.utc.com.

Congress, Defense Budget and Contractors — Seeking Alpha

Here is an exclusive article I wrote for Seeking Alpha on Congressional changes to the defense budget and how they will aid contractors.

Soldier Radio Waveform Network Manager Determined Operationally Suitable and Effective — Press Release

SAN DIEGO – The Joint Program Executive Office for the Joint Tactical Radio System (JPEO JTRS) announced that the Soldier Radio Waveform Network Manager (SRWNM), developed under the guidance of Program Management Office, Network Enterprise Domain (NED), was assessed as operationally suitable and effective with a recommendation for Service use with JTRS Rifleman Radios by the Commander, Operational Test and Evaluation Forces in Norfolk, Virginia during an Integrated Operational Test and Evaluation (IOT&E) conducted during the Army’s Network Integration Evaluation (NIE) in October and November of 2011.

The Operational Test Agency Evaluation Report (OTN-1-RR), dated April 10th, 2012 was signed by Rear Admiral David A. Dunaway, Commander, Operational Test and Evaluation Forces.

The SRWNM software creates JTRS communications plans for Soldier Radio Waveform (SRW) capable JTRS radios based on user input and importing data files from other DoD communications planning systems. These communication plans are then converted into radio configuration files by SRWNM and exported directly to the radio or to external media such as compact disc (CD) or USB memory devices.

The SRW Network Manager plans, configures, and monitors JTRS radio networks that use the SRW waveform. These networks have the ability to transmit both voice and data, including video, pictures and graphic images, and are intended for use by the individual Warfighter, small units and unmanned sensors.

SRWNM is a precursor network management system to the JTRS Enterprise Network Manger (JENM) which is currently under development. JENM manages both SRW and the Wideband Networking Waveform (WNW) used on the Ground Mobile Radio (GMR). SRW is also employed on the HMS Manpack Radio, GMR, and four Non-Developmental Initiative (NDI) radio systems under evaluation at NIE, with SRWNM managing SRW on all of these radios.

The JTRS NED Program is one of four major Acquisition Category (ACAT) 1D programs within JPEO JTRS. JTRS NED developed software provides interoperable, affordable and secure tactical networking technologies and capabilities for Joint, Coalition and International Warfighters. SRWNM provides the ability for SRW based radios, developed by Program of Record (POR) and commercial vendors, to interoperate within the same Infantry squad, platoon, or company. SRWNM has been incorporated into the JENM and is currently undergoing testing at NIE 12.2 at White Sands Missile Range, NM, supporting mounted and dismounted Warfighters in an operationally relevant environment.

About JPEO JTRS

The JPEO JTRS program, headquartered in San Diego, California, has evolved from separate radio replacement programs to an integrated effort to network multiple weapon system platforms and forward combat units where it matters most – the last tactical mile. JTRS will link the power of the Global Information Grid to the Warfighter in applying fire effects and achieving overall battlefield superiority.

JTRS is developing an open architecture of cutting edge radio waveform technology that allows multiple radio types (e.g., handheld, aircraft, maritime) to communicate with each other. The goal is to produce a family of interoperable, modular software-defined radios which operate as nodes in a network to ensure secure wireless communication and networking services for mobile and fixed forces. These goals extend to U.S. allies, coalition partners and disaster response personnel.

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General Dynamics Awarded $176 Million Contract from U.S. Coast Guard for Support of the Rescue 21 System — Press Release

Contract provides for the system maintenance and related management services needed to keep the life-saving Rescue 21 system operational and technically current.

TAUNTON, Mass., May 3, 2012 /PRNewswire/ — General Dynamics C4 Systems, a business unit of General Dynamics (NYSE: GD), has been awarded a contract by the U.S. Coast Guard to provide ongoing sustainment services for the national Rescue 21 search and rescue system. General Dynamics, the prime contractor for the system’s design, development and deployment, will continue to provide field service personnel, technical support and maintenance of the system. Rescue 21 currently comprises 232 fixed towers and related facilities that enable the Coast Guard to monitor the nation’s coastline and inland waterways; it also serves as the U.S. Department of Homeland Security’s first nationwide command, control and communications network. The four-year contract has a total potential value of $176 million if all options are exercised.

