BAE Systems Investor Brief - June 2005
01 Jul 05
In this month's brief:
- Nimrod MRA4 Update
- Joint Strike Fighter (JSF) Aft Fuselage arrives in Fort Worth
- Typhoon achieves first ASRAAM Firing
- UK RAF Typhoons move to Coningsby
- Type 45 Project
New Contracts received this month
- Electronic Warfare PRISM contract
- MoD awards VC10 contract extension
- Warship Technical Documentation
- Italy orders RG-12 vehicles
- Sweden orders 102 Armoured Patrol Vehicles
- Extended support to Navy Surface Warfare Center
- DoD Applications Contract
- Next Generation Mission Planning Capabilities for the U-2
- Shaman Project
- Information Warfare Low Band Transmitter contract
- $1.127 billion order to remanufacture Bradleys
General News
BAE SYSTEMS creates Land & Armaments Operating Group
BAE Systems completed the acquisition of United Defense Industries on 24 June 2005 after receiving all shareholder and regulatory approvals. To maximize the benefits from the acquisition, BAE Systems is integrating its existing land systems activities in the UK, Sweden and South Africa with United Defense to form a new BAE Systems Land & Armaments Operating Group.
Land & Armaments will be headquartered in the U.S. and employ some 11,000 people. Land Systems, part of the new Land & Armaments Group, will continue to work closely with Customer Solutions & Support which is responsible for managing our relationship with the UK’s Defence Logistics Organisation.
Tornado Support strategy announced by MoD
The UK Ministry of Defence (MoD) has announced its intention to reduce the complexity of Tornado support by placing, incrementally, where it offers best value-for-money, contracts with BAE Systems, leading to the eventual placement of a single support contract to provide improved platform availability.
This new concept submitted by the Tornado Integrated Project Team to the MoD, known as ATTAC (Availability Transformation: Tornado Aircraft Contract), is underpinned by a series of successful pilot programmes which the Defence Logistics Organisation (DLO) has undertaken in partnership with CS&S MASS over the past three years.
CS&S MASS will work with the MoD and UK RAF to deliver a solution that increases aircraft availability and operational effectiveness whilst at the same time reducing costs.
Major Programmes Update
Nimrod MRA4 Update
The flight trials programme continues to make good progress, with the lead design and development aircraft, PA01, achieving more than 50 flying hours and reaching its in-service maximum altitude of 35,000ft for the first time.
The third aircraft, PA03, is expected to start engine ground runs at Woodford in late June, as part of the preparations towards first flight later this year.
Joint Strike Fighter (JSF) Aft Fuselage arrives in Fort Worth
The JSF Team within Air Systems has celebrated the on-time delivery of the aft fuselage to US partners Lockheed Martin in Fort Worth, Texas, USA. The aft fuselage left BAE System's Samlesbury, UK site and arrived at the Fort Worth facility almost a week ahead of its 'on-dock' date of 6 June 2005.
This enabled the mating of the aft fuselage to the centre fuselage and wing to take place ahead of schedule on 9 June 2005. The mating took place with exceptional structural accuracy ~ to tolerances within 30 thousandths of an inch. No modifications were required to make the fit.
This exceptional accuracy was due to the digital design and manufacturing controls used on the JSF programme, which were pioneered by BAE Systems.
Typhoon achieves first ASRAAM Firing
On 16 May, the Typhoon Operational Evaluation Unit (OEU) undertook the first live in-service firing of the UK RAF's latest variant of ASRAAM. This achievement was matched the following day, with a second firing. Trials are ongoing, but initial indications are that the firings were a resounding success.
UK RAF Typhoons move to Coningsby
On 19 May, the Case White, Contractor Support Services (CSS) programme achieved 1040 Typhoon sorties, meeting one of the contract objectives, eight weeks ahead of schedule.
The Case White programme at Warton, UK came to a successful conclusion on 1 July when 29 Squadron RAF departed for its new base at RAF Coningsby, UK. The event was marked with a four Eurofighter fly past.
Support will continue to be provided by Warton and through the Typhoon Training facility based at Coningsby.
Type 45 Project
Work on Type 45 continues apace on the First of Class with all blocks now at Scotstoun. Block E/F (bow section) was successfully transported from VT Shipbuilding to Scotstoun arriving on the 13 June and was moved into the Module Hall on the 18 June.
New Contracts received this month
Electronic Warfare PRISM contract
CS&S Australia has been contracted by Australian Customs to supply a Passive Radar Identification System (PRISM) III Electronic Support Measure (ESM) system. The contract valued at AU$1M complements the current PRISM contract for the Royal Australian Navy (RAN) Armidale Class Patrol Boat programme which is being manufactured, assembled, tested and deployed by CS&S Australia.
PRISM is an electronic sensor that passively uses the electromagnetic spectrum to gain information about other parties on the battlefield, or in this case, the maritime operating environment.
MoD awards VC10 contract extension
BAE Systems has been awarded a £38M extension to the current VC10 maintenance contract which will guarantee availability of the fleet to the UK Royal Air Force.
Under the original £207M JAVELIN contract, signed in 2003, CS&S MASS took responsibility for spares-inclusive major maintenance of the VC10 fleet and support to first and second line maintenance. This contract has delivered cost savings of 20 per cent.
