Demand for Unmanned Aircraft Systems continue to grow in the U.S.

The MQ9-Reaper Unmanned Aircraft

Unmanned Aircraft Systems (UAS) are a hot topic for both the U.S. Military and the FAA. According to the FAA there are some 100 U.S. companies, academic institutions, and government organizations developing over 300 UAS designs. This unmanned aircraft industry is in its infancy; currently the majority of the users of these systems are military. Unmanned aircraft systems are part of the larger group of unmanned systems which include unmanned ground systems, unmanned maritime systems and their related technologies. The Department of Defense is aggressively developing unmanned systems and technologies and has slated plans out till the year 2034.

Unmanned aircraft systems have experienced an explosive growth within the DoD, providing highly capable intelligence, surveillance, and reconnaissance (ISR). While DoD is currently the primary user of these systems interest is growing within federal agencies, state and local governments. Potential uses such as law enforcement, firefighting and commercial real estate photography just to name a few. Sizes of current UAS’s range from only few inches to over 250 feet long, some can remain aloft for 30 hours or more.

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MQ-9 Reaper – Unmanned Aircraft System

The U.S. Air Force has procurement requests planned for 48 units per year over the next 5 years until 2015. The total budget request for UAS in fiscal year 2011 is $1,079,595,000 dollars. This procurement cost includes all components of the MQ-9 weapon system.

The MQ-9 Reaper is a fully operational UAS consisting of the aircraft, sensors, ground control station, (GCS) satellite link, spare equipment along with operations and maintenance crews for deployed locations.  A typical crew consists of a rated pilot to control the aircraft and command the mission and an enlisted aircrew member to operate sensors and weapons plus a mission coordinator, when required.

MQ9 Reaper Control Room

The MQ-9 baseline system carries a robust suite of sensors for targeting including infrared sensor, laser-guided munitions, and synthetic aperture radar; color/ monochrome camera, laser designator and a laser illuminator.  Each MQ-9 aircraft system can be disassembled and loaded into a single container, transported in the C-130 Hercules or larger aircraft, for deployment worldwide.

This past May (May 27, 2010) the Army recognized a milestone of 1 million hours of flight for unmanned aerial systems.

Based on the numbers and reports it looks like unmanned aircraft systems are here to stay, providing opportunities to companies both large and small.

* Writers are free to paraphrase or re-publish this article as long as they credit bidlink.net and link back to the original.

Photo credit: MQ-9 Reaper_081103-F-8477M-991|Capt. Sam Allen operates the controls of a battlespace simulator in the Unmanned Aircraft Systems Fundamentals Course’s laboratory. Captain Allen is an instructor with the 563rd Flying Training Squadron and the UASFC director at Randolph Air Force Base, Texas. (U.S. Air Force photo/Rich McFadden)

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Batteries are Big Business for defense contractors

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As we continue to mine our 500 million+ records of defense industry data, we are finding that there is money to be made supplying seemingly common items.  While attention is generally directed toward big ticket buys like aircraft and weapons systems, the DOD is spending quite a bit of money on replacement parts known in the industry as spares. We draw attention to this because there is opportunity for U.S. companies, who might be struggling during the Great Recession.  With retail sales in decline, the DOD can provide some stability for vendors.

This week, we focus on batteries.  With so much portable technology as the foundation of the modern military, batteries have become an essential, recurring need.  From AAA to D, fuel cells to rechargeable, the defense department runs on batteries.  There are 227 registered contractors supplying batteries to DOD.  We examined several supply classes (FSC) for this study:

FSC list for batteries

While total contracts have declined from 2008, the number of battery purchases has almost doubled since 2006.

The leader in battery sales by number of contracts is Eastern Carolina Vocational Center in Greenville, North Carolina.  The company has  205 employees and generates annual revenue of $32 Million.  It has a number of long-term contracts for common items including batteries, adapters and equipment.  According to our records, the company is 8H tax exempt, and manufactures some of the items it sells.

Top contractors by number of contracts

For total sales, Enersys Energy Products of Warrensburg, Missouri leads by almost double the number two position.  The company sold over thirty three million ($33M) dollars worth of batteries to the defense department in 2009.  The company has 1,500+ employees and is a for profit corporation with $1.4 billion in annual revenue.  Enersys is a manufacturer, specializing in batteries.   More details can be found by searching the CAGE code 0WY95 in the vendor lookup tool on BidLink.  By clicking “procurement history”, you can see the long-term contracts that produced much of this revenue.