“The Rescue 21 system’s 232 fixed towers have enabled life-saving assistance for countless boaters from Seattle to Key West to Massachusetts and many points in between,” said Chris Marzilli, president of General Dynamics C4 Systems. “With this award we will continue our collaboration and support of the Coast Guard’s Rescue 21 system and its expanding role within the Department of Homeland Security.”

The Rescue 21 system will be a network of 32 Coast Guard sector command centers, 167 stations and more than 260 fixed towers located along U.S. waterways and the shores of the Great Lakes, Hawaii, Guam, the U.S. Virgin Islands and Puerto Rico. Using advanced direction-finding technologies and digital communications, the Coast Guard rapidly and efficiently responds to emergency calls from mariners while coordinating with federal, state and local law enforcement and first responders. The system also supports the Coast Guard’s homeland security missions that include drug interdiction, defense readiness, marine environmental protection and law enforcement.

More information on the Rescue 21 system and border security solutions by General Dynamics C4 Systems is available online at www.gdc4s.com/Rescue21.

Additional information is available online about General Dynamics C4 Systems at www.gdc4s.com.

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

SOURCE General Dynamics C4 Systems

Australia to Stretch Out F-35 Deliveries

One of the key components of the F-35 Joint Strike Fighter (JSF) program was the early participation by U.S. allied countries. Unlike traditional Foreign Military Sales (FMS) these countries provided some of the development costs and committed early to buy the the aircraft rather then wait for the establishment of production and get it after the aircraft entered U.S. service. These included Great Britain, Australia, Canada and The Netherlands.

These countries planned to buy different amounts of the three types of the F-35. Britain to operate from their new carriers and replace the Harrier Jump Jet, Canada to retire their CF-18 fleet and the other two to upgrade from the aging F-16. In fact the F-35 would be similar to the F-16 program with parts and components made by the buying countries. Norway, Japan and Israel have also decided to buy the F-35 over other potential aircraft.

The F-35 has seen serious delays and cost growth due to testing and development issues. It is currently in Low Rate Initial Production (LRIP) as well as continuing testing. The U.S. in their latest budget proposal have decided to stretch production out to save money in the near term. Australia has now decided to do the same thing.

That country’s budget plans now call for delays of accepting the majority of their aircraft to mirror current U.S. plans. The goal is to save over $1.6 billion in the next few eyars. The first two Australian aircraft are in production and should be delivered in 2014-15 to start training but their first squadron will not stand up now for a few years after that.

The problem with stretching out production buys is that while it does save money in the near term the same number of systems will have to be bought over a longer time. Due to inflation alone as well as the loss of production efficiencies the average price per aircraft will increase causing the whole program to get more expensive. One potential problem that may arise is that the total number to be bought will be reduced.

Canada is also re-considering their F-35 buy due to issues with how the contract was awarded last year. These decisions will be a blow to Lockheed Martin (LMT) as they reduce near term revenue and earnings.

Lockheed Martin Delivers Final, Historic F-22 Raptor To U.S. Air Force

MARIETTA, Ga., May 2, 2012 /PRNewswire/ — Lockheed Martin [NYSE: LMT] leadership delivered today the 195th and last F-22 Raptor to U.S. Air Force leadership in a ceremony at the Lockheed Martin Aeronautics site here. With this delivery, the U.S. Air Force now possesses the world’s only 5th generation stealth fighter aircraft fleet in the world.

“There is no longer any nation that wishes us ill or any adversary who wishes us harm that has any doubt that their actions will have consequences – that they will be held to account and that our response will be undeterred,” said Robert J. Stevens, Lockheed Martin’s chairman and CEO. “The very existence of this airplane – your airplane – has altered the strategic landscape forever.”

A host of distinguished officials participated in this monumental event, including senior leaders from Lockheed Martin and the U.S. Air Force; local, state and national elected officials; and Lockheed Martin employees who helped build the F-22 Raptor fleet.

