General Dynamics Corp.
) has received two contracts from the Department of Defense
(DoD). The total contract value comes to $54.7 million.
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As part of the award win, General Dynamics unit − General
Dynamics Advanced Information Systems Inc. − received a sizeable
$29.7 million contract for engineering and technical
services in support of the AN/BYG-1 tactical control system for
U.S. Navy submarines.
This is a cost-plus-incentive-fee modification contract under
which the company will continue to transfer the AN/BYG-1 Tactical
Control System from a Technology Insertion (TI-10) baseline to a
TI-12, incorporate Advanced Processing Build (APB-13) and
instigate development of the TI-14 baseline. General Dynamics
will deliver multiple variants of the system aboard multiple
submarine platforms. The work is due for completion by July next
Under the second contract, General Dynamics Information
Technology, a general Dynamics business wing, won a $25 million
modification contract for about 300,000 hours of integrated
logistics services for technical analysis and investigations of
Foreign Military Sales (FMS) programs. FMS mainly refers to the
programs under which the U.S. government operates as an
intermediary between the U.S. defense contractors and foreign
governments willing to procure their weapons systems. General
Dynamics expects to wrap up the work on this second contract by
September next year.
General Dynamics has a long-standing business association with
the U.S. defense establishments and tries to meet its commitments
in terms of maintaining products and services standard along with
The performance of defense operators primarily depends on the
orders coming from the national and international defense
establishments. U.S. defense budget cuts due to the ongoing
sequester could impact the performance of the defense operators.
We believe these small-ticket domestic as well as overseas orders
will enable the defense pros to retain a regular revenue inflow.
General Dynamics currently has a Zacks Rank #3 (Hold). Other
stocks from the sector that are presently performing well include
Erickson Air-Crane Inc.
The Boeing Company
Northrop Grumman Corporation
). While Erickson carries a Zacks Rank #1 (Strong Buy), Boeing
and Northrop Grumman retain a Zacks Rank #2 (Buy).