Aerospace & Defense Update
Almost five months after the Air Force awarded Northrop Grumman a contract to provide the Long Range Strike-Bomber (“LRS-B”), Air Force secretary Deborah Lee James finally disclosed seven major contractors who will join Northrop in building, what is now officially designated, the B-21. James announced that Pratt & Whitney will build the B-21 engines at its facility in East Hartford, Connecticut. James also noted the Air Force’s decision not to go with GE aviation on the engines reflects a departure from the legacy B-2 stealth bomber. The other partners that will supply the airframe or mission systems include BAE Systems, GKN Aerospace, Janicki Industries, Orbital ATK, Rockwell Collins, and Spirit AeroSystems. James did not disclose additional details about which B-21 component each contractor will build. The Air Force’s decision to release the names of the key contractors is the first major step in the on-going effort to increase transparency and build support for the program.
Orbital ATK featured a wide range of satellite and space launch, propulsion, and logistics technologies during the Satellite 2016 conference and exhibition. The Company highlighted their ability to design, build and deliver products to orbit for a variety of commercial and government customers around the world. During the conference, Orbital ATK announced it is close to signing a pioneering contract with Intelsat to launch robotic space tugs to extend the life of geriatric satellites circling the Earth. In addition to repositioning satellites, the tug would eventually fuel or repair ailing craft with robotic technology, which would permit satellites to be blasted into space with minimum fuel on board, generating substantial weight and cost savings. The deal is expected to be announced as early as next month and would cap a lengthy struggle to turn in-orbit satellite servicing into a commercial reality.
Government Technology Solutions Update
The Department of Veteran’s Affairs (“VA”) announced the awardees to its $22.3 billion Transformation Twenty-One Total Technology Next Generation Acquisition (“T4NG”) program this week. 21 contractors won spots on the program, including 10 service-disabled veteran owned small businesses (“SDVOSB”), two small businesses, and nine large businesses, with all 21 having the ability to bid on any of the task orders (“TOs”) released under the vehicle. The contracts have a base period of five-years and a one-year option period. The program seeks to foster private-public sector strategic cooperation in order to provide information technology (“IT”) services and solutions to support “MyVA” initiatives, including health IT, telecommunications, cybersecurity, and cloud mobility to further support and improve veteran care.
As part of the Executive Branch’s initiative to improve IT interoperability, the White House plans to release the plans for a pilot program that will call for the sharing of source code amongst Federal agencies. The plan will call for agencies to release at least 20% of their new code as open-source in order to support improved access to the custom codes of these agencies. Custom codes are defined as those codes developed by third parties for specific agencies. As noted by U.S. Chief Information Officer (“CIO”) Tony Scott, “this policy is consistent with the Federal Government’s long-standing policy of technology neutrality through which we seek to ensure that Federal investments in IT are merit-based, improve the performance of our government and create value for the American people.” To support the initiative, the Office of Management and Budget (“OMB”) will launch “Project Open Source” to aid agencies in implementing the White House’s guidance within 90 days of announcement.
Comtech Telecommunications (Up 7.3%) – Shares were up this week following a dividend announcement of $0.30 per share, representing a $1.20 dividend on an annualized basis and a yield of 5.57%
Finmeccanica (Up 7.3%) – Shares were up this week after the Company announced contract awards totaling around $130 million for air traffic control management systems
Drew Marine, Inc. to acquire NAL Research Corporation, a provider of iridium satellite modem and tracking terminal services. The terms of the deal were not disclosed.
Jet Aviation AG, a subsidiary of General Dynamics, to acquire AvJet Corporation, a provider of private jet management services. Terms of the deal were not disclosed.