The US Defense Advanced Research Projects Agency’s Tactical Technology Office has 3 major focus areas. Advanced Platforms does a lot of work in robotics, from load carriers that walk like a dog (LS3) to UAVs designed to stay up for months (Vulture). They also do work in areas like hypersonic vehicles, however, and helicopter rotors that work better by changing their shape. Advanced Space Systems deals with programs like MOIRE flat-lens surveillance, and F6 fractional/clustered satellites. Advanced Weapons Systems covers projects like the naval LRASM missile, the Triple Target Terminator missile for fighters, or guided small-caliber sniper rounds (EXACTO).

In October 2011, US Space and Naval Warfare Systems Center (SPAWAR) Atlantic in Charleston, SC issued a multiple-award contract for FY 2012, whose options could drive it to $150 million, and extend work through FY 2014.

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The Army’s Maneuver Center of Excellence at Fort Benning, GA is an outgrowth of the BRAC 2005 process, which consolidated the Army Armor Center and School with the Army Infantry Center and School. In October 2011, they issued a 5-year, maximum $458 million contract among 14 contractors.

Winners will bid on task orders to help the center produce training strategies, doctrine, capabilities, analysis, instruction and products for the current and future force. Per standard procedure, work location will be determined with each task order, during a contract period that will run until Sept 30/16. The bid was solicited through the Internet, with 34 bids received by the Mission Contracting Office in Fort Bragg, NC. The 14 winners were:

• The Missile Defense Agency (MDA) awards Teledyne Brown Engineering an indefinite delivery indefinite quantity (IDIQ) contract worth up to $595 million for the development, deployment and sustainment of an Objective Simulation Framework (OSF).

• AeroVironment unveils its lightweight man-portable Shrike VTOL UAV. Shrike is the result of a contract from DARPA to develop a persistent perch and stare (SP2S) UAV.

• BAE Systems announces a successful testing of its Mk 38 MOD 2 Tactical Laser System (TLS) at Eglin Air Force base, Eglin FLA. The test system fired against air and surface maritime targets.

• The UK Ministry of Defence is preparing to announce its latest round of redundancies in line with the Strategic Defence and Security Review (SDSR) [PDF]. It is rumored that Royal Air Force (RAF) personnel supporting Libyan operations may be among the 1,000 troops to go.

• South Africa’s Defense Minister unveils the committee tasked with undertaking the country’s first defense review in thirteen years. The committee is in broad agreement that the 1998 review [PDF] no longer reflects the strategic environment of the African continent.

• Filippino media reacts favorably to comments made by right-wing think tank The Heritage Foundation that the acquisition of the cutter Gregorio del Pilar demonstrates Manila’s commitment to safeguarding territorial integrity, and should result in the transfer of further excess defense articles from the United States.

• The President of South Korea’s Agency for Defense Development tells local media that the production of materiel like the K21 infantry fighting vehicle (IFV) demonstrates that Seoul has come ‘a long way’ over the past decade in the development of cutting-edge weapons to counter North Korea.

• Bulgaria’s Defense Ministry is reportedly preparing to issue a tender for new handguns and sniper rifles.

• Zacks Investment Research’s Aerospace & Defense Stock Overview – Aug. 2011 maintains a ‘neutral’ stance on the US defense sector, while suggesting that international markets may help contractors to counter reduced Government spending.

• Data recently compiled by Bloomberg shows that ManTech, Northrop Grumman, General Dynamics and Lockheed Martin are among 9 companies that receive 70% of their revenue from the US government. Bloomberg also predicts that such companies have the most to lose from the recently announced budget cuts.

• A Russian defense industry insider claims that China’s fifth-generation J-20 fighter may be be based upon the Mikoyan 1.44 rejected by Moscow during its tender to develop a stealth fighter.

• Meanwhile Russia’s state-run Rosoboronexport reveals that it will sell $9 billion-worth of arms and equipment throughout 2011.  One customer could be Venezuela, whose President, Hugo Chavez,  today thanked Moscow for its help in re-equipping its armed forces.

• The website Spend Matters UK/Europe reveals that the UK Ministry of Defence (MoD) is paying US consulting firm Alix Partners almost £4,000 ($6,500) per day to help find savings in contract negotiations.

