Defense Procurement News

The UK government is currently planning on buying Eurofighters and F-35 JSF aircraft to modernize their fixed wing aviation force. There are rumors that the Eurofighter buy may be canceled as a cost savings. See an article here. Eurofighter is built by a multi-nation consortium in Europe with BAE being the most important UK participant. If the contract is canceled, with the Government paying termination fees, that means no major aircraft will be built by BAE. They build parts of the JSF but do not assemble the final aircraft. This would be the end of fighter production in England if it happens until a more advanced aircraft then the F-22 or F-35 comes along.

The UK government, fresh off of awarding the construction contract for the two new aircraft carriers, has now awarded a second major one related to the effort. BAE has been awarded a contract to develop the IT backbone for the ships. See this article for more. This over $500 M contract will develop the system that integrates everything on the ship. Sure to be key as one of the goals of the new design must be to minimize crew size.

This article discusses the effect BAE has had on Phoenix, AZ. It also illustrates how the non-US company has grown through the acquisitions of US companies and has gained more and more US defene business. In Phoenix alone the number of BAE employees has tripled in the last five years or so, and the company has been buying facilities and companies. The article also shows how some in Congress feel a British company is better than a joint German and French, making it easier for BAE to continue to gain work in the US.

The US Army awarded BAE a $1.6 B contract to buy 10,000 medium tactical vehicles. See a story here. The contract if all options are exercised could be worth over $2.0 B. The contract will be for three years base, and it makes BAE one of the top ten defense contractors selling to the US military now. This has been done through judicial acquisitions and expansion in the US, as well as some successful joint ventures.

This article describes how BAE plans to expand its facilities and hire more workers at its Land & Armaments group. Under the most recent BRAC the Army will move its unmanned vehicles program offices to Warren, MI from Huntsville, AL. This leads BAE to believe that work will be coming with them. The state of Michigan has also assisted BAE by providing tax credits and training funds for the expansion. The Michigan economy has taken many recent hits with the decline of the US auto industry.

BAE placed an order with Saft to provide lithium-ion batteries. See the press release here. These batteries will be used by BAE in the FCS Manned Ground Vehicle (MGV). FCS is a system of systems that includes various vehicles and sensors. Saft has already provided batteries for the Non-Line of Site Cannon, the first FCS system that will be deployed. The batteries will be used in a hybrid battery power system for the vehicles. It will be interesting to see how this application of technology will work in the future.

BAE Systems was awarded a $71 M contract for 12000 turret motors for US Army light tactical vehicles. The story is here. The motors will be used to move the turrets on HUMVEEs and MRAP vehicles. Obviously the part will be provided to whomever outfits the vehicles with the turrets, either at an Army depot or the factory. It again shows that little things cost a lot and the price of something can add up quickly.

This story is about how BAE Systems possible expanded production of MRAP’s and their submission of a bid for the Joint Light Tactical Vehicle (JLTV) contract may allow them to enlarge their Michigan facility. Right now no production is done there, but the demand for the MRAP or JLTV may lead that to be done at their Sterling Heights facility. While there has been consolidation in the US defense industry since 1990, the demands of the current budgets have made it possible for the companies to invest in physical plant to increase production and repair of key items.   Read the rest of this entry »

The USMC awarded BAE a contract worth $715 M to build two versions of MRAPs for the Corps. See the press release here. BAE is moving to seize a large part of the MRAP business from the various US services. For the struggles of Force Protection lately see this past post. The BAE contract includes money for developmental upgrades and for Contractor Logistics Support (CLS).

Tata just does not make the cheapest car in the world, but has now begun forging agreements with foreign defense companies to bid on Indian contracts. See The Financial Times for more on this. Tata has joined with EADS to begin preparation for bidding on a communication contract. They have signed with Sikorsky to make helicopter cabins, and is also in talks with BAE. This is a sensible way for the large company to begin getting into the defense business. Of course, with the US companies the export controls may limit what they can do.

This analysis in The Guardian says that BAE and the VT Group will lose billions in orders from the British government if planned cuts to the defence budget go through. Because some of the contracts for hardware have cancellation clauses the government may be force to buy the systems and then sell them to other nations. This is all part of an attempt to reduce public spending.

BAE systems won a contract to install and integrate C4I systems on US Navy assets. It is a five year contract with three option years. If all options are exercised it could be worth $344 M. See more at The Houston Chronicle.

According to the Dayton Business Journal, MTC Incorporated was awarded a IT contract worth $23 M by DoD. The story is here. A few weeks ago, BAE Systems announced they were purchasing the Dayton, OH based company.

According to this article in Crain’s Detroit Business the economically depressed state Michigan is seeing some gains from the increases in the defense budget due to the wars in Iraq and Afghanistan. The Army has a large presence in Michigan due to its activities in Warren, MI which include track and wheeled vehicle development. BAE Systems which manufactures M1 and M2/M3 systems is also building up its group there .The service is also planning on moving its robotics efforts there as well.

The US Army awarded BAE Systems a initial order of $20 M for MMPV. The total contract could have a value of $2.3 Billion. See the story here. BAE will perform most of the work at Letterkenny Army Depot. This initial order is for 9 vehicles for evaluation. This is a specialized engineering vehicle for route clearance, and not just another MRAP.

BAE Systems was awarded a contract to evaluate missile defenses on civil airliners. Three aircraft will be tested with an existing BAE system. See this story here. Although no airline aircraft has been shot down in the West with a Man Portable Air Defense (MANPAD) system; there is a significant threat. El Al airliners have long been rumored to be equipped with these types of defense systems.

BAE was awarded a $375 M contract to begin purchasing the parts and supplies to reset over 600 M2 Bradleys. Reset is when the Army takes a system that has been used a lot and rebuilds. When you are done you have a new system with the same capability. Reset does not add any capability, that is what a modification program does. See more here. For more on the Bradley reset program see this. Anniston Army Depot in Anniston, AL provides reset for M1 and M2 vehicles. They are working 3 shifts/7 days a week.

The C4ISR Journal has more detail on the purchase of BAE’s Pennsylvania based surveillance and attack unit. Cobham has been buying other companies as it builds up its capabilities and revenue. See the article here.

Yesterday BAE announced that it would purchase MTC Technologies for a total price of $450 Million. The news story is here. Information about the Dayton, Ohio headquartered MTC Technologies can be found here.

BAE Systems sold their Surveillance and Attack system development group located in Lansdale, PA to Cobham Defense Electronic Systems Corporation. See the Press Release here. This moves the corporation away from subsystem development and into being a primary developer and integrator of total systems. The work being done there was part of their Electronic and Integrated Solutions group, which “designs, develops, and manufactures a wide range of electronic systems and subsystems for military and commercial applications.” Their web page here.