Defense Business Brief: All eyes on Austin, Milley budget testimony; MAG/L3Harris win Army surveillance contract; Questionable hypersonic test; and more.
Wall Street is watching what some believe will be a pivotal week in determining whether Congress will add, or maybe even subtract, from the Pentagon’s $842 billion fiscal 2024 spending request.
Unlike the past two years, when there was a bipartisan push to increase spending due to high inflation and pandemic-related supply chain issues, this year has had a different feel, with control of Congress split. In the Republican-controlled House, there is a group of far-right lawmakers joining progressive Democrats in opposition to record-high peacetime spending levels for the military. Defense Secretary Lloyd Austin and Joint Chiefs Chairman Gen. Mark Milley are scheduled to appear before the Senate Armed Services Committee on Tuesday and House Armed Services Committee on Wednesday.
“We don't expect final answers on the top line, but we're looking to see how confident defense hawks are about boosting FY24,” TD Cowen analyst Roman Schweizer wrote in a Monday note to investors. “There are multiple issues on big programs and this is [the] first chance for details.”
We’ll be watching.
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If you’re in Huntsville, Alabama, for the Association of the U.S. Army’s annual Global Force symposium, make sure you say hello to our new Army reporter Sam Skove. You can follow him on Twitter here.
The Army has reportedly chosen a MAG Aerospace/L3Harris Technologies team to perform intelligence, surveillance, and reconnaissance missions for a five-year period. The deal is worth $552 million, William Blair analyst Louie DiPalma wrote in a March 23 note to investors. The MAG-L3Harris team beat Leidos and Sierra Nevada. “Winning ATHENA-R is strategic as it gives MAG Aerospace an advantage toward winning ATHENA-S, which is expected to be awarded this fall. It also positions MAG Aerospace to be a leading contender for the future HADES program,” DiPalma wrote. For some background about ATHENA-R, check out our story from December about the plane Leios has built.
Additionally, the Army has chosen Lockheed Martin to develop advanced propulsion for the Long Range Maneuverable Fires missile. “The missile can be fired from existing Army launchers to defeat distant threats at ranges that significantly exceed those of the PrSM baseline,” the Army said in a statement. “To reach a significantly extended range with launcher volume constraints, Lockheed Martin’s solution will employ unique design elements and key technologies to address size and endurance challenges.”
Of note: U.S. Indo-Pacific Command included $151 million on its unfunded priorities list sent to Congress last week, which in part would go toward PrSM.
Meanwhile the Air Force said it tested an AGM-183A Air-launched Rapid Response Weapon, called ARRW, on March 13. The key word missing in this March 24 statement is successful. Instead, the Air Force said the test of the “full prototype operational hypersonic missile … met several of the objectives and the ARRW team engineers and testers are collecting data for further analysis.” ARRW has a checkered past. The Air Force budget, which was sent to Congress the same day as the questionable test included no procurement money for hypersonic weapons in its fiscal 2024.
Defense tech startup Anduril has partnered with the National Offshore Wind Research and Development Consortium to inspect undersea power infrastructure. “Under this partnership, Anduril’s autonomous undersea vehicle (AUV), the Dive-LD, will inspect an existing export power cable from Block Island to Point Judith, Rhode Island, by the end of 2023,” the company said. “The Dive-LD is a modular and customizable commercial large displacement AUV that can be optimized for various defense and commercial mission types, such as bathymetric and geophysical surveys, long-range oceanographic sensing, undersea battlespace awareness, mine countermeasures, anti-submarine warfare, seabed mapping, and infrastructure health monitoring.”
HII named Julie Jarrell Gresham vice president and chief counsel of the company’s Ingalls Shipbuilding division. She will succeed George Simmerman, who will retire March 31, 2023, after 32 years with the company. Gresham previously served as deputy chief counsel and director of compliance and privacy.