This final Raptor joins a U.S. Air Force fleet of 187 operational F-22s and will join other F-22s in the Air Force’s 3rd Wing at Joint Base Elmendorf-Richardson, Alaska. In all, Lockheed Martin delivered 195 F-22s to the Air Force beginning in 1997, with eight Raptors used as test aircraft.

F-22s are assigned to seven U.S. bases. Flight testing takes place at Edwards AFB, Calif. Operational tactics development continues at Nellis AFB, Nev. Pilot training takes place at Tyndall AFB, Fla. Operational F-22 aircraft are assigned to Joint Base Langley-Eustis, Va.; Joint Base Elmendorf-Richardson, Alaska; Holloman AFB, N. M.; and Joint Base Pearl Harbor-Hickam, Hawaii.

The F-22 Raptor is the world’s only operational 5th generation fighter, making it an unmatched national security asset. The Raptor is designed to defeat denied-access threats, enable joint and coalition operations in contested areas, and globally promote deterrence and security. For more information on the F-22, visit www.lockheedmartin.com/products/f22/.

Headquartered in Bethesda, Md., Lockheed Martin is a global security and aerospace company that employs about 123,000 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 net sales for 2011 were $46.5 billion.

For additional information, visit our website: www.lockheedmartin.com

Congress Continues Push Back on Defense Spending Proposals

The House Armed Services Committee (HASC) continues their mark up of the 2013 defense budget proposed by the Obama administration and continues their push back on proposed cuts to programs. As part of a plan to reduce defense spending by almost $500 billion over the next 5 year defense plan certain programs were ended or reduced. Congress as it often is does not like some of these reductions and is adding them back into the budget.

The HASC is just one of four different committees in both parts of Congress that can rewrite the budget. After the markups are complete the House and Senate vote their own versions of the bill and a Conference Committee irons out the final version that goes to the President. There is no guarantee that any changes made by any of the committees will stick but it is clear that there are a lot in Congress not willing to reduce spending the way that is being proposed.

Earlier we wrote of how they added back in a submarine the Navy had delayed until 2018. Now the committee is changing some proposals with other systems.

These include the retirement of several Northrop Grumman (NOC) Global Hawk strategic Unmanned Aerial Vehicles (UAV). The Air Force had proposed mothballing the Block 30 version of the system and continuing to use the manned U-2/TR-1 aircraft instead. They also would not buy more of that block. The bill the HASC is writing would prevent the retirement before 2014.

The committee has also reduced or eliminated some of the troop cuts and increased co-pays and fee for TRICARE, the military medical plan. Another area they are exploring is increasing funding for some of the Army’s vehicle programs which was cut.

These reductions and the troop cuts are based on the fact that the U.S. is withdrawing from Afghanistan and the Obama administration is predicting less deployments and action in the near future.

This is just the first round of mark ups and the ending bill will be some sort of compromise where some cuts are kept and others aren’t. It does show though that there are many in Congress not ready for large reductions in defense spending and investment.

ATK Announces Retirement of TacSat-3 Satellite — Press Release

Spacecraft Significantly Exceeded Mission Life ? On-Orbit Operations Lasted Nearly Three Years

Mission Confirms Robustness of ATK’s Quick-to-Launch Spacecraft Bus and Components

ARLINGTON, Va., May 1, 2012 /PRNewswire/ — ATK (NYSE: ATK) announces the conclusion of the Tactical Satellite-3 (TacSat-3) mission. The Air Force announced on April 30th, 2012, that the satellite deorbited into and burned up in the Earth’s atmosphere nearly three years after its May 2009 launch. TacSat-3 was designed for six months of operation, with a goal of one year. Not only did it outlive its design life, it also surpassed its original mission requirements and goals as an experimental spacecraft, and was successfully transitioned to operational status in 2010.

The satellite was removed from operational status and transferred to the Space and Missile Systems Center in February 2012. Once transitioned, ATK provided the Air Force Research Laboratory with updated flight software, which allowed the vehicle to conduct on-orbit collection testing.

