BAE Systems Investor Brief - December 2006
End of December 2006
In This Month’s Brief:
- Taranis Technology Demonstrations Programme
- A first and final for Hawk
- F-35 Lightning II
- Wing to fuse join for first Nimrod MRA4 production aircraft
- F3 upgrades near completion
- Key milestones for Meteor
- PAAMS (Principal Anti-Air Missile System) C2 hardware deliveries commence
- Almirante Cochrane handed over to Chilean Navy
- Support agreement for Chile Frigates
- Hornet Industry Coalition contract
- Strategic Systems Programs contract
- E&IS to provide jammers to defeat IEDs
- Army gets more refueling systems
- GRIDS to improve warfighter intel
- Flight Control Computer kits
- RG31 MK5 vehicles and Integrated Logistic Support contract
- Option to convert 335 M113A3 Family of Vehicle (FOV)
- Contract mod for HERCULES recovery vehicles
- Contract mod for systems technical support and logistics services
- New Bradley remanufacture and upgrade contracts
GENERAL NEWS
San Diego facility scores new CMMI Level 5
E&IS’ National Security Solutions is the first company to be rated Level 5 in systems and software engineering maturity using the new Capability Maturity Model Integration (CMMI®) version 1.2.
Level 5 is the highest SEI rating. It means the company is operating at the “optimizing level” in its systems and software development processes. A number of US based BAE Systems facilities have achieved CMMI Level 5 certification under previous guidelines: Santa Clara, Ca.; Wayne, N.J.; Reston, Va.; and Minneapolis.
Queen’s Silver Medal
A submarines apprentice has become the first from Barrow, and the first female, ever to win the prestigious Worshipful Company of Shipwrights’ Queen’s Silver Medal for the best shipbuilding and ship repair apprentice in the country. Gemma Halshaw was chosen for the medal and £1,500 prize ahead of top apprentices from around the country.
MAJOR PROGRAMME UPDATES
Taranis Technology Demonstrations Programme
BAE Systems has succeeded in securing its position as prime contractor for the UK Ministry of Defence’s (UK MoD) £124m Taranis Technology Demonstrator Programme. This was confirmed by Lord Drayson at a special event in London on Thursday 7 December at the Institute of Physics.
The four year Programme will involve designing, developing and flying a substantially-sized Unmanned Air Vehicle demonstrator which will help the UK MoD to assess the potential of UAV's as part of the armed forces mix.
BAE Systems' Autonomous Systems & Future Capability unit at Warton will lead the industry group driving the contract. BAE Systems will be working with QinetiQ, Rolls-Royce and Smiths Aerospace on the contract together with a range of tier 2 suppliers.
A first and final for Hawk
On 11 December, the first Indian Hawk Advanced Jet Trainer (AJT) took to the skies on schedule for its maiden flight, at BAE Systems’ Warton facility. The Hawk Mk132, designated HT001 and specifically tailored to meet the Indian Air Forces requirements, took the air for a 7 minute flight.
Also on 15 December, the final two of six Hawks destined for the Royal Bahrain Air Force (RBAF), were officially accepted by the Bahrain Defence Force. The Hawks, along with a package of equipment, support and training also being provided by BAE Systems will enable the Royal Bahrain Air Force to train its frontline pilots and develop an indigenous military flying training capability.
F-35 Lightning II
BAE Systems employees are celebrating their part in a historic occasion – successful completion of first flight of the F-35 Lightning II. The first F-35 Lightning II aircraft - a Conventional Take Off and Landing variant – took to the skies above Lockheed Martin’s site in Fort Worth, Texas at 18.45 (UK time) on Friday 15 December. The aircraft was in the air for 40 minutes, during which time it performed a variety of manoeuvres to test aircraft handling and the operation of the engine and subsystems, before landing back at its Fort Worth base.
Wing to fuse join for first Nimrod MRA4 production aircraft
An important milestone has been achieved to plan by the commencement and continuing success at Woodford of the wing to fuse join up on the first Nimrod MRA4 production aircraft, PA4. This involves the first full 'tip to tip' wing manufactured at Woodford.
F3 upgrades near completion
The final three of the 73 Tornado F3 aircraft to be upgraded in the F3 sustainment programme are on target for completion by the end of the year. This will complete the current contract, a successful programme that has received a Chief of Defence Logistics commendation.
Key milestones for Meteor
The end of 2006 has seen a major programme success with the acceptance by the 6-nation customer organisation of Key Milestone 1 on 4 December. This is the first of the four Key Milestones (KMs) placed upon MBDA to demonstrate the maturity of the product and that the programme is on time.
KMs 2 and 3 have both been submitted ahead of schedule and a formal response on these is awaited from the customer. KM4 is on schedule and Seeker Data Gathering flights against the scenarios for KM4 were flown in November.
PAAMS (Principal Anti-Air Missile System) C2 hardware deliveries commence
A major programme milestone was reached at the end of November with the delivery of a full set of C2 hardware to HMS Daring in Glasgow. Prior to delivery, the equipment successfully passed its Factory Acceptance Test at MBDA in Stevenage, witnessed by a number of customer representatives.
On the SAMPSON radar programme, a further significant milestone has been achieved with the delivery of the third Multi-Function Radar prototype, P3, to the Type 45 MISC (Maritime Integration Support Centre) on Portsdown Hill, near Portsmouth, at the end of November.
Almirante Cochrane handed over to Chilean Navy
The first of three ex Royal Navy Type 23 frigates has been officially handed over to the Chilean Navy in a ceremony at Portsmouth Naval Base. BAE Systems was appointed as Prime Contractor for the preparation of the vessels following a government to government agreement. Fleet Support Limited has been responsible for the majority of the physical preparation under the contract managed by CS&S Naval.
