Filed under: Boeing, SAAB, Sweden, Syndicated Industry News, United States
Filed under: BAE Systems, Denmark, Sweden, Syndicated Industry News
The Danish Army has received five Armadillo type armored infantry fighting vehicles for testing. The Armadillo is one of several options considered by the Danish Army. Tests are expected to continue through the summer, leading to final selection in...
South Korea will likely buy the Taurus KEPD 350 long-range air-to-surface cruise missiles next year. Seoul is seeking to equip the next batch of fighter aircraft it intends to buy with the new missile.
Filed under: Sweden, Syndicated Industry News, U.S. Dept. of Homeland Security
Filed under: Brazil, Embraer, SAAB, Sweden, Syndicated Industry News
Filed under: Brazil, Embraer, SAAB, Sweden, Syndicated Industry News
Filed under: Bulgaria, Sweden, Syndicated Industry News, United States
Filed under: Alabama, Business Line, Companies, Contract Additions, Contract Awards, Countries, Department of Defense, Events, Federal Budget Process, logistics, production program, SAAB, Services, States, Sweden, training, U.S. Army, U.S. Marine Corps, U.S. Navy
The U.S. defense budget encompasses spending on all different types of products and services. The increase in spending after 9/11 required a ramp up of suppliers for all of the things the Pentagon wanted to buy. Due to the shrinking of the U.S. industrial base in the Nineties after the “Peace Dividend” was executed by President Clinton and Congress this meant for some items the U.S. had to turn to foreign suppliers. Many of these defense contractors also expanded their U.S. operations through mergers & acquisitions of U.S. based corporations.
That did not mean, though, that some suppliers had already entered the market. Swedish aerospace company SAAB (SAAB:Stockholm) has been delivering training targets to the U.S. Army since the 1970′s. They continue this work with qualification on a recent Indefinite Quantity/Indefinite Delivery (ID/IQ) contract to supply these targets. SAAB is one of five contractors qualifying and they could win up to $475 million in orders if all parts of the contract is executed.
SAAB has been providing similar systems since 2002 for the Army and Marine Corps. The targets will be used on different ranges to support weapon qualification and training.
SAAB recently won a major contract to install their Sea Giraffe radar system on U.S. Navy Littoral Combat Ships (LCS). The radar will be used by the Austal America version of the LCS built in Mobile, AL. The shipbuilder’s parent company is Austal in Australia so the program has a definite international flare.
Even though the U.S. defense budget is expected to decline significantly over the next decade that does not mean international providers will be forced out. Many of them have a substantial U.S. presence now and some provide products necessary for the U.S. There will also be contracts that they will win because they have the best bid but it will become harder for them to do this.
Filed under: Austal, Business Line, Companies, Contract Additions, Contract Awards, Countries, Department of Defense, Events, Lockheed Martin, Marinette Marine, production program, SAAB, Services, Sweden, U.S. Navy, United States
Update at 1700 CDT – The post has been updated to make clear that the SAAB radar has been selected only for the Austal USA version of the LCS.
The U.S. Navy’s new Littoral Combat Ship (LCS) is a small combatant designed to fight close in to shore. It will carry out a series of different missions including anti-piracy operations, Anti-Submarine Warfare (ASW), surveillance and reconnaissance and sanction enforcement. It is unique to the U.S. Navy at this time in that two very different designs with the same basic capability are being built from two contractors This is to allow rapid production.
LCS construction is being carried out by Lockheed Martin (LMT) teamed with Marinette Marine Corp. of Wisconsin as well as Austal USA, a subsidiary of Australian company Austal. The Navy has ordered 9 of the ships so far split between the two teams.
The Navy announced this week that it has decided to install the Sea Giraffe AMB radar onto the Austal USA version of the LCS. This system is manufactured by SAAB’s (SAABB) American subsidiary. The “Agile Multi-Beam” radar provides air and surface surveillance capabilities and is used to generate a three dimensional picture of the area to support operations. It has already been installed on a variety of combatants in use with countries like Sweden, Canada and Australia.
No value for the contract was given.
The first two, LCS 1, USS Freedom, and LCS 2, USS Independence, have already been completed.
The Navy had gone back and forth on the acquisition strategy for the ship due to concerns about price and schedule after the first two were put on contract. The original plan to use the two sources was ended and there was discussion of ordering batches of ten to a single producer at a time. After the proposals were received for the first contract from Lockheed and Austal the prices were so good the Navy went back to ordering from two suppliers.
