The U.S. Air Force announced the F-22 Raptor has resumed normal flight operations after modifications to aircrew life-support equipment were completed across the fleet. F-22 crews have also resumed their aerospace control alert mission in Alaska...
Filed under: Alaska, Lockheed Martin, missile defense, northrop grumman, Poland, Raytheon, Russia, Syndicated Industry News
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: Alaska, Boeing, Business Line, Companies, Congress, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, MDA, missile defense, Proposal, Raytheon, Services, States
The United States has been developing missile defense systems since the Eighties when President Reagan announced the “Star Wars” Strategic Defense Initiative (SDI). Over the last thirty years a variety of land and ship based programs have been initiated and some have come to fruition. In the last decade the Bush Administration put a great deal of effort into the Ground Based Mid-course system that currently has missiles based in Alaska and sensors across the world with a goal of protecting the United States from attack.
The Obama Administration changed the plans for this system by eliminating the missiles that would have been installed in Eastern Europe and some radar sites. They shifted their emphasis to the Navy’s ship based program. The existing parts of the Ground Based Mid-course still are in use despite this change in focus.
Boeing (BA) was the lead contractor through the development, production and deployment phase of the program. Last year the Missile Defense Agency decided to have a competition to see who would take over the maintenance and sustainment of the system. Proposals were received by Boeing and a team of Raytheon (RTN) and Lockheed Martin (LMT). Raytheon has been involved in building the radars for the system and Lockheed the interceptors for other Army and Navy programs.
The new award was supposed to be made this summer for the multi-billion contract. Now they have decided to delay that decision for about six months until November. This will push it into the next Fiscal Year, 2012, and may have been made due to the current budget situation or the government may need more time to evaluate the proposals.
Delays in an award of this size are not uncommon but it does mean that the incumbent, Boeing, will maintain their existing work and contract for another few months which will help that company’s revenue and earnings. The delay though will mean the two bidders will be on the edge of their seats for an announcement for another few months.
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., Raytheon, Services, States
Since Desert Storm the United States has spent billions on developing different missile defense systems. While they have invested in more exotic systems such as the Air Force’s Airborne Laser (ABL) which uses a large chemical laser on a Boeing (BA) 747 to engage long range missiles the majority have been based around ground or ship launched interceptors. One of the largest programs and a priority of the previous George W. Bush Administration was the Ground-based Midcourse Defense system.
At one point called the National Missile Defense (NMD) system this consists of several silo mounted interceptors in Alaska supported by a collection of radars and other sensors across the world. The new Obama Administration canceled the expansion of the program which included more missiles in Alaska as well as building a site in Europe but has continued to maintain and keep ready the existing parts of the program.
The primary contractor on the systems has been Boeing and this has included a contract to maintain and run the deployed missiles and radar. This contract is coming up for renewal and the Missile Defense Agency (MDA) has decided to compete it. The contract has an initial value of about $600 million and has attracted interest from the major U.S. defense contractors.
Boeing obviously plans to try and win their existing work and has teamed with Northrop Grumman (NOC) to submit a proposal. Northrop has worked with Boeing since the Nineties on the system as it was developed, tested and deployed. As the incumbents they do have extensive experience with the system.
Lockheed Martin (LMT) and Raytheon (RTN) form the other team that has so far submitted a proposal. These two companies have worked extensively together on Army and Navy missile defense programs such as THAAD, PATRIOT and AEGIS. There teaming to try and win this contract away from Boeing is only natural.
The total value of the contract if all options are exercised could be as much as $10 billion. In a time when it looks like the U.S. defense budget may be flat or even decline large support contracts like these are attractive to many companies.
The MDA is hoping that with competition they will be able to get a better deal to maintain the system and the fact that they have attracted at least two bids seems to indicate there will be some price variation that must be balanced against technical capability and past performance.
The source selection will take several months and there is always a chance of a protest by the losing team. If defense funding does decline competition for these contracts will become more fierce leading to potential delays for the government in awarding work to the winner and saving money compared to the current contract.
Photo from Irish Typepad’s flickr photostream.
Filed under: Alaska, Business Line, Companies, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, Restructuring, S&T, Services, States
For a variety of reasons the Democratic controlled current Congress has yet to pass any spending bills. The government is operating under a Continuing Resolution now through the 18th of this month while they attempt to work out some sort of omnibus spending bill. The new Republican House and stronger Senate are not supporting the notion of passing one bill rather then the eleven or so required normally.
