A new 2010 Aerospace & Defense (A&D) market survey released today by CSC found that substantive changes in U.S. defense policies, system priorities and budgets, and the effects of the global recession on commercial aerospace are driving new growth strategies within the A&D industrial base. The globally representative survey queried 2,200 senior and mid-level executives at leading global A&D companies to identify the current and near-term issues facing the A&D industry in today’s global market and economic dynamics.

The survey also revealed that A&D industry executives have significant concerns regarding market contraction, regulatory complexity, and technology, knowledge and talent management. However, these executives are also seeing growth opportunities in non-traditional sectors such as cybersecurity, renewable energy, and physical and information infrastructures. In order to pursue growth, both in their core defense and aerospace sectors and in these new markets, survey results showed businesses are focusing on the following approaches:

1. Innovation in products and services
2. Preservation of core product and manufacturing capabilities
3. Expansion of foreign military sales
4. Acceleration into adjacent commercial markets
5. Retention of institutional knowledge
6. Creation of new value chain networks to deliver continuous performance improvement

“We are entering a new era in the Aerospace & Defense industry given the change in U.S. government policy as well as the continued effects of the recession,” said Eileen Sweeney, president, Global Manufacturing Industry Sector, CSC. “Future growth for the industry is contingent upon developing new business strategies and models to pursue new markets and using technology to enable this shift.”

In addition to surveying respondents about general business strategy and areas for growth, the 2010 A&D market survey solicited responses about program management, engineering and production operations, supply chain, aftermarket/MRO, compliance and security, and human capital. Additional findings included:

• Most companies today rate themselves as average in the performance of their program management
• Companies believe that they can gain a competitive advantage by ensuring the free and rapid flow of information between both their engineering and production operations teams and between internal and external value chain partners
• The top three challenges to their global supply chains, as ranked by respondents, are lead time and schedule performance, supply chain event management and collaborative planning
• The majority ranked the following as the most significant emerging trends in aftermarket/MRO: shift to performance-based logistics, outsourcing of non-core services, and international supplier certifications and quality
• Most companies today consider themselves to be early adopters of new or emerging business information technology
• Many of the respondents, despite high unemployment in the U.S., reported that they are currently experiencing a shortage of qualified workers or expect a shortage within the next five years.

These findings came from an online survey of 2,200 global A&D industry executives from Aviation Week & Space Technology’s subscription database. The CSC survey was conducted online in late 2009. For complete results of the survey, visit www.csc.com/A&Dsurvey_2010.

Atlas Air announced that Boeing has selected Atlas Air to provide key supply-chain support for the production of Boeing’s all-new commercial jetliner, the 787 Dreamliner.

Beginning toward the latter part of 2010, Atlas Air will operate Boeing’s Dreamlifter fleet of four 747-400 aircraft that have been modified to transport major assemblies for the 787 Dreamliner from suppliers around the world to Boeing production facilities in the United States.

The parties have structured the nine-year agreement in a manner consistent with the outsourcing business model under which Atlas Air typically operates. Under that model, Atlas Air will receive contractually determined revenues for the operation of the Dreamlifter aircraft, with Boeing assuming responsibility for certain direct costs, including fuel. Under the CMI arrangement, Boeing will provide and maintain ownership of the aircraft assets.

“Atlas Air is very excited to partner with Boeing as it ushers in a new era in air travel with the first all-new jet airplane of the 21st century,” said William J. Flynn, President and Chief Executive Officer of Atlas Air Worldwide Holdings, Inc. “We look forward to working closely with Boeing and to providing world-class Dreamlifter service.

“Our dynamic customer solutions and our ability to integrate with our customers’ operations set us apart from other participants in the aircraft operating solutions market. We believe that our global scope and scale, high-quality service and reliability, cost-effective operations, and premium customer service create a compelling value proposition for our customers.”

Mr. Flynn added: “We are well positioned to execute on our growth initiatives and to drive future revenues and earnings. In addition to the expected start-ups of our new CMI service for Boeing in the second half of this year and for SonAir in the second quarter, we are focused on introducing our new Boeing 747-8 freighters into service in 2011 and on adjacent dry leasing opportunities in our Titan subsidiary.