CONTRACT AWARDS THIS MONTH
Support agreement for Chile Frigates
An agreement has been signed for the provision of support to the three Type 23 frigates being transferred to the Chilean Navy. The contract covers the vessels for the period they are in the UK before they depart for Chile. Discussions are also underway on a longer term support solution for the vessels.
Hornet Industry Coalition contract
CS&S Australia has signed the first major F/A-18 Hornet upgrade contract as part of the Hornet Industry Coalition (HIC). The contract will deliver a range of avionic, structural modifications and deeper maintenance to sustain the longevity of the Royal Australian Air Force’s Hornet fleet. The contract will be in place until the introduction of a longer term In-Service Support contract which is anticipated late in 2007. The Hornet Industry Coalition consists of Boeing Australia, BAE Systems and L3MAS of Canada.
Strategic Systems Programs contract
Technology Solutions & Services (TSS) has been awarded a $71.7m contract from the US Navy's Strategic Systems Programs (SSP) based in Washington, D.C. TSS will provide system integration support for the Trident II (D5) Fleet Ballistic Missile (FBM) Strategic Weapon System (SWS) program and the nuclear-powered guided missile submarines (SSGN) Attack Weapon System program.
The contract is a continuation of a range of system engineering, test, analysis, IT, and logistics solutions performed by BAE Systems for SSP since 1956. The contract contains options, which if exercised, would bring the total contract value to $165.679m.
E&IS to provide jammers to defeat IEDs
Electronics & Integrated Solutions has received a $79.5 (£40.3)m contract from the US Navy to provide Dismounted Counter Radio-Controlled Improvised Explosive Device Electronic Warfare (D-CREW) systems to meet urgent Department of Defense requirements in support of Operation Iraqi Freedom and Operation Enduring Freedom.
The contract calls for up to 3,800 wearable jammers to defeat radio-controlled detonators used on some improvised explosive devices (IEDs). The wearable electronic signal-jamming systems will be used by forces in each of the military services.
Army gets more refueling systems
Electronics & Integrated Solutions has received a $31.6 (£16)m order from the US Army for 119 portable combat helicopter refueling systems. It is the 14th order in a production run that now totals 362 units — bringing the total contract value to date to $94.3 (£47.9)m.
The Advanced Aviation Forward Area Refueling Systems (AAFARS) are used by U.S. troops deployed in Iraq and Afghanistan, principally to fuel AH-64 Apache, UH-60 Blackhawk, and CH-47 Chinook helicopters.
GRIDS to improve warfighter intel
Electronics & Integrated Solutions' Network Enabled Solutions (NES) has been named principal teammate to Science Applications International Corporation (SAIC) on a contract to develop an enhanced intelligence capability for US Army troops and air crews. The system will provide faster access to geospatial and human intelligence information.
NES joins prime contractor SAIC for the Geospatial Research, Integration, Development and Support (GRIDS) contract recently awarded by the Army Corps of Engineers' Topographic Engineering Center. GRIDS is an indefinite - delivery/indefinite-quantity contract with a total ceiling value of $250 (£126.9)m that will combine geospatial intelligence with information collected by tactical ground and air forces to improve the quality and availability of information.
Flight Control Computer kits
Electronics & Integrated Solutions’ Platform Solutions has received a $13.7 (£7.2)m order from NEX1 FUTURE Co., Ltd. (NEX1), for Flight Control Computer (FLCC) kits for the Republic of Korea’s T/A-50 aircraft. The order includes 47 shipsets of FLCCs plus spares.
RG31 MK5 vehicles and Integrated Logistic Support contract
Land Systems OMC, in association with General Dynamics Land Systems Canada (GDLS-C), has been awarded a contract for the supply of RG31 vehicles to the US Army. This is a follow on order for a further 60. Vehicle delivery will commence in January 2007.
Option to convert 335 M113A3 Family of Vehicle (FOV)
The US Army awarded a 335 vehicle option to convert variants of the M113 FOV from the A2 to the A3 configuration in November 2006. The $87.9m award to the BAE Systems Vehicle Upgrade Facility in Anniston completes the options under a contract awarded in 2005. The total contract value is now $228m with 871 vehicles being converted through September 2008. These vehicles are needed to support the US Army’s modularity requirements.
Contract mod for HERCULES recovery vehicles
BAE Systems was awarded a $251m contract modification from the US Army TACOM Life Cycle Management Command to remanufacture 113 M88A2 HERCULES recovery vehicles, provide spare parts and extend system technical support for the US Army. Work will begin immediately at the Company's York, Pa. facility, with vehicle deliveries scheduled to begin in December 2007 and continuing through November 2009. This is the largest continuous production run of M88A2 vehicles since the program began.
Contract mod for systems technical support and logistics services
Under a new contract modification for systems technical support and logistics services,
BAE Systems will supply training services in the way of New Equipment Training Teams (NETT) to support the training of new Bradley crews receiving Bradley A3 and ODS based vehicles over the next year. The training will be provided to both active force and National Guard units receiving Bradleys in 2007.
New Bradley remanufacture and upgrade contracts
BAE Systems has received contract modifications worth $1.16bn from the US Army TACOM Life Cycle Management Command to remanufacture and upgrade 610 Bradley Combat Systems and to provide spare components for these systems.
BAE Systems, working through its Public Private Partnership with Red River Army Depot (RRAD), will remanufacture and upgrade 490 Bradley A3 systems and 120 Bradley A2 (ODS) systems under the awards.
Initial disassembly and subsystem rebuild will be performed at RRAD, final disassembly and structural modifications will be performed by BAE Systems in Fayette County, Pennsylvania, and final assembly, integration and test will be conducted at the BAE Systems facility in York, Pennsylvania.
Work on the contracts will begin immediately, with deliveries scheduled to begin in April 2008 and run through April 2009.
