On Tuesday, Boeing reported the highest annual orders and deliveries of its commercial jetliners in the Company’s history. With net new orders of 1,432 in 2014, Boeing topped its previous record of 1,355 orders made in 2007.
As expected, 2014’s GovCon M&A market ended on an uptick as–deal announcement-wise– the fourth quarter was the busiest quarter of the year. While the business-side of the GovCon market remains challenging from a budget and competitive perspective, many of the factors that contributed to the slight GovCon M&A volume increase in 2014 are expected to support continued deal activity into 2015.
Earlier this week, Bombardier Inc. announced a deal with an unnamed customer for a firm order of 16 of its CSeries regional jets, along with options to purchase an additional eight jets. The order, for the CRJ900 NextGen model, is worth approximately $1.12 billion at list price should the customer exercise its options.
The Pentagon approved another $3 billion in foreign arms sales to Iraq for General Dynamic’s M1A1 Abrams tanks and for AM General’s Humvee armored cars. Pending congressional approval, the deal would bring the total U.S. weapons sales to Iraq to almost $15 billion.
The Aerospace Industries Association (“AIA”), a premier trade association representing major aerospace and defense companies, released it 2014 Year-End Review and Forecast earlier this week.
This week, both Boeing and Airbus announced cuts to monthly production rates of their respective wide-body jets. The Companies have cited a decrease in demand for their long-range, wide-body jets as airlines have opted for smaller, twin-engine jetliners and the cargo market has proven less robust than expected. In response, Airbus will decrease production of the A330 to 9 per month in 2015 with further cuts planned for 2016.
In the wake of Chuck Hagel’s resignation, President Obama formally nominated Ashton Carter as his candidate for Secretary of Defense early next year, pending Senate confirmation. Carter served as the Undersecretary of Defense for acquisition, technology, and logistics from 2009 to 2011 before being appointed Deputy Defense Secretary, where he served as the Pentagon’s number 2 civilian officer until December 2013.
Given these dynamics, agencies are embracing technology in order to continue innovating with fewer resources. For example, the General Services Administration’s (“GSA”) Network Services 2020 (“NS2020”) strategy envisions a converged IP environment with common, core security standards through an array of modern telecommunications and IT service offerings, which will be achieved through a Government-wide marketplace for data and commodity services. The Department of Veteran’s Affairs (“VA”) also recently announced a restructuring plan, in which the Secretary of the VA identified a shared services plan as one of the top four changes to be implemented.