Defense Watch

Defense Daily, Dec 8, 2008

New Team. Boeing announces it is teaming with Creative Technologies Inc. (CTI) Hollywood, Calif., to explore new training solutions for the military and law enforcement. The agreement brings together Boeing's expertise in aviation training systems and CTI's experience in game-based simulations for ground forces training. Mark McGraw, vice president for Training Systems and Services, a division of Boeing Integrated Defense Systems Global Services and Support, says: "We are committed to finding new ways to use the talents of both companies to expand the services we're able to offer the military." The agreement formalizes an ongoing relationship--CTI contributes to the Boeing Future Combat Systems program, and Boeing and CTI are partners in the Army's Fires Center of Excellence integration effort at Fort Sill, Okla.

Diamond Quality. BAE Systems says its won a five-year indefinite- delivery/indefinite quantity contract valued up to $78.5 million from DoD for Information Operations Family of Systems (IOFoS). The system is based on BAE's Diamond(tm) open software architecture. It will be a family of systems that provides full capability while minimizing the number of fielded units. Under this contract, BAE will provide DoD with analysis, research and development, field support and sustainment, as well as the production of IOFoS units. Deliveries are scheduled to begin in 2009 and continue through 2013.

Cash Back. Defense firms are now a "leading sector" in the economy in terms of generating free cash flow and returning it to shareholders, Sanford Bernstein aerospace and defense analyst Douglas Harned says. In 2005, the defense sector moved to the top in terms of generating free cash flow yields but was relatively weak in terms of returning that cash to shareholders. "Today, however the story is very different, with more shareholder-oriented management teams that are deploying cash more effectively," Harned writes in a note to clients. "We appear to be past the days of using cash in aggressive diversification or acquisition strategies, particularly with few large acquisition candidates available." Firms typically return cash to shareholders through stock repurchases, which tends to boost earnings per share and dividend payments.

A Good Hand. Raytheon's advanced countermeasures electronic system, known as ACES, has been selected the Royal Moroccan Air Force's F-16 aircraft, the company says. Morocco purchased 24 Block 52 F-16s from Lockheed Martin. ACES consists of a radar warning receiver, digital jammer and chaff-flare dispenser. Raytheon's contract, received from Lockheed Martin, calls for deliveries to begin in December 2009.

On Wisconsin. The future USS Green Bay (LPD-20) has "sailed away" from Northrop Grumman Shipbuilding's Avondale Operations Dec. 1 on its maiden voyage, manned for the first time by the ship's crew, the Navy says. LPD-20 will first sail to its homeport of San Diego, before steaming to Long Beach, Calif., for commissioning in January 2009. Once commissioned, Green Bay and its crew will begin a succession of sea trials to thoroughly test the ship's systems and to complete crucial certifications, the Navy adds. Meanwhile USS Mesa Verde (LPD- 19) is completing its Post Shakedown Availability in its homeport of Norfolk, Va., the Navy says.