Top battery contractors by sales 2009

The key to succeeding for these companies is to win long-term contracts to supply the defense department.  Periodically, these contracts expire and are available for public bidding.  If a company is qualified and competitive, business can be won.  Even non defense contractors can supply some of these top companies and still benefit from defense buying activity.

Air force requests over 100 new aircraft for FY 2011

Beale Global Hawk deploys for first time

The U.S. Air Force requests for over 100 new aircraft with 13 different models in their Fiscal Year 2011 Budget.

On the top of the list by volume is the MQ-9 Reaper an unmanned aircraft system (UAS) with a total request of 48 units.  The basic MQ-9 system consists of the aircraft, sensors, a control station, communications equipment, weapon kits, support equipment, simulator and training devices, initial spares and training. The total cost for all 48 units is just over one billion dollars. The prime contractor is General Atomics-Aeronautical Systems Inc.

The Joint Strike Fighter (JSF) F-35 is second with a requested quantity of 23 aircraft at a total cost of  4.5 billion dollars. The F-35 is the much talked about next generation strike fighter with Lockheed Martin as prime contractor, while Northrop Grumman and BAE Systems are principal partners in the project.

Air Force FY2011 Aircraft orders (top 6 by quantity)

The Light Mobility Aircraft program is third with a requested quantity of 15 and a total program cost of 65 million dollars.  This program plans to acquire Commercial-Off-The-Shelf (COTS) aircraft to satisfy the USAF light mobility mission requirement. The new program has  no chosen manufacturer as of yet.  According to Government data there are currently 22 interested vendors.

The USAFA Powered Flight Program is requesting a quantity of 12 Commercial-Off-The-Shelf (COTS) aircraft for the United States Air Force Academy (USAFA) in Colorado Springs, CO.  with a program cost of about 4 million dollars.

The RQ-4 Global Hawk is an unmanned aircraft system with a total procurement cost of just over 1 billion dollars for 4 units.  This aircraft is fully autonomous with a range of over 9000 nautical miles.

The CV-22 Osprey also on the list for a quantity and a cost of just over 500 million dollars for 5 complete systems.  The CV-22 is a Special Operations Forces (SOF) variant of the V-22 vertical lift, multi-mission aircraft.

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Top 10 States with highest percentage of Government contractors per capita

In a review of the latest data of Government contractors currently registered with the U.S. Government having an active CAGE code; the data shows that the District of Columbia ranks number one with the state of New York showing the lowest percentage of Government contractors per capita.

According to the most recent data tabulated by BidLink.net,  the associated chart represents the percentage of “Government contractors” (based on the number of CAGE codes) per state verses the population of the given state. The state populations used in these calculations are from the most recent extract of population estimates from U.S. census data based on state on residents 18 years or older.

Over 1.6 million organizations in the United States are currently active in the Governments database with an active CAGE code. Basically any company or organization wishing to do business with the U.S. Government, specifically military agencies such as the DoD, Army, Navy, Air Force, and Marines will have a CAGE code.

Highest Percentage of Defense Contractors (source: bidlink.net)

A CAGE code is a five (5) position alphanumeric code used to identify organizations that provide, manufacture, or control the design of items supplied to U.S. Government Military agencies. The CAGE code is an integral part of the military cataloging system and is shared with many of the automated data processing (ADP) systems throughout the military.

According to the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation (DFAR) any organizations wishing to conduct business resulting in an contract award or any type of purchasing agreement must have their CAGE code active in the Central Contractor Registry (CCR). CCR registration must be updated on an annual basis to remain in the system. Currently a little over a third of the total organizations active in the CAGE database are active in the CCR database.

There are two basic types of CAGE codes Manufacturers and Non-manufacturers.

Of the total active U.S. CAGE codes only 11% of them are classified and Manufactures and 89% of them are Non-manufacturers.

The basic CAGE code data contains contact information such as phone and address information. There is a myriad of other relative data which is associated to a single CAGE code. Information such as part numbers and National Stock Numbers (NSN’s) manufactures, sources, contract numbers, procurement history etc.

BidLink.net provides vital information to defense contractors by mining its enormous and comprehensive database.  This data includes millions of defense contracts, procurement history, part numbers and vendor information.  This unique combination of resources allows BidLink to monitor and extract important information for the defense contracting industry.  BidLink.net, based in Washington, D.C., provides bid consolidation, searching and notification services, as well as part number (NSN) lookup services to many military activities and thousands of private companies around the world.

