March 13, 2013
On Tuesday, the Department of Defense announced the award of more than $50 million via two new contracts for Northrop Grumman (NYSE: NOC ) . Both contracts fall under the broad category of "electronic warfare" products, but one is offensive, and the other defensive.
The larger, offensive equipment award calls upon Northrop to supply $30 million worth of "contractor logistics support services" on the company's "precision geo-location and non-traditional intelligence, reconnaissance and surveillance" radar pod, the AN/ASQ-236, for the U.S. Air Force. The AN/ASQ-236 is an externally mounted, self-contained antenna and radar system installed on the Boeing F-15E Strike Eagle. Northrop is to service the equipment in question through March 11, 2016.
The larger, defensive award is a $20.6 million contract modification through which Northrop will provide both hardware and support services for the Air Force's Large Aircraft Infrared Countermeasures System (LAIRCM). LAIRCM uses Northrop's high-intensity Viper Laser to target and blind incoming heat-seeking missiles, to disable them before they can engage a defended aircraft. LAIRCM is already installed on some Sikorsky CH-53E helicopters. The Pentagon has been working to expand its deployment on fixed-wing transport aircraft, such as C-17 and C-130 transports, as well as other helicopters. The current contract, however, is labeled "involves Foreign Military Sales" -- so deployment plans may extend beyond U.S. military forces.
LAIRCM is estimated to cost approximately $3 million per unit, adding $3 million to the cost of each aircraft upon which it is installed. Northrop's work on the instant LAIRCM contract is to be completed by April 30, 2015.