• It’s not just the pending US FY13 President Budget that won’t reflect sequestration, the 5-year Future Years Defense Program (FYDP) projection won’t either, based on an Office of Management and Budget (OMB) document seen by Bloomberg. OMB states this is still “pre-decisional material” though, but this matches our expectation that budgets made of a relatively flat DoD baseline and a reduced OCO (i.e. war spending) line item are the mostly likely outcome in the next few years. But because of that cloud of uncertainty some firms plan to increase the share of their revenue coming from civilian customers.

• The Aerospace Industries Association (AIA) sent a letter to US SecDef Leon Panetta to push back against the Pentagon’s attempt to shift more project risk on contractors. The latest F-35 contract negotiations are no doubt prominently in their mind.

• US Naval Air Systems Command (NAVAIR) is using predictive modeling to “compare manpower to flight rate [and recommend] employee workloads and tracks daily activity to proactively identify bottlenecks or constraints” on the CH-53K program.

• The US DoD will host a public meeting in Washington DC on Jan. 12, 2012 on the use of open source software in its contracts. They want to assess risks such as potential copyright infringement liability or performance and warranty deficiencies that would leave contractors without recourse.

• Raytheon bought Pikewerks Corporation, the latest of a long string of acquisitions in the cybersecurity realm.

• SAIC’s Q3 shows a flat topline and an 8% revenue decrease in the defense sector because of “the termination of the U.S. Army Brigade Combat Team Modernization contract, the June 2011 completion and delivery of the CityTime system, and reduced activity on an infrastructure support services program for the Department of Defense (DoD).”

• India’s state-controlled shipyard modernizations are behind in their modernization, and that’s hurting a number of programs. The private sector might be able to help, if India lets it.

• A shortage of Eurofighters for training & certification exercises is delaying the handover of Britain’s 1st A330 Voyager aerial tanker.

• The UK’s Department for Transport issues “Interim guidance to UK flagged shipping on the use of armed guards to defend against the threat of piracy in exceptional circumstances”. As armed guards continue to work, official resistance continues to weaken.

• 2011 in review as seen by Australian Minister for Defence Materiel Jason Clare.

In October 2011, Global Integrated Security (USA), Inc. in Reston, VA won a 4-year, $480 million firm-fixed-price contract from the U.S. Army Corps of Engineers, for Reconstruction Security Support Services throughout Afghanistan. Work will be performed in Afghanistan, with an estimated completion date of Oct 19/15. Five bids were solicited, with 5 bids received by the USACE office in Winchester, VA (W912ER-12-D-0001).

Global Integrated Security has performed RSSS work in Afghanistan before. A $34 million task order in December 2009 focused on Kabul and Kandahar, but a March 2010 contract [PDF] from the US Army Corps of Engineers saw them expand those services to encompass a National Operations Center providing intelligence and analysis, reconnaissance teams, interpreters, aviation services throughout Afghanistan; and “mobile security support services” to USACE personnel during travel to, and presence at, construction sites.

In late August 2011, Dyncorp International, LLC in Falls Church, VA received a $146.6 million cost-plus-fixed-fee contract to help train Afghanistan’s Ministry of the Interior personnel, on behalf of the Combined Security Transition Command – Afghanistan. This has been an ongoing effort in Afghanistan, and DynCorp has been heavily involved throughout. They have been criticized for questionable results in this area, and have obstructed efforts by American commanders to change the focus of past contracts, as events on the ground changed.

Work on this contract will be performed in Afghanistan, with an estimated completion date of Aug 31/14. The bid was solicited through the Internet, with 8 bids received by the U.S. Army Contracting Command at Aberdeen Proving Ground, MD (W91CRB-11-C-0053).

• Fitch Ratings grades Lockheed Martin’s financial status as ‘A-’. The ratings are supported by such factors as Lockheed Martin’s competitive position in the defense sector and growth prospects for several large programs. F-35 program restructuring and related cost growth gives cause for concern.

• The Director of the Defense Security Cooperation Agency says the Defense Department is streamlining the administration of the foreign military sales program. The move comes as foreign military sales average $30 billion for each of the last three years, up almost three-fold from the 2005-2008 timeframe.

• Honeywell announces that it has signed a definitive agreement to acquire EMS Technologies, Inc., a provider of connectivity solutions for mobile networking, rugged mobile computers, and satellite communications, for approximately $491 million.

• The Ministry of Defence’s (MoD) Major Projects Review Board (MPRB) meets for the first time. The MPRB is tasked with examining the MoD’s 50 most expensive projects. The first projects examined were the £635m Watchkeeper UAV, £315m communications system Falcon and the £134m Valiant Jetty berthing project for the Astute class submarines.

• Boeing has delivered the UAE’s 2nd C-17, from its order for 6. UAE 01, delivered a month ago, has already started flying missions.

• Aviation Week reports that the USA’s proposed DDG-51 Flight III air and missile defense destroyers could be headed for difficulty, in large part due power, cooling, and weight requirements for the forthcoming AMDR radar. Can one of the AMDR contenders crack that engineering problem?

• UPI reports that the newly-formed Selex Elsag defense electronics company has launched a new modular and upgradable soldier radio system. The Frontline Soldier Radio is a fully integrated C2 module and can host both soldier system C2 and situational awareness applications. Selex Elsag says the design reduces system complexity, box and wire count and cost.

• H.I.G. Capital’s portfolio company Vaupell Holdings, Inc. acquires Russell Plastics Technology Company, Inc. a supplier of composite plastics products and assemblies serving primarily the aerospace and military markets.

• Wired’s Danger Room speculates that some of Xe Services’ – the company previously known as Blackwater – most high-profile appointments may raise a few eyebrows.