Because of this a line in the Senate Defense Appropriations bill inserted by Senator Mark Begich (D-AK) will not be passed. This would prevent the Defense Department from spending any money closing the six super computer centers it funds at college campuses across the country including one at the University of Alaska Fairbanks. The Department had wanted to stop funding some of these including this one when their current contract expires at the end of next May.
The loss of Defense funds for this center would basically end the centers work as over ninety percent of their money comes from DoD.
The Department is under pressure to make its spending more efficient both from Secretary of Defense Gates as well as outside groups including some in Congress. If they feel the next contract will not have enough work for the six centers then some will receive less or no funding. The Defense Department did say the center will be allowed to bid on future work but that will not be soon enough.
Over the last ten years the U.S. has invested a lot of tax dollars in not only the equipping of troops for and operations in Iraq and Afghanistan but also in new capabilities and facilities. As the budget retrenches some of that investment will have to end or be adjusted and other places will begin to feel the effect as Fairbanks seems to be.
The current political situation only adds to the problems and the next Congress may be less likely to support Democratic Senators and some of their spending priorities.
The defense budget looks like at best it will stay flat for the next few years forcing more cases of prioritization such as this with a potential loss of jobs and a negative effect on local economies.
Filed under: Alaska, Boeing, Business Line, Companies, Contract Awards, Department of Defense, development program, Events, Lockheed Martin, MDA, Military Aviation, missile defense, northrop grumman, Northrop Grumman Corp., Proposal, Services, States
The Missile Defense Agency (MDA) manages several different programs to provide missile defense for the United States and its military. One of these is the Ground-Based Midcourse system. This consists of right now a group of interceptors in Alaska along with sensor and fire control radars scattered across the globe. The Obama Administration as one of its defense reform decisions canceled further expansion of the system stopping further deployment of interceptor missiles and a radar system in Europe. The existing system though remains functional and must be supported.
Boeing (BA) had been the primary contractor on the development and deployment of the Mid-Course system. It currently has the contract to provide maintenance and support for the existing components. The MDA intends to re-bid this contract with an open competition and various teams are forming to bid on this work.
Photo from mightyohm’s flickr photostream.
Lockheed Martin (LMT) announced that their team will contain the Alaska based Alaska Aerospace Corp.. This company had been heavily involved in the development of the Kodiak Island space launch complex used by the MDA to launch test and target systems. That facility though will not see much use in the future as MDA and other U.S. users look to use other sites.
Boeing will attempt to keep the contract and have already announced that they will team with Northrop Grumman (NOC) on their new proposal.
Choosing partners in these kind of situations are motivated by more then just what work they can do but also what political influence they might have. AAC will certainly aid Lockheed in that it will most likely garner support from Alaska state and local officials as well as their Congressional delegation. Look for similar announcements by all those intending to win the contract to highlight small businesses and other companies that might be helpful.
Filed under: Alaska, Business Line, Companies, Congress, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, IT, logistics, production program, Services, States
The Federal Government has a program called “Section 8(a)” that is used to favor small businesses. This rule allows the award of sole source contracts to companies meeting certain requirements. The idea is to grow small businesses through this simpler award process and also aid disadvantage groups. The 8(a) rules favor those contractors owned by women, minorities and service disabled veterans. The restriction on the program is that the size of the contract is limited to under $20 million since the goal is jump start small companies into larger ones.
One of the legacies of Senator Ted Stevens (R-AK) was a rule that Alaskan Native American companies could win a contract of any size. He had this change made in the defense bills. This has allowed those corporations to grow and win contracts over not only other 8a companies but also traditional contractors as well. This rule had raised the hackles of other Senators and in the last few years there has been movement to eliminate the rule favoring Alaskan companies.
Not only that but one of the reforms that the Obama Administration is trying to accomplish is the reduction in the number of sole source contracts awarded. The goal with that reform is to gain more competition, better pricing and ultimately save money. The use of sole source contracts makes an award process simpler and easier for the contracting command involved as it shortens the time line since there needs to be no competition. There use is often justified to gain speedy awards. These changes are putting pressure on all Native American owned companies but especially Alaskan ones who may see a significant decline in their work if the government does limit awards and increase competition.
