HII is Awarded $74 Million Contract to Support U.S. Navy Vertical Launch Systems

Rhea-AI Summary

HII (NYSE: HII) secures a $74 million contract to enhance fleet defensive capabilities for U.S. Navy ships by developing improved vertical launching systems. The contract includes outfitting the first Zumwalt-class destroyer with advanced technology, aiming to bolster warfighters' defensive capabilities. HII's mission technologies division will conduct research, analysis, and development to support the Navy's combat systems and sensors, emphasizing technological advancements for naval warfare.

Defense Industry Analyst

The award of a $74 million contract to HII's Mission Technologies division by the Naval Surface Warfare Center highlights the U.S. Navy's ongoing commitment to advancing its fleet's defensive capabilities. This development is significant for stakeholders as it not only solidifies HII's role as a key player in defense technology but also indicates potential for growth in the defense sector. The focus on the Mk 41 and Mk 57 vertical launching systems, particularly the outfitting of the Zumwalt-class destroyer, underscores the Navy's emphasis on versatility and adaptability in warfare technology.

From an industry perspective, the ability to fire any missile from any VLS cell is a notable technological advancement, enhancing the flexibility and firepower of the Navy's surface fleet. Such improvements are essential in maintaining a strategic edge in an era where threats are evolving rapidly. The contract also suggests a steady demand for defense contractors capable of handling complex R&D and system integration tasks, which could influence investment in similar firms.

Furthermore, the contract's provision for addressing obsolescence issues through rapid design prototyping and technological improvements is a proactive approach to lifecycle management of military systems. This could set a precedent for future defense contracts, emphasizing the need for agility in both development and upgrade processes to ensure long-term viability of critical defense systems.

Military Technology Research Analyst

The commitment to research and development as evidenced by HII's contract is a key driver for innovation within the defense industry. The integration of new technology into naval weapon and combat systems is not just about immediate enhancements; it's a long-term investment in the technological superiority of the U.S. Navy. The task order's five-year term suggests a long pipeline of work and sustained revenue for HII, which is positive news for investors in the defense sector.

The use of the Information Analysis Center Multiple Award Contract (IAC MAC) vehicle for this task order is indicative of the Department of Defense's strategy to leverage existing contracting frameworks to expedite the development process. This could imply a more streamlined approach to contracting in the future, potentially reducing lead times for project initiation and completion.

Investors should note the strategic locations of the work—Syracuse, New York and Arlington, Virginia—as indicative of HII's leveraging of regional expertise and existing infrastructure to fulfill the contract requirements efficiently. This geographical distribution of defense work contributes to a robust defense ecosystem and can have positive economic impacts on the regions involved.

Financial Analyst

The financial implications of HII's newly awarded contract are multifaceted. The immediate revenue boost from the $74 million contract provides a clear short-term benefit to HII. However, the long-term financial health of HII will depend on its ability to deliver on this contract and potentially secure further contracts of this nature. Investors should monitor HII's execution on this contract as a barometer for future performance and its capacity to capitalize on the growing defense budget allocations.

It is also worth considering the broader market implications of this contract. A contract of this magnitude can act as a bellwether for the defense industry, potentially leading to increased investor confidence in the sector. As defense spending remains a priority for the U.S. government, companies like HII that show a proven track record of fulfilling government contracts could become attractive to investors looking for stable returns in a volatile market.

Additionally, the mention of leveraging industry capabilities suggests potential subcontracting opportunities, which could benefit smaller firms in the defense supply chain. This has implications for market dynamics, as it could lead to increased M&A activity or partnerships within the defense sector.

Research and development will enhance fleet defensive capabilities

MCLEAN, Va., April 09, 2024 (GLOBE NEWSWIRE) -- HII (NYSE: HII) announced today that its Mission Technologies division was awarded a $74 million contract to research, analyze and develop enhanced capabilities for the Mk 41 and Mk 57 vertical launching systems (VLS) onboard U.S. Navy surface ships.

The task order, administered by the Naval Surface Warfare Center (NSWC) Port Hueneme Division, also applies to associated naval surface weapon systems, combat systems and sensors employed within the Navy.

HII’s statement of work includes outfitting the first Zumwalt-class destroyer (DDG 1001) with the latest Mk 57 vertical launch system universal canister electronics unit. The unit, developed by HII, ensures warfighters can fire any missile from any VLS cell on Zumwalt-class ships.

“We are extremely pleased to continue our support to the U.S. Navy, providing critical research, development, test and evaluation in support of vertical launch systems for NSWC Port Hueneme,” said Todd Gentry, president of Mission Technologies’ C5ISR business group. “Facilitating the insertion of technology into naval weapon and combat systems maximizes defensive capabilities for our warfighters, giving them a distinct advantage over adversaries.”

A photo accompanying this release is available at: https://hii.com/news/hii-award-support-us-navy-vertical-launch-systems-2024/.

HII will also leverage industry capabilities to support rapid design prototyping, technological improvements and engineering requirements associated with obsolescence issues.

HII was awarded the recompeted task order under the Department of Defense’s Information Analysis Center Multiple Award Contract vehicle (IAC MAC). These IAC MAC task orders are awarded by the U.S. Air Force's 774th Enterprise Sourcing Squadron to develop and create new knowledge for the enhancement of the Defense Technical Information Center repository and the research and development and science and technology community.

The task order has a five-year term. Most of the work will be performed in Syracuse, New York, and Arlington, Virginia. HII’s support to NSWC Port Hueneme is an extension of work performed under a previous contract awarded in 2021.

About HII

HII is a global, all-domain defense provider. HII’s mission is to deliver the world’s most powerful ships and all-domain solutions in service of the nation, creating the advantage for our customers to protect peace and freedom around the world. As the nation’s largest military shipbuilder, and with a more than 135-year history of advancing U.S. national security, HII delivers critical capabilities extending from ships to unmanned systems, cyber, ISR, AI/ML and synthetic training. Headquartered in Virginia, HII’s workforce is 44,000 strong. For more information, visit:

• HII on the web: https://www.HII.com/
• HII on Facebook: https://www.facebook.com/TeamHII
• HII on Twitter: https://www.twitter.com/WeAreHII
• HII on Instagram: https://www.instagram.com/WeAreHII

Contact:

Greg McCarthy
(202) 264-7126
gregory.j.mccarthy@hii-co.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/d0ec59e5-f196-433c-98bf-8f3a97c0daca

What is the contract amount awarded to HII for enhancing fleet defensive capabilities for U.S. Navy ships?

HII was awarded a $74 million contract for this purpose.

What specific systems will HII focus on developing enhancements for under this contract?

HII will work on improving the Mk 41 and Mk 57 vertical launching systems onboard U.S. Navy surface ships.

Which division of HII was awarded the contract for this project?

HII's Mission Technologies division was awarded the contract.

What is the purpose of outfitting the first Zumwalt-class destroyer with the latest Mk 57 vertical launch system universal canister electronics unit?

The unit ensures warfighters can fire any missile from any VLS cell on Zumwalt-class ships.

Where will most of the work related to this contract be performed?

Most of the work will be performed in Syracuse, New York, and Arlington, Virginia.

How long is the term of the task order awarded to HII under the Department of Defense's Information Analysis Center Multiple Award Contract vehicle?

The task order has a five-year term.