TacSat-3′s mission demonstrated the capability to conduct hyperspectral imaging to support the needs of U.S. warfighters.

“TacSat-3 served America well. We were proud to be part of the team that provided reconnaissance data from space to warfighters in the field and to intelligence analysts at home,” said Tom Wilson, vice president and general manager, Space Systems Division, ATK Aerospace Group. “Our innovative bus technology was a key factor in successfully extending the TacSat-3 demonstration to a longer-term operational mission. The mission enabled us to apply and enhance our flexible, modular bus platforms for future small satellite missions that included the ORS-1 spacecraft.”

The spacecraft is a pioneer of the emerging Operationally Responsive Space program, which was designed to meet the growing need of U.S. forces for flexible, affordable and responsive satellite systems.

ATK, as the spacecraft bus prime contractor, provided the complete bus system, which included the onboard command and data handling system, electrical power system, spacecraft bus primary structure, and interfaces to the launch vehicle and payload. Built and designed in just 15 months, ATK’s spacecraft bus met the TacSat-3 program goals of being operationally responsive, low-cost and with expected performance. The spacecraft also featured first-generation modular bus technology designed to provide flexibility for future small satellite missions. As a rapid, affordable experimental mission, the specification did not include a propulsion system to sustain long-term low-Earth orbit.

The TacSat-3 program was managed by the Air Force Space Command with collaboration from the Air Force Research Laboratory Space Vehicles Directorate and the Army Space and Missile Defense Command.

ATK is an aerospace, defense and commercial products company with operations in 22 states, Puerto Rico and internationally. News and information can be found on the Internet at www.atk.com.

U.S. Army Places Contracts for Defensive Radars

U.S. troops deployed to Afghanistan primarily face a threat from indirect weapons. These include rockets and mortars used at their static facilities and the ever present mine and Improvised Explosive Device (IED) to vehicle and foot movement. The U.S. Army placed yesterday two contracts for systems to help counter these threats.

First, Lockheed Martin (LMT) received an option on an existing contract to procure more TPQ-53 counterfire radars. These provide detection and warning of mortars and rockets and allow defensive and counter measures to take place. This contract has a value of almost $400 million and will procure 33 sets of equipment. Earlier the Army had issued a contract for 12. These radars have been in development since 2007 and use since last year.

The Army also placed an Indefinite Delivery/Indoctrinate Quantity (ID/IQ) contract with NIITEK, a subsidiary of Chemring Group PLC, for their Husky Ground Penetrating Radar. This contract has a total value of close to $600 million if all options are exercised. The initial contract is worth $161 million. With all ID/IQ contracts the government does not have to spend anything or just a part of the total value.

The NIITEK Husky is a radar mounted on a vehicle used to detect mines and other threats buried in the ground. It also includes a metal detector if desired. The system supports route clearing and checking as part of a convoy or on separate missions.

These two contracts demonstrate that the U.S. still meets significant threats in Afghanistan and that the U.S. is being innovative in meeting them. It also shows that the U.S. will invest in systems for these missions despite budget and deficit issues.

RTCA Honors LCS Team Lead Todd R. White for Contributions to the DO-178C Software Standard — Press Release

LDRA Certification Services team lead to be formally recognized in Washington, D.C. as a key member of the RTCA SC-205 Committee.

Wirral, UK, April 30, 2012. LDRA Certification Services (LCS), a division of LDRA committed to providing safety-critical software verification tools and certification services, celebrates RTCA’s decision to honor LCS team lead Todd R. White for his role in advancing the newly ratified DO-178C software certification standard. RTCA wishes to publicly recognize White’s contribution to both DO-178C Software Considerations in Airborne Systems and Equipment Certification and DO-330 Software Tool Qualification Considerations on June 5th by presenting him with a Certificate of Appreciation at its Annual Symposium in Washington, D.C.

