Apr 21, 2008

A group of scientists on Wednesday told lawmakers that a missile defense plan will not protect the U.S. from a real missile attack. However, George C. Marshall Institute President Jeff Kueter said the anti-missile program is making progress and will improve with further testing

A report released this month by the Aerospace Industries Association urges the White House to boost spending on efforts to modernize and recondition the military. AIA President Marion Blakey said the U.S. risks creating a "hollow force" if it does not increase the overall defense budget to pay for more weapons. The AIA called for a floor of 4% of GDP for defense spending. "What we have advocated here is a reasonable investment," Blakey said. "Historically, 4% is not a figure that in any way outdistances what this country can do, in good times and bad." Apr 18, 2008

Lawmakers may send the $108 billion fiscal 2008 defense supplemental spending to the White House before the elections in November. However, lawmakers are still at odds with the White House over off-budget requests, and Democrats have criticized the administration for cuts in non-defense spending. Apr 18, 2008

The Navy and Marines will purchase an undetermined number of 40-pound vertical-takeoff UAVs. The Scan Eagle is equipped with electro-optical infrared sensors capable of beaming images from 5,000 feet. Apr 18, 2008

Rep. Duncan Hunter, R-Calif., said he is concerned that defense secrets could be compromised as foreign companies increase investment in U.S. defense contractors. The decline of the dollar has prompted more international firms to invest in U.S. defense companies. However, Duncan said globalization of the industry remains inevitable. Apr 17, 2008

The VH-71 presidential replacement helicopter will be equipped with classified capabilities, including protection from electronic attack. It also includes an advanced communications system that will allow the president and cabinet members to talk to any government agency at any time. Apr 17, 2008

Lawmakers are likely to focus attention on foreign investors and multinational defense companies when debating the fiscal 2009 defense authorization bill, a reaction to a string of contracts recently awarded in part to European companies. A key question this year will be whether to seek additional oversight of the Pentagon's processes and entities tasked with ensuring the security of the U.S. defense industrial base and the technology that gives the American military an edge over other countries. Apr 16, 2008

Recently Defense Security Service has taken steps to address many of the issues raised in the GAO report, said Kathleen Watson, the DSS director. DSS is hiring additional specialists dealing with companies that have foreign owners, investors or control. There are 8,710 companies and 12,000 facilities that have been cleared for access to classified information. Half of DSS security personnel, about 350 people, work on industrial security cases, she said. But DSS also has a shortage of about 100 people, she said. DSS has a budget of $416 million for 2008. Watson reviewed the entire agency for the past year and has implemented a plan to address the critical problems. Apr 16, 2008

Some of the US Department of Defense's top defense contractors are foreign-owned companies, such as Airbus parent EADS, Rolls-Royce, BAE Systems, Thales, Alenia Aeronautica and Finmeccanica. These companies have invested significantly in U.S. firms, including acquisitions in the last few years of firms such as United Defense, which was bought by BAE Systems. Over the last several years, top defense contracts were awarded to some of these companies, including for Mine Resistant Ambush Protected vehicles, the new presidential helicopter, the Joint Cargo Aircraft, engines for the Joint Strike Fighter and, most recently, the Air Forceis new refueling tanker contract. In most of these cases, the firms partnered with large U.S. contractors. Apr 16, 2008

The Department of Defense is the executive agent for the program, which spans across other federal agencies. More specifically, the Defense Security Service (DSS) is the primary agency for implementation of NISP not only at the Pentagon but also for 23 other federal agencies. The growth of foreign investments in the U.S. could present a serious challenge for DSS, which has gone through organizational turmoil recently in a much-publicized breakdown regarding its handling of security clearance for contractor personnel. That function has now been outsourced to the Office of Management and Budget. Apr 16, 2008

The Government Accountability Office (GAO) several years ago found that Defense Security Service does not have sufficient oversight to reduce the risk of foreign interests gaining unauthorized access to U.S. classified information. Testifying in front of the House panel, GAOis Ann Calvaresi-Barr on Wednesday said that the security personnel have difficulty navigating through the intricacies of ownership. According to GAO, DSS does not collect and track the extent to which classified information is accessible to a contractor before measures are taken to reduce the risk of unauthorized foreign access. For instance, contractors may have had access to classified information for months before any protected measures were implemented. Apr 16, 2008

The North American subsidiaries of the European companies have gone through security checks and have instituted a firewall between themselves and their European parent companies or mitigated their foreign ownership through steps that include special security agreements, among several others. On programs that do not have any classified portions, the technology is subject to rigorous export-control laws. The US Department of Defense also complies with the Buy America Act, the Berry amendment, and other laws that require domestic materials or parts in certain purchases. For contracts involving classified information, foreign firms typically participate through U.S. subsidiaries, joint ventures with U.S. companies or as subcontractors on major programs. Nevertheless, some lawmakers are asking questions. Apr 16, 2008

