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Region’s Ability to Get Defensive Leads to $2B-Plus in Contracts

Most of the nearly $2.7 billion worth of contracts tallied on the San Diego Business Journal’s Top 20 Defense Contracts list in the first nine months of 2011 is a huge benefit to the county, with almost $2.3 billion of it directed to the region.

The largest award went to Nassco/General Dynamics Corp. for the procurement of the detail design and construction of two mobile landing platform, or MLP, ships for the U.S. Navy. The award of $744 million was made May 27 and work has already begun on the first ship, with delivery expected to occur by spring 2013.

Work on the second of these ships, which perform like a “pier at sea” where ships can load and offload supplies in the middle of the ocean, is expected to begin in the second quarter of 2012 and finish in the first quarter of 2014, said Mary Montgomery, manager of government and public relations at Nassco. The contract includes an option for the construction of a third MLP that, if exercised, will increase the contract value to about $1.3 billion.

Montgomery said the next milestone will be the keel laying of the first MLP in mid-December, signifying the official start of construction. All of the physical construction of the MLPs will occur at the Barrio Logan waterfront shipyard.

Several of Nassco’s local MLP suppliers are: American Rigging Inc.; MacArthur Co.; PCI Performance Contracting Inc.; and California Marine Cleaning Inc., Montgomery said.

“This contract will allow our workforce to continue to do what they do best,” Montgomery said. “Providing steady work for those people is definitely a local economic asset.”

Last week, Nassco acquired the ship repair company Metro Machine Corp. in Norfolk, Va., for an undisclosed price, bringing its total employment to 3,800, according to Montgomery.

Branching Out

Although the largest contracts are weighted heavily to the Navy, with about $1 billion on the list, significant amounts are for U.S. Army and U.S. Air Force work, at roughly $577 million and $445 million, respectively.

The largest Air Force contract on the list — ranked by amount to San Diego — is the No. 3 ranked, $247 million award to Northrop Grumman Systems Corp. for logistics support for the Global Hawk unmanned aerial vehicle. The high-altitude, long-endurance unmanned aircraft system flies autonomously after mission parameters are programmed. The pilot in the ground station can redirect Global Hawk at a moment’s notice based on data that the air vehicle’s sensors suite collects, or on new requirements from the data users.

The aircraft is designed to provide military field commanders with near-real-time intelligence, surveillance and reconnaissance over large geographic areas and has been used in direct support of the warfighter in the Middle East and Libya.

Humanitarian Efforts

But the Global Hawk was also used for humanitarian support after the tsunami struck Japan, and has been used to track hurricanes entering the United States and to help coordinate fire relief efforts, according to Avis Anderson, support contracts manager for Global Hawk at Northrop Grumman.

“This contract provides a unique opportunity for us in San Diego to support humanitarian causes and support the men and women on the ground in the Middle East and to be able to do something for the people in Japan,” Anderson said. “To be able to fly over Afghanistan and provide direct support to keeping them out of harm’s way is very satisfying and people who take a part here should be very proud.”

The contract supports 290 jobs in San Diego in addition to suppliers Raytheon Co. in El Segundo and Washington, D.C., and L-3 Communications in Utah. The need for additional staff was minimal, as employees were transitioned from a development stage to production and sustainment phases, he said.

GA-ASI Lands Work

At No. 2 on the list is the Army’s $300 million-plus contract to General Atomics Aeronautical Systems Inc. for the purchase of system hardware applicable to the Extended Range Multipurpose Unmanned Aircraft System, known as the Gray Eagle.

Kimberly Kasitz, GA-ASI public relations and communications manager, said the company expects to provide 32 Gray Eagle aircraft and associated hardware, including air, ground and communications equipment. Production is estimated at two per month for the next several years, with manufacturing performed locally.

The contracts awarded to GA-ASI in the first three quarters of 2011 helped make Poway a winner, with 100 percent of the contract amounts that totaled about $824 million going to that North County city.

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