• Arguments over Israel’s defense budget continue, as the Defense Ministry accuses the Treasury of using defense expenditures to cover up its mistakes.

• CACI International reports Fourth Quarter FY2011 revenue of $963.2 million, a 13.5% increase on the corresponding period for FY2010. The US Department of Defense (DoD) accounted for almost $780 million in revenue.

• AEE Technology Co. becomes the first Chinese company to exhibit at AUVSI North America 2011. The company showcased its F50, an unmanned aerial vehicle (UAV) billed as capable of monitoring protests.

• Russia’s Morinformsystem-Agat JSC unveils its ‘Pandora’s Box’ cruise missile system. The company is marketing the system as a ‘take anywhere’ weapon capable of attacking naval and land targets with the Klub-K 3M 54TE missile.

• A senior Russian defense official claims that the Sukhoi T-50/PAK-FA stealth fighter will be the ‘principal plane’ of the Russian and Indian Air Forces.

• A new Pike Research report predicts that the military fuel cell market will reach $1.2 billion by 2017, an increase from $9 million in 2011.

• Moscow’s MAKS 2011 air show has prompted a number of developments concerning Russia’s military and defense industry. Russia’s Air Force is expected to receive 450 helicopters this year, including the Kamov Ka-52 Alligator. The state-run United Aircraft Corporation (UAC) plans to provide the Air Force with 20 new aircraft a year. UAC is also keen on securing a contract to supply the military with 10 Antonov AN-124 freighters.

• Western aerospace contractors keep at low profile at Taiwan Aerospace and Defense Technology Exhibition (TADTE) 2011. Boeing and General Electric miss the show altogether.

• Elbit Systems’ Second Quarter 2011 Results show revenues at $691.6 million, as compared with $603.3 million for last year’s corresponding quarter. C4I and airborne systems were leading contributors to the increase.

• Israel Aerospace Industries (IAI) is considering aerial refueling options for the upgraded version of its Heron unmanned aerial vehicle (UAV).

• The US Army awards an Omnibus III $497 million indefinite-delivery-indefinite-quantity (IDIQ) contract for the provision of support to the US Navy Medicine Research and Development (R&D) programs.

• Meanwhile, the General Services Administration (GSA) awards N~Ask Inc., BIT Systems and CACI Technologies an IDIQ contract worth up to $40 million for Signals Intelligence (SIGINT) Engineering Support Services (SESS II).

• Ukraine’s Arsenal Design Bureau claims to have developed a ‘world class’ infrared seeker for use on anti-ship missiles.

• The DoD Inspector General’s internal audit of DARPA contract awards will likely pay close attention to business conducted with RedXDefense, a bomb detection company co-founded by the current director of DARPA.

• Moody’s Investors Service predicts that the US debt ceiling agreement could result in a downgrading of defense contractors’ credit ratings. Major defense projects like the V-22 Osprey and Littoral Combat Ship (LCS) are identified as vulnerable to quantity reductions, deferrals and even cancellation.

• US debt reduction policies may also prompt European defense contractors to continue their expansion into military technologies deemed safe from spending cuts, as well as cyber-security and energy industry opportunities.

• EADS’ chief financial officer says the company will not be able to reach its target of $10 billion-worth of non-Airbus sales in the US by 2020 without further acquisitions.

• CAE’s first quarter results for fiscal year 2012 report a 14 per cent increase in defense business revenue to $206.4 million compared with $181.8 million for last year’s corresponding quarter. However CAE’s President and Chief Executive acknowledges that the market outlook will become more challenging as governments evaluate their armed forces’ structures.

• RSK-MiG and Sukhoi are to collaborate on the development of a future unmanned combat aerial vehicle (UCAV). The vehicle is expected to be modeled on the Skat UAV demonstrated at the MAKS air show in 2007.

• The US Air Force awards Honeywell an $11.5 million contract to provide heat stack and brake components for F-15 fighters.

• The Hong Kong Commercial Daily publishes a picture apparently showing the final preparations for the maiden voyage of China’s first aircraft carrier.

• Russia to move Navy headquarters from Moscow to St. Petersburg by 2012, the Defense Ministry said.

• Where is DoD’s billions of dollars in FY 2012 cybersecurity spending going? Nextgov takes a look.

