BAE Systems Investor Brief - June 2007
02 Jul 2007
In This Month’s Brief:
GENERAL NEWS
- Indirect Procurement Service wins excellence award
- Department of Defense award
- Composite manufacturing facility wins Shingo Prize
- UK Best Practice Award for commitment to environment
- Insyte welcomes new MD
- Astute launch
MAJOR PROGRAMMES UPDATES
- Hawk IOS contract goes live
- F-35 Lightning II STOVL aircraft
- More firsts for MRA4
- Future Rapid Effects System (FRES)
- Meteor key milestones
- Fourth Astute-class submarine
- Astute support contract
- Fourth Landing Ship Dock (Auxiliary)
CONTRACT AWARDS THIS MONTH
- Engineering and technical services contract
- Software development contract
- Schofield Barracks recompete
- Sensors for U.S. Navy
- Malaysian Navy Gun contract
- FV430 Upgrade contract
- Australian Army contract
GENERAL NEWS
Indirect Procurement Service wins excellence award
A specialist magazine for Procurement professionals: ‘European Leaders Procurement’ has presented BAE Systems Indirect Procurement Service (IPS) with an award for Procurement Excellence. The award submission was based on the IPS journey of 'turning an overhead cost into a revenue stream'.
Department of Defense award
BAE Systems and the U.S. Navy have jointly received a Department of Defense (DoD) Value Engineering Achievement Award for improving the performance of the ALQ-99 radar and communications jammer.
The award recognised the Navy-BAE Systems team for establishing a programme to reduce life-cycle costs and improve operational availability of the ALQ-99 as a radar jammer that protects strike aircraft and ships by disrupting enemy radar signals.
The DoD Value Engineering Achievement Award is an incentive for government and industry to improve innovation and creativity through “value engineering” — a process of identifying actions that reduce cost, increase quality, and improve mission capability.
Composite manufacturing facility wins Shingo Prize
Electronics & Integrated Solutions’ (E&IS) Advanced Composite Manufacturing (ACM) facility in Merrimack, N.H., has earned a Gold award from the Northeast Shingo Prize office for “excellence in manufacturing.”
The Shingo Prize is North America’s premier manufacturing award program. It was established in 1998 in honour of manufacturing expert Dr. Shigeo Shingo.
ACM provides structurally embedded composite antennas used on many military programmes, including the F-22 and Joint Strike Fighter.
UK Best Practice Award for commitment to environment
Surface Fleet Solutions has been praised by the Scottish Parliament for its achievement of a Business Commitment to the Environment UK Best Practice Award, in recognition of efforts to reduce the use of solvent-based paints.
The team has changed the method for painting warships, leading to reductions in the use of over 12,000 litres of paint and in the production of 10 tonnes of volatile compound emissions, a cut in landfill by over 300 tonnes and cost savings of tens of thousands of pounds.
Insyte welcomes new MD
Guy Griffiths joined BAE Systems Integrated System Technologies (Insyte) on 1 June as the new Managing Director following the departure of Clive Richardson. Guy brings with him over 28 years experience within the defence industry and joined Insyte from MBDA where he had been the Chief Operating Officer since October 2002.
Astute launch
More than 10,000 people saw the Duchess of Cornwall name first of class submarine Astute at Barrow on Friday 8 June. Among the 420 invited guests who attended the naming and roll-out ceremony were Minister for Defence Equipment and Support Lord Drayson, First Sea Lord Admiral Sir Jonathon Band, Chief of Materiel (Fleet) Vice Admiral Trevor Soar, and Secretary of State for Work and Pensions, Barrow MP John Hutton.
MAJOR PROGRAMMES UPDATES
Hawk IOS contract goes live
The Hawk Integrated Operational Support (IOS) contract, which will see BAE Systems ensure agreed levels of sorties can be carried out by the UK’s Hawk fleet through to 2011, went live on 1 June.
Military Air Solutions and Babcock Defence Services will provide fleet and supply chain management, forward and depth maintenance, and technical support for Hawks based at RAF Valley and RAF Leeming. In addition, a spares availability service will be provided to RAF Scampton, home of the Red Arrows, and to MoD Boscombe Down. RNAS Culdrose will also be included in the contract from April 2008.
This contract 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, which currently provide Hawk maintenance support.
F-35 Lightning II STOVL aircraft
The Military Air Solutions F-35 Lighting II Assembly Team have 'shipped' the vertical tails for the first short take off and vertical landing (STOVL) variant to industry partner, Lockheed Martin, on schedule.
These will be followed by the horizontal tails within the next few weeks. This follows the delivery of the first aft fuselage for the STOVL variant. The first aircraft, BF-1, will see all the major airframe parts 'mated' over the coming weeks. Its first flight is due mid 2008.
More firsts for MRA4
The Nimrod MRA4 has been deployed on an ‘operational mission' for the first time, participating in exercise Neptune Warrior. The Royal Navy exercise was staged in international waters off the Scottish coast in early May and involved UK and allied warships. Crewed by a joint BAE Systems and RAF crew, PA3 worked with a Trafalgar-class submarine in a successful sortie.
The exercise provided the opportunity for the MRA4 to visit its future operational base of RAF Kinloss. Over 300 RAF personnel were shown around the aircraft and the reaction was extremely positive.