The new agreement, known as Javelin Amber, transfers second line maintenance and other responsibilities to CS&S MASS with performance incentivised based upon aircraft availability.
The contract will deliver cost savings and increase the availability of the VC10 fleet to the front line for operational duties through to 2011.
Warship Technical Documentation
CS&S Naval has begun work on developing the first fully electronic technical documentation suite for the Type 45 Destroyer. The business has won a contract worth £8.5M to produce all the technical handbooks for what will become HMS Daring, which is currently under construction at BAE Systems’ Naval Ships Scotstoun, Glasgow, UK.
The technical documentation, used both to operate and maintain HMS Daring, will be delivered in spring 2008 to allow crews to become fully conversant with it well in advance of the destroyer’s sea trials and subsequent handover to the Royal Navy. The data will be viewed using trilogi, a software browser also developed by BAE Systems.
Italy orders RG-12 vehicles
Iveco Defence Vehicle Division (DVD) has ordered a first full production batch of 30 RG-12 public order vehicles from BAE Systems - Land Systems OMC for use by the Italian Carabinieri. Delivery is expected early in 2006.
The order was confirmed as Land Systems OMC prepared to deliver the remaining five of six custom-built pre-production vehicles - part of an overall contract for up to 200 of the RG-12s, won by Land Systems OMC in partnership with Italy’s Iveco DVD in mid-2004.
Sweden orders 102 Armoured Patrol Vehicles
The Swedish army, working through its procurement agency FMV has placed an order for 102 RG32M Mine Hardened Patrol Vehicles (MHPV) with BAE Systems Land Systems OMC at a value of R180m.
This follows delivery of the first two proto-types of the technologically advanced RG32M vehicles to Sweden. The delivery of the first 6 vehicles is scheduled for January 2006 with the rest of the order expected to be completed by November 2006.
Extended support to Navy Surface Warfare Center
Technology Solutions and Services was awarded, through competition, an incrementally funded $17.7 million task order under its SeaPort-e prime contract to provide engineering, technical and logistics support services to the Naval Surface Warfare Center (NSWC), Carderock Division, Acoustic Research Detachment (ARD), Bayview, Idaho.
The base plus three option years allows Technology Solutions & Services to continue to provide operational support services to the NSWC - ARD through May 2009.
DoD Applications Contract
National Security Solutions (NSS) will provide precision geopositioning software for DoD applications under the U.S. Navy’s Common Geopositioning Services Project (CGSP). The contract, awarded by the Naval Air Warfare Center, is initially valued at $4.6 million and includes options through 2008.
Next Generation Mission Planning Capabilities for the U-2
The U.S. Air Force has awarded the National Security Solutions - Raytheon team a $12.9 million contract to develop an advanced network-centric mission planning capability for its U-2 reconnaissance aircraft.
The contract also directs the team to develop common software that can be used to plan intelligence, surveillance and reconnaissance (ISR) missions for several lines of manned and unmanned aircraft. Besides the U-2, these aircraft include the RC-135, E-3, E-8, E-10, Global Hawk and Predator.
Shaman Project
Information Warfare in Nashua, N.H., has been awarded a $12.5 million contract for the Advanced Demonstration Phase of Project Shaman. The work is part of a larger contract between the UK Ministry of Defense (MoD) and BAE Systems Integrated System Technologies (Insyte) to provide the next generation of Maritime Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR) sensors for the Royal Navy. The seven-month long initial phase will conclude with a demonstration to the MoD.
Information Warfare Low Band Transmitter contract
Information Warfare’s Lansdale, Pa., facility has been awarded a $10 million contract modification for the production of eight additional Low Band Transmitters (LBTs) for the US Navy’s EA-6B Prowler aircraft. The Navy uses the EA-6B in electronic attack roles.
The LBT Antenna Group is a radar and communications jammer used to provide protection for strike aircraft, ships and ground troops by disrupting enemy radar and communications signals.
$1.127 billion order to remanufacture Bradleys
BAE Systems Land & Armaments Operating Group has been awarded a series of orders and contract modifications worth $1.127 billion to remanufacture and upgrade more than 500 Bradley Combat System vehicles.
Under the four delivery orders, Land & Armaments will remanufacture and upgrade 450 older Bradleys to Bradley A3 vehicles; 50 vehicles to Bradley A2 Operation Desert Storm vehicles plus provide A2 conversion kits for 100 additional vehicles; 33 vehicles to Bradley Fire Support Team vehicles; and provide spares for Bradley A3 vehicles.
International Partnerships
Insyte wins CAPTOR order
Insyte has won a £27M order from SELEX Sensors and Airborne Systems for the manufacture of electronic modules on the CAPTOR Airborne Radar, which will be fitted to the Eurofighter Typhoon. The work will be starting almost immediately at Hillend, UK, with the first delivery commencing in 2006 and continuing until 2011.
MBDA signs LFK Accord
The Master Understanding defining the terms and conditions for the German missile systems house EADS/LFK to become part of MBDA is now agreed and formal signature of the accord took place on 15 June. Subject to the respective Board and regulatory authority approvals, the transaction is due to be completed later this year.
