BAE Systems Investor Brief - March 2007
05 Apr 07
In This Month’s Brief:
- BAE Systems sells stake in Xchanging joint ventures
- High-level aerospace accreditation achieved
- Armament Systems to open new facility in Alabama
- Signing of an LTPA Foundation Contract
- First ASRAAM firings for Typhoon
- Typhoon air-to-ground capability acceptance
- F-35 Lightning II flight schedule progressing well
- M777A1 system approval
- CWID Framework Agreement signed
- Partnering Principles document signed
- Astute milestones
- Targets achieved on boat 3
- Artillery improvement programme
- Contract for work on two amphibious transports
- Link 16 Saudi MIDS contract
- Four military support contracts won
- Novel Satellite Communications contract
- Second phase of MOKYS awarded
- M88A2 HERCULES recovery vehicles
- Pilot monitoring facility
- Lead-In Fighter In-Service Support contract extension
- Mistral order from Estonia
- Kuwait orders Aspide 2000
- Archerfish contract
- Hawk support contract secured
GENERAL NEWS
BAE Systems sells stake in Xchanging joint ventures
BAE Systems has sold its 50 per cent holding in the joint venture companies which provide it with outsourced HR and Indirect Procurement services, as part of its strategy to realise value and concentrate on its core businesses.
High-level aerospace accreditation achieved
Electronics & Integrated Solutions’ (E&IS) Federal Aviation Administration-certified maintenance and repair facility in Mojave, California, US, has achieved the highest level of certification conferred by the International Aerospace Quality Group.
E&IS is one of the first aerospace companies in the US to receive AS9110 registration by BSI Management Systems - an international standards, testing, registration, and certification organization. By obtaining the certification, BAE Systems demonstrated that it consistently meets customer and regulatory requirements.
Armament Systems to open new facility in Alabama
BAE Systems has announced plans to lease a manufacturing plant in Cordova, Alabama beginning in the summer of 2007. The plant will fabricate and deliver ammunition magazines for BAE Systems’ Advanced Gun System and missile launcher assemblies for their Mk57 Vertical Launching System. Both of these systems will be used as weaponry on board the US Navy's new DDG 1000 Zumwalt class of surface ships.
MAJOR PROGRAMME UPDATES
Signing of an LTPA Foundation Contract
BAE Systems and the UK Ministry of Defence took a significant step towards an air sector Long Term Partnering Agreement (LTPA) when they signed an LTPA Foundation Contract on 1 March. This sets out a framework, milestones and partnering principles for continuing negotiations with our UK customer, aimed at concluding a long-term, legally binding LTPA by year-end.
First ASRAAM firings for Typhoon
Typhoon passed another milestone on its journey to become a fully operational UK Royal Air Force multi-role combat aircraft, with the first firings of Advanced Short-Range Air-to-Air Missiles (ASRAAM) from a frontline squadron aircraft. Four ASRAAMs were successfully launched.
Typhoon is being positioned in anticipation of an imminent RFP (Request for Proposal) from the Indian Air Force for their MRCA (multi role combat aircraft) programme.
Typhoon air-to-ground capability acceptance
Typhoon achieved one of its first major milestones of the year when the four partner nations of Germany, Italy, Spain and the UK, agreed with the customer air forces the standard for the initial air-to-surface capability and improved air-to-air functionality.
This key event allows all the remaining Tranche 1 aircraft to be delivered, as well as aircraft in the Retrofit 2 upgrade programme and initial deliveries to Austria - the first export customer.
F-35 Lightning II flight schedule progressing well
Following its successful first flight in December, the first F-35 Lightning II conventional take off and landing (CTOL) variant, AA-1, has continued to make good progress through its flight schedule in Fort Worth, Texas, US.
M777A1 system approval
The M777 Integrated Project Team recently received the news that full materiel release has been approved in the US for M777A1. This means that full permission has been given to use this equipment without any restrictions, and effectively means that it is now fully in service.
