February 25, 2013
On Monday, the Department of Defense announced that it has awarded defense contractor Northrop Grumman (NYSE: NOC ) a pair of contracts worth a combined $77.9 million.
The larger of the two contracts, a $71.2 "modification" (i.e., an add-on) to an existing contract, calls for Northrop to provide engineering services related to the production and passing of acceptance tests on Global Hawk unmanned aerial vehicles. Work on this contract should be complete by the end of 2014.
The second, small contract is for $6.7 million, a firm fixed price, and calls on Northrop's Maritime Systems division to perform design, production, and testing works on Integrated Bridge Navigation System equipment for the DDG 51 modernization program. This is the program under which the Navy performs upgrades and "modernization" work on Arleigh Burke-class guided missile destroyers as the ships reach their "approximate midlife point (17 1/2 years)."
According to the Pentagon contract announcement, up to three ships per year are to undergo this modernization every year through fiscal year 2017. It is currently unclear whether this pace will be maintained in the face of sequester, but the instant contract is expected to be completed by June 2014.