Welcome to BidLink Defense News

AH64-Apache kicks ass

Welcome to BidLink Defense News!

We are expanding our news area to provide in depth research and information about the defense contracting industry. BidLink has millions of rows of information, which we often mine for information that can help keep our clients informed. Our data team are constantly analyzing trends and studying data on a never ending quest to find something that can give our clients a competitive edge.

BidLink has hired a number of professional writers and employed a research team, which will provide up to the minute information on the defense industry.

We hope you enjoy BidLink Defense News.

- The BidLink Staff

Business Opportunities for Suppliers of Packing and Gaskets to US Government

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In an age of tightening defense budgets, suppliers are finding that replacement parts used to maintain existing equipment are good business. Even though purchase volume is down over the past few years, vendors are finding comfort in the consistent business of replacement parts. BidLink will periodically examine a particular industry segment in search for opportunities for our clients.  Today we examine one such industry segment, FSC 5330: Packing and Gasket Materials.

Over the past 10 years the Department of Defense, has purchased over 61,000 unique NSN’s from more than 3,000 different companies in the gasket industry according to data obtained by BidLink.net, a provider of defense industry information.

National Stock Numbers (NSN) are used by the government to categorize the items that they buy.   Items are classified in segments, indicated by the Federal Supply Class (FSC).

The segment -FSC 5330 – titled: “Packing and Gasket Materials” is defined as Seals, gaskets and packing are made from materials specifically designed and constructed to resist deterioration from the action of heat, gas, chemicals, liquids, and used to fill a cavity and create a tight seal.

They include items such as General Purpose Oil Grease, Air, Liquid, Gas, and chemical Seals; Oakum; Prefabricated Gaskets and Seals designed for a single specific application. Note-This FSC includes only seals and gaskets designed for standard use.

SALES VOLUME

Although belt tightening has reduced the volume of purchases for items under FSC 5330 over the past three years, annual volume is still close to $100 million.

In this segment, sixteen percent (16%) of these suppliers are women owned. Fifty Seven percent (57%) of these companies are listed as manufacturers where as Forty percent (40%) are categorized as non-manufacturers  including distributors and brokers. The last 3% categorized as NATO (or foreign companies). Eighty Seven percent (87%) of these 3,000+  companies are classified as small business, where the  company has employees ranging from 0 to 500 people.

Quantities sold to the Government range from a few pieces to over 300,000 pieces in a single purchase order. This specific NSN 5330-01-298-7343 was sold for $0.18 each a quantity of 300,000 for a single contract totaling $54,000 dollars- a nice contract and should keep the stamping machines running for awhile. Not all orders are this large in volume but prices range all the way up in the thousands of dollars each.

We are finding that a large amount of money spent by the defense department is for simple items that one might overlook, like batteries, gaskets, cookies and sunglasses.  Companies who can make these types of products will find the defense department as a huge potential customer for American made goods where private sector sales might be faltering.

BidLink.net provides vital information to defense contractors by mining its enormous and comprehensive database.  This data includes millions of defense contracts, procurement history, part numbers and vendor information.  This unique combination of resources allows BidLink to monitor and extract important information for the defense contracting industry.  BidLink.net, based in Washington, D.C., provides bid consolidation, searching and notification services, as well as part number (NSN) lookup services to many military activities and thousands of private companies around the world.

Knowledge & Features: NSN structure

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What is a National Stock Number (NSN)

The concept of the NSN was established by the U.S. Military more than 60 years ago. It gives the military services (Army, Navy, Air Force, Marines, etc.) the ability to accurately describe an item of supply using a common name and description. This standardization allows the services to share stock and accurately procure an item which is repeatedly used within their supply system using a single number “The NSN”.

NSN’s describe every imaginable item from the simple metal washer to complex military hardware and systems used in military aircraft and vehicles etc. There are millions of NSNs used within the current U.S. military supply system. Each NSN contains a set of data fields such as Item Name, part number, technical characteristics etc. Within the BidLink database you can look up any NSN by NSN, Part Number, etc. Go to the section labeled “NSN Lookup” to try.

