Contract Awards by US Department of Defense - July 16, 2019

On the same subject

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  August 14, 2020 | International, Land

  AM General CEO on acquisition by a private equity firm

  WASHINGTON ― KPS Capital Partners is acquiring Humvee-maker AM General, the private equity firm announced last month, marking a new chapter for the South Bend, Indiana-based vehicle maker. AM General President and CEO Andy Hove will continue to lead the company, and KPS Partner Jay Bernstein said the firm would continue to build on the ubiquitous Humvee, leveraging the company's “research, technology, innovation and new product development, as well as its heritage and iconic brand name.” The Humvee appears to have some growth ahead. For one, U.S. Army budget documents call for $1.5 billion through 2025 to pay for modernization of its fleet of High Mobility Multipurpose Wheeled Vehicles and their up-armored variant. That can include replacing major components, applying new technologies or replacing vehicles entirely. After the Army reaches its procurement objective for the Joint Light Tactical Vehicle, made by Oshkosh, it will have an enduring requirement for 54,800 Humvees. Otherwise, AM General ― which has advertised both its Brutus 155mm and Hawkeye 105mm mobile howitzers ― is expected to participate in the Army's mobile howitzer shoot-off evaluation at Yuma Proving Ground, Arizona, next year. Meanwhile, the Army is expected to complete a new tactical wheeled vehicle strategy in fiscal 2021, which has thus far received congressional support, per the House and Senate versions of the annual defense policy bill. Hove, who has said KPS will continue to execute AM General's existing strategy, spoke with Defense News on Aug. 6. This interview has been edited for brevity and clarity. Private equity firm KPS Capital Partners is in the process of acquiring AM General. At this preliminary stage, what would you say are KPS' plans and vision for the company? I think [KPS partner] Jay Bernstein represented it in his quote in the announcement that they feel really good about the capabilities of AM General and the strategy we've been executing. We've discussed with them where we can go. They're confident in our business and the growth prospects of AM General. They feel good about and stand behind our strategy, and we're going to work together with them. Will the company focus more on the Humvee, or do you see it becoming more flexible? What is the future for the Humvee? Who are its customers these days? To say we're only focused on the Humvee today would not be a correct premise. We've made investments across the board, in base automotive systems, and then automotive systems that have a particular special use. Our core focus is in solving very complex mobility challenges for customers. So the Humvee has a great future. I would offer that you turn to not what I say about what the Army will do but what the Army says they're going to do on the Humvee fleet, which is to steadily and systematically manage a very large fleet by systematic replacement of that fleet and recapitalization of that fleet going forward. They've been buying new-built Humvees to replace old Humvees over the last four years at a pretty heavy clip and have announced their intention to continue to do that going forward. We're obviously going to focus on the Humvee because there's significant demand. It is today the world's leading military 4x4 in its class, and we build more of them than any other military vehicle manufacturer in the world, and especially more than anybody in our weight class. That won't be the only thing we invest in. You can see our investments in the Hawkeye, which brings game-changing breakthrough technology [in relation to] how artillery systems are moved around and employed on the battlefield, together with a whole other range of implementing technologies such as autonomous navigation, off-board power and those kind of things. The U.S. Defense Department is an important customer, but a considerable portion of our businesses is global business, so we take a global view of how we solve mobility challenges for our customers around the globe. The Army recently issued a request for information about replacing heavy trucks. Is that a potential opportunity? We certainly feel like we have something to offer, a range of things to offer there, and that RFI's only been out for a couple of weeks. We'll will certainly take a closer look at that. We're also taking a look at the JLTV competition they announced back in February. Defense News recently characterized AM General as “largely stagnant” since losing the competition for the JLTV in 2015 to Oshkosh. Do you want to push back at all to talk about AM General's time under McAndrew & Forbes? The JLTV decision was 2015, and the four years since the announcement on the JLTV competition we've built more military vehicles than Oshkosh or any other military vehicle manufacturer by a long shot, and sold them to more customers around the globe than anyone else. I think that's far from being stagnant. There are a lot of adjectives you can apply to the company. “Stagnant” would not be the one I would apply. Private equity firms will typically set up companies they buy for faster growth, and then potentially that'll lead to a future sale. Do you think that's something that might happen here, and what do you predict? Is there any indication of time horizons for KPS? KPS has made a lot of smart investments, they have a pattern, but they're not going to be pigeonholed into a particular time frame for a next-step strategy. https://www.defensenews.com/interviews/2020/08/13/am-general-ceo-on-acquisition-by-a-private-equity-firm/

