The Insider

All About That Base
By Courtney Albon
March 5, 2015 at 6:27 PM

The Air Force and Raytheon are working together to solidify a new program baseline for the next-generation Global Positioning System ground control center, after continued delays to the program triggered a Pentagon-level review last month.

In a March 3 email, a service spokesman told Inside the Air Force that the February deep-dive review focused on past and future development challenges as well as detailed cost, schedule and performance assessments.

The program was rebaselined last year due to execution delays and the spokesman said the new program baseline is currently under coordination.

Engility Sales, Profit Drop
By Marjorie Censer
March 3, 2015 at 5:25 PM

Engility said today that sales in its most recent quarter declined to $319.5 million, down nearly 3 percent from the same three-month period a year earlier.

Profit fell more steeply, down to $3.5 million from $11.6 million in the same quarter last year.

Tony Smeraglinolo, Engility's chief executive, said in the announcement that the company is still experiencing delayed contract awards and start dates.

L-3 Expects M&A Increase
By Marjorie Censer
March 3, 2015 at 2:14 PM

Defense contractor L-3 Communications is seeking to boosts its acquisitions, the company's chief financial officer said today at a J.P. Morgan conference in New York City.

Ralph D'Ambrosio acknowledged that L-3 has done only "very modest" mergers and acquisitions in the last few years. However, "the improvement in the [Defense Department] budget is going to make us more inclined to invest in business acquisitions," he said.

L-3 is seeking targets that are available, he added, noting that "we don't like to force transactions . . . because it tends to lead to overpaying."

"We'll continue to look for businesses that fit well with L-3 and that provide attractive economic returns," D'Ambrosio said. "I expect that you're going to see an increase in the pace of M&A at L-3 in short order."

Orbital ATK Talks M&A
By Marjorie Censer
March 3, 2015 at 2:12 PM

David Thompson, the chief executive of Orbital ATK, said at a J.P. Morgan conference today that in the mid- to long-term, the company may seek acquisitions or reshape its business.

Speaking at the New York City event, Thompson said that the $4.4 billion company, created last month by merging Orbital with ATK's defense and aerospace groups, is still in the early stages of its integration process.

"I do like the mix of businesses we have today," he added.

However, the company may make changes in the future.

"I wouldn't rule out over the mid- to long-term either smaller acquisitions to enhance what we have or potentially shaping the portfolio in other ways," Thompson said. "But at this point, I think it's premature really to speculate on how that might play out."

Lookingglass Acquires CloudShield
By Marjorie Censer
March 2, 2015 at 1:32 PM

Lookingglass Cyber Solutions announced today that it has acquired CloudShield, which specializes in deep packet processing.

Lookingglass said in its announcement that the deal will improve its offerings for commercial businesses as well as government agencies. The combined company will have more than 130 employees.

Reaper Offered To Spain
By James Drew
March 2, 2015 at 11:59 AM

General Atomics Aeronautical Systems has teamed up with a Spanish firm to offer its multimission MQ-9 Reaper to Spain, which has a requirement for a new surveillance and reconnaissance aircraft.

The union between GA-ASI and SENER, a Spanish technology company, comes just weeks after the Obama administration announced a new policy on the export of these types of remotely piloted aircraft. The MQ-9 is marketed abroad as the Predator B.

"GA-ASI is fully committed to working with Spanish industry as we believe this program's success requires local industry partnerships that provide collaborative innovation in enhancing the capabilities of Predator B for the Spanish Government," GA-ASI Aircraft Systems President Frank Pace said in a March 2 press statement.

The offer to Spain comes after the State Department approved the sale of MQ-9s to the Netherlands and an announcement by Australia that some of its airmen are in the United States learning to fly the Reaper.

The United Kingdom, France and Italy have each stood up Reaper squadrons and Germany is interest in acquiring a similar capability through the foreign military sales process.

In the press statement, SENER Vice President Andrés Sendagorta said the company is pleased to partner with the GA-ASI on "this challenging project" to supply the Reaper to the Spanish Ministry of Defense.

Ricardo Creates U.S. Defense Unit
By Marjorie Censer
February 27, 2015 at 11:48 AM

British company Ricardo said today it has formed a U.S. defense subsidiary and is moving through the approval process for a special security agreement.

The subsidiary, called Ricardo Defense Systems, will be based at Ricardo's existing campus in Van Buren Township, MI. The company said the new organization will make use of Ricardo's knowledge of wheeled and tracked vehicles, powertrain, electronics and software engineering.

Exelis Sales, Profit Fall
By Marjorie Censer
February 27, 2015 at 10:20 AM

Exelis, which has agreed to be acquired by Harris, reported today that its sales and profit in 2014 fell.

The contractor boosted its sales of products slightly to $2.1 billion, but services revenue fell slightly to cut total annual sales to just shy of $3.3 million, down about 2 percent from 2013.