White’s expertise in avionics standards rises out of his 30 years of experience as a consultant and FAA Designated Engineering Representative (DER). White has been delegated full Level A authority for all aircraft systems and equipment for both software and airborne electronic hardware. This strong background in development, verification, and avionics certification enabled him to guide the evolution of the avionics standard so that it reliably addressed current software development and design practices of avionics systems.

With White as leader of the team, LCS provides comprehensive support, oversight and guidance for certification applicants through a wide range of aviation standards:

• Aircraft & Systems Development (ARP-4754A)
• Safety Assessment (ARP-4761)
• Integrated Modular Avionics (DO-297)
• Flight Electronic Hardware (DO-254)
• Flight Software (DO-178B/C)
• Ground Systems (DO-278/A)

“For nearly 40 years, LDRA has helped avionics customers address certification concerns and achieve compliance,” noted Ian Hennell, LDRA Operations Director. “With Todd leading the LCS team, our customers can rest assured that their certification plan will map out the most efficient and effective way for them to achieve certification. We are very proud to see Todd honored for the extensive contribution he has made to move the DO-178 standard forward.”

As a DER and certification consultant, White has worked with the largest and best known suppliers of avionics. He is an executive committee member of the DO-178C/DO-278A committee, an executive committee member of the NextGen Task Force, and holds a leadership role in the U.S. DO-254 users group. White is recognized for outstanding DER leadership by key individuals at FAA headquarters in Washington, D.C. and the Atlanta, Chicago, Seattle, Denver and Los Angeles Aircraft Certification Offices (ACOs). He has also provided DER oversight on projects through the Fort Worth and Wichita ACOs. With appointments as Organization Designation Authorization administrator, unit member at key OEMs, and Supplier Airworthiness Specialist DER at Airbus, White has become well-known at Transport Canada and the European Aviation Safety Agency (EASA), as well as with US Army and US Air Force facilities.

Joining White and the LCS team is Steve Morton, co-chair of the DO-178C Tools Group. Morton will support the tool qualification and validation efforts of suppliers to avionics, automotive, industrial control, rail, medical and other industries. Morton’s capabilities are complemented by Marty Gasiorowski, a systems, safety, software and complex electronic hardware FAA DER, and Dr. Holly Hildreth, a safety engineer with expertise in a wide range of US and international standards. Together they will provide certification expertise in DO-178/DO-278, DO-254, DO-297, IEC 61508, IEC 62304, ISO 26262, IEEE 1012:2004 and CENELEC EN 50128.

Proficient in both commercial and military airworthiness, LCS addresses critical project requirements that relate to certification, including management, planning, staff training, development, verification and production. While analyzing certification and safety needs from a total aircraft system perspective, LCS ensures that the individual and exacting aviation standards can be met at a fixed price.

White’s Certificate of Appreciation will be awarded at the Awards Luncheon during RTCA’s Annual Symposium on June 5, 2012 in Washington, D.C.

Telephonics to Make Radars for Navy Helicopters

The Navy recently awarded Lockheed Martin (LMT) a contract to provide avionics and instruments for their Sikorsky, part of United Technologies (UTX), made MH-60 Sea Hawk helicopters. Lockheed in turn has awarded Telephonics a contract to build a radar for the aircraft.

The AN/APS-153 radar performs surface search functions to locate and identify submarine periscopes. The total value of the contract for 160 radars is about $330 million.

The MH-60R is designed to perform a variety of missions and be based on carriers, destroyers and other U.S. and Allied ships. It replaces the previously used SH-60, SH-2 and SH-3 helicopters previously used for ship based Anti-Submarine Warfare (ASW).

The contract also illustrates how expensive not only the base aircraft is but also the sub-systems hat go into it. Capability and performance is expensive.

Lockheed Martin Earnings — Seeking Alpha

This is an exclusive article I wrote for Seeking Alpha about Lockheed Martin’s latest quarterly earnings and the rest of 2012.

House Begins Markup of 2014 Budget with Add of Submarine

The House and Senate are in the process of considering the President’s 2014 budget request. As often different committees will review it and make changes sometimes based on their own priorities which means adding things or removing items from the original request. The budget has to go through two committees in each the House and Senate. Then it is voted on and a Conference Committee held. This means that often the final budget is not necessarily similar to what was submitted in February.