The most recent Defense Authorization Bill included a limit of sole source contracts to $20 million dollars without requiring extended approval and justification. This change will make it harder to award these contracts quickly which may lead to more competitions among non-8(a) companies. The Defense Department is meeting with Native American groups to discuss these changes and their affects.
The government is also facing problems because of a recent court case that ruled that HUBZone companies take precedence over other small businesses. Since few Native American corporations are in Historically Underutilized Business Zones which are normally in large urban areas this ruing will also limit their chances of getting sole source awards. This means that Native American companies may have to compete for these contracts as if a HUBZone company wants the business and it is decided to sole source it they must get it.
The government has in the past justified these contracts as a way to help disadvantaged groups at the cost of a small amount of inefficiency and the chance of slightly higher prices. The current deficit situation and the desire to increase efficiency as well as Steven’s exemption of his home state businesses have led to a reevaluation of these processes. The end result may be a significant decrease in the amount of work these companies now get from the government or increased costs for them as they must bid on contracts. Either result limits the effect of the Federal spending on their communities which was the whole point of the program in the first place.
Filed under: Alaska, Business Line, Congress, Contract Awards, Editorial, Events, Federal Budget Process, Industry Analysis, IT, logistics, Services, States
Last Tuesday, 4 March, President Obama announced some new rules affecting how the government will try to contract. One of them is to try and reduce, or even eliminate, no-bid contracts. Of course he may not have explored fully Federal procurement rules and goals. One of the types of companies that qualify to get these sole source contracts are disadvantaged, minority owned corporations. This rule is to encourage Federal work flowing to these companies. Now the Alaskan Native corporations (ANC) have put out that this change in how the government will operate won’t affect them. TMCNet.com reports that the four largest of these all basically said that their business will continue. Most of these disadvantaged business are limited to contracts under $5 million, but due to a quirk in the law the ones owned by Alaskan natives do not have such limits. In 2004 these ANC had over $1 billion in business. This illustrates that some reforms, if it is a reform, will be harder then others due to the various, somewhat arcane provisions, of Federal contracting and the different goals set by the government. If you want to encourage non-traditional companies from doing business you may have to accept or adjust your desires in other areas.
Filed under: Alaska, Congress, Contract Awards, crime, development program, Federal Budget Process, MDA, missile defense, S&T, SMDC, space, U.S. Air Force
We have written in the past about Mr. Cantrell, an manager at the Army’s Space and Missile Defense Command (SMDC), and his corruption scheme that will lead to his jailing on taking bribes from contractors in the past here and here. Now The Kodiak Daily Mirror has more details on how Mr. Cantrell used Alaskan Senator Stephens to build a range on Kodiak Island which allowed him to get the necessary work in order to generate the kickbacks. Read more
Filed under: Alabama, Alaska, Congress, crime, development program, MDA, missile defense, S&T, SMDC, U.S. Army
Last year the US Government arrested two employees of the US Army’s Space and Missile Defense Command (SMDC) on charges that they were taking bribes to steer contracts to selected companies. Now the New York Times has done some further research on the issue and have found out that the main figure, the head of SMDC S&T center, had created a whole scheme to make Congress fund a large test program that would then be self-perpetuating. As part of this he broke Federal law by lobbying Congress directly.
The scheme he concocted was one that when I worked supporting the Ballistic Missile Defense Organization (BMDO), now Missile Defense Agency (MDA), never made much sense to me. The MDA had an issue with testing the systems against long range targets. They targets required could not be tested in the United States as there was no range big enough to hold them. The Navy invested in improving their range on the West Coast of Kuaii in Hawaii that faced a broad open area. Targets would be air launched and fired into the range. The Army looked at building a launch facility on Midway to fire that targets at their main range in Kwajalien. The gentlemen at the core of the scandal, Mr. Cantrell, worked a proposal directly with Congress and various contractors to build a facility in Alaska on Kodiak Island and then use an old Navy helicopter carrier to fire the targets at Kodiak. This never really made sense due to its cost and the creation of all new facilities and modifying the ship at some cost.
Ultimately the idea went nowhere, although a launch facility has been built at Kodiak which supports Air Force operations right now. MDA made the sensible decision to begin testing US Army systems in Hawaii using the range there. Now that it turns out the Mr. Cantrell and various Senators using the earmark system was doing this for personal gain.
See an article in the Huntsville Times here.