The trend of foreign interest in U.S. defense contracts is likely to grow because the large U.S. defense budget attracts more foreign companies at a time when the defense spending has declined in most European countries. On Wednesday, panel Chairman Ike Skelton (D-Mo.) for the first time convened a hearing on the so-called National Industrial Security Program (NISP). One of the most important features of NISP is how it manages contractors that are under foreign ownership, control or influence. Apr 16, 2008

The US Air Force said Thursday that a Pentagon investigation found a $50 million contract to promote the Thunderbirds aerial stunt team was tainted by improper influence and preferential treatment, leading to administrative action against three officials. Air Force Secretary Michael Wynne took administrative action against Maj. Gen. Stephen M. Goldfein, who was the commander responsible for the Thunderbirds at the time, as well as two others, and referred action on two additional personnel to their commanders, according to a release issued by the service. Wynne also ordered a review of contracting processes and a training program to correct problems raised by the investigation. The release also said the assistant U.S. Attorney in Nevada has declined to pursue any criminal prosecution. Apr 16, 2008

A report by the Aerospace Industries Association said the White House must modernize the U.S. military despite budget pressures in order for the country to continue to lead the world in advanced technology. The AIA said the U.S. should spend at least 4% of GDP on the annual DoD budget. AIA President Marion Blakey said presidential candidates must shift their discussions to the challenges surrounding funding for military modernization. The AIA suggests that the Pentagon spend up to $150 billion annually on weapons procurement, up from $104 billion requested for fiscal 2009. Apr 15, 2008

Raytheon has won a Missile Defense Agency contract worth up to $400 million to design and develop a radar system for a European-based missile defense system, the Defense Department said late Tuesday. Raytheon Integrated Defense Systems will design the radar to detect and track missiles in the mid-course phase of flight. Shares of Raytheon, based in Waltham, Mass, fell 85 cents to $64.23 Tuesday. Apr 15, 2008

Coast Guard officials say they will accept the first National Security Cutter next month but noted that testing could take two years. The Coast Guard hopes to deploy the cutter in 2010. The vessel can carry two VUAVS and two helicopters. Apr 14, 2008

Advance Realty

Advance Realty started construction at the beginning of this year for the Picatinny Applied Research Campus, which will build out to 1.1 million sf within the U.S. Army's 6,500-acre Picatinny Arsenal. Now, the PARC development has signed its first tenant. The space is relatively modest--Alliant Techsystems, an Edina, MN-based defense and aerospace contractor with operations in 21 states, has taken 2,850 sf in PARCis initial single-story, 27,000-sf flex building. Officials of the Bedminster, NJ-based Advance Realty expect it to be just the first of many similar companies that will eventually call the spec development home. Advance is developing PARC in conjunction with InSitech Inc., a partnership intermediary for the U.S. Army. Terms of the lease were not disclosed. Apr 16, 2008

American Pacific

American Pacific Corporation ("AMPAC") is a leading manufacturer of specialty and fine chemicals within its focused markets, as well as propulsion products sold to defense, aerospace and pharmaceutical end markets. AMPAC's products provide access to, and movement in, space via solid fuel and propulsion thrusters and represent the registered or active pharmaceutical ingredient in drug applications such as HIV, epilepsy and cancer. AMPAC also produces specialty chemicals utilized in various applications such as fire extinguishing systems, as well as manufacture water treatment equipment. AMPAC's products are designed to meet customer specifications and often must meet certain governmental and regulatory approvals. Additional information about AMPAC can be obtained by visiting the Company's web site at http://www.apfc.com Apr 14, 2008

American Pacific

American Pacific Corporation's wholly-owned in-space propulsion subsidiary (AMPAC-ISP or ISP), has been awarded a contract to develop a liquid divert and attitude control system (DACS) for the Ballistic Missile Defense System. The work will be performed at AMPAC-ISP's Niagara Falls, New York facility, and will apply proven component and subsystem design to develop a modular and scalable DACS. The program will leverage ISP's design for manufacturing experience to develop a low cost, low risk propulsion system for interceptor kill vehicles. The cost-plus-fixed-fee contract, of approximately $15 million, will culminate in the delivery of a qualification unit and two flight test units in September 2010. AMPAC-ISP is teamed with Moog Inc. Space and Defense Group, East Aurora, New York, who will provide subsystem design and component support. This contract is one of the largest issued to a Western New York company in 2007 and will be supported by more than one hundred technical professionals at ISP and Moog. Apr 14, 2008

AMPAC

AMPAC-ISP Corp. is a leader in the development and manufacturing of liquid rocket engines, tanks and propulsion systems for launch vehicles, commercial and defense satellites, deep space exploration, and missile defense. AMPAC-ISP, with facilities in Niagara Falls, New York and Westcott, United Kingdom, is a wholly-owned subsidiary of American Pacific Corporation. Additional information about AMPAC-ISP Corp. can be obtained by visiting their web site at http://www.ampacisp.com Apr 14, 2008