Future Rapid Effects System (FRES)
BAE Systems SEP 8x8 has not been selected to participate in the FRES "Trials of Truth" programme for the utility vehicle this summer. SEP had the greatest growth potential but was the least mature.
The FRES utility vehicle designer downselect does not affect BAE Systems commitment nor its belief that BAE Systems can bring significant benefit to the roles of Vehicle Integrator and System of Systems Integrator.
BAE Systems key skills in systems engineering and project management, combined with the company’s broad domain knowledge in armored fighting vehicles and integrated land systems, can deliver great benefits to the FRES programme.
Meteor key milestones
As part of the Meteor Beyond Visual Range Air-to-Air Missile contract, MBDA was required to complete four "tightly defined" Key Milestones as part of the development programme, to provide the six Customer or Partner Nations with proof of the level of technical maturity and progress against the programme.
The acceptance of the fourth, and final, key development milestone on 7 June, for demonstration of the key electronic countermeasures performance and its ability to counter certain severe jamming threats, was a major success for the programme.
Fourth Astute-class submarine
The UK Ministry of Defence has announced a contract for approximately £200m for the start of construction of the fourth Astute-class nuclear powered attack submarine, to be named Audacious.
The contract runs to March 2008 and covers initial build work. The MoD aims to contract for the whole submarine by late 2008, subject to agreeing detailed terms and conditions.
Astute support contract
Submarine Solutions has been awarded a UK Ministry of Defence contract for approximately £10m for technical services to support the first three Astute-class submarines in-service. This contract runs to December 2012 and involves the BAE Systems Technical Authority partnered with the UK MoD’s Approval Authority to act as the Design Authority for the submarines.
Fourth Landing Ship Dock (Auxiliary)
The fourth and final of the LSD(A)s, RFA Lyme Bay, left Govan shipyard on Friday 15 June - 2 months ahead of schedule - to commence sea-trials following successful final inspections where the ship exceeded all expectations.
CONTRACT AWARDS THIS MONTH
Engineering and technical services contract
Technology Solutions & Services has won a US$26.1 million contract modification from the U.S. Navy to continue providing engineering and technical services in support of identification systems which today’s military forces rely on to distinguish friendly forces from enemy forces.
The work, to be conducted at the Naval Air Warfare-Aircraft Division, Patuxent Naval Air Station in Maryland, supplements a previously awarded cost-plus-fixed fee contract and is to be completed by April 2008.
Software development contract
BAE Systems Information Technology won a US$49.9 million contract from the Air Force Research Laboratory to provide life-cycle software development engineering for the Department of Defense Intelligence Information Systems (DoDIIS) and the U.S. intelligence community worldwide.
Schofield Barracks recompete
Technology Solutions & Services won the Schofield Barracks recompete contract to provide logistical support and services to the U. S. Army Garrison Hawaii at Schofield Barracks on Oahu and at the Pohukaloa Training Area (PTA) on the Island of Hawaii.
The support includes all project management requirements, supply and services support, transportation support, and equipment maintenance support to the 25th Infantry Division and other key military customers in Hawaii and the Pacific Region. The base period begins September 1 2007.
Sensors for U.S. Navy
Electronics & Integrated Solutions (E&IS) has been named sensor subcontractor for Raytheon Technical Services Company’s Shared Reconnaissance Pod (SHARP) Target Cueing System demonstration.
Under the US$2.3 million contract, BAE Systems will use its Spectral Infrared Imaging Technology Testbed (SPIRITT) high-altitude hyperspectral technology to automatically detect, classify, and identify camouflaged and concealed targets based on their spectral signature.
Malaysian Navy Gun contract
BAE Systems Bofors has been awarded a contract worth US$10 million from the Malaysian Navy. They have ordered a Life Time Extension for twelve 57 mm Mk1 navy guns already mounted on Malaysian ships. In addition the Malaysian Coast Guard has ordered two 57 mm Mk 1 navy guns.
Malaysia, with more that 100 BAE Systems Bofors guns installed, continues to be an important market for the company.
FV430 Upgrade contract
Land Systems has been awarded a £70 million contract amendment by the UK Ministry of Defence to upgrade the power train of a further 400 FV430 series vehicles for the British Army. The original contract, signed in October 2005, included the upgrade of the engine, transmission and other systems to 500 FV430 series vehicles. The upgraded vehicles are designated as FV430 Mark 3.
Performance on the original contract has been exemplary. Schedule adherence has been critical with all milestones successfully achieved whilst concurrently managing Urgent Operational Requirements on the upgraded vehicles by fitting additional armour and weapon stations for operations in Iraq. The uparmoured, upgraded vehicles, designated Bulldog by the British Army, have been successfully deployed on the streets in Basra by the 2nd and 4th Rifles.
Australian Army contract
BAE Systems Australia has been awarded a A$15 million contract by the Australian Defence Force (ADF) to provide ten Message Centre Assemblages (MCA) to the Australian Army as part of Project PARAKEET.
The contracted work scope will include the design, manufacture and qualification testing of two prototype MCAs followed by the manufacture, test, delivery and introduction into service of ten MCAs. The delivery of the MCA's to the Australian Army is expected to be completed within 38 months, commencing in June 2007.