• Providence Equity Partners agrees to acquire SRA International, a Fairfax, VA-based defense consulting firm, for $1.88 billion in cash.

• Global aerospace and defense sector reaches $646 billion in revenue and $58 billion in operating profit in 2010, according to PricewaterhouseCoopers.

• Thailand dispatches its carrier, HTMS Chakri Naruebet, to evacuate tourist flood victims stranded on southern islands. The carrier has been criticized as a “tourist attraction,” due to its low operational use, and the operating cost issues associated with that may also bear on Thailand’s bid to buy small SSK U206A submarines.

• Voice of Russia: “A rapprochement between Moscow and Brussels on Euro-ABM issues is indeed a complicated matter, but it is not hopeless, the Russian envoy to NATO believes…”

• New all-platform, all-target AGM-114R Hellfire II missile completes proof-of-principle tests, heading into system qualification. It will replace 4 of the 6 current missile variants (AGM-114K/ K-A/ M/ P)

• Environmental assessments are holding up efforts by American Ordinance to shift munitions production from the Milan Army Ammunition Plant in Tennessee to the Army’s Iowa Ammunition Plant, the GAO finds. Under a 2008 US Army contract, American Ordinance is renovating the Iowa plant at its expense and will be allowed to sell munitions commercially from the plant.

• The Netherlands defense sector is expected to decline from $12.2 billion 2009 to $10.9 billion in 2015, iCD Research predicts.

• Lockheed Martin snags $5.4 million US Navy contract to provide MK39 Expendable Mobile Anti-submarine Warfare Training Targets (EMATTs) for air and surface crew anti-submarine warfare training.

The US Air Force has exercised a second option year on a $90 million 5-year contract (FA8224-07-D-0001) for Mainstream GS in Bethesda, MD, to provide continuous process improvement (CPI) services. CPI is intended to improve the efficiency of how the USAF works as an organization.

A main portion of Mainstream’s work involves support for the Air Force Smart Operations 21 (AFSO21) program, which is based on both Lean and Six Sigma business process improvement tools.

In an interview, Mainstream President Alan Horowitz told DID that his company is supplying the USAF a number of CPI services, include Lean and Six Sigma consulting, training, facilitation, and planning…

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International consulting firm Alix Partner recently released their 2009 Global Aerospace & Defense Review(SM), which investigated virtually all segments of the global aerospace industry, its key customers, and key issues. Their conclusion? After 5 years of strong, profitable growth, financials for virtually all segments of the aerospace industry globally are deteriorating rapidly – and the situation is likely to worsen in 2010. Extracting cash from operations will be key. Or, as Alix Managing Partner Phillip Toy puts it: “In times like these, cash is king, queen, pilot and co-pilot.”

Alix believes that the ways in which the industry is changing, and underlying business fundamentals for industry firms, are at least as important as the overall trend. Overall, industry financial-distress indicators have deteriorated by 24% since 2008. The debt/capital ratio of North American airlines in particular is a concerning statistic, and the financial state of European supplier firms also bears watching. On the defense front, continued cuts are expected past 2010, with a possible counter-trend in Asia. The biggest change, however, concerns Tier 1 and 2 suppliers, whose EBIT margins have exceeded their customers’ by an average of over 30% over the last 2 years. That power relationship is changing, and the change has important implications for industry firms up and down the supply chain.

DID is working with Alix Partners on a guest article that will discuss some of this research, and flesh out some of the study’s insights and implications for our readers (July 22/09: The article is up).

Battelle Memorial Institute in Columbus, OH received the fourth option, worth $6.9 million, under a previously awarded indefinite-delivery/ indefinite-quantity contract (N62473-07-D-4013) to provide environmental services and technology to U.S. Navy and U.S. Marine Corps installations and commands worldwide. Battelle will provide engineering and incidental services for research, development, testing, evaluation, and implementation of environmental technologies, strategies and techniques; operation of sites and systems, including maintenance and monitoring; and technical consultation.

The total estimated contract amount after exercise of this final option is $30 million. Battelle will perform the work at various Navy, Marine Corps, and other federal locations worldwide. It expects to complete the work by June 2010. The Naval Facilities Engineering Command, Specialty Center Acquisitions in Port Hueneme, CA manages the contract.