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  January 21, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  Contract Awards by US Department of Defense - January 17, 2020

  NAVY Raytheon Integrated Defense Systems, Tewksbury, Massachusetts, is awarded a $30,358,285 cost-plus-fixed-fee and cost-only modification to previously-awarded contract N00024-19-C-5509 to exercise the option for dual band radar design agent support efforts. Work will be performed in Tewksbury, Massachusetts (69%); Port Hueneme, California (17%); and Arvonia, Virginia (14%), and is expected to be completed by January 2021. Fiscal 2020 shipbuilding and conversion (Navy); and fiscal 2019 research, development, test and evaluation (Navy) funding in the amount of $2,099,910 will be obligated at time of award, and funds in the amount of $1,069,769 will expire at the end of the current fiscal year. The Naval Sea Systems Command, Washington, District of Columbia, is the contracting activity. CACI International Inc./BIT Systems, Sterling, Virginia, is awarded a $13,336,559 firm-fixed-price, cost-plus-fixed-fee, cost reimbursable, indefinite-delivery/indefinite-quantity contract. This contract provides engineering, program management and technical services to support the installation, integration and sustainment of counter unmanned aerial systems. Installation and integration includes modeling and simulation, hardware installation, software integration, verification testing and integration trouble shooting support. System sustainment includes maintainability and deployment upgrades of operational systems, reconfiguration of installed systems, training, system maintenance, software updates and hardware repairs. Work will be performed in Sterling, Virginia (34%); various locations within the continental U.S (33%); and various locations outside the continental U.S. (33%), and is expected to be completed in January 2022. No funds will be obligated at the time of award. Funds will be obligated on individual orders as they are issued. This contract was not competitively procured pursuant to 10 U.S. Code 2304(c)(1). The Naval Air Warfare Center Aircraft Division, Patuxent River, Maryland, is the contracting activity (N00421-20-D-0020). ARMY Phillips Corp.,* Hanover, Maryland, was awarded a $28,570,997 firm-fixed-price contract for the procurement of Computer Numeric Control mill and lathe assemblies. Bids were solicited via the internet with one received. Work locations and funding will be determined with each order, with an estimated completion date of Jan. 16, 2025. U.S. Army Contracting Command, Rock Island Arsenal, Illinois, is the contracting activity (W9098S-20-D-0004). Four Tribes Enterprises Inc.,* Gaithersburg, Maryland, was awarded a $13,147,968 firm-fixed-price contract for the construction of a perimeter security entry point at Rome Laboratory. One bid was solicited via the internet with one bid received. Work will be performed in Rome, New York, with an estimated completion date of July 14, 2021. Fiscal 2020 civil construction funds in the amount of $13,147,968 were obligated at the time of the award. U.S. Army Corps of Engineers, New York, New York, is the contracting activity (W912DS-20-C-0005). Booz Allen Hamilton Inc., McLean, Virginia, was awarded an $8,873,629 firm-fixed-price contract for program management support services on the Integrated Personnel and Pay System-Army for the Functional Management Division, Deputy Chief of Staff, G-1, Technology and Business Architecture Integration Directorate. Fifty-five bids were solicited with one bid received. Work will be performed in Arlington, Virginia, with an estimated completion date of Jan. 17, 2023. Fiscal 2020 operations and maintenance, Army, funds in the amount of $8,873,629 were obligated at the time of the award. U.S. Army Contracting Command, New Jersey, is the contracting activity (W15QKN-20-F-0144). DEFENSE LOGISTICS AGENCY Honeywell International, doing business as Honeywell Aerospace-Tucson, Tucson, Arizona, has been awarded a $25,664,750 firm-fixed-price, indefinite-delivery/indefinite-quantity contract for helicopter generators. This was a sole-source acquisition using justification 10 U.S. Code 2304 (c)(1), as stated in Federal Acquisition Regulation 6.302-1. This is a one-year base contract with four one-year options periods. Location of performance is Arizona with a Jan 17, 2026, performance completion date. Using military service is the Army. Type of appropriation is fiscal 2020 Army working capital funds. The contracting activity is Defense Logistics Agency Aviation, Redstone Arsenal, Alabama (SPRRA1-20-D-0016). *Small Business https://www.defense.gov/Newsroom/Contracts/Contract/Article/2060522/source/GovDelivery/