CWID Framework Agreement signed
A Framework Agreement signed with the UK Ministry of Defence (MoD) confirms Insyte’s key role as UK ISTAR Integrator at the Coalition Warrior Interoperability Demonstration (CWID) 2007. This is in support of Directors Equipment Capability (DEC) Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR) and Command, Control and Information Infrastructure (CCII). The agreement was endorsed in December following Insyte’s recognised success as ISTAR integrator at CWID 2006.
Insyte will support the UK MoD by leading and managing the integration of over 20 pan-industry Intelligence, Surveillance, Target Acquisition and Reconnaissance (ISTAR) capabilities. This enables the demonstration of solutions to fill existing UK MoD capability gaps in a real operational context.
Partnering Principles document signed
A formal signing ceremony was held at Abbey Wood on 8 March, endorsing the Partnering Principles Document (PPD) signed between the UK Defence Procurement Agency (DPA)/UK Defence Logistics Organisation (DLO) and Insyte in December 2006, under the auspices of the Operational Partnering Initiative (OPI).
The agreement covers Insyte’s Maritime ‘footprint’, outlining the principles with which the DPA/DLO (shortly to become the DE&S) and Insyte will take a through-life approach to combat systems across a variety of Royal Navy ships and submarines. The agreement identifies three initial work streams under which opportunities will be investigated: combat management system coherence; sensor coherence; and training coherence.
Astute milestones
The primary circuit that will power first of class submarine Astute has been filled for the first time. This is the culmination of a huge effort across Submarine Solutions and opens up commissioning on the vital reactor line.
It is being followed by cold and hot operations, which prove the integrity of the circuit and pave the way for loading the reactor core, completion of which is a major programme milestone. The next major milestone is vessel launch, scheduled for 8 June.
Targets achieved on boat 3
Two important milestones have been achieved on the third Astute class submarine Artful, marking its full transition into production. Welders have achieved the boat’s first major anchor/payment milestone – the build and weld of the reactor primary circuit loops.
This was to schedule and puts the boat team in a good position to achieve the reactor build schedule, which is critical to the overall boat programme.
CONTRACT AWARDS THIS MONTH
Artillery improvement programme
As part of an incremental programme to deliver increased artillery capability to the British Army for the next two decades (Indirect Fire Precision Attack (IFPA)), BAE Systems has been awarded a £30m contract to manage the second Assessment Phase and the Loitering Munition Capability Demonstration (LMCD).
The assessment phase will be carried out by a joint team of BAE Systems’ Future Systems and UK Ministry of Defence employees and will assess and review maturing munitions and technologies and associated performance, time and cost envelopes against future Defence Planning Assumptions.
Contract for work on two amphibious transports
BAE Systems San Diego Ship Repair has been awarded a cost-plus-award fee contract by the Naval Sea Systems Command for work on two LPD-17 San Antonio-class amphibious transport dock ships, USS New Orleans (LPD 18) and USS Green Bay (LPD 20).
The three-year contract, with an initial value of $11.3m, is for fitting out availability (FOA) and post shakedown availability (PSA) work on both ships from 2007-2009. The first job, the USS New Orleans FOA, is tentatively scheduled to begin in May.
All work will be completed at BAE Systems San Diego Ship Repair and the total value of the contract could reach $50m if all options are exercised.
Link 16 Saudi MIDS contract
The Electronics & Integrated Solutions (E&IS)/Rockwell Collins joint venture Data Link Solutions (DLS) won a $34.8m contract from Warner Robins Air Logistics Center, Georgia, to provide Link 16 Multifunctional Information Distribution Systems (MIDS) capability to the Kingdom of Saudi Arabia.
Link 16 provides real time data communications, situational awareness and navigation in a jam-resistant, crypo-secured package. The award marks Saudi Arabia’s first purchase of MIDS and includes deliveries of the MIDS LVT-3 Fighter Data Link to be incorporated on the Saudi F-15 fleet.
