Defense Business Brief: Foreign arms sales plummet; F-35 deliveries rise; Leidos to sponsor NASCAR driver; and more.

Completely happy New 12 months! It’s been a comparatively sluggish week in Washington, as back-to-back snowstorms have closed colleges and prevented the few federal employees who’re nonetheless exhibiting up in individual for work from bodily being within the workplace. Omicron is surging and various business officers I spoke with this week say their firms are placing tighter restrictions on in-person work.

Whereas many people had been taking a much-needed break from the stange every day grind, two key new objects occurred. First, President Biden signed the fiscal 2022 Nationwide Protection Authorization Act, the annual must-pass protection coverage invoice. Whereas the NDAA approved $770 billion, that money isn’t accessible till Congress passes an appropriations invoice, which it nonetheless hasn’t performed. And Politico reported that the Biden administration’s fiscal 2023 Pentagon price range request can be delayed till March, one month later than the standard early February submission to Congress.

Second, the State Division launched its annual arms export totals, which confirmed a 21 % decline 12 months over 12 months. Foriegn army gross sales (FMS) totaled $34.8 billion and direct business gross sales (DCS) of army tools totaled $103.4 billion. In fiscal 2020, arms exports totaled $175 billion, in line with the State Division.

Why it issues: “We’re shocked by the magnitude of the drop, which suggests FMS/DCS gross sales shall be a headwind for large-cap protection primes with FMS publicity,” Cowen & Firm analyst Roman Schweizer wrote in a Dec. 23 notice to traders. Schweizer notes that the Biden administration is approving far fewer overseas army gross sales every month. Over the previous 12 months, the Biden administration has authorized a median of $2.5 billion in arms gross sales monthly in comparison with a median of $6 billion monthly throughout the Trump administration.

Whereas with reference to overseas arms gross sales, Israel signed an agreement to purchase 12 Sikorsky CH-53K heavy-lift helicopters and two Boeing KC-46 refueling tankers. Boeing additionally acquired a $470 million contract to improve Japan’s F-15 fighter jets.

Additionally of notice, Lockheed Martin delivered 142 F-35 stealth fighters in 2021, the corporate mentioned. That’s up from the 120 jets it delivered in 2020, a quantity effectively under the 141-aircraft objective because of the provide chain points associated to the pandemic.

Subsequent week: The Floor Navy Affiliation will maintain its annual convention in Arlington, Virginia, starting Tuesday. The occasion has ceaselessly been a discussion board the place prime Navy brass preview objects within the forthcoming price range proposal. In-person attendees should be absolutely vaccinated and masks are required.

Leidos mentioned it would sponsor NASCAR driver Bubba Wallace and the No. 23 Toyota Camry inventory automobile from 23XI Racing. The race group is owned by former NBA star Michael Jordan and NASCAR driver Denny Hamlin. Leidos sponsored Wallace, who has been an outspoken voice on racial justice points, when he drove within the decrease Xfinity sequence. 

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