Defense contractor, Northrop Grumman Corporation (NOC) has been awarded a NASA contract to build Modular Space Vehicles (MSV) for the Department of Defense (DoD). Northrop is among the five contractors selected by NASA for the DoD’s Operationally Responsive Space (ORS) program, a five-year contract.
NASA’s Ames Research Center, Moffett Field, California, is the contracting agent for the Department of Defense.
Under the terms of the contract, Northrop Grumman has initial task orders worth $46 million for the ORS Office located at Kirtland Air Force Base, New Mexico. The company is also entitled to build a multi-mission spacecraft bus employing a Modular Open System Approach (MOSA) and use Plug-n-Play technology to allow for rapid manufacturing, integration and testing.
This approach and technology will provide innovative, affordable and expedient solutions to the U.S. Combatant Commanders and open up new markets.
This contract offers Northrop the opportunity to strengthen its existing relation with Ames Research Center and build on the recent mutual successes on the LCROSS mission. Northrop Grumman is also eager to support ORS and its vision to provide assured space power focused on timely meeting the Joint Force Commanders’ needs.
Los Angeles-based Northrop Grumman is one of the world’s leading shipbuilders and the second largest defense contractor in the U.S. The company supplies a broad array of products and services to the U.S. Department of Defense, including electronic systems, information technology, submarines and surface ships, aircraft, space technology, and systems integration services.
Northrop’s future outlook remains largely secure based on expectations of solid revenue growth across the board, a broad diversification of programs, strong order bookings and an order backlog of more than $64.6 billion at the end of third quarter 2010.
However, apprehensions regarding defense cutbacks on high-cost platform programs, over-exposure to the DoD budget, lower backlog, cost over-runs and substantial exposure to missile defense- related programs keep us on the sidelines.
We retain our Neutral recommendation for the stock. The company currently has a Zacks #3 Rank (Hold), in line with its closest peers General Dynamics Corp. (GD) and The Boeing Company (BA).
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