Weekly Defense Industry Roundup

Posted by Fred Wellman

Defense Companies Target Health Care

Marjorie Censer, Washington Post. We have been seeing this trend for a while as defense firms look to diversify into revenue producing areas in anticipation of coming budget cuts. One area is the health care management field as both Lockheed Martin and General Dynamics have made acquisitions in recent weeks to strengthen their positions in this section of DoD that won’t see significant cuts.

Army to Industry: Help Us Save Money, Time

Joe Gould, Army Times. In a presentation Thursday the military deputy to the Army’s acquisition executive, LTG William Phillips, outlined how the Army wants to move away from pie-in-the-sky acquisitions with “stupid requirements” toward more pragmatic approaches for buying new equipment. Essentially they will want to work with industry to seek interim solutions with existing technology that can be delivered on time, on budget and in significant numbers rather than extravagant programs seeking new and undeveloped technology with massive R&D costs. This sounds like a good plan but anyone who has been around the military knows that the “bright idea fairy” is a constant companion. Limiting ambitions will be the real challenge.

Citi: Defense Sector Stocks Undervalued

Associated Press, Forbes. In an analysis that is bucking the current pessimistic outlooks on defense, Jason Gursky with Citi Investment Research and Analysis is moving defense stocks to the buy category. He lays out a compelling case with the already low stock prices, historic trends in defense spending, opportunities in other countries and ongoing world-wide threats.  Gursky believes the downward trend on aerospace and defense stocks is bottoming out and he is placing a host of defense companies in the “buy” category. He makes a compelling argument.

ATK Is Moving Headquarters to Virginia for Proximity to Pentagon

Roxana Tiron, Bloomberg. Yet another major defense manufacturer is moving their corporate offices to the Washington, DC area as Alliant Techsystems, commonly called ATK, is moving from Minneapolis to Arlington, VA. ATK is the leading small arms manufacturer for DoD. This follows the recent move by Northrop Grumman into Falls Church, VA which is also home to General Dynamics. The DC suburbs have become the center of gravity for the defense sector.

How the Pentagon’s Policies Hurt U.S. Manufacturing

Loren Thompson, Forbes. Thompson returns to a theme he has touched on in recent months that the defense cuts and poor foresight on the part of the Pentagon are undermining the U.S. manufacturing base and endangering U.S. security. He makes the case that DoD has a mission to help preserve the national defense manufacturing base and that the Pentagon is not even considering the loss of U.S. capacity in its budget calculations, much to the danger of the nation as a whole.

Panetta Warns DoD Small-Biz Contracting Goal is Impending

Matthew Weigelt, Defense Systems Magazine. Secretary of Defense Panetta has warned DoD senior leaders that they are not on track to meet federally mandated small business contracting goals for this fiscal year. Just a few weeks are left before the end of the budget cycle. The Department has a goal of 22.3% of all contracts to go to small businesses. It has often struggled to even come close to that goal as incumbent contractors and large defense corporations dominate most of the contracting space in the Pentagon.

McKeon: Temporary Spending Measure Necessary for FY 2012

Kate Brannen, Defense News. It looks like Congress has already admitted failure in their duties to pass an annual budget and is already planning on a continuing resolution for the 2012 defense budget. This will be the second year in a row the department has had to muddle through with the previous year’s funding levels stalling new programs and locking in uncertainty.

The Spy Who Tweeted Me:  Intelligence Community Wants to Monitor Social Media

Sharon Weinberger, Danger Room, In another example of government agencies wishing to mine the conversations in social media to use as a predictive tool, the Intelligence Advanced Research Projects Activity (IARPA) has pushed out the Open Source Indicators program. The secretive organization wishes to use publicly accessible information to predict trends such as revolutions and riots before they become “crowd sourced.” It all sounds innocent enough but what is really publicly accessible and when does monitoring becomes shaping?

Fred Wellman with General Petraeus in Iraq

Fred Wellman, President ScoutComms, brings us his weekly review of defense industry news via The Scout Report. Fred served over twenty years as an Army officer in both aviation and public affairs. You can follow Fred on Twitter @ScoutComms.

This entry was posted on Friday, September 09, 2011 12:31 pm

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