General Dynamics’ (GD) Information Technology unit has won a three-year $3 million Air Force contract, whose potential value can go up to $23 million based on the exercise of all options.
Under the contract, General Dynamics will assist the U.S. Air Force with its F-22A Integrated Maintenance Information System (IMIS) program.
The indefinite delivery, indefinite quantity contract will involve customization of laptops that will be used to perform maintenance on F-22 fighter jets. These laptops will be portable maintenance devices capable of being put to use wherever the jets land.
General Dynamics said each laptop will have the appropriate software installed and will perform functionality tests and integrate required systems in support of the IMIS program. This program aims to improve the capabilities of aircraft maintenance by providing technicians with a single information system for intermediate and organizational maintenance.
General Dynamics said it hopes to meet the Air Force’s strict requirements for preparing these rugged laptop computers for critical F-22A maintenance support. Additionally, the company expects to streamline delivery and reduce costs by leveraging its in-depth experience in integrating, installing and testing software on U.S. Air Force strategic assets.
General Dynamics will perform the majority of the work under the contract in Bossier City, Los Angeles. This unit supports seven Air Force bases (AFB) throughout the country including, Tyndall AFB, Florida; Langley AFB, Virginia.; Elmendorf AFB, Alaska; Hickam AFB, Hawaii; N.M; Sheppard AFB, Texas; and Nellis AFB, Nevada.
Based in Falls Church, Virginia, General Dynamics is one of the leading companies in business aviation, information systems and technologies, shipbuilding and marine systems, and land and amphibious combat systems, as well as armaments and munitions.
General Dynamics is the fourth largest U.S. defense contractor in terms of revenue in fiscal 2010 after The Boeing Company (BA), Lockheed Martin Corporation (LMT) and Northrop Grumman Corporation (NOC). We view General Dynamics as a well-run company that is likely to continue delivering on expectations, driven by revenue growth, margin expansion and cash flow generation.
However, an uncertain political stance makes future defense budgets vulnerable to cutbacks. Additionally, the falling order backlog is a headwind for the company.
General Dynamics presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
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