Filed under: MDA, missile defense, Raytheon, Syndicated Industry News
Filed under: IAI, MDA, missile defense, Syndicated Industry News
Filed under: Business Line, Companies, Countries, Department of Defense, development program, Events, Hawaii, Lockheed Martin, MDA, Military Aviation, missile defense, New Jersey, northrop grumman, Northrop Grumman Corp., Poland, production program, Raytheon, Services, States, U.S. Army, U.S. Navy
In the early 1990’s in a response to Iraq’s use of Scud missiles during Desert Storm the U.S. military, led by the then Ballistic Missile Defense Organization (BMDO), now the Missile Defense Agency (MDA), began investing in defenses against shorter range threats. Previous efforts had been oriented to defending the United States from the large the Intercontinental Ballistic Missile (IBCM) based in the Soviet Union. All three of the major services had programs but the focus was on U.S. Army and Navy missile systems.
The Navy began developing 2 different systems that mirrored the Army’s path. Both involved modifying their current primary long range air defense system, AEGIS. This utilized large phase arrayed radars and the STANDARD Missile-2 (SM-2) interceptor. The AEGIS radars and other systems had originally been developed by General Electric (GE) but by the mid-1990’s had transitioned through Martin Marietta to Lockheed Martin (LMT). The SM-2 was produced by Hughes Missile Systems and Raytheon (RTN) but ultimately Raytheon acquired the whole business.
First, the missile, radars and command and control systems would have capability added to defense against shorter range missiles but still maintain their air defense mission. The Army was doing the same thing with their Patriot surface-to-air missile system. Secondly, a dedicated missile utilizing an exo-atmospheric kill vehicle would be developed. That meant the missile would not be able to engage air breathing targets but much longer ranged missiles.
By the early part of this century the air defense capable version, SM-2 Block IVA, had been cancelled due to budget and schedule issues. The long range SM-3, though, continued development and testing. It has proved successful including being able to intercept and destroy a failing satellite in 2008. The system has entered production and several cruisers and destroyers have been modified to utilize it. The Navy has continued development and the new SM-6 missile has just entered production at a new factory in Huntsville, AL.
The MDA has also decided as a way to supplement the current Ground Based Mid-Course System based in Alaska to develop “AEGIS Ashore”. This places the radars, other systems and missiles in trailers and containers that can be set up in different places and even moved around as necessary.
This program made a major step forward recently with the build up of the first test set that will be installed ultimately at the Pacific Missile Range Facility (PMRF) in Kauai, Hawaii for testing. Once that system is moved a second one will be installed at the main AEGIS production and development center in New Jersey. Ultimately the first set will be set up in Eastern Europe.
Originally the Bush Administration had planned on an expansion of the Alaskan ground based system into Poland and other parts of Eastern Europe. This was cancelled by the Obama Administration and AEGIS Ashore substituted. There is also plans to utilize AEGIS ships to provide missile defense converge of parts of NATO in Europe.
AEIGS Ashore is just one part of the continued Navy and U.S. investment in missile defense as it includes upgrades to the AEGIS radars, C2 systems and steady development of the STANDARD Missile. All of this will be to the advantage of key contractors like Lockheed and Raytheon. Further developments of a new radar, the Air and Missile Defense Radar (AMDR) also include bidders like Northrop Grumman (NOC) so as the program develops there will be chances of contract wins and work for other contractors. These efforts could also flow into the AEGIS Ashore or its replacement system in the future.
Filed under: Business Line, Companies, development program, Events, MDA, missile defense, Press Releases, production program, Raytheon, Services, U.S. Navy
SM-6 program on track to reach initial operating capability in 2013
TUCSON, Ariz., May 22, 2013 /PRNewswire/ — A Defense Acquisition Board approved full-rate production of Raytheon Company’s (NYSE: RTN) Standard Missile-6. Once operational in 2013, the SM-6 will provide U.S. Navy vessels extended range protection against fixed- and rotary-wing aircraft, unmanned aerial vehicles and cruise missiles.
“SM-6 is a game-changing, transformational fleet defense missile, and we’re on track to reach initial operating capability this year,” said Wes Kremer, Raytheon Missile Systems’ vice president of Air and Missile Defense Systems. “This is a monumental moment for the SM-6 program and signifies a new era of fleet defense for our naval warfighters.”
