Defense Business Brief: NDAA passed; Zelenskyy meets US defense execs, New Rebellion Defense CEO, and more.

In today’s Defense Business Brief:

• Waiting for the National Defense Industrial Strategy
• Zelenskyy meets with US defense contractors
• Rebellion Defense names new CEO

Welcome

You’ve reached the Defense Business Brief by Marcus Weisgerber. Send along your tips, and feedback to mweisgerber@defenseone.com or @MarcusReports. Check out the Defense Business Brief archive here, and tell your friends to subscribe!

Programming note: We won’t be in your inbox next week, but don’t worry, we’ll be back on Jan. 2 with our 2024 look ahead. We’ll also have a new design in 2024, so stay tuned!

Congress passed the fiscal 2024 National Defense Defense Authorization Act. Now all lawmakers need to do is pass a full-year appropriation bill … and figure out what’s happening with the supplemental spending request for Ukraine, Israel, and the industrial base. The Senate is expected to vote on Ukraine funding and border security this week.

Speaking of Ukraine, while lobbying U.S. lawmakers to send his country more weapons and aid, President Volodymyr Zelenskyy met with a group of American defense executives. Zelenskyy posted a photo on X, formerly known as Twitter, following a meeting with defense executives from RTX, Boeing, Northrop Grumman, BAE Systems, Sierra Nevada, and others.

“I … proposed creating a European defense hub in Ukraine,” Zelenskyy wrote in Ukrainian. “We are ready to make all the necessary decisions, reduce bureaucracy, and place orders. We are ready to produce more ammunition and military equipment, but we need support. It is important to develop joint production of artillery ammunition, air defense systems, artillery and missile systems. We can create more jobs, empower and benefit our people by working together.”

ICYMI: RTX, the company that used to be called Raytheon Technologies, named Chris Calio its next CEO, effective in May. The former Pratt & Whitney executive and current RTX president and COO will replace Greg Hayes, who has led the company since the merger of Raytheon and United Technologies in 2020.

Space-based radio frequency data and analytics startup HawkEye 360 purchased RF Solutions from Maxar Intelligence. The terms of the deal were not disclosed. “With this acquisition, HawkEye 360 gains ownership of two existing RF satellites, … RF scanning intellectual property, and a multi-year global database rich in RF collections ranging from 1.4 GHz to 40 GHz,” the company said. “The additional satellites will enable HawkEye 360 to expand frequency coverage to include 26 to 40 GHz. This broader range will enhance customer understanding of the signal activity occurring in each region of the world.”

A looming question for 2024: Who will buy United Launch Alliance? This came up during numerous discussions on the sidelines of this year’s Reagan National Defense Forum. In November, Ars Technica reported that ULA, a Lockheed Martin and Boeing joint venture, was choosing between three potential suitors: an undisclosed private equity firm, Jeff Bezos’ Blue Origin, and a “well-capitalized aerospace firm that is interested in increasing its space portfolio,” which also  wasn’t disclosed.

Through the first nine months of 2023, M&A activity in the aerospace and defense sector was well below the five-year median average of 98 deals per quarter, according to an October B Riley Securities analysis. Seventy-nine deals were announced in the first quarter, 75 in the second quarter, and 66 in the third quarter. But several large U.S. A&D companies are flush with cash that could be used for M&A, research-and-development, or other capital investments, according to the analysis. Lockheed Martin has had the most dry powder, followed by Honeywell, Northrop Grumman, BAE Systems, General Dynamics, and RTX.

A company that doesn’t have a ton of cash on hand: L3Harris Technologies. “We intend to discontinue our M&A program for the foreseeable future to prioritize strengthening our balance sheet and returning all excess capital to shareholders,” L3Harris Chairman and CEO Chris Kubasik said during an investor conference last week. That’s not surprising, considering the company closed on its $4.7 billion acquisition of Aerojet Rocketdyne in July.

Speaking of L3Harris, the Government Accountability Office says U.S. Special Operations Command has not justified its planned buy of 75 propeller-driven attack planes. SOCOM  placed an order with L3Harris in August 2022 for a weaponized Air Tractor AT-802 cropduster, a deal that has been regularly touted by company executives as an example of how its strategy of making tailored research-and-development investments will lead to contract wins. But now GAO is recommending the Pentagon “slow the acquisition of new planes until it analyzes how many it needs to meet mission requirements.”

Still waiting: The much anticipated, first-of-its-kind National Defense Industrial Strategy, which Pentagon acquisition chief Bill LaPlante previewed at the Reagan National Defense Forum, is now expected to be released early next year. That’s probably a good thing, since Washington is already slowing down for the holidays.   

Required reading: While you’re waiting for the finalized industrial strategy, the Center for Strategic and International Studies has a deep dive into acquisition trends in fiscal 2022. Check that out, here.

Lauren Williams sends: New Year, new CEO. Rebellion Defense has named Ben FitzGerald, the company’s executive chair, to be its permanent CEO starting Jan. 1. Barry Sowerwine took over as interim CEO this fall to fill the vacancy left by co-founder Chris Lynch. After the New Year, Sowerwine will join Rebellion’s board of directors.

The new CEO appointment rounds out a leadership shuffle the company initiated earlier this year. Despite those changes, FitzGerald, a former Senate staffer and Pentagon strategy director, recently told Defense One there is “complete alignment” between Lynch’s original vision and what the company will do in the future.

“The original mission and vision of Rebellion is still exactly what we're here to do. The things that Chris, as a founder, wants to see this company solve are things that we all want to solve,” he said, highlighting AI and data as areas of interest.

Rebellion has landed contracts across national security, including with the Army and National Nuclear Security Administration to help boost cybersecurity.

Defense One readers probably remember FitzGerald, since he was quoted in articles during his tenure at the Center for a New American Security, and later when he worked on the Senate Armed Services Committee staff and at the Pentagon. He even wrote a piece for us about the Defense Innovation Unit, here.

The U.S. Army awarded Palantir a contract that could be worth upwards of $115 million, “to continue operating and enhancing the Army Vantage data-driven operations and

decision-making platform,” the company said in a statement. The contract extends Palantir’s existing contract another 12 months. 

“Under the extended contract, Palantir will continue to provide its open data and analytics platform through continuous delivery to provide new AI-enabled capabilities and open platform infrastructure that promotes the program’s evolution to the Army Data Platform vision,” the company said. “This extension is a testament to Palantir’s continued success in empowering U.S. military decision-makers with actionable insights and advanced analytical capabilities through the delivery of a secure and open data environment.”

The Army awarded BAE Systems Ordnance Systems a potential $8.8 billion deal to continue operating the Holston Army Ammunition Plant for the next 10 years. The company has been operating the Tennessee plant since 1999.

Making Moves

Boeing named Chris Raymond president and CEO of Boeing Global Services, effective Jan. 1. He succeeds Stephanie Pope, who was recently promoted to Boeing chief operating officer. Boeing has named Brian Moran chief sustainability officer, where he will replace Raymond.