Not only do different companies lobby Congress for inclusion of their products and projects but sometimes the Services will indirectly. There exist lists of “unfunded priorities” and needs that Congress may address even though they are not part of the budget request.

The House Armed Services Committee as part of its review has reportedly increased the Navy’s buy of U.S.S. Virginia class attack submarines by 1 more then requested. The Navy had originally planned to buy two a year but in order to meet budget cut goals and reduce spending only 1 was asked for in 2014. The HASC has bumped that back up to 2.

Congress also wants the Navy to consider signing a multi-year contract for 10 submarines. Multi-year contracts are normally for five years and done for systems, especially aircraft, in steady state production. This allows efficiencies and better pricing due to stable quantities and funding. Virginia submarines are currently built by two companies – Huntington Ingalls Industries (HII) in Virgina and General Dynamics (GD) Electric Boat in Connecticut and Rhode Island.

One of the problems that the Pentagon will face as it tries to cut money required to meet budget goals is that Congress is loathe to reduce programs. There are 435 House members and 100 Senators who see defense spending as a way to bring money and jobs into their districts. The idea of keeping one more submarine in the current budget will do so. It will also require the Navy to cut less money or take it from other budget priorities.

U.S. Army Expands Rifle Production to Remington

Update — It has been reported that Colt will protest the Army decision to award this contract to Remington. Protests are normally settled within 100 days and no work may be done until it is resolved.

The U.S. Army and most of the rest of the U.S. military and allied nations have been using the M16 rifle since its introduction almost 50 years ago during Vietnam. During the fighting in Iraq and Afghanistan the M4 carbine version of the rifle came into heavy use due to its shorter length and lighter weight. The M4 has been primarily produced by Colt.

The U.S. has tried to develop multiple times a new rifle to replace the M16 but no new weapon has gone into production. The most recent try was the XM8 system that saw only the 25mm “Punisher” variant go into use. Dissatisfaction with the M4′s range and accuracy has also led to Special Forces and other select troops using weapons like Hechler-Koch’s SCAR system. Even so the M4 has soldiered on for the last decade in the dust and heat of South West Asia.

Now the U.S. Army has awarded a production contract to Remington Arms for up to 120,000 M4/M4Aq carbines. There were rumors of this contract award earlier this week and yesterday the company issued a press release confirming it.

The initial buy is for 24,000 of the rifle with another 96,000 if all options are exercised. The contract is an Indefinite Quantity/Indefinite Delivery (ID/IQ) one which allows the Army to pick-and-choose how much and when.

The Army is carrying out trials for a new standard rifle with a potential new contest in the future.

The decision to expand production to include Remington is interesting as Colt has made the M4 for many years.

Primordial Wins Prestigious Tibbetts Award — Press Release

April 24, 2012 by · Comment
Filed under: Business Line, Companies, Events, IT, Press Releases 

Tibbetts Award Recognizes Primordial’s Ground Guidance® Route Planning Software for Technical Innovation and Warfighter Impact

Saint Paul, MN – April 24, 2012 – Primordial was one of 18 companies to receive the prestigious Tibbetts Award at the White House today. The United States Small Business Administration (SBA) recognized Primordial for its “unique contributions as a model of excellence for the Small Business Innovation Research (SBIR) program.” The award citation commended Primordial for providing outstanding SBIR leadership and greatly contributing to the SBIR program’s success. The keynote speaker at the ceremony was Todd Park, Chief Technology Officer of the United States.

Established in 1998, the annual Tibbetts Award is a national honor named for Roland Tibbetts–father of the SBIR program. The SBA presents the award to companies that exemplify the best in the SBIR program: those that stimulate technological innovation, meet federal research and development needs, and successfully commercialize the resulting technology.

Becky Aistrup, the SBIR/STTR program director at Minnesota Science & Technology Authority, nominated Primordial for the award. Primordial also received endorsement letters from Senator Amy Klobuchar, Congresswoman Betty McCollum, General Dynamics C4 Systems (GDC4S), and the United States Army Communications-Electronics Research, Development and Engineering (CERDEC).