In February, Raytheon delivered the first SM-6 from its new $75 million, 70,000 square-foot SM-6 and Standard Missile-3 all-up-round production facility at Redstone Arsenal in Huntsville, Ala. The facility features advanced tools and the latest processes for missile production, enabling Raytheon to streamline processes, reduce costs and add value for the warfighter.
“The first delivery of low-rate initial production rounds to the U.S. Navy was in February 2011, which was six months ahead of contract,” said Mike Campisi, Raytheon’s senior director of Standard Missile-1, -2, and -6 programs. “The first full-rate production Standard Missile-6 is on track for an April 2015 delivery, which is three months ahead of contract.”
About the Standard Missile-6
SM-6 delivers a proven over-the-horizon air defense capability by leveraging the time-tested advantages of the Standard Missile’s airframe and propulsion.
- The SM-6 uses both active and semi-active guidance modes and advanced fuzing techniques.
- It incorporates the advanced signal processing and guidance control capabilities from Raytheon’s Advanced Medium-Range Air-to-Air Missile.
Raytheon Company, with 2012 sales of $24 billion and 68,000 employees worldwide, is a technology and innovation leader specializing in defense, security and civil markets throughout the world. With a history of innovation spanning 91 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 @raytheon.
Filed under: MDA, missile defense, Syndicated Industry News, Thales, United States
Filed under: MDA, missile defense, Syndicated Industry News
Filed under: Boeing, MDA, missile defense, Syndicated Industry News
Filed under: Alliant Techsystems, Business Line, Companies, Contract Additions, Contract Awards, development program, Events, MDA, missile defense, Services
Despite the “Fiscal Cliff” negotiations and the fact that the Federal Government continues to operate under Continuing Resolution Authority (CRA) the Department of Defense continues to execute contract options. Under CRA new ones cannot be awarded but options on existing contracts may be executed. That explains why a production option for the F-35 could be issued even though it is worth over $3 billion.
ATK (ATK), for example, recently received a contract from the Missile Defense Agency (MDA) related to the development of Modular Divert and Attitude Control Systems (MDACS) technology for the Navy’s SM-3 Block IIB interceptor. The SM-3 is a ship launched missile that ultimately places a kill vehicle outside the atmosphere to engage the enemy missile threat.
The recent North Korean launch highlighting potential threats that the SM-3 is designed to perhaps deal with. It was reported that the U.S. and Japanese Navy deployed ships with the SM-3 capability in response to the launch.
The contract has a value of almost $53 million.
Because the kill vehicles are based on ships they cannot use liquid propelled DACS so solid rocket ones must be developed. They are flown like miniature space ships using controlled thrust from little rockets to move them. ATK is working on extending the performance of the DACS systems already used on the SM-3 program.
Filed under: Alabama, Business Line, Companies, Contract Additions, Contract Awards, development program, Events, MDA, missile defense, production program, Raytheon, Services, States
As the Fiscal Year 2012 comes to an end contracts continue to be awarded although they should dry up as the government moves to begin closing out the books on this year and begin executing next year’s budget. FY 2013 looks to start with an extended Continuing Resolution Authority (CRA) which could limit what can be done with available funds.
One program that has had steady awards is Raytheon’s (RTN) work producing the SM-3 missile for the U.S. Missile Defense Agency (MDA). The SM-3 is part of the ship based AEGIS system and is optimized to engage enemy ballistic missiles. Further versions are being developed to deal with more complicated and longer range threats but the SM-3 has been tested several times in Hawaii and is equipping the U.S. and Japanese AEGIS ships.
The most recent award was for 19 missiles and has a value of over $200 million. This follows a contract awarded in July worth almost a billion dollars for development effort for a new version of the missile.
Raytheon is building a new facility in Huntsville, AL to produce the SM-3 missiles.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, development program, Events, MDA, missile defense, production program, Raytheon, Services
Following up on a recent award for the development of a kill vehicle for the Army operated Ground Based Midcourse system based in Alaska worth over $600 million, Raytheon (RTN) received another contract for a new ship based missile. Raytheon currently produces versions of the STANDARD Missile (SM)-2 and SM-3 to provide air as well as missile defense from ships of the U.S. and Allied Navies.
The new contract which is worth over $900 million will be for the new SM-3 Block IIA missile. This version of the missile will have larger, more powerful second and third stage motors along with a new warhead.
