News & Events

Industry Week in Review – January 15, 2016


Aerospace & Defense Update

The U.S. Air Force selected Orbital ATK and SpaceX to develop prototypes of rocket engines as a part of the persistent push to end reliance on the Russian RD-180 boosters for military space launch.  Orbital ATK secured a $47.0 million contract to develop prototypes of its GEM 63XL strap-on solid rocket motor, the common booster segment solid rocket motor, and an extendable nozzle for Blue Origin’s BE-3U engine.  The potential value of the contract, including all options, is estimated at $180 million.  Additionally, SpaceX won a $33.6 million contract to develop the Raptor rocket engine prototype for the company’s Falcon launch vehicles.  The contracts are part of the Air Force’s Evolved Expendable Launch Vehicle (“EELV”), a program that intends to find an American alternative to RD-180 boosters and ensure U.S. access to space.

Government Technology Solutions Update

According to Bloomberg Government, Federal contractors could soon compete for $1.9 billion in funds provided for 40 new programs in the fiscal 2016 omnibus bill.  The recent analysis identified programs by performing a search on the omnibus bill and a companion explanatory statement for which Congress allocated specific funding amounts for the first time.  New projects, such as new vessel construction for the National Oceanic and Atmospheric Administration and headquarter consolidation for the Department of Homeland Security, provide attractive contract opportunities as they offer companies a timely reason to demonstrate how their capabilities would help meet congressional directives.  Under the omnibus appropriations law, defense primes, construction companies, and technology services providers will have the greatest number of newly funded potential opportunities.

Earlier this week, Pentagon officials completed a classified assessment of the efficacy of Defense agencies’ cybersecurity measures.  The aim of the comprehensive review is to determine what threats are being mitigated, and how valuable those mitigation tools and capabilities are to the agencies.  This initial step was conducted by the Defense Information Systems Agency (“DISA”), the Office of the Defense Department Chief Intelligence Officer (“CIO”), and the National Security Agency (“NSA”).  This effort represents part of a broader campaign to evaluate cybersecurity capabilities and deficiencies, which includes a cybersecurity scorecard to grade agencies’ preparedness.  While the specific details of the findings are classified, the report uncovered myriad vulnerabilities which Department of Defense (“DoD”) officials will use as a basis for making future investments in cybersecurity services and solutions.

The final Request for Proposal (“RFP”) for First Responder Network Authority Umbrella (“FirstNet”), a nationwide, wireless, interoperable broadband communications network for first responders, was issued earlier this week.  The $6.5B RFP has over 50 sections, maps, and tables generated from over a year of dialogue as part of a public / private partnership to reach a consensus on the objectives and scope of the overall mission.  Though there is no specific designation as to the types of bidders the RFP is looking for, telecommunications carriers are the clear choice, as the winning bidder will need to build and operate a system with 20 MHz of 700 MHz broadband spectrum.  Despite the recent release of the RFP, the Department of Homeland Security (“DHS”) has already expressed interest in exploiting this emerging mobile communications technology.

Big Movers

Aerojet Rocketdyne (Up 7.1%) – Shares were up this week after the Company announced a partnership with NASA to mature the development of new propulsion systems

BAE Systems (Down 10.1%) – Shares were down this week after Digital Ally, Inc. launched a lawsuit over patent infringement for law enforcement body cameras

Transactions

Aavid Thermalloy, LLC acquired Niagara Thermal Products, LLC, a designer and manufacturer of compact heat exchangers and heat transfer surfaces.  The terms of the deal were not disclosed.

Preferred Systems Solutions, Inc. acquired Tetra Concepts, LLC, a provider of system architecture and software design to the DoD, Intelligence Community, and commercial health firms.  Terms of the deal were not disclosed.

Mission Solutions Group, Inc. acquired Marshall Communications Corporation, a provider of broadband satellite communications and intellectual property (“IP”) multimedia services to Federal agencies and commercial customers.  Terms of the deal were not disclosed.

Battle Resource Management, Inc. (BRMi) has acquired Clearsoft, Inc., a provider of IT services, including custom enterprise software development and systems integration, to Federal and commercial clients.  Terms of the deal were not disclosed.

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