The SBIR program has provided $2.6 million in funding for Primordial’s flagship product, Ground Guidance. Ground Guidance is patented software that plans fast and concealed routes for mounted and dismounted soldiers through on- and off-road terrain. Ground Guidance supports planning routes before a mission as well as real-time rerouting during a mission. Primordial has developed Ground Guidance over ten years under contracts with the Army Geospatial Center (AGC); Communications-Electronics Research, Development, and Engineering Center (CERDEC); Defense Advanced Research Projects Agency (DARPA); Natick Soldier Research, Development, and Engineering Center (NSRDEC); Product Manager (PM) Movement Tracking System (MTS); and others. Primordial has integrated Ground Guidance with several battle command platforms including Falcon View, Land Warrior, and MTS. In 2011, the United States Army approved Ground Guidance for fielding with the Land Warrior.

The Tibbetts Award stemmed from Primordial’s work on a SBIR contract with CERDEC. The project’s goal was to develop real-time route planning software for tactical and logistical vehicles. Primordial received SBIR phase I and II contracts for the effort as well as a Commercialization Pilot Program (CPP) contract to integrate and field Ground Guidance with the Land Warrior soldier system.

“The Tibbetts Award is a great honor,” said Primordial’s president, Randy Milbert. “We are grateful whenever we have a chance to contribute to our soldiers.”
About Primordial

Founded in 2002 and based in Saint Paul, Minnesota, Primordial is a leader in off-route planning and navigation software for the United States military and consumer applications. Primordial’s flagship product, Ground Guidance®, is patented software that determines the best path through off-road terrain by analyzing vegetation, terrain, threats, and man-made features. Primordial’s customers include the United States Army, United States Air Force, United States Marine Corps, DARPA, General Dynamics, Rockwell Collins, Lockheed Martin, and Raytheon.

Web Site: http://primordial.com

More V-22 Engines for Rolls-Royce

Following the second operational crash of a V-22 during exercises in Morocco there was the usual hand wringing about the safety of the V-22 Osprey tilt-rotor made by Boeing (BA) and Bell, part of Textron (TXT). Even so the program continues with planned expanded deployment and new missions including support of Presidential movement operations.

It has been reported that as part of the planned reductions in spending starting next year that V-22 quantities will be reduced. The total purchased should remain the same but it will be spread over more years. The next five year multiyear production contract is still being negotiated as the current one ends.

Even so the Pentagon went ahead and place orders for engines to support delivery of over 100 more aircraft with Rolls Royce (RR). The almost $600 million contract for 268 engines will have one base and four options years. The base contract will be for 70 engines.

The company has delivered over 500 engines for the V-22 program.

The V-22 offers unique capabilities compared to traditional rotary wing aviation assets. It has served in Iraq and Afghanistan with no combat losses although an Air Force one crashed in Afghanistan and now a Marine one has crashed as well. It is planned to replace Navy logistics aircraft as well as serve more with the Marines and Air Force Special Operations.

Boeing and Bell are obviously looking for new missions and customers for the aircraft. Certainly there may be pressure as the Pentagon reduces its budget to cut the number of V-22 to buy as they are expensive to buy and operate. The more that are sold, though, drives down the price for every customer.

McLane Team Awarded Contract by U.S. Army — Press Release

TEMPLE, Texas, April 23, 2012 /PRNewswire/ — McLane Advanced Technologies (MAT) announced today that as the subcontractor to SAIC, the company was recently awarded a contract by the Software Engineering Center (SEC-Lee) for Property Book Unit Supply Enhanced (PBUSE). PBUSE is the Army’s web-based, state-of-the-art, property accountability system. The team will provide professional and technical services to include sustainment support, software development for product enhancements, help desk support, fielding, and training.