Both contracts will work with systems designed to intercept the missile outside the Earth’s atmosphere utilizing hit-to-kill technology. Raytheon as part of the AEGIS Weapon System and SM missile team has been involved with U.S. Navy efforts to develop missile defense systems for almost 20 years.
Filed under: Alabama, BAE Systems, Business Line, Companies, Congress, Contract Additions, Contract Awards, Countries, Department of Defense, development program, Events, MDA, missile defense, production program, Raytheon, Services, States, U.S. Navy
The AEGIS system is the primary ship based anti-air warfare weapon used by the U.S. Navy and some allied Navies. It consists of radars, fire control software, vertical and rail launchers and version of Raytheon’s (RTN) STANDARD missile. It has been in use since the 1970′s and consistently upgraded.
Using modified software and the SM-3 missile it provides ballistic missile defense. The SM-3 has the ability to engage targets at high altitude. More advanced models of the SM-3 are being developed with a new plant being constructed in Huntsville, AL at Redstone Arsenal.
A few years ago the Obama Administration decided to end deployment of the Ground Based Mid-course system in Europe. That Army operated ballistic missile defense program now has interceptors based in Alaska and sensors across the globe. A similar installation of interceptors was planned for Eastern Europe but it was decided to pursue other ways to provide the defense for NATO allies.
Part of this is to take an AEGIS system and base it on the land. This “AEGIS Ashore” will make the majority of the ship installed components and make them transportable. This includes radars, fire control installations, the SM-3 and a version of the Mk 41 Vertical Launch System.
BAE Systems (BAE:LSE) is the manufacturer of the Mk 41 through the acquisition of a U.S. defense contractor several years ago. The just received a further contract for Mk 41 components for both AEGIS ashore and new DDG-51 class destroyers. This contract has a value of about $23 million.
The contract will see Mk 41 components for DDG-116 and parts of the AEGIS Ashore installation. The use of the Navy’s missile system to provide land based missile defense is rather innovative and combined with ship based systems as well as the Army’s shorter ranged PATRIOT and THAAD provide some layer of defense for an area.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Countries, Department of Defense, development program, Events, Lockheed Martin, MDA, missile defense, production program, Raytheon, Services, U.S. Army, UAE, United States
One of the advantages of being the prime contractor on a major program is that after it is designed and developed and begins production you receive contracts to continue to upgrade and support the system. Lockheed Martin (LMT) the main contractor for the U.S. Army’s Terminal High Altitude Area Defense (THAAD) system was awarded a contract to provide support to future upgrades to the land based missile defense system.
The THAAD is the bigger, longer ranged part of the Army’s missile defense program. The modified air defense missile system, PATRIOT, is the shorter ranged component. THAAD will be used to provide defense of larger areas and more potential targets then PATRIOT which is normally used to provide close in defense. The PATRIOT radar and C3I system is made by Raytheon (RTN) while the PAC-3 missile is manufactured by Lockheed.
The contract which is an Indefinite Delivery / Indefinite Quantity (ID/IQ) one has the potential value of over $500 million if all work is awarded. It provides for development, integration and testing of upgrades as well as work on improving all parts of THAAD. This includes the missile, launcher, radar and C3I components.
Because it is an ID/IQ contract there is no guarantee that any work will be awarded under it. Lockheed will be awarded individual task orders which might provide for research into a better rocket motor, its integration and then testing. These kind of contracts allow the government, here the Missile Defense Agency (MDA), to pick and choose what work and how much it wants.
If the government does not buy all of the technical data for the THAAD a policy which it has pursued on many different programs as a cost savings measure then it will have to rely on Lockheed for most of the future support as that company developed it. Owning the tech data would allow a contract be awarded to another vendor or contractor who could then be given the data to support there work.
THAAD has been developed over the last several years and entered production recently. It has been deployed in limited numbers and sold to the United Arab Emirates (UAE) as its first foreign military sale. As the system gets made in larger numbers there will be efforts to upgrade and improve its capability and take advantage of new technology. Right now Lockheed is well placed to gain a great deal of that work.