Aurora Flight Sciences

Aurora Flight Sciences will develop a new aircraft under DARPA's Vulture program. DARPA hopes the Vulture program will eventually act as a satellite substitute for communications relay or reconnaissance. Aurora's design uses solar energy to power the aircraft during the day, and stored solar energy for power at night. Apr 18, 2008

Boeing

Boeing Launch Services will manage DigitalGlobe's third satellite launch now scheduled for mid-2009. The WoldView-2 satellite, the company's most advanced satellite, will launch from Vandenberg Air Force Base, Calif. Apr 17, 2008

Boeing, Raytheon

Boeing and Raytheon have formed a partnership to compete for an air-to-missile contract. Raytheon will be the prime contractor on the bid. The new missiles will replace the Hellfire and Maverick missiles. Apr 15, 2008

Lockheed Martin

Lockheed Martin said the Littoral Combat Ship program remains on schedule for deliveries this summer. Trials will start next month, a company spokeswoman said. General Dynamics is competing with Lockheed on the program and expects to deliver its vessel in December. Apr 17, 2008

Lockheed Martin

A Navy official said Lockheed Martin is making good progress on the VH-71 presidential helicopter program. The company is scheduled to field the first helicopters in September 2010. Lockheed has already logged 700 hours of flights on the test aircraft. Apr 15, 2008

Lockheed Martin

Lockheed Martin has won a contract to build a Web-based, self-service application that will help the Air Force perform human resources tasks. The contract is worth $234 million, and the application will allow the Air Force to respond to personnel requests electronically. Apr 14, 2008

Northrop Grumman

Northrop Grumman has awarded a $134 million contract option to Alliant Techsystems to work on rocket motors. Alliant will refurbish parts and replace propellant on Minuteman III Stage 1, 2 and 3 rocket motors. Apr 17, 2008

Northrop Grumman

Northrop Grumman, which was among the top drags on the S.& P. 500. Shares of Northrop Grumman fell 6.9 percent, to $71.57, after the military contractor said it expected to take a first-quarter pretax charge because of delays related to quality concerns in its amphibious assault-ship program. Economic data earlier in the day painted a mixed picture. Apr 16, 2008

Northrop Grumman

Northrop Grumman on Monday said it expects to take a charge of up to $360 million in the first quarter. The company said the charge is related to its shipbuilding business and reflects a re-evaluation of the cost of building an LHD-8 amphibious assault ship, among other things. Apr 15, 2008

Northrop Grumman

Northrop Grumman said Tuesday it would take a charge of at least $320 million because wiring problems will delay delivery of a ship it built for the U.S. Navy. The move sent the company's shares down nearly 7 percent. The military contractor and shipbuilder said it expected to deliver the LHD-8 ship during the second quarter of next year, instead of November 2008. The company delayed delivery by six months once before. Northrop said it would take a pretax charge between $320 million and $360 million, or between 61 and 69 cents a share, in the first quarter for costs associated with the delay. Analysts polled by Thomson Financial expected the Los Angeles-based company to earn $1.28 a share. Northrop shares fell $5.27, or 6.9 percent, to $71.57. The company is expected to release its full first-quarter financial results April 25. Apr 15, 2008

Northrop Grumman

The DoD has awarded a $453 million contract to Northrop Grumman to perform repair worked on the aircraft carrier Enterprise. The company is expected to spend 16 months completing maintenance and repair work on the ship, the world's first nuclear powered aircraft carrier. Apr 14, 2008

Northrop Grumman, Airbus

Just weeks after a highly lucrative Air Force contract to build new refueling tankers was awarded to a partnership between the U.S.[sup.1]s Northrop Grumman and the Airbus parent European Aeronautic Defence and Space Company (EADS), and not Chicago-based Boeing , some lawmakers have raised concerns that the Pentagon is "outsourcing" national security. They are wary of the ability of the Pentagon to keep tabs on a rapidly globalizing defense industry and a new trend in which investment vehicles such as sovereign wealth funds, hedge funds and private equity firms have created new means for foreign investments in U.S. defense firms. Many remember 2006, when a major controversy erupted in Congress and across the country over a United Arab Emirates company's attempt to take over operation of several U.S. ports. Pressure from Congress led Dubai Ports World to withdraw from the deal. Apr 16, 2008

Raytheon

Raytheon will partner with Harris Corp. and HP in its bid to win an Air Force satellite broadcasting contract. The companies will help provide wide-band Internet protocol broadcasts for video, imagery and data transmissions to the armed forces if they win the $30 million contract. Apr 14, 2008

Textron

Textron Inc. says first-quarter profits rose nearly 18% to $231 million, bolstered by strong demand for aircraft and military equipment. But the company's industrial unit, home to E-Z-GO and Jacobsen, failed to keep pace, with profits sliding nearly 17% due to pricing pressure. Apr 18, 2008

ZZ

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