NGC Wins $600M Logistics Contract Under ITES-2

I protest, you protest, we all protest ITES. So it seemed after the US Army chose 11 of the 17 bidders as winners, eligible to compete for $20 billion worth of defense-related IT contracts under the ITES-2 umbrella vehicle. Northrop Grumman is probably glad that it protested – not only did it win re-admittance to the winners circle (along with all other eliminated firms), but it just landed a key battlefield logistics contract that could be worth up to $600 million.

Under the Global Combat Support System-Army (Field/Tactical) program (GCSS-Army) contract, Northrop Grumman’s Mission System sector will lead a team (NGC MS, IBM Global Services, Computer Sciences Corporation, Joint Logistics Managers, Inc., and SAP America) to implement an enterprise system capable of providing the current status of all Army equipment and assets so that soldiers can best anticipate, allocate and manage the flow of available resources. CGSS-Army will be a global system that supports Army, National Guard, and Army Reserve forces, re-engineering the current STAMIS (Standard Army Management Information Systems) system. As a key element of the Army’s larger vision for the integration of its major logistics systems and processes, GCSS-Army will also be important in the management of logistical assets of future programs. If it was up and running now, for instance, it would be used to track MRAP-related logistics.

NGC received initial funding of $10 million on this cost plus fixed fee task order, which is valued at up to $600 million over 7 years. NGC release.

$730M for 514 APG-68v9 Radars

AN/APG-68v9
(click to view)

Northrop Grumman Systems Corp., of Linthicum Heights, MD has received an indefinite-delivery/ indefinite-quantity and firm-fixed price contract for $730 million covering up to 514 AN/APG-68v9 radar systems.

Saudis Seek Sniper ATP Supplementation for F-15S

Sniper ATPs

On Dec 7/07 the US Defense Security Cooperation Agency announced [PDF] Saudi Arabia’s request for 40 of Lockheed Martin’s AN/AAQ-33 SNIPER Advanced Targeting Pods, which would replace the older LANTIRN twin-pod systems installed on Saudi F-15S Strike Eagles. Sniper ATP pods significantly enhance an aircraft’s strike capability by adding stabilized long-range laser tracking and targeting illumination, high performance day/night surveillance, GPS targeting capabilities, and even some air-air target detection and tracking abilities to aircraft using them.

Most DSCA announcements attract little attention, but Saudi sales are facing some political hurdles in Congress these days.

L-3 Out, Dyncorp-McNeil in for $4.65B Iraq Translation Contract?

Translators on the ground are an often-overlooked but critically important aspect of US operations in Iraq, Afghanistan, et. al. Indeed, when L-3 Communications acquired Titan Corp. in a $2+ billion June 2005 deal, one of the strengths it was buying was Titan’s status as the U.S. Government’s leading supplier of linguists and interpreters under the U.S. Army Intelligence and Security Command’s (INSCOM) Worldwide Linguist Support Contract.

In a services business, however, such strengths are only as durable as the contracts they’re associated with. Indeed, this is one of the reasons services businesses tend to have low acquisition multiples.

A December 2006 US Army award brought that principle into sharp focus, by handing the 5-year, $4.65 billion contract for Iraq-related translation and interpretation services to Global Linguistic Solutions LLC (GLS), a joint venture formed by security contractor DynCorp International (51%) and McNeil Technologies. But a GAO protest placed the whole process into limbo – and the GAO’s ruling stirred the issue up further. The process has finally resolved again after almost a full year, with L-3 providing all translation services in the interim. And the winner is…

The US Navy’s FY 2007 Nuclear Propulsion Contracts

Basic Nuclear Propulsion
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In October 2006, the US Navy awarded over $1 billion in contracts related to naval nuclear propulsion, some of which echo a set of contracts issued in October 2005 that were worth about $898.5 million. DID has provided related comparative figures for our readers where applicable, and we have continued to track nuclear propulsion-related contracts throughout FY 2007. Including awards over the last week worth over $1 billion.

Note that all contracts are awarded by The US Naval Sea Systems Command in Washington, DC, and that completion date or other additional information will not be provided on Naval Nuclear Propulsion Program contracts. Other contracts related to maintenance, however, may show completion dates.