“We are excited that we are part of the SAIC Team on this contract and look forward to working with SAIC and SEC-Lee in this important endeavor,” said James Chambers, Executive Vice President for MAT. “SAIC and MAT have worked together for several years and this collaboration fortifies the relationship. We are especially honored to continue our support to the Soldier by assisting materiel readiness for the US Army through both SAMS-E and PBUSE.”

SAIC was awarded the PBUSE contract in February 2012 and subsequently awarded a sub-contract to MAT in February 2012. MAT’s period of performance is for two years and includes a number of PBUSE IT specialties to meet the customer’s requirements.

About McLane Advanced Technologies
McLane Advanced Technologies is a global logistics and technology solutions company built upon a bedrock of over 100 years of global supply chain, warehouse, distribution, and technology experience. Utilizing our rich history, we have grown into a recognized technology leader in the Distribution and Defense industries. For more information, please visit our website at www.mclaneat.com or call 254-771-6429.

About SAIC SAIC is a FORTUNE 500® scientific, engineering, and technology applications company that uses its deep domain knowledge to solve problems of vital importance to the nation and the world, in national security, energy & environment, health, and cybersecurity. The company’s approximately 41,000 employees serve customers in the U.S. Department of Defense, the intelligence community, the U.S. Department of Homeland Security, other U.S. Government civil agencies and selected commercial markets. Headquartered in McLean, Va., SAIC had annual revenues of approximately $10.6 billion for its fiscal year ended January 31, 2012. For more information, visit http://www.saic.com/. SAIC: From Science to Solutions®

Expectations for Defense Earnings This Quarter — Seeking Alpha

This is an exclusive post I wrote for Seeking Alpha looking at the upcoming earning reports from defense contractors.

Navy Buys Internet Services for Troop Morale & Welfare

The U.S. military is made up of mainly young men and women who form the bulk of the enlisted members. They have grown up with the internet and instant communications. Over the last ten years they have added such tools as Facebook, Twitter, Skype and other social media applications. The U.S. military recognizes this and in a move to help morale and welfare contracted to set up internet cafe services across the world.

DRS Technical Services (DRS) has been awarded an Indefinite Quantity/Indefinite Delivery (ID/IQ)m contract to provide these kinds of services by the U.S. Navy. The value of this contract if all options are executed would be over $250 million. As with all ID/IQ contracts there is no guarantee that the Navy will order any tasks under this so even though DRS has qualified for the work they may get little or none out of it.

The services will be to set up and maintain logistics support for communications services for DoD and other government agencies internet cafes and site for personnel use. The majority of the work will be done in Iraq and Afghanistan but will also have support in Germany and the U.S. It looks like this task will be used by other Agencies as they are the majority of personnel deployed in Iraq right now.

The need for these kind of services is just a normal growth of the other Morale, Welfare and Recreation (MWR) services provided by the U.S. military. This includes commissary and exchanges for shopping as well as organized sports and tourism and other activities meant to fill time. The internet connection is especially key now to provide troops with family contact beyond the traditional mail.

CSC Wins British Military Payroll Contract

In a move that surprised some observers the British Ministry of Defence (MOD) awarded the contract to manage their payroll and personnel services to CSC (CSC). The current contract is being executed by Hewlett Packard (HP).

The seven year contract which will begin in late 2012 has an estimated value of almost $1.5 billion. HP has been executing this work since 1997.

CSC was one of two other bidders then HP who had attempted to win the contract alongside Capita.

The decision was somewhat a surprise due to CSC’s recent failure on a contract with the British National Health Service (NHS) for a patient administration IT system. The fallout from this contract is currently under negotiation between CSC and the NHS to reach a settlement. It was recently reported that these negotiations are ongoing and some sort of agreement will be reached by 1 June. CSC has said that they have had to write off their nearly $1.5 billion investment into the system.

The agreement will manage the reduction in CSC’s support and the use of the system.

Despite this past performance the British MOD has clearly stated that CSC submitted the best proposal and believe the contract was evaluated fairly and properly.

As the U.S. military has had the British military also experienced problems in the past paying personnel the right amounts due to the large movement to and number of troops in Afghanistan and Iraq.

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