Industry Week in Review – June 27, 2014
Aerospace & Defense Update
The White House this week requested $60 billion from Congress to fund military operations in Afghanistan and other global contingencies. The Pentagon is set to receive $58.5 billion through the 2015 overseas contingency operations (“OCO”) request, with an additional $1.5 billion requested through a budget bill amendment for State Department contingency funding. The combined $60 billion figure is nearly $20 billion less than the $79.4 billion placeholder included in the administration’s 2015 Pentagon spending request. Included in the request is $6 billion for new military aircraft, drones, vehicles, and bombs to fund the war in Afghanistan, $3.8 billion for the Air Force, $1.3 billion for the Army, $658 million for the Navy and Marine Corps, and $239 million for defense-wide initiatives. The Department of Defense and State Department also requested $4 billion and $1 billion, respectively, as part of a new counterterrorism fund supported by President Obama. Despite drastic reductions in troop levels, the White House reports the OCO budget will not decrease swiftly.
Government Technology Solutions Update
The Senate Homeland Security and Governmental Affairs Committee passed three bills on June 25th, aiming to augment cybersecurity and bolster IT management within Federal agencies. The bills include the Federal Information Security Modernization Act, which updates the Federal Information Security Management Act standards to move toward automated and continuous monitoring of information that supports agency operations; the National Cybersecurity and Communications Integration Center Act, which focuses on the consolidation of federally managed cybersecurity resources; and the Federal Information Technology Acquisition Reform Act, which aims to strengthen the authority of agency Chief Information Officers.
The Defense Intelligence Agency is in the process of rolling out its Open Innovation Gateway initiative, a major component of the agency’s push to acquire new technologies in smaller increments and shorter procurement cycles. The initiative is aimed at gaining a broader set of products and solutions in order to increase opportunities for small businesses and nontraditional providers, and streamline the agency’s acquisition process.
Big Movers
iRobot Corporation (Up 5.3%) – Shares were up this week after the Company announced a 7.5% increase in revenue for the most recent fiscal quarter, driven by 16.5% revenue growth in the Home Robots segment.
Relevant Transactions
Alcoa, Inc. to acquire Firth Rixson Limited, a manufacturer of rings, forgings, and metal products to OEMs, serving the aero-engine and structural components aerospace industry. The deal is worth an estimated $2.85 billion.
