IT Deal Tops $19 Billion in April Contracts
A group of companies, including a unit of General Dynamics Corp., won the U.S. Defense Department’s biggest contract last month, a $6.9 billion deal for information-technology equipment.
The Air Force selected eight companies to supply it with computers, networking equipment and biometric hardware in a six-year deal potentially valued at $6.9 billion under a program called Network Centric Solutions, or NETCENTS-2, according to the April 19 announcement.
The award topped a list of more than 200 contracts with a combined value of almost $19 billion in April, according to a Military.com analysis of the Pentagon’s daily contract announcements. That figure doesn’t reflect what is actually spent, or obligated, because many deals are only partially funded at first.
Four out of the top five were so-called multiple-award contracts. Under these kinds of arrangements, companies win seats on the contract, then compete against each other for individual orders.
Two closely held companies, Science and Engineering Services LLC and Support Systems Associates Inc., shared the second-largest contract, a $1.5 billion deal with the Army to provide aviation services.
A group of five companies received an Air Force award potentially valued at $950 million for civil engineering services. A group of 15 companies, including the world’s largest defense contractor, Lockheed Martin Corp., won a Navy contract potentially valued at $900 million over five years for support services related to combat systems, intelligence and reconnaissance.
Lockheed, based in Bethesda, Md., also landed the fifth-largest contract, an $830 million agreement with the Air Force to provide 18 F-16 fighter jets and related equipment and services for the Iraqi military.
The Pentagon in 2011 notified Congress of the so-called foreign military sale to Iraq. The deal, estimated at $2.3 billion, will also include weapons such as Sidewinder missiles, Paveway II laser-guided bombs and radar, according to a release from the Defense Security Cooperation Agency.
The Army also issued contracts to extend by another six months early development of the Ground Combat Vehicle, the tank-like tracked vehicle designed to replace the Bradley Fighting Vehicle.
The service on April 23 awarded $180 million to General Dynamics, based in Falls Church, Va., and $159 million to the U.S. subsidiary of London-based BAE Systems Plc. That’s on top of the $440 million it awarded to General Dynamics and the $450 million it awarded to BAE in 2011 to begin developing the technology for the vehicle.
Army Secretary John McHugh this week defended the vehicle as “a highly viable program” and “one of our critical modernization efforts going forward.”
Whether the vehicle will survive the downturn in defense spending is uncertain. The Defense Department’s budget request for fiscal 2014, which begins Oct. 1, recommended delaying the program by a year partly in response to automatic budget cuts and a strategic shift to the Asia-Pacific region.