08 June 2011
Top 20 defense contractors - Defense contractors are facing a market that on the macro level is contracting.
The budget-cutting knives are out for military spending, and no contractor is immune. In fact, the biggest names in the market – Lockheed Martin, Northrop Grumman, Boeing, General Dynamics and Raytheon – have all gone through rounds of layoffs, buyouts and other moves to reduce costs and streamline operations.
But even in a market that overall might be shrinking there are bright spots.
First, there is the sheer size of the market. The contractors on the 2011 Washington Technology Top 100 did $84.6 billion in prime defense contracts during fiscal 2010. The annual rankings analyze government procurement data in areas of information technology, systems integration, engineering services and professional services.
Even a reduction of 10 percent would still leave one of the largest markets in the world.
A second bright spot is the fact that there are pockets of growth within the defense market. And here is where you see many of the top players investing resources. These areas include cybersecurity, command and control systems, health IT, cloud computing and intelligence systems.
The rush toward these markets is driving many companies to make acquisitions to bolster their portfolios and you see the shedding of business units that are in less attractive segments of the market.
Below is a list of the top 20 defense contractors, derived from the 2011 survey based on 2010 contract revenue:
Washington Technology Top 100 list
Defense Revenue (2010)
1 Lockheed Martin Corp. $10,888,633,000
2 Northrop Grumman Corp. $ 8,212,891,000
3 Boeing Co. $ 5,051,984,000
4 General Dynamics Corp. $ 4,576,415,000
5 Raytheon Co. $ 4,095,309
6 KBR Inc $ 3,546,554,000
7 L-3 Communications Corp. $ 3,332,433,000
8 Science App Internat’l Corp. $ 3,280,980,000
9 DynCorp International Inc. $ 2,398,874,000
10 Hewlett-Packard Co. $ 2,344,325,000
11 Booz Allen Hamilton $ 2,344,325,000
12 CACI International Inc. $ 2,059,613,000
13 Harris Corp. $ 1,993,623,000
14 Computer Sciences Corp. $ 1,828,670,000
15 ITT Corp. $ 1,808,674,000
16 Fluor Corp. $ 1,742,216,000
17 BAE Systems Inc. $ 1,381,184,000
18 Dell Inc. $ 1,263,236,000
18 ManTech International Corp. $ 1,167,928,000
20 United Technologies Corp. $ 1,121,492,000 . (Source: Defense Systems)
Lockheed Martin, Raytheon, Submit JAGM Proposals - Teams led by Lockheed Martin [LMT] and Raytheon [RTN] submitted their Joint Air-to-Ground Missile (JAGM) proposals yesterday, the same day as the deadline to respond to the government's Request for Proposals (RFP) for the next phases of the program.
Raytheon is partnered with Boeing [BA] on the program.
JAGM is to be the next-generation air-to-surface guided missile expected to replace the aging Airborne TOW, Maverick and Hellfire family of missiles for the Army, Navy and Marine Corps.
On April 13, the Army Aviation and Missile Command issued the RFP for Engineering and Manufacturing Development and Low-Rate Initial Production for the JAGM program. The contract award is expected during the fourth quarter of 2011.
The Raytheon and Boeing team enters the competition with a three-for-three record of success in the contractually required guided test vehicle flights in the technology demonstration phase. Additionally, the team in May completed a series of government tests on the ATK [ATK] rocket motor for the engineering, manufacturing and development phase.
The Raytheon-Boeing JAGM features a fully integrated tri-mode seeker that incorporates semi-active laser, uncooled imaging infrared and millimeter wave guidance. The system leverages proven components from other Raytheon and Boeing programs, including the Raytheon Small Diameter Bomb II and Boeing aircraft launchers.
Frank St. John, vice president of Tactical Missiles at Lockheed Martin Missiles and Fire Control, said: “Lockheed Martin’s JAGM builds on Hellfire, Longbow and Javelin, three of the most trusted precision-guided weapons on the battlefield today. Our JAGM offering will provide U.S. Army, Navy and Marine Corps warfighters with the next product in that line, an affordable weapon that will offer the decisive edge in combat.”
“Our proposed JAGM weapon system can provide significant performance advantages to help save warfighter lives,” St. John said. “And with hot, high-volume production lines already in place for Hellfire, Javelin and the M299 launcher family, we can provide a critically needed capability at an affordable price and with best value over program life.”
Lockheed Martin’s team includes Aerojet [GY], which will provide the rocket motor for all six threshold JAGM platforms. Marvin Engineering will supply launchers for all six threshold platforms. General Dynamics [GD] Ordnance and Tactical Systems (GD-OTS) will make the multi-purpose warhead with significant Hellfire commonality.
