Defense department demand stable for electric motors

Honda Clarity Electric Motor

Pentagon demand for electric motors has been stable over the last five years, with Defense Logistics Agency (DLA) annual purchasing at around $26 Million.  Many industries studied by BidLink have shown the same pattern of a significant increase in sales from 2006-2007, then stabilization.  In September 2010, defense secretary Robert Gates called for $100 Billion in cuts to the Defense Department budget over the next five years.  Fortunately for companies that make replacement parts, this means more business as many of these cuts could affect large projects like the F35 aircraft, while not affecting the process of repairing and restocking, and technologically upgrading the military.   The Defense department has expressed their commitment to cut waste without reducing capabilities.

DLA Motor Purchases - Source

DLA Motor Purchases - Source

We examined the competition in this industry for FY 2009, since at the time of this article, 2010 had not yet ended.  Honeywell International (CAGE code 70210) is the clear leader by number of contracts, winning 450% more than the second place holder, Arc Systems (67245).

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This follows a similar pattern that we have seen in other industries analyzed by BidLink.  It seems that each industry has a clear leader, winning significantly more contracts than the other competitors.  Much of this business comes from long term contracts, which are periodically re-awarded.   Opportunity exists for savvy competitors.

Top 10 DLA electric motor suppliers

Top 10 electric motor suppliers to Defense Department DLA - Source

By sales volume, Honeywell (70210) almost tripled the sales of GE Avation Systems (81039) in 2009. The other eight competitors were almost evenly matched.  The largest contract for 2009 was 296 AC Control Motors, NSN: 6105-00-938-8503 at $6.102.17 each for a total contract value of $1,806,242.32 (see contract).

Top 10 electric motor suppliers to Defense Department DLA - Source

Top 10 electric motor suppliers by sales to DLA - Source is a provider of defense industry information for contractors worldwide.  This data includes millions of defense contracts, procurement history, part numbers and vendor details.  This unique combination of resources allows BidLink to monitor and extract important information for the defense contracting industry., based in Washington, D.C., provides bid consolidation, searching and notification services, as well as part number (NSN) lookup to many military activities and thousands of private companies around the world.

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