Photo from U.S. Missile Defense Agency flickr photostream.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, Events, Germany, Holland, Israel, Lockheed Martin, MDA, missile defense, production program, Raytheon, Saudi Arabia, Services, Taiwan, U.S. Army, UAE
The Pentagon may be planning to reduce or hold spending flat in the upcoming years but with the final passage of the 2012 defense budget major contracts are now flowing to different contractors as Project and Program Offices place production orders. Lockheed Martin (LMT) benefited from this yesterday as they received the latest production contract for the PATRIOT PAC-3 missile.
The PATRIOT air and missile defense system is made up of two major parts: the radar and the interceptor. Currently Raytheon (RTN) is the prime contractor for the radar and command and control systems while Lockheed manufactures the current standard missile, the PAC-3. The PAC-3 version of the system in use since the late Eighties incorporates modifications to maximize missile defense capabilities while the missile is smaller, relies on hit-to-kill technology and is a significant upgrade to the earlier PAC-2 missile as it allows more rounds to be used by each launch unit.
The FY12 order is for both U.S. Army use as well as a follow on delivery for Taiwan. It has a value of just over $900 million and represents a rather significant contract. The work includes not only the missiles but also kits, spares, support equipment and engineering services.
The PATRIOT represents the shorter ranged part of the Army’s missile defense capability with the Theater High Altitude Area Defense (THAAD) system made by Lockheed providing longer range and larger area defense.
The PATRIOT has seen significant foreign military sales to countries like Germany, the Netherlands, Israel, Saudi Arabia, U.A.E. and Taiwan. It is especially valuable to those countries facing a ballistic missile threat like Israel, Taiwan and the Gulf States.
The PAC-3 missile has been in production for several years from Lockheed’s facility in Camden, AR.
Photo from Tumbleweed:-)’s flickr photostream.
Filed under: Boeing, Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, development program, Events, General Dynamics, Lockheed Martin, MDA, Military Aviation, missile defense, Northrop Grumman Corp., Raytheon, Services, U.S. Army, U.S. Navy
The FY12 defense budget while it did not grow much did keep spending at the high levels generated by the Iraq and Afghan fighting. There are certain key areas that remain highly funded as well in the U.S. budget. Future cuts are expected but it is hoped by contractors that these areas will maintain their funding even as other parts of the U.S. military are shrunk. One of these is in missile defense.
The Missile Defense Agency (MDA), the successor to the Ballistic Missile Defense Organization (BMDO) created under President Reagan, is responsible for managing development and deployment of systems for this mission. Although technically many of the programs belong to the Services MDA provides their funding and direction. The Army has three major ground based systems and the Navy has a ship one as well.
MDA is also responsible for building a network of sensors and the software that links all of these parts together.
Lockheed Martin (LMT) is the lead contractor on the Command, Control, Battle Management and Communications (C2BMC) program which has as a goal the integration of the different sensors and weapon systems to most efficiently detect, identify and engage a target. Lockheed is assisted by several other major contractors on this program including Northrop Grumman (NOC), Boeing (BA), Raytheon (RTN) and General Dynamics (GD).
Lockheed has just received further funding for this effort close to a billion dollars as MDA executes the latest option on this contract. It can be expected as long as the MDA wants to keep developing its system of systems that the C2BMC will keep going as it is necessary for the best use of them.
This means despite the defense cuts there will be some funding for this program so that it may be kept going to completion which favors Lockheed Martin and does provide some core revenue.
Photo from the U.S. Missile Defense Agency Flickr Photostream.
Filed under: Alaska, Boeing, Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, logistics, MDA, missile defense, production program, Raytheon, Services, States
UPDATE – Lockheed announced today that it and its partners would not protest the decision to award the contract to Boeing.
For the last two year the U.S. Missile Defense Agency (MDA) has been working to award a new contract to manage and support the land based Groundbased Midcourse Defense (GMD) system. This system consists of interceptors based in Alaska and a world wide system of sensors to detect threats and guide the missiles to their targets. The GMD is designed to protect the United States from limited ballistic missile attack.
Boeing (BA) has been the prime contractor for the development, deployment and operation of the system since the early Nineties. A few years ago the Obama Administration cancelled plans to expand the system by installing missiles in Europe but decided to keep the existing assets operational. Last year MDA announced a competition for the support of the system and bids were delivered by Boeing and a team made up of Lockheed Martin (LMT) and Raytheon (RTN).
