A Note From Our President & Founder Jim Garrettson
What will the U.S. government services market look like when we enter 2016 and who will be in it? We received some clarity to that question early Thursday morning when Britainâs BAE Systems said it would hold onto its U.S. government manpower and services business and not push forward on efforts to sell the unit.
Market conditions, company valuations, federal budget movement and recent contract wins are the shifting sands that make handicapping the GovCon marketplace and this potential sale a murky equity equation and best left to those with an appetite for risk while eliminating the faint of heart.
BAE launched a review of the business in April after the worldâs third-largest defense contractor reported âexternal interest and a number of enquiriesâ for the unit that posted $800 million in revenue during its last fiscal year.
GovCon observers are now shifting their attention toward Lockheed Martin and L-3 Communications to find out what those companies will do with their respective government services segments.
Both companies have indicated to Wall Street they would like to reach a decision by the end of this year on whether to sell their respective units as a whole, offload in pieces or spin them off entirely into publicly-traded businesses.
One factor that could decide both outcomes is the Federal Reserveâs December meeting as investors are betting interest rates will rise from the near-zero levels Lockheed cited in its rationale behind the $9 billion Sikorsky acquisition.
Lockheedâs services unit posted nearly $6 billion in 2014 revenue and L-3âs services business recorded $1.1 billion in sales last year.
Congress OKs Revised Fiscal 2016 Defense Bill
House and Senate negotiators took out $5 billion from this new version to fall within limits set by the recent two-year budget agreement.
The Defense Security Cooperation Agency has notified Congress of a proposed $1 billion military training contract extension with the government of Saudi Arabia. The move was announced Friday following the State Department’s approval of the foreign military sale, which will require deploying 339 U.S. government or third-party personnel to Saudi Arabia for at least one
The State Department has approved Saudi Arabia’s potential $582 million foreign military sale request to procure hardware and software from the U.S. government to replenish and modernize its RE-3A tactical airborne surveillance system aircraft fleet. The proposed FMS deal covers seven Global Positioning System/Inertial Navigation System security systems with selective availability anti-proofing module and five
The State Department has approved Saudi Arabia’s request to procure combat vehicle fleet services from the U.S. government for $500 million as part of a Cooperative Logistics Supply Support Arrangement program, Foreign Military Sales Order II. The potential deal covers the provision of common spares and repair parts for the Saudi Arabian army’s fleet of