The Boeing Co. (BA) recently won a sizable contract from the U.S. Department of Defense (DoD) for engineering logistical support services for all H-47 helicopter variants. The contract is worth $499.1 million.
Per the contract, Boeing will provide services comprising technical, engineering, logistics, data analysis, technical data reproduction, supportability, and management requirements for post-production, sustainment and fleet support for all H-47 helicopter variants. The contract will run through Dec 31, 2019. The Army Contracting Command, Redstone Arsenal (Aviation), AL is the contracting activity.
Boeing is one of the major players in the defense business. Its broadly diversified programs, strong order bookings and order backlog enable it to compete on an equal footing with the likes of Lockheed Martin Corp. (LMT), Northrop Grumman Corp. (NOC) or General Dynamics Corp. (GD).
The company’s fighter jets, the rotorcraft line-up and 737-based military derivatives are seeing brisk demand in the international markets. The strongest opportunities for Boeing Defense, Space & Security (BDS) businesses this year are in the Middle East and Asia-Pacific regions. The company is also expanding its presence in cyber security, intelligence and surveillance and unmanned systems, where growth rates are higher than the overall defense budget. With a stringent budget environment, rising foreign military sales (FMS) contracts are more than welcome.
Recently, India approved proposals to acquire 22 Boeing AH-64E Apache attack helicopters and 15 CH-47F Chinook heavy lift helicopters for the Indian Air Force. The transaction is valued at $2.5 billion and is a part of the country’s plans to beef up its military strength.
Boeing is optimistic of achieving its 2014 defense revenue target of $30.0 billion to $31.0 billion and an operating margin of approximately 9.5% largely on the strength of FMS deals.
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