The announcement of the winner was supposed to have been made this summer but the MDA kept pushing it back so that ultimately it was announced just before New Years. The winner was the incumbent, Boeing, who will now receive a contract that has a value of up to $3.5 billion over the next seven years.
Obviously Lockheed and Raytheon are disappointed but there has been indications that they will protest the decision.
The bidders had submitted their final, revised proposals just before Thanksgiving which meant it took the MDA about thirty days to make their final decision.
While all three companies are involved in other missile defense programs that the current defense plans see as being expanded or invested in the win by Boeing is a big deal to that company as it keeps one of the largest programs in their hands. MDA may be one of the areas that sees flat budgets over the next few years as the U.S. adjusts its defense spending due to the end of the fighting in Iraq and Afghanistan and attempts to reduce the deficit.
Photo from U.S. Missile Defense Agency’s Flickr photostream.
Filed under: Alaska, Boeing, Business Line, Companies, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, logistics, MDA, missile defense, northrop grumman, Northrop Grumman Corp., Proposal, Raytheon, Services, States, U.S. Army
The U.S. Army and Missile Defense Agency have been operating and supporting the Ground Based Missile Defense (GMD) system for several years now. The system consists of a group of interceptors and control system in Alaska supported by a network of sensors and guidance radars across the globe. Originally this was to be expanded into Europe but the Obama Administration ended that plan to focus on ship based and shorter range Army systems. The current deployed portions though continue to need to be operated and supported.
Boeing (BA) was the lead contractor on the development and deployment of GMD. They have also been providing the necessary support. Last year the MDA decided to compete this contract with a goal of awarding the new one last fall. Two different teams of companies submitted proposals for this contract. Boeing teamed with Northrop Grumman (NOC) in a bid to maintain the work and they were challenged by Lockheed Martin (LMT) and Raytheon (RTN).
Due to the complexity of the contract evaluation MDA has pushed out award of the new contract several months. Most recently in October they delayed it again until nearer 2012. Boeing’s existing contract kept being extended to maintain the necessary support.
Now in the last week both teams submitted their final revised proposals to the MDA. This should be the final step in supporting a decision by the Government on the award of this multi-billion dollar contract.
Lockheed and Raytheon stressed their experience and work in support of various Army and Navy ballistic missile defense systems. The companies support the PATRIOT, THAAD and ship based STANDARD Missile-3 interceptors. They also make radars and software for the mission.
Boeing and Northrop also turned in their proposal on time with a stress on the fact that due to their experience with the system they offer the lowest risk and best value to the Government. Boeing also feels they have an advantage as the incumbent of minimizing the transition to the new contract. Lockheed and Raytheon would have to do some work hiring and organizing things after they won.
The contract is one of the largest currently in competition. It represents to the bidders a significant amount of earnings and revenue. The contest will be watched closely and will hopefully make up for some of the other cuts coming in the U.S. defense budget to support and acquisition contracts.
Filed under: Acquisitions, Boeing, Business Line, Cobham Defense Electronic Systems, Companies, Countries, Department of Defense, development program, England, Events, General Dynamics, Industry Analysis, IT, Lockheed Martin, logistics, MDA, Military Aviation, northrop grumman, Northrop Grumman Corp., production program, Raytheon, Restructuring, Services, training
In yet another M&A action in the defense industry British contractor, Cobham plc (COB:LSE), has agreed to sell its Analytic Solutions group to Parsons Corporation. The transaction is estimated at about $350 million.
Sparta was formerly a private company started in 1979 that provides SETA support as well as technical products and services to the U.S. defense and intelligence business sector. The company was acquired by Cobham a few years ago. Foreign defense contractors, especially those from Great Britain, had grown their presence in the U.S. defense market in the last decade through mergers, acquisitions as well as winning some contracts. Due to the rapid expansion of the defense budget post-9/11 the market was their for them to provide competition to the U.S. domestic industry.
Sparta provides design, development, fielding and sustainment support for ballistic missile defense systems primarily working through the Missile Defense Agency (MDA). It also supports tactical weapon systems especially in the area of logistics as well as network-centric warfare operations. Sparta also supports the intelligence community through developing software and hardware tools and operating computer networks and systems.
