WWE-5: up to $853.3M for Small Package Delivery

Under the World Wide Express-5 program, the United States Transportation Command (US TRANSCOM) Directorate of Acquisition at Scott Air Force Base, IL has issued 3 multiple-award, indefinite-delivery/indefinite-quantity, fixed-price contracts worth a total maximum of $853.3 million. This will cover international express delivery of packages and letters weighing 300 pounds or less. This is not the same thing as the Defense Logistics Agency’s Small Surface Package Program, or the billions of dollars in annual international airlift contracts issued by the Pentagon over the last few years – but some of the companies do overlap.

The initial contract award value to each winner is $2,500, and winners will compete for delivery orders over the contract. This arrangement is a one-year base contract for FY 2012, with 4 more 1-year options that could take the contract to Sept 30/16. Unlike the $400 million FY 2008-2011 contract, which had 9 offers and 9 eligible firms, World Wide Express-5 had just 5 bidding firms, and only 3 awards were announced, to:

• Federal Express, Washington, D.C. (HTC711-12-D-C001)
  
• United Parcel Service in Louisville, KY (HTC711-12-D-C003)
  
• Polar Air Cargo in Purchase, NY (HTC711-12-D-C002). They’re a subsidiary of Atlas Air Worldwide, and partnered with DHL. Atlas was not included in the 2007 contract, but Atlas and Polar have received some international airlift contracts in the past. They recently entered the military passenger charter market with their 1st 747-400 charter flight, in May 2011.

Rapid Fire 2011-08-11: Russian UCAVs

• 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.