The Contract

The US Department of Defense Press Desk released today that Orbital ATK [NYSE: OA] has been awarded a Naval contract to the sum of $156,831,389 for the full-rate production of Lot 6 for the Advanced Anti-Radiation Guided Missile (AARGM).

 

Source Excerpt

Department of the Navy Contract:

“Orbital ATK Inc., Defense Electronic Systems, Northridge, California, is being awarded a $156,831,389 firm-fixed-price contract for the full-rate production of Lot 6 for Advanced Anti-Radiation Guided Missile (AARGM).  This contract provides for the conversion of AGM-88B High Speed Anti-Radiation Missiles into 230 AGM-88E AARGM All-Up-Rounds and six captive air training missiles, to include related supplies and services necessary for their manufacture, sparing, and fleet deployment.  Work will be performed in Northridge, California (90 percent); and Ridgecrest, California (10 percent), and is expected to be completed in March 2019.  Fiscal 2017 weapons procurement (Navy) funds in the amount of $155,352,654; and fiscal 2015 non-U.S. Department of Defense funds in the amount of $1,478,735 will be obligated at time of award, $1,478,735 of which will expire at the end of the current fiscal year.  This contract was not competitively procured pursuant to Federal Acquisition Regulation 6.302-1.  The Naval Air Systems Command, Patuxent River, Maryland, is the contracting activity (N00019-17-C-0005).”

Source

 

Contract Interpretation

  • Firm-Fixed-Price: A contract with such a price is not subject to any adjustment due to costs in performing said contract. This is a maximum risk, full responsibility contract in which Orbital ATK theoretically could end up eating costs that exceed the amount they’ve initially agreed upon. More

 

Advanced Anti-Radiation Guided Missile (AARGM)

 

The AGM-88E Advanced Anti-Radiation Guided Missile (AARGM) is a special missile designed to target Integrated Air Defense (IAD) points and other targets that attempt to shut down our offensive capabilities. Using a multi-mode seeker, AARGM is capable of breaking through these defenses and efficiently eliminating the target at hand.

 


Disclaimer

As of this moment, I do not own shares of Orbital ATK. My opinions are entirely my own and may or may not reflect the opinions of my peers on TickHounds. I am not being compensated for sharing my due diligence in any way other than what tips may be accrued.

Most information for this post was retrieved from various sources listed throughout the post. For other sources, see below:

AGM-88E
Original Image Source