Parson’s is about a $2.7 billion engineering support company that not only provides defense services but also civil efforts across the globe. These include engineering and construction, transportation and infrastructure support. Many of their efforts in defense have synergy with Sparta’s but they provide some that are different such as range and training support. Parson’s revenue recently peaked in 2008 and is now about $700 million less then that year. Stock price and Net Operating Income though have gone up steadily though.
If the U.S. defense budget does see major cuts it might be harder for the U.K. and other non-U.S. companies to sustain their current level of revenue. The pressure to always choose a domestic provider will be high on the U.S. Defense Department and the Services. Cobham could also be looking at the market and believing that what Sparta provides may be an area of shrinkage or more competition and now has decided to focus on more core assets. Sparta formed one of nine business units in the company. Last year the company had revenue of about $3 billion.
If the expected decline in defense spending does occur then the U.S. defense industry may see major consolidation as happened in the 1990′s though M&A as well as companies moving out of the sector. The government reportedly has made it clear that they would not like to see any of the big 5 defense contractors (Boeing (BA), Raytheon (RTN), Lockheed Martin (LMT), Northrop Grumman (NOC) and General Dynamics (GD), who are the primary hardware providers merge as did happen in the 90′s.
Filed under: Boeing, Business Line, Companies, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, logistics, MDA, missile defense, Proposal, Raytheon, Services
The U.S. Missile Defense Agency has been deploying and operating the GBMD system for several years. It operates intceptors in Alaska and a world wide network of sensors to protect the United States proper from limited ballistic missile attacks.
Originally the system was going to be expanded into Europe but the Obama Administration cancelled those plans and will invest in ship based systems and more Army Theater Missile Defense (TMD) assets. Even though the expansion was cut short the existing components need to be maintained, supported and ready to use.
Boeing (BA) was the original Lead Systems Integrator (LSI) for the program and currently is the support provider. Last year the MDA decided to put the contract up for competition and Boeing bid against a team of Raytheon (RTN) and Lockheed Martin (LMT).
Both have submitted proposals but for the second time the MDA has delayed announcement of who has one the contract. Earlier this year it was delayed until after 1 October and into the new fiscal year. to cover that first delay.
The contract will be quite substantial and winning it is important to the bidders. It is necessary to keep the GBMD system up and running and utilizing the investment made over the years.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, development program, Events, Lockheed Martin, MDA, missile defense, Proposal, S&T, Services, U.S. Army, U.S. Navy
The Missile Defense Agency (MDA) is charged with developing different systems to provide anti-ballistic missile capability for the United States and its military services. It has spent billions over the last thirty years looking at a variety of sensors as well as interceptors. Right now several different Army and Navy programs are in production as well as development. These include a variant of the PATRIOT air defense system, the THAAD land based system used by the Army and the Navy’s AEGIS Weapon System modified to engage ballistic missiles rather then aircraft.
The AEGIS system has already been installed on several cruisers and destroyers and uses a missile built by Raytheon, STANDARD Missile (SM) -3, that is a version of an air defense system. It has been tested several times in Hawaii and was also used to engage a satellite that was falling from space and posed a threat due to toxic materials.
Now MDA is spending money to look at making a version of the AEGIS Weapon System and SM-3 missile that could be land based. Earlier this month the Agency awarded Lockheed Martin (LMT), the manufacturer and developer of the system, a contract modification to continue work on Aegis Ashore Combat System adaption efforts.
The contract is worth a little over $100 million.
While it would seem fairly easy to take a radar and a missile in a box off of a ship and install it on land it is not as easy as it makes out. The THAAD and PATRIOT have been designed from the start to fit in a small footprint able to be placed on vehicles. The AEGIS Weapon System has been placed on ships with decent volume of space, large amounts of power and that are designed around placing the radars in optimum locations. Any AEGIS ashore system might be “transportable” but not really “mobile” without serious efforts to shrink their footprints.
It does show though that the U.S. is interested in placing one of their more successful missile defense capabilities in places that a ship cannot reach. The idea will probably take a few years and an investment of several hundred million dollars to come to fruition.
Filed under: Australia, Business Line, Companies, Contract Additions, Contract Awards, Countries, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, Massachusetts, MDA, Military Aviation, missile defense, Northrop Grumman Corp., production program, Raytheon, S&T, Services, Spain, States, U.S. Army, U.S. Navy
Raytheon (RTN), the Massachusetts based large defense contractor, is a key contributor to the U.S. missile defense systems. It manufactures the radar and other parts of the Army’s PATRIOT air and missile defense system. It provides the Navy’s STANDARD Missile (SM)-3 interceptor for their AEGIS Weapon System based ship board system and it is heavily involved in Research & Development for the next generation of weapons being planned. Recently it continued this contribution in different ways.