Alenia’s C-27J Wins Romanian Contract

C-27J Spartan
(click to view larger)

After a competition that saw the Alenia Aeronautica’s C-27J Spartan/ “Baby Herc” face off against EADS-CASA’s C-295M, Alenia Aeronautica announced on Dec 1/06 [PDF] that Romania’s Ministry of Defence has began exclusive final negotiations for 7 light tactical transports, plus support et. al. The planes will also be equipped with a complete (but as-yet unspecified) self-protection system to allow them to carry out missions in high-threat areas. The Romanian contract was expected to be signed by the end of 2006.

The contract took much longer, and was interspersed with some drama along the way, but a contract has finally been signed, and planes are being delivered…

Bulgarian Corvette Deal Sunk By Second-Hand Frigates

F910 Wielingen

“Bulgaria Orders 4 Gowind-200 Frigates from DCNS” seemed to herald both a EUR 900 million order and a new shipbuilding center for DCNS. Despite promises of 100% industrial offsets to the Varna shipyard, and a price that was reportedly lowered to EUR 780 million, Bulgaria’s defence minister Vesselin Bliznakov recently announced that Bulgaria’s government could not afford the deal. Instead, Bulgaria will buy 3 upgraded ships from Belgium for only EUR 54 million, payable over 8 years. The ships are 2 frigates (almost certainly the Wielingen and the Westdiep, both commissioned in January 1978), and a minesweeper of the Tripartite Class.

Cost Pressures Force European Aerospace to Look Outside Europe

A330 MRTT with
boom & drogues

EADS Airbus’ politically controversial “Power 8″ restructuring plan is already planning to shift future production out of Europe, and a recent EADS announcement intensified that pressure with more downward pressure on earnings. Worse, Airbus’ customers insist on pricing their contracts in dollars, while its costs are mostly denominated in Euros. EADS CEO has complained that every time the US dollar falls by 10 cents, Airbus loses $1 billion dollars – even as the Euro has risen from $1.20 to almost $1.50 over the last few years. Some analysts think this is a dodge (financial hedging strategies exist), but CEO Louis Gallois has apparently decided that if you can’t beat ‘em, you had better join ‘em. Deutsche Welle:

“We don’t have a choice,” Louis Gallois, chief executive of EADS, told Europe 1 radio Monday. Gallois said the only way to “prepare the company for a dollar that no one can control is — unfortunately — to set up shop in a dollar zone.”

The French government is reportedly less than happy about this, and has fired a shot across EADS’ bow in return…

Dutch Rekenkamer Issues F-35 JSF Program Reports

Getting there?

In June 2002 the Dutch House of Representatives approved the Netherlands’ participation in the development phase of the F-35 Joint Strike Fighter, which will last until 2013. They joined as a Tier 2 country, one step below the USA and Britain, and made a contribution of $800 million. In return, they expected that participation would create orders for Dutch firms like Stork Fokker et. al., and they are well on their way to securing a key maintenance center for European F-35 fighters. The Dutch went on to sign the Production Sustainment & Follow On Development Memorandum of Understanding in November 2006, and are scheduled to make a final procurement decision in 2010. Officially, their ‘Plan B’ options include the EADS Eurofighter tranche 3, Dassault Rafale F4, and F-16 E/F Block 60.

As a democratic, accountable government, the Dutch share the common practice of review by a national audit organization. Their version of the GAO, NAO, et. al. is called the Rekenkamer, or Dutch Court of Audit. The proposed F-35 purchase remains somewhat controversial, and arouses hostility on the Left in part due to its status as an American-led project. The Rekenkamer’s F-35 program reports thus have political impact in the Netherlands, and are also watched in other European countries that face the same issues. The Dutch Court of Audit’s October 2006 report has now be joined by a December 2007 follow-on…

European JVs Aim to Consolidate Underwater Weapons Systems

MU90 Eurotorp

In December 2005, “Beyond Armaris: Thales “Buys” Minority Stake in DCN” covered the government-prodded merger of Thales naval business with state-owned DCN, to create DCNS. That agreement excluded some naval items like electronics, but it did include Thales’ 24% share in Eurotorp, the European lightweight torpedo consortium that was officially founded in 1993 as a joint venture between DCN International (26%), Thomson-CSF (now Thales, 24%) and Whitehead (now Finmeccanica, 50%).

The DCNS transaction was not concluded until March 2007, and now the Eurotorp consortium has taken the next step by creating a more wide-ranging set of joint ventures in underwater weapons systems. The longer-term goal remains European integration, and the 3 CEOs have said they would consider opening the alliance to other European players at some point…