Late last year the Navy gave contracts for ten ships each to the two companies.
The LCS remain controversial due to their size, weapon suite and capabilities. The Navy seems committed to the program and has begun large scale production. The decision to use the Sea Giraffe also highlights their commitment. It is uncommon for a non-American system to be ordered like this. The standard U.S. Navy radar and combat system, the AEGIS Weapon System, is much too large for the LCS and buying an existing system like this should save time and schedule.
As with all new classes of ships once they have been in service for a few years, worked out their kinks and demonstrated their capabilities they will be accepted and should be a valuable addition.
Due to the concerns about future shipbuilding budgets and capabilities the LCS if it really is built in the numbers proposed will make up a decent portion of the U.S. surface fleet by mid-Century. Ships last a long time and can receive incremental upgrades as technology progresses and that is what will happen with this class.
Filed under: BAE Systems, Boeing, Brazil, Business Line, Companies, Contract Additions, Contract Awards, Countries, D'Assault, development program, EADS, Events, France, India, Lockheed Martin, MiG, Military Aviation, production program, Restructuring, SAAB, Services, Sweden, UAE
The Western defense contractors face a shrinking market right now domestically for advanced combat aircraft. The U.S. and many of its Allies are committed to Lockheed Martin’s (LMT) F-35 Joint Strike Fighter and that system will dominate their inventories for the next few decades. The U.S. ended production of the F-22 Raptor by Lockheed and Boeing (BA) and European nations have pretty much finished up ordering Eurofighter Typhoon’s with the United Kingdom even planning retiring some of their older aircraft due to budgetary pressures. France and Sweden have their own domestic aircraft in the Dassault Rafale and SAAB Gripen but have purchased as many of those as they really can.
All of these companies and countries have looked to overseas customers to sell these aircraft with the two biggest deals being for Brazil and India. Unfortunately these contract are not materializing in the near future and may now be pushed out a year or two.
India has planned major upgrades to its military through the purchase of advanced Western systems. This has included aircraft like C-130J transports from Lockheed and P-8I maritime patrol aircraft from Boeing (BA) but their cornerstone program was for over a hundred fighters. This contract has been going through the source selection with the competitors from the U.S., Europe and Russia demonstrating their aircraft and at one point was hoped to be awarded this summer. It is now being reported that this major contract won’t be decided until early in 2012.
Brazil has also been planning to expand and improve its military through some deals with overseas suppliers. They too would like to buy a new fighter and that contest has seemed to be between Boeing’s F/A-18 and the Rafale although SAAB bid as well. The original plan was to award this year but due to budget cuts the decision will now be postponed for at least twelve months. There are concerns that it may not happen at all as Brazil had to cut its defense spending significantly.
Finally Dassault had hoped that the U.A.E. might invest in the Rafale as well which so far has yet to find a foriegn buyer. The Emirates already operates French Mirage aircraft and the Rafale would be the logical extension of these. The big arms expo in the U.A.E., IDEX, came and went though without any announcement of a deal although a contract was awarded to upgrade Mirage aircraft worth about $30 million. Failure to win this contract would be a blow to France’s aggressive campaign to sell the fighter to new customers.
It had been hoped that these overseas sales would make up for the decline in U.S. and European defense spending and help keep production lines going and workers employed. Unfortunately they are not materializing as fast as hoped and this may affect different contractor’s plans. The Asian and South American markets were seen as key to keep the defense business going in the next several years. It may be that even these nations who were hoping to improve their military may not have the money necessarily to meet their original plans.
Photo from Jerry Gunner’s flickr photostream.
Filed under: Business Line, Companies, Contract Awards, Countries, Events, Finland, production program, Protest, Services, Sweden
The U.S. Government has seen an increase in contract protests over the last ten years. This has been especially true with defense contracts. The situation reached a point that late last year the Defense Department’s Undersecretary of Defense for Acquisition, Logistics and Technology, Ashton Carter, actually complained about the problem they had become. Protests of awards while perfectly legal lead to delays in the start of work by the winner and in the case of the KC-X aerial tanker program cause the contest to start over causing major delays to the fielding of a new aircraft.
One of the major reasons for the amount of protests is the small number of large contracts available to be won. This means that each and every win is more important to a company’s bottom line. It is not even with just hardware contracts that you see protests but also with service ones. The last round of TRICARE health care management contracts led to protests some of which were upheld. These contracts were worth billions and the competition was pretty fierce. Now it has become almost expected that the loser of a contract will protest the decision.
