Aerospace & Defense Update
On Tuesday, the U.S. Air Force announced that SpaceX received certification for military space launch, making it only the second provider approved to launch military payloads into orbit. The Air Force’s certification of SpaceX’s Falcon 9 rocket effectively ends the service’s decade long sole reliance on United Launch Alliance (“ULA”) for military launch services. SpaceX will have its first opportunity to compete with ULA, the Lockheed Martin and Boeing joint venture, in June, when the Air Force is expected to release a Request for Proposal (“RFP”) for the launch of its next-generation GPS III navigation spacecraft. The Falcon 9 certification, which is the result of a certification process that began in June 2013, sets the stage for the rocket to lift the Air Force’s GPS navigation satellites, missile warning platforms, weather satellites, and orbiting spy payloads. The opportunity for the Air Force to compete launch services is expected to drive down costs related to space missions moving forward.
Sikorsky’s S-97 Raider successfully made its maiden flight last Friday, nearly one year after the rotorcraft was made public. The S-97’s first flight included three take-offs and landings, as well as basic maneuvers to test its hover and low-speed capabilities. More advanced test flights are scheduled to take place over the course of the next year. The S-97, which is based on Sikorsky’s X-2 technology, features coaxial counter-rotating main rotors that enable flight at greater speeds than conventional aircraft. Ultimately, pending successful testing, the S-97 platform positions Sikorsky as a top contender for the U.S. Army’s future vertical lift – light concept and armed aerial scout requirement.
Government Technology Solutions Update
The U.S. Army has released a draft solicitation for its Information Technology Enterprise Solutions-3 Services (“ITES-3S”) contract and extended the deadline for industry day questions. The $12.1 billion contract, with a five-year base and one four-year option period, is open to both the Department of Defense (“DoD”) and civilian agencies. However, the Army intends for the contract to meet specific branch needs including a single security architecture, network normalization, identity and access management, enterprise services, cloud computing, and data center consolidation. The ITES-3S Industry Day is scheduled for June 10th and the final RFP is expected to be released in September 2015. As a result of ITES-3S procurement delays, the Army extended ITES-2S through April 2018.
The General Services Administration (“GSA”) recently launched CALC.gov, a tool for agencies to conduct market research on professional service labor categories. The website allows agencies to see the awarded hourly rate ceilings across eight GSA professional service schedules. Though geared toward use by contracting officers and specialists to negotiate more effectively, the GSA also anticipates use by program managers to estimate program costs. Users have the option of filtering by qualifications such as skill level, education, experience, and business size to find comparable labor rates. CALC.gov was created by the GSA to facilitate smarter labor category pricing for more informed contracting decisions within the Federal Government.
B/E Aerospace (Down 5.2%) – Shares were down this week after the company revised its earnings guidance for FY 2015. The company provided earnings per share guidance of $3.03 for the period, compared to consensus estimates of $3.09 per share.
Veritas Capital to acquire StandardAero, a provider of services including engine and airframe maintenance, repair, and overhaul, engine component repair, engineering services, interior completions, and paint applications. Terms of the deal were not disclosed.
L-3 Communications Corp. acquired CTC Aviation Group Ltd., a provider of high-quality, global airline pilot training and crew resourcing services. The deal is worth an estimated $220 million.