“When fully implemented, we expect that the annual contribution per aircraft from our Dreamlifter service will meet or exceed the current average contribution that we achieve in our 747-400 ACMI service.”

L-3 Communications announced that its Command & Control Systems and Software (C2S2) division has been awarded a cost-plus-fixed-fee contract by the U.S. Navy for systems engineering and technical support services. This is a one-year award with four option years. If all options are exercised, the total contract value will be $187.4 million.

Under this contract, L-3 will provide a broad array of services, including systems engineering and integration, avionics, software and air vehicle technology insertion, environmental engineering, program performance and engineering assessment, analysis, and planning.

“This contract award represents a significant opportunity to support the Navy’s programs over their entire life cycle – from systems design to reclamation and disposal,” said C2S2 president John Medea. “The renewal of this contract affirms our 26-year relationship with our NAVAIR customer and allows our seasoned professionals to continue to provide exceptional support to the warfighter.”

L-3 C2S2, headquartered in Eatontown, N.J., has more than 3,400 employees worldwide and assists its customers in moving technology from concept to deployment by providing systems and software engineering and integration, software development, sustainment and modernization, training, field support services, and logistics capabilities. With established credentials in C⁴ISR and aviation technologies, C2S2 supports multiple services within the Department of Defense and other federal agencies. To learn more about L-3 C2S2, you can visit the company’s Web site at www.L-3Com.com/C2S2.

Headquartered in New York City, L-3 Communications employs over 66,000 people worldwide and is a prime contractor in aircraft modernization and maintenance, C³ISR (Command, Control, Communications, Intelligence, Surveillance and Reconnaissance) systems and government services. L-3 is also a leading provider of high technology products, subsystems and systems. The company reported 2009 sales of $15.6 billion.

BAE Systems had some good news this past week when they announced that the company is developing the mission computer system suite for the P-8I aircraft for the Indian Navy. The aircraft is a variant of the U.S. Navy’s P-8A Poseidon.

Developed by a Boeing-led team, the P-8I is a multi-mission maritime patrol aircraft with a broader range of capabilities to operate over land or water while performing anti-submarine warfare; search and rescue; and long-range intelligence, surveillance, target acquisition, and reconnaissance.

“Maritime surveillance and patrol is becoming more and more important to effective defense,” said Donna Linke-Klein, director of mission computers and antenna solutions for BAE Systems. “The P-8I mission computer system provides superior interoperability for the future battle space.”

BAE Systems’ mission computer system suite for the P-8I is a flexible and ruggedized processing platform that can be configured to meet the general purpose, input and output, video, voice, and graphics processing needs for modern military battle management requirements.

The P-8A Poseidon is a long-range; anti-submarine warfare; anti-surface warfare; intelligence, surveillance, and reconnaissance aircraft. The Indian government selected Boeing to provide eight P-8I aircraft to fill its maritime patrol needs, replacing Tupolev Tu-142M aircraft.

BAE Systems will begin deliveries to Boeing in 2011.

This past month has been a very busy time for defense contracts, and following up on the news we covered this week, CACI International announced that it has been awarded a prime contract by the Fleet and Industrial Supply Center, Norfolk, Detachment Philadelphia, to provide technical services to support the Fleet Assistance and Shipboard Training (FAST) program. The award, which is for one base year with four one-year options, has a current value of $31 million that could increase to $190 million if all options are exercised. CACI will perform the work at various U.S. Navy and Marine Corps facilities stateside, overseas, and on board naval vessels. As the prime incumbent for these services for more than two decades, CACI continues to demonstrate its expertise in logistics analysis and training. Additionally, the company continues to increase its role in Navy and Marine Corps support, which is a key component of its core logistics and material readiness line of work.

The FAST program provides a wide range of support for afloat and deployable automated supply management programs and services for the Navy and Marine Corps. This support consists of on-site assistance, training, and analysis; formal training; database validation, correction, and reconciliation, and inventory reconciliation.

CACI’s role is to provide FAST users with comprehensive and innovative logistics, inventory, training, and financial management solutions that help improve automated supply operations and fleet readiness. The FAST program focuses on program-level, user-level, and other functional solutions that address and resolve supply problems from an applications, systems, and training perspective. To achieve this goal, CACI’s solutions apply experience, expertise, tools, and performance monitoring to meet the operational, technical, and programmatic challenges of supporting our Navy’s ships, battle groups, aircraft, and Marine Corps aircraft in maintaining optimum readiness at all times. CACI also supports the design, prototyping, and evaluation of new logistics applications and concepts.

