Home / News / Weekly Roundup Sept 28 – Oct 2 2015: Frank Kendall’s Outlook on Defense Sector Consolidation & More

Weekly Roundup Sept 28 – Oct 2 2015: Frank Kendall’s Outlook on Defense Sector Consolidation & More

Weekly Roundup
Sept 28 – Oct 2 2015

A Note From Our President & Founder Jim Garrettson

The military’s chief weapons buyer sought to throw cold water this week on the idea of consolidation among the U.S.’ largest prime contractors in a year that has seen a rapid pace of merger-and-acquisition deals in the government contracting industry.

Frank Kendall — defense undersecretary for acquisition, technology and logistics — told a group of reporters Wednesday the Defense Department wants Congress’ help to examine methods to limit consolidation among the U.S.’ top weapons manufacturers, Defense News reported.

Kendall said he expects to start the conversation with Congress within the next few months and cited legal and policy tools as potential means to preserve the defense industrial base’s current landscape of prime contractors and suppliers.

According to the Wall Street Journal, Kendall raised no objections to Lockheed Martin’s planned acquisition of helicopter maker Sikorsky for $9 billion that cleared the antitrust approval process last week and said he did not directly address any specific deal in his comments.

This year has seen a flood of GovCon M&A deals not seen since the early 1990s such as Harris Corp.’s purchase of Exelis, the future CSC Government Services’ pending acquisition of SRA International, SAIC’s buy of Scitor and Engility’s deal for TASC.

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Our newsroom editor Ross Wilkers spoke with Federal News Radio live Thursday morning for a segment to analyze what Kendall’s comments could mean for GovCon’s M&A market and other developments from September surrounding the GovCon Index, Executive Mosaic’s composite stock index of 30 contracting firms.

The Index traded Monday and Tuesday in correction territory, or 10 percent down from its most recent high, before a jump Wednesday to close above that mark.

Wilkers and “In Depth” host Francis Rose examined how the Index was subject to the same global economic headwinds that dragged U.S. markets in September, how the upcoming earnings season could give a picture of the GovCon sector’s health and Aerojet Rocketdyne’s move to get in the action on 2015’s M&A spree.

Click here to listen to the full 9-minute segment that aired Thursday.

THIS WEEK’S TOP NEWS STORIES

Obama OKs 10-Week Govt Funding Extension
Federal agencies will continue to operate at current funding levels through Dec. 11 as lawmakers and the White House work on a longer-term spending package.
Kevin Kelly: LGS Eyes ISR Portfolio Growth Through Axios Buy
Axios is headquartered in Dulles and makes signal processing and communications technology products for military and intelligence agencies.
Gene Colabatistto: CAE Completes Buy of Bombardier Military Flight Training Business
Montreal-based CAE becomes the prime contractor on NATO’s “Flying Training in Canada” program and takes in 200 more employees.
Army Vet John Davis Joins Palo Alto Networks as Federal Chief Security Officer
Davis served as senior military adviser for cyber to the defense undersecretary for policy before he retired in May.
Ret. Brig. Gen. Frederick Henry Named DISA Business Lead at Unisys
The 30-year Army veteran previously served as the agency’s chief of staff and will help oversee cybersecurity and application modernization work at Unisys.
DHA Vet Allen Middleton Heads to Booz Allen
Middleton retired from government service in the spring after a four-decade career that concluded with service as deputy director at the Defense Health Agency.
Lt. Gen. Arnold Bunch: Air Force Bomber Contract Delayed for ‘Couple of Months’
One Northrop Grumman-led team and a Boeing-Lockheed Martin group are in the running for the contract.
PSC Unveils Study of Federal CTO Role in Innovation Efforts
Casey Coleman of Unisys and Robin Lineberger of Deloitte will oversee the project to explore ways for CTOs to help agencies take in new technologies.
IBM’s Andras Szakal, Dan Chenok Overview FedRAMP’s Mobile Offerings
Szakal and Chenok describe the government’s efforts to link mobile technologies with cloud computing platforms.
Inmarsat’s Rebecca Cowen-Hirsch: DoD Eyes Industry Partnerships for Transition to ‘Satcom as a Service’
Cowen-Hirsch, an SVP at Inmarsat, says vendors should offer this model to soldiers in search of on-demand satellite communications services.
Gulu Gambhir: Leidos, Virginia Tech to Research Big Data Usage for Healthcare Field
The company and university will examine how healthcare organizations can extract large amounts of data from electronic health records.
$612B Defense Policy Bill Clears House
House lawmakers voted 270-156 Thursday to clear the legislation and the Senate is scheduled to take up the bill next week despite a veto threat.
Ashton Carter Recommends Veto of DoD Policy Bill for FY 2016
The defense secretary says the $38 billion war funding allocation in the latest defense authorization bill avoids mandatory budget caps.
James Clapper, John McCain Express Doubt on US-China Cyber Cooperation
Clapper, national intelligence director, tells Senate lawmakers the agreement does not specify sanctions in case China violates the pact.

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