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Boeing-Lockheed JV Wins $882M U.S. Modification Contract

United Launch Alliance ("ULA"), a joint venture of Lockheed Martin CorpLMT and The Boeing Co.BA , has won a modification contract worth $882.1 million from the U.S. Air Force for Evolved Expendable Launch Vehicle (EELV) capability for the Delta IV and Atlas V family of launch vehicles.

The contract includes mission assurance, program management, systems engineering, mission integration, base and range support, maintenance, depreciation on equipment, integration of space vehicle with launch vehicle, launch site and range operations, and launch infrastructure maintenance and sustainment in 2016.

The contract will run through Sep 30, 2016. The company will execute work at Littleton, CO; Vandenberg Air Force Base, CA. and Cape Canaveral Air Station, FL.

Contracting activity is the Space and Missile Systems Center, Los Angeles Air Force Base, CA. The number of launch vehicles in the contract remains undisclosed.

EELV, the U.S. Air Force's space lift modernization program, commenced in 1994. The objective of the program is to make space launch vehicles more cost-effective and reliable. Per the program, the existing fleets are being replaced with two families of launch vehicles - the Boeing Delta IV and the Lockheed Martin Atlas V. These initiatives will reduce the cost of launching the Atlas, Delta and Titan space launch systems by 25-50%.

Yesterday, the U.S. released a compromise version of the defense authorization bill for fiscal 2016 of $612 billion. This allowed ULA to use total of nine additional Russian-built RD-180 engines for its Atlas V rockets to vie for military and spy satellite launch contracts.

While the initial defense authorization bill issued in fiscal 2015 had allowed the use of five Russian-built rocket engines only, the new bill added another four, bringing the total count to 9.

ULA provides U.S. government missions with affordable, consistent and assured access to space. It has three launch vehicles - Atlas V, Delta IV and Delta II. ULA's launch vehicles have played a significant role in U.S. space ventures with the highest commitment to crew safety and mission success.

Zacks Rank

Both Boeing and Lockheed Martin currently have a Zacks Rank #2 (Buy). Investors interested in the aerospace and defense sector may also consider Leidos Holdings, Inc. LDOS and Northrop Grumman Corporation NOC . While Leidos sports a Zacks Rank #1 (Strong Buy), Northrop carries a Zacks Rank #2.

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NORTHROP GRUMMN (NOC): Free Stock Analysis Report

BOEING CO (BA): Free Stock Analysis Report

LOCKHEED MARTIN (LMT): Free Stock Analysis Report

LEIDOS HOLDINGS (LDOS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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