The Initial operational capability (IOC) of JAGM is 2016 for the Army AH-64D Apache helicopter, the Marines' AH-1Z Cobra attack helicopter and the Navy’s F/A-18E/F Super Hornet fighter. The IOC for the Navy’s MH-60R Seahawk armed reconnaissance helicopter, the Army’s OH-58 cockpit and sensor upgrade program for the Kiowa Warrior armed reconnaissance helicopter and the Army’s extended range multi-purpose unmanned aerial system is 2017. (Source: Defense Daily)
Congressmen Visit EB To Show Support For Subs - The ranking member of the House Armed Services Committee was in Groton Monday for what he called his "first real comprehensive look" at the submarine fleet.
U.S. Rep. Adam Smith, D-Wash., said the visit to Electric Boat and the Naval Submarine Base reaffirmed his support and solidified his understanding of how submarines are built and operated.
"I think it puts me in a better position to make the case to others as well," Smith said at EB after his tour finished.
The Navy recently awarded Electric Boat $1.2 billion to build a second submarine this year, funding that had been held up during the prolonged federal budget debates. This award marks the start of the production increase for the Virginia-class program.
Even as economic pressures force Congress to look for spending cuts, Smith said he supports sustaining the two-per-year rate since it saves money in the long run. The shipyard can order parts in bulk and use its work force more efficiently.
Rep. Joe Courtney, D-2nd District, said he invited Smith to Groton so his colleague could see the synergy between the base and the shipbuilder in person and the "amazing work" done at both sites.
The congressmen visited the training simulators at the base and saw the construction at the facility. Smith said he has been to a lot of bases and the amount of activity in Groton was "definitely in the high end."
Smith said he does not foresee another base-closure process, such as the 2005 round where the base was almost closed.
"I think we've made our decisions. This is where we build our submarines," Smith said. "And the synergy between the base and EB is critical to that."
At EB, Smith was briefed on the company's employment outlook and projects. EB notified the state Department of Labor Friday that it would lay off 59 employees Aug. 5. The company does not have enough work for these carpenters and machinists, according to EB spokesman Robert Hamilton, who also said that "overall the employment outlook remains very stable."
Smith said it was important to maintain the work force during dips in the workload over the next five or six years so the company's capabilities would not diminish. He said he was told about one of the company's strategies, sending EB employees to the public shipyards to work on projects there.
He also learned about a concept EB is working on to add missile tubes to Virginia-class submarines to boost firepower. Smith said he wants to hear more about the idea before deciding whether he supports it, but that overall, submarines will be "critical to our national security interests for a long time to come." (Source: The Day)
DOD Waiting On Topline Numbers, Strategy Review To Identify New Savings - The Defense Department is waiting on two developments before it begins to identify its part of the $400 billion in new security savings President Obama called for over the next decade: the topline defense budget numbers for the next two fiscal years and the comprehensive strategy review, which is set to be completed by the end of this summer, according to Robert Work, the under secretary of the Navy.
“The comprehensive strategy review will be completed by the end of the summer, early fall, so that Secretary-Designate [Leon] Panetta will have a chance to put his stamp on it and by that time we should know, hopefully, what our topline numbers are,” Work told reporters today. “So between September and December, that's when we'll be making all the programmatic decisions in preparation for [the 2013 budget request], which will be put on the hill in February.”
Work emphasized that no options will ruled out when it comes to identifying savings. “Every single program is on the table,” he told reporters today. “Depending on what the comprehensive strategy review tells you and the topline, we will start to make investment decisions in the fall based upon those two key inputs.”
Work added that, “What we're expecting to have happen out of the debt ceiling debates is a firm number for '12 and '13, that the number will be set, and then we will make projections on what the growth rate will be thereafter,” after which “every single program will be reviewed as part of those two inputs and everything is on the table.”
Speaking last month, Defense Secretary Robert Gates stated that “meeting this savings target [of $400 billion] will require real cuts given the escalating costs of so many parts of the defense budget.”
According to Work, if the Defense Department is forced to make budget cuts before it is ready, the department might be forced into mistakes.
“If you have to make enormous cuts in '12, it actually costs money to get people out,” and the cuts would have to come primarily from investment accounts, he said. “It will actually cost you money to buy people out. So if the money comes down fast, the pressure will be on the investments accounts. If we have more time, what will happen is we'll be able to adjust between O&M, personnel and investment, and it will make it a better balance.”
“With personnel costs skyrocketing, and with the cost to deploy the force and operate it, the only place that you could take this [sudden] cut is in investment, which is either R&D, procurement or military construction,” he added. “That's the only place you can go, unless you want to start cutting big parts of the force structure.” (Source: Inside Defense)
Posts
No comments:
Post a Comment