Four military support contracts won
Electronics & Integrated Solutions (E&IS) has received four Department of Defense contracts for operational support of current military programs. In separate contracts with the US Air Force and Navy, E&IS’ Platform Solutions will perform capability assessments for several Air Force bases, provide engineering services for the Navy’s F/A-18C/D fighter, upgrade Air Force F-15A-D rate sensor assemblies, and update technical orders for the Air Force National Guard Bureau.
Novel Satellite Communications contract
The Defense Advanced Research Projects Agency (DARPA) has selected Electronics & Integrated Solutions (E&IS) to lead a team of 10 companies to develop the Novel Satellite Communications (NSC) program. NSC will protect uplink signals to satellites against hostile jamming using advanced signal processing techniques to enable uninterrupted communications.
Second phase of MOKYS awarded
The Slovak Ministry of Defence has awarded Electronics & Integrated Solutions (E&IS) the second phase of an interoperable mobile military communications system known as MOKYS, which combines handheld and manpack radios with integrated security and automated command and control routines. The $30m contract is for development and delivery of seven prototype systems to the Slovak armed forces.
M88A2 HERCULES recovery vehicles
On 5 March, BAE Systems announced it was awarded a $7m contract modification from the US Army TACOM Life Cycle Management Command to remanufacture and upgrade four M88A2 HERCULES recovery vehicles. Work will be completed at the company's York, Pennsylvania facility by January 2010.
Pilot monitoring facility
BAE Systems Australia has been awarded a AUD$14.5m Contract Change Proposal (CCP) by the Australian Defence Force to provide additional Pilot Monitoring Facility’s (PMF) to the Royal Australian Air Force (RAAF).
This CCP builds on the Australian Military Airspace Control and Communications System (AMACCS) initially developed, delivered and currently being supported by BAE Systems under project AIR 5397.
The additional PMF’s will be integrated and tested at the North Ryde facility in New South Wales, Australia and distributed to nominated units and provides an extension of the RAAF’s ground to air communications capability. A total of 35 PMF sets will be delivered and installed across 35 RAAF sites in both Australia and Malaysia over the two year program.
Lead-In Fighter In-Service Support contract extension
BAE Systems Australia has been awarded a AUD$342m contract by the Australian Defence Force to provide continuing In-Service Support (ISS) to the Lead-In Fighter (LIF) fleet from April 2007 to June 2011.
This new contract provides a solid basis for the continued through-life support of the 33 aircraft Hawk LIF fleet at Royal Australian Air Force (RAAF) Williamtown (New South Wales) and RAAF Pearce (Western Australia) to 2011 and beyond.
Mistral order from Estonia
On 28 February, the Estonian Ministry of Defence signed a contract valued at around €60m with MBDA and SAAB AB for the supply of Mistral air defence missiles (MBDA) and associated Giraffe AMB radars (SAAB AB).
This latest selection makes Estonia the ninth European country and the 27th in the world to be equipped with a Mistral weapon system.
Kuwait orders Aspide 2000
Kuwait has awarded MBDA a €65m contract to upgrade its Aspide air defence missile batteries, deployed by the Kuwaiti air defence brigade, to the improved Aspide 2000 configuration. The contract, to be performed over three years, covers the modernisation of the standard Aspide missile.
Archerfish contract
Underwater Systems has recently announced that its Archerfish sea mine neutralisation vehicle has been selected by the US Navy on a sole source supply basis.
Hawk support contract secured
Training Solutions has been awarded an initial £74m contract by the UK Ministry of Defence to support the Hawk TMk1/1A aircraft of the UK Royal Air Force (RAF) and UK Royal Navy (RN).
The Hawk Integrated Operational Support (Hawk IOS) contract will ensure agreed levels of sorties can be carried out by the UK’s Hawk fleet through to 2011, and will save around £18m for the customer. RAF Valley, RAF Leeming and RNAS (Royal Naval Air Station) Culdrose, will be supported directly by BAE Systems and Babcock Defence Services, which currently carries out Hawk maintenance.
The solution breaks new ground for BAE Systems in its relationship with the RAF and RN in that forward (i.e. Flight Line) operations are being directly supported by BAE Systems personnel, supported by its principal contractor Babcock Defence Services