First, it was awarded a contract by the Missile Defense Agency (MDA) to produce more SM-3 missiles for the Navy and select U.S. allies who operate the AEGIS system. The contract modification was for about $285 million and will buy a further 23 SM-3 and associated engineering services and support. These are the Block IA variant of the missile. Raytheon also recently began construction of a new manufacturing facility at Redstone Arsenal, Huntsville, AL to build the SM-3 and the improved version of the STANDARD Missile called the SM-6.
Raytheon also announced that last month it continued testing its new radar for a competition that MDA and the Navy is having to develop a new radar that could ultimately replace the AEGIS’s SPY-1 made by Lockheed Martin (LMT). The Air and Missile Defense Radar (AMDR) will go on the DDG-1000 and DDG-51 destroyers. MDA had awarded contracts to Raytheon, Lockheed and Northrop Grumman (NOC) to do basic development of the radar. Raytheon said that new Gallium Nitrade transmit/receive modules had completed over 1,000 hours of testing in support of the program.
The AMDR will combine S and X band radars for search and fire control. The current AEGIS radar is S band with separate radars that provide illumination and terminal guidance for missile interception. Systems like the Army’s THAAD land based missile defense system utilize a X band radar for its missions. The higher wavelength provides better target discrimination and precision for the high velocity intercepts required by missile defense.
Despite the coming cuts in U.S. defense spending the combination of a new radar and interceptor for U.S. Navy air and missile defense will be developed and produced. The only question is how fast and in what numbers. The MDA is looking at making a land based version of the AEGIS / SM-3 combination and Raytheon has propose that over the years as well. There are also several countries that operate the system for air defense and they could be upgraded to carry out the missile defense mission. Japan already does but countries like Spain and Australia also could. This foreign market could help Raytheon offset U.S. market changes.
The AMDR winner is also looking at steady business for several decades. The AEGIS has been used now for almost forty years from one source. The company that gets the contract for the AMDR at the end of the development phase should expect a similar situation providing a steady stream of revenues and earnings.
Filed under: Boeing, Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, IT, logistics, MDA, SAIC, Services, SETA, U.S. Army
The Missile Defense Agency (MDA) announced that SAIC (SAIC) was one of the companies who qualified for a recent Indefinite Delivery / Indefinite Quantity (ID/IQ) science and technical service support contract. This is a five year contract and the Agency expects to award close to $300 million in tasks under it.
By qualifying it gives the right to SAIC to bid on any tasks issued under the contract against the other four companies. As with all ID/IQ contracts the government does not guarantee that any work will be awarded and that all qualifiers will receive it. Depending on the task and its requirements, though, one of the companies is probably more qualified then the others and has a better chance of winning it.
This type of work has been SAIC’s bread-and-butter for years. It is one of the largest defense contractors in terms of annual contract awards. In 2010 it was ranked fifth with over $5 billion in awards by Washington Technology. It has also branched out teaming with Boeing (BA) on the lead of the Army’s formerly new vehicle program now cancelled Future Combat System (FCS).
It also teamed with Boeing on the Army’s replacement program, the Ground Combat Vehicle (GCV), but was not awarded a contract. The two companies have since protested that decision. If the protest is upheld and a contract is awarded to them that would potentially be billions worth of business in developing, building and supporting the new armored vehicle.
In the last quarter SAIC saw a decline of about six percent in revenues and called the results “disappointing”. The company blamed the lack of new contracts as well as the overall situation with the defense industry at this time. Cuts to the defense budget may seriously affect the traditional business areas of SAIC.
Like all other defense contractors they are looking at new and different markets such as health care to provide offsets to these potential cuts. SAIC is supporting non-traditional energy production which has potential in the future as the world turns away from coal and oil based energy sources.
This also may be a blip as the company does win some new work and contracts. Overall though it should be expected that as the market declines with cuts in spending and the return of troops from Afghanistan and Iraq that more quarters like this may be in the future. The defense industry may be flat and have to become more creative. As such stock prices and valuations also may be flat or decline.