BAE Systems Wins $212M Navy Contract For Armored Vehicles
6:57 p.m. 06/28/2007 WASHINGTON (AP)--
The U.S. Navy on Thursday awarded a $212.4 million contract to a unit of BAE Systems PLC (BAESY) to build 441 armored vehicles for American soldiers in Iraq.
The award may help ease concerns about BAE's ability to secure U.S. government contracts in light of a Justice Department investigation. BAE said Tuesday that Justice is looking into allegations - denied by company officials - that it funneled money to a Saudi prince to help win an $86 billion weapons deal with the British government.
The new pact awarded to the North American subsidiary of British defense conglomerate BAE Systems PLC is the fifth order to date by the Pentagon for Mine Resistant Ambush Protected, or MRAP, vehicles. They are used to reduce the number of U.S. soldiers killed or wounded by roadside bombs. The Defense Department is seeking to replace up to 17,700 so-called up-armored vehicles in a deal that could be worth up to $20 billion.
BAE is expected to complete the work by July 2008 in York, Pa., the Navy said.
The MRAPs, designed with a V-shaped hull to repel improvised explosive devices, will replace armored Humvees made by privately held AM General Corp.
The military selected nine companies earlier this year, including BAE Systems, to each build four test MRAP vehicles. So far, Ladson, S.C.-based Force Protection Industries Inc. (FRPT) has won three contracts worth $723.6 million to build 1,469 vehicles. The company is teaming up with Falls Church, Va.-based General Dynamics Corp. (GD) under a joint venture called "Force Dynamics" to increase production capacity.
Additionally, Navistar International Corp.'s (NAVZ) subsidiary International Military and Government LLC has won the largest vehicle order of $623.1 million to build 1,200 vehicles.
Last week, a government panel that oversees foreign investment in the U.S. approved a pending $4.1 billion buyout of armored vehicle maker Armor Holdings Inc. (AH). BAE proposed the acquisition on May 7 as part of a bid to tap into a heavy demand for American military for vehicles in Iraq and other war zone. Armor Holdings is one of the nine companies vying for a stake in the MRAP program.
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