I think part of the enduring weakness in the stock is due to the reduced prospects for FOG production and sales to Kongsberg for the CROWS III. A reduction from 18,000 CROWS to 3,000 over five years is significant and KVH has yet to show that VSAT can pick up the slack in revenue and profits.
hedge
Defense Daily International
September 30, 2011 Friday
CROWS III Remote Weapon Station Competition
Kongsberg Protech Systems' Protector CROWS remote weapon system (RWS) is
preparing for a CROWS III competition with a potential value of $970 million,
officials said.
The draft request for proposals (RFP) is available now, and the final RFP
is expected to be released this year, with a competition to follow.
Early this month, the Army modified the draft and reduced the number of
units wanted from some 18,000 to around 3,000 and spares. Production is expected
to range from 0 to 50 units per month. The work is for new units and
recapitalization and overhaul of units.
For Kongsberg Protech Systems, it's an exciting time to be the incumbent,
Rune Johannessen, executive vice president marketing and sales United States,
said in an interview at their Virginia offices.
"The last time we counted we had something like 30 different
competitors," he said. "Still, we own the U.S. market and have more than 80
percent of the world market so we are the biggest one. That's also why the
future and investment with our own R&D money and the learning curve from
different customers, we are trying to stay ahead of the others all the time. We
have been able to do that so far."
Kongsberg Protech Systems Protector CROWS is a unit of Norway's Kongsberg
Gruppen, which has a long history in the United States. Its first success came
in 1892, when it won the Army rifle contest then licensed the design for the
bolt-action rifle and magazine to Springfield Armory, which produced some
480,000 of the weapons.
Recently, Johannessen said the company realizes that as conflicts in Iraq
and Afghanistan wind down and troops are pulled out, the requirement for rapidly
fielding a huge number of systems will no longer exist.
The CROWS RWS is being integrated across more U.S. military vehicles, he
said. "The feedback we have from the soldiers is that the CROWs weapon station
is changing the way they fight. Suddenly, you have a lethality capacity on
patrol vehicles, lighter vehicles and trucks that we didn't have before. It's a
force multiplier."
It also means that heavy vehicles don't need to be assigned to protect
convoys if smaller vehicles and trucks have such self-protection.
Additionally, Kongsberg has used its own research and development (R&D)
funds to integrate new capabilities on CROWS, pushing it into wider roles.
The benefit of a CROWS RWS is in protecting soldiers who don't need to be
exposed, unprotected and vulnerable in the hatch while handling weapons. The
CROWS RWS protects the soldier and makes him more accurate. It also offers the
vehicle a self-defense capability.
CROWS is a simple system consisting of three main parts and some cabling.
A stabilized platform rises above the vehicle roof, and can mount a variety of
weapons: 5.56 caliber, 7.62, 40 millimeter and .50 caliber. Inside, there's a
Fire Control Unit, a video screen and a control grip.
The weapons station is unique in that it not designed for a particular
vehicle and can be mounted on any kind of vehicle and can be placed in a static
mount for something like base protection.
CROWS has a day camera, thermal imagery and a laser rangefinder. The fire
control unit does all the calculations for accurate fire, and stabilizes the
weapon station so it can fire on the move. The laser range finder and advanced
fire control system provide the first round on target in 1,000 meters.
"You use the laser correctly and do as you're trained to do, you'll be
dead on every time," Johannessen said.
Interestingly, CROWS can also detect IEDs, Johannessen said. There's a
heat signature associated with the IED when it's buried in the sand and thermal
imagery from the weapons station can detect it, so the gunner can shoot it.
Also, the system can be integrated with the Sniper Shot Detection System
providing a slew-to-queue function within a 10th of a second, dead on and return
fire, he said.
"We have a very open architecture so the system can hook into a network
and receive targeting quality data," Johannessen said. "This works every time,
and we have millions of hours of battle operation. It's been proven in combat
for a number of years now."
CROWS right now weighs 440 pounds with a .50 caliber weapon and a full
complement of ammunition, Kongsberg official "Bo" Barbour, director of
Capabilities Development, said.
Johannessen said that's less than half of the weight of a gunner
protection kit, so it helps mobility, saves wear and tear on the suspension and
tires, and reduces fuel and ammo consumption.
"We're on more than 30 U.S. platforms right now, Johannessen said. All
the Mine Resistant, Ambush Protected vehicle types, Abrams tanks, trucks, a
variant is on Stryker vehicles, and in Europe other variants can be found on
ships--frigates and high speed vessels, doing is anti-piracy among other
missions.
CROWS can also be part of perimeter defense mounted on a tower and
remotely controlled. Barbour said the company in 2009 studied attacks on Combat Outposts Keating and Wanat and came up with a concept that was proposed to the Army for integrated base detection. "We're evolving to the point that we hope to see something fielded this year," he said.
All CROWS RWS are made in Johnstown, Pa. The different variants have a
commonality of more than 90 percent. "We can do more than 100 weapon stations
per week if they want us to, Johannessen said.
Of the CROWS II M153, the total contract calls for some 11,690 units, of
which 8,000 have been produced and delivered.
The company won a contract in 2001 to supply RWS as a subcontractor to
General Dynamics [GD], which produces Stryker vehicles. It is the PROTECTOR M151
on Strykers. More than 2,300 units have been delivered on a contract calling for
a total of 2,785.
Kongsberg competed for and won the CROWS II contract in in 2007. It
called for 6,500 units. A few bridge contracts later, the total contract now is
almost double, 11,690 units, Johannessen said. This summer, the CROWS II became
a program of record.
"Every time we got a new sole source bridge contract for that system we
have lowered the price," he said. "Every time."
The price keeps coming down because of competition, he said. "We have
lean manufacturing so we are learning every day to reduce internal costs. We
have more than 100 sub suppliers in 23 states, and almost every part we buy from
the sub supplier, we have more than one supplier, so we compete between the sub
suppliers."
Additionally, Kongsberg has tight quality procedures. "We have developed
our own test tools to make sure that every small part is according to the
requirements and when we are building the system we are testing more and more
the final function test also helping keep quality testing," he said. "We have
very few quality issues at all with this system." |
