Defense Procurement News

Talley Inc, owned now by the Norwegian company Nammo, won a contract from the USMC to develop a launcher for 83mm rockets. The current system has been in use since 1984. The ammunition, currently produced by Talley, will remain the same, but a new system for firing the rockets from a Marine’s shoulder will be developed. The contract is for an initial buy of 146 launchers and 900 rounds of ammunition. Talley has produced over 40,000 rounds of this type. Nammo purchased the company last year as a way in to the US defense market.

See The Arizona Republic business site, here, for more on this contract.

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.

The USMC awarded Agility Defense & Government Services a contract to provide storage and transhipment of material. The one year plus six option years contract has a value of about $140 M if fully executed and will cover both US and overseas bases. The company will be responsible for not just heavy equipment but also smaller and the Marine’s personal gear as well. This the third major contract that the company has won from the US Department of Defense in the last few years.

For more see this press release on Albawaba.com

The USMC exercised a contract with TeleCommunications Systems to buy their Wireless Point-to-Point Link (WPPL) system to support deployed forces. The initial contract is worth about $3 M, but the company hopes to grow this through options to a total of $70 M by 2011. The WPPL System provides network and communication wireless capability to support maintenance and logistic activities. It is able to use line-of-sight and non line-of-sight capabilities to do this.

For more see the press release at the Wall Street Journal’s MarketWatch.com.

The USMC purchased 773 MRAP from General Dynamics. See a press release here. The contract is worth over $500 M. These are RG-31 MRAP designed in South Africa and will be sent to Afghanistan. The RG-31 was selected as it is smaller and lighter then other MRAP in the inventory and according to this article the US military is now concerned with rollovers and the size of the MRAP vehicles already purchased. Although wheeled they are very heavy and have issues with the roads and bridges in Iraq and Afghanistan. MRAPs are very all as well and can roll over more easily then other tactical vehicles.

The USMC awarded a contract to Hawker Beechcraft for 6 new transport aircraft. See a story here. These will replace older UC-12 aircraft also made by Hawker Beechcraft that have been in service for a few decades. These will most likely be used for personnel transport in more benign environments. The Army has been working to buy larger tactical transports through the Joint Cargo Aircraft (JCA) program but are struggling with the USAF on requirements and quantities.

The US Navy, along with the USMC, and acting for FMS customers awarded a contract to Sabre Defence to manufacture M16 rifles. See a press release here. Sabre becomes only the third company to manufacture military specification M16 rifles since its introduction in the early Sixties. The order seems small at under 6,000 rifles but the Army and USMC have turned to the Colt Industries M4 carbine over recent years. The Special Operations Command went with their own unique HK product as well. The number of M16 rifles in the US inventory is large and will probably support needs in the near future.

Armstrong Tools announced that they were awarded a contract to provide standardized tool sets to the US Army and Marine Corps. See the press release here. One of the key components of the contract is that it is Berry Amendment friendly. The contract is for over 90,000 kits and is worth over a $100 M.   Read the rest of this entry »

The USMC awarded Lockheed Martin a contract to build advanced, new sights for the AH-1 Cobra helicopter. See a story here. The $50 M contract will begin producing the sights in 2010. The AN/AAQ-30 Target Sight System is a multi-sensor system that will also provide targeting data and guidance for the Hellfire missile system. The US has used attack helicopters with great effect in Iraq and Afghanistan as they can provide a great deal of firepower at short notice. The new sight will extend the engagement range of the aircraft.

Force Protection was awarded a contract by the USMC to support MRAP vehicles. See the press release here. The contract is worth over $40 M and will last over a year. Force Protection had recently had some issues winning MRAP contracts, and this win will be welcome. For more see this and this.

According to this article Navistar International was awarded a contract by the US Navy to provide maintenance support for USMC MRAP vehicles. This contract is to provide parts and most likely Contractor Logistics Support (CLS) for the many vehicles that are being used in Iraq and Afghanistan. The contract value is over $700 M. It again illustrates that modern systems are not only expensive to procure but to maintain which opens up a whole new venue to defense contractors.

The US Navy awarded a contract to Harris Electronics to purchase tactical radios for the USMC. See an article here. The AN/PRC-117 radio order is worth about $118 M. Earlier the company had been awarded a $350 M contract for the radio. Harris has been eyed as an acquisition for a while, as reported here.

It is not news that the Colt M4 carbine has received a lot of criticism for its performance in Iraq and Afghanistan. This article summarizes a great deal of it. It turns out that the M4, originally a shortened M16 for use by armor and air crew, does not do well in dusty environments. The Special Forces have moved to an HK product, called the SCAR. Many in Congress and the Army have lobbied for a the regular Army and USMC to buy the SCAR as well. The Army did work on a new rifle, the XM-8, that was canceled recently due to problems with the program. Because this is a key piece of equipment for the military expect to see more about this and further efforts to broaden the small arms inventory.

As part of the recent procurement of 167 V-22 Osprey’s by the USAF and USMC the Boeing led team will buy parts from Eaton. The expected revenue for this company from the contract could be over $300 M. See a story here. Eaton makes parts for the tilt rotor aircraft. This again illustrates the spillover effect from these large procurement contracts. Companies all over the world participate in the production of parts and services for the total systems. Gone are the days where one company does all of the work.

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).

L-3 Communications won a contract from the Navy to provide video and audio capture devices. See the article at Forbes here. These will be used to support pre-deployment training at various sites in the US. The contract is worth $326 M. The devices are quite sophisticated as the price indicates.

This article in the North County Times describes a recent exposition held at Camp Pendleton that allowed a variety of contractors to hawk their wares. See the article here. It stresses the money that small contractors are making by selling very specific equipment. While the bulk of the defense investment budget; procurement and RDT&E funding, goes to several large contractors for mainly systems; there is a lot of business for smaller, specific companies.

One thing that the article does not discuss is that individual Soldiers and Marines use their own money to buy equipment they take when they deploy. These can range from foot gear to weapon grips and magazines.

An English website, The Register, reports on the USMC experience with the V-22 in Iraq. See the article here. The Marines are being close mouthed in general, but the reports seem to indicate it is performing well in the missions it is being used for. It helps that the situation in Anbar is much less violent then it was last year.

The MRAP, as previously discussed, was a knee-jerk reaction by Congress to the IED threat. Now the Marines are realizing that they really have no use for the out sized tactical vehicle in their normal operations. See this note here about how it is not meeting the needs of the USMC and the Army.

SPSA LLC of Harrisonburg, PA won a contract from the USMC to build Explosive Ordinance Disposal (EOD) kits. These will primarily be used to destroy Improvised Explosive Devices (IED) and left over ordnance in Iraq and Afghanistan. The IED remains the primary threat to US and Coalition troops in Iraq, so EOD is a major part of the mission. More details may be found here.