Bill Fairl, CACI’s President of U.S. Operations, said “We’re very pleased that, with this award, the Navy and Marine Corps continue to demonstrate such a high level of confidence in our logistics analysis and training expertise. The CACI team is proud to be able to play such a vital role in helping these armed services accomplish their missions.”

According to CACI President and CEO Paul Cofoni, “Serving the nation’s highest priorities has always been high on our agenda at CACI. This important award is very welcome, as it enables us to support and enhance the highest levels of readiness for the Navy and the Marine Corps as they carry out their missions around the world.”

The Navy has awarded Alion Science and Technology, an employee-owned technology solutions company, a $71.8 million task order to provide acquisition management support to the Program Executive Office for Ships, Acquisition Management (PEO Ships AM) Directorate.

Under the five-year-contract, Alion will provide program management, business and financial planning, acquisition and configuration management, and Enterprise Resource Planning (ERP) implementation support to the Directorate. Alion will help PEO Ships AM acquire and manage Government-Furnished Equipment (GFE) and Government-Furnished Information (GFI) for several ship classes, including the DDG 51, DDG-1000, Littoral Combat Ship (LCS) Sea Frame, Cruiser Modernization, Destroyer Modernization, LCS Mission Module program and the Egyptian Fast Missile Craft (EFMC) programs.

“Alion provides an experienced, well-integrated team solution to ensure PEO Ships AM delivers its products on time, on budget and without technical risks,” said Kevin Lees, Alion Senior Vice President and Manager of the Acquisition Programs Management Group. “Alion understands that the DDG 113 and Aegis Cruiser and Destroyer Modernization efforts will be a major thrust for PEO Ships and PEO Ships AM and will significantly impact their already tremendous workload. The Alion Team will play a critical industry leadership role in working with senior military and government personnel to provide programmatic and technical details regarding these critical programs to ASN RDA and DASN. We are directly involved in and knowledgeable of every aspect of PEO Ships AM’s mission and we will leverage our expertise to ensure the Directorate has continued success in the future.”

Alion leads a team of contractors on the PEO Ships AM program. Partners include TASC, The Columbia Group, Delta Resources and Triumph Enterprises, Inc. The contract runs until December 16, 2014.

PEO Ships AM is responsible for GFE and GFI acquisition for ship classes. This includes, but is not limited to, acquisition strategy, budgeting, procurement, preparation of ship project directives and establishing appropriate procedures and controls.

CSC announced that the U.S. Army Materiel Command (AMC) issued the company two contract modifications to continue providing information technology and logistics services under the Army’s Logistics Modernization Program (LMP) contract. Both modifications have two-year periods of performance and an estimated combined total value of $261 million. These contracts were won during CSC’s third quarter ending January 1, 2010.

Overall, CSC will continue to provide comprehensive services required to reengineer and modernize the Army’s logistics processes through the adoption of best commercial business practices and associated technologies. Under the terms of the first modification, CSC will support the sustainment of the modernized system, and on the other, CSC will provide services for future deployment and implementation activities.

“These task orders solidify our position as the leader in the Army’s national level logistics modernization program,” said Austin Yerks, president of CSC’s North American Public Sector Defense Group. “We are honored to play a crucial role in assisting the Army as it transforms its 30-year-old logistics business processes and practices through innovative modernization alternatives and implementation strategies.”

The LMP is one of the world’s largest, fully integrated supply chain, maintenance, repair and overhaul, planning and execution solutions and stands at the center of the Army’s business transformation initiatives. AMC has more than $40 billion in diverse services and goods, a portfolio of six million items and global operations spanning more than 1,000 dynamic locations in 38 countries. The LMP delivers real-time situational awareness and decision-making capabilities—allowing the Army to provide service to warfighters more quickly and cost effectively.

CSC first won the LMP contract in 1999 to provide a fully integrated suite of software and business processes. Working in collaboration with the AMC, CSC is the prime contractor, program manager, systems integrator, applications service provider and full partner.