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  April 28, 2020 | International, Aerospace, Naval, Land, C4ISR, Security

  DoD Budget Cuts Likely As $4 Trillion Deficit Looms

  By THERESA HITCHENSon April 27, 2020 at 5:02 PM WASHINGTON: With the federal deficit expected to balloon to over $4 trillion in fiscal 2020 due to spending to pump the economy in the face of the COVID-19 coronavirus pandemic, downward pressure on the US defense budget is inevitable, several experts believe. “I think the budget comes down sooner rather than later,” Mackenzie Eaglen, resident fellow at the American Enterprise Institute, said bluntly in a webinar today. The best-case scenario is for flat defense budgets for the foreseeable future, but if history is a guide, the smart money is on defense budget cuts, explained Todd Harrison, DoD budget guru at the Center for Strategic and International Security (CSIS). “What has historically happened is, when Congress's fiscal conservatives come out and get serious about reducing the debt, reducing spending defense is almost always part of what they come up with for a solution,” he said. “So, we could be looking at a deficit-driven defense drawdown coming. ... At least history would suggest that that is a real possibility.” Indeed, even as Congress is pulling out all the stops trying to assist DoD and the defense industrial base to weather the COVID-19 coronavirus pandemic, DoD already is being eyed as the future deficit bill-payer, Eaglen told the webinar. “DoD is at the top of the list,” she said. Eaglen added that, at a more macro-level, the budget crunch could force DoD to re-look the goals of the 2018 National Defense Strategy (NDS) with an eye to downsizing. “There's going to be an impact across the board,” she said. “There probably will be a total relook — at even the NDS fundamentals, and what mission is going to have to go — in response to this.” Harrison noted that already DoD has been looking at flat budgets through 2021, which has caused it to have to take some risks as it tries to juggle divesting in high-maintenance legacy systems with investing in future programs while maintaining readiness to handle a possible peer conflict with Russia and/or China. “Just to divest legacy systems and invest in new ones and try to maintain, or slightly grow, force structure, DoD was already saying that it would need three to five percent real growth each year in the defense budget, going forward, just to fully execute that,” he said. This means that DoD leadership is going to face even more difficult decisions in the future, Harrison explained. “Now we're looking at an environment where the budget might be flat at the best case or trending down over time. Something's gonna have to give. And so, if DoD really wants to protect these key modernization programs, not only is it going to have to divest legacy systems, it's going to have to divest them faster, and it's going to have to make some reductions in force structure that's going to incur risk.” More immediately, Harrison said, as Congress moves over the next few months to pass a fourth, or even a fifth, economic stimulus package DoD already is signaling that it hopes to see a number of its “unfunded requirements” stuffed into those bills. “DoD is saying: ‘hey, if you want to fund more things for DoD to help stimulate the economy, and help the defense industry, well, here's a list you already have that you can pick from.” DoD's unfunded priorities list — the annual wish list of programs it would like to fund if only there was more money in the top-line — for 2021 includes a total of $35.9 billion for programs across the military services and the combatant commands. The Pentagon might also petition Congress for greater authority to use operations and maintenance funds appropriated but not spent due to work slowdowns to short up programs facing cost overruns because DoD paid contractors for work supposed to be done, but not actually done, while employees are home-bound due to the pandemic, Harrison said. “DoD has implemented the CARES Act implementation, saying that they would pay for paid leave for employees of defense industry firms that are unable to report to work. And so that cost is covered,” Andrew Hunter, who works on defense industrial base issues at CSIS, explained. “Those folks aren't necessarily going to be laid off; they will be kept on the payroll and paid. And again, that will create some costs down the road to then pay those folks to do the actual work that they're originally scheduled to do.” Most of the nearly $10.5 billion in the CARES Act, signed by President Donald Trump on March 27 to help DoD protect itself from the impacts of the pandemic goes into O&M accounts, according to CSIS. That said, some $1 billion goes to procurement funding, with an eye on health-related equipment. Further, it includes some $1.5 billion in the Defense Working Capital Fund, which allows DoD to make investments in things like depot maintenance, transportation and supply management in the near term and recoup the costs through future year pricing deals. However, the bill grants DoD a good deal of flexibility to move money around — with the exception of banning any funding for Trump's southern border wall construction. https://breakingdefense.com/2020/04/dod-budget-cuts-likely-as-4-trillion-deficit-looms/