Program Decision Makers: Defense Firms Providing Less Value
Defense Industry Daily surveyed more than 400 executives, asking them their opinions on the top defense contractors based both on their personal experiences and general impressions. The results show that defense contractors on average suffered worse ratings than were seen a year earlier. Some groups bore the brunt of that fall, particularly the information technology players.
The lowered satisfaction ratings among the IT players corresponds to generally poor performance among the IT divisions of major contractors, as evidenced by July financial filings of General Dynamics and Lockheed Martin, as covered previously by DID.
The bubble chart in the graphic shows the relative impressions of the different types of defense contractors, with those meeting schedules being the highest, those meeting quality standards extending to the right the furthest, and those meeting budgets showing the smaller bubbles. A link to the free executive summary can be found here.
Defense executives generally felt strongly that a few major U.S. prime contractors hold a captured advantage against other firms in competition, often attributed either to a reluctance of military procurement managers to buy items from lower-tier firms or a more cynical read of a “revolving door” effect, with recent military hires proving effective for the major civilian contractors. Interestingly, this impression was no less strong among the top prime contractor executives themselves.
Aerospace firms were again lauded for quality but not treated well for cost or timing considerations. Interestingly, an inversion occurred where Boeing pulled well ahead of Lockheed this year in terms of industry impressions of quality and schedule integrity.
In data collected last year, executives were asked about certain qualities of the firms, such as the degree to which they hired good people, and the degree to which they fostered a culture of competence. These elements tended not to show a direct correlation with those same executive’s opinions about the different brands in 2011, but the elements did provide accurate data for predicting the direction in which those ratings would rise or lower this year.
The study, including break-outs by individual firms, is available now for $399 here. Firms covered include ATK, BAE, Boeing, Computer Sciences, DRS, EADS, Exelis, General Atomics, General Dynamics, Harris Corporation, Honeywell, KBR, L-3, Lockheed Martin, Northrop Grumman, Raytheon, Rockwell Collins, SAIC, Thales and United Technologies.