RC-7B “Crazy Hawk”

$50M to AirScan in Iraq. (March 29/11)

The US military has planes like F-22A stealth fighters that make a lot of news. It also has planes that make very little news, even though they play key roles in a number of conflicts around the world. One example is the RC-7B/EO-5B “Crazy Hawk”/ Airborne Reconnaissance Low aircraft, which use their short-field takeoff capabilities and array of imaging, signals collection, and radar sensors to monitor developments on the ground. The RC-7B made the news briefly in 1999 when one went down in Colombia, and again when the US military had to cancel the $8 billion ACS (Aerial Common Sensor) replacement program in 2006 and start over in 2008. Meanwhile, the situation in Afghanistan and Iraq is well suited to planes like the Dash-7 derived RC-7Bs.

ACS’ cancellation, delay, and restructuring have left the Navy pursuing its own independent program. The US Army’s RC-12N Guardrail electronic intelligence aircraft are being refurbished to keep them current and in service until the ACS arrives. And the RC-7B fleet continues to receive additional help, via a parallel program called MARSS. It’s part of a trend that involves putting private ISR planes on the front lines…

• The MARSS Program
• Contracts & Key Events [updated]
• Additional Readings
  Continue Reading… »

L-3 MPRI, Inc. in Alexandria, VA recently received a $156.1 million cost-plus-fixed-fee contract to embed former law-enforcement professionals into corps, division, brigade, regimental and battalion headquarters. Their mission will involve helping battlefield commanders penetrate and suppress criminal networks involved in IED land mine production, distribution, and use throughout Iraq, Afghanistan, and other overseas operations. The contract will run to Dec 10/11, and 1 bid was solicited with 1 bid received by the U.S. Army Research, Development and Engineering Command Contracting Center at Aberdeen Proving Ground, MD (W91CRB-08-D-0049).

C-212, hot & high

New contract for Berry. (Dec 9/10)

Presidential Airways, Inc. of Moyock, NC uses the EADS-CASA 212 transport aircraft for its work, which is short-haul supply flights in and out of remote locations – including combat zones. It also fields helicopters and other assets. The US military hoped that Presidential would be able to address some of the issues US combat commanders have raised re: the need for transport aircraft that can use smaller runways, and land closer to zones of operations. Accordingly, the firm received several contracts from the US government for these services, covering a number of Central Asian countries.

They remain a major provider of fixed-wing, in-theater contract transport – but are no longer the only option…

The U.S. Department of State’s Bureau of Diplomatic Security – Worldwide Protective Services (WPS) contract hires armed bodyguards and security for American diplomatic personnel worldwide. That means a combination of personal protective (bodyguard), static guard (facilities and checkpoints), and emergency response security (fan looks hit…) services. It is probably the most lucrative such program on the planet, and as one might expect from its size and nature: the FY 2010 budget request and justification was for $1.65 billion, covering 1,898 personnel.

It’s also occasionally the subject of controversy when its contractors are involved in armed clashes, or some segment of the people involved display stupid, unprofessional, or even illegal behavior. If allegations are true, extremely lax management and poor choices in contractors have contributed to the problems. The State Department’s own rules can also create Catch-22s for the unwary, and corruption where they work can be as dangerous to contractor employees as enemy bullets.

Fore the US Department of State, the questions ultimately boil down to control and consequences. Do they have it, and do they enforce them? Which is why the latest 5-year, $10 billion multi-award umbrella contract is attracting interest and scrutiny. Under solicitation SAQMMA10R0005 (-a), 8 pre-approved contractors can compete for each award during the base year and up to 4 option years of the contract. Each is guaranteed only $5,000, which would serve as minimal compensation relative to even the cost of bidding. The winning firms include:

• Taranis Rex: Named for the Celtic god of thunder, the GBP 143 million Taranis stealth unmanned combat air vehicle (UCAV) was unveiled by manufacturer BAE Systems.

• US Commission on Wartime Contracting in Iraq and Afghanistan says US pullout will mean more use of security contractors in Iraq.

• Border Dispute: Canada’s CGI extends $920 million offer to buy US defense IT firm Stanley until Aug 2/10 due to delays in US regulatory approvals.

• Austal prepares to lay the keel for JHSV-1.

• Finding the Formula: Cosworth, a UK-based company that supplies Formula 1 racing car engines and electronics, is providing the UK military with technologies to improve counter-IED vehicle design.

• AnaptysBio to develop antibodies for sensors to detect bioterrorist attacks [pdf] under DARPA contract.

• ManTech continues to provide technical and engineering support to the US Naval Undersea Warfare Center Keyport Division for naval range acoustic test programs under a $19.5 million contract.

• Running of the Bulls: Deutsche Bank is bullish on military aircraft segment but cautious about weapons production firms.

• FOR SALE: US defense security contractor Xe Services, formerly known as Blackwater Worldwide, is on the block.

• I, Robot: General Dynamics-led research consortium secures $220 million US Army contract for robotic air and ground systems research.

• EH101 is back! In a switch, Boeing would license-build AgustaWestland’s helicopter, entering the US Presidential competition. An AW/Lockheed “US101” was the VH-71 program winner, before its cancellation and re-compete.

• URS snags $95 million contract to provide communications and maintenance support to the USAF’s Unmanned Aircraft System Operations Support Center.

• Eurocopter unveils NH90 TTH MEDEVAC variant for German military, proposes related CSAR (Combat Search And Rescue) kit.

• Neighborhood Watch: US Navy seeks to expand its role in patrolling “fragile maritime neighborhoods” of the world’s littorals. How it will do that with a shrinking fleet, will be the interesting part.

• Last Call: Thursday is the last day to comment on the new UK coalition government’s defense program (or, as the British would say, defence programme).