It is not only in America though that the problem of protests exists. Sweden had awarded a contract earlier this month to Finnish company Patria Land and Armament Oyj for over a hundred new armored vehicles. The contract has a total value of over $300 million. Now an unidentified Swedish company is protesting the award.
As part of the contract Patria offered to offset the cost of the contract with one hundred percent investment in Sweden’s economy including using Swedish sub-contractors for major components.
The AMV vehicle has been in production for several years and over 1,000 have been ordered since 2004. Interestingly Patria won this contract in 2009 but a protest by BAE Systems Hagglunds, a component of Great Britain’s defense giant, BAE Systems (BAE:LSE), caused a recompete won again by Patria.
In the worst case this protest could lead to another competition delaying the start of the program by another year. Certainly competitors have the right to protest especially if they feel the award was not conducted properly but it does in the end delay the delivery of the hardware which in some cases is necessary for the modern battlefield.
Photo from hr.icio’s flickr photostream.
Filed under: Australia, Boeing, Brazil, Business Line, Canada, Companies, Contract Awards, Countries, development program, Events, Holland, India, Lockheed Martin, Military Aviation, northrop grumman, production program, Proposal, SAAB, Services, Sweden, U.S. Air Force, U.S. Marine Corps, U.S. Navy
Right now two of the biggest military aviation contracts out there are new fighters for Brazil and India. Both of these contracts have attracted bids from United States and European defense contractors. In Brazil the contest seems to be between the Boeing (BA) F/A-18 and the French Rafael. In India there have been offers from Boeing, Lockheed Martin (LMT), MiG of Russia, Rafael. Eurofighter and SAAB of Sweden. These contracts are interesting as all of these companies face declining markets at home due to budget difficulties and the decision by the U.S. and many of its Allies to focus on the F-35 Joint Strike Fighter (JSF) headed up by Lockheed.
Canada currently operates a force of older F/A-18 aircraft and is planning a potential buy of more modern aircraft worth about $9 billion (Canadian). Canada has put some money into the development of the JSF as have countries like Great Britain, the Netherlands, Australia and Japan but is not committed to buy the aircraft. They certainly could do that when the aircraft is ready in the 2015 – 2017 time frame or they could conduct a new competition. If they did this they would certainly draw a diverse group of suitors similar to what India has. The market for new fighters was supposed to stagnate as thousands of F-35 replace the F-16 aircraft of numerous U.S. Allies. Now with the delays and cost increases to that program some countries are having second thoughts.
A third major competition would be good for the industry and would allow some production lines like the SAAB Gripen to remain hot as the JSF program tries to get itself sorted out. If countries like Holland do decide to go a different path the market for current in production aircraft will increase greatly.
More fallout as the JSF program struggles with its cost and schedule may be expected as current customers re-think their commitments. This will increase the cost to the U.S. military while reducing Lockheed’s chances of making up some of their losses on the development piece of the contract. Canada if they choose to not buy the JSF may be the start of some bad news for the program and its prime contractor.
Photo from TMWolf flickr photostream.
Filed under: BAE Systems, Business Line, Companies, Contract Awards, Countries, Events, General Dynamics, Norway, production program, Sweden
Not that it really makes up for not winning the latest British armored vehicle contract which went to a team led by General Dynamics (GD) but BAE Systems (BAE:LSE) did win a contract to provide artillery to Sweden and Norway. The contract is worth over $250 million and is for a total of forty-eight of the Archer systems for the two countries.
Many European and overseas countries are putting money into upgrading all aspects of their military. The most important upgrade program right now is the F-35 which will replace F-16 aircraft in many NATO countries.
A contract like this while not huge will keep BAE Systems jobs and help the production line stay hot. This means that if Britain or another country wants the Archer it will be able to do so at lower prices then if the line went down due to lack of sales. BAE Systems has had a rough time of late with the loss of the U.S. Army truck, FMTV, contract to Oshkosh and the fines it must pay to settle bribery charges related to a large Saudi Arabian contract. Diverse product lines like this will help weather the down period.
Filed under: Contract Awards, Lockheed Martin, Military Aviation, Norway, production program, Sweden
The Fort Worth Star and Telegram reports that Norway has selected the F-35 aircraft over the Swedish Gripen. The new aircraft will replace the F-16 fleet currently operated by the Scandinavian country. Norway had always been leaning towards the F-35 due to its integration in NATO; but Sweden had made an unsolicited offer for the Gripen that was considered a very good deal.