Profit reached $249 million, down from $281 million the previous year. The contractor said revenue in its C4ISR electronics and systems segment rose slightly, buoyed by increased sales of airborne and ship-based electronic warfare equipment. Exelis' information and technical services business saw sales decline, "driven by lower activity on the U.S. Air Force Spacelift Range Services program and several other services contracts."

Earlier this month, Harris said it had agreed to acquire Exelis in a $4.75 billion deal that marks a major step to consolidate the defense industry.

Tangible Software Settles
By Marjorie Censer
February 25, 2015 at 4:12 PM

Contractor Tangible Software has agreed to pay the U.S. government between $500,000 and $1.05 million to settle allegations that it submitted false claims to the Defense Department from 2008 to 2011, the U.S. Attorney's Office for the District of Maryland announced today.

The settlement resolves allegations that the company -- under prior management -- knowingly submitted reimbursement claims associated with contracts with the General Services Administration and the Defense Information Systems Agency that were higher than the company's actual costs.

Under the deal, Tangible will make payments above the minimum settlement payment of $500,000 based on the company's financial performance over the next five years as well as the outcome of a lawsuit against the prior management, the attorney's office said.

Kelley Drye Expands Contracting Practice
By Marjorie Censer
February 25, 2015 at 3:29 PM

Law firm Kelley Drye & Warren is building up its government contracts practice group, adding partners Dorn "Bo" McGrath and William Jack as well as associate Amba Datta.

McGrath and Jack join from Barnes & Thornburg, where they were both partners in the firm's corporate department. McGrath focuses on federal, state and local contracts and construction contracts, while Jack represents contractors before the Government Accountability Office, the U.S. Court of Federal Claims and the Board of Contract Appeals.

Datta was previously a law clerk for a judge at the U.S. Court of Federal Claims.

Kelley Drye said in its announcement that the firm saw significant growth in its contracting practice in 2014.

IBM Touts 'Brain-Inspired' Chip
By Marjorie Censer
February 24, 2015 at 5:01 PM

Representatives from IBM gathered today with members of Congress to celebrate development of a neurosynaptic computer chip -- a chip meant to mimic the skills of the human brain.

The chip was developed with support from the Defense Advanced Research Projects Agency. IBM said the agency has contributed $53 million to the effort since 2008.

The IBM-built chip integrates memory and computing power, just as the human brain does. At today's event on Capitol Hill, Dharmendra Modha, who founded the cognitive computing group at IBM Research, said the effort sought to mine mother nature.

"The long-term goal of the project is to actually build literally a brain in a box," he added.

Now, Modha said, IBM and its partners are weighing applications for the technology, from home health care to monitoring forests or oceans. "In some sense, this really marks a very significant moment," he told reporters after the event.

Blakey Leaving AIA
By Tony Bertuca
February 24, 2015 at 12:46 PM

Marion Blakey will be stepping down as president and CEO of the Aerospace Industries Association to become president and CEO of Rolls Royce North America, according to an announcement from AIA.

AIA noted that Blakey "led the establishment of a broad-ranging campaign to alert elected officials and the general public of the significant impact to our nation and the aerospace and defense industry of sequestration and budget cuts imposed under the Budget Control Act of 2011."

Despite this advocacy, the BCA defense cuts are still poised to occur when sequestration is triggered in fiscal year 2016 unless Congress overturns the law.

"I'm very proud of AIA's record of achievement these last seven years," Blakey said in the statement. "I strongly believe we've strengthened AIA and better positioned the organization and our member companies to inform and influence the debate on key issues facing our country and our industry in the coming years."

Blakey's successor has yet to be named.

Shareholders Approve Engility Deal
By Marjorie Censer
February 23, 2015 at 4:24 PM

Engility shareholders today approved the company's acquisition of TASC, the contractor said.

With the approval in hand, Engility now expects the $1.1 billion deal to close on Thursday.

Israel Buys More F-35s
By James Drew
February 23, 2015 at 1:04 PM

Israel will purchase 14 more F-35 Joint Strike Fighters at an average cost of $110 million per aircraft, the country's Ministry of Defense announced in a Feb. 23 press statement.

The deal brings the country's total order for the Lockheed Martin-built jet to 33, and includes an option for 17 more aircraft, according to the statement.

Israel was the first country to join the F-35 program as a foreign military sales customer, with an initial order for 19 aircraft placed in 2010.

This latest deal with the United States was formalized last November, the MOD said.

Israel's first two F-35As are being assembled as part of low-rate initial production Lot 8 and are due for delivery in late 2016.

Unisys Hires CSC Exec
By Marjorie Censer
February 23, 2015 at 12:30 PM

Tom Patterson, the former global general manager of CSC's cybersecurity consulting business, has been named vice president of global security solutions at Unisys, the company said today.

Patterson has also worked at MagTek, Deloitte, KPMG and IBM. He founded Command Information, which was later acquired.

At Unisys, he will oversee the strategy and development of security offerings for both commercial and public sector clients around the world, the company said.