The structure of an NSN can be thought of in two ways:

With three (3) distinct parts:

First four (4) numbers represent the Federal Supply Class (FSC)
5th and 6th numbers represent the Country of Origin – All US NSN’s will be either 00 or 01
Numbers 7 through 13 are sequentially assigned and are unique to each NSN

With two (2) distinct parts:

First four (4) numbers represent the Federal Supply Class (FSC)
Last nine (9) numbers represent the National Item Identification Number (NIIN)

For example take the NSN 5305-01-142-6280
Just by looking at the first four (4) numbers (the FSC) you can make a quick determination that this item is some kind of screw since the FSC 5305 is the code for Screws.

Try this yourself in the ‘NSN Lookup’ to see the kind of details a NSN can provide.
Look this number up by either the full NSN: 5305-01-142-6280 or the NIIN: 011426280.

After looking up the NSN or NIIN note all the data associated to this single NSN, you will see the Item Name, Part number cross-reference, Procurement history, NSN Status, Management data, Technical characteristics, Packaging data, Forecast data, etc.

The first block of data shows the “Item Name” for this specific NSN
It is labeled “SCREW,CAP,SOCKET HE”
Just by knowing the FSC for Screws is “5305” you have determined that this NSN is some sort of Screw, as that is the reason behind the FSC coding; giving the ability to categorize an item of supply with just 4 specific numbers. There are lookup tables in BidLink that will cross-reference FSC’s to their specific titles and descriptions, so use them.

The official Item Name, in this case is “SCREW,CAP,SOCKET HE”. This is how the Government describes this item using a name. You might find the commercial industry describing the same item it in a catalog something like this “Socket Head Cap Screw”. Remember, when looking at Government data either when searching for Bids or looking to source items – Be sure to use the Government terminology, such as Item Names and FSC’s. See the examples within the help section, other news articles or contact your BidLink representative for assistance when searching for Bids.

DLIS a division of the Defense Logistics Agency (DLA) is the agency responsible for the creation and management of NSN’s. They are the only organization authorized to assign NSN’s; requests for the creation of new NSN’s can only come from a military service, not a commercial company or individual. When a new product is introduced to the military, the military will initiate their own request from within, for the creation of new NSN’s. This process can take time as each item is carefully reviewed by the Cataloging department assigned to that specific classification of item.

Note: An official Item Name will be a maximum of 19 characters. Click on the INC code number to see the details and a short description for the Item Name, in this case click on the number “16282” in the first bock of information after looking up the NSN in “NSN Lookup”

http://www.dlis.dla.mil/PDFs/NSN.pdf

Source Approval Request & Alternate Offers for NSNs

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Basics about the NSN:

A National Stock Number is basically a number which identifies a specific item of supply that is repeatedly procured, stocked, stored, issued, and used throughout the federal supply system. Every NSN (National Stock Number) has at least one reference number/ logistics/ part number or specification associated to that specific NSN. That same NSN will also have at least one CAGE code associated to that specific NSN. The associated CAGE code(s) will represent either a manufacturer or non-manufacturing organization such as a Government agency. This information on all NSN’s is listed in BidLink.

When a single NSN is introduced to the Governments supply system there are many departments and agencies involved with the proper labeling and cataloging of the individual NSN. Since the introduction of the NSN over 50 years ago millions of NSN’s have been added to the supply system. The Government has sources for some of these NSN’s however some NSN’s have only one supplier known as a “Sole Source” and NSN’s are not available at all from any company known as a “zero source” (as the original manufacturer(s) are no longer in business). When the government has an NSN with no source or a sole source and the item is currently in use they have a reason to look for other sources. Also when an NSN has limited competition, is overpriced or low reliability there is reason to search for additional sources.

Many company’s say “there is too much competition selling to the Government” – Only if you are selling items with many manufacturers or multiple sources. There are close to a million NSN’s with zero or sole sources, go after those.

Your company has the opportunity submit an alternate offer for evaluation to be listed as an approved source for a NSN. Once your company has made the determination that your part (or item) you wish to supply is equivalent to a specific NSN you must create a TDP (Technical Data Package) which basically proves that your item is “equivalent” to the current part (NSN) the Government is buying.

One of the first criteria the Government looks at when evaluating if they should accept your Alternate Offer is a “Savings Threshold”. A savings threshold is the total dollars saved, comparing your proposed unit price to the Governments average price, for the armed services actual demands over a four quarter time period, updated quarterly.

Once proper analysis is made on a specific NSN by your company that you can supply the item then the process of creating a Source Approval Request, creating a TDP should be considered. It can be